TDsngumbo LSU Fan Member since Oct 2011 7823 posts Online
Debt payoff/paying for a huge trip question(Posted by TDsngumbo on 2/25/13 at 9:07 am)
I have about $12,700 in car and student loan debt right now. The interest rate on the car debt is 4.25% (purchased two years ago) and the interest on the student loan debt is 6%. I'm currently paying $1,300 extra each month toward this debt which will have everything paid off by the end of October 2013. However, I have a $7,000 trip planned for the summer of 2014. I currently plan on paying everything off by October 2013 then paying off the trip within a few months after that. Should I only pay off the car debt (until May) then pay off the trip, and THEN pay off the student loans -- OR -- pay off the student loans first, then car, then the trip? I have an emergency fund that is equal to a little less than 6 months of expenses currently and I will begin investing the extra $1,802/month in payments that are currently going toward the car and student loan debt. These investments will consist of maxing out my IRA, my wife's IRA, and an additional growth mutual fund along with a little going into savings each month.
What does the money board think about this plan? How can I improve it or am I doing well the way it is?