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Pay Off Truck Or Roth
Posted on 7/11/19 at 2:35 pm
Posted on 7/11/19 at 2:35 pm
I saw the Roth IRA post made and didn't want to piggy back his thread. I'm also 25 and am very green to the personal finance world. I have $5962 left on my truck to pay off. I contribute 12% into 401k and have 4 months post tax income saved. Should I dump the money into the truck to get it paid off and pay into the IRA weekly and then max out roth IRA at the end of year? My rate on the loan isn't great (paperwork is back in La, but I think it's 5ish%), I think the $317 per month I'd save could have better returns if I just have it paid off completely and can put it elsewhere. TIA guys
This post was edited on 7/11/19 at 2:37 pm
6
Posted on 7/11/19 at 2:40 pm to JGood
If you're disciplined I'd probably just pay off the truck. Returns are going to neglible and it would be nice to have $315 of cash flow a month.
Posted on 7/11/19 at 2:45 pm to JGood
Yeah either way.
Congrats on being disciplined at your age!
Congrats on being disciplined at your age!
Posted on 7/11/19 at 2:47 pm to Mingo Was His NameO
I'd say I'm disciplined with my money. I don't spend much on frivolous things; I get my 5-6 rounds of golf and couple date nights a month in. Beyond that, I don't spend much on extra curriculars....but I do want a new driver pretty bad 
Posted on 7/11/19 at 3:23 pm to JGood
I just pulled out my contributions from my Roth (which are not penalized or taxed) and sold some stock to pay off my car so I could free up $365/mo to pay off other debt.
When you pay off your car, you car becomes an asset, albeit one that depreciates.
Downside: you won’t get the long term interest and earnings on that money. Upside: you free up a good amount of cash in your monthly budget. Depends on what you need. I needed more cash to pay off debt elsewhere, so I paid off the car since that was the largest payment I had outside of student loan debt.
First time I’ve paid off a car. It felt good to do it.
When you pay off your car, you car becomes an asset, albeit one that depreciates.
Downside: you won’t get the long term interest and earnings on that money. Upside: you free up a good amount of cash in your monthly budget. Depends on what you need. I needed more cash to pay off debt elsewhere, so I paid off the car since that was the largest payment I had outside of student loan debt.
First time I’ve paid off a car. It felt good to do it.
Posted on 7/11/19 at 6:35 pm to bluestem75
If you can beat a 5% interest rate in your ROTH, then it is smarter to invest there.
Although being debt free is nice.
Although being debt free is nice.
Posted on 7/11/19 at 6:38 pm to tenderfoot tigah
Being debt free besides my house is a personal goal. I don’t have any student debts and no other debt besides the truck. I think I could do better with the extra money per month. Thanks to all responses!
Posted on 7/12/19 at 7:29 am to JGood
I'm always a fan of freeing up disposable income.
You are taking care of retirement already but hopefully you are getting a match in your 401k. If you aren't, I'd recommend getting your 401k contributions up to 15% of your pre-tax salary ASAP. You will be less likely to need to adjust it as you get older that way.
You are taking care of retirement already but hopefully you are getting a match in your 401k. If you aren't, I'd recommend getting your 401k contributions up to 15% of your pre-tax salary ASAP. You will be less likely to need to adjust it as you get older that way.
Posted on 7/12/19 at 7:47 am to JGood
Pay off that debt man.
Max your Roth
Contribute all you can comfortably afford to a 401k.
Solid that you have 4mo liquid saved!
If work offers an HSA, consider maxing that contribution annually as well.
Max your Roth
Contribute all you can comfortably afford to a 401k.
Solid that you have 4mo liquid saved!
If work offers an HSA, consider maxing that contribution annually as well.
Posted on 7/12/19 at 8:07 am to Brobocop
She's paid off!! Thanks guys! Now onto the house
Posted on 7/12/19 at 11:07 am to JGood
SMART MAN!
Posted on 7/13/19 at 8:44 am to JGood
Pay off the truck. And stop borrowing money to purchase depreciating assets.
Limit your 401K contributions to only what the company matches. The rest put into a Roth at a discount broker. ( I like Schwab) Take the monthly truck payment and put in a high interest savings ( I like Synchrony). This money will purchase the next truck. Don't buy new. Get low milage 2yr old vehicle and let someone else eat the major portion of the depreciation.
Limit your 401K contributions to only what the company matches. The rest put into a Roth at a discount broker. ( I like Schwab) Take the monthly truck payment and put in a high interest savings ( I like Synchrony). This money will purchase the next truck. Don't buy new. Get low milage 2yr old vehicle and let someone else eat the major portion of the depreciation.
Posted on 7/16/19 at 12:25 am to JGood
Payoff truck and be debt free
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