Author Topic: Should I pay off my car loan, start an emergency fund, or move cash to savings?  (Read 1257 times)

MetalMo

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Hi! 

Hereís my situation:
I make 50K/year, and have a mortgage of about $120K still owed, and a car loan of about $4,600 at 2.9% still owed. No other debt. I have a 401K that is, at this moment earning me %16.5 in interest. I contribute 19% of my paycheck to it every two weeks.

Should I start putting surplus money from my paycheck into savings for an emergency fund (I donít have one yet), or pay off the car loan, or increase my 401K contribution in a big way? 

Thanks so much for your help!

-Monique

Rimu05

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I'd start the EF first.

I believe there's a good thread here on the beginners steps to personal finance. I'll try to find where it is.

MetalMo

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Thanks!  I looked for about a half hour, and didn't quite find where someone addressed this. :)

sisto

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MetalMo

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Thank you so much!  This is perfect.  :)

Meesh

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I'd agree. Save up for an emergency fund. The average person laid off takes about 27 weeks to find another job. Add up all your I truly need this to survive expenses *6 months. I personally added another 30% buffer and put it in a betterment fund to keep it growing, but that's up to you. Then go through the investment order steps from the link.