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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: lyson15 on July 18, 2016, 07:40:30 AM

Title: What should I do? Pay down debt vs invest
Post by: lyson15 on July 18, 2016, 07:40:30 AM

I have debt of 7k on my LC at 4.9% interest. I received 1000$ from tax returns that I don't need for my emergency fund and I'm not sure what the best option would be: use it to pays down my LC or start investing in a TSFA ?

Is it worth opening a TSFA with such a small amount?

Title: Re: What should I do? Pay down debt vs invest
Post by: HPstache on July 18, 2016, 08:07:38 AM

If it were me, I'd kill the debt.  If you put some effort into that, it will be gone in no time.

Title: Re: What should I do? Pay down debt vs invest
Post by: NestEggChick (formerly PFgal) on July 18, 2016, 09:15:44 AM

I'm with v8rx7guy - pay down the debt. Once the debt is gone you'll have plenty of time to invest, and a lot more freedom to do it with any and all of the available money you've got.

Title: Re: What should I do? Pay down debt vs invest
Post by: ShoulderThingThatGoesUp on July 18, 2016, 09:49:54 AM

7k isn't very much and 4.9% is a lot. Clear your debt.

Title: Re: What should I do? Pay down debt vs invest
Post by: boarder42 on July 18, 2016, 09:55:58 AM

4,9% is borderline enough and the amount is small enough i'd kill it off (and i'm usually in the invest camp)

Title: Re: What should I do? Pay down debt vs invest
Post by: lyson15 on July 18, 2016, 10:27:51 AM

Thanks for your insights. I am really eager to start investing (I'm still in University) but it makes sense to pay off the LC first, so that's what I'll do instead.