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paynetrain37 t1_j6kxrmz wrote

What is your retirement planning looking like?

If you have a 6 month emergency fund saved up, that’s great! And I get wanting to pay off the car, although that’s a pretty low interest rate. If you’re behind on saving for retirement, the stock market is pretty much guaranteed to average more than 3.4% over the long term.

But if your retirement is on track, you’ve got an emergency fund built up, and you don’t have any other savings goals at the moment (you already have a house, so the only other thing I might think of would be a 529 plan if you have kids and want to set aside money for college), then I would use your leftovers to pay down low-interest debt.

Love that you’re spending less than you make and saving each month, but saving should always have a purpose. If there isn’t a specific reason you’re saving the money, then I would pay down debt.

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funghi2 OP t1_j6kyota wrote

Funny you should mention that. I have a newborn and am actually looking at the educational savings plans now RESP here in Canada. Retirement plan is ok. I put about 5% in a year. Took some out to put down payment on house.

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paynetrain37 t1_j6kz6uv wrote

Then I would probably spend that extra money on investments (either retirement or educational savings plan) if I were in your shoes.

I’m not familiar with the cost of that stuff in Canada, so I don’t know how much you need, but the S&P 500 historically has averaged ~10% (7% after inflation), so mathematically it likely makes more sense to invest the money instead of paying the car off early.

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