https://www.reddit.com/r/personalfinance/wiki/commontopics

Not enough info. What’s the apr rate on your auto loan? How much are you currently saving monthly?

I'd plus up the emergency fund a bit more considering how large your mortgage is relative to your incomes.

3.4%. Minimum $800 saved, but usually $1000. Currently paying $466 a month on the loan just with the payments that are set up

It’s about 3.5x income, is that a lot? What would you recommend we save up to?

What’s your mortgage payment and APR?

Good plan. I would not recommend a line of credit for emergencies. Just compounds the problems.

Yes. Stop savings and attack the car debt. Pay other debts too if you have them.

Once the debts are gone, Crank up retirement savings to 15% of gross income plus any matching at work.

Mortgage is $1960 a month with taxes rolled in

Car and mortgage are the only debts either of us have. I’d plan too only have the line of credit available if I somehow hit really hard times and had no other options (which I don’t foresee) is there any negative to having the LOC and not touching it?

I would save to $70k before paying off loans faster than necessary. This replaces your primary earners wages for a full year in the event of a catastrophe.

I would also ensure your maxing out retirement contributions prior to paying off debt as you’re likely to getter a better return than you’re losing in interest on the vehicle.

Either way you’re doing fine.

It will show up on your credit report. That can be both good and bad. Many LOCs have application fees and time limits on when you can use them. Lastly, in 2008, many banks closed them when things went south. So not a good product to depend on.

So, yes. throw every spare dollar at that car loan and get it out of your life.

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.

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.

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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Thanks Cum_cuddle

You have enough saved for an emergency fund. Your car loan interest rate is pretty low as well. Paying it off early wouldn’t save you much other than piece of mind. I would refer to the sub’s wiki. You’re at the point to start saving for retirement. General rule of thumb is to save 20 to 25% of your gross income for retirement. The way you want to do it is save up to your employer’s match into a 401k, then max out an IRA ($6500/year), then save what you need to back into your 401k to total the 20 to 25%.

Here's a link to the PF Wiki for helpful guides and information.

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Investments and debts both grow. If your debts grow faster than investments, pay them quickly. If investments grow faster than debt, pay the debt slowly.

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