Depends what you have going on in life. Similar position to you: 32, no debt, renting, matching 401k, depositing in Roth/HSA. The good news is neither option is a bad one!
I was in a similar position once and decided to pay off my car in full 3 years ago because I hated the idea of debt. Similar rate to yours. Once the car was paid off, there was a sense of peace of mind, but the repairs still came, the tires still needed replacing, so on and so forth. All I did was contribute more to savings/investing. Sure it's always nice to see my net worth go up, but if you've got the fundamentals in place, it should always be going up anyways. It gave me more peace of mind, sure, but it didn't make me happier so to speak.
As long as you have your foundations in place, which it seems like you do, you have options, which is everything. I actually financed a car (my dream car), 6 months ago at an attractive rate with a monthly payment safely in my budget. I could pay it off tomorrow, but this time I will be taking a different approach and leveraging the low cost of debt and take my chance in the market.
If I were you, I'd boost that savings to at least 15k before changing anything you're doing. Account for your trips and save a portion monthly for them, then use the extra towards the car if you feel like it. Having a good rate doesn't mean much if you don't use it!
joshisboomin t1_j6iphoh wrote
Reply to I want to pay off my car. Should I stop adding to savings? by julianorts
Depends what you have going on in life. Similar position to you: 32, no debt, renting, matching 401k, depositing in Roth/HSA. The good news is neither option is a bad one!
I was in a similar position once and decided to pay off my car in full 3 years ago because I hated the idea of debt. Similar rate to yours. Once the car was paid off, there was a sense of peace of mind, but the repairs still came, the tires still needed replacing, so on and so forth. All I did was contribute more to savings/investing. Sure it's always nice to see my net worth go up, but if you've got the fundamentals in place, it should always be going up anyways. It gave me more peace of mind, sure, but it didn't make me happier so to speak.
As long as you have your foundations in place, which it seems like you do, you have options, which is everything. I actually financed a car (my dream car), 6 months ago at an attractive rate with a monthly payment safely in my budget. I could pay it off tomorrow, but this time I will be taking a different approach and leveraging the low cost of debt and take my chance in the market.
If I were you, I'd boost that savings to at least 15k before changing anything you're doing. Account for your trips and save a portion monthly for them, then use the extra towards the car if you feel like it. Having a good rate doesn't mean much if you don't use it!