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From time to time I get questions from Couple Money readers. So far I’ve been getting some wonderful emails about family and finances in the real world. As always I love to get your input. Many of you have some great insights and some of you have been in same the same boat.
I recently heard an update from a long-time Couple Money reader and it was a fantastic and common concern from a couple looking at improving their finances, but dealing with a family change.
I was thinking of doing the usual – sharing their question and then sharing my response. This time, though, I want to do something a bit different with the money question.
I'm going to present the same money question, but switch up scenarios. I‘ll present them as if they were emails sent to me. The intention is to show how there can be general money rules, but personal finance is truly personal. A PF blog can be a great resource (and I hope that is how you Couple Money), but it;s only part of the equation.
Ok, ok, enough chit chat, here are the questions!
Family # 1: Just Married and Looking for Big Wins
We're newlyweds and we have a money question. Before we got married we both took out car loans. We have about $10,000 left to pay off the car. We've been putting $500/month (in addition to our regular car payments) in a debt snowball. Our concern is that my husband wants to finish school and get his degree.
He's been working full time and going to school part time. He has about 1 1/2 year left in classes. He's planning on going back full time this summer and working part-time.
We have savings to cover for emergencies and it's just about enough to pay off the car loans ($8,000 right now). What are your thoughts on paying the car loans off using the savings or just keep paying the loans down with the debt snowball?
Family # 2: Going to Have a Baby
We have about $10,000 left to pay off the car. We have been putting $1,000 towards the car every month and plan to pay it off next year. At that point my wife is going to stop working as we are expecting our first child. She plans to take a few months off and then maybe try to do some part-time work.
We have savings for emergencies and more ($12,000). What are your thoughts on paying the car off using the savings or just keeping the debt snowball to pay the car off by next year?
Family #3: Paying Down Debt With Possible Job Change
We have about $9,000 left to pay off the car. We have been putting $750 towards the car every month and plan to pay it off next year.
We have savings for emergencies and more ($11,000). Our job situation is a bit iffy right now. My husband's job had been cutting back hours this summer, but it's back to normal for now as the holiday season is approaching.
What are your thoughts on paying the car off using the savings or just keeping the debt snowball to pay the car off by next year?
Thoughts on Having a Safety Net Versus Eliminating Debt ASAP
I'd love to hear from you about the above situations. What would be your advice for each of the couples? Would it vary much?
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