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Pay off Loan or Save?
So, we have a motorcycle loan, and it still has $8500 left on it. I want it paid off by next year, because we hope to be pregnant then and I want the payment gone before kids and daycare. It currently is $360 a month, but I was thinking, if I pay $600 a month on it, it will be paid off by next summer, which was what I wanted. Is it better to do that? We are still able to put $865 a month into savings on top of that plumper payment, and then as of next summer, $600 more into savings once it's paid off. Or should we make the payment lower to put more into savings? We are trying to plump our savings up to our 7 month e-fund goal, which we should be at by next summer as well. No credit card debt. Unfortunately, selling the motorcycle isn't an option right now. We have about $12,000 in savings and already own a house and 2 cars, no kids. Thanks!
edited to include: If something happened in the next year, we would sell
the motorcycle for between 10-12k cash if it was really needed and we
needed that emergency fund at that point before we got to it next
summer. but this is assuming we won't.
Re: Pay off Loan or Save?
Go ahead and pay it off. It will be nice to have that extra money coming in once baby is there. I would only recommend paying lower payments if the interest rate is 0%, but even then it's not a big deal because your savings account probably isn't
I would probably pay it off as well. Even if you don't want to sell it, I might consider it just due to insurance premiums. I'm no expert on insurance, but I have to imagine that insuring a motorcycle costs waaaay more than insuring a car..