Debt Payoff Car and Lease going to buy
First of I want to share with some one, We just payed off our last student loan WOOP WOOP!!totally due to YNAB the Last 5 months or so.
Now comes to my question. It's complicated well at least to me it is.
Here is what we have, Extra a month to toss at debt $1,500.00
Just so everyone knows we wont get rid of my truck and we wont get rid of my wifes jeep (lease will buyout) It's the one thing we want and splurged on probably wont do it again but this is what it is.
What we have left for debt. My truck and a Lease ( I count the lease because we will be buying it out)
Truck Payment $31,000.00 at 2.99% Payment $711.00/Mo (I know stupid but is what it is)
Lease with 9 months left Payment is $452/MO Buy out at $21,000.00 + fees ect So saying 25k on the high side.
So all said and down I will have a
Truck debt (In 9 months not sure think i would have to look at an amortization schedule)
Jeep dept in 9 months 25k give or take
In 9 months saved if just banked 13.5k
Now my question is in that time (9 months) should I pay off my truck with the extra a month or save it? Pay ourselves into an account and have $13,500 to put towards the 25k to buyout the jeep then work on paying off the jeep then move to the truck?
It confuses me on the best option I feel if I do my truck first then I will feel crappy when I then have another debt (jeep) for 25k in 9 months verse a Jeep (debt) of only like 11k. Debt snow ball theory pay lowest first to feel a win? Kinda the same thing here?
A little background if it matters
We have a 4k emergence fund( not at all close where it should be based on salary and living expenses but trying to work on debt per DR book) I felt 1k EF was way to low, money is at 33 days old YNAB (I know it doesn't matter to much but it is a starting point) , I get a bonus in Nov. lets call it 5k after taxes could be more like 10k but I believe not betting on the come.
I am 30 and my wife is 28
Side note we really want another kid, try next Fall with that I need 7.5k for medical and 1,540/Mo for daycare. it will either happen or we will wait currently have a 15month old and I know it shouldn't matter but wife doesn't want them 4 years apart HAHA
We are ok with our money but could be better, I know we could get more out of it but still trying to learn this stuff.
I would take any advise just Don't lecture me on the vehicle thing I read Dave Ramsey book and I know vehicles are the biggest waste that's why my goal is to pay them off and drive them into the ground. 2015 Jeep Grand Cheerokee 24k miles all the bells and a 2016 Tundra TRD Pro 34k miles. So they should last a long time
If I left anything out that people want to know I will be an open book and share anything.
There are people in a better position and there are people in worse, I'm not really wanting to discuss any of that.
Advise is much appreciated.
I've never leased a car (and hopefully you now won't ever again) so I am not sure, but I'm fairly certain you can't prepay the lease regardless of its effective interest rate. So for now, the extra money goes to the Jeep. Once the leased car is bought at the lowest rate you can snag, you throw your extra money each month at the car with the higher interest rate until both are gone.
re: the kid, when you are sure your wife is pregnant, there will be around 35 weeks to plan for the kid. At 1.5K extra per month, it will only take you 5 months to amass the money. Stop your debt snowball once you know she's pregnant to save up for the medical, but don't do that first, because the return on the money will be small compared to paying off debt. With any luck, you'll be out from under both cars by the time any of that becomes an issue. You have a big hole but also a big shovel, to use DR's terminology. You can do it.Reply