I am slowly but surely making a dent in my student loan debt. With the way the economy is, I’ve been trying to put as much money into savings that I can while paying off this debt. I’m not in too big of a hurry to pay this off because of the ultra low interest rate I am paying on it. This is the only other debt we have besides this loan is our mortgages. I’m not in too big of a hurry to pay those off right now.
I’ve decided that for our next vehicle purchase, we’re going to pay cash. I understand that we may not be driving the newest, hippest cars out there, but we’re going to have a car that gets us from point A to point B. Back when the tree fell on our house in January, I was able to get a 1994 Oldsmobile Achieva from my very gracious aunt. I have been so thankful for that car! It may not be the best looking, but it does the job and I love it. We can afford a car payment, but my thinking is if it isn’t broke, don’t fix it.
I want to have enough money saved up that in the event I am able to stay at home with our children. With me not bringing in a stable income from the bank, I’d like to know that we’ve got an emergency fund to cover everyday living expenses in the event something horrible happened. Let’s just say that I lost my job (knock on wood); I’d rather have the money that I normally would be putting toward debt reduction to be able to make the monthly payments on those loans and be able to pay living expenses rather than have less principal on the loan. That’s just my thinking.
Maybe once the economy gets better I’ll start being more aggressive in paying off our debts. Right now, this is working for us, so I’m going to continue to do what we’re doing. Of course I’m going to keep trying to make as much money as I can online by the different avenues I’ve discovered, and I’ll be putting that into savings.
Do you think I am doing the right thing by saving instead of paying off debt in this case?