Help me figure out the right move

[Anonymous]

Hi everyone. I'm really stuck on what I should do and would love some advice from better financial planners than me.

In September, I'll get my annual bonus and my dad's estate will settle. At minimum, I'll have 30k after taxes. Could be more like 50k but let's use 30k for now.

I have a few goals right now:

- Increase 401k to 15% (will do that in September regardless)

- Increase HSA to 5k (ditto)

- Stop cashing in ESPP (ditto)

- Start saving 25k for emergency fund

- No new debt

- Put solar on my house 

- Pay off 13k personal loan

My current car lease is ending in March. The buyout is 23k. I don't love my car but don't hate it. My original plan was to pay off the car and then put the rest toward my personal loan, and finance the solar. 

Now I'm tempted to buy a Tesla Model Y, with enough down to keep my monthly payments the same as they are now, pay off the personal loan, and finance the solar. But that again goes against my attempt to avoid any new debt. I'm also concerned the timing isn't going to work with my lease end since I need the 7 seater, which is very much TBD.

It occurred to me that I've overlooked another option, which is to pay for the solar cash, pay off the personal loan, and then get another loan for the car balance. A 23k car loan wouldn't be a big payment so I'd save the $500 I pay monthly for the personal loan, about $200 monthly in energy costs, and could throw my monthly savings at the car to pay it off rapidly. Then I could put all that monthly savings into an emergency fund and investments. And maybe buy the Model Y in another year when it's more predictable and I'm better situated financially.

Thoughts? Things I'm missing? I really want to buy the dang car now but can't shake the feeling it's the wrong option.

[coldfusion]

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@Anonymous wrote:

Hi everyone. I'm really stuck on what I should do and would love some advice from better financial planners than me.

In September, I'll get my annual bonus and my dad's estate will settle. At minimum, I'll have 30k after taxes. Could be more like 50k but let's use 30k for now.

I have a few goals right now:

- Increase 401k to 15% (will do that in September regardless)

- Increase HSA to 5k (ditto)

- Stop cashing in ESPP (ditto)

- Start saving 25k for emergency fund

- No new debt

- Put solar on my house 

- Pay off 13k personal loan

My current car lease is ending in March. The buyout is 23k. I don't love my car but don't hate it. My original plan was to pay off the car and then put the rest toward my personal loan, and finance the solar. 

Now I'm tempted to buy a Tesla Model Y, with enough down to keep my monthly payments the same as they are now, pay off the personal loan, and finance the solar. But that again goes against my attempt to avoid any new debt. I'm also concerned the timing isn't going to work with my lease end since I need the 7 seater, which is very much TBD.

It occurred to me that I've overlooked another option, which is to pay for the solar cash, pay off the personal loan, and then get another loan for the car balance. A 23k car loan wouldn't be a big payment so I'd save the $500 I pay monthly for the personal loan, about $200 monthly in energy costs, and could throw my monthly savings at the car to pay it off rapidly. Then I could put all that monthly savings into an emergency fund and investments. And maybe buy the Model Y in another year when it's more predictable and I'm better situated financially.

Thoughts? Things I'm missing? I really want to buy the dang car now but can't shake the feeling it's the wrong option.

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Forget about the Tesla.   It appears on the surface that you're already stretching to keep your head above water since you have a personal loan in play, minimal emergency savings, and you have been selling off stock purchased through your employer's ESPP plan. 

Retire that $13K loan.

Stop cashing in against that ESPP plan especially if you're selling off stock before the profit is taxed as a capital gain. 

Pay out of the bonus/estate to put solar on your house. 

Increase your 401K savings as planned.

Increase your HSA as planned.

Use the remaining money to seed that $25K emergency fund. 

Keep your current vehicle until the lease runs out. 

[Anonymous]

You're probably right. Dang it.

I originally was just using ESPP as a quick way to make 10% and was focused on buying a home. I did that in December, so now I am trying to shift my goals to be more savings focused... hence no longer cashing in ESPP.

I'd really like to end 2020 with the personal loan paid off (plan was to pay it off in less than a year and took it in March), solar on board, my 401k and HSA plans in play, and have something figured out for the car when lease ends in March.

I wish I liked this car more, then it would be a no brainer. If I go this route and get a lease buyout loan in March, then I think the question is do I: 1) pay the loan off as aggressively as possible or 2) do I pay it off in 2-3 years and save as aggressively as possible?

[ChazzieT]

I would go in this order, as far as you can get before the money runs out:

- Pay personal loan down to 9% (assuming terms on loan will allow you to pre-pay capital with no penalty and doing so moves your payment due date out by a corresponding amount - otherwise, pay it off completely)

- Start saving 25k for emergency fund (at least $15k)

- Increase 401k to 15% (will do that in September regardless)

- Increase HSA to 5k (ditto)

- Stop cashing in ESPP (ditto)

- Top up emergency fund to full $25k

- Start a SEPARATE savings account to use to put solar on your house

- Finish out lease on your current car

I would then use the money saved from the persoanl loan payments to continue with this plan until the cost of solar is covered, make the solar upgrade, then continue paying into that account to build up a nice down payment for a new car (or to pay off the last 9% of the personal loan if times are tight when the last few payments come due).