@Anonymous wrote:Hello all,
I'm in a bit of a situation here and can't decide what I would rather do. First off, I have a baby on the way and this is why I am thinking about a few decisions here.
My scores are pretty solid between 707-720 across the board. Income is around $35k.
I do have a car loan that has a remaining balance of $12,300 at 4.2% interest, a 0% CC with $2,500 on and another card with $1,600 on (unsure of interest but closer to 20%). I do have $7k in the bank.
Option A: Just keep the $7k in my savings and pay down what I can and figure it out after my baby arrives.
Option B: pay down my car to around $5000 and refinance (rate can be down to )1.74%)just for the lower monthly but still pay more towards it each month.
Option C: Pay off both credit cards and use the rest towards my car, and also refinance and have it in the middle between option B and C.
You didn't mention your goal. Are they finances, FICO scores or other? That may be useful information for members to advise best course of action.
4.2% APR isn't too bad. After managing your revolving (CCs) accounts, I would imagine having reserves on hand would be beneficial?
I understand your desire to simplify your finances but I would not recommend depleting your savings to do so - especially with a baby on the way (congrats!).
How much money do you think you can save before the baby arrives?
@Anonymous wrote:Well the girlfriend is due in May, we split all bills and utilities down the middle besides our own separate bills obviously. She has her own nest egg, for when she will be off work to help even everything.
I'm sure I could squeeze another $1500 ish, and now since stimulus got passed again that will be another $1400 for when that arrives.
We like to be prepared on life so we have already stock piled diapers and wipes in all sizes and will get more of that before the baby is due from ourbaby shower, so that will help thepockets when the time comes.
Haha... I don't have kids so can't speak from experience, but some of the most consistently over-prepared people I know managed to be wholly unprepared for for the actualities of parenthood - through no fault of their own.
My advice is to wait til after the baby is born. Maybe just pay off your credit cards for now - that'll be two less payments and you'll be left with ~3K in savings.
Deal with the auto loan paydown/refinance later once you know exactly what your situation looks like.
Others may come along with better/different suggestions.
Wishing you and your little family all the best!!