My wife and I have been reading Dave Ramsey's "Total Money Makeover" and we are looking into paying off all of our loan debt. I'm wondering if this is the best decision.
Last year, we made about $130k with a net income of $30k leftover at the end of the year. We are 32 years old and currently have about $85k in savings as well as $85k in 401k building up. The loans we would pay off now would be two cars ($5900, $15k) and student loans ($15k). Paying off these loans all at once would give us an extra $917 a month to put towards our mortgage ($100k) plus whatever else we put towards the mortgage.
I recall reading that some debt can be good and help your credit score. Ours is currently 794 so I'm not sure how that would be affected.
The reasons I've found to not pay off these debts would be to build up 401k or emergency savings which we would still have after paying off loans. We have an Amazon Rewards credit card that we use for most purchases and always pay it off each month so we do not have any credit card debt.
If we pay off these loans, the goal would be to get the house paid off in a few years and be debt free. Are there any other considerations to be made before taking the step of paying off our cars and student loans? I think paying them off would be the right thing to do but would appreciate any feedback. Thanks!
Submitted March 14, 2019 at 07:03AM by d3btornot4987 https://ift.tt/2TzCwXc
