What should I do with $$$?
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|Sun, 08-15-2010 - 2:01pm|
DH gets money for school - some grants, some loans. He's getting back $5245 after his tuition/fees are paid - plus he will get another $2250 in several weeks (after the Army processes his tuition assistance application). So total we're looking at $7495, of which $668 has to go pay off the credit card (we just put some minor home/vehicle repairs on it b'cuz we knew we could pay it off before interest was charged). That leaves us with $6,827. So - tell me - what should I do with it?
-I have a student loan with a balance of $6,341.75 remaining (monthly payments are $87.97. Interest rate is 6.8%; of course, the interest is tax deductible.
-We owe $16,845.38 on the car we just bought with an interest rate of 6.69% APR and $336.56 monthly payments.
-We have $2,236 (1.5 months worth of bills - not including grocery/gas/household needs) in our emergency fund, which is a savings account that earns 1.1% interest.
-We have a vacation account and a Christmas account but neither of them need additional money.
-We have no other bills/savings.
Part of me wants to pay off the student loan to free up the monthly payment amount. However, it would also be nice to pay a huge chunk on the car and not have to be paying on it so long. With the interest saved by making such a huge payment, it would cut out like 2 years of payments on the car. Of course, it would also be nice to put at least some of it into the emergency fund, but I hate to pay almost 7% interest and earn just 1%.
Okay, I'm done blah-blah-blah'ing and am open to suggestions now. Thanks in advance!