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I put my $3,200 emergency fund in a savings account instead of paying off my car, and I'd do it again
Everyone at my credit union in Dayton told me to just throw the $3,200 at my 6.4% car loan and be done with it. But I kept the cash parked in a plain savings account earning 4.1% instead, and last month when my work van needed a new transmission I paid for it same day without touching a credit card. The math says I lost about $80 in interest over the year, but I didn't lose a single day of work waiting on a loan approval. My old roommate did the payoff thing and ended up putting the next emergency right back on a card at 22%. Has anyone else run the numbers and decided the peace of mind was worth the small loss?
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emmaward8d ago
Why not just split it though? You could've thrown $2,000 at the loan and kept $1,200 in savings. Yeah the transmission would've eaten that and maybe you'd need a card for the rest, but you'd still be $2,000 ahead on the loan instead of $80 behind. The all or nothing part is what gets me. My wife and I did the middle ground and it worked fine, though I'll admit a van transmission is a bigger hit than most surprises. Your roommate's story is real but that's a spending problem, not a math problem.
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