Tax Return: Debt or Savings?
So tax season is upon us, and I expect a decent amount back in taxes. My dilemma is currently whether I should place the return into savings, or put it towards the balance left on my mustang. The bonus of having no other debts.
I’m leaning towards the former, simply because I really want to reach the $5k balance in my emergency savings as a security cushion. A friend of mine recently posted an entry about a chunk of car troubles he had that amounted to $1,000, and normally this would devastate his finances, but he had an emergency fund to take care of it. So it served its purpose. That and it’s good security should you lose your job and need to live off of the emergency fund for a few months.
So it’s pretty important. I can still work towards making extra payments on the mustang so I can pay it off early. It’ll just take longer. It may be more expensive in the long run to put the money into savings instead of paying off the mustang earlier, but I’ll feel more secure.
Course I could always put it into my Roth IRA too 
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One Response to “Tax Return: Debt or Savings?”
January 12th, 2008 at 1:49 am
To me this sounds silly to have to mention it, but since at different times both C and his mom did it wrong, I thought I should mention it. If you are going to pay extra on your car, send in only one coupon with the extra money, and if you can, ask to have it put on the principal. When C was young and bought his first vehicle, he sent in double payments with two coupons, so he paid the interest! His mom is doing that too right now with a bill she has. She pays like, 4 payments a month every month, but sends in the coupons. She may pay it off early, but she is paying interest she doesn’t need to pay.
I knew this, however, but was baffled that they didn’t. So maybe its a common occurance? Just a heads up.
lav