[USER]

How much of an emergency fund would you keep in a HYSA before aggressively paying down car loans? $1000, 1 month, or 3 months? Income is stable (military). We might move in February and will need at least some cash for that.

We have $17k in a HYSA getting 4.75% which is a little less than 2 months of income. We owe $23k at 5% interest on a car worth maybe $25k. It’s a rare car though in excellent condition so could possibly get $30k. The other car is $45k at 7%. It’s new and has either depreciated $5-10k or is at the same value. We could sell both and buy 2 crappy cars for $17k but we need reliable vehicles that don’t break down all the time. I’m not OK being alone and stranded somewhere.

We have $1000/mo to either keep building the emergency fund or pay towards one of the cars.

The car loans cause stress but so does the thought of not having 2-3 months of income saved. My husband and I are both leaning towards saving aggressively to $30k and then shifting towards paying off the cars, refinancing, or selling for hopefully lower payments and interest rates.

[Wen]

Hit 25k in HYSA, pay off the 7% then tackle the 5%. If you’ve got 1k extra per month after expenses put 700 as extra in the 7% 300 in HYSA. Don’t forget to invest so your money grows. ROTH, NYSE.

VOO, VTI, QQQ

[Richard]

In your shoes somewhere between 3-6 months of expenses, not income.

[Anthony]

My wife and I are both high salaried physicians and we have less expensive cars than you. Those car loans are not wise in my opinion.

[Author]

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