Your Questions About Save Loan

George asks…

Save or pay off auto loan??

I would like to construct a debt-free (except home) plan for the year. I currently have an auto loan that I owe $7,000 on. The auto is a 2003 model. I’d like to pay off this debt because my car has 70,000 miles on it – and I’d like to have money for car repairs should anything happen to it. (Knock on wood).
I can’t afford a car note and a mechanic…but I can save tax returns, bonuses, and so forth to try to get this debt out of the way. Any thoughts? Ideas??

John answers:

Pay off the car loan. Put whatever you can onto it and get rid of it. The earlier you put money into that loan, the sooner it’ll be gone and you can concentrate on the homeloan.

Saving your tax returns and bonuses and pumping them into this loan is a great idea. This will give you a head start.

See if you can shave a few more dollars off your budget. If you work out what your bare necessities are, then you can use that to work out how much you can afford to tip into the loan. Things like buying your washing powder in bulk, taking your lunch to work, (I make curries and pasta and freeze them in plastic containers, and make sandwiches) can save you hundreds every year. Take 3 minute showers, use energy efficient light bulbs, and even consider renting out a room in your house to someone if you can afford the space. That’s my contingency plan if my income goes and I need to keep up the house payments.

Get rid of the debt first, and then use the habits you’ve developed to kickstart your savings.

If you want some more specific advice about saving money around the home, feel free to email me. I don’t mind.

Lisa asks…

Can auto loan save the income tax?

John answers:

Auto loan per se can not save any income tax. The interest on loan is claimable from the taxable income of the business which uses the automobile purchased through that loan.


I am silent about depreciation because that is available irrespective of whether the car is purchased out of loan or own funds.

Carol asks…

Loan/Saving for Flight Training?

After I graduate college, I plan on working in order to save enough money to obtain my instrument rating, commercial rating, and CFI. I have my PPL and anticipate having about 150 hours at that point.

Assuming that I have built a bit of credit, what do you think are the chances of receiving a loan for all or part of the bill for the remainder of my training?

John answers:

Taking a loan for flight training is the start of a very steep financial downhill –
Your first wages as pilot will be miserable – will need to get a second job –
So, on top of that, with that little money left, you want to repay a loan…?

Are you a masochist…?
I recall regional pilots sleeping in their car, at O’Hare motel parkings –
In temperatures like 10º F…

My only recommendation would be saving for training –
Save money first, and when you got enough, continue training –
College graduate…? – Get a good job in your trade or field.. First…?
Work 9 to 5 – then continue your training on weekends –

Donna asks…

Should I pay off Student Loans or save money?

I’m going back to school later this year and I don’t qualify for grants, but do for some loans. So I’m trying to save as much as I can (in case I have to pay for most of the out-of-state tuition myself). But I also have student loans that I’ve managed to pay down to $10K. With only 7 months to go, should I focus on paying off my current student loans or saving money for school? The thought of acquiring more student debt along with those $10K scares me. As does the scenario of going off to school without enough money.

John answers:

I would suggest that you save as much as possible- only because you say that you qualify for some loans, but that doesn’t mean that you’re guaranteed to get them. And you don’t want to be in a situation where you paid off your loans, and then don’t have anyway to fund your education. I would however make sure that I save money and obtain the loan first and if it goes through then take some of the saved money and pay off the loans, or just put it away until you’ve gotten through school. There’s nothing more frustrating than trying to find money while attending school. So save money for school and wait until the semester starts to make sure that everything works out.

Laura asks…

Pay off Student Loans or save??!!! Need Advice?

So I have about 14k in student loans left…but I’m 31 and not getting any younger..I feel like I need to have a savings going, but when I think about it…what am I saving if Im in debt?! I know people say I should have a emergency fund…but I’m so GUNG HO on getting these stupid student loans off my back…what should I do..throw all my money at my student loans? save a little? any advice? anybody in the same boat? THANKS!!!

John answers:

I had like 40k in student loan debt when I graduated at 21. 29 now and only have 10k left. I had been paying the loans back faster and I don’t greatly regret that decision but I do regret not having an emergency fund or a downpayment for a house when i wanted them.

Luckily I never lost my job but we laid a lot of people off during the recession and it was a terrifying time in which I wished I had all those extra loan payments back. I managed to put 5 down on a house so I have to pay pmi but other than that I was able to get a place.

At this point i have enough money where I don’t really think of it as paying off debt its more like trading balances between accounts. Interest rates are all below 5% and doing well worse than the cash I’ve put in the stock market. Its all a wash at the end of the day.

Do whatever makes you happy but practically its good to have some cash on hand if an emergency ever arises.

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