I hold a high-paying job that I’m very happy with I’m saving a lot of money for retirement. I also have money in savings currently, and I’m wondering if it’s better to keep it or pay down debt. I’ve never needed to use the money for an emergency, but the cash is essentially my emergency fund. I’d like to not use my savings to pay down debt because I have it earmarked for an emergency, and as long as I have a job and can pay my debt, I don’t think I’m in an emergency situation. However, if I did lose my job or get thrown out of work for whatever reason, I would like to be debt free, so paying off the debt is an enticing thought. I tell myself that if I lose my job that I can get another one doing something else and live cheaply. The debt is on my car, and I owe about $4,900 on it. The problem is that I fear the loss of the $4,900, but I know that if I pay it off, I won’t miss the money and I’ll own the car outright. I always have a problem with parting with any sum of cash over $2,000, but after I do and buy the thing/pay the debt, I feel fine and don’t think about the money at all.
Basically, in order to not have to touch my emergency fund and/or investment accounts, I’m thinking that I should make the car pay for itself by getting a second job, like a gig job delivering food. And then I tell myself that I make too much money to have to take on a second job. And then I wonder why I just can’t humble myself to get a second job and the amount of money I make now is neutral and getting a second job is also something I can do if I like my reasons enough.
Here are my models about paying the debt:
C: Owe $4,900 on my car
T: If I pay it down, I’m going to need that money for something else
A: Hang on to the money, continue to pay down the debt, continue to work a demanding job, spin in indecision about paying the debt, don’t make a decision to spend it on anything else, stay in my comfort zone, repeat the entire aforementioned process the next day, week and month, never clear space in my brain for anything else
R: Keep living in a version of Groundhog Day about my car debt
I can’t help but think that I just keep myself on this tedious hamster wheel about this one decision in my life. I don’t know why my brain feels comfortable in this spin versus just making a decision.
T: Something emergency will pop up that I need that money for
A: Hang on to the money, feel trapped by the car loan, make sure that my car is always worth more than the debt on it, don’t come up with another list for what I will spend the money on, watch the number on the screen when I check my online banking and see the numbers there, tell myself everything will be fine if I just leave the money there, don’t plan ahead, don’t create more brain space for other things.
R: Keep this annoying cycle going
I know making a decision will make this better, but I have so many challenges no matter how many times I spend money on something that is objectively beneficial for me.