[930addict]

This might be a no brainer to some but I have a question regarding what to do with a sum of money I have in the bank.

I have a truck payment that is about $350. I have enough to pay the truck off but this would deplete my savings. The interest rate is really low – like 1.5%. This would obviously save me $350 per month.

Or I can put it towards my mortgage. Currently we are paying PMI (about $171/month) because we did not have a full 20% to put down. The amount I have in the bank is not enough to eliminate the PMI but it will get me half way there. Regardless I will still have PMI and the truck payment.

Or I can put it towards my mortgage and also sell my truck and put those proceeds towards my mortgage to get ¾ the way there. But I would need to buy a beater for commuting. This is an idea that I recently started toying with. The thing is the truck was a $60k truck – I bought it 3 years ago. I know it’s an expensive truck but I was hoping to keep it until the wheels fell off. However, I'm not using it as intended (to pull an RV). I wanted to get the truck paid off then by a camper or trailer but I don't see buying an RV anytime soon. Really on the fence on this. At any rate I would not have the truck payment or the truck but would still be paying PMI but I could probably eliminate it within two years.

Or just leave it in the bank for a rainy day and make the payments. I can comfortably afford to make the payments I just hate car payments and also puting money out for something I will never use (PMI).

Regarding the issue of depleting my savings, I’m in a pretty secure position but anything can happen. Also if I were to leave or lose my job my employer pays whatever I have in vacation banks and half of what I have in sick leave bank. This would give me about 4 months of reserve. However, this only works if I lose/leave my job.

What are your thoughts?