Originally Posted by MonarchDon
I would need to pay $ 6,300.00 up front but I would be set for the next 3 years. I don't plan on selling or moving. Should I go ahead an pre pay for the next 3 years ?
You're liquidating $6300 up front to save $45/month for 36 months.
If you left that $6300 in a MM account at 5%/year then in three years you'd have about $7320.
Most people would spend the $45/month and three years later they'd wonder what happened. If you save that $45/month (instead of letting it trickle through your fingers!) at the same interest rate then you'd have about $1744. So you give up $1020 in savings to earn $1744 and come out ahead by $724, but again that ONLY works if you SAVE the $45/month.
I know you don't plan on moving, but would a layoff or mass firings change your plan? Any other financial shocks that you'd want to have $6300 handy for an emergency fund?