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  -  Pay off debt or save? (http://www.absolutepunk.net/showthread.php?t=2965692)

birdman 11/27/12 05:52 PM

Pay off debt or save?
 
I am an in a position right now where I have enough savings to wipe out all of my debt, credit cards and the remainder of my student loans. However, doing so wouldn't leave me with a whole lot of savings. My condo is underwater by about $20k. I paid off my car last year so that isn't an issue.

In this economy, do you think it is more important to have lots of savings or no debt?

Jake Gyllenhaal 11/27/12 05:58 PM

You don't want to be apart of the 40% of Americans with less than $500 in savings to their name.

sjb2k1 11/27/12 06:04 PM

pick the one with the highest interest rate and pay it off fully.

birdman 11/27/12 06:06 PM

Quote:

Originally Posted by Jake Gyllenhaal (Post 115818922)


Yeah it's scary, luckily personal debt is decreasing. Maybe people will start saving again as it gets lower.

birdman 11/27/12 06:07 PM

Quote:

Originally Posted by sjb2k1 (Post 115819152)
pick the one with the highest interest rate and pay it off fully.


Well, they are all higher than the rate I am earning on my savings. So while I have cash in the bank, I am losing money on my debt's interest rate. So the question is whether or not the risk of having a low savings balance for a while so I can wipe my debt out is worth it.

David87 11/27/12 06:10 PM

I personally would wipe out all my debt first. From there, everything I don't spend on living is savings, and not going towards payments on something

birdman 11/27/12 06:11 PM

Quote:

Originally Posted by David87 (Post 115819472)
I personally would wipe out all my debt first. From there, everything I don't spend on living is savings, and not going towards payments on something


That would be the plan. Though, risk there is in an emergency I would have to use debt again because my savings is shot.

birdman 11/27/12 06:12 PM

There is always the school of thought that says that I should just pay more on my debt than I save. I have been doing that, and maybe I should just keep doing that.

sjb2k1 11/27/12 06:12 PM

Quote:

Originally Posted by birdman (Post 115819282)
Well, they are all higher than the rate I am earning on my savings. So while I have cash in the bank, I am losing money on my debt's interest rate. So the question is whether or not the risk of having a low savings balance for a while so I can wipe my debt out is worth it.

okay so it's kinda all or nothing? pay that shit off. if something bad happens you'll have your credit card, not the greatest idea but at least you won't be caught with your pants down

sjb2k1 11/27/12 06:14 PM

Quote:

Originally Posted by birdman (Post 115819512)
There is always the school of thought that says that I should just pay more on my debt than I save. I have been doing that, and maybe I should just keep doing that.

that's probably the best compromise if you don't want to risk your entire savings.

birdman 11/27/12 06:15 PM

Quote:

Originally Posted by sjb2k1 (Post 115819532)
okay so it's kinda all or nothing? pay that shit off. if something bad happens you'll have your credit card, not the greatest idea but at least you won't be caught with your pants down


Yeah, I guess your right. Ughhh, writing that check is gonna be hard.

A lesson to all of you, do your best to not use a credit card, its a real bitch.

sjb2k1 11/27/12 06:22 PM

Quote:

Originally Posted by birdman (Post 115819712)
Yeah, I guess your right. Ughhh, writing that check is gonna be hard.

A lesson to all of you, do your best to not use a credit card, its a real bitch.

honestly the only reason i haven't cut mine up yet is because i know my luck is that i would immediately need the physical card for something.

credit cards are the devil

David87 11/27/12 06:24 PM

I like having my credit card, if only because i needed to start building up some credit.

This will be the first month that I can't afford to pay off the entire balance and avoid interest charges, so I'm kinda pissed about that. But I should be able to pay a solid chunk of it

sjb2k1 11/27/12 06:32 PM

see, i am delightfully irresponsible with my money, and the credit card only further facilitates my recklessness.

Love As Arson 11/27/12 07:12 PM

Send some money to my pay-pal. Show some charity that you libertarians are always talking about. lol.