[birdman]

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]

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

[sjb2k1]

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

[birdman]

Originally Posted by Jake Gyllenhaal

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

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

[birdman]

Originally Posted by sjb2k1

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]

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]

Originally Posted by David87

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]

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]

Originally Posted by birdman

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]

Originally Posted by birdman

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]

Originally Posted by sjb2k1

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]

Originally Posted by birdman

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]

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]

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

[Love As Arson]

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