Comments on: Building up savings while getting out of debt http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/ Sun, 14 Mar 2010 19:16:20 -0600 http://wordpress.org/?v=2.8.4 hourly 1 By: bill http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/comment-page-1/#comment-34991 bill Sat, 07 Feb 2009 16:56:11 +0000 http://sensetosave.com/?p=998#comment-34991 I think Karen has it right. An emergency fund is a "must", and paying down debt is a "must". So, there's really no other obvious choice for risk averse people other than doing a little with both. I suppose if your risk profile is lower, or if you have friends and family that you could lean on for an emergency fund, you could defer building up an emergency fund. Not many people have that luxury though. I think Karen has it right. An emergency fund is a “must”, and paying down debt is a “must”. So, there’s really no other obvious choice for risk averse people other than doing a little with both.

I suppose if your risk profile is lower, or if you have friends and family that you could lean on for an emergency fund, you could defer building up an emergency fund. Not many people have that luxury though.

]]> By: friday roundup #7 | we like money http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/comment-page-1/#comment-16759 friday roundup #7 | we like money Fri, 29 Aug 2008 20:06:00 +0000 http://sensetosave.com/?p=998#comment-16759 [...] from Sense to Save takes a look at building up savings while getting out of debt.  Dave and I saved up a small emergency fund and then switched our focus over to debt reduction.  [...] [...] from Sense to Save takes a look at building up savings while getting out of debt.  Dave and I saved up a small emergency fund and then switched our focus over to debt reduction.  [...]

]]> By: tiffanie http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/comment-page-1/#comment-16554 tiffanie Wed, 27 Aug 2008 00:46:23 +0000 http://sensetosave.com/?p=998#comment-16554 I definitely think "to each their own", you know? I wanted to build a small emergency fund ($1500) and then switch to debt reduction, which is what we've done. We have just enough in savings to cover a true emergency (hopefully) and once we get our debt paid down, we'll get a larger emergency fund in place (6 months of income, hopefully). great article, though. <em>tiffanie's last blog post..</em><a href='http://www.welikemoney.com/2008/08/26/a-look-at-the-7-debtly-sins/' rel="nofollow">a look at the 7 “debtly” sins</a> I definitely think “to each their own”, you know? I wanted to build a small emergency fund ($1500) and then switch to debt reduction, which is what we’ve done. We have just enough in savings to cover a true emergency (hopefully) and once we get our debt paid down, we’ll get a larger emergency fund in place (6 months of income, hopefully). great article, though.

tiffanie’s last blog post..a look at the 7 “debtly” sins

]]> By: Festive Link Love Carnivality #21 | Free From Broke http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/comment-page-1/#comment-16241 Festive Link Love Carnivality #21 | Free From Broke Sun, 24 Aug 2008 11:52:11 +0000 http://sensetosave.com/?p=998#comment-16241 [...] Building Up Savings While Getting Out Of Debt by Sense To Save [...] [...] Building Up Savings While Getting Out Of Debt by Sense To Save [...]

]]> By: Rachel http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/comment-page-1/#comment-15942 Rachel Thu, 21 Aug 2008 20:33:39 +0000 http://sensetosave.com/?p=998#comment-15942 Oh, no, I didn't mean using your EF that you already have to pay off the car. I meant since you've already established your EF w/6 months of expenses, I would go the route of paying extra on the car instead of sticking *everything* extra into the EF. With much more coming in than going out, I would pay off some of the higher interest debt in order to be losing less money and getting closer to getting rid of the debt. <em>Rachel's last blog post..</em><a href='http://frugaldaybyday.blogspot.com/' rel="nofollow">Yeah, I'm a cheap date!</a> Oh, no, I didn’t mean using your EF that you already have to pay off the car. I meant since you’ve already established your EF w/6 months of expenses, I would go the route of paying extra on the car instead of sticking *everything* extra into the EF. With much more coming in than going out, I would pay off some of the higher interest debt in order to be losing less money and getting closer to getting rid of the debt.

Rachel’s last blog post..Yeah, I’m a cheap date!

]]> By: Kacie http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/comment-page-1/#comment-15941 Kacie Thu, 21 Aug 2008 20:23:57 +0000 http://sensetosave.com/?p=998#comment-15941 Yeah, a few of you didn't like that statement of mine. I'm not slamming anyone--if I was better with money, I wouldn't have a car loan right now. I'm not saying I'm perfect. We could have purchased a cheaper clunker car and have it paid for by now, but we didn't. We owe about $9k on the car. We *could* use our emergency savings to pay that off, as it's about 6.95% interest and we're only earning 3% with ING. But as I said, we're a one-income family and we're having a baby in four months. We're not going to risk wiping out our savings just to eliminate a $277 payment, even if that makes more financial sense. Right now, we need plenty of liquid cash. Our emergency fund will be enough to pay our car payment (and other expenses) for six months if we need to go that route, which I'm hoping we won't. We'll pay that car off later when we can do it without putting ourselves at risk. Yeah, a few of you didn’t like that statement of mine. I’m not slamming anyone–if I was better with money, I wouldn’t have a car loan right now. I’m not saying I’m perfect.

We could have purchased a cheaper clunker car and have it paid for by now, but we didn’t.

We owe about $9k on the car. We *could* use our emergency savings to pay that off, as it’s about 6.95% interest and we’re only earning 3% with ING.

But as I said, we’re a one-income family and we’re having a baby in four months.

We’re not going to risk wiping out our savings just to eliminate a $277 payment, even if that makes more financial sense.

Right now, we need plenty of liquid cash. Our emergency fund will be enough to pay our car payment (and other expenses) for six months if we need to go that route, which I’m hoping we won’t.

We’ll pay that car off later when we can do it without putting ourselves at risk.

]]> By: Rachel http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/comment-page-1/#comment-15931 Rachel Thu, 21 Aug 2008 18:18:16 +0000 http://sensetosave.com/?p=998#comment-15931 Quote from your post: "But. To that, I would say, “If you’re so good with money, then you wouldn’t be in debt in the first place.” So there." I had to bristle a little bit at this one, even though we have never carried credit card debt. We all have to realize that everyone is in different situations in life because of totally different reasons. There's a big difference between $20,000 in credit card debt for Coach purses, $20,000 in student loan debt for a degree, and $20,000 in medical debt due to a bad hospitalization. Everyone has their own reasons for their strategy toward money. As for paying off a car, I would unless perhaps it were at 0% interest. Because of that same reason you quoted: loss of income. I can tell you from experience with lay-offs, when your income disappears it is wonderful to not have car payments, credit card payments, etc. hanging over your head. We're stressing now because of health insurance costs, but don't have to stress over monthly payments on debt (other than our mortgage). If you're paying more in interest on your car than you're earning at ING, you're loosing money in interest as well with what you sock away versus paying down your car loan. <em>Rachel's last blog post..</em><a href='http://frugaldaybyday.blogspot.com/' rel="nofollow">Yeah, I'm a cheap date!</a> Quote from your post:

“But. To that, I would say, “If you’re so good with money, then you wouldn’t be in debt in the first place.” So there.”

I had to bristle a little bit at this one, even though we have never carried credit card debt. We all have to realize that everyone is in different situations in life because of totally different reasons. There’s a big difference between $20,000 in credit card debt for Coach purses, $20,000 in student loan debt for a degree, and $20,000 in medical debt due to a bad hospitalization. Everyone has their own reasons for their strategy toward money.

As for paying off a car, I would unless perhaps it were at 0% interest. Because of that same reason you quoted: loss of income. I can tell you from experience with lay-offs, when your income disappears it is wonderful to not have car payments, credit card payments, etc. hanging over your head. We’re stressing now because of health insurance costs, but don’t have to stress over monthly payments on debt (other than our mortgage). If you’re paying more in interest on your car than you’re earning at ING, you’re loosing money in interest as well with what you sock away versus paying down your car loan.

Rachel’s last blog post..Yeah, I’m a cheap date!

]]> By: Kacie http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/comment-page-1/#comment-15806 Kacie Wed, 20 Aug 2008 15:40:27 +0000 http://sensetosave.com/?p=998#comment-15806 Yikes. Big yikes, Abby. I'm really sorry you have to deal with all of that! Medical debt is one of those types of debts that can really sneak in and get you if you don't have amazing health insurance or a large emergency fund already in play. Yikes. Big yikes, Abby. I’m really sorry you have to deal with all of that!

Medical debt is one of those types of debts that can really sneak in and get you if you don’t have amazing health insurance or a large emergency fund already in play.

]]> By: Pete http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/comment-page-1/#comment-15795 Pete Wed, 20 Aug 2008 13:08:02 +0000 http://sensetosave.com/?p=998#comment-15795 I tend to agree with the Dave Ramsey way of doing things - building up a $1000 (or $2000 if you like) baby emergency fund, and then paying off debt. I has worked for so many others, there must be something to it! <em>Pete's last blog post..</em><a href='http://www.biblemoneymatters.com' rel="nofollow">Money Matters</a> I tend to agree with the Dave Ramsey way of doing things – building up a $1000 (or $2000 if you like) baby emergency fund, and then paying off debt. I has worked for so many others, there must be something to it!

Pete’s last blog post..Money Matters

]]> By: Tenille http://sensetosave.com/2008/08/19/building-up-savings-while-getting-out-of-debt/comment-page-1/#comment-15790 Tenille Wed, 20 Aug 2008 12:50:21 +0000 http://sensetosave.com/?p=998#comment-15790 Our $1000 emergency fund has worked for us for a year now. Just having it seems like insurance against needing it. <em>Tenille's last blog post..</em><a href='http://glutenfreefrugal.blogspot.com/' rel="nofollow">Well Hai</a> Our $1000 emergency fund has worked for us for a year now. Just having it seems like insurance against needing it.

Tenille’s last blog post..Well Hai

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