The reason Why I SAVE instead of paying off debt is.....

[Savingmonster]

Originally Posted by greedy4chips

Savingsmonster,

Apparently you have not read enough posts yet. What I mean is everyone here has had some sort of debt problem mostly because they did not understand how to handle money. Pay off your debts now, because more will come along faster than you can imagine, especially when you lose that good paying job.

You also have all those wants in life and I can see the attitude already, I got so much income I can afford this $40k SUV, $4800 living room set, $4k plasma tv, etc. Oops big cutback at work, doh! Now what?

I don't hire male babysitters to watch my kids. Reason being, I don't let foxes into the chicken-house to watch chickens.

When you justify debt only because of substantial income, you are inviting disaster!

I hear you. But I am very deciplined when it comes to stuff like $40k suvs, etc, lol. I am 28 and don't even drive because it's not a neccesity in this city, esp where I live.

That was pretty funny! I am paying off my debts & do have plans on paying them off in full, granted, not agressively as saving or paying myself. 1st is to get rid of the CCs. I am basically using the "Snow-ball" method to pay off the remaining CCs. Its funny because, I pay myself high because I look at myself as the credit card company (I know it's strange). Once I am done paying myself then I can pay off the school loans in a waaaaay more agressive manner.

[Ima saver]

You need to do what makes you happy. Life is too short not to do that. If saving money feels good right now, then do it. i completely understand!

[disneysteve]

Originally Posted by Savingmonster

In logic, a person will lose some money when 'taking their time', but to be honest, it sounds silly but, I wouldn't even mind loosing say 1 or 2k a year but saving 15-20k a year. By paying the min in loans of say $100 a month, I understand that is money I can keep for myself. I can't really explain it, but it just feels better to SAVE NOW. Its really a psychological thing, I guess.

It is a psychological thing and I understand that so here's what I would suggest. Don't pay just the minimum on any of your loans. Pay at least a little over the minimum. If the min. is $100, pay $110. You'd be amazed at how big of a difference that extra $10 will make over time. You'll save hundreds in interest. And the rest can still go into savings if that is what will make you sleep better at nite.

[disneysteve]

Originally Posted by greedy4chips

I don't hire male babysitters to watch my kids. Reason being, I don't let foxes into the chicken-house to watch chickens.

Sorry to stray OT, but what the heck is that supposed to mean? Are you saying that men aren't qualified to care for children? Or are you somehow implying that you wouldn't trust a man because of the infintesimally small chance that he could be a child abuser?

[Savingmonster]

Originally Posted by Ima saver

You need to do what makes you happy. Life is too short not to do that. If saving money feels good right now, then do it. i completely understand!

I mean, I posted this to see how many people were against it and what they have to say. I take everything people say to me into consideration. The feeling of saving feels good and it kinder makes me happy and I feel a way more secure than paying off all my debts and being totally broke in 3-5 years when I am done will ALL THE DEBTS. I rather have some debts and pay them off in that time and also have something to say, "Hey I buid this".

I have No Kids, I am single, No car (s), etc.

[parafly]

Originally Posted by Savingmonster

I mean, I posted this to see how many people were against it and what they have to say. I take everything people say to me into consideration. The feeling of saving feels good and it kinder makes me happy and I feel a way more secure than paying off all my debts and being totally broke in 3-5 years when I am done will ALL THE DEBTS. I rather have some debts and pay them off in that time and also have something to say, "Hey I buid this".

I have No Kids, I am single, No car (s), etc.

It is a completely valid viewpoint. That's why most financial experts suggest that you build up an emergency fund FIRST, and THEN pay off debts as aggressively as possible. In the end, all that matters is your ultimate goal and your mental well being while attaining that goal.

[Savingmonster]

Originally Posted by disneysteve

Sorry to stray OT, but what the heck is that supposed to mean? Are you saying that men aren't qualified to care for children? Or are you somehow implying that you wouldn't trust a man because of the infintesimally small chance that he could be a child abuser?

Yes, thats her opinion. A lot of women feel that way.

But I think she was trying to use that example with me saving all that money, there are going to be times where I wanna buy expensive stuff. Just because I have it does not make it neccessarily good and I will be inviting more debt.

She basically feels having a man baby sitting her kids a greater risk having a woman baby sit.

If I had kids, I would not let a man babysit my kid(s) either unless it's a really close friend or family member and I am a MAN. Most women feel that way.

I tried to explain it, but I don't know if it made much sense. When she said It was like

[Savingmonster]

Originally Posted by parafly

It is a completely valid viewpoint. That's why most financial experts suggest that you build up an emergency fund FIRST, and THEN pay off debts as aggressively as possible. In the end, all that matters is your ultimate goal and your mental well being while attaining that goal.

Thanks a lot. . That is my true goal, to get out of debt and still be happy. That means a lot to me. If I get out of debt in 3-5 years and I am broke with no emergency funds. I will feel good about it, but I will be broke.

The way I planned it, I can SAVE ALOT, pay off my debts, Vacation, Do the things I wanna do, like go to parties and enjoy my young life, because when I turn 30 its basically over (lol, Joking!!!).

Life is too short for me to be unhappy and broke in 3-5 yrs when I will be close to my mid 30s. I've learned to stay away from Credit Cards and never ever go near them again however.

[greedy4chips]

Originally Posted by Savingmonster

Yes, thats her opinion. A lot of women feel that way.

But I am a man! Look at the avatar closer...lol

Originally Posted by disneysteve

Sorry to stray OT, but what the heck is that supposed to mean? Are you saying that men aren't qualified to care for children?

Nope, I am a SAHD and do quite well I think.

Originally Posted by disneysteve

Or are you somehow implying that you wouldn't trust a man because of the infintesimally small chance that he could be a child abuser?

Yes! We are not the only one's who think this way...in fact I do not know 1 single couple willing to have a boy babysit their kids.

Some people buy guns because of the infintesimally small chance that they could be robbed or need it for self defense.

Some people buy flood, earthquake, hurricane, etc insurance because of the infintesimally small chance that they could flooded when they don't live in a flood plain, have their house destroyed by an earthquake when an earthquake hasn't happened in Missouri in how long, or hit by a hurricane in Maine.

I just believe in watching out for my kids safety!

[Ima saver]

I knew you were a man. I think this is getting off topic. I think what disneysteve said made good sense, just pay a little more than the minimum on the credit cards each month and put all the rest in savings.
Believe me life is not over at 30; actually after 40 was the best times in my life and I am still having fun![Automated by GetSmile]

[creditcardfree]

I am proud that you are saving. So many people don't. You also intend to be aggressive in paying back the loans after the savings. You will be way ahead of so many.

If you change your mind and decide to pay the debt off first let us know.

[Savingmonster]

Originally Posted by creditcardfree

I am proud that you are saving. So many people don't. You also intend to be aggressive in paying back the loans after the savings. You will be way ahead of so many.

If you change your mind and decide to pay the debt off first let us know.

I will be on here and let you guys know. The one CC, I will pay off sometime next year. It won't be an issue, I'll pay it off when I get my tax return (after unclue same robs me as always). The loans? I will take it easy then get more and more aggressive as time goes on. I am very good this past couple of years of accomplishing my financial goals.

[LuxLiving]

Savingmonster -

You are doing fine! I can understand. I don't feel comfortable with only the debts paid off either. I wanted those savings put back to cushion us if 'something' happened. We put a big effort out for a year or two paying off all our credit card debt and car loans. Then we took a short breather. Not stopping. Not quitting. Just breathing!



Yes, we still budgeted and we still were putting extra towards our remaining mortgage balance. But we weren't hitting it aggressively. Now, we are ready to get down to business again and get that bloodsucking leach paid off!

It is more than okay to breathe folks. Catch your breath SavingMonster. Look ahead and reassess. Plan some moves on paper. Hit the old calculator. Read those compound interest tables. Read some personal finance articles. Consolidate to Advance. {I don't mean consolidate loans before anyone mentions it - I mean consolidate your thinking/plans!

I can totally understand what you are saying. You've made some great strides it sounds like.





Keep up the good work!!

[autoxer]

Originally Posted by Savingmonster

I'll pay it off when I get my tax return (after unclue same robs me as always).

That brings up another point. If you are expecting a large tax refund, then change your witholding so you have more of your money now, instead of waiting till you file. Last year my refund was $1600, so I changed my witholding getting $25 more with each paycheck, and this year my refund will only be a couple hundred.

IRS Witholding Calculator: http://www.irs.gov/individuals/artic...=96196,00.html

[Broken Arrow]

Yes, if you're dead set on saving first, then by all means, don't let anyone stop you.

If all my friends thought like you, I'd be a happy camper.

[TinyFish]

I'd say an emergency fund (a reasonable amount, I'm assuming you don't have 70K of expenses in 3-6 months) is probably not a bad idea, as it will help you to deal with any unexpected issues without having a demoralizing 'backslide' into debt.

I'd save up at least a small emergency fund, for the psychological benefit and then KILL that credit card debt. You don't say explicitly how much the interest rate is on it, but I'm betting it is pretty bad. By all means get the 0% rate for the short term while you are not paying as aggressively.

Student loans. Well there are things to be said on both sides. What kind of interest rate are we talking about here? Have you been able to consolidate them at a lower rate? Now, most people in 'big tax brackets' cannot deduct the interest, so that's probably not a reason to keep them. Sounds like you are only paying $100 a month on them, so it is unlikely that they will become a huge 'make or break' issue if you are temporarily unemployed, especially if you have your emergency fund in order.

Personally, I paid down a lot of our student loans until I felt they were a) down the ones with the lowest, fixed interest rate and b) down to a level where the monthly payments were not a big burden, even under bad circumstances. Then I turned some of my money to other things. Of course, I've never had a serious 'debt problem' and I don't think carrying a student loan for a while is the equivalent of robbing a henhouse or whatever it is that all men are suspected of by their gender. :P Your mileage (and men) may vary.

Sure, financially, getting rid of those loans would probably save you some money in the long run. On the other hand, you deserve some credit and maybe a little slack for getting rid of your credit card debt.

If you feel like saving and watching your money grow, I highly recommend you contribute most of the savings to your 401K or IRA, now that's a very good habit to get into!

-TinyFish

[disneysteve]

I went the "psychological route" when repaying my student loans. Even though the rates were low, I just hated having them. Had I only made the scheduled payments, I would still be paying off my student loans when my daughter was in college and I just found that scenario absurd. So I pretty aggressively made extra payments and had them paid off in about 12 years instead of the 25 years they were scheduled for. Could I have made more money by investing those extra payments? Absolutely, but I am much happier to be done with the loans.

[RJB1180]

Don't forget that with most student loans you can get a defferment for a loarge number of reasons.

So that payment can be changed in the hard times

[creditcardfree]

In hard times, I'd want an emergency fund AND no payments that I had to defer.

[WellManicuredMan]

If I had CC debt I would definately destroy it before going savings crazy. I understand the emotional aspect of building a large savings balance. But I wouldn't feel good about my savings knowing I had all this debt. I would always subtract the debt from my savings in my mind and then have to think about how crappy it is throwing money away on interest.

Just think how good you will feel when the debt is gone and you can throw everything into savings. If I were you I would set a goal of killing the debt by a certain date and then set dates after that for increasing your savings.

Right now I have a savings and retirement goal I want to hit by the end of 2006, end of 2007, end of 2008, etc. and I keep track in Excel with calculations showing me how much I have left to save to hit each goal.