finance ?

audrey10607 · October 2010

Would you put all/most of your savings to pay off a large debt, then put money back into savings afterwards, or pay the debt over time?

kaylakaylakayla · October 2010

We pay of 'debt' over time.
Savings are savings. They need to be there in case of emergency.

MrsSR · October 2010

Pay it over time.

I wouldn't want to be left without emergency money.

Mkitt0823 · October 2010

Typically I'd pay it all off now then save later but it all depends on the interest rate of the debt you want to pay off and if there is anything coming up in the near future that you may need that saved up money for. Case in point I want to pay off a debt and with savings able to do so but the interest rate isn't that bad and we're looking at moving in less than a year. Calculating what we bring in and how much more we'll be able to save until then it's smarter just to keep paying it off monthly until after the move. But any other time once I've saved up the amount I need to pay off a debt, I do.

PubStar09 · October 2010

MrsSR:
Pay it over time.

I wouldn't want to be left without emergency money.

This.

ladybug8510 · October 2010

MrsSR:
Pay it over time.

I wouldn't want to be left without emergency money.

This.

Without savings you run the risk of having an emergency and going right back into debt

monkski · October 2010

we loosely follow the dave ramsey plan. I highly recommend grabbing one of his books. We've been debt free for years now because of it (besides our mortgage). He says to build an emergency fund first and then conquer debt.

murphy's law: "anything that can go wrong, will go wrong", but if you have an emergency fund to cover it, then you won't build more debt because of it. Also, if you are prepared for an emergency, they seem to happen a lot less often.

I'm saying this as we discovered we need a new roof, new furnace and electrical work all in the same week, but it doesn't matter because we have our emergency fund to cover it.

dec341 · October 2010

If the interest rate isn't too high, I would pay over time. What we generally do is take extra money for the month (that would have gone into savings) and pay extra on the bill each month. That way we don't touch our emergency fund but it gets paid off quicker and we feel a little relief. GL!

Kaylasmommy86 · October 2010

I would have a savings, and then pay it off over time. This is what DF and I are doing and in a year's time we have paid off 20% of our debt (which equates to about $4,000). We have a lot of debt right now, because DF has student loans and a CC that has a large balance from being used for college as well. We also have 2 vehicle payments, and a couple smaller CC's.

It is definitely important to have a cushion because finances are not always a sure thing. My ex just got medically discharged from the military in July, and wasn't able to pay CS for 2 months, and is only to pay half of it right now. We were really counting on the CS for while I am on maternity leave This has thrown a wrench into things, and our money is tight right now. Nothing we can't manage, but it causes stress. If we didn't have money in savings we would be screwed.

That being said, if we had a good amount of $ in savings, and came into extra money, we might use it to pay off debts, but only if we had the $ in savings.

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