Comments on: Debt Reduction Vs Savings

By: IlliniRN

IlliniRN — Sun, 28 Feb 2010 13:39:02 +0000

Since this is THE YEAR I am getting out of debt, once and for all, I can look at the balance between savings and debt and make some plans. I was finally able to get 3K in savings. That will at least give me an emergency fund. I can continue to pay off my debts according to schedule by the end of the year. I will see how life is going throughout the year and may opt to pay extra on the schedule when I feel comfortable doing it. It is great to see how people here are able to keep at their goal to pay off debt despite set-backs. Sometimes that has really discouraged me, but I just keep telling myself that I am “Moving Forward”.

By: Mary Hall

Mary Hall — Tue, 20 Oct 2009 03:15:26 +0000

While I agree with most of the ideas in the post, I think I personally lean more towards Jim’s (the commenter) concerns. I try to compromise by also allotting a specific portion of my income for savings and other expenses. True, a huge chunk of my funds still go to paying off my debts and at the moment I can only afford little pleasures with the little amount from my ‘other expenses’ fund but it seems to be working for me so far.

By: Debt Sucks

Debt Sucks — Mon, 19 Oct 2009 12:31:17 +0000

I’m just trying to fix my own debt right now. I’m tired of stressing over it. It seems to just consume you.

By: aspiringgirl

aspiringgirl — Wed, 14 Oct 2009 17:11:36 +0000

I think balance in all areas of life is key to living healthy and flourishing in all that you are as a person- THIS is the best gift to society.

By: RealEstateKid

RealEstateKid — Mon, 05 Oct 2009 15:18:53 +0000

As you pointed out, while being debt free quickly would be nice, what happens if you lose your job? I think there needs to be balance between saving into an emergency fund and paying off your debt until you have a comfortable amount of savings to fall back in. If you pay off all your debt and have no savings you will quickly find yourself in debt again if an emergency occurs. This would emotionally hit me hard if I back in debt after having been debt free a while. My ultimate goal is debt free with a nice cushion in savings so I can remain debt free even if a job loss or emergency occurs.

By: Jim

Jim — Sat, 03 Oct 2009 18:22:10 +0000

I think you are partially on the right track. It is very important to have an emergency fund to cover possibilities such as being without an income for a time and I would strongly recommend that you build up a fund for this.

Where you go off track would be to think of spending on frivolous activities such as hobbies or travel before you have your debt slaughtered. Well, maybe you could think about it in the context of how nice it is going to be when you can do those activities without having to worry about your debts. Make it a future goal, something to keep you focussed on the immediate goal of paying down your debt.

Would you borrow money to travel? Spending on a trip before you have your debts paid off is equivalent to borrowing the money. Having funds available which allows you to cope with an emergency is good planning. Focus on what is most important.

By: Michelle Tee

Michelle Tee — Fri, 02 Oct 2009 15:26:16 +0000

Debt is the worst thing we can have, other than bad health problems. It is an albatross that hangs over us, until we make it disappear slowly but surely.

By: Craig

Craig — Fri, 02 Oct 2009 15:23:48 +0000

I think concentrate on one goal at a time. If you have debt, work on depleting the debt, then once you reach that goal begin to save.

By: Credit Card Chaser

Credit Card Chaser — Fri, 02 Oct 2009 03:43:08 +0000

Very good points, only once one has that safety net of 3-6 months of fixed expenses set aside as savings should the full scale debt paydown really begin.