| Posted By |
Message |
|
|
Have a cushion or be debt free?????
SO, we have the chance to pay off all of our debt...we have ALOT and we have enough saved to get out of debt.
By "debt" I mean Credit Card debt.
We would still have 1 school loan, mortgage, HELOC. (in addition to our utilities etc, but that isnt considered debt)
However it leaves us with a small amount afterwards.
So here's my question....is it better to have no credit cards with minimal cushion, or a lot of debt but a nice cushion?
I know there are a lot of financial savy ladies on here so I was wondering.
I think I know what we are going to do, but was curious to hear opinions and advice.
Thanks.
|
Posted 1/31/10 1:53 PM  |
| |
|
Long Island Weddings
Long Island's Largest Bridal Resource |
Beth
The Key to your new home....
Member since 2/06 24849 total posts
Name:
Beth
|
Re: Have a cushion or be debt free?????
how much would you save each month by not having debt?
are you salary or self-employed?
what if you paid down the highest balances or interest rates- that would save you money each month that you could put towards the other debt and pay that off quicker
with out knowing what you owe and the rate paid on it - this is the best answer I can give
|
| Posted 1/31/10 8:05 PM |
| |
|
|
|
Re: Have a cushion or be debt free?????
I would maybe try to keep enough in savings to cover several months of expenses and if something major were to need to get fixed (i.e. car or home repair) and then pay off the credit cards. If you don't have to keep paying the credit cards, you can put that $$$$ back into savings as if you were still paying them off each month and build it up again.
|
| Posted 1/31/10 8:08 PM |
| |
|
jps
LIF Toddler
Member since 11/09 435 total posts
Name:
Jennifer
|
Re: Have a cushion or be debt free?????
Posted by mzsocialworker1
I would maybe try to keep enough in savings to cover several months of expenses and if something major were to need to get fixed (i.e. car or home repair) and then pay off the credit cards. If you don't have to keep paying the credit cards, you can put that $$$$ back into savings as if you were still paying them off each month and build it up again.
I totally agree. In a perfect world with no surprise emergency expenses it would be better to use it all for paying off credit card debt because it's costing you a lot in interest (more than you would be making by keeping a savings cushion). However, you never know if you will need emergency cash so its best to keep a small cushion and use the rest for the cards.
Message edited 1/31/2010 8:15:48 PM.
|
| Posted 1/31/10 8:15 PM |
| |
|
MrsBlueSash
Love my sailor
Member since 6/05 5793 total posts
Name:
Christian
|
Re: Have a cushion or be debt free?????
I say pay it off.
|
| Posted 1/31/10 10:36 PM |
| |
|
ChilisWife
God Bless America
Member since 5/05 3572 total posts
Name:
A.K.
|
Re: Have a cushion or be debt free?????
I've always been credit card debt free- paying it off every month, until last year when the economy hit us hard with layoffs and for several other reasons. For the first time we are carrying some hefty balances on some of our credit cards and while I pay more than the minimum each month, I don't pay them off even though I have the savings. It kills me, but I am terrified of not having liquid cash available in case some other bad events come our way. It has actually worked out because in the last few months we've had some more unexpected expenses that we couldn't charge so I needed that cash.
|
| Posted 2/1/10 10:07 AM |
| |
|
AngnShaun
Sisters
Member since 1/10 21015 total posts
Name:
Ang
|
Re: Have a cushion or be debt free?????
i would pay a large chunk of it but not all of it at once... its good to have some revolving credit like that...
|
| Posted 2/2/10 11:33 AM |
| |
|
Sash
Peace
Member since 6/08 10312 total posts
Name:
fka LIW Smara
|
Re: Have a cushion or be debt free?????
I'd pay it off, thats actually what we are going to do over the next few weeks. As much as it is great havea huge cushion, god forbid an emergency happens all you are going to do with that cushion is pay off all teh CC bills you owe.
My thinking is why not do it now and start saving with less debt. Me an dDH both are unemployed now and our cushion is just helping stay afloat, if we had less CC debt it would be better. Thankfull he picked up some wide work recently. JMHO, you have to really evaluate and decide what will work best for you and your family.
|
| Posted 2/2/10 11:57 AM |
| |
|
Superkat
More a stranger than a friend
Member since 5/06 9730 total posts
Name:
K
|
Re: Have a cushion or be debt free?????
No debt, small cushion and REBUILD the cushion. Just don't rebuild the debt 
|
| Posted 2/3/10 4:08 PM |
| |
|
LoriH
There's no place like home
Member since 8/07 4110 total posts
Name:
Lori
|
Re: Have a cushion or be debt free?????
Pay a good chunk of it off and leave enough of a cushion in case of an emergency. The interest you are paying on the debt is much higher then the return you get on it sitting in the bank.
|
| Posted 2/3/10 5:18 PM |
| |
|
MamaB17
Back for baby #3
Member since 5/09 4065 total posts
Name:
N
|
Re: Have a cushion or be debt free?????
Debt free. We had to decide to be debt free (credit card debt), or buy a new car out right. We choose to pay off the credit cards. We took out a car loan which is also considered debt, but it is only for a couple years & without finance charges. Credit card debt is just awful b/c of the finance charges & interest rates.
|
| Posted 2/4/10 12:39 PM |
| |
|
Katie111806
Team Pink!
Member since 12/06 5349 total posts
Name:
Katie
|
Re: Have a cushion or be debt free?????
Posted by LoriH
Pay a good chunk of it off and leave enough of a cushion in case of an emergency. The interest you are paying on the debt is much higher then the return you get on it sitting in the bank.
agreed
|
| Posted 2/4/10 2:55 PM |
| |
|
|
|
Re: Have a cushion or be debt free?????
Debt free. 100%.
|
| Posted 2/5/10 4:18 PM |
| |
|
LAMGAJ28
.
Member since 10/05 6039 total posts
Name:
|
Re: Have a cushion or be debt free?????
Posted by Superkat
No debt, small cushion and REBUILD the cushion. Just don't rebuild the debt
Ditto !
|
| Posted 2/6/10 8:59 AM |
| |
|
MrsPJB2007
MBA at your service!
Member since 7/06 12020 total posts
Name:
MJ
|
Re: Have a cushion or be debt free?????
Posted by Superkat
No debt, small cushion and REBUILD the cushion. Just don't rebuild the debt
Ditto
I think the APR rates of the cards can play a bit role to me as well. If you're paying high APRs, get rid of the debt now while you can.
|
| Posted 2/6/10 12:21 PM |
| |
|
NYCbride09
LIF Infant
Member since 1/10 69 total posts
Name:
M
|
Re: Have a cushion or be debt free?????
With all the new credit card rules going into effect...
AND
the credit card companies are changing fees BEFORE they go into effect...
GET RID OF THE DEBT!!!!!
|
| Posted 2/8/10 6:40 PM |
| |
|
