[personal profile] moominmuppet
Debt reduction or savings?

Debt reduction. I've had bad financial experiences in the past (bipolar + money = mess), and people chasing me down about debts, or threatening legal action, or turning off utilities, or whathaveyou is like flashbacks to some of the worst parts of my life. I feel best when I don't owe anyone anything, and I'm more prone to panic over financial messes than just about anything else.

And in terms of savings -- I'd like to have them, but I don't feel as strongly about that as much of the population seems to. Part of it, I think, is my underlying pessimism about the American financial system -- I figure it's only 50/50, at best, that money I sock away now for retirement and such will actually be there and have value in 40 years. Also, I refuse to intentionally participate in the stock market for a number of reasons, and many forms of savings involve doing so, so that feeds into my feelings on it, as well.

Date: 2006-02-17 05:23 pm (UTC)
From: [identity profile] compostwormbin.livejournal.com
Part of it, I think, is my underlying pessimism about the American financial system -- I figure it's only 50/50, at best, that money I sock away now for retirement and such will actually be there and have value in 40 years.

I have similar pessimism. The U.S. has a knack of constantly finding new ways to shift money to the wealthy.

Date: 2006-02-17 06:08 pm (UTC)
From: [identity profile] leveldeaded.livejournal.com
MAN. I'm am with you there, too. My current debt is a monster I think about daily. I've had the manic sprees and am now paying for it, with a somewhat enforced frugality.

And, you can calculate, using interest rates on both sides, whether it's even worth it to save money if you owe money. Usually it isn't, unless your owed money is an investment of some kind (home, business...). Like, I pay an average of 5.99% interest on my $23,000 of credit and school loans, but the most I could earn in a savings account would be about 4%, so I'd be LOSING money by saving it instead of paying off debt with it.

So you are the smart one in thinking the way you do, for more than one reason.

Date: 2006-02-17 07:06 pm (UTC)
From: [identity profile] habari.livejournal.com
Word re:picking debt reduction first. But then, I'm a Dave Ramsey convert.

I'm much more ambivilant regarding savings. I want them, and am willing to look the other way long enough to invest. Which doesn't really fit the hippie tree-hugger morality i usually like to pretend that i exude, but, i'm zen with that part of the hypocrite(sp) in me. ;)

Date: 2006-02-17 09:56 pm (UTC)
From: [identity profile] blackbyrd2.livejournal.com
This was my question, and I'm actually more in line with your thinking.

Currently my debt is running between 4% and 7%, ao I'm socking stuff away into mutual funds as quickly as I can, which will hopefully get me at least 8%.

Of course, part of my problem is the short window I have in this area.

And hey, hippie tree-huggers don't carry huge debts because they eschew the whole consumerism aspect of life to start with. :) So I get to be doubly hypocritical.

Date: 2006-02-22 08:06 pm (UTC)
From: [identity profile] fabulousmisst.livejournal.com
i think of "savings" and "investments" as totally different: savings, to me, is liquid assets, e.g., cash under your mattress, or in my case, in my savings account. i've discovered the importance of savings through several long periods of unemployment, and i intend to continue saving even though it slows my debt reduction some b/c how else am i going to pay rent if i can't find a job? i do pay on my debts, and wish i could pay more, but savings are just too important to me. i couldn't sleep at night until i had 2-3 mos. rent in the bank. also, savings are so handy for emergencies - like when my car got towed recently, or when i needed new tires. now, i don't have to go further into debt for emergencies because i can pay cash instead of credit.

Date: 2006-02-22 08:12 pm (UTC)
From: [identity profile] moominmuppet.livejournal.com
*nod* That's a type of savings I would like to have, and should put some effort into creating.

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