Okay... it feels really strange to hear all this doom-and-gloom talk...

[wolfwings]

...but it's really driven home just how well I was trained growing up with my finances, to an extent I've only realized it's usefulness since this recent global economic collapse we seem to be experiences.

I never really appreciated it, or my intuition and dump luck/Karma helpnig out, until I look back at my timing for things. WaMu? Used to bank with them, bailed about 2 years ago when they jumped some mental shark for me and went from cool to a cyst on my ass. Floated more-or-less bankless briefly, then of all things ended up with US Bancorp. Which appears to have been one of the least impacted major national banking whatever-the-term-is.

But I'm being faced with an honestly wierd decision now, especially in light of the current economic situation. I may well be able to save over $1k/month into the bank, and I'm wondering if I should just sock that away, or start paying my car off as fast as possible first? (Already checked, no early repayment penalty.)

So, thoughts out there, folks?

Comments

[sebkha.livejournal.com]

I'd expect the bank interest rate is a lot lower than the rate on your car loan, so stomping on your debt with both feet seems the sensible move.

[lionman.livejournal.com]

Go debt free.

[lironess.livejournal.com]

Put half to your car and use half to buy silver bars. You can always re-sell them later, perhaps not at a gain, but at least you know that if there is a big crash of some sort you have REAL money.

[genkitty.livejournal.com]

I have a different approach.

Make sure you have liquidity to cover 3-6 months of expenses if your income were to suddenly cease, amount depending on how hard it would be to reestablish that income flow.

Then pay off every debt you have, starting with the highest interest rate.

Then sock away whatever you can. We've discussed the rotating CD schema before and I'll keep my answers within the realm of the actual question asked :)

Lather, rinse, repeat.

HOWEVER, an acquaintance of mine studies the economy obsessively, datamining what professionals are saying and keeping track of who seems on the ball and who's blowing smoke. She's saying that having cash on hand is a Good Thing(Tm) right now, to prepare for some banking holidays in the near future and the possibility that credit/debit cards and checks may not be honored. So factor that into your plans.

This was actually what I was thinking.

[wolfwings.livejournal.com]

The only debt I have, yes, only, is my car payment at $300/month. And I'm not, and will not be, upside-down on the loan at any point in the loan. And I have another $7500 in indefinately pre-approved credit (rolling line of credit) with my bank at 7.5% APR. Yes, even now it's only 7.5% APR.

So yeah, I was vaguely thinking keep two thousand dollars or so in liquid funds, and pay off the car with the remainder, but I wasn't sure if I was being overly paranoid about the economy at this point when I was thinking of keeping said funds in cash or material goods instead of simply 'in the bank' for now.

Savings.

[vyl.livejournal.com]

I've been playing the banking game. My savings are safe, spread between two dependable banks, and all earning me a *very* nice rate of interest. 5.75% AER, mostly, with some of it in 8%.

Unfortunatly I am unemployed, so my savings are rather small... I'm making the most I can of my unemployment handouts.

In theory I could also open a 12%, but I would need more money to put in in. One nice consequence of the financial crisis is that the banks are eager to borrow money from me.

All in all, I'm earning a whole £10 a month in interest payments... I need more money to go in the accounts before it becomes really worth something.

[uplinktruck.livejournal.com]

Pay off the car. Dump all the credit you owe ASAP. Consumer credit is one of the biggest shafts the American public routinely gets. It is true that a car loan is no where near as predatory as some of the credit cards out there, but still it is nice to know your car is paid off.

Then you can take the payment money and start socking it away for your next set of wheels. Wouldn't it be cool to walk in and buy your next car with at half the money down? Or maybe just pay cash?