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

[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.