Wednesday, April 27, 2011

Savings or paying ahead?

Okay so I want your thoughts on this....

If you have a month, or a week, however you are paid, where you have MORE money coming than expected... what do you do with it?

Obviously we surely don't SPEND it :).... but whats the best thing to do.

I struggled with this. I'm in a commission job so there are roller coaster months. Some months are great, and others... well, not so great. SO... what do you do?

Do you put extra money in savings OR do you pay ahead? Do you pay 2 or 3 car payments? Do you get ahead on your credit cards? Do you pay an extra month's rent/mortgage?

WHAT DO YOU THINK IS THE BEST WAY TO HANDLE UNEXPECTED MONEY? Savings... or paying ahead?

2 comments:

Megan said...

Hrm... well, I've been reading a lot of frugal advice lately. Here's my sort-of-informed opinion: First, it should go to savings. Experts recommend somewhere from 3-6 months' living expenses as savings. Yowza. I think I'm going to stick with 2 months' living expenses for now.

Because the other thing I have to worry about is interest. Always pay whatever has the highest interest rate. Once you only have low interest debt, go back to savings and/or retirement. For example, I have student loans with something like 2.88% interest. That's so low that I might as well not pay ahead and instead invest or save the money.

Sorry that was so long-winded - you know me, Cara.

Jere and Cara said...

See I agree with you Megan. But theres this TINY part of me that thinks paying ahead on things would be smart. It's ALL about interest, like you said. And yes, Dave Ramsey says 3-6 months worth of bills in savings AFTER your $1,000 emergency fund. I'm kinda like you--THATS a lot of money!! But so far, so good. Okay well thanks for your opinion.

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