Setting priorities

[OkieJonesClan]

We have been through Dave Ramsey course and it sounds to me like you are very close and most of the stuff you probably already do. We have the same 3 goals and are in a similar situation job and car wise right now. We are doing 3 things at once - we are putting 1/3 of the "extra" (money left over after the necessities are covered) into one of three funds - 1- extra in the ER savings fund 2- Car fund 3- house payment. The ER fund and car fund are savings accounts -so atleast we can draw a little interest while we save up to replace the nearly dead car

I don't know if that helps or gives you any ideas at all. We were just so torn about those 3 things and my husband just threw up his hands and said "that's it! we are doing all 3!!"

 

[On Our own]

We have been through Dave Ramsey course and it sounds to me like you are very close and most of the stuff you probably already do. We have the same 3 goals and are in a similar situation job and car wise right now. We are doing 3 things at once - we are putting 1/3 of the "extra" (money left over after the necessities are covered) into one of three funds - 1- extra in the ER savings fund 2- Car fund 3- house payment. The ER fund and car fund are savings accounts -so atleast we can draw a little interest while we save up to replace the nearly dead car

I don't know if that helps or gives you any ideas at all. We were just so torn about those 3 things and my husband just threw up his hands and said "that's it! we are doing all 3!!"

Yep, that's our situation too! Expecting the job loss we had thrown lots of money at the mortgage. Not all banks will allow this, but some will credit pre-paid months so we are actually paid up through April. So, we threw everything at the car loan this month and paid it off! WooHoo! We budget our mortgage payment at $200 more than it is every month and the extra gets applied to principle. But, I think we should stop that for now and use that money toward those other three until they're under control. The mortgage is the lowest interest debt we have and I really want more liquid cash.....

What do you think?

 

[Alaska Animal Lover]

It's so hard right? No one wants to make the wrong decision!
I personally would go for the cash. I think putting extra $ on your mortgage is smart too, but like someone said above, if something were to go wrong, you can't use that to buy food.
Good luck!

 

[hoosier]

Congratulations on paying off the car!!!

Yes, I would have cash on hand if you expect a job loss. There aren't many job openings htese days.

 

[captchris]

if you want to pat off debt pay off the highest intrest first. also in canada we have a programe where we can put money into a retirement found and get a tax rebate i beleive in doing this and using the tax rebate to pay off dept

 

[On Our own]

What I am worried about is the banks failing altogether. I can't take my money out of the bank really.....

Do I even worry about paying off debt? Do I plan for a depression or SHTF??

 

[On Our own]

I'm still stuck on this question. I am working steadily toward being as debt free as possible and we're making good progress. That has always been our goal anyway.

But, is it possible that we could face a situation where our money was practically worthless and we would have been better off getting into debt to get those things we feel we'll need in really bad times?

 

[patandchickens]

But, is it possible that we could face a situation where our money was practically worthless and we would have been better off getting into debt to get those things we feel we'll need in really bad times?

As far as getting into debt, IMHO it depends on what the debt is secured with. While banks may be willing (or forced by the gummint) to give people a *little* more slack regarding foreclosure if things get really really bad, remember that banks are businesses and they WILL want yer house if they can't get yer mortgage money. Same for car loans, although having a car repossessed isn't AS bad as losing your home. Personally I would try real hard to pay down the mortgage and preferably pay off the car (although, as others have said, you want *some* cash cushion first).

The issue of running up unsecured credit card debt is murkier, and depends a lot more on what you expect the rest of your life to be like and your philosophy/ethics/etc about such things and your willingness to live with potential consequences.

Second, there is the question of what is "needed" to survive hard times. To me, what is needed is, in no particular order, clean water supply, a way to keep from freezing in the winter, and an adequate supply of nutritious food (even if it is not your *preferred* food). (I ignore clothes and shoes because most people have plenty more than needed, and purchasing just a coupla items secondhand is not that expensive).

So, as for a generator... do you really *need* it, for circumstances in which you'd even be able to GET a regular supply of fuel for it anyhow? For most people the answer is probably no, as long as you are not relying on freezers for most of your food supply. (And if you are, shifting to greater reliance on non-electric-dependant food storage methods is way way cheaper and more reliable than a generator anyhow). If you want the generator mainly for heat it might be worth looking at other heat sources e.g. woodstove.

I don't think it's necessarily any easier to decide what we NEED (versus just want) to be self-sufficient than to distinguish needs vs wants in anything else in life. But, if you are on a tight budget or expecting to have tight financial times ahead, it is really pretty essential to stick only with NEEDS.

JMHO anyhow.

Good luck,

Pat