what should I do with the money?

iVillage Member
Registered: 07-29-2003
what should I do with the money?
12
Sun, 10-17-2004 - 12:54pm
I just learned about this board and Im so happy I found it!! I have $500 in my savings account. I just got my home rebate check for $800 and I have alot of debt, cc, line of credit, etc. I also just opened an ING savings account that has $200 in it.

I dont know if I should take that $800 and put it all on one of my credit cards which will pay one off or should I put that money in my ING account where I wont be able to touch it??

What do you think makes more sense?

Pages

Avatar for cowboy4me
iVillage Member
Registered: 03-25-2003
Sun, 10-17-2004 - 1:33pm
Personally, I would pay off that one credit card.

Jenny






"Love knows hidden paths."~~German Proverb

Jenny

iVillage Member
Registered: 03-30-2003
Sun, 10-17-2004 - 1:45pm
I think, too, that you should pay off your highest interest credit card first. When you do, its like earning XX% back than a little 2% back on your ING. If you run into trouble again, you can use the credit card (which I hope you won't). Start snow balling your credit cards. Then save up for an emergency fund. this is so important. Or you can put half on credit card and half in ING. Cut the fat from your budget. Good luck.


iVillage Member
Registered: 07-06-2003
Sun, 10-17-2004 - 4:42pm
Between your savings account you have a $700 cushion. Honestly if it were me, I would feel good enough to go ahead and pay most if not all of the $800 on the credit card. Like the previous poster mentioned that interest wise you'll get a much better return on paying off your debts.

I also encourage you to snowflake/snowball any extra money you can scrounge up...check the snowflaking website link as many of us have come together to throw nearly $110K so far this year towards our debts!

Stick around the board; at least you'll have the support of people who truly understand your situation without rendering judgement whatsoever :)

Best wishes,

Kassandra

Kassandra

"It is said that life has its peaks and valleys.  The challenge is to accept them equally and experience them

iVillage Member
Registered: 02-19-2004
Sun, 10-17-2004 - 5:31pm
Do you feel $700 in savings is enough to cover the typical emergencies you run into (car repairs, house repairs, etc)? If so, then I'd pay off one credit card. If not, add a little to savings and then pay the rest to the credit card. How much interest are you paying on the card compared to how much you will earn with the money in the bank? I am sure the interest you owe is much higher that what you'd earn.

Are you still charging on your cards? If you pay it off and just run it up again, then the money is safer in savings. Once the one is paid off, I'd freeze it in a block of ice in the freezer so I couldn't use it.

Once you pay off one credit card, you can take the money you used to pay to it every month, and add it toward paying one of your other debts. This way you will pay off that debt faster.

Photobucket

iVillage Member
Registered: 07-29-2003
Sun, 10-17-2004 - 11:27pm
Well, it sounds like everyone is in agreement. In my head I know that is the right thing to do but putting it in savings makes me feel more secure in case something happens. It seems like emergencies lately, especially for a house,can be very costly. The security thing is throwing me a little.

I dont use my cc anymore but I guess it does make more sense to pay off the credit cards. IF something happens and I dont have an alternative, I guess I could use a card if absolutely necessary.

Thanks for the help. I think this board is very motivating! Ive already cancelled cable and some other things I dont use anymore. But where is the snowballing info?

Thanks,

Meena

Avatar for mymartes
iVillage Member
Registered: 03-26-2003
Mon, 10-18-2004 - 1:12am
I would put the $800 to payoff the c/c. Literally, that was money you had already spent. Once that c/c is payoff, I would cut it up. You don't necessary have to cancel the account.

That's just my two cents.


MYM

iVillage Member
Registered: 02-19-2004
Mon, 10-18-2004 - 9:03am
There is a link at the top of the board page under "community" that explains snowflaking, and I think snowballing too.

Photobucket

iVillage Member
Registered: 03-27-2003
Mon, 10-18-2004 - 12:51pm
Well, let me be the dissenting voice then LOL. I think you should put enough in savings to feel secure. While mathematically speaking, you "earn" more money on credit that is paid off, motivationally speaking, it makes more sense to me to have a safe cushion. Why? Because when an emergency does hit, it is more demoralizing to have to charge up more debt than to spend some savings. I feel prepared and together when I dip into savings for emergencies. We recently depleted my $700 in savings on a combination of dental work, a settlement with our former apartment complex--we ruined the carpet, blush--and expenses relating to retrieving a car that turned out to be a total loss, grrr. If I had charged up $700 on a credit card, I'd sit down and cry and probably just quit for a while. On the other hand, taking it out of savings hurt (yes, I cried a bit), but at the same time felt empowering. "I'm paying cash for all these things at once!!" I thought to myself. Wow. What a feeling. No panic, no depression.

Now, having suddenly depleted all $700, I also felt vulnerable, and my first goal is not only to replace the $700, but to build it up to $1000 before I go back to snowballing my debt. Luckily, it's bonus-time at dh's work, and check's-in-the-mail time for my small freelance business, so we should be able to replenish it fairly quickly.

So, my point is, if I were you, I might pay some debt with that money, but I would put enough in savings to feel secure. Then you can continue to bring that debt down over time while knowing that you won't have to charge it up if you're hit with an emergency.

Of course, just be sure that "emergency" doesn't include things like a sudden need for a designer blouse or that gorgeous lighting fixture that's on sale this week only! LOL

Bottom line is, do what makes you feel secure financially, and then work on the rest.

Blessings,

Heather

iVillage Member
Registered: 09-21-2004
Mon, 10-18-2004 - 1:17pm
Personally, paying off the cc just sounds to good for me. lol Can you tell I've had cc payments for too long? But I can also see why you would want to put the money in an account for security. Couldn't you pay off the cc and put the money you would be paying to that into your ing account?
iVillage Member
Registered: 07-29-2003
Mon, 10-18-2004 - 4:32pm
That is a good idea and one I wouldnt have come up with. This is new thinking on my part. Ive been sending $300 a month on each credit card to pay them off for the last 6 months. I could take the money I wont have to pay anymore (because I paid off the cc) and put it in my ING acct. I'd really only have to do that for a month or two to feel better.

I just finished separating all my change (I have a round glass cookie jar Ive been saving in for a long time and its just about full) and Im taking it to the bank to find out how much I have. I wanted to buy a new dresser with that money but its going to pay a cc. I cant wait to see how much I have!!! And I cant wait to pay off another card!

I have been working toward paying off my debt for a year now (although I have used my cards on rare occasions) but its more exciting since I found this board last week!! Everyone has such great ideas and its become a focus for me to pay off as fast as I can.

Thank you all for your great ideas.

Meena

Pages