I thought I’d share a few “food for thought” ideas relating to personal finance.
In this time of great uncertainty, is it better to work on building your savings or to use that cash to pay down or payoff debt?
In the past, it has almost always been suggested to pay down or off if possible whatever debt you might have. In almost all cases, the interest rate you are charged on your debt is quite a bit higher than what you are being paid on your savings balance. Therefore it is only logical to lower what you owe rather than collect a few pennies on your savings, right?
Maybe not, at least not right now anyway.
With credit card companies and some home equity lenders reviewing accounts and reducing limits, it might just be better to keep those funds in a savings account where you could actually use them if an emergency happened rather than be forced to scramble for credit at a time that is likely stressful enough as it is.
No one can decide which option is right for you. Hopefully it will help you think about different options, though, and open your mind to other tools that might help you whether the storm a little better.
And, if you’d like even more help or tips to improve your finances, check out Balance Financial Fitness program on our website. It’s packed with great articles, tips, and tools.
Posted by brandih 