[NefCanuck]

Oscar The Grouch,Sep 29 2005, 08:31 AM Wrote:

darkpuppet,Sep 29 2005, 08:22 AM Wrote:ALWAYS pay off debt before saving money.  making 2% on your investments won't offset the 23% you're paying on your credit cards.

ING is a pretty good way to go.... though I miss the days of 3%...

gonna move this out of the cage...
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Well, I like keeping a certain amount of debt. Reason being, if you pay it all off right now and have no savings, and if s**t hits the fan (like losing your job or a nasty divorce), then you have no savings to backup on.

And if you lose your job, the financial prospects of getting another loan are lower.

So my recommendation is to first pay off short term high interest debts (credit card, payday loans, etc), then save 4-6 months of wages in savings or highly liquid investements.

Then once that's done, start investing and put more money into paying off long term debts.
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I agree to a point, that point being that quite frankly I have yet to meet anyone who has actually managed to sock away 4 - 6 months worth of wages in a bank account or liquid investments, if only because that's a boatload of cash to sit around doing nothing (or next to nothing)

I mean I've only managed to sock away an extra weeks worth of income this entire year to add to my previous savings (which amount to a months worth of income). Too many things pop up, esp. when you are a single person keeping a household up.

NefCanuck