Submitted by [deleted] t3_1233auf in personalfinance
[deleted] OP t1_jdudcry wrote
Reply to comment by autismspeaksdotcom in Preparing to buy our first home by [deleted]
[deleted]
autismspeaksdotcom t1_jdueh34 wrote
Im sorry, I might’ve been a bit harsh.
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You’re right, having emergency savings is very important.
On another note, it can be risky to have all of your emergency savings in stocks.
In the same way how one can lose their job in a recession, your (savings) investments can shrink or even cease to exist. That’s double trouble. Triple if you count the debts too.
Then you still have debt, less savings and reduced/no income. The debt will not wait for the recession to be over; month by month, it piles back on. Snowballing if you will.
If you pay off your debts, you can guarantee that you’re no longer losing more money to interest. Each month, the money you would’ve paid towards your loan & interest, can go to savings. You can’t guarantee that you’ll make money in investments.
[deleted] OP t1_jduf00n wrote
[deleted]
Potential_Lock6945 t1_jdunxyf wrote
By you not paying off your credit card debt today and keeping $7000 in a savings account, you’re basically paying 26% apr (or whatever your credit card apr) for that. You should take $6,000 out and apply it to your credit card today and keep $1,000 in you’re emergency fund then start rebuilding your emergency fund.
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