Monday, June 27, 2005

To Save or Not to Save?

Let me just say that I am terrible at saving money. Big surprise? Ok, Ok, I know what you are thinking...its not because I have out of control spending habits. Its just because saving money is so boring. I'd rather put my money to good use instead of hoarding it away in a dark corner like a squirrel hoards acorns for the winter. With such a huge amount of debt wouldn't it be better to pay off my debt than to put it in a savings account?

I did some research and found this cool calculator that can tell you how much money you would save or lose if you paid of your debt as opposed to putting your money in a savings account.

If for example, you are a slave to your credit card as I am and owe approximately $17,981.00 with a 3.5% APR and pay approximately $1,000 towards your debt every month it would cost you $839 over a period of two years if you put that into a savings account with a 3% interest rate.

A little savings is necessary to have around for emergencies. I've decided to put away $1,000 for life's little hiccups. They say that you should save at least 3 months salary in case of unemployment but this will obviously vary from person to person. I live at home and don't have dependents so I can get by on a small cushion while I dig myself out of my mess while other people with families and mortgage payments should plan on saving considerably more.

Saving money doesn't have to be all bad. I previously had my savings account with Wells Fargo and was earning not even .06% in my savings account every month. I finally looked around and found out that ING Direct pays loads more at 3% and offered a $25 bonus just for signing up through a friend and will give $10 for every person that you refer. So far, so good. I have referred 3 people plus the $25 sign up bonus and have made $55 just for saving my money. If any of you are in the market for a savings account, let me know and I will send you the link.

Current Debt: $17.981,00

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1 comment:

Chris said...

Nice blog and a very good goal. I've been through it before myself and it's a constant struggle, but you'll get used to it soon enough. I'll definitely mark this :)