I've got ninety thousand pounds in my pyjamas...

[smeddley]

(yeah, be prepared for a lot of posts today, it's a great procrastination tactic!)

I dropped off the change that has been accumulating around the house for... oh, probably a few years. We don't use cash often, so it doesn't build up that fast. Anyway, I was one teller over from an old lady who was asking whether the leap day would mess up her pension check being deposited. Evidently, something did, because it hadn't been. She was distressed because she had plans for the weekend, and needed the money. So she asks how much money was in her checking account. The teller told her it was $14 and some change. So she asks how much is in her savings. Now, I'm figuring she's going to tell her a few hundred at the least... but no. Just over $17. So this woman had about $32 to her name.

I remember those days, running my checking account down to under a dollar, and not even having a savings account. (Oh, college. How I don't miss you.) It's not pleasant. And things do happen even when you're on reasonably good footing (last year my hubby didn't get paid for over a month, and I just barely noticed in time!).

So even though my logical mind tells me I really should empty out my savings account to pay down my home equity line of credit, should I? I don't know. Part of me says yes, I'm paying interest on borrowed money and getting next to nothing on money sitting in the bank. And it is a line of credit, should I need the money in an emergency, I can get more out. And in the meantime, less interest! But it feels wrong to be without savings. As wrong as paying that much interest? *sigh* I don't know. I like the safety net of the savings account. It's comforting. But I hate paying interest... ARGH! *tears out hair*

Which is the right thing to do? (Yeah, besides stop spending money and all that good stuff - I'm already feeling guilty about all the things I want to buy for the house, I know the tax refund should go straight to debt but I want a new stove! And, unlike the couch I want for downstairs and the new counter tops I would like, oh, and the furniture we bought last month... the stove really is going to die at some point. It's already touchy!)

Comments

[alankria.livejournal.com]

I'm one of those fortunate people who's had savings all their life, and I'm not sure I could live without that blanket. Of course, I'm mortgage-less, so my savings are big and will hopefully get bigger in order to one day put a deposit on a house. But even when I have a mortgage, I think I would want savings of at least a few grand. Because you never know what will come up.

(Also, your terminology confused the heck outta me when I went to get cash in the States. "Checking account? The hell is a checking account? ... Well, it's not my credit card, and it's not my savings, as those are there too (and whut is this allowing me to access all three from one card? this is convenience we lack in England) (and, er, which savings account, I wonder...), so I guess my checking account is my current account. Here's hoping!" It was, fortunately. =D )

[smeddley.livejournal.com]

Checking account - the thing you write checks out of, or, if you're with the times like me, use your Visa Check card which is just like a credit card except... not. ;)

I have a lovely savings account before we bought the house, now it's pathetic. I ran the numbers, and because of the introductory interest rate we got on the HELOC (for three years) it'd only save me $300 if all goes according to plan (fingers crossed!). Honestly, my peace of mind for the next two years is worth that. And once my savings account tops a certain amount I can transfer some out to pay it down more - it's just not there yet!

I am tired of owing money, but not enough to stop spending it, evidently. Hopefully we'll be out of debt in 2-3 years. Just in time to need a new car!

[alankria.livejournal.com]

We have debit cards, which we can pay with and the money comes directly out of our current accounts. (Which is our checking account -- we do, indeed, write cheques out of it, although cheques aren't used much these days. I haven't written a cheque in aaaaages, I just use my debit card for everything.)

[smeddley.livejournal.com]

See, if I use my bank/atm/check/debit card as a 'debit card' they charge me a transaction fee. It's something like $0.25 per transaction, but over a month that could add up. Now if I use the same card as a credit card, it's free. The differences are with a debit card you can get cash back and use your PIN, with the credit card you can't get cash back and you sign for it.

I write checks to pay certain credit card bills, the ones I don't want to bother setting up on-line accounts for (like Sears and Lowes) and to put money towards my HELOC (because I can't pay that on-line with money from a different checking account, which is annoying). Other than that I mostly use my Discover card to try to get a lot of cashback bonus gift card to places so I can shop!

[alankria.livejournal.com]

Our debit cards and credit cards are separate things. Neither charge for transactions (though the credit card will charge for withdrawing cash from a cashpoint). Both use PIN.

I only have the one credit card, which is set up to be paid off automatically each month (though I normally do it ahead of time on pay day, which is mid-month, just so I know exactly how much of my pay I have for the next month, rather than getting a fun surprise* in the middle of my pay period). I don't have credit card debt and it's something I'm going to work really hard to avoid, because the interest is a bitch.

*It's not really a surprise, because I know what's on my credit card, but you know what I mean? It's good to get it all squared off on pay day, then I know exactly what I have.

[smeddley.livejournal.com]

See, my bank credit card acts like a debit card in that it takes the money out of my checking account. So it's not like it ever has a balance, it's just a different (cheaper) way of doing the same thing!

Now, I have other credit cards not associated with my bank that are real credit cards. Only one has a balance that is drawing interest, the others are store cards on promotional 0% APR and my Discover, which I pay off every month (though actually sometimes the balance does come as a surprise to me, I've become extremely lax about keeping track of my finances lately).

And, of course, the HELOC and the mortgage, both with suck the money out of my account like... well, that analogy probably isn't fit to type, but you get what I mean! ;)

[oneworldvision.livejournal.com]

I've yet to experience real-world type things like checking accounts and lines of credit, but even now once I put money into my savings accounts I'm extremely loath to take it out again for any reason. I take a certain amount out of each paycheck when I deposit it and try to stretch it as far as I can until I next get paid. Of course, during the school year this is next to impossible, but I still hate filling out those withdraw slips and seeing my balance go down. It feels like my safety net is shrinking, even though I'm at this very moment sitting in the biggest safety net of all, aka my parents' house. Lord knows how frugal I'll get once I'm really out on my own.

[smeddley.livejournal.com]

I know, it's a sad feeling to pull money out of a savings account. It feels like all that hard work is just... slipping away. But sometimes it's worth it, it just depends.

I used to be a lot more frugal, but the house has cost so much and once you're so far in debt.... I have to admit it'd be really easy to let it snowball, at least for awhile. Though I can't image how freaked I'd be in the end if I actually let that happen! That's why I'm waiting for the tax money before buying a stove (I guess I should finish filling out my taxes, then...) and am putting off getting a couch even though I'd LOVE to run out this weekend and buy both!

[dynastic-queen.livejournal.com]

Debt follows you even after you're dead. Girl, if your stove is about to die, get yourself a new stove. That doesn't qualify as a luxury in my book (unless it's one of those models that talks to you, runs the house, and takes the pet to the vet...)

:)

[smeddley.livejournal.com]

I dunno what it's life expectancy is at this point, it could hold on for awhile. But it would be nice to have a newer one, sadly, I need a Jenn-Air and that is a bit of a luxury, comparatively speaking!

[revoked-soul.livejournal.com]

I've always felt silly having savings when I could/should be using the money to pay off debt. Because I HATE being in debt.

Then again, I am disturbingly accustomed to operating without a safety net. Having any significant savings is a luxury I look forward to having someday. ;)

[smeddley.livejournal.com]

I hate it too, and sadly, I very much am. I'm considering my choices... I dunno what I'll end up doing!

I don't know that my savings account would be considered 'significant', but it's nice to have a little bit!