Loans vs. Residency

[spacecowgirl]

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What's the alternative to an emergency fund? Using credit? I'd rather pay my smaller loan interest rate than a credit card interest rate. I've been down that road before and never want to go back.

 

[crazybob]

An emergency fund is essential. It's great to work on paying down debt, but if you don't have a few months worth of expense money in the bank, you could lose everything you own if you lose your job or get hurt/sick and can't work.

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While it's great to pay off ASAP, you need to make sure that you have enough money to support yourself while making those payments.

 

[crazybob]

What's the alternative to an emergency fund? Using credit? I'd rather pay my smaller loan interest rate than a credit card interest rate. I've been down that road before and never want to go back.

Having friends or family members to help? Well, it's probably not for everyone though.

 

[All4MyDaughter]

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While it's great to pay off ASAP, you need to make sure that you have enough money to support yourself while making those payments.

And if you keep your monthly expenses in check while you are paying off loans, it shouldn't take too long to get that emergency fund saved up.

 

[owlegrad]

An emergency fund is essential. It's great to work on paying down debt, but if you don't have a few months worth of expense money in the bank, you could lose everything you own if you lose your job or get hurt/sick and can't work.

For sure. That's what makes me torn.

 

[owlegrad]

You wouldn't want to know what we paid in mortgage interest last year then! We have a fairly modest house at a low interest rate, but we still pay over ten grand a year in interest. I fully advocate taking on the least debt possible but it's hard to avoid unless you don't buy a house for a long time. Life is expensive and we've had a rash of costly home and car repairs lately...you can't avoid that. I pay extra on my debts every month, have no consumer debts or car loans, have a good emergency fund and we put away a lot in retirement. Beyond that I really try not to think about it too much. It's the cost of the investment I made in my future.

That is a very healthy perspective.