I haven’t updated the status of my debt reduction lately. I think that’s partly because I feel guilty that I haven’t made that much of a dent in it. I’ve decided that with all the talk about having a baby, gas prices skyrocketing, and the unstable economy that I’m going to be throwing every extra “snowflake money” into our savings account.
I go back and forth between paying off debt and saving money. I’ve got quite a nice chunk of change in our savings account now, but I want to keep building it up in case something happens. I think about paying off our student loan and mortgage early, but then I get worried that we’ll need a new car or something will break or something awful will happen and then I decide to just put the money in savings.
It’s almost an obsession, which I’m sure it can be for a lot of people. “Should I pay off debt, or save money?” is one of the most prevalent, if not number one, question among smart savers these days. In our situation, it’s a toss up, I think. Our loans are at good interest rates (nothing more than 6.89%), and I think that if we need to get a loan in the future there’s a possibility that the interest rates may be much higher than they are now. If I save enough money, I won’t need to borrow any.
Any way I look at it, I’m still paying off debt and saving money at the same time, so it’s a win-win situation. Maybe when things start looking up I’ll put more money towards paying off debt faster. But for now, the peace of mind of having that savings account have a larger balance outweighs any other doubts I may have. And that’s all that matters.