.
 |
pay off debt, unless you want more debt... |
|
ne11
 |
Put $1000 in a CD with a good rate. Use the remainder to pay off your debts. |
|
Dave M
|
Depends on the interest rate of your debt compared to how much you can earn in savings. If it's credit card debt, you're better off paying that off.
As an example, if you have a 21% APR on Credit and a 6% APR on your savings, then paying off credit is like getting a 15% earning on your cash (think of all the money you'll save not paying that interest for the year). On the other hand, if it's something like a home mortgage, then put the money in a high-yield CD as 5000 towards your home isn't going to make much of a dent, but having 5000 for emergencies would be nice. |
|
PS
|
the answer depends on the interest rate. put your money to whichever is the highest. for example, if you have debt with a low interest rate (say 2%) and your savings account gives you 4%, put it in savings. don't forget that you will need to pay taxes on the gift, so you do not really have $5000.00. |
|
ersof59
|
Pay off debt unless you can find a savings plan that pays higher interest than the interest you are paying on your debt. If you do, let me know where. |
|
notarycat
 |
You could do both. Put some towards bills, maybe payoff one bill completely. Then put the rest in savings. Or you could pay off a couple littler bills, and put a bunch in savings. It really depends on what you want to do. I hope you will put at least something into savings. It's hard to save money these days, so every bit helps. |
|
twv706
 |
If your paying off credit cards, I would use it towards that to save on monthly interest on your balances. Otherwise, save it for a rainy day when you may need it for a mortgage payment or car payment.
That is just my opinion... |
|
Colette B
 |
If your debt has interest, you should pay off the debt and then put the payment that you would have made to the debt into a savings account. |
|
dmvariety
 |
It depends if you are going to report it to IRS then put some in savings to pay taxes. Pay on the debt and see if you can negotiate a pay-off make sure it is in writing, names, sign, dated if you decide. Pay on time that is what counts and double up. You want to have some money left and invest little some in HSBC before April 30 online banking get 6% interest. www.HSBC.com sign-up let it draw some interest (New money account.) |
|
jdkilp
 |
It depends on the interest rates and if the interest on the debt can be deducted on your income tax. Start with paying off high credit card debt. After you get that paid off, pay off debt you're paying interest on that you can't deduct (car loans, etc.). Don't pay off your home mortgage ... invest first. |
|
sparklinbeeze
|
pay off your debts...anything left over, put into savings... |
|
ldsnightmare
|
It is absolutely better to pay off debt. This is simply because the companies you owe money are charging you interest until you pay them back. On average, this interest rate is around 10%.
If you put that money in a savings account, you will most likely earn an interest rate of less than 1%.
To make a long story short, it only makes sense not to pay off your debt if you find somewhere to invest the money that pays you interest at a higher rate than you are being charged by the people you owe money to. :0) |
|
Thin Kaboudit
|
Debt always grows faster than savings, so pay off your debt.
If you have $5000 in debt, though, you will soon have that much again... That's just ridiculous... |
|
notyou311
|
Pay off your debt. Otherwise the interest will keep going up and you well end up paying more. |
|
Alex
|
There's always a lower interest rate when you invest in a savings account or Certificate of Deposit, because the bank has to make money somehow. By charging more for their loans and credit they make money to pay for that fancy sign. What you would pay them in investments they would loan out to someone else at a higher rate. Therefore pay off as much of your debt as you can. Never invest until your out of debt. |
|
aluisious81
|
Pay off your debt.
There's no way you're going to find "savings" that pay more interest than your debt is charging. |
|
Elisabeth
|
pay off debt. unless you want to invest it on something. |
|
Jessy
|
I would compare the interest rates of your savings account versus the interest rates of whatever debt you have. More than likely, it would be better to pay off your debt in the long run, since the interest rate that accumulates on debt is usually much greater than the interest you would gain in a savings account. |
|
Alison D
|
Put most of it on debt (about $4000) and the rest into savings. That way you eliminate some of your interest. |
|
BionicNahlege
|
It's always a good idea to pay yourself first.
Three options:
1. Pay half on the debt and half into savings.
2. $1000.00 in savings, $4000.00 on debt.
3. $3000.00 on debt, $1000.00 in savings, and $1000.00 in IRA, Mutual Fund, CD, invest in something...
Bottom line, if you have $5000.00 in debt, you can pay it off at once or decrease the debt by a decent amount and see it as a freebee and reminder not fall behind again. |
|
steel warrior 01
 |
both if you can if the debt is able to be payed on pay on it some most money market accounts open at 1200 dollars and many pay at 4.5 to 5.4 depending on your loacal market so you can make some of that money work for you for a bit |
|
The Scorpion
|
It depends. If you have reasonable debt at low interest then it would probably be better to save it/invest. If you have high interest then you should get rid of the debt. If the debt is something that you're going to be able to get rid of normally and without problems, then save. The effect on your net worth is exactly equal regardless of what you do, the issue is the nature of the debt you have. |
|
Rich
|
A few of the other responders have touched on the right idea. Here are my thoughts.
The real question is the interest rates. Figure out how you would invest the $5,000...CD, stock, savings account, etc. What is the interest paid on your investment? Compare that interest rate to the interest you are paying on your debt. If the interest you pay on the debt is higher than the interest you'd make on the investment, then it is smart to pay off the debt. If you make higher interest on the investment, then make minimum payments on the debt and save as much as possible. |
|
linkin
|
Think of it like this: Would you borrow $5k to put it in your savings acct.? Probably not, but that's essentially what you would be doing if you didn't pay off the debt.
It doesn't matter how much interest you might earn on an investment, or how much you're paying on your debt (assuming that you are).
If this money gets you completely out of debt, take the monthly payments that you were making towards the debt and invest it. I buy mutual funds that have been est. at least 10 yrs. with an average APR of at least %12 for the life of the fund. |
|
Eva D
|
none of the above... it's better to spend it like a pimp, and get a new grill or some rims. you'll get some mad respect in da streets, ya dig? |
|
| |
|
Homepage 
Financial
Forum 
Personal Finance 
No Spam
Adult 
Gambling
Unfinished
Deception
Plagiarism
Not English
