Comments on: Forget Your Senses to Make Cents

By: Alan Spiegelman

Alan Spiegelman — Fri, 29 Jan 2010 02:37:42 +0000

Interesting ideas, but I have to disagree with your suggestion to “pay the smallest debt first.” This strategy might help people find happiness, but bliss through ignorance, to me, is not the best financial strategy for people to pursue. it’s definitely not the most efficient way to achieve financial security nor independence from bills and debt. One way to get psychological AND financial benefits is to write down specific goals for to pay off debts and save. Week by week, month by month, goal-setters who target their high interest rate bills first can achieve financial goals faster by maximizing the debt-decreasing impact of their hard-earned money. And at the end of the day, what could make someone with debt happier than that?

By: Cd Phi

Cd Phi — Tue, 26 Jan 2010 16:34:40 +0000

I totally agree with paying the smallest debt off first because it does give you some peace of mind. Psychologically, it’s a relief to even pay off one thing, despite how large or small it is.

By: MoneyNing

MoneyNing — Tue, 26 Jan 2010 06:25:27 +0000

I don’t think a home is ever an investment, but I totally agree that borrowing money to make money is not the right idea for most people.

While the idea sounds right, most people will lose money doing it.

By: MoneyNing

MoneyNing — Tue, 26 Jan 2010 06:17:55 +0000

As they say, knowing is half the battle…

By: MoneyNing

MoneyNing — Tue, 26 Jan 2010 06:17:15 +0000

I actually think that HELOC is a great alternative to emergency funds. Of course, this is only recommended for those people who won’t abuse it thinking that their house is some type of an ATM machine.

By: basicmoneytips

basicmoneytips — Tue, 26 Jan 2010 01:56:44 +0000

Good article, I especially like the idea about waiting 30 days to see if you still need something.

In the end, it all boils down to discipline. If you can use credit cards and pay off the balance, do it. You can get a lot of free rewards. If you are complusive spender, then tear them up.

What works for one person may not work for the other. In the end, that person should know his or her limits and stick to them.

By: marci

marci — Mon, 25 Jan 2010 21:17:38 +0000

I think it depends on how small your smallest debt is… 1. It’s nice to get “something” paid off…. 2. Sometimes by getting rid of that one payment it can ease up your cash flow, making things a bit less stressful. Even tho you know you are going to put that payment money towards the next debt, there is that “safety cushion” of not having to pay it in case of a real emergency.

If there is not a really small debt, for that “jump start”, then I’d definitely go for the largest interest one first.

Paying off the Mortgage Early – Besides peace of mind and sleeping more soundly, this Opens UP your equity via a Home Equity Line of Credit. Those who say the money is tied up in the house and not available for use, can make the money easily available via a HELOC if needed. Not that I would encourage that, but it does make the money available in an emergency

By: Cheng

Cheng — Mon, 25 Jan 2010 19:27:21 +0000

I love shoes but the less I buy, the less I somehow want them.

I’m starting to understand that not satisfying my desire will help me want less. It’s backwards but it works for me too.

By: 2 Cents @ Balance Junkie

2 Cents @ Balance Junkie — Mon, 25 Jan 2010 18:54:32 +0000

I don’t think that borrowing money against your home to buy long term appreciating assets is EVER a good idea. You are risking the roof over your head in order to invest in “assets” with no guaranteed returns, and possibly huge losses. Why not pay down your mortgage, secure your place of residence, and receive a guaranteed tax free return at your mortgage rate? After all, isn’t your home as much a “long term appreciating” asset as a stock or bond investment?

By: Vincent

Vincent — Mon, 25 Jan 2010 17:56:10 +0000

I’m not sure if I agree with forgetting about common sense but point well taken. I still like paying off the highest interest rate first but I agree that it’s not for everyone.