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@Truth Bombs: My mom is an accountant and my best friends are *stellar* financial planner people so I definitely get your main focus on interest rates (both debt and savings) and qualms about DR. From my rudimentary understanding, a basic rule of thumbs is 7% ROI?? I am a risk-averse person with $$. I hate the idea of the stock market etc. but I know I have to dip my toes in, in a low-risk way. So to me, paying off my student loans around 5-6.8% has a better physiological pull and a roughly-even financial pull. Where it gets tricky is definitely when you get to areas like the mortgage, 4.7% APR, etc. My heart says mortgage, my head says investments. I know both is optional but I struggle with allocations.
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@Dr. Pepper: thanks for your detailed reply.
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@lawbee11: yes, I love Ally and that's where we keep our savings. As for CC, yep, we pay everything on CC and pay them off weekly. Since we budget and track expenses, I never worry about not being able to pay them off. We earn about $50 in rewards monthly and have for the last 10 years.... wow that is $6000! Just did the math for the first time.
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@DesertDreams88: I wasn't sure what your pension situation was so was interpreting your prior explanation as not having any retirement. So with the pension then no I wouldn't be so worried about investments right now. I really consider my retirement contributions beyond the pension to be a bonus. I started teaching so young that I can retire at 80% salary age 58 so I'm hoping that will work out. Don't know what life will throw at us though! Reminded me that I gotta get on the life insurance situation
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I do want to point out that not all 403b's are terrible. I had a healthcare run 403b and it was amazing. The fees were low and the funds performed great. I think a lot of that depends on the administrators of the plan. My hospital has done away with the 403b at the end of last year in favor of a 401k (which is also performing amazing). No matter if your work has 403b or 401k, you need to look through those wordy documents that describe the fees, the funds, and the administration of the plans. You can have good and bad in each kind.
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@Dr. Pepper: thanks for pointing this out! I work in a university setting and we only have the option for a 403b but you can choose different carriers (e.g., Vanguard, Fidelity, etc) and different funds within them. I have a target date retirement fund that is functionally the same thing as my husband's through a 401k.
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I am a business credit underwriter and review a lot of personal financial statements for a living so I have opinions about this lol! It really depends on your personal situation and what your cash flow is like. But I always think it's best to pay off toxic debt like cc's, helocs, even student loans, etc. while at the same time building a cash reserve. I don't think the reserve should come first I think it should be 50 cash/ 50 debt payments. Then once toxic debt is gone pay off things like car and house. In theory it should get easier and easier as you go.
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@DesertDreams88: I am also extremely risk averse with $. And in my line of work I've seen individuals and businesses lose everything when investments took a turn for the worse. So I think money you invest should truly be extra cash and money you would have otherwise invested elsewhere like in an income property or a business or something. Ideally you pay off your debts first THEN invest your cash. That's just my personal approach though and I'm sure a lot of finance people would disagree.
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