Do you think I should save some of my cash and THEN pay the credit cards?

A friend of mine and her husband have a secure safe in her home where she saves most of her money in the form of cash and keeps little in the bank. I am very level-headed and like my money earning interest, but I can%26#039;t help but think that this is not such a bad idea, especially with the way the economy is right now. Who can really say that something like the Great Depression could NOT happen again? What would happen if the market crashed, the government was overthrown, or if there was some sort of natural disaster where it%26#039;s strictly cash and carry? Not so far-fetched. How would my credit cards, or bank account help me then? I am not generally a %26quot;what if....%26quot; person, but the more I think about it, it%26#039;s a good point. Maybe I should put about a grand in a safe in my home (one no one could steal of course) along with a handgun (with a trigger lock) just in case? Then save the rest in the bank %26amp; pay bills. Has anybody else thought about this or am I just being a little too paranoid?

Do you think I should save some of my cash and THEN pay the credit cards?

Don%26#039;t give in to paranoia. This sort of widespread financial or natural disaster is highly unlikely - and if it does happen, everyone will be equally screwed, and the cash you have on had might not be worth the paper it%26#039;s printed on, anyway.

Financially speaking, be prepared. Pay off any debts you have right away, or the interest will just continue to grow and spiral out of control. Don%26#039;t spend more than you earn, and pay off your credit card bill in full every month.

Then start an emergency fund with 6 months worth of living expenses. A money market mutual fund at any bank or financial institution like Fidelity or Vanguard is perfect for this.

Home-wise, yes, definitely prepare for a natural disaster. Make sure you have enough food, water, medical supplies, blankets, radios, batteries, flashlights, etc to last everyone in your family 3-7 days. Sure, have a few hundred or thousand dollars on hand in case you need to evacuate quickly, but remember that in a real emergency, a simple can opener is priceless and money is just paper.

Being prepared and having a reasonable plan will help to keep you from panicking.

Do you think I should save some of my cash and THEN pay the credit cards?

If any or all you are worried about happened, cash would be worthless! There is no point! In the great depression, you could have walked down the streets with a wheel barrow full of cash and it would have done you no good!

Do you think I should save some of my cash and THEN pay the credit cards?

Well, if what you are thinking actually happened, the US economy would melt down, there would be no Federal Reserve to insure you up to $100,000 (Depositor limit, does not matter how many accounts you have) We would break down into tribes and it would be the survival of the fittest.

Do you think I should save some of my cash and THEN pay the credit cards?

iwish has a great point. If we are in a situation like you discribed, money would have no value. I would just contiue like your living and not worry about it too much. I know plenty of people that have that though. About $1000 and a gun in a safe. If it makes you feel better, then do it.

Do you think I should save some of my cash and THEN pay the credit cards?

Pay your credit cards first. If you keep cash you are losing 3% a year due to inflation. Paying your credit cards down is almost always the best investment.

If you are paying 15% interest on your credit card then any payment you make on the card is equal to a 15% return on investment (and you won%26#039;t find that in todays market).

As for your second question:

Put your money in the bank. It is FDIC insured meaning that if the bank goes under, the government will reimburse you up to I believe $250,000 (this was not around during the Great Depression). If you are really worried about the US economy and the falling dollar, put some money in an overseas account or any account valued in another currency, prefferably the British Pound or the Euro.

Do you think I should save some of my cash and THEN pay the credit cards?

In the case of a natural disaster, the preparations you%26#039;re talking about would be wise. I keep cash in the house and also own a handgun. The cash isn%26#039;t in a safe, and there%26#039;s no lock on the loaded gun, but then again, I don%26#039;t have kids and I have an alarm system.

About the economy....we%26#039;re not heading for a crash. A capitalist economy is cyclical. You have to have periods of economic downturn in order to have growth. It%26#039;s the basics you learn in economics classes in college. The news media is blowing things WAY out of proportion, but sure, there are some companies who sunk themselves through subprime lending. To them, I say...%26quot;DUH%26quot;. You were giving money to people who don%26#039;t pay their bills...what did you think was going to happen?

In the end, if it makes you feel safer and more prepared, take any and all precautions you feel are necessary to ensure your well-being and safety. Remember that old adage %26quot;It%26#039;s better to be safe than sorry?%26quot;. Why not? It%26#039;s not going to hurt anything.

Do you think I should save some of my cash and THEN pay the credit cards?

Don%26#039;t be silly. Even in a melt-down situiation, your creditors will still come after you. Pay off that credit card debt and don%26#039;t run it up again!

Do you think I should save some of my cash and THEN pay the credit cards?

I think we are in for another great depression. For one thing there are too many unsecured debts in the form of credit cards, people are loosing their homes, fuel prices have raised the price of everything and there are people already on the streets because of it. There is too much you don%26#039;t hear on the mainline news. The style of life you are living needs a change. Start out on the weekends. You can learn a different style of life, should it become necessary to live that way you will be ready. Get a small cabin out in the country where you can have a garden, well, wood stove, etc. Learn to use them. Learn to can and preserve the things you grow. I am only giving you the advice I took for myself... Don%26#039;t hide your money in a steal able safe. Also don%26#039;t hide under the bed......... Get going and good luck.

Do you think I should save some of my cash and THEN pay the credit cards?

Nah dont think that way. If you want, just save a small amount just in case but on the short term. Your money is more secure in a bank and it is backed by the Federal Reserve plus you make interest. Your friends are thinking like the %26quot;1930s under the mattress%26quot; point of view. Its been over 70 years since the depression. There are more chances of it not happening than having another depression.

A smarter way of being prepared is by paying off all your stupid debt like credit cards, car loans, etc...

-Ed