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A question

June 14th, 2020 at 10:23 pm

Do you think that people who are employed have the ability to save money even in smaller amounts no matter how deep in debt they are? I'd like to read your take on this.

7 Responses to “A question”

  1. Smallsteps Says:

    I think people get overwhelmed by all the items they feel needs to be done. debt reduction/ savings plans either long or short term.

    While some like to take on one item ( debt) at a time ... I feel that LIFE is not like so why should financial planning.
    It may work for some people but in the end often those fretting on paying off one item only get derailed for not having a small saving fund for the what ifs.

    There are so many options to set aside a small amount and if left alone perhaps in a separate bank/ cu and you don't watch it it is amazing how fast small things add up.

  2. CB in the City Says:

    It is hard to save when you have debt, but it is so important to have an emergency fund so that you aren't always turning to your credit cards when something breaks. I believe people can save up an emergency fund, even when deeply in debt, if they make it a priority.

  3. Lucky Robin Says:

    Yes. We did, but it was hard. It took a lot of discipline and sacrifice. I remember in the beginning all I could manage was $10 a month into savings. And then it became $10 a paycheck. Then it was all my coins and one dollar bills in addition to that. We scrimped to get an emergency fund into place. So I know it can be done.

  4. mumof2 Says:

    yes having an emergency fund really helps out...and it can be done..every small bit counts I live by a busget that has everything in it....when I help people with their budgets it is written out and then they call debt people and say this is how much I can pay and no more..most are fine with this some will argue but as long as you pay like you say you will and you can if you stick to your budget then you can save and pay down debt and pay for all essential services (rent/food/elec/gas etc)

  5. MonkeyMama Says:

    No. But I would say the vast majority of people I have known "deep in debt" (most in our peer group over the years, especially during the debt bubble) had debt payments that exceeded their income. For reference, I am only referring to middle class/higher income situations. I am guessing that at smaller income levels, it doesn't take much to be "deep in debt". If necessities already take up all of your income.

    Thankfully, this has become a less common scenario post housing bubble. But... I have a co-worker a few years older than me (similar income) who has 5x as much debt as we do. ??? & it's not all at 2.5% like our mortgage. They are paying usurious interest rates on some of their consumer debt, I would presume. So... Their debt payments are more than their income? I guess that's a perfect example. This was pretty much everyone I knew in 2005. This is probably more of a high-cost region bias where "deep in debt" means DEEP.

  6. Wink Says:

    I don't think the answer is a simple "yes" or "no". I really think each person's circumstances are different. There are people who are deep in debt simply because they spend too much on wants instead of needs. If they change some behaviors they can most certainly start saving. But there are others who are employed and deep in debt because of circumstances beyond their control. Things like medical debt, unexpected job loss, or divorce to name just a few. For those people it can be a lot harder. Not saying they can't do it, but it can be really tough.

  7. Creditcardfree Says:

    I think yes. I think most of us believe that despite the amount of debt, one has the ability to pay extra to pay it off. If that isn't true, than the answer is no. Should some save when deep in debt, yes to some degree, everyone could use even a small safety net, such as $1000 EF Dave Ramsey suggests. I do get that on lower incomes, much harder, but if determined, resourceful and thinking out side box, it can be done.

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