This week, let’s start with a recurring question – Pay Off the Mortgage or Keep the Money in Savings? This question was asked by JD Roth at Get Rich Slowly. It’s both a thought provoking and emotionally charged question for many. Personally, I’m on track to pay off the mortgage by the time Jane 2.0 goes off to college. After multiple refinances, all no cost, the house will be paid off 21 years after we bought it. My advise to others – be sure to get your employer’s 401(k) match if any, then be sure your emergency fund is well positioned. After that, if paying the mortgage at a faster pace will help you sleep, go for it.
The Financial Buff observes an Irrational Sensitivity to Gas Prices. I agree that driving around or waiting on a long line makes no sense when the dime you may save only multiplies to $1.50 or so. I’ve started to use GasBuddy more often. When I see my gas tank is starting to run low, I’ll take a peek at prices on the next drive I’ll take. Depending on my direction I’ll save $2 or so, but I avoid the station if there’s going to be any wait.
At Saving – Frugal Living, Mary Ann Romans asked (and answered) Are We in a Depression? I’m reminded of the quote, “A Recession is when your Neighbor is out of work, a Depression is when you are out of work.” Truth is, this recovery is not as robust as past recoveries. As they say “past performance is no guarantee of future results.” So, this economic cycle will simply be a new data point, one that shows that not all slowdowns are folowed by big moves up.
Lazy Man and Money has had another run-in with an MLM (Multi-Level Marketing scam). Read about it at his site One24 Responds to “The Scamâ€. I’d never heard of this company before, and with any luck, never again.
At Money Hacks, BillSpaced offers a somber chart showing that Real Median Household income was the same at the end of 2009 as it was in 1995. Tough times.
At My Money Blog, as interesting article on Mortgage Down Payment Size vs. Delinquency Rate. I’ve been a fan of getting back to basics, a 20% downpayment requirement, and more stringent underwriting requirement for mortgages that are going to be collateralized. Low downpayments were not the only cause of the financial meltdown, but they were part of it.
And in a completely stream of consciousness post, Brainy Smurf over at Pants In a Can tells us why he thinks Avocados are Gross. More important, his post inspired the strange name of this roundup…
Thanks for the link to the article citing low downpayments as a cause of the financial meltdown. I know people with masters’ degrees and good jobs who, despite being able to afford more of a downpayment, put down less than 5%. Why? Because they did not want to tie up cash, and they did not understand what a financial waste private mortgage insurance is.
I think it is partly a math illiteracy problem. I also think the banks’ push to have lower downpayments helped promote the concept of borrowing as a way of life instead of the bad behavior it is.
Depression is when the median household income has gone up merely 25% in 40 years, though it required two adults to go full-time into the workforce while strangers raised their children.