Whats best use of savings?

[Alyx]

This question is posted for my girl friend. She's got 20k saved up from work (middle school teacher) and she isn't quite sure what to do with it.

Still owes ~10k on a car.
Has college loans of ~15-20k, they are deferred right now at a really low interest. Probably will try to get the teacher Apple Grant to help pay them.
She's thinking about possibly buying a Condo in LA for around $100-$150k and she had WaMu clear her for $150k loan a month or so ago. Also has a Realtor friend who would help her with negotiations/looking for loan.


So what would be the best use of the 20k? Is it a good time to buy a condo?

 

[Baked]

They have 150K condos in Cali? What city and neighborhood?

 

[George P Burdell]

She has ~30k in debt and she wants to take on 150k more? In this economy?

I would leave the 20k alone as an emergency fund.

 

[kt]

Condo in LA for $150K? Do you mean LA as in the state of Louisiana.

 

[FP]

Hookers and blow of course.

 

[RaistlinZ]

Originally posted by: kt
Condo in LA for $150K? Do you mean LA as in the state of Louisiana.

Yeah, I also call B.S. on $150k condos anywhere near Los Angeles. If I were her I'd pay off that car and save herself all that compunded interest she'd otherwise be paying for the next few years. Then start saving up until she can pay off her student loans, then start saving up again to purchase a condo.

Saving up for the condo should be much easier when she doesn't have to throw money each month toward car payments and student loan payments.

 

[zerocool84]

Originally posted by: kt
Condo in LA for $150K? Do you mean LA as in the state of Louisiana.

x100000000000

 

[onlyCOpunk]

Depending on the APR of the car loan, and said student loans have a low interest rate. Either sit on it, or invest in something that wont depreciate, such as property. Also I guess it depends how quickly she can save money.

 

[Eli]

It's really burning a hole in her pocket eh?

Keep sitting on it, IMO.

 

[dawp]

I'd pay off the car and put the payment amount in savings along with what she was putting in savings before. And depending on the care, drop the full coverage and put that in savings too. all you really need for insurance is what the state requires plus a little more.

 

[SoulAssassin]

pay off the car first

 

[sdifox]

pay off loan. condo price will drop a lot more.

 

[BurnItDwn]

She should pay off the car unless she has a 0% rate or some crazy low interest on the car loan.
I would put the rest into the stock market and save it for retirement.

 

[HardcoreRobot]

i think 20k stashed away in a high interest savings account is a good rainy day fund. savings beyond that should pay off the highest interest debts that are in excess of the interest of the savings account

 

[desy]

Pay off the car and redirect the payments back into savings, Condo prices could soften more

 

[PHiuR]

Originally posted by: onlyCOpunk
Depending on the APR of the car loan, and said student loans have a low interest rate. Either sit on it, or invest in something that wont depreciate, such as property. Also I guess it depends how quickly she can save money.

hellloooo? where have you been?

 

[TheSlamma]

I don't know about Condo's there... but most condo's here in CO are hard as hell to sell. My friend has had his for sale now for 4 years. Best he can do is rent the thing out.

 

[Turin39789]

atot is slipping.



hookers and blow

 

[onlyCOpunk]

clearly not investing in property

 

[AmpedSilence]

Pay off highest interest rate loan, sit on rest.

 

[BurnItDwn]

Originally posted by: onlyCOpunk
clearly not investing in property

It's a better time to invest in property than it has been over the last 5 or 6 years ....
Of course prices will probably go down some more, so it might make sense to wait another 6-18 months before the market hits bottom ...e

 

[captains]

Originally posted by: SoulAssassin
pay off the car first

 

[spidey07]

Two approaches depending on goals. Eitherway try to have 6 months expenses in savings.

1) pay off car, save the rest and keep saving until have 20% down for condo/home
2) Don't pay off car, keep saving until have 20% down for condo/home

Which one you do depends on when and how much home you want to buy.

 

[thomsbrain]

Originally posted by: desy
Pay off the car and redirect the payments back into savings, Condo prices could soften more

 

[summit]

there's 150k condo's in cali, its called cardboard box villa on 3rd and la cienega.