Financial Advice, please

[El Casey S]

OK - we have a lot of new costs with a new apartment and need money to pay for them, like at least $5,000. Now, question - should we take the money out of our hard earned saving (ouch) or get a loan and pay interest on the loan, but not lose so much out of the savings. I'm so confused about what would be best. It seems that paying interest on a loan would be stupid if you have the cash - but when you've scraped for so long to have a savings it hurts to take that money out - and lose the interest earned. I can't seem to get my head around this! Any insights?

[madrone]

Is your savings in dollars or Euros?

[behr]

Casey,
I would say you go with interest paid on the loan vs. iinterest gained for savings account. Which saves you more money? Of course, being German myself I hate loans.... but I totally understand your feelings. Have you checked out Sparda Bank, they have free checking accounts and give loans for home improvements at decent rates, might try to check them out.
Good luck and much fun in your new space!!

[El Casey S]

Our savings are in dollars in the US in a Benefit Accumulation Account with our Pension Fund. I'm not sure, but I believe we aren't allowed to have savings in our host countries, for tax purposes, or something like that. So we can't get German credit. I can't seem to figure out how much we earn in interest. I'll PM you with more personal details of our account .


Now, T Koblenz! I once tired to get a job there! It seemed so perfect - isn't it the meeting of two main German rivers? I just hear the name and think, green! I think, historic! I think, I really should go there! If you are ever in Berlin, contact me! I'm basically in Stadtmitte!

lkcs

Edited to add:
So I guess I should somehoe figure out the % of interest earned on my saings and compare it to the % lost on a loan. Why isn't my brain working? Because this seems so hard - I'm getting wrinkles on my brow just thinking about it! Also - I'm taking off - I'm late for a meeting! be back in a couple of hours!

lkcs

Edited again to say - this is not my day - you are from Konstanz, not Koblenz! : Oh helP!

[madrone]

LKCS - I read your pm before your post. I don't quite know why you would think that you cannot have savings abroad. Are you working for an employer in the US, just as if you lived in the states or something? My father did that when he worked in Saudi. Never liked it because of the US tax stuff.

Not all of what I said in the pm response is applicable. Last year, you made about 4% interest. You would lose over 15% by exchanging it in euros. I assume that what you need to pay is in euros at least. Taking it out of the US savings is still a bad idea. Need to wait until the dollar becomes stronger. If you get an allocation logement, you will still be eligible for the government settlement assistance and the loan. Renters can get these loans for their rental needs. If you are not eligible because of residency status, I would still go to the bank in Germany. I know German banks have things together a lot more than in France. It's possible that one of them might use your US savings as collateral. There's one dutch bank, ABN/Amro that I pretty certain would because they are quite large in the states.

US interest rates are low, so I would think you would get a pretty low interest rate loan there, but I would think that you probably will not get as great of a rate this year on your savings. You really need to get something in euros rather than dollars. It's not the time to be paying things in euros with dollars. Surely the dollar will go up sometime in the next five years so that we won't lose so much.

[Missgrl]

Moving this to Personal Growth........Cynthia has expanded that forum to host all financial threads!:

[Hilary Briss]

Now, Koblenz! I once tired to get a job there! It seemed so perfect - isn't it the meeting of two main German rivers? I just hear the name and think, green! I think, historic! I think, I really should go there! If you are ever in Berlin, contact me! I'm basically in Stadtmitte!

Further T... Koblenz is a lovely town. I've passed through there a couple of times, although the second time was in the dead of winter, and all of the cheap hotels were full because of the local festival that was going on. We slept in the open air train station. We froze. I still remember being awakened by a policeman pulling at our sleeping bag, barking "Raus, raus!"

[lovelee]

as far as "should you use savings or borrow":

We listen to a financial planner: Dave Ramsey. He asks, Would you borrow money to put into a savings accounts? Well no of course not. That is basically what one is doing when they borrow money but have the cash already!

Sure it hurts, but thats what it's there for. Your going to spend the 5K anyway, you'll just pay more if you borrow it with interest!

good luck!

[behr]

I just now found this thread again...
Casey, did you figure out what to do about the money? If your money in in the States that would complicate things a bit..
You can definitely have a savings account in Germany and don;t have to pay taxes as long as you're earning below a certain amount (I think it's $75,000 but can't remember for sure, could look it up though) We file US taxes every year in case we will return and have money on accounts on both sides of the ocean.

Koblenz - we live in Konstanz, often the two places are confounded, Konstanz is ALL the way south, on the Swiss border on beautiful lake Konstanz (Bodensee auf deutsch). It's very nice in the summer- lots of tourists, but nice. If you ever come this way you can sleep on my couch. Hilary, I will defend you from German police. They're busy catching old ladies with stashes of greens in their underwear trying to make it over the Swiss border anyway.
It is green and historic here too. Historic downtown because the mayor during the 2nd WW gave orders to keep the lights on during bombings so they thought Konstanz belongs to Switzerland. A lot of nice buildings got spared that way.

[Hilary Briss]

Hilary, I will defend you from German police. They're busy catching old ladies with stashes of greens in their underwear trying to make it over the Swiss border anyway.

Actually, we were more fearful of the roving bands of skinheads. Historically, punks and skins have not gotten along.

[behr]

So you're a punk?!
I know, skinheads are usually bad news, they used to beat up on us crunchies when I was young. There aren't too many down here and they concentrate their anger on foreigners. It's sad.

[Hilary Briss]

Still, off topic...

I was a punk in 1985, the last time I was in Koblenz... so it's been a while. I suppose I'm still a punk at heart, which must be where my bad attitude comes from. Never been to Konstanz, though. I'll bet it's nice.

[behr]

even more off topic

Maybe we met back then, I often went to Koblenz to visit my boyfriend, I was the little kid in the overalls, they called us 'freaks' back then.