[stovt001]

Another point on spending vs saving.

Camaropete is technically correct when he says to buy when the market is down. After all, we tend to buy physical good when they're on sale, but for some reason we do the opposite with stocks. The caveat is that we may or may not be at a bottom here, and there is still a number of things our economy has not worked through yet, so a certain degree of skepticism and fear is certainly healthy and warranted right now.

Now throwing your whole savings into the down-payment is an interesting debate. On one hand, while you won't be earning interest on that money it will also mean you'll incur less interest on the money you do take out in a loan. However, you should also have cash savings in case of emergency and saving and accumulating a means of living after retirement (as well as saving for a house, kid's education, etc). I plan on splitting my savings. I will save a regular amount for retirement, emergencies, house, kids' education, etc. I will also have a second savings, equal to the difference between a Camaro monthly payment and my Cobalt's monthly payment. That savings will be my down-payment. That way when I get my Camaro there will be no impact to my regular savings.