I've done some thinking this weekend over that debt vs savings argument my mind was having. I think that the point of not really being secure financially with credit card debt is a very key one. But, I also like the security of having a savings, so if something come up that I need (car repairs, fort instance) I don't have to put it on the CC, thereby giving myself more debt.
So, I have decided to take some of the FAB advice I got here. When my EF hits $1,000 I will stop saving and start putting all extra money towards paying off my CC debt. Now, I know it seems like that will take forever, since my EF is currently only $176.17 But here is the hidden part of this plan. I am going to take the $756.59 I have in my personal savings and transfer that to my EF. Thereby giving myself almost the $1,000 in my EF I want. Personal savings can be rebuilt up when this debt is gone.
Lookit, I'm being responsible.
Yay me.
Old EF Balance: $176.17
Personal savings turned EF: $756.59
-----------------------------
New EF balance: $932.76
Debt vs Savings, Part 2
May 5th, 2008 at 04:03 pm
May 5th, 2008 at 04:09 pm 1210003764
May 5th, 2008 at 04:12 pm 1210003960
I think it was David Bach in one of his books that explained that the psychology was just as important as the financial numbers.
When we were where you are now and paying off CCs, I had to have some in the Emergency Fund first. Then I paid on those darn CC's like crazy. But it didn't make sense TO ME to pay the CCs down and not have any money set aside if an emergency came up (and it did) and we'd just have to go right back to charging. So for us, having some EF worked better than just all going to the CC at first. We got the EF in place and THEN went all gazelle intense on the CCs.
May 5th, 2008 at 04:17 pm 1210004278
May 5th, 2008 at 04:40 pm 1210005601
May 5th, 2008 at 05:07 pm 1210007261
May 5th, 2008 at 07:24 pm 1210015464
May 6th, 2008 at 01:52 am 1210038761
May 6th, 2008 at 03:08 am 1210043337
I think you have made the right choice