Do You Put $ in Savings While "Flaking"?

iVillage Member
Registered: 08-13-2003
Do You Put $ in Savings While "Flaking"?
3
Sat, 01-15-2005 - 6:46pm

I tend to lurk more than post here, but I am curious about how you all are handling the need for savings while "attacking" your debt. I've read Dave Ramsey's books (and loved them) but at this point, my dh's job is insecure (company is very shaky right now) and we feel we must have more than $1000 in savings for emergencies. We're working on getting that built up as quickly as possible, but also want to work on our debt load.

We had no CC debt at this time last year, but out of necessity, added a master bedroom and small bath onto our home and now, along with a new higher mortgage payment (from rolling our HELC into a refi), we have an add'l $12K in CC debt. :-(

By adding this $12K, we are now technically in the hole. We don't make enough money each month to make the min. CC payments based on my dh's salary alone. However, he does a great deal of moonlighting and makes more than enough to pick up the slack ... so far. Obviously, we want to get rid of the CC debt ASAP, but if his job and/or moonlighting dry up, we could be stuck.

I have 2 parttime jobs, and will hopefully be adding a 3rd temporary one in the next month. That 3rd salary needs to go either toward debt or savings. At this point, I'm thinking about splitting it between the two, but was wondering how others handle this dilemma.

Any input would be appreciated!! :-)

iVillage Member
Registered: 11-13-2004
Sat, 01-15-2005 - 7:36pm
This is how I am doing it. I was not comfortable either just having $1000 in an emergency fund, so I was just making the minimum payment on my credit cards until I had a more in savings. About 3-6 months. Now that I have a descent emergency fund, I am paying more than the minimum payment by about $35 more for each card, I have two. In the meantime, I am still working on building my emergency fund. My goal is to have 8 months of expenses saved. I will probably use my tax refund this year to pay down this debt and put the rest in savings. By March or April, I should have my 8 month emergency fund in place, and then I will more aggressive with paying off debt, since I have student loan debt also. If you are not comfortable with just $1000, then yes, I would save more than that and still continue to snowflake if you can. I don't think there is anything wrong with doing both, especially if you would be more comfortable. Do what feels right to you. Take care!
Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Sat, 01-15-2005 - 8:27pm
We live on DH's pay, and we use my pay as debt reduction pay.

All my best,
Danni

iVillage Member
Registered: 06-18-2004
Sat, 01-15-2005 - 11:42pm

I would definitely do what you feel comfortable with. Dave Ramsey, if I am remembering correctly, gives the $1000 emergency fund figure, as guidance. I think he also tells you to look at your situation and adjust that figure based on your needs. If your DH's job is shaky, then I would definitely look for a higher emergency fund.

Getting out of debt is important, but so is being able to live if you or your DH should have a job that falls through.

Good luck and keep us posted.

Kellie