Still afraid to throw snowballs
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Still afraid to throw snowballs
| Thu, 02-05-2009 - 5:29pm |
Every month we have some money leftover, and I transfer it into our savings. I've been paid a good amount on a couple projects lately and that's gone into savings too. I'm paying double the minimums on my cc, but just can't bring myself to pay any of them off completely and wipe out my nice little emergency fund. It's like a security blanket! I sooo want to be out of the grips of this cc debt, but worry about losing my job or dh losing his (there's been no talk of this, just worry) and being panicked. There are days I want to throw big snowballs at stuff, but then I worry I won't sleep at night!
Thoughts??

I guess the way I would look at it is moving the efund from one place to another. If you pay off the CC, then you have room on it in case something major happens and you need it. The only reason I can think of not to do it is if you are concerned you will run it right back up again. If that isn't an issue then pay of the CC's and
Bex -
There are different schools of thought on this.
If you are paying
The first step most planners suggest is to get that emergency fund funded at a certain amount. Many say $1000 but for us, we have older cars (as we saw today in fact) and we would feel better with $2000 in an emergency fund.
Then step 2 is to pay off credit cards, snowball, by paying off the smallest first, then using the amount from that to add to the next smallest, etc.
After that save 3-6 months of expenses, then fund retirement - in that order.
Now, if you think you may be facing a lay-off soon, I would say BUILD the 3-6 month emergency fund first. If you were to ever go bankrupt, the last thing you would pay for is the ccards.
-Marie