Am I doing this all wrong?

iVillage Member
Registered: 08-23-2006
Am I doing this all wrong?
9
Thu, 10-01-2009 - 3:57pm

So, since starting this journey a month ago we are doing much better than we were 31 days ago! So, thats a good thing. Doing better for us now means.....we are still living paycheck to paycheck, but we now know where our money is going and all of our bills are current (except the cc's) and we have $400 in our EF and still growing(should be at $1000 on or before October 31). Next month it looks like I will be able to put a large amount towards our credit cards (yay). My problem is that some of our cc's got paid this month and some did not....the ones with the HUGE min. payment did not.

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iVillage Member
Registered: 11-14-2008
Thu, 10-01-2009 - 4:37pm

Oh life is about balance....

Here is the problem with bad credit: If you want to get a loan, or buy a house or refinance, you will have to pay more interest. You are in the "we don't know if we can trust them to pay it back category" therefore you have to pay through the nose for credit. And lets face it, if most people want a house or a car--they must get credit.

Of course pay your mortgage, food, car payments & insurances and necessities first. But how much are your minimums on these cards you are not paying? Could you squeak them out and still put a little in efund? All I'm saying is you might be paying more in interest and penalties not taking care of these minimums on time than you actually have in your efund?? Something to do the math on.

I am not a die hard Ramsey fan although I do agree with most of his ideas. I do believe minimums on cards are first before efund?

Someone on here may know better.

You are not doing it wrong. There are many ways to do this. The fact you are doing it at all is wonderful. It never hurts to change a few things or revisit the plan through out your entire journey.

Hang in there. Next month will be better, because honey, you are gonna make it better!


iVillage Member
Registered: 07-02-2008
Thu, 10-01-2009 - 5:11pm

If I may ask - what are the "minimums" you skipped and what does that total per month?

Personally ( and I am NO financial expert here by any means ) I would pay the minimums on your c/c's before funding your efund 100%. It took me MONTHS to get my efund up to even $1K. But, I stayed current on my c/c's. If you skip a month you will get hit with fees making your next month's balance double plus fees. You can't afford that honestly. If you can't afford the minimums you can't afford a double payment since you didn't pay in say Sept and then didn't pay in Oct. Your Nov bill will be too high for you to even pay the minimum. I am not trying to sound harsh - I have a way with bluntness - but just trying to get you to see it might not be best to shoot for an efund that will just sit there (hopefully you won't have to touch it) when your other bills are getting further and further behind.

Others might have a better plan for you.

I needed an efund for assurance for ME that I wouldn't run to a c/c for emergencies. And I didn't. But after one month of not using a c/c it seemed natural and I haven't used my c/c's in about 15 months.

Anyway, I think its great you are so determined to build an efund but getting behind on other bills isn't the best way to go about it. (IMO) I would probably leave $200 in Efund and stick the rest towards your behind c/c's.

Good luck - It's hard at first. Remember - you can't do it all in 30 days or even 12 months. It takes TIME as a lot of women here will agree with. You didn't get into debt in 30 days and it will take a lot longer than that to get out of it.

iVillage Member
Registered: 12-29-2008
Thu, 10-01-2009 - 5:58pm

First, congratulations on improving your financial/budget situation!


I agree with the other posters...you should try to pay the minimums on the credit cards rather than rushing to establish a $1000.00 Emergency Fund.

iVillage Member
Registered: 11-17-2007
Thu, 10-01-2009 - 6:36pm

I think also that you are making a great start.


Also I am not a big fan of old Dave and I will tell you why. First he says let your credit go to hell This is totally wrong in my book What ever the late fees and stuff you have had in the pass will be totally gone in 5 years. That means that in 5 years you will if you start now to repair your credit will have perfect credit again.


In 5 years a lot may change. You might need another car. You might have to move and need good credit for a house or an apartment. Right now your homeowners and your auto insurance depends on your credit score. There are also a hundred little things that also depend on just how your score adds up. See what people don't understand sometimes is that old Dave has money and he doesn't have to worry how high his homeowners goes up or the insurance on his car. Most likely they are both in the company's name and he takes it all off his taxes to start with but most people do have to worry. And having auto insurance go up by 50.00 a month hurts most families..


Efunds are great but stopping at 500 and getting one credit card caught up is a much better idea in my book. I am not saying that you have to catch them all up in one month but every month that you go on is a month more that it will stay on your record down the line. If I were you and I have been where you are today a few times in my life. I would take

iVillage Member
Registered: 03-27-2005
Thu, 10-01-2009 - 8:06pm

Dave does say to pay your four walls first.

iVillage Member
Registered: 03-27-2005
Thu, 10-01-2009 - 8:18pm

Also I am not a big fan of old Dave and I will tell you why. First he says let your credit go to hell This is totally wrong in my book


I'm a

iVillage Member
Registered: 05-18-2005
Thu, 10-01-2009 - 10:14pm

Just a little note regarding Dave......he doesn't believe in a fico score at all.

Jan
iVillage Member
Registered: 01-25-2009
Thu, 10-01-2009 - 10:33pm

I agree with you on the credit card part. Got my first credit card at age 19, I am now almost 40, never had a problem with it.

In general I am very leery with those so called financial gurus and their one-size-fit-all advice. It is better to read up, ask around, and come up with a system that works for you. It is probably also a lot more empowering to say, "These are my goals and priorities and I am going to save, pay off debt, etc." instead of "Dave says this, dave says that".

iVillage Member
Registered: 07-15-2008
Fri, 10-02-2009 - 6:35am

I agree with pay all minimums and build the ef fund slowly.