the current status of my other debts:
- other chase card: $9774.43
- bank of america card: $5043.41
- car loan: $386.59 (this one is so close too, i am so excited)
- student loans: $173,464.66 (these are paid by loan repayment money, not my own money, but i still think it counts)
when i started in january, my total debt was $194,644.97. that means that in only 3 months, i have paid off $5975.88. this is amazing!
on top of that, i am saving money too. i currently have the following saved:
- emergency fund: $175.30
- trip to new orleans with give back cincinnati: $200.00 (plus i already paid $150.00 for this trip)
- christine and nate's wedding: $260.00
now i need some advice. according to dave ramsey, i should be putting all extra money on top of minimum payments towards an emergency fund until i reach $1000. right now i am only putting $50/month towards my EF. the point of the EF is that if i have a financial emergency, then i have some money saved to deal with it rather than putting it on my credit cards and therefore setting myself back financially.
i guess one way of thinking about it is that i really do have a total of $635.30 in savings and if i had an emergency, i would skip the trip and the wedding. so maybe i really only need a little bit more savings to reach $1000 if i count that money.
so what do you guys think, should i keep paying off my credit cards the way i am, or should i put paying anything above the minimum payments on hold until i get more into my EF? and how much do i really need right now in there?
Congratulations on paying off the credit card!
ReplyDeleteI am working the Dave Ramsey plan as well.
I think you should complete the $1000 and work your way through the baby steps. Since you have plans for $460, you may consider striving to have $1460. This way you won't miss the events and you won't have to start over on the emergency fund when you go on the trips.
It is kinda inconvenient to go back to Baby Step 1 (I have recently been set back to the beginning), but there is something to be said about staying true to your plan.
My advice: Emergency Fund, as long as you are making progress on your CC debt.
ReplyDeleteI've had an EF for a couple of years now and it's brought me financial stability, helped with cash flow, and brought me peace of mind in a tense economic climate.
PS congradulations on your progress. :)
ReplyDeletehalf my tax refund went straight into my emergency fund. boom.
ReplyDeletei really have no experience with credit cards, but i know the ef is important. one thing you might do is check the cost/benefit of a few scenarios. one, you keep paying minimums on the credit cards and up your ef contribution, two, you pay more than your minimum on the cards and lower your ef contribution, three, you keep going the way you're going. there's probably one way that allows you too avoid incurring more interest debt than you're putting into the ef. might be kind of complicated, but ultimately, for a couple hours of work, it'd be totally worth it.
and just so you know, your previous two posts were hilarious. i was laughing out loud at the dave ramsey cult stuff.