We are in debt and swimming around in it instead of getting somewhere. How much do you need in savings before you start putting the extra on credit cards? I am just curious what you all do??? Amy

Enough that if job(s) are lost you can pay your bills for 3 to 6 mo. or longer if it makes you feel safer.

Remember those periodic payments like insurance and other stuff like that.

I read a book once that said pay yourself first! I always have a little taken off every month and then I pay as much as I can on debt. I also saw a show that said you should have 3-6 months savings for an emergency. It used to only be 3 months but, with the economy the way it is they now suggest more.

Okay, I am going to be a little different. If you have a lot of debt I would just build up a small cusion of maybe $500. Then I would start paying down my debt and still put a little in savings every month. If you can only afford $20, then put $20 in. As some bills get paid off you can always up the amount you put in savings a bit.

I think that for a lot of folks having 3-6 months worth of money in savings is a HUGE goal. It seems like a mountain of money, especially when you are trying to juggle a lot of debt. While I understand the importance of having so much money in savings, sometimes you have to start small.

Good Luck

Dave Ramsey recommends an emergency fund of approx. $1000 (to keep from needing to use your credit cards) , then tackle debt.

That is what we have done- successfully.

If you can live off of just one paycheck then put the second one in savings this is what we did before I stopped working. So 4 months of my entire paycheck went to savings. We made it just fine Pay off smallest debt(s) first! don't pay a big chunk on a larger debt and still have the monthly payment. For Instance, Next wekk I will be able to pay off 2 credit cards that are under $200.00 each. Then I can add more to the next lowest one, does this make since? I hope it does.

My thoughts on this are, if you lose your job, you do NOT want to be worrying about a debt. Yes, you should put aside a bit for savings, but I would concentrate on the debt first. No income and a huge debt is nearly impossible to survive. No income with no debt is much easier.

I would suggest 1,000-1500 in savings then when you get your consumer debt paid off then concentrate on getting the 6 months of salary/expenses in there. If you have nothing in savings and then an emergency came up...how would you pay for it? If putting it on the credit cards would be it then thats the evil cycle. Always have a little to fall back on so you don't have to reach for plastic.

Here is what we have done. If you have multiple C.C. pick the one you have the least amount on and pay it off first. Then put that money on the next lowest one. and so on.

Another way to do it is to pick the C.C. with the highest interest and work that one off first.

I agree that some should be put aside for savings. That is something I am working on now. Dh can't lose his job right now. The Army wouldn't let him out even if he wanted to go. (but that's a whole other story) I plan on starting out saving just $10-$20 a month and working up from there.

HTH!
Melody

Thanks for all the advice. I think I am going to do the 1000-1200 in savings and put the rest on debt. We will get our taxes back and I will reburish the savings and use the rest to pay off my van which will free up some money to put on other bills. 6 months worth of savings would be a lot of money for us to save. I would love it but I think I am going to concentrate on getting some of the debt more manageable before I conquer that goal. Thanks again for all your great advice. Amy