Simple question that needs to sink in my brain

**Palooka** · 11-27-2009, 08:43 PM

Hello.

Dh got his bonus check so I was paying some bills today and thinking... I mean really thinking about the next years finances (don't we all this time of year.

)

This is something that I really need to understand even though I've read it here several times.

Okay...lets say your minimun payment on a credit card is 50 bucks and you pay 70 bucks for that month. Would it be better to pay the 50 and put the 20 extra in your EF fund(assuming you are trying to build it)

Because I was raised polar opposite of this and still trying to understand. I was always taught to pay my debt first before I pay myself anything. (you can thank my mom and dad)

And yes I need to build my EF. I guess sometimes my silly thinking..thinks its better to send them even 5 bucks more before I even consider putting that 5 bucks in our savings.

TIA

**ladykemma2** · 11-27-2009, 10:10 PM

you are BS1? pay the minimum and bank the rest...

**Palooka** · 11-27-2009, 10:17 PM

Originally Posted by ladykemma2

you are BS1? pay the minimum and bank the rest...

What does BS1 mean?

ETA - just hit me..Baby step one, right?

Yes, I would like to start this plan and force the dh.

**Palooka** · 11-27-2009, 10:22 PM

I guess I have a hard time re-training my brain to pay the minimum and bank the rest.

**ladykemma2** · 11-27-2009, 10:27 PM

dave ramsey teaches to put away 1000 in a baby emergency fund.

get current on all bills, paying for roof, utilities, food, basic clothing, and transport to work before anyone else gets paid.

mary hunt teaches to give 10%, save 10% to the emergency fund , do a rapid debt repayment with any available funds after bills are paid.

**Palooka** · 11-27-2009, 11:12 PM

Edit........

**Greebo** · 11-27-2009, 11:29 PM

Basically you want to get a baby emergency fund as anti-murphy insurance. It's $1,000 for a rainy day, and don't tell me to be more positive, cause I'm positive - IT WILL RAIN sooner or later. So you sock away $1,000 first.

THEN, every extra penny you can get your hands on goes to paying off debt.

**Palooka** · 11-27-2009, 11:36 PM

Originally Posted by Greebo

Basically you want to get a baby emergency fund as anti-murphy insurance. It's $1,000 for a rainy day, and don't tell me to be more positive, cause I'm positive - IT WILL RAIN sooner or later. So you sock away $1,000 first.

THEN, every extra penny you can get your hands on goes to paying off debt.

I understand about the emergency fund!

That didn't answer my question about the cc debt though.(sorting even 5 bucks out)

Pass the Vodka please.

**madhen** · 11-27-2009, 11:46 PM

I was raised like you, Palooka, and I am not a fan of DR; however, I did find that having an EF saved my bacon when my roof suddenly decided to fail on me, and I had to replace it. I "get it" that I need some money in reserve, but the idea of the cc's charging me exorbitant interest on the money I owe to them keeps me up at night.

The solution I found I could live with was basically to split the difference. I pay more than the balance on my cc, but I also put money into an EF account. By doing so, I feel I am making progress on both.

**Palooka** · 11-28-2009, 12:10 AM

madhen

The solution I found I could live with was basically to split the difference. I pay more than the balance on my cc, but I also put money into an EF account. By doing so, I feel I am making progress on both.

Yes, that makes total sense to me!

The problem is the dh owes sometimes more than the income flowing in the month.

**Greebo** · 11-28-2009, 05:04 AM

Well what I was trying to say was - you build the baby emergency fund BEFORE you start paying any extra on debt. So if you don't have $1000 in the bank as anti-murphy insurance, you don't pay anything above the minimums to the debt.

The reason you wait is that *if* something happens while you're paying down the non-mortgage debt, having that $1,000 can mean the difference between simply paying for the emergency or going back into debt.

It's extremely demoralizing to have to go back into debt once you've made the commitment to get out.

But if your DH isn't on board - if your debts are going up - then the no-bef-had-to-go-back-into-debt problem won't be the most demoralizing one you'll face.

**sinopa27** · 11-28-2009, 05:09 AM

OH......now I get it. Build the BS1 fund first. Well, that makes sense. If I pay extra on my cc and have a murphy problem, then I will end up using my cc instead of my EF. Thanks. I understand it now!

**Palooka** · 11-28-2009, 09:21 AM

Originally Posted by Greebo

Well what I was trying to say was - you build the baby emergency fund BEFORE you start paying any extra on debt. So if you don't have $1000 in the bank as anti-murphy insurance, you don't pay anything above the minimums to the debt.

The reason you wait is that *if* something happens while you're paying down the non-mortgage debt, having that $1,000 can mean the difference between simply paying for the emergency or going back into debt.

It's extremely demoralizing to have to go back into debt once you've made the commitment to get out.

But if your DH isn't on board - if your debts are going up - then the no-bef-had-to-go-back-into-debt problem won't be the most demoralizing one you'll face.

Lets leave dh aside for the moment. I'm trying super hard to get everything on track. I'm just trying to understand the whole debt thing because it's hard for me to just pay the minimum.

When I go to pay the bills, it's just normal for me to try to pay above the minimum and also try to save. Something is not working though.

I really want to build the EF and that's what I'm trying to understand or even rationalize it in my head.

**NikoSan999** · 11-28-2009, 09:30 AM

Palooka, try to rationalize it this way. With the shape we are in, as you know, we had about 8 months give or take living expenses. Now they are gone. If we hadn't had that big EF we wouldn't have made it this far. Even that big, it's gone. SAVE THE EMERGENCY FUND. Belive me, $1000 isn't that much when crap hits. And it WILL hit.

**Palooka** · 11-28-2009, 09:47 AM

Originally Posted by NikoSan999

Palooka, try to rationalize it this way. With the shape we are in, as you know, we had about 8 months give or take living expenses. Now they are gone. If we hadn't had that big EF we wouldn't have made it this far. Even that big, it's gone. SAVE THE EMERGENCY FUND. Belive me, $1000 isn't that much when crap hits. And it WILL hit.

Yeah, that makes sense! I know 1000 is not much for most peeps but it's a start.

I hear ya!

When I think about the past...I wonder how much I could have saved if I didn't pay extra to all the debt. I still feel like I'm getting no where.

Also does this count for basic loans?