Tell me again, why BEF over large credit card payment

**frugalfriend** · 02-12-2011, 06:35 PM

Originally Posted by pollypurebred39

Us too! We are not following DR rules. We may end up being sorry, but every dime we can get our hands on goes right to living expenses and then debt.

You're not wrong, your living expenses do come first before debt. You have to cover your basic needs (four walls) first.

**RABBIT** · 02-12-2011, 07:03 PM

I would have your BEF in place (even if it's just the $500) before you start to pay off the cc debt. The reason for this is you want to change the way the think about credit cards. If you don't have the $ for an emergency and then you have to pull out the cc once again, you are not changing the way you have done things in the past that put you in cc debt.

I know you are anxious to get rid of the cc debt but I think in the long run you will be glad to have that BEF in place. I know I sleep better knowing that I have an EF in place.

Best of luck to you!

**dcompton** · 02-12-2011, 07:21 PM

If the goal is to break totally from cc use, them probably DR's plan is best. But the numbers never made sense to me.

If you have to charge an emergency expense, yes, you will up the interest. But in the meanwhile, you will have been paying the balance down it down and decreasing the interest, so it seems to me that you are ahead, having saved the interest at least in the intersal, and certainly you are not any more behind.

Also, I agree with Craftypam. Interest on savings is totally stinky today. I don't have debt to pay down, but if I did, I would feel like I was loosing money and loosing ground with every dollar I put in savings.

Just my take on it. I say if you are going to be anxious over the BEF first, do it the other way. The point of this is to work on debt and gain some peace of mind. To struggle to work it a way that feels wrong to you is, it seems to me, counter-productive, because it will be harder to stick with it.

**Greebo** · 02-13-2011, 04:57 AM

The baby EF isn't about investing it's about insurance.

If you don't have a BEF in place before you start paying off those cars and your car blows a hose, how will you pay that repair bill but with the CC you hate?

And how much more demotivating will it be to see that balance go right back up again?

You need yourself a little anti-murphy insurance set aside so you can weather small storms when they come along - and MOST financial "emergencies" ARE in the under $1,000 to deal with range. The big ones - illness, job loss, etc - those are huge - but much less common than the little ones like car repairs, new washer, new water heater, etc.

Stop doing math - start thinking behavior. DR has never been about the math first.