Financial Advice

[Marie78]

I need advice! I am working on my debt snowball and I am trying to plan for future events (which can be pretty difficult to predict). I need some advice with my current financial situation, it's hard to talk to people at home about this, because they are either doing worse with their own finances than I am or they don't take into account how little my income is compared to theirs and have a difficult time relating to my situation.

After my tax return, extra pay check in May, small work bonus, stimulus check, and what I have already saved in my EF, I should have around $2500 at some point in June.

I will need car repairs soon and I am not sure how much those will come to. I need at least all new tires and maybe some other work is due for my 6 year old car. I also may need dental work, but I won't know until my teeth cleaning this week what the total work might be. My car insurance bill (6 month bill) is due in June. Here is the plan I came up with for the money, please let me know what you think:

$1,000 for my EF, $1,000 to pay down 1 of my two credit cards to 0% balance, and $500 to pay my 6 month car insurance bill. Then if I need to dip into my EF for the car repairs and dental work I have $1,000 to draw from.

After bills and essentials are paid for, I have about $500 left at the end of the month. So far I have been putting as much of this as possible towards my CC debt, but I could use the $500 to help with the car repairs or for dental for a few months if need be.

Any suggestions welcome, especially if you see anything I might have missed with my plan. It's hard to predict how big the bills will be, but I have a small cushion right now and I want to use it wisely.

[Frugal Nurse]

Pay off anything that charges you interest.

Your dentist could accept a payment plan... but dental work might be able to wait a bit. I am NOT saying that it should be put off indefinetely, it depends on the amount of work and what kind. A small filling is cheaper than a huge filling requiring a root canal. so fixing a small filling now- will prevent to huge one later. (I had to say that- I don't want people to think I think dental care is second- I don't, but if resources are scarce....)

Tires. I HATE when they need to be bought. But life saving. What I do is spread it out over the year. I buy 2 new tires for the front (if front wheel drive- otherwise put them on the back if rear wheel drive) and put the two best tires on the back. Then six months later, I move the new tires to the back... and put new ones fresh for the winter.. in the front.
Don't wait too far in between the two purchases... because you'll want to keep track of the tires, wear, and rotation etc.


Always keep an EF and $500 is a good low amount.

Don't charge anything to the charge card either.

[Jamauk]

Using your EF as your cushion is a good idea, but my fear is that the $1000 would be wiped out completely (and maybe then some) for the car repairs and dental work and then you no longer have an EF.

The $500 at the end of the month - that you've been putting towards debt - could you split that up and put $250 towards debt and $250 back into your EF for a few months so that you can build your cushion back up?

It sounds like you've given this a lot of thought and I'm sure you'll figure out the best way to spread the money around...sometimes it just helps to get all of the figures out in front of you (like in this post).

[Marie78]

Thank you for both of your thoughts. I have been thinking about my situation for awhile. I am hoping if the dental work is going to be expensive I can get onto a payment plan with the dentist office. I also like the idea of buying the tires two at a time so I don't have to come up with the entire amount for those up front. Especially since I can't imagine at this point what some of the other repairs might be. The car is 6 years old and hasn't really had to have any major repairs yet, so I am keeping my fingers crossed that it stays that way awhile longer.

I also like the idea of splitting up the $500each month between the EF and the debt reduction until my cushion is built back up to $1,000, in the event that I have to start tapping the EF for the dental work and car repairs. It helps to talk things over, I know we can only do what we think is right in the moment and hope for the best outcome. I just don't want to have to charge anything this year, this is supposed to be the year I pay off the rest of my debt and finally after a decade feel financially stable .