Pay it or Save it

**jenloveschip2001** · 05-19-2007, 10:00 AM

I am trying to go by Dave Ramsey's book to pay off our debt. We are doing pretty good. We have our EF in place and always pay extra on our credit card that we are snow balling but I could pay more. Dave recommends keeping $1000 in the EF and paying everything extra on your debt. We have $2207 in our EF right now but I am having trouble making myself pay the $1207 on the credit card. I like knowing it is there. Does anyone else have this problem. We are paying $53 a month in intrest on the card right now. I know that it would save us money if we payed that 1207 on it. What is your opinion? Should I pay it or save it?

**itsahumanzoo** · 05-19-2007, 10:07 AM

I'm probably not the one to be giving advice, but I would pay it. Everytime we get a little extra money thrown our way, we always put it right towards the credit cards. For Christmas we got $2000 from DH's grandma, and about $1200 of it went to credit cards. Right now we're trying to save up for vacation, but after vacation we're going to use the same saving method to pay off all our cards.

**tbs727** · 05-19-2007, 10:12 AM

I understand how difficult it is to see the savings account decrease, but just think of it like it is COSTING you $53 a month to keep that money in savings. If you pay off the cc now, you will have an extra $53 earning interest in a checking account. That's just my opinion.

**JustJoy** · 05-19-2007, 10:18 AM

I know the feeling and I've been struggling with it for months. We have about $3400 in our EF and a CC with a balance of $3200. One thing that's keeping me from paying is that we have 0% interest on the CC for another few months. I just like the security of having that money in the EF.

**Jenna** · 05-19-2007, 10:41 AM

Can you do a 0% APR balance transfer to another card?

**PB&J** · 05-19-2007, 11:05 AM

I would pay it. With the money you would save in interest, you can put it back in your EF pretty quickly.

**Libby** · 05-19-2007, 11:32 AM

I would pay it, do you really want to see that nagging $53 extra per month FLUSHED down the toilet for nothing. Its not like its something you bought, say a lamp, that you get to see everyday. Its a donation to the credit card company if you will, would you normally give $53 away every month? Try to look at it that way...plus do you want to keep paying a bill each month for the next 'x' months until the balance is gone OR have one less bill to pay as of right now?

Sounds harsh but sometimes you just gotta bite the bullet and do it. I think knowing that you have one less bill to make a payment on each month is enough motivation to pay it. And you still will have $1000 in your EF and it will continue to grow as its been doing all along.

**Sahmamma** · 05-19-2007, 02:07 PM

I kept 7k in our savings account and started snowballing 8k of cc debt we accumulated while building our house.

then, the interest rate skyrocketed to 14 percent and the interest for one month was over $100!!! YIKES!!!! It would take us way too long to pay that off, so I transfered all but$1200. I know your pain, but know I know it will get paid off sooner.

**dcompton** · 05-19-2007, 04:15 PM

It depends. If there is no reason to actually expect unplanned expenses -- like an untrustworthy car or air conditioner on its last legs or something similar -- I would pay it. Even if there are such things waiting to happen, I would probably pay it anyway. At the very worst, though this might be heresy, the unexpected expense beyond your $1000 emergency fund could at that point go back on the card; you would be no worse off (except perhaps in the frustration department) and you would at least have saved the interest in the meanwhile.

**ConnieD** · 05-20-2007, 09:32 AM

I'm with dcompton!

Keep $1000 in your emergency fund and pay out the rest! Without the debt and interest payment you'll be able to get your emergency fund built back up in no time.

**emily_hope** · 05-20-2007, 09:37 AM

I would go with Dave and keep the $1000 in the EF and pay the rest on the CC. When you are done paying the CC you can then put that money back into your EF.

**geckoace** · 05-20-2007, 03:41 PM

i agree, pay that sucker off

**SammeyG** · 05-20-2007, 03:54 PM

I was doing that two summers ago. Then last year I wanted to keep my ef up. But I would pay it off so it would be one less bill to pay on.

**chatterweb** · 05-20-2007, 05:42 PM

Originally Posted by Jenna

Can you do a 0% APR balance transfer to another card?

Sure, I have done those before, I actually came out ahead
because I avoided paying interest.
Tempting to spend more on the cards, though.

I tend to pay off debt when it comes to saving versus paying off debt.

**rosebron** · 05-21-2007, 12:22 AM

I'm confused.
Why would you have a $53 per month interest payment on a $1207 balance??!! This implies that your interest rate is somewhere in the region of 50% APR!!! If so, I would ditch that $1207 and cut up the card, quick!