How do you rank the level of importance?

**beautifullyhaunted** · 09-20-2007, 02:00 PM

I have about $23000 in debt to include student loans (Less than $6000) Credit Card Debt (Just over $15000) and some random other things.

When I graduate from basic training at the end of January, I want to start attacking those bills, and a good portion of my paycheck will be going to just that. When I get to my first duty station in the beginning of April, I'll get my bonus ($10,000 minus taxes) and this is where I'm confused.

Do I set up an EF Fund of 6 months of expenses in a Money Market Fund (about $4000) open a TSA with $3000, and put the rest to bills? Do I put it all to bills and worry about the rest later? A little bit of both? I dont know what to do...

**Dancing Lotus** · 09-20-2007, 02:40 PM

I would set up an emergency fund then pay those debits. I would put 2,000 to 3,000 in your ef to start and then add to it. That way you have a good 7 or 8 thousand to knock that debit down with.

**McD** · 09-20-2007, 06:08 PM

I would put at least 1500$ in an emergency fund and then I would start knocking down debt.

**Canongirl** · 09-20-2007, 07:40 PM

Hi, I hope you don't mind me jumping into your discussion. I've been away from the boards for awhile ( as I'm pursing a nursing degree), but having lived the military life with my DH, I'd like to say that your income will be consistent for whatever time you have enlisted for. Therefore I'd recommend that you put $1500 (as I'm assuming your single) into an EF fund, then put the rest on your debt this way you have some $$ put aside, you continue to collect a regular paycheck while knocking out some debt and the dredded interest that builds up.

Just my 2 cents. Bless your heart for serving this country!! Best of luck to you.

**jamie79** · 09-20-2007, 09:03 PM

Also I would sign up for the military retirement plan which is called the Thrift Savings Plan (TSP) where a % of your check goes into a retirement acct. You pick the %. It automatically comes out of your check so you wont even miss it. Every year you can raise the amount of %

**annymoll** · 09-20-2007, 09:19 PM

I did not realize you were in the service! I really appreciate all that you do and I want to thank you.Have an emergency fund first.

**Jenna** · 09-30-2007, 09:42 PM

Originally Posted by beautifullyhaunted

I have about $23000 in debt to include student loans (Less than $6000) Credit Card Debt (Just over $15000) and some random other things.

When I graduate from basic training at the end of January, I want to start attacking those bills, and a good portion of my paycheck will be going to just that. When I get to my first duty station in the beginning of April, I'll get my bonus ($10,000 minus taxes) and this is where I'm confused.

Do I set up an EF Fund of 6 months of expenses in a Money Market Fund (about $4000) open a TSA with $3000, and put the rest to bills? Do I put it all to bills and worry about the rest later? A little bit of both? I dont know what to do...

I would say that depends upon the APR's of that debt, the utilization rates of your cards, the amount of money you have saved for retirement, and whether you are paying any "extra" fees associated with the debts (ie over the limit fees, annual fee for c/c usage et al.)

Set aside $1k for an e fund - to help cover life's ups and downs.

Assuming those are your debts in your sigs, I'd wipe out the top 7 small debts immediately. That will make it much easier to focus upon a fewer amount of debts/payment schedules. This also assumes you aren't behind and paying any penalties.... Pay the mins on the other debts while you are hacking away at the smallest 7 debts in the sig.

How's your retirement savings? I'd stash at least 2K - 4K this year in some sort of retirement savings account. You have to get used to paying yourself first!!! I wish I had done this in my twenties!!!

Next, focus on the debt that is costing you the most in interest. If your student loan is at low interest (2-3%) pay the minimum on that while paying off the c/c's.

Anyhow, that's what I would do, and best wishes with your new career.

**Jenna** · 09-30-2007, 09:47 PM

Do I set up an EF Fund of 6 months of expenses in a Money Market Fund

You probably don't need that much of an e-fund, yet... especially if your APR's are high. Also, what's the APY on the Money Market Account? You may be better off going with a high yield savings account at an online bank.

**gentledenny** · 10-04-2007, 12:56 PM

I just wanted to Chime in and say. YEAH YOU> The military is having a hard time finding good recruits. AND i am honored to learn of your enlistment and pray you have many happy times and stories as i have. AS a military person, I think i would pay all of the money on the debt. Since you are in the MILITARY. There are several items set up if you have a emergency. one is Army emergency FUNd. which is money donated my service members that is loaned to soldiers if thier car breaks down, if the plumbing in the house messes up. If you have a death in the family. Some of the loans they make are forgiven and don't need to be payed back. and some are required to be paid back a little at a time with no interest. That is just one program, there are many. SO it is always a good ideal to set money aside for A EF. i am just saying in the military. free housing, free food, free medical care, free dental care. a emergency fund is not more important than 18 percent debt in my opionon.

**Peter** · 10-25-2007, 03:05 PM

I would skip the emergency fund and start attacking the credit card debt ... especially if you are paying an interest rate of over 10% on that (usually it's around 18%). If your credit card debt in your signature is current and your interest rate is 18% per year then you are losing ~$2750 per year in interest charges on your credit card alone. Definitely, do what you can to pay that down as fast as possible.

I would say that should be your number one priority until it is gone. Just my opinion.

**Edna_E** · 10-25-2007, 04:52 PM

I'm with Peter on this. Pay off the higher interest first, and keep paying more than the minimum on whatever is the highest rate while paying the minimums on all others.

**Peter** · 10-26-2007, 02:19 PM

Just think of the balance on a credit card with an interest rate of 18% as a "savings account with 18% return." It makes the decision much easier. Why would you invest money into a savings account at your bank which has an interest rate of 4% when you could invest the money into you credit card balance and get 18% return? Paying off credit card debt is a great investment.