Another question...

**Valerie in WA** · 01-24-2006, 04:45 PM

Since it makes the most sense to pay off the CC now and then save for the kitchen remodel, should I also let go off the money I've already saved?

I could take the $2,500 I've already saved and put $1,000 in the EF (with more money coming through the year) and the other $1,500 to the CC. Or I could put all $2,500 in the EF and once the EF is funded (the goal is $4400), put those monies into the CC.

Here's what I have to work with:

$720/month that I've been splitting between the CC and Kitchen
$1400 lump sum in April (dh's '3rd' paycheck that month) - was earmarked for Kitchen
$1400 again in September - was earmarked for EF
$1800 coming in irregular bits thoughout the year (confusing to non-Americans but its my reimbursement from my flex spending account - I budget in the out-of-pocket expenses, and when I get reimbursed it's 'extra' money)

TIA (again)

ETA: plus the $100/month that goes into the EF

**homesteadmamma** · 01-24-2006, 04:51 PM

If it was me, I'd put a $1,000 into the EF account and put the rest towards your debt. Once your cc is paid, you can take that money and divide it up, some towards your EF account and the rest towards your cupboards.

**Valerie in WA** · 01-24-2006, 05:04 PM

I think I've just answered my own question.

If I take my 'kitchen money' of $2573 and put it in the EF, AND continue to add $100/month (as I planned) for January through April, and add the 'extra' paycheck of $1400 in April, then the EF will be fully funded at $4400 by the end of April. Because dh is self-employed, we want more than $1000.

For those same months, January through April, I'll pay $720/month on the CC. Starting in May, I'll snowball in the $100/month that was funding the EF, so I'll being paying 820/month for May through August. In September, I'll pay it off with dh's 2nd 'extra' check of $1400.

As the little bits of the $1800 come through out the year, I'll save them for the Kitchen. September through December, I'll save the $820/month that was going to the CC. The savings balance will then be $5080 by the end of December.

I can continue to save $820/month (assuming the EF doesn't need replenishing for any reason). and should have 10,820 by the end of July '07. Plus there will be another 'extra' check of $1,400 somewhere in the first half of '07, just haven't figured out exactly when.

**Englishlady** · 01-24-2006, 05:08 PM

I tend to agree with cj on this one.

However, there is no "one size fits all"....................

Me?, I would want to be free of the CC debt first..............then I would want to get some savings.

The car debt, well I am assuming that you pay a specific amount a month? and you have kind of got used to that as a regular" outgoing"?

Saving for the cupboards, I would put them on short ration$ ( for now) and then maybe I would divide all the odd "extras" coming in ( over this next year)into paying off CC debt/EF and last of all kitchen.
I hope that makes sense?

**Englishlady** · 01-24-2006, 05:10 PM

I obviously can't type as fast as you guys!

**AmyBoz** · 01-24-2006, 05:39 PM

I'm with you. Personally, I'd put the whole kit and caboodle toward the cc debt. But that's me. I know everyone else love their EF's, so to go along with the crowd

I'll say put $1,000 toward the EF, and then put the rest toward the debt.

**Lucky Star** · 01-24-2006, 06:10 PM

I'll add my vote to the "put everything you can towards cc first". Once it's paid off, you can then snowball those payments towards your kitchen remodel. Personally, focusing on one goal at a time works best for me. Plus, you'll be saving all the interest charges on your cc - which is more $$ towards your kitchen!

But definitely do whatever you feel most comfortable with - it has to work for YOU!

**rebecca** · 01-24-2006, 06:19 PM

I would put a $1,000 up for an EF and the rest on the cc. For me knowing that their is an EF is a comfort. You never know when Mr. Murphy will come along and he likes to find people who don't seem to have an EF.

**my4littlebuffaloes** · 01-24-2006, 06:22 PM

Ok, I just used my calculator on this one. If you put $1500 towards the cc, then the $720 each month and the $1400 in April, the cc will be paid off in July - 6 months and done! I am with you though on the emergency fund. My dh has a very secure job (teacher) and I wanted $2000 in ours. With 4 kids and lots of experience, I knew that we could blow throuhg 1K in less than 1 true emergency, as you found out with your water pump.

So on the other hand, maybe put the entire $2500 in the EF, continue to add $100 a month, and just stick all $720 each month as well as the $1400 onto the cc. I think it would take 8 months then to pay off the cc.

Good luck!

Jennifer

**forestdale** · 01-24-2006, 06:24 PM

I agree with the ladies. I'd keep a $1000 EF and pay the extra to the credit card. But you're the only person who knows what kind of EF you need or feel comfortable with. I do think it's prudent to pay off your debts first and save later, so long as you have a small EF.

**SHOPGIRL** · 01-24-2006, 07:22 PM

Valerie,

It sounds as if you've figured this out. From your other posts, it seems that financial peace of mind is more important to you then the interest your paying on your credit card balance. I can understand where your coming from. I'm in a similar situation. If your dh had a bi-monthly paycheck with a secure job, then it would make sense to pay off the debt first. However, since he's self-employed, your income fluctuates monthly. It's not as if your running your credit cards up higher.

So, if it was me, I'd fully fund my EF to an amount that I felt comfortable with. Then, I'd pay of my credit card, then I'd save towards the new kitchen cabinets. I too am in need of new kitchen cabinets, but it's going to be at least two years before I can do this.