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What is best? Unofficial pole

December 19th, 2006 at 05:17 pm

Is it better to put $ away for emergencies-then start paying down the cards so that you can use the savings instead of the cc? Or is it better to put every dime towards the cc's then only if an emergency comes up use them?

11 Responses to “What is best? Unofficial pole”

  1. tinapbeana Says:

    depends on your definition of emergency, and what kinds of card/s you have. i.e. if you only have store and gas cards, they're probably not gonna help in an actual emergency. same if you have low limit cards (as i do).

    my budget for next year has $400 per month alotted to short term savings: gifts, household items, car repairs, medical, etc. all of this money could and would be used in the event of an emergency. if there's no emergency, then these funds can be used for their 'budgeted' purposes. all extra is hopefully going to go towards debt.

  2. yummy64 Says:

    I'd suggest getting the book "total money makeover" by Dave Ramsey out of the library. He suggests a baby emergency fund of $1000 then paying off all your debts then increasing the emergency fund to 3-6 months of expenses

    There are arguments to do it all sorts of ways but I like his approach.

  3. janH Says:

    I split it. It is much slower, but I can't decide what makes me feel better. I put some extra on credit cards and some extra into savings each month. I probably would do better moneywise if I paid off the debts, but I like having some money set aside, also.

  4. sarah Says:

    I also split it. This way if there is an emergency I don't have to use credit to resolve the problem

  5. rduell Says:

    I am splitting it also. I need to have extra cash stashed away that I know is available for an emergency so that I have some peace of mind.

  6. jersey jen Says:

    i keep about 2 months of spending money in checking and money market accounts. anything above 2 months go directly into credit card repayment. it may not be the fastest way, but it does stop me from worrying about overdraft in checking account. after the CC is paid off, i plan to build 6 to 12 months of fund. am i helping here?

  7. Ima saver Says:

    i would build up your emergency account also. If you find extra money, throw that at the credit cards.

  8. Broken Arrow Says:

    Marie, I believe the answer is what will work best for you financially.

    I recommend to crunch some numbers and see which way to get you further ahead.

    It may also be worth alternating in smaller increments, such as doing a little bit here, and then a little bit there.

    You can do a mix of both, in whatever proportions that you feel is best.

    Lots of choices, and lots of controvery for that matter. Smile But in the end, so long as you're diligently working on your finances, that's the most important thing.

  9. fern Says:

    I would pay off the credit cards first. The interest rates these days are highway robbery.

  10. princessperky Says:

    small EF for the soul and pay all other cents to the CC..
    small being 1000 for us...that way we bought our new dryer without adding to the CC...so we felt..competant....but it didn't take over our budget, that was focused on debt...actually right now we have a slightly higher EF..and the spare money goes to the car.

  11. fairy74 Says:

    I say go for fully funding the EF, it is true that the credit cards are at a higher interest rate, but as others have said in similar threads, if anything comes up you need to not be dependent on the credit cards. Once the EF is funded, fully or almost fully, start getting really aggressive with the credit cards. Having said that, whatever works for you is probably best.

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