Need Some Advice- No- Forget About It

jannieFebruary 22, 2013

I was deeply in debt a couple years ago, by negotiating with debtors (mostly credit card companies) and paying monthly I have whittled $30,000 in debt down to around $10,000. I made a pretty strict home budget, have been paying down my debt. For me, renting a movie on Pay Per View is a "luxury". Anyhow, this month I wound up with about a thousand dollars extra in the bank. I guess because February only has 28 days. I didn't know what to do with the bonus grand, so I decided to pay $500 extra toward the credit cards and save $500 in my emergency fund. I'm sure there will be a car bill or need for a plumber in my future. Conventional wisdom would say put all of the grand against the debt, but I did what I said above. I was going to ask on this forum, but I've received some snarky advice in the past. I'm not looking for "You go girl". Just reporting a little progress. Thanks for readung. No replies needed!

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sushipup1

I think you did a good job. An emergency fund is a great idea!

    Bookmark   February 22, 2013 at 10:11AM
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dadoes

Emergency funds are a very good thing!

    Bookmark   February 22, 2013 at 10:14AM
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jkom51

Wise decision, absolutely.

Life happens. One needs to be prepared for it.

    Bookmark   February 22, 2013 at 5:43PM
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dreamgarden

"so I decided to pay $500 extra toward the credit cards and save $500 in my emergency fund."

Great!

Hope you took a few bucks out of this to reward yourself for your diligence with a nice glass of wine, chocolate, or whatever other inexpensive luxury floats the boat!

    Bookmark   February 22, 2013 at 10:02PM
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frugalwallflower

Always a good idea to set something aside for the inevitable surprise expense. You did a very logical thing and are now that much closer to meeting your goal!

I've begun to plan for "surprises" in my 2013 budget, which is for household costs, debt repayment and updates/repairs on our 40-year-old home. I know surprises will come up; they always have.

    Bookmark   February 23, 2013 at 1:04AM
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hilltop_gw

Jannie, I'm glad you're reporting such good progress! I remember reading about the debt and other issues in prior posts. Emergency fund and paying down debt are both GOOD things. Give yourself a pat on the back.

    Bookmark   February 23, 2013 at 2:27PM
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jannie

Awww.,gee, thanks!

    Bookmark   February 25, 2013 at 9:51AM
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joyfulguy

Hi again Jannie,

Just my $0.02 (and Canadian pennies are dead dogs, these days) ....

Don't know whether you are rather expecting an emergency, or whether you are operating on one of those 0% interest-rate introductory offers for a limited time that some cards offer from time to time (which I rather doubt).

If your emergency fund is in a bank account, when you consider the interest rate that it pays ... and the rate that you're paying on those balances owing on the credit card(s), you might consider an alternative.

Should you choose to put some of the $500.00 in the emergency fund toward paying off some of the amount owing on the card, you'd be getting something of a bonus in interest cost avoided.

That would also depend substantially on whether, should an emergency develop within the next while, you could cover it by using the card.

Were you to do so, you wouldn't be paying more on the card than you'd have been paying in the interim ... you'd have saved the amount that was the difference between what the bank paid you and what you'd paid the card company for the length of time until you needed the emergency money.

Maybe your satisfaction in having some money on hand in case of need is more important.

Congratulations on having improved your financial condition substantially: you've had enough to deal with on your plate, without having those worries also.

ole joyful

    Bookmark   February 25, 2013 at 7:46PM
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azzalea

You're definitely right about not asking for advice--sounds like you don't need any.

Good choices, and of course, by putting a portion of the money into your emergency fund, you can always, down the road, change your mind and put it toward your debt (that doesn't work the other way round, though). Good going, girl!--even if you didn't ask for it!

    Bookmark   February 26, 2013 at 2:17PM
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jannie

Well, an "emergency" has already popped up. Last week I was driving in a parking lot, hit a snowbank that was all ice, damaged my front bumper. Glad I have a little extra in the bank.

    Bookmark   March 3, 2013 at 8:07AM
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joyfulguy

Hi jannie,

Sorry to hear that - I was pretty sure that was you.

ole joyful

    Bookmark   March 4, 2013 at 6:06PM
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jannie

I must be doing something right. This month, even atfer paying what the "estimate " on the car repair is, I'll have another surplus, this time $700. I'll continuing paying half to credit cards and half to save for "emergencies".

    Bookmark   March 6, 2013 at 10:36AM
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maifleur01

I would start checking as to why you have the extra. I would worry that the bank was making an error.

    Bookmark   March 6, 2013 at 9:40PM
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jannie

I'm not worried about the bank. In the past I was way too crazy in spending. I now keep a balanced checkbook, and I'm on a strict budget. I know how much my utilities, taxes, groceries, gas and pets will cost, as well as hubby's medical expenses. I'll watch those credit card balances go down, at some point I'll have enough in savings to knock out those dreaded CC bills.

    Bookmark   March 7, 2013 at 8:44AM
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gmp3

You are doing a great job. You have proven your ability to keep the credit under control and it makes sense to keep a cushion in the bank.

    Bookmark   March 7, 2013 at 11:25PM
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williamsem

Sounds like a great plan!

Yes, technically putting it all on the debt would be worth more than the interest earned in the bank. BUT with the amounts you are dealing with I wouldn't worry. A huge debt or a huge surplus or a very high interest rate would be different, but I would not let that concern you with what you're dealing with. I suspect the peace of mind knowing an emergency will not set you back or add to the debt is worth much more in terms of stress level and sanity! (Or at least it would for me!)

Keep up the good work, and don't worry about splitting hairs on which way is more right as long as you're headed in the right direction!

    Bookmark   March 10, 2013 at 11:20PM
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EATREALFOOD

"I'm not looking for "You go girl". Just reporting a little progress. Thanks for readung. No replies needed!"

Jannie: Why not ? You deserve all the positive comments(I remember your original post and a nasty comment from one particular poster, who usually is pompous in their remarks). YOU'RE DOING GREAT !
It's an intelligent decision to save in tandem with paying down the debt., exactly what I would recommend.
As a reward I would buy the best ingredients for your favorite meal and cook yourself a nice dinner(with candles of course).

    Bookmark   March 14, 2013 at 2:13PM
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jannie

EatReal-that was so nice! Yes I'm planning a good meal Sunday (St. Pats Day) fr myself and DH. My local deli has the corned beef, I'll add some boiled potatoes, carrots and cabbage. And I'll make a good dessert-homemade apple pie or chocolate cake. Thanks for the nice comments, everyone. The satisfaction I'm feeling over whittling down this debt is the best feeling in the world.

    Bookmark   March 15, 2013 at 10:22AM
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joyfulguy

Have a great parrty on the weekend, Jannie!

Keep up the good work.

o j

    Bookmark   March 15, 2013 at 5:00PM
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