Save Extra, Pay Debt, A little of both?

[STLDisney_Freak]

Okay, So I actually sat down with my excel and mad a spreadsheet of all our bills and the two paydays that we have each month. We have approx. 141 dollars left out of our first check and 126 dollars left out of the second one if we can stick to our budget. Now my question is would you take part of it and save some then use the rest to pay debt or would you use it all to pay debt? I'm just happy to see we arent bad off as I thought we were. The good thing is though I have an interview on Saturday at Macys for part time work so if I can get a few extra hours there on top of my current job then we'll definitely be good, but I don't want to take any more time away from my girls than I already have to....:confused3

[kfeuer]

Do you have an emergency fund? If not, I'd save it. What kind of debt are you talking about? If it's credit cards, I'd try to pay those down (assuming you have an emergency fund).

[Chicago526]

If you don't have savings in place already, I'd spend the next few weeks/months puting between $1k and $2K in the bank as a mini emergency fund first before paying back debt (other than the minimum payments, of course!). Once you've got that savings going, then concentrate on your debt. Having 1 to 2k in the bank allows to pay for life's little surprises without having to put anything new on your credit cards.

Once you get the savings in place and start paying extra towards the debt, you will find at some point that something will happen and you have to dip into that mini emergency savings account. When that happens, stop paying the extra towards your debt, just pay the minimums, and use the extra to refill your savings account. Once you've got that topped off, start paying the extra towards your debt.

Just my opinion, but I feel this is the best route. Good luck! :)

[twinklebug]

I was just about to start a thread like this -

It makes sense to put it into the emergency fund account. I've heard some folk sa yyou should be prepared to pay minimum due of all of your bills for at least two months for a decent size fund. That's A LOT of saving to do, but I can see their point.

The temptation to pay off other bills is great esp. if you have high interest rate cc accounts.

I think I'd start with the E-fund and as it builds to a good amt (someone mentioned $2 K which is a good number in my book) I think I'd switch to 50% savings / 50% debt.