[terry1156]

I understand wanting to have savings even with credit card debt because I have been there before. The thing to remember is that the savings are false savings. The savings can make it even harder to get out of debt. At least that was the situation in my case.

What happened was that we decided that we always wanted at least $2000 in our savings account. But everytime we got it to $2000, something would come up and we would have to dip into the emergency fund. We never wiped it out completely, but because we were always focused on building the emergency fund, we never began to pay down the credit card debt.

After several years of this, we decided to place all our savings against our credit card debt. After doing so, it was the first time that we started to really make a dent in our credit card debt. This is what happened. Everything was fine for the first 6 months and then we had a car repair bill that cost us $1000 which we had to put on the credit card because we had no savings. Then at 9 months we had another emergency that took another $500 from the account.

At the end of the year, we had replaced all the money we had taken out for the emergencies. Had we kept all the money in our savings account, we'd still would have had $2000 in savings, but our credit card debt would have been the same. Since we had placed the money against the debt, even though we had to charge money to the credit card during the emergencies, we found at the end of the year we had $2200 worth of room on the credit card. by paying off the credit card insted of putting it in savings, we had managed to erase $200 of the debt.