First things first: Pay off Debt or Save more

[autoxer]

I also think upping my 401k contributions would be better in the long run than paying down the debt.

That really depends on the interest rate and whether or not you think the markets can beat the interest rate on your debt. If the credit cards are a high interest rate, then they should really be your first target. But any debt reduction plan really has to focus on the spending habits that got you into this situation in order to last.

[Rogerthat11]

You should build up some sort of emergency fund first, even if its for 1-2 months to start. Don't keep trying to go on with no emergency fund, because things will happen and you'll just keep building debt for any unexpected expenses. After that, pay off your debts.

Do you have a breakdown of your budget? Do you monthly expenses (described by your 6 month e-fund amount) include your debt payments? If not, I think it could be lowered, but I don't know your situation. Can you downgrade your housing/car, sell things, save money in others ways to free up more cash to put towards debt repayment? If you only have $300 at the end of each month that sure isn't a lot, and my guess is you could be living beyond your means.

Yes I agree. You don't need that much of an emergency fund at this point. I also agree $300 a month isn't a lot and it looks like your debts require much more monthly income to pay them off. I agree with the above post. You probably need to downgrade a few things, and pay off the debt in more of a lump sum that way you avoid the incurred interest over time in the case you were paying it off slowly. Emergency fund and your family is priority, but maybe you can go without a few things your family spends their money on?

[lotuslady42]

same boat in some ways

I completely understand where you are coming from. I didn't think it was a huge deal to not have an EF...until I told a co-worker in private (also a friend I trust). She looked so pale and shocked. The onslought of questions started, "what if you get hurt? what if you can't work? what it someone dies and there are funeral costs? what if your fiance passes?"

me....

SO what to do when you also have CC debt? I'm no expert! BUT I have saved up a good chunk of money since this horrid conversation. (partially out of the horrible embarrassment) and it was a good thing!!! DMV registration? not such a headache, fiance got laid off, not the best, but hey we have rent saved for the next month while he job hunts, so not the worst of times, you get the idea...and we don't have pets or a kid.

I've been paying my credit card payments and putting 10% of my take home into our joint EF. I don't know if you can even sock $150.00 of that $300 to your EF, but trust me, the $150.00 will add up fast. And, if you have joint savings like we do, your wife may breathe easier just knowing and seeing the money there. I know as a stressed female (my poor lovable man puts up with a lot when I'm anxious), that my peace of mind equals a whole lot of happiness for him.

You also mentioned pizza? What kind are you doing? delivery? we used to love that, too exp though. Even frozen pizza can add up, but you can get some good deals if you know where to look. Also, if you have a Trader Joes near you they have SUPER cheap pizza dough and you can make them with the kids. Trust me...I'm not a cook, and you can't mess them up. You will save a ton of money and spend more time with the kids...time that doesn't include other expenses. It's just an idea. Everyone loves pizza. (plus if you make it yourself, everyone gets to choose what's on their pizza...instead of maybe having to order separate pizzas for separate people). Anyway...I know you weren't asking about pizza.


300 left over: 150 to EF, 150 to CC.