Newbie here....lot's a help needed!!!

[marmatt]

Well, let's start with the good news 1st:

We got serious about debt reduction in Feb of 2006. Since that time we have done the snowball method and have managed to pay off $28, 433

Now for my question, we have 3 cc's remaining:

$15, 474 @ 4.99%(Chase), $12,969 @ 2.99%(Citibank) and $6,815 @ 2.99%(AX). All are fixed until balance is paid off.

In paying down debt so much over the last 18 months, I've drained down our savings to about 3K. I still contribute to my 401K and dh's IRA.

Since the cc's are at such a low rate, I've thought about slowing the snowball to rebuild our emergency fund.

Any thoughts???

[disneysteve]

I think that is probably a good idea. Even a high-yield savings account earning upwards of 5% will do better than what you're paying on 2 of your cards and nearly match the rate on the 3rd. Keep paying extra on the 4.99% card but direct some toward rebuilding the savings.

[PrincessPerky]

personally debt owns you..if something should happen you have to pay the CCs...on the other hand if they were gone, and something happened to your income you do not have to put massive amounts in your savings.

Unless you have enough to cover the debt instantly (or nearly so) I do not recommend keeping debt.

But no reason you have to go 100% of discretionary funds one way or the other. dunno how much you make (or what you have available) but a nice percent split helps meet both goals and keep the debt shrinking quickly.

My pick would be around 10% of income to saving, and split discretionary 80% debt, 20% wants (like eating out, or whatever you have). (assuming you still save to the retirement stuff as well)

[marmatt]

Thanks for the feedback, both responses reflect exactly th edebate I've been having with myself.

Because we've been on such a roll with the paydown strategy, I think I'm going to stick with the momemtum I have and at least knock off the lower balance by throwing $150/wk at it. I should be gone in @ 1 year and if the sale of a property we have goes through, I'll pay the others off in full.

I can't believe I can see the light at the end of the tunnel. I just hope Murphy dosn't show up at my door, or at least if he does, that the 3k will be enough!!