Saving vs. Paying Down Debt

[KennySoward]

I'll step away from most of the posters and say to just put a majority (75%-85%) of it into your debt. Based on the $750 per month you have available, you can get the job done in maybe two years, and still grow the emergency fund a little. In my experience, paying off a lot of CC debt (20k isn't too bad, but nothing to laugh about) just a little at a time never really gets the job done in a decent amount of time.

Not having an emergency fund is playing with disaster a little, but I'd shoot for lowering your high interest before that. If an emergency does come up, then you have some money to play with on your CC anyway because you have been paying it off.

Sounds like you made a decision already, so good luck. I think it would have been my next choice.

[sylviaB]

You can make your choices. I suggest, A. Split in half - go with paying down debt half and saving half; or B. Build up savings with the entire 750/month. There's no much problem since in the best of times, a certificate of deposit is a low-risk investment that gives reasonable compensation. But when CD rates are as low as they are today, consumers are well-advised to look elsewhere, suggests Bankrate.

[sylviaB]

its a matter of discipline and determination to budget the money you have save and pay off your debts.

[timib]

Pay off the debt, keep some in cash. best way to make it

[Aristippus]

I'll step away from most of the posters and say to just put a majority (75%-85%) of it into your debt. Based on the $750 per month you have available, you can get the job done in maybe two years, and still grow the emergency fund a little. In my experience, paying off a lot of CC debt (20k isn't too bad, but nothing to laugh about) just a little at a time never really gets the job done in a decent amount of time.

Not having an emergency fund is playing with disaster a little, but I'd shoot for lowering your high interest before that. If an emergency does come up, then you have some money to play with on your CC anyway because you have been paying it off.

Sounds like you made a decision already, so good luck. I think it would have been my next choice.

Thanks! One thing informing the choice is that the debt is all pretty low-interest -- all but about $1000 of it is under 6.5%, and that last $1000 is still under 8% -- so I feel a little more comfortable with a 50/50 split. If the interest rates were higher, I'd probably be focusing exclusively on debt. Plus, while I think we're out of the woods medically, this winter certainly taught me the hard way about why an emergency fund is a good thing.