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URL:  http://boards.fool.com/i-do-like-xraymds-plan-and-im-wondering-if-23606956.aspx

Subject:  Re: Should I pay off a cc with my ING fund? Date:  1/25/2006  11:46 AM
Author:  Booa Number:  219313 of 308343

I do like xraymd's plan, and I'm wondering if there's a way to achieve balance between your three goals--pay down the MBNA that's about to balloon, save for your Roth, and save for your known periodic expenses--tuition, loan repayments, etc. I actually love doing this sort of calculation, I don't know why, I just do. I'll sit and make a spreadsheet, and title the columns Roth, MBNA and Known Expenses, oh, and you need one for the credit card minimums total, and put the current balances, and project out the next three or six months paychecks, and see if I can do everything, or how much of whatever I can do. (I am picturing the whole board backing up with their hands in that universal "Calm down, wild grizzly bear/person holding the diaper genie/spreadsheet nerd" position, while scoping out the quickest exit from the room.)

Anyway, if you do something like this, and leave a blank column at the left, you can try out different scenarios to distribute your minimum snowball to see what plan you like best. Take that minimum $2K snowball, subtract out what you owe on the minimums to the other CCs every month, and see if you can replenish your Known Expenses with $5650 before they are due. (If you feel truly anal, and you know when the known expenses are going to happen, you can schedule them in there, too.) What if you have the additional $950 or so for two months (I'm remembering your numbers, so they might be off, but it was the 403(b) and the disaster something or other, that extra), can you do it then? I think you said something about needing $650 or so a month to repay the $5650--could it come out of your snowball? And what about the Roth?

Also, do you have any good BT offers? It may feel like backsliding, but you have your finances under control now--it's not. BT the MBNA, and you can concentrate on the Roth, and leave your known expenses fund intact. You can aim the snowball temporarily at rebuilding your known expenses fund if you raid it for either the Roth or the MBNA.

Anyway, just sit and play with some numbers. Aim the snowball at different stuff and see what happens. Use all your resources--not just the known expense fund at ING, but your balance transfers on other cards. I'd rather see you BT the MBNA than use your ING money--that's your sleep-at-night money, you know? For me personally that would be a bigger "backslide" than using BTs for good and not for evil. :-) It's good to remember we can snowball things besides our CCs, we can aim it at savings or Roths or something else temporarily, if it's a high enough priority for you personally.

At the end of the day, it's whatever you're most comfortable with. And if you can get a good plan that relies on you cutting $100 a month from your budget and throwing it extra at your snowball, then it might even motivate you (as another person said on the thread) to be even more committed to paying down debt.

Good luck! Sorry to drone on so long. :-)


--Booa
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