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I have been lurking on this board for about 7 months, getting some extremely helpful advice from the regulars here (Thank you!).

Anyway - my question.

I have been working a debt snowball since July, & have paid approx $11K worth of debt in that time. I have about $34K in unsecured debt left & at the rate I am going, plan on having most of that gone by the end of 2008 & all of it gone mid 2009. Some things in my job & with the economy are making me wonder if paying all this debt off is in my best interest.

Here is where I stand now.

My income $4700
DH Income $3300
Total $8000

House $2201/6.375/$257,000
HELOC $194/4.99adj/32400 (prime -2% after 2 years)
Home is valued at $400K, conservatively

OK - debt
CC1 16.00% $40 $1805
CC2 0.00% $60 $2957
CC3 0.00% $60 $2890
CC4 0.00 % $75 3626
Bank loan 12.75% $150 $4900

Total CC debt $ 385 $16178

401K loan 7% $368 $8200

Car 1 0% $471 $2355
Car 2 3.9% $468 $7428

Daycare (3 kids 5 & under) $1500 per month average
Gas $600
Food $700
Electric $120
Heat $218
CPI $148
SMW (union dues) $38
Garbage $31
Insurance $98
YMCA (required for daycare) $14
Cell phone $57
Life ins $97
Preschool $90
Gymnastics (2kids) $104
Eating out once a week $100

Total monthly payments $8002

As is obvious, we are extremely tight. I budget us down to the dollar, which is not easy & we have slipped up - the bank loan is our 'buffer, it has a 5K limit which keeps us in check (or has so far).

Anyway - March is bonus month at my company & I am expecting to get at least $5K. In may, I expect to get a $2100 rebate from good old US. CC1 & bank loan are expected to be paid off. In July 08 car 1 will be paid off. This will leave me an extra $661 for my snowball.

However - I have NO savings. I have been so focused on paying the debts down, that I have not built up any savings at all. There are rumblings at my company about restructuring,& while I feel pretty secure in my job today, in 6 months - who knows what will happen. So my question - do I keep my nose to debt reduction, (my ultimate goal is debt elimination, which will be complete in 2 years, with the exception of my home). Or do I instead, lengthen the time it will take me to get out of debt & put some of the bonus money in savings?
I am a poor saver - I am really afraid of having money in savings, basically I am afraid that we will blow it. We are excellent bill payers - We are good at that. How do I justify putting money in savings when I have cc debt?

Anyway - thanks in advance for any & all advice...
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