I have a steady job with good income, and once I've taken a hard look at my finances after purchasing this home, will be putting money into a 401. At the moment, I have just under $3,000.00 in credit card debt left - I was going to have that paid off in six months. Should I just pay it off now and get that interest rate out of my life? Or should I invest half in a 401?If your 401k has a open season why not start at whatever your company matches until the rest of the debt is paid off and you have enough in your e-fund to feel comfortable.After struggling so hard to get this house, of course I feel like getting a new couch and refrigerator (believe me, these need to be replaced, it's not just a matter of wanting spiffy new stuff), but I won't do that until the credit cards are paid off and I can pay for the items in cash (or know that I can pay them off on a card within two months).If you pay off the credit cards now and an unforseen emergency comes up (the need for a new fridge for instance becomes a necessity as the old one blew up) you can always use a card and pay it off until you get enough in your E-fund to feel comfortable. If nothing happens then your cards are paid off and you have managed to come up with the E-fund. The rule of thumb I have heard for savings towards home repairs is you need to save 1% of the value of the house each year towards repairs. IE your house is worth 100,000. Each year you need to budget 1000 for repairs and roll over what you haven't used and add 1000 to that the next year.
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