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Author: dsemmler Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308367  
Subject: Re: Paydown debt, or e-fund? Date: 8/21/2003 5:10 PM
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$IQ wrote,

A friend of mine who has been unemployed and living on an e-fund has gotten an unexpected reimbursement of $6,600 which she is very relieved to have. The question is whether she should use this to set aside for her to live on, or pay down her debt. She owes about $3,000 on American Express and $1,000 on Visa.

Are these two CCs the only outstanding debt? If so, I would be inclined to pay them off completely and put the remaining $2600 into the eFund. That should be good for at least one month of living based on what you indicated.

By paying off the debt, the monthly expenses will be slightly reduced so the eFund dollars will go a little further. Not to mention it removes two items that no longer need to be worried about.

If it gets to the point where this friend is running out of cash in the eFund and there is no new job on the horizon, I would suggest finding any type of job to start bringing in some cash. There was recent discussion of the idea of having too much of an eFund and possibly not pursuing a new job with the same fervor as one without much of an eFund. Do you think your friend may be doing that? What is this person trying to do to find a new job? Are they actively looking?

You mention there is at least 6 more months of eFund and that the friend has already been living off the eFund. It sounds like the eFund may be okay and the friend really needs to focus on finding a job. Hopefully they can find something soon and eliminate the concern regarding the eFund.

dt
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