UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next
Author: EditorialWe Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308884  
Subject: Re: Pay off Credit Cards Date: 8/17/2000 8:40 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
Rosee,

Do you have a particular reason for "wanting to pay them off very quickly"? I think many of us fall into the trap of being impatient to get out of debt, throwing too much of our cash flow at the debt, and then winding up high and dry when something unexpected happens. That's a recipe for falling back *into* debt, many times.

If I were you, I would maintain the emergency fund that you currently have, and then evaluate the Roth and money market contributions in the light of your total budget. You will probably want to throw that $300 a month at your debt instead.

Also, why are you putting money into a money market when you already have an emergency fund? Is your emergency fund already in a money market? That's usually the best place to keep it, as you at least earn a bit more interest than a savings account - sometimes 5 times more. But a money market isn't really an investment, more like a savings account with a better rate of return.

Many people struggle with whether or not to build up an emergency fund while paying off debt - I say, if you've already got one, keep it. I think of an emergency fund as a way to keep yourself out of further debt when the car conks out or you need emergency travel money or whatever else life throws your way.

Then, don't forget all the other strategies: asking your current card issuers to consider a rate reduction; playing the balance transfer game (ONLY if you can commit to incurring no new debt as a result of it); cutting other items out of your budget to devote more to debt reduction; looking for more money elsewhere (second job, ask for overtime, sell an asset you own, etc.)

With more info we can give more specific suggestions. Good luck!
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (2) | Ignore Thread Prev | Next

Announcements

TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement