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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 310999  
Subject: Re: Pay off Credit Cards Date: 8/17/2000 8:40 PM
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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!
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