No. of Recommendations: 3
Hey everyone,

I have been focusing on saving some cash each month towards what would be a first home down payment...but neither of us feel comfortable purchasing at this point, even with the market and rates being so low. We have discussed it, and the small amount we do have saved doesn't even feel close to what we would want for a down payment. On top of this, we are both pretty apathetic about "settling" aka buying a home and locking ourselves to this area. So we may be considering job changes and a move in the next few years.

So with this in mind, and a good amount of debt to pay back, we were considering the option of dropping most/all of our savings on to one of the lower balance debt accounts to "realize" some more cash flow to either replenish savings or snowball on the higher APR debt accounts. I currently have $150/mo go to this savings account, and of the low balance accounts that could be repaid with this savings, the student loan, while the lowest non-zero APR account [2.75%], would offer the most benefit in cash flow. If I were to pay off the loan account, I could replenish the current savings balance in about 10 months. At 14 months out, this account will be paid in full anyway, if this matters at all.

Last update thread:

ING E-Fund/Home Fund $ 3550.60

Debt Balance APR Min
Discover $10288.45 10.24% $165
BofA-CC $ 3582.62 9.99% $59.00
CU-CC $15115.40 6.24% $400
CU-Auto $13490.62 5.99% $449
Student Loan $ 2690.17 2.75% $195.45
RoomsToGo $ 1301.31 0% $30
Citi $ 7210.00 0% $69
Totals $53678.57 ?.?? $1367.45

"Snowball" is approx $600, but varies month to month depending on vehicle/home/medical expenses. These have been consistently low for the last 12 months, and most emergencies come from savings.

That's where I am at right now, and I will go ahead and accept now that while my overall debt since my last "update" is lower, we have not been as good as we could have been in our progress. We are struggling with it every month, but still committed to our goal of becoming debt free in 24 months or less. This would be a bigger accomplishment for us than getting in to a new home that will most likely dig the hole deeper. Not a favorable option at all.

About half of Discover is actually at 0% for 12 months, so the actual APR there is lower than the given 10.24%. RoomsToGo is 36 months at 0% and will be mostly paid off by end of August when DF gets her annual bonus. Citi is 0% through July 2011. Everything else is fixed and Discover is the only variable APR [oldest account]

Biggest slip was probably buying new furniture, even if it was something we actually needed. I realize "need" is subjective, but it's done so not really up for debate at this point. Other than that, I am sending $150/mo to savings and about $2000/mo and any "windfalls" from work, tax returns, etc directly to debt and/or savings.

So if you've made it this far, my "question" is actually this...

What would you do if given the above options/scenario? Should I keep the savings for a home we will most likely not purchase in the next 12-24 months, or should it be applied to high APR debt, or low balance payoff to realize cash flow?

Thanks in advance,
Trying to say vigilant
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