Efund v. CC debt (and cooking beans)

[Deleted]

We have no efund and about $14k in cc and medical debt. Right now interest on the cc is running about $200/month. I know people say to build up an efund first, but I don't see the logic in that. It would probably take us about 3-4 months to save up that $1k. That's $600-$800 in interest we'd be paying and there may not even be an emergency. Wouldn't it make more sense to throw it all at the cc, then in the case of emergency, it'll have to go on the cc, but if there is no emergency, then we save all of that money.

[kershnic]

That's what I would do. Maybe worth spending some time thinking about whether there are any emergencies you could conceive of that wouldn't accept credit. The only one I can think of for us would be if we needed to move in a rush and needed a new security deposit, broker fee, etc.

The main reason this isn't recommended is that many people who have CC debt are not good judges of what constitutes an emergency worth putting on the credit card, so people end up just growing the CC debt and never catching up. If you can trust yourselves not to do that I think it's a fine plan. Emergencies are unexpected things you can't plan for and are necessary (Christmas gifts are not emergencies, for example).

[Deleted]

We had a really rough year, so usually good at the money thing. I lost my job (now have a great new one), had to care for family members, had an accidental pregnancy where we've paid $4k oop so far (another $4k to go) and a few grand on emergency dental work for both of us.

[nevermind]

I would build up a baby emergency fund as quickly as possible. Sell some stuff if you have to.

[Roc A Bee]

How much do you have to put towards debt every month?

[Deleted]

We have to reassess that this week. School is starting back up, so we'll need a sitter two days a week. Going to sit down as soon as we are home at the same time (work different shifts) to recalculate. DH waits tables, so it's hard to know what he's going to make every day, which doesn't help.

[thatgirl2478]

so the 1k efund is supposed to be there to keep you from adding more to your debt. I TOTALLY see how the numbers may not work out in your favor, however.

I suggest not only sitting down to figure out a budget, but go on a cash only budget so you aren't adding to the cc debt on a daily basis. That way if you HAVE an emergency and HAVE to charge it, you haven't built it up unnecessarily. Also - look for ways to decrease your fixed costs (insurance, cells, food, etc) as well as items you can sell - you can then either throw that $ at the debt or savings.

Your baby is adorable btw .

[Deleted]

Yeah, part of that reassessment is cutting things out. We're going to hopefully have our cell plan down to $25/month each and we just applied for the Chase Slate with balance transfer. (only to eliminate interest, not to have more available spending) My major focus is groceries right now. I can probably make some decent cuts there. Thank goodness for breast feeding and cloth diapers! (We got our entire stash used for under $200)

[sillygoosegirl]

I agree about not having an efund while paying off high interest credit cards. As a warning though, if an emergency does come up and you have to charge it, do NOT put it on the balance transfer card. Sometimes those cards have extra high interest rates for regular purchases AND won't let you pay off the regular purchases until the transferred balance is paid off.

Also, while I know this should go without saying, I'm gonna say it anyway: don't charge anything unless it is a real emergency! The $1K efund recommendation is that most people don't have the discipline to make good decisions on what constitutes a true emergency when charging a little more to a mountain of credit card debt. Don't be most people.

[Deleted]

CC goes locked in a safe unless we have not a speck of food in the house or something similar. Today I used 20 quarters to get gas. That was partly a timing thing, but partly a we don't have money thing. And you should see some of the recipes I've found utilizing beans! Now if only I could master soaking them instead of buying canned.

[limey]

Do you have a crockpot? When I actually made beans from scratch, that was the easiest way to do a big batch.

[Deleted]

I do. Hmmm, I'll have to try them in the crock pot. Just sitting in a pot of water for 8 hours gets me nowhere.

[isabel]

Dried beans are easy. Sort them (get out all the little rocks and stuff), leave them to soak in a bowl overnight. Rinse them the next day, then throw them in a crock pot with some broth or water for a few hours.

I think you've gotten good advice on your main topic, so I'll just say good luck!