Monday, October 15, 2012

So what now?

I know I'm combining quite a few different debt repayment methods, but hey, as long as they work, there's no harm, right? I started with the snowball, paying the smallest first, but switched to the avalanche to get rid of the car loan, and I am thinking I may stay with the avalanche, because I'm tired of paying interest.

With the car gone, that frees up $410/mo to pay things. The car was my second highest expense after rent ($450), and a very far second from the next highest item ($133 for my Student Loan #2). I could easily rebuild my EF in 2 months, no problem.


To be entirely honest, I don't think I am ready for an EF. I'll give you a few seconds to consider that.

My problem with an EF is money that is there. I know it's there. And even though I won't go spending it foolishly on myself or something like that, history has shown that something non-emergency will come by and sweep it away (90% of it will have to deal with my family). If I don't have it, I can't spend it, right? I will eventually complete my EF, of course. But for right now, it may be a triumph of hope over experience to re-complete it right before Christmas... I have a bad feeling that if I do, it will be gone before New Year's hits.

After surviving April through September of this year paying the steep price to re-complete my own $2000 loan (which was used to pay off the car), I don't want to put myself into the same situation. Because it truly, truly sucks. And I got no benefits out of what my funds were used on.

So instead, I will stick with one of my original modification to my plans, which is to pay off CC1 with the extra money. If I stick with it, it will be gone by January, and save me an additional $80 or so in interest. And then I can work on my EF under less stressful times. Jan - May are usually very financially stable for me, so if I can hope on that, it should be the best time to have an EF last.

I know it's probably a bad idea to forgo an EF for such a long time... and I can trust myself not to spend the money on me, but my family is another matter. I believe my best alternative is to go this holiday season without an EF or intended funds. I'll scrape by a Murphy fund (~$300), and if that goes away, no biggie. Still gotta run the numbers on this plan, but I'll let you know!


  1. I have been going over this in my head so I don't sound like a bitch an I have even delete it three times. But here is my opinion..and opinions are like assholes everyone has please don't be offended by what I say.

    If you were to get hurt an be unable to work tomorrow who would pay your bills? Your family? or and EF. Also the longer you carry them the longer they are going to expect it, believe me I have a cousin who thinks the family lives to bail her out.

    I am going to say this point blank. Today is the only October 16, 2012 you are ever going to get. You are getting older and it is time to live your life on your terms and not save your family every time. I know you love them but love does not cost money.

    In 5 years do you still want to be renting a room or living in your own place? Right now you are in a room that you can't even really relax in, because at any moment the owner might want to give a tour. You are so sweet and you have been working so hard to pay bills that are yours and bills that aren't even yours.

    I love your blog. I like you. I am so proud of the progress you have made but I would never expect my children to support me if I had money coming in. You are not a bank you are a young, hardworking, giving person but eventually you have to put yourself first. You have paid so many of their bills and saved them so many times don't you think its time you saved yourself?

    I am sorry if I sound cruel. I don't mean to I just think that you need to start living for yourself, that is what us parents are supposed to do, give our children roots and wings. We are not supposed to expect them to pay our bills and dig us out of the problems we get into. Yes sometimes as a family we have had something occur where everyone has kicked in but not every week and not to the point where I would prevent my children from paying their bill, having an ef or would I incur bills in their name.

    It's ok if you don't publish this. Just know that I do truly worry about your overworking yourself and I worry about the fact that your family sees you as their savior. As a parent I should be my childs savior.

    Again sorry if I sound bitchy. But I care

    1. You're not cruel at all, Judy. And if that was cruel, then I tend to be pretty ruthless at times! I really appreciate your comments, and I too agree with what you've had to say.

  2. I'm with Judy and I bet you get a whole slew of folks leaving the same sentiment.
    but I've said how I feel before so I won't beat that dead horse again. My blood pressure can't handle it

    That being said, I want to talk about something else here.

    I 'sort of' get what you are saying about not wanting to have an EF going into the Holiday Season. You know you are a pushover when it comes to the moochers, er....parents/family, and you know that EF will be doomed to be spent on them.
    I get that totally!
    But think about is a good idea to throw all that extra cash into debt and be walking around for months(3 or 4, right?)with NO EF at all?
    What if an emergency happens and you've use all the spare cash to throw at debt? You know you can't count on the, parents/family to help YOU out...funny how that road only travels one
    What is the plan if a true emergency happens and you have no EF? Make sure you have a REAL plan in place before you use all the spare cash for Debt repayment. That's all I wish for you.

    Now, as for what to pay off? I'd throw it at the highest interest rate debt. I don't care if it's the biggest or the least amount owed....get the highest rates gone first!

    1. I will definitely work on said plan... sad to my post/choice, any such plans will need some cash back up, so I'll take a second good luck at it.

  3. Ditto what the other ladies said. Long before you came into this world your family was able to make ends meet, long after you are gone they will continue to make do. A EF is what will keep you out of debt in the future, help you sleep better at night and have a little extra to treat yourself sometimes. I too am a giver, I understand your need to give but there are many places that your giving can make a difference other than your family. Why not split the extra $$ 3 ways, part to debt reduction, part to savings and part to a local charity. Your family won't know about your EF unless you share that information with them, some things need to remain your little secret!!!!!

    1. They rarely know I have an EF... but as others have pointed out, I'm a hopeless pushover when it comes to helping. I've liked how you think in these sorts of situations. I will play with the 2 or 3-way part of the extra money in a debt setting and go from there. Thanks!

  4. Double ditto with the above ladies comments. It is time for it to be all about you! I think you do need an EF, but I also understand how you feel if the money is there in the EF, you might spend it or give it away. Decide on an amount that you can live with.... continue to pay the debt down, and treat yourself once in awhile. Definitely treat yourself! :)

    1. The amounts I know I could live with would be $1000 EF, $300 Murphy fund for stuff not covered.

  5. I think I understand your approach: Pay off debt instead of building up cash. Cash is too easy to tap into (maybe for family needs more so than for yourself), but you'd be very unlikely to take on debt for the same purposes. Yet, if you truly needed the money for yourself for some sort of emergency, the credit lines are there.

    To me it's like two buckets side-by-side. Keep your debt high and build up cash - or, alternatively, keep little cash on hand and pay down your debt. I understand why you want to do the latter and I think it's a sound plan, given your circumstances.

    Keep your credit lines open and in good standing just in case of some dire need to tap into them, and save on interest. I'll be a good feeling to have less debt.

    1. I have a pretty good credit backup, but I think I'd rather not eat than run that up. Going through the struggles of getting out of debt, I am determined on never paying interest again on my own debt. It is still pretty nice to know it's there somewhere accessible.

  6. I understand what you are saying, and like everyone else I wish you could feel like you could have your own EF fund without feeling pressure to use it on your family's non-emergencies. I agree with 444 - as long as you have some credit line available, in case of a true emergency (for YOURSELF) then it would be ok to tackle the debts. Don't leave yourself without any means to access funds in an emergency - I'm sure you don't want to end up living with your parents again. Maybe you could put your extra savings into a CD, where you need to leave it in there for a certain length of time to earn the interest - would you be so tempted then to use it on your family? Sounds like you are making great progress overall - keep it up!

    1. I've thought about a CD or something long term. I really need to revisit those options, but I think that would make my cash less fluid and less accessible, in case I did need it during an emergency?

  7. I have to say that using All the extra cash to throw into debt and leaving yourself Only lines of credit as an "emergency fund" is not something you want to do. While it would work for some types of emergencies(real little ones), I think it's a bad mindset to use as a general plan. are cash poor but are throwing $ at the debt, therefor the interest goes down and you get traction. That's good!
    But, suppose your emergency is a job loss. No income coming in and no replacement job on the horizon. No cash so you use the credit lines to live, rent, groceries, utilites, etc. That's great until you can't make the payments on the credit cards...because you don't have a job still.
    It's really just transferring your debt from the landloard, the electric co., the corner market onto a central creditor.
    And when you can only make the minimum payments or god forbid you start missing payments because remember, you still don't have income coming in, they jack the interest they charge you for THIS debt to what?....20, 28%?! So much for all that debt you paid down by throwing all your cash(when you had some)into repayment. Now your debt hole is deeper than when you started.

    If you have kept some cash reserves in this scenario while still throwing the rest into debt repayment and the job loss happened, you would have a cushion....possibly not enough of one to get you to the next job, put you could tread water some and once you had to go to credit to pay the bills, you could make sure you made your minimums, so less likely to dig yourself a deeper hole with increasing interest rates.

    This, living a leveraged life, is the kind of thinking that got our society to this very bad point we are at. It started in the 1970's and most folks alive today, it's the only way they've ever known(unless you had an old fashioned Grandma or
    Of course, don't take my word for anything just because I have a big mouth and an more than willing to share MHO with anyone. The fact that I have only used credit when absolutely necessary and only as a last resort and thus have NEVER been in a debt hole EVER should speak for me and my way of approaching how to live with credit. But it's all up to what you think is best.

    Credit is tool and it can be worthwhile tool, but it is also very VERY dangerous and if you don't realize it's deadly power, it can eat you alive, before you realize it's taken off an arm and a leg. ;-)

    I WILL shut up now about this....promise! 8-)

    1. I completely agree that credit can be dangerous. So far I've threaded safely with my own zero-balance card I use for rewards. I still dont have a balance on it at the end of the month, but I have come to borrowing from an upcoming check for that, and it is scary. No need to be quiet about things! I enjoy your opinions. And while a job loss is very scary, it is highly unlikely at the present time, for me. (Not to be an ungrateful snob that takes things for granted or anything)

  8. I think you should save the money in your EF fund and then blow it having so much fun or buying something incredibly awesome. Remember that its your money and not your family's. I feel like you don't do anything for yourself but just pay debt and bail out your family. You need to remember why you like money and keep motivated.

  9. It is easy to get sucking into family drama at lest for me. But my family (sisters ) have also been very good to me in the past and to my children.

  10. I'm going to echo what others have said... You really should have an emergency fund. Stash it some place like ING direct or Ally. Some place that has a small barrier to keep it away from you.

    You can even just do a hybrid system and put in a couple hundred one month to build it up a little and then do $25/week (or paycheck) and put the rest towards debt. That way you are tackling both at once.

    But I think you would be doing yourself a great disservice to not have an EF. I know I recently tapped into mine becuase I chipped a filling and had to get a crown to replace it (that's $500 right there and putting that on a CC because I would have no cash would just make things worse).

    Just my thoughts, but you are going to need to do what you feel is best.



  11. Not much I can add here, but I do think it's good to have some $$ set aside for a rainy day! ;) Even if it's just $500... You never know!