I rec'd a phone call early Monday morning that my great-grandmother was possibly dying (chest pains, kidneys failing). I made the decision to take a quick trip to see her, if I could make it in time. Fortunately, she has rallied for the time being and is doing much better.
Anyway, this has caused our finances to take a bit of a hit (could only pay the trip expenses plus $17 toward the credit card this time). Oh well, it's what would have been taken out of an emergency fund, had we had one. I'm just glad that we could pay back the trip expenses and that it didn't set us back any.
So, begs the questions once again: Do we fund an emergency fund or continue to work at the debt? My vote is the debt. What do you think?
Unexpected Trip - Unexpected Spending
June 27th, 2007 at 05:06 pm
June 27th, 2007 at 05:39 pm 1182962397
June 27th, 2007 at 05:40 pm 1182962459
June 27th, 2007 at 07:54 pm 1182970475
June 27th, 2007 at 08:05 pm 1182971100
Suppose on the other hand, that you put that thousand toward principal, saving interest, making it possible to pay down more principal. Then you have an emergency and you have to put it on your credit card. Well, some of the debt is back, but it wasn't sitting there accumulating interest the whole time, you paid principal faster than you would have, and now it will sit interest-free for the first 30 days it's on your credit card.
Some people say you should have cash on hand in case of an emergency you can't use your card for. I say, take a cash advance on a credit card if you really need it that bad; there are very very few emergencies a credit card wouldn't solve. Or, get a checking account with a reserve line; works like a credit card but you can take cash out of the ATM even if you're below your balance. That's my emergency cash fund.
Of course I wish I had savings, but I'm just not there yet. It doesn't make fiscal sense for me to save when I could be reducing debt.
Just my 2 cents (do you take Visa? lol)
CJ
June 27th, 2007 at 08:31 pm 1182972660
My vote is on the debt too. I couldn't see the sense in having money sitting around that could be busy working to lower interest expenses.
June 28th, 2007 at 01:36 am 1182991003
June 28th, 2007 at 05:12 am 1183003932
June 28th, 2007 at 01:57 pm 1183035445
June 28th, 2007 at 03:13 pm 1183040009
I suppose I should have mentioned that the debt we have is on a 0% credit card until July 2008, so we really don't have issues with paying interest.
Plus, we have an ING account, where we could stash an emergency fund and earn 4.05%.
Hmmm, this is making me rethink my "payoff the debt first" stance.
I also like the idea of even starting to save just a little amount ($5 per week), so we can begin good saving habits.
Thanks again!