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Old 03-14-2013, 04:37 PM   #1
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Where to throw our access money - debt?

I'm going over our budget because DH has agreed to take on the day to day budgeting. I LIKE doing it, but can't seem to stick to it, so he's going to take a stab at it [we've tried doing it together but it's been a failure].

Our combined net income is $3348.45, from his pay, my freelance work, rental income & government benefits.

Our expenses are $2348.45 [how perfect], leaving an excess of $1000.

We have approx. $1600 of debt. $1100 leftover from buying an $1800 Macbook [my old one was over 5 years old, on it's last legs & I need my computer to work], $300 in CC debt & $200 in back-taxes because we made a mistake on them & were reassessed.

Should we throw that extra $1000 at our debt for two months until it's paid off & then start to put it savings, or should be put one portion towards debt & another towards emergency fund/savings?

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Old 03-14-2013, 04:48 PM   #2
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Dave Ramsey would tell you to have a $1k savings then through the rest at debt
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Old 03-14-2013, 04:58 PM   #3
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Re: Where to throw our access money - debt?

I will say, to pay off debt as soon as you can. You can do this by sending more than the minimum; otherwise, the interest will eat you alive. For starting, put some money on savings and the rest for debt.

When I had my first child, I stayed at home with her for almost three years and it was difficult sometimes, until I decided to do coupons. We had saved a lot doing this. So, if you want to have a little bit more available, I will suggest you start doing that. The other thing we did was to get rid of AT&T and only kept phone and internet service. We invested in an anthena and DVR and that was paid within 6 months. We have an extra $80 a month thanks to that. Grocery for 4 people is about $250 after coupons (includes diapers, food, personal and household items, among others and I only buy at the lowest price and with a coupon). I only buy clothes on clearance a couple of times a year at Kohl's for my kids and only if I get the 30% coupon. We go straight to the clearance racks. I seldom times buy clothes for myself. We do not go to restaurants since I do cooking most of the days of the week. We spurge on Fast Food once a week and if we have a coupon, a lot better. We do not go to the movies because I get tired of sitting down next to a stinky person, so, we have Netflix instead. I know it sounds really thrifty, but our lives are a lot simpler like that.
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Old 03-14-2013, 05:06 PM   #4
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Re: Where to throw our access money - debt?

$1000 in savings and then attack that debt
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Old 03-14-2013, 05:15 PM   #5
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Re: Where to throw our access money - debt?

We don't have cable [we use Netflix], we use coupons when we can but they're not as plentiful here in Canada, we cook from scratch but even doing so & using coupons we're still at around $600 a month for groceries for the 4 of us [food is much more expensive here]. I use mama cloth & family cloth, unpaper towels, make my own cleaners....I don't think we can get a whole lot thriftier than we already are.

I think $1000 in extra cash is pretty great, it's just knowing where to put it. Some people think savings first, some think debt. Just trying to decide what is best.

Then after we pay off debt, put away a bunch in savings....time to save for a new vehicle & a vacation!
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Old 03-14-2013, 06:05 PM   #6
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Re: Where to throw our access money - debt?

The first month, I'd put $400 in savings, $600 towards the debt (the two smaller ones first). Then the next month, the whole $1000 to the debt, then the rest in savings. That way you are attacking both, but have a more immediate emergency fund (even though it's smaller than normal) right away.
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Old 03-14-2013, 06:26 PM   #7
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Re: Where to throw our access money - debt?

I'd put $500 towards debt the first month, $500 to pay off the two smaller bills. Then on the second month, pay off the entire $1100 (I'd find that $100 somewhere just to have it paid off). So by the end of month 2, you'd be debt free, and have $500 in savings.
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Old 03-14-2013, 08:18 PM   #8
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Re: Where to throw our access money - debt?

I'd probably do $500 ... taxes & CC. $500 in savings. Then the next month $500 in savings $500 to debt. The 3rd month pay off the debt. Then I'd start putting $500 in savings and $400 towards a car/$100 toward vacation. You don't get a vacation till you save up at least 3 months worth of income & the cost of the trip.
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Old 03-15-2013, 12:53 AM   #9
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Re: Where to throw our access money - debt?

Nice easy numbers, you can totally tackle that and take care of quickly - way to go! I'd throw half the money at whatever debt causes the most strife with high interest or scary government back-owed taxes, then stick the rest in savings. After you pay all the debt and have $7,000-$14,000 (3-6 months of expenses) in savings, go crazy working on a vacation and car. With that kind of extra money you can do so much and make huge changes fast. But I will warn you that you really need to stay on top of the budget because it can quickly get out of hand with the "well we can afford this one thing" mentality.
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Old 03-15-2013, 03:08 AM   #10
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Re: Where to throw our access money - debt?

How much do you pay a month on your cc & Macbook?

I would put all $1000 into debt, if you take off what you are paying a month on debt it should drop the $1600 down a bit & then pay the rest off the next month & you will have some left over to start your savings..well done.
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