2010/08/13

Is is better to pay off debt or put money in savings?

As I posted a couple of days ago - my savings account is now rolled back to $0.

It's sort of a scary prospect. It's scary because if we needed something; I'd be forced to go back to the credit card. The upside is my 0% card from Wells Fargo is 0% on balance transfers AND purchases - so that gives me access to free credit provided of course I can pay it off before the promotional period expires. But the habit of swiping a credit card at this point makes my stomach turn, so while searching the internet for advice, I stumbled across Dave Ramsey and his seven "wealth building" baby steps.

When it comes to radio, I really only listen to NPR so I have no working knowledge of Dave Ramsey from talk radio - but I did google this question yesterday:

Is is better to pay off debt or put money in savings?

The links took me to some forums and eventually I found Dave Ramsey's seven baby steps. And there it was. His step 1 is: put away $1000.00 for your baby emergency fund. I like it. It's enough to cover a failed alternator but not too much to take away from debt butt kicking. So next month's debt reduction will be re-purposed to make sure I have a G in savings - just in case.

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