https://boards.hellobee.com/ Pregnancy, Baby and Parenting blog, by Hellobee en Wed, 15 Jul 2026 12:12:15 +0000 https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-562180 Tue, 12 Feb 2013 13:54:18 +0000 plantains 562180@https://boards.hellobee.com/ <p>@runsyellowlites: This used to be the case for me too, but then I started paying my cc balance every 2 days to keep myself accountable. This has been really great for keeping my balance at zero and forcing me to question whether I can really afford things but still racking up rewards etc. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-561025 Mon, 11 Feb 2013 20:06:58 +0000 runsyellowlites 561025@https://boards.hellobee.com/ <p>@Bao: I really liked it because it give RL example of someone following his plan even though it seems kind of scary &amp; extreme.</p> <p>@MrsH: You would think, but I believe it's been found that even when using cash vs. debit (cash in bank) one spends more when using their card than when they see/use cash in hand. I actually noticed this just today with buying groceries.... Thankfully I wasn't "too much" over. Using a CC is much "easier" than handing over the last bit of money you know you have in an account.</p> <p>It may not be like that for everyone but I know it would be for me. :-/ </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-561012 Mon, 11 Feb 2013 19:54:13 +0000 MrsH 561012@https://boards.hellobee.com/ <p>@runsyellowlites: Knowing that you want to be wise with your money wouldn't you be just as frugal paying with credit? I certainly don't pick more expensive choices just because I'm using credit. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560996 Mon, 11 Feb 2013 19:43:42 +0000 Bao 560996@https://boards.hellobee.com/ <p>@runsyellowlites: great article! </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560989 Mon, 11 Feb 2013 19:36:28 +0000 runsyellowlites 560989@https://boards.hellobee.com/ <p>@PurplePumps: If we weren't following the Dave Ramsey plan then I could see the "breaking even" and still having the "savings" BUT acquiring new debt is a pretty big no no for us and since any emergencies would rely on us paying 100% cash (given we had it all) and depleting our savings we would be much more frugal in how we dealt with our emergency as opposed to how things may be if we had the "credit" to deal with it.</p> <p>Since we don't survive on our cc we will not be adding to the debt we have through them and once paid off they will be cut! (For those that have been relying on their CC to survive Dave Ramsey does suggest weaning off them as opposed to not using them/relying on them immediately)</p> <p>I think this couples situation give examply to exactly how DH and I would handle a situation that needed emergent funding without acquiring more debt.<br /> <a href="http://www.whitneysparks.net/oh-no-our-emergency-fund-has-depleted-what-are-we-going-to-do/" rel="nofollow">http://www.whitneysparks.net/oh-no-our-emergency-fund-has-depleted-what-are-we-going-to-do/</a></p> <p>I think it really just depends on what is more important to you... cash or not increasing debt. For us, I know we can build back up and acquire more cash, but trying to pay off debt and KEEP it gone is much harder so being more diligent in that area would take precedence for us. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560668 Mon, 11 Feb 2013 16:27:56 +0000 Modern Daisy 560668@https://boards.hellobee.com/ <p>Well right around this time last year, my DH was obsessed with overpaying our mortgage every month and putting our cash into different investments. It took a long time and lots of convincing, but I finally got him to agree to save some just as cash. Turns out, it's really good that we did that because a month later we realized we hadn't been witholding enough so not only did we have to pay the IRS 1/2 of our cash savings, we also had to change our witholdings at work so our paychecks were much smaller. If we didnt have that cash I don't know what we would have done, we'd be in big trouble! </p> <p>So I obviously go by the philosophy that cash is king and it's more important to have a stash of cash than to have your debts paid off. Of course, everyone's situation is different and sometimes debt just has to be paid off quickly, but I think in general this is true. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560501 Mon, 11 Feb 2013 15:28:38 +0000 Bao 560501@https://boards.hellobee.com/ <p>@plantains: We aren't able to put much at all away each month (the reason why we don't have anything in there now), but that is because with the CC and personal loan, plus all of life's other expenses it has been tight, with me being a SAHM. However, if we pay off that debt we could pay them both off, PLUS put 3k in savings and have some to repair some necessary issues in the house, but there wouldn't be as much of a down payment on DH's car (he totaled his the other week). But having all those debts paid off and having some to save would be much better... </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560428 Mon, 11 Feb 2013 14:57:57 +0000 PurplePumps 560428@https://boards.hellobee.com/ <p>I agree. I'd definitely wipe out the personal loan and credit card if I could do that with the tax refund. Then focus on building up "true" savings with no high interest loan hanging over your head anymore. Worse case scenario again, you have something unexpected it and need to put it on your credit card again, you're no worse off than if you had that cash in savings and was still carrying a credit card balance. But hopefully that wont happen until you can get that nice savings buffer. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560413 Mon, 11 Feb 2013 14:49:12 +0000 plantains 560413@https://boards.hellobee.com/ <p>@Bao: seperate from your tax return, can you afford to put anything into your savings every montth? If you can then it might make sense to pay off the cc and personal loan and put $1k into your emergency savings with the tax return. From there, you can decide on an amount you want to put into your emergency fund every month until you have 5K or 10K or whichever amount you feel most comfortable having. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560375 Mon, 11 Feb 2013 14:34:20 +0000 Bao 560375@https://boards.hellobee.com/ <p>@yoursilverlining: We have excellent credit scores so that wouldn't be an issue. With our tax return though, we could pay off the CC and personal loan, CC is 8% and personal loan is 13%, but that would leave us with a little less for our savings account. We could still do the 1k in savings though, on top of paying off both debts. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560368 Mon, 11 Feb 2013 14:31:39 +0000 yoursilverlining 560368@https://boards.hellobee.com/ <p>@bao: I’m usually not a fan of taking on new debt to get out of debt; but if your credit cards are up over 8% interest you might look into getting a personal/debt consolidation loan through a local credit union. My credit union offers personal loans for up to $15k at between 4-6% interest (depending on your credit score). If that would be a lot less interest than you are currently paying; that might be worth it to look into. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560335 Mon, 11 Feb 2013 14:15:54 +0000 plantains 560335@https://boards.hellobee.com/ <p>@PurplePumps: this. And said so much more eloquently than I could have. I would rather pay off a cc and have to charge it again in an emergency than not pay it off at all to save a bit more while accruing all that interest. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560328 Mon, 11 Feb 2013 14:10:00 +0000 PurplePumps 560328@https://boards.hellobee.com/ <p>@runsyellowlites: I think the point of the savings it's to build money, since Dave Ramsey's next steps include investing and such, but moreso IF something were to happen (needing new tires, etc) you wouldn't have to rely on your CC to pay for them.</p> <p>That is true, but as long as you are still carrying CC debt, that savings is not truly savings to me. Say it's January and you have 2k CC debt, you put 100 into the CC and 100 into savings. But In Sept, you need to fix something in the house, and use that 900 in savings to do it. Ok, great, you didn't need to put it on the credit card. But the way I see it, if you were to have been putting all 200 into the CC, then in Sept, yes, I have no savings and I'd need to use the CC again for the expenses, but during that entire time, the money has been applied to the CC reducing the interest being charged. You'd end up in almost the same place, but just slightly ahead due to the saved interest. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560315 Mon, 11 Feb 2013 14:07:25 +0000 Bao 560315@https://boards.hellobee.com/ <p>@Thehistoryofus: gotcha, that makes sense! </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560309 Mon, 11 Feb 2013 14:06:30 +0000 T.H.O.U. 560309@https://boards.hellobee.com/ <p>@Bao: I believe they recommend looking at what the yearly cost is and then "budget" for that amount over 12 months. </p> <p>For example, we budget about $1,200 car repairs, oil changes, etc every year (I have an older car). So, a simple $100/month is set aside for that and if it isn't used that month, it saves up for the future months. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving/page/2#post-560307 Mon, 11 Feb 2013 14:06:18 +0000 Bao 560307@https://boards.hellobee.com/ <p>@daniellemybelle: I am not pregnant but we have a LO :) </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560283 Mon, 11 Feb 2013 13:57:26 +0000 Bao 560283@https://boards.hellobee.com/ <p>@Thehistoryofus: We have a monthly budget but we don't budget in car repairs, dr issues etc ahead of time...I'm not really sure how I would even do that since I wouldn't know how much something is. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560278 Mon, 11 Feb 2013 13:56:22 +0000 daniellemybelle 560278@https://boards.hellobee.com/ <p>@runnerd: I was going to come and mention that. If you are pregnant, I would focus more on savings than paying off debt. Also, once the baby is born, I wouldn't put ALL your savings toward a debt payment - I would leave at least $3,000 rather than typical Dave Ramsey $1,000 emergency fund. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560268 Mon, 11 Feb 2013 13:53:06 +0000 T.H.O.U. 560268@https://boards.hellobee.com/ <p>@Bao: Do you have a good monthly budget. Really the first step in DR is to set up a good budget. Things like car repair, doctor issues, etc should be budgeted out ahead of time. The $1,000 should just be the truly surprise things. I agree though, with owning a home, two cars, and having a LO, $1,000 doesn't seem like a lot. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560251 Mon, 11 Feb 2013 13:45:14 +0000 LindsayInNY 560251@https://boards.hellobee.com/ <p>We have a hybrid method. We're changed our loan repayment plans but still saved a lot. Almost all of our savings is going towards a down payment now so we'll be back to square one with the savings. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560241 Mon, 11 Feb 2013 13:36:08 +0000 mlm2934 560241@https://boards.hellobee.com/ <p>Oh and another Dave Ramsey point to throw in since this is a baby blog - he says to halt your debt snowball (minimums only) when pregnant and save as much cash as possible. Once mom and baby are home and fine, take that money and make a big payment on the debt (but have the cash in case there are any pregnancy complications). </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560233 Mon, 11 Feb 2013 13:30:44 +0000 mediagirl 560233@https://boards.hellobee.com/ <p>I would pay off the credit card and the personal loan. Then work on your car payment. Once those are paid off, then start putting what you were putting to those into savings. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560232 Mon, 11 Feb 2013 13:29:25 +0000 Bao 560232@https://boards.hellobee.com/ <p>@runsyellowlites: I love that idea, it seems so attainable!<br /> @2PeasinaPod: Yes I agree I for sure need something in an emergency fund for house related problems.<br /> @runnerd: That is very true! </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560222 Mon, 11 Feb 2013 13:21:23 +0000 mlm2934 560222@https://boards.hellobee.com/ <p>@Bao: Dave always emphasises the following reasons for $1k emergency fund:</p> <p>1. You survived life this long with no savings ( for most people on his plan) so $1k is great compared to what you had before<br /> 2. He wants you to pay off your debts quickly and make it a priority, so waiting to fully fund the emergency fund adds a sense of urgency to get out of debt </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560213 Mon, 11 Feb 2013 13:14:46 +0000 Mrs. Lemon-Lime 560213@https://boards.hellobee.com/ <p>@Bao: 8 months isn't realistic for me either, especially with planning for a baby.</p> <p>@berdine: thanks for the response, our emergency investment acct is separate from our retirement savings- our 401Ks, my IRA. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560203 Mon, 11 Feb 2013 13:10:50 +0000 MrsBrewer 560203@https://boards.hellobee.com/ <p>I am following Dave Ramsey's plan right now loosely. We decided that $1000 isn't nearly enough, so we actually put $5000 in our do not touch account. Although we have no CC debt, and the only things we are paying off right now is 1 car, (we owe $748 only on it now!!) student loans (about $50k) and our home loan ($71k) </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560188 Mon, 11 Feb 2013 13:04:58 +0000 2PeasinaPod 560188@https://boards.hellobee.com/ <p>Since you said you're buying a house as well, I would definitely have something in savings just in case something does go! </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560185 Mon, 11 Feb 2013 13:03:00 +0000 MrsTiz 560185@https://boards.hellobee.com/ <p>I am having a really tough time with this too. On one hand I want to get rid of our credit card debt, on another our savings is pathetic now. Meeeh. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560183 Mon, 11 Feb 2013 13:02:14 +0000 plantains 560183@https://boards.hellobee.com/ <p>@Bao: If I were in your position, I would look to have 1 to 2 thousand in an emergency fund and then pay off the credit card and personal loan. After those were paid I would work on increasing emergency fund to a level that I was more comfortable with and then start paying down the rest of the debt. based on everything yo have told us, i would get rid of the cc debt asap. </p> https://boards.hellobee.com/topic/paying-off-debts-vs-saving#post-560170 Mon, 11 Feb 2013 12:52:58 +0000 LuLu Mom 560170@https://boards.hellobee.com/ <p>We also follow the Dave Ramsey method, we are really working on paying down our CC debt and then will do a bigger emergency fund, then work on my car payment and student loans. </p>