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Determining a Strategy

April 4th, 2012 at 10:15 am

As you know, we have been trying to decide whether or not to sell our car. We listed it for sale, then took it down. We are just not ready to see it go. A 2007 Focus with only 44,000 miles? Who would be? Our payment is only $136/mo. We owe $3,200. Insurance is now at $132/mo ($7 of which is for Renters Insurance). So we are doing a little better. It is nice to know that we can jump in our car on the weekends and know it won't die on us.

However, keeping this car means getting tires before the next winter. So that is $450-500.

But before we can do that, we need to tackle our credit card debt that we accumulated from moving over here for this better life (and believe me - I don't ever regret it!). That total comes out to $1,300.

Technically, we should be able to pay these down pretty quickly. However, our savings is pretty far behind. It is lingering at $770, which is not even half of a month's bills.

So, question: Should we build our savings first, or pay off the cards?

After getting the savings up, and credit cards back to zero, I plan on doubling-up on car payments.

All this and no health insurance for the wife and I. Hopefully, that will come soon...

I should have a $400+ side job coming up, as well as a promotion. I don't want to psych myself up for that one though, in case it does not happen.

5 Responses to “Determining a Strategy”

  1. Swimgirl Says:

    I would build the savings to a reasonable amount. I know some people say $1000... and then pay off the credit cards. As for the tires, you should be able to do better than that, especially since you have several months before you truly NEED them. Watch ads and sales!

    Fingers crossed for the side job and promotion!

  2. creditcardfree Says:

    I'm going to agree with Swimgirl. You need a little bit more in savings. I'd look to get $1000. That side job would help get you there.

    After that I would look to start saving monthly for the tires. Divided amount you need by number of weeks/months/payperiods to determine how much you need to save. Everything extra (including side jobs and unexpected cash) should go to pay off your debt. Focus on one debt at at time.

  3. Frgal Says:

    Thanks, guys.

    I was thinking the same thing also. Apple's spreadsheet program, Numbers, has a nifty template that includes a chart of how much savings you will have saved by the end of the year, with a field for planned purchases. I wish I could figure out how to get it into Google Docs, but this works.

    $1,000 is what we did before also. But that was before we had rent. $1,000 would only cover one month's worth of rent. While I totally believe my job is secure, you never know if I'll get injured or something. *shrug*

    Hopefully I can score more side jobs like this. Smile

  4. Jerry Says:

    It's hard when neither spouse has health insurance through work, which is the most common place to get it in the US. Are there possibilities that the potential promotion could add that benefit to the package? I hope so! Good luck...
    Jerry

  5. Frgal Says:

    Jerry - Health coverage is offered at work. Along with Life, Vision, Dental, 401(k), etc. Most of them are so expensive, however, that the state-funded health program (only health) at $60/mo per individual is more affordable. I will have more details after my 90 days, but I am pretty sure you can only sign up during Q4.

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