efund and debt

SallyAnneS · April 2013

In my poat below theipre was two schools of thought in the efund vs debt. Just want to get some more feedback on this.

One was that the efund should be 3-6 months of funds then start paying more towards debt. The other was that the efund should be $1000, then start working at the debt.

So for me that would be an efund of $10, 000 vs just $1000. Saving $10, 000 seems so impossible.

How does it work once tou get a base amount in the efund. Do you then split the money you were contributing each month in half so say $100 goes to the efund and $100 goes to the debt (if you were doing $200 into the efund originally)?

riebeetee · April 2013

Check out the Dave Ramsey Financial Peace University.

Step 1: fund your e-fund to $1,000

Step 2: then do the debt snowball

Step 3: and then add more to your efund

(and then the rest of the steps)

mgarza1231 · April 2013

To me it depends on job stability and what we're comfortable with. I like to keep one month of expenses but other's may be comfortable with more or less. Just save a minimum of $1000 and start snowballing your debt.

CuriousKiddosMama · April 2013

riebeetee:
Check out the Dave Ramsey Financial Peace University.
Step 1: fund your e-fund to $1,000
Step 2: then do the debt snowball
Step 3: and then add more to your efund
(and then the rest of the steps)

This exactly! You can rent his book at the library- it's called The Total Money Makeover.

Get a $1000 baby emergency fund once you have that in place, quit saving for your emergency fund and put everything towards the smallest debt to get it paid off. Then move on to the next smallest debt. Once you have all your debts paid off except for your home mortgage, get a 3-6 month emergency fund.

SallyAnneS · April 2013

Is his total money makeover similar to the peace book? I have it on hold at the library (3 people still ahead of me though). I will see if they have the peace one available. Thank you foe the detailed steps.

My dh has great job stability (works at a family business and works really hard) and as long as my supervisor doesn't change then I have a pretty stable job, I would still have the job without her just not sure if someone new would keep my same number of hours. She has said though if she ever moved jobs she would take me with her, so fingers crossed that would happen. I am pretty sure if I did lose hours at my store our sister store that trained me would take me on for a shift or two.

So after the $1000, you stop buildingit and just work on debt till it is paid off?I

SallyAnneS · April 2013

So tou keep your efund in a regular savings account or a better interest account? As we are moving banks I plan on keeping my savings accounts at the old bank so it is out of sight out of mind. It was way to easy with all of the accounts together to just say "im sure we will pay it back, its only x dollars" and transfer it to savings. Big mistake.

vlagrl29 · April 2013

we are both self employed and would like more of a efund than just $1,000 before we start paying down my school loan. We got to the $1,000 in 2 months and now we are paying off DD's medical bill. I still put extra money in that fund about $100/month.

riebeetee · April 2013

We use an internet bank, so we can get to it in an emergency, but it's not convenient enough to "borrow" from. Either way, you're not going to much too much in interest on it now anyway.

Like PP said, it's up to you what you feel comfortable with about efund amount. In regards to your other question, it's pretty much the same thing. Honestly, just going to his website will give you the steps while you are waiting for the book. If I remember correctly, "The Total Money Makeover" book was more antidoctal stories about money management than an actual plan. But I do think it inspires getting on the plan. If you have issues staying on budget, I also recommend looking into doing the "envelope system."

sparklerose · April 2013

Our efund is currently in a credit union savings account. We are still in debt snowball mode till december, but our efund is currently $2500. We didnt feel comfortable with only 1k.

CuriousKiddosMama · May 2013

SallyAnneS:

Is his total money makeover similar to the peace book? I have it on hold at the library (3 people still ahead of me though). I will see if they have the peace one available. Thank you foe the detailed steps.

My dh has great job stability (works at a family business and works really hard) and as long as my supervisor doesn't change then I have a pretty stable job, I would still have the job without her just not sure if someone new would keep my same number of hours. She has said though if she ever moved jobs she would take me with her, so fingers crossed that would happen. I am pretty sure if I did lose hours at my store our sister store that trained me would take me on for a shift or two.

So after the $1000, you stop buildingit and just work on debt till it is paid off?I

Total Money Makeover is Dave Ramsey's book- Financial Peace University is actually the course he teaches/ his company teaches to help people make their way out of debt- it is sometimes offered by churches for free so that would be something to look into- otherwise I think it's like $100-150. Which may be worth it after you get your emergency fund in place, or your husband gets an unexpected bonus.

Yes, after $1000 you should stop building your emergency fund and go full force at your debt. If an emergency happens- you take the money out and then take a couple months to rebuild the emergency fund.

CuriousKiddosMama · May 2013

SallyAnneS:
So tou keep your efund in a regular savings account or a better interest account? As we are moving banks I plan on keeping my savings accounts at the old bank so it is out of sight out of mind. It was way to easy with all of the accounts together to just say "im sure we will pay it back, its only x dollars" and transfer it to savings. Big mistake.

If the savings account at the old bank is FREE (no fees) then yes, it would be an okay place to leave your emergency fund so you know you don't touch it unless it is a legitimate emergency. But that is just it, the emergency fund is for emergencies only- you have to be disciplined enough to leave it there for when you really need it.

jrodgers239 · May 2013

Start with getting your efund up to cover a months expenses and then take a portion of what you are putting in to your efund now and put it towards snowballing your debt (while still contributing to your efund) that way you can still save up money, but get your debt paid off as quickly as possible.

efund and debt

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