[Angela]

Once I get my tax return (which was supposed to be much larger except my husband failed to pay into his small business taxes last year hehe big whoopsies over there sir), I will be able to pay off 3 credit cards that will total $1,500 which is a huge yay! After that, I’ll only have two left!!! One is $1,600 and one is $3,500.

My husband also has one credit card with a $1,500 balance.

Right now we just pay the minimum on those 3 because we put more towards the ones with the smallest balances. Also my $3,500 card only has a 5% interest rate so it’s not a super huge rush for me.

Presently, I save $100 per check into my teacher’s credit union.

My question is- after paying off those 3 cards, should I switch my plan up? I was thinking of putting $30 into my Ally savings instead of the credit union, doing a small Christmas fund in of like $25 per check in the credit union (I think they put $5 towards every $40 you add in).

And then I’d have $400 ($270 from the usual amount towards the 3 cards that will be paid off, and then around $150 extra that my husband’s eBay business is going to bring in) a month to put towards the remaining 3 cards.

I just think saving $30 in Ally and $25 in the credit union wouldn’t make a huge difference, and I could start putting towards my emergency fund again.

I’d love to hear thoughts or even an alternate plan that may differ from this one. Thanks for any input!

[Melissa]

One of the biggest things I like about Miko vs some other advice is that she’s realistic that you need to be able to have cash on hand to prevent future debt spending. I do both. We don’t have a lot of debt overall, and pay low interest but I need to fund sinking funds to enable me to pay cash and not reach for a cc in the future.

[Carrie]

No small amounts can add up to a lot of money at the end of the year and there are easy amounts that anyone can do because they just put it away and forget about it if you’re getting a huge refund it’s because you paid the government and interest free loan I rather get nothing back on taxes.

[Peggy]

You need sinking funds for what put you into debt. I paid off debt and did sinking funds. I haven’t used a credit card to finance debt in almost 3 years.

[Amber]

You’re basically creating sinking funds.

This is how I do things. When I did have additional debt – I learned that it was imperative that I also had sinking funds to help me stay out of new debt. Pharmacy deductible, auto insurance (paid annually), Christmas, etc. Nothing too much, just enough to have what we needed. I was still very focused on paying off debt – so back then my Christmas fund was $40 a month.

[Mandy]

I save while paying off debt. It makes me feel secure and I know that if anything happens I’ve got money to fall back on.

[Author]

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