by Matt Fildes
Hey everybody and happy Tuesday!
There’s been a lot of talk on this blog lately with respect to the the proper amount of cash savings to have on hand in case of an emergency. If you haven’t yet ready my post and the subsequent comments, I suggest you do here. Ashley also wrote some great posts about this topic yesterday, here, and here. Based on the comments on my post, as well as Ashley’s, a case can be made for both:
1) keeping your EF low and paying off the debt as quickly as possible and
2) saving up 3-6 months worth of expenses before tackling at debt.
After doing some thinking and sleeping on it for a couple of nights, I’m going to pursue item #2. Based on my current expenses, 3 months worth would put me at $3,803.31. This is assuming I would cut out my internet service, my YMCA membership, cut back on gas, and cut out anything I could that could be considered “extra”. I think I would feel more comfortable in the $4,000-$5,000 range. However, this means I won’t be paying anything except monthly minimums on my student loans for the time being.
As for a timeline: I feel like I could have this saved up by February. At the point at which I have my target savings in hand, I will do what I need to do to keep this savings untouched for the duration of my debt payoff. As many of you have already observed, for the last few years, I have kept all my emergency funding, short-term savings and long-term savings in one account which has continually gone up and down as I saw fit. I’d like to get better at making future projections, in terms of costs, so I that I can weather them without dipping into my newly formed EF.
What this all means is that after today I will no longer be providing any “Weekly Debt Updates”. Instead, I’ll post weekly updates respective to me achieving my savings goal. Once my goal is reached, I’ll continue my “Weekly Debt Updates” where it left off today.
I’d love to hear more feedback in the comments.
As for my last debt update for a little while, here you go:
| Loan Name | Interest Rate | Original Balance- May '09 | Current Balance | Total Paid Off | Paid Since Last Update |
|---|
| Sallie Mae 01 | 5.25 | $27,837.24 | $23,063.69 | $4,773.55 | $598.92 |
| Sallie Mae 02 | 4.75 | $22,197.02 | $18,506.00 | $3,691.02 | $50.32 |
| Sallie Mae 03 | 7.75 | $20,692.10 | $0.00
| $20,692.10 | $0.00 |
| Sallie Mae 04 | 5.75 | $10,350.18 | $0.00 | $10,350.18 | $0.00 |
| Sallie Mae 05 | 5.25 | $6,096.03 | $0.00 | $6,096.03 | $0.00 |
| Sallie Mae 06 and 07 | 4.75 | $6,415.09 | $0.00 | $6,415.09 | $0.00 |
| Sallie Mae- DOE 01 | 5.25 | $5,000.00 | $0.00 | $5,000.00 | $0.00 |
| Sallie Mae- DOE 02 | 5.25 | $3,000.00 | $0.00 | $3,000.00 | $0.00 |
| AES | 6.8 | $9,000.00 | $0.00 | $9,000.00 | $0.00 |
| TOTALS | | $110,587.66 | $41,569.72 | $69,017.94 | $649.24 |
Have a great week!
