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  1. #1
    Hi, this is my first post.

    I have a $2,500 debt left on my credit card, and a $2,600 amount in my checking account.

    I know some may say to pay off the credit card, however every May, June & July I have a chance of getting laid off from my current job, I work at a school. That money could be used for my traditional expenses during that time so I'm not worrying.

    Has anyone run dealt with a situation like this? What did you do? My credit card bill is $60 a month which is manageable, but I know that interest costs in the long run.

  2. #2

    Default Pay a Debt vs Save

    Note: This $2,600 does not include a $1000 emergency fund... at one point I did a Dave Ramsey style challenge. It's kept elsewhere.

  3. #3
    Welcome to SA. We're a diverse bunch with different experiences and different views. Good on you for maintaining $ 1,000. EF. I hope you keep employment but worse scenario, if you lost employment June 2018, how many weeks of unemployment insurance could you get? How many weeks waiting could you cover your traditional expenses?

    What is the employment situation in your community? Are you keeping your resume current? I mention, most jobs are found by referral so it's important to let people know you are interested in stable, full time employment if they have openings with their employer. Do you work another job June - Aug.. or 1st day of school?

    I suggest adding up the interest charge on your credit card Jan. - Dec. 2017. That's your cost of 'renting' money! If employment is unstable, I wouldn't carry revolving credit. Can you explore transferring balance to a no/low fee 0% card, paying it off in carefully divided segments each pay before it expires?

    With minimal info offered, Does employer offer any contribution to a retirement plan? Do you participate in that free money? I wouldn't be in a hurry to use the $2,600. Suggest moving$ 1,000. to double EF savings. Use the Snowball theory to escalate the current $ 60. payment to pay off the CC by your June payday.

  4. #4
    How much do you need on hand to cover your expenses for May-July? I'd be focused on keeping your EF at least at that amount or more. When May arrives, if you don't get laid off, then go ahead and pay off the card.

    In the meantime, is that $60 the minimum payment? If so, at least start paying more than the minimum. Even if you only pay an extra $5 or $10 each month, it will reduce your interest costs and get it paid off sooner.

    Also, work on finding something you can do to keep income flowing during the 3 months you are laid off each year. Maybe a local business can use an extra hand. Maybe you have some talent or skill set that you can monetize during that time. Maybe in March and April you start scouring yard sales and thrift shops for merchandise that you can resell online when you're out of work. There are lots of relatively easy ways to earn some extra income which can help stretch your EF.

  5. #5
    I got laid off as well in 2014. I knew it was coming but it came much sooner than I thought. I'd keep the $2,600 as a safety net. You never know when you'll need cash. I used my CC for food and gas to survived, and tried my best to spend only when needed, and I paid the minimum. I also qualified for unemployment benefits so that helped. I hope you have that where you're from. Keep your spending at a minimum and start hustling for a new and more stable job. There's a light at the end of the tunnel.



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