Credit cards and savings

[mrm1203]

I have 4 credit cards with balances that I am attempting to pay down. Should savings goals go to the wayside while trying to minimize my credit card debt? Here is a common problem I have: I will get a credit card paid off then I need some kind of necessary car repair and BAM! I'm right back where I started a few months ago. What should the balance between savings and debt repayment be?

[mommyof4]

I would pay minimum on the CCs for now, and take any and all extra money in your budget and build up at least 1K in emergency fund. After that, start snowballing your payments for the CCs and you can get rid of them relatively quickly.

Here is a link to the snowball calculator that I use: http://www.whatsthecost.com/snowball.aspx

[Jerry91]

You can consolidate your credit cards debts so that you have to make a single monthly payment. This will help you in paying off your credit card debts quickly and then you can seriously concentrate on saving money.

[disneysteve]

Here is a common problem I have: I will get a credit card paid off then I need some kind of necessary car repair and BAM! I'm right back where I started a few months ago.

I would pay minimum on the CCs for now, and take any and all extra money in your budget and build up at least 1K in emergency fund.

I agree. The reason you fall into CC debt is because you have no savings. You NEED an emergency fund. $1,000 is a good start. Once you have that, you can focus on debt but even then, I'd be putting a little each month into that EF to build it up. Your goal should be to have 3-6 months worth of living expenses saved.

The other thing is to really focus on your budget. See where you can cut back. There are almost certainly areas where you spend more than you need to. If you post your budget here, we'd be happy to make suggestions. If you can reduce spending, you can use that money to build your EF and pay off your debt.

[btctony]

It's really tough to save while using credit cards.

If you are good to manage your budget then it's fine, it's might be benficial but people like me can ever do saving with credit cards. It's really tough to do so.

Thanks!
paysoftintern

I use credit cards for everything I possibly can and I make money from them. I save/invest approx 35% of my income while doing this. I also budget and monitor it daily.

I think the underlying issue is either a spending problem or an income problem and the OP needs to figure out which it is and correct it. If it's a spending problem, budgeting and sticking to it is a very good solution. If it's an income problem ... Can you find a higher paying job with your experience and education? If not, I would start looking for other sources of income. Get a part-time job, work over-time (if you can), ect.

[snafu]

mrm, Welcome to SA. I wonder if some of the experienced participants could offer practical suggestions to help your cash flow. It's very helpful to understand exactly where all the money goes. I suggest for the month of January, you actually write down every dollar spent whether cash or credit. You need to know where all your money goes. There may be some categories that can be cut back/reduced for the short term to free up money to pay off debt.

Some spending once identified can be eliminated. For example, if you have been charged fees for late payments on any loan, utility, cell phone or credit card it's an easy fix. You need to know the interest rate you're being charged for each CC. I'm confident if you set a goal to pay off CCs you can make some adjustments to get out of debt. We're here to offer suggestions and cheer every step forward.

[figuringmoneyout]

Build up savings first so you have a cushion against using the credit cards again for emergencies. Then attack the credit card debt.