Earlier today, I was glancing at a couple of blogs I refer to for personal finance (http://www.thesimpledollar.com/) and my continuing efforts to declutter and simplify (http://zenhabits.net/). On Zen Habits, I found 73 Great Debt Elimination Tips.
#70 Credit documentary. Watch the PBS documentary about credit card companies. Get mad, really mad and start hating the credit industry. They are enabling you to do some terrible things to yourself. Cut up your cards and pledge to never use them again. It is a form of slavery.
(#71 is to watch MaxedOut, which I'd already seen).
I watched the Frontline episode just after work. I got home and began looking through my net worth balance sheet, my accounts and my credit card statements. I recalled that a friend recently recommended that I use some of my emergency fund to pay down some of my ... and I went ahead and set up the transfers to get it done ASAP.
Then I began to freak out (I still have time to stop it ::: chews fingers nails :::). While I'd be paying down 60% of my credit card balance (not including my regularly scheduled payment for the month), I'd be using over 80% of my emergency fund!!!
There is a certain amount of comfort and security I developed with my growing Emergency Fund. I've NEVER had this much money saved at one time and it feels great! But I'm reminded of the 4 credit card holders that were interviewed in the Frontline episode. Many of them had savings they could apply towards their debt. Even though they were paying more in interest than their return on savings, they preferred to retain the "security" of having an Emergency Fund in reserve. Shouldn't we feel more secure when we don't have debt looming over our heads? It's really interesting how normalized it is to carry debt (in America).
I could choose a slightly less aggressive route...pay it off in June instead of April or May and not put as large a dent in my Emergency Fund...
But I thought about it...actually I AGONIZED about it, then googled "Emergency Fund or Debt" and read some of the results and THEN decided....I won't back out.
I'm single. No kids. No car. I'm healthy (*as long as I don't OD on Advil getting used to Mirena). If I got fired tomorrow, I'm confident I could find SOMETHING that'll pay enough to cover my relatively low expenses. It's one thing to enjoy the safety of an Emergency Fund, but it'll be a whole new feeling to get rid of a credit balance that has revolved for nearly 3 years! As soon as my credit debt is gone, I can replenish my Emergency Fund and make extra payments on my student loans.
DEBT = BAD!!! I banish thee!!!
:::Maniacal laugh:::
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