Where would you start

Ok here we go, I have $8820.70 in debt. It isn't pretty. I recently got married and would like to  kill this sooner rather than later. I am buffered but only have $800 in my emergency fund. My question is, would you focus on getting a larger savings account (my husband has more than enough in savings but while we will have a joint account for most things, I'd rather handle my debt on my own) and then tackle the debt ? Help! I don't know where to start!

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  • Here is a recent thread with a similar question. https://support.youneedabudget.com/t/362lhw

    There's not a single right answer to this question, regardless of what personal finance experts want to tell you to sell books. Here are the things you might consider: 

    1. The higher the interest on your debt, the better to pay it off before building substantial savings because the time costs you lots of money in interest. 

    2. Revolving debt is a higher priority than installment debt, because it is usually higher interest and can change interest rate. At the same time, installment debt may be secured and you may want to guarantee your continued ownership of the item securing the loan (your car, for instance). 

    3. The more stable your income and the less likely the risk of expensive problems, the more safely you can go after the debt with less emergency savings.  Conversely, if you are facing a major need for emergency savings, it is prudent to save up instead of paying down debt because you likely can't redraw the money you used to pay down debt except by taking out a revolving loan, which can be expensive. 

    Things working in the favor of "go ahead and pay it off:" you're buffered and your household has savings.  However, we don't know your interest rates, the mix of loans, or anything about your income (and you aren't obligated to share). 

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      • Lady M
      • Pink_Mainframe_fb373478
      • 2 yrs ago
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      WordTenor  Thank you so much! That was incredibly helpful. I am off to tackle my debt. Have a great day!

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