Question

Wow.  My first month of budgeting.Wow. My first month of budgeting. It was a success! I still have my car payment to come out on Friday, but after my rent comes out and my car payment, I will have $1400 in my bank account. This does not include my February savings challenge, or the money I have left over from my envelopes! I am actually really proud of myself. I didn't think I could do it. I have also lost 10 pounds this month from not eating out (Im also breastfeeding, so that's a bonus too). My question is: I want to keep $400 in my chequing as a cushion, but what would you do with the $1000? I have 2 credit cards that need paying. I guess I should just throw it on the highest balance? Im almost scared too. I feel like I have to be missing something here!  

Answer 1

Do you already have an emergency fund? If not, put the 1000 in a savings acct for your EF.  

Comments

@ye34835 I currently do have an EF. $2500 or $3500 in there.  

Answer 2

I would double check your budget to make sure you haven’t forgotten anything and then I would put the money on whichever credit card has the higher monthly payment.  

Comments

@frieder so far everything has come out that needs to, and I don’t expects anything else to. But I’m going to wait until March 1 to pay my credit card

Answer 3

I have an emergency fund it sits in a tax free savings account. I think there is either $2500 or $3500 in there. It’s earning 2. 75% compounded interest!  

Comments

@buckler wow that’s an excellent savings account  

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Motusbank! It is Canadian though. I have done my research and it is legitimate :)

Answer 4

Good for you! I’d throw the extra to your credit card for sure.  

Answer 5

I would pay highest interest, hopefully you can do this every payday

Answer 6

So I’m combining Dave Ramsey and tbm in my journey. That being said I say throw as much money you can to pay off the smallest card first. Once it’s paid off it makes you feel empowered which gives you hope and paying off the larger becomes easier. I know not everyone agrees but that is how i have been working to pay off mine. You’re doing great whatever you decide to do so keep up the good work!  

Comments

Kerri, I also apply both concepts. I had a hard time for awhile getting my monthly budget in order so I used TBM paycheck one until Hubby retired and now gets one check a month.  

Answer 7

When I have extra money at the end of the week or month, I put it in a separate account (not my EF! ) and let it sit for a month, THEN make any extra debt payments. It gives me peace of mind as a second backup buffer, almost. Then I repeat the following month!  

Answer 8

Great job! I keep $400 in my checking as a cushion $1000 in a linked checking for emergencies. Then I put x amount in savings each week and everything else to debt.  

Answer 9

Congratulations! Start your ER fund. And yes throw money at debt.  

Answer 10

So exciting! I felt anxious the first month also. Like I clearly had to have missed something. So I put the extra money aside for 3 weeks. After I was certain I didn’t miss anything I used it to pay down one of my credit cards.  

Answer 11

I agree with Thanksshaun Brown. If you haven't already, I would put the $1, 000 in a starter emergency fund first. Then start paying off debt.