Sent this in as an email first, forgot about the forums:

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I've bee reading for a little while now, and while I've taken some
stuff to heart and started implementing things, I'm not on great
footing yet. And yet I've come to my first crossroads.

I started an emergency fund in January, auto depositing $25 a paycheck
to an ING account. I started a debit snowball on my credit cards
about the same time putting $300 a month towards them. My first of
six cards will be paid off in July. And a long standing medical bill
that I've been paying on is paid out next paycheck.

Which direction should this money now head. With only 6 months into
the emergency fund it's not a serious cushion should anything happen
right now, but it's only 3% incoming while the plastic has an average
15% out. I think I've convinced myself to put this money into the
snowball, but wouldn't mind the second opinion.

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Any opinions?

so- you have $150 in your ING emergency account? If you have $325 per month to allocate, and still have other non-mortgage debt, I would try to boost up that emergency fund a little bit more - to 500 or 1k, depending on your job security.

Then go back to your snowball - what is the next debt to pay? What is the rate? the balance?

I'm inclined to say to work on getting the emergency fund set up, perhaps diverting $125 towards that and $200 towards CCs, then, once getting a cushion, revert back to $25 towards saving and $300 towards CCs.

However...would be helpful to know your income (after taxes) and expenses, as well as CC balances. This will help determine whether you would be okay with just a $1,000 emergency fund or if you have a mortgage, dependents, etc., if you may need a little more. Also, how often do you get paid?

The emergency fund is closer to $350 since it's $25 a paycheck, and I get paid every 2 weeks.

I can't scale back the CC payments much and still meet the minimums, at most I could cut down to $225, but then I'm not making any headway.

As for what I'm looking for in an EF, even $1k isn't going to cover me if I loose my job, but it'll be there for the unexpected expense I can't cover.

Now I'm waffling again on this. But I guess that's why I asked.

I'd pay the card minimums until you have about 1k in the emergency fund. Remember that the emergency fund is there so you don't have to go deeper into debt if something unexpected comes up. Then you can start attacking the debt with the extra cash that you had been socking away in the emergency fund.

One thing I've found is that I can usually find extra money in my budget to throw at my next objective (sometimes called snowflaking) so if I have 30 bucks left over in my groceries budget at the end of the month that goes straight toward whatever my primary objective is at that point.

1) Like the others have said, pay minimums on cc's until you get that starter emergency fund up to at least $1,000.

2) Attack those CC's with a fury!!!!!!!!!!! Get a second job if you have to, eat PB&J for a year!! You have six credit cards? I'd be working 60-70 hours/week until those bad boys were gone.

3) Forget about interest rates on emergency funds and credit cards. Who cares. Pay off your smallest debt first. Then snowball that money up to the next smallest. It's a behavioral issue at this point. Good luck.

Personally, I would put everything I can into repaying debt. If a true emergency does come up, I can always put it back on the credit card. But in the mean time, I am saving that 12% difference in interest.

So if I strip the CC down to their minimums and put the medical and existing money into the emergency fund, I could have it up to $1k in about 4 months.

Working an extra job isn't really an option, I'm a salaried employee where I'm out and often work extra hours to begin with.

Reality also is that I have a decent family fall back should true disaster hit, so the emergency fund is more for my independence.

I strongly disagree with that because I think the whole point of the $1,000 emergency fund is to psychologically get yourself off of the credit card, even for "emergencies."

Well...again, I think we could use some more information. What are your monthly expenses (grocery, car payment, gas, dining out, housing, utilities, etc)? And what is your monthly income after taxes?

You'd be amazed at some of the great ideas people come up with on here! I mean, the way to tackle debt/savings for a single parent with two children who owns his/her own home is going to be a bit different than, say, a college grad living at home with his/her parents and has problem w/ lifestyle inflation, ya know?

Firstly the best thing about your dilemma is that there are no bad choices here. Anything that you can stick to will work.

Is there anything likely to happen that would require a particular size of emergency fund? If not pick a number that makes you feel comfortable and is also quickly achievable (like the proverbial $1000) and go for that. If the current $325 is a good number for you, it's ok to stick at that.

Then hold off on the emergency fund and attack the credit cards. It's great that you're so close to paying off the first one and the medical bill. Don't forget to celebrate this (frugally).

What? Where was that "family fall back" when you had medical bills and were racking up 6 CC's worth of debt? Hopefully you didn't mean that comment. No offense, but with that mentality you will have debt your whole life unless you learn to depend on yourself and not others.

Hiding behind a little thing called pride, and the stupidity of wanting to live beyond my means. If I wanted to today, I could call up my father and ask him to pay off everything but my house and if I whined enough he could and would without incurring any debt of his own, but then what would I have learned.

Be careful before you go poking around with sharp instruments, someone might get hurt.

It's admirable that you are now owning up to your mistakes of living beyond your means and to having the privilege of a family support structure that some do not have when times are hard, making it easier for them to go deeper into debt. It is also admirable to do it yourself, especially your statement, "Then what would I have learned."

It's a bitter pill, but you need your medicine!

I really think, if you're serious about eliminating debt, you should lay it on the line with GRS readers, and try not to pay too much attention to unhelpful comments that are harsh/judgmental. It's good to lay the past on the line to get a clearer picture of your financial situation, and behavior/mindset changes that would be beneficial to your long-term personal financial well-being. You sound like you're heading in the right direction, and don't be scared away if you get some tough love in the interim. I only speak for myself, but I know *I've* been there before.

Quick numbers because I don't have it to break out in front of me

Income: $4000
Bills, Gas, Grocery, etc: $3600

That doesn't including my emergency funding, the extra I'm putting towards CC, lunches or eating out.

edit: Forgot to mention, married, one kid (still home), own my home (which is $1500 or that outgo)