E-fund vs Debt

Thinking about my possible future of maybe getting a faculty position and having to move across country in the end of July/beginning of August I’m reconsidering my contributions to debt vs E-fund.

Currently I’m putting away at least $1500/month onto my debt and only $33/month towards my emergency fund since it is at a level I feel reasonable comfortable with.

However, if I get this position in San Diego I’m going to have quite a few new expenses:

  • Moving my stuff ($1,000)
  • Moving me ($500-ish)
  • First month/last month/deposit on an apartment in San Diego ($3,500)

I don’t expect to get much of my deposit back from my apartment here, because landlords in this town are notoriously sneaky.

Now, I don’t have the job, nor do I even have an interview. But if I do get this job I’ll be moving across the country with debt. Something I didn’t want to do, but isn’t the worst thing in the world.

I’m beginning to think that it might be better for me to hold off on the debt repayment for a little while and save up my E-fund to $5,000. If I don’t get the job then I put the money straight onto the debt. Yes, I will lose money on the interest side of it. But I can also keep myself from using the credit card when I’m in the moving process – something that will help prevent debt.

So I’m thinking of starting this with my April paycheck, putting $1,000/month into my E-fund and $500/month on my debt (still $150 above my minimum payment). This will put me at $5,000 by July, however, I’ll know most likely by May whether or not I’ll be moving.

I really hate to slow down my debt repayment, however, I think that this is the smartest move for me to make right now and in the long run doesn’t cost me *too* much money in interest on the credit card if I don’t get the job.

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13 Responses to E-fund vs Debt

  1. This is something I’ve been struggling with too – debt repayment vs. saving up moving expenses. Right now, I think I have a plan that will allow me to get to both by August if I am very, very careful. However, I think you have the right strategy here – save up that moving money! 🙂 (You’re GOING to get the job, I just feel it.)

    • SS4BC says:

      I had a dream the other night that the chair called me and told me that I was TOO qualified for the job, so they wouldn’t be giving it to me. And by dream, I mean nightmare!

  2. Laura says:

    Oh no! What a horrible nightmare!! I think this is a good decision, though. Whether you do get the job and move or not, getting your E-fund to $5000 will give you that much more security for whatever may happen in the future, then you can go back to whacking away your debt. But I of course have my fingers crossed you get a call about the job!! You deserve it 🙂

  3. I have debating the possibility of moving to another city for a job (though I am not currently looking), and one of the things that made me more comfortable with the idea was that I have a pretty hefty e-fund and savings account. I think that bulking up that e-fund is a great idea. Like you said, you don’t want to get into more debt right after you spent so much effort getting out of the one you have now.

    Good luck on your job offer. I hope you get it 🙂

  4. Jess says:

    I think that’s a smart move. If you do end up moving, you’ll be glad to have that (moving is SO expensive!), and if you don’t, you can always put some of that money into a bigger credit card payment. Or keep the e-fund, but I’m like you, I’d rather just get the debt paid down!

  5. Save for your moving expenses. The interest that you will miss out on over 4 months isn’t large enough to worry about if the alternative is aquiring more debt.

    Good Luck in the job process!

  6. Jessie says:

    I like what you are thinking of doing – reducing your debt repayment some and upping your EF fund some. Great plan!

  7. Smart idea. Cause even if you don’t move, it can be just rediverted. Hopefully, you get the job though! 😀

  8. eemusings says:

    I agree with you. Wise move – if you don’t end up moving, you can just make a huge lump sum debt payment if you want to.

  9. Chad says:

    Good idea. It is tough because you may feel like you are losing intensity. We did the same thing when we had a baby. We pulled off our debt payments and started stocking up cash in the bank in case of complications. When we were free and clear we dropped a huge amount on the debt.

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