E-fund vs Debt
March 22, 2010 13 Comments
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.