[Kayla Buell – Ambassador]

Hey guys! So a little over a year ago my hubby and I bought a new house which meant that we needed to buy some new furniture. After all was said and done, we put a little over $3,000 on a 0% interest credit card from the furniture store. Up until now, we’ve been paying $200 a month to pay off the card, but I’ve finally had it! I don’t want monthly payments, so we’re going to bite the bullet and pay it off. We have the remaining balance available in our savings account, but I’m a money hoarder and I like to see my savings account get really big. Over the past few years I’ve learned that having tons of money in savings can actually be a bad use of your money if you have debts to pay, so I’m working on establishing a better balance between having some money in savings but also using it to pay off debt. Anyone else been in the same boat? Would love to hear your story!

[Suzanne Oldham – Ambassador]

I have had the opposite problem. That is, I have NOT built savings and instead opted to use extra cash to pay down debt. While I have succeeded in reducing my debt, I do not have enough savings for unexpected expenses. So I plan to be build a better balance between saving and paying down debt so I can handle unexpected expenses.

[Stacey Daprile – Ambassador]

Kayla, I feel that it is always important to have your emergency savings held sacred. At 0% interest the debt is not costing you anything, and if you are earning interest on the savings you are money ahead. If the debt is costing more than you can earn, then I’d say pay off the debt.

[Antoinette Minor – Ambassador]

I agree with the other ladies BUT I also know what peace of mind feels like. Do you have a ton of time left to pay off the furniture? If so, I see what you mean but do you think you can hold out a little longer to take advantage of the 0%? Either way I think you’re in good standing. Debt without interest is a win and peace of mind is a win!

[Sum180 Lead Coach]

Throwing a little financial theory into the conversation. Here is the “best practice” decision waterfall list in priority order:

1. Use all extra $$ to pay off high interest debt, where high is anything over 5%; then
2. Split the use of all extra $$ by 50% to finishing the debt payoff of lower interest debts (0-5%) and 50% build up of emergency funds. (exclude your mortgage unless it is high interest or under water)

[Kayla Buell – Ambassador]

Thanks for all the advice, everyone!