“You can’t go wrong getting out of debt.” Personal finance is a personal journey. As long as you are following a few basic key principles… you can’t really go wrong.

Thanks for all the input on this guys – I decided to write a post dedicated to the subject today – check it out… “Debt Reduction – Emergency Fund Savings – The Balanced 75/25 Method“

Another point that I would not agree with is Matt’s continued funding of a car fund while still in debt and the emergency fund is still less than fully funded. I believe this is just a matter of intensity. My family’s desire was to be out of debt rather than have money for a newer car. Just to be clear, the car I drive every day to work is 16yrs old with 203,000 miles, so we do plan to fund a car fund, but not until all the debt is gone and out emergency fund is fully funded.

Basically I not a fan of trying to tackle so many things at one time with a limited amount of extra money. Trying to pay down debt AND get $20 in EF, AND get $10K in car fund, AND get……
Why not just focus on one, with a starter EF in place, then move on to next? Once you are debt free, then you could be more flexible.
.-= lrgche´s last blog ..Time to Refinance? =-.

@Kevin – Great point about being purposeful to avoid the marketing traps and messages that are out there. We have to be vigilant because the message of frivolity and materialism is everywhere!
.-= Jason @ Redeeming Riches´s last blog ..7 Things You Don’t Want to Be Caught Dead Without =-.

I agree with you on the emergency fund. We saved $2,000 for our baby emergency fund, instead of the $1,000 suggested. I think there is an emotional amount that allows us to continue our plan without concern. That amount is different for everyone which is why I wrote a series that expands on DR’s baby steps to account for individual situations and desires.

I like the way you connected the protection of armor with behavior, attitude, and knowledge.
.-= Brad @enemyofdebt´s last blog ..Million Dollar Club =-.

We will NOT have the above amounts in these funds while we still have high interest debt. But we do not want to stop at $1,000 because (as you seem to agree w/from your EF amount) we do not feel comfortable halting contributions at that level. So we will continue putting 25% into the EF while paying off our high interest debt.

Once the high interest debt is paid off, we will then focus 100% of our available income into the above funds until they reach the above numbers.

Once that is done, we plan to stop funding the above accounts and start putting all (or at least a vast majority) of our available funds toward our low rate mortgage and student loans.

Does that answer your question?

It actually looks like you did the same thing, but took a different route. Instead of using the percentage model that I use to fund your EF while paying back high interest debt, you essentially halted your debt repayment to fund your EF for a few months.

That few months may have equated to the same dollar amounts we stand to realize by using the percentage approach over time. See what I’m saying?

Speaking from the experience of recently becoming debt free (except the house), we got much more momentum from putting 100% than we would have gotten by putting 75% and it would have taken even longer. But here’s the kicker, we did have a comfort level in the EF of around $3k instead of $1k, even though we are avid Dave Ramsey fans. We even bumped it up when the threat of a lay off at my employer was eminent, but then when that passed we pulled it back out and applied to the last of our debt.
.-= lrgche´s last blog ..Time to Refinance? =-.