Wife and I current have about 11k saved up of emergency fund which is about exactly our 3 months of bill.

We have about $15k HELOC high interest debt of about 8.5%. We got it around covid time and didn’t think that the feds would raise the rates that much.

We do have parents on both sides that are well off that can help us out in case I do get laid off or let go (I make the most between us so I support most of the bills).

Thinking of taking out maybe half of that or “1 month” of “emergency fund” out of that 11k and paying our debt. Thoughts?

Comments

You must log in or register to comment.

AutoModerator t1_jae29td wrote on February 28, 2023 at 7:40 PM

#2,120,487

You may find these links helpful:

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

_Nuba_ t1_jae2zmn wrote on February 28, 2023 at 7:45 PM

#2,120,708

How fast could you pay it off if you don’t?

RobEreToll t1_jae3dvu wrote on February 28, 2023 at 7:47 PM

#2,120,834

Maybe use about 8k to get ahead of interest, try to pay 2x monthly interest and try to save $250/mo until your savings gets to 6k, then make as large of payments as you can without starving until payed off.

Knipfty t1_jae4dyi wrote on February 28, 2023 at 7:53 PM

#2,121,174

I would tighten the budget, drop 10k on it and pay it off as quickly as possible. Then rebuild the EF.

innkeeper_77 t1_jae7087 wrote on February 28, 2023 at 8:10 PM

#2,122,082

Replying to Knipfty (#2,121,174)

This but it might be a good idea to leave at least one month in the emergency fund. 8.5% is bad, but not EXTREMELY bad.

Levertki1 t1_jae9xjl wrote on February 28, 2023 at 8:28 PM

#2,123,154

Pay down Heloc now. It will still be there if you need in an emergency.

themeowsmeows OP t1_jaeg44e wrote on February 28, 2023 at 9:09 PM

#2,125,374

Replying to Levertki1 (#2,123,154)

You mean use HELOC as emergency fund??

themeowsmeows OP t1_jaejxkr wrote on February 28, 2023 at 9:33 PM

#2,126,835

Replying to innkeeper_77 (#2,122,082)

I decided to take out one month of savings to pay the HELOC.

Levertki1 t1_jaeltgo wrote on February 28, 2023 at 9:45 PM

#2,127,579

Replying to themeowsmeows (#2,125,374)

Yes until you get on the positive side. Why pay when interest when you can make most go away. Get it to zero, pay off any other debts(other than house). Build emergency fund/ increase retirement savings.