Something to keep in mind: Paycheck to paycheck is not good. Period.
This is why this blog is to be taken lightly. I wouldn’t suggest that someone else do the things I do, because they are risky. Instead of beefing up my emergency fund to cover months’ worth of expenses in case my primary (currently only) source of income is no longer available, I am funneling as much of my discretionary income as possible into eliminating old credit card debt. I have my reasons for doing this. First, the idea of continuing to pay interest on my old credit card debt really bothers me. Also, paying the debt will improve my ratio of available credit to my debt balances, and this may improve my credit, which is important to me, because down the road I want to fetch the best mortgage terms and most painless closing costs possible when I buy my house. (They say when your score is in the mid-700s, improvement is moot, but I say Every Little Bit Helps.) When I finally do move into my house, my mortgage won’t have to compete with my old credit card debt for a slice of the take-home pie. Generally, though, I just want it gone. My old credit card debt is like split ends, or hangnails, or extra tummy weight - you look at it, it bothers you, and you do what you have to do to excise it. It’s very psychological, and I’ll be glad when I move past this part of my financial journey.
That said, if I were to lose my job tomorrow, I’d be SO NOT "okay for a few months." I’d be at the unemployment office immediately. I’d be settling for a percentage of my current pay, while scrambling to get another position with no certainty in sight except my faith that something is out there for my skill set (or I’ll wind up taking "whatever" to make ends meet). I couldn’t pay my September rent until I got paid this week - not unless I was willing to dip into my small emergency fund.
So yes, I am making progress. But as Charles Barkley might say, "I am not a financial role model." I am gambling. I am depending on the ASSUMPTION that my income will continue at its current rate while I repay debt and that no emergency will happen that my emergency fund can’t handle alone. This is why folks recommend that you get up a certain amount of savings together before repaying debt. I’m just eager and hard headed. But I do know my risk.
