One credit card down!

One of the goals that I had set myself was to build up an emergency fund. I'd been doing rather well but I decided to modify my plan a little.

In my last posting, I talked about the Cashflow game and the concepts that it teaches you. One of the key concepts in the game is that you are more likely to succeed in the game if you eliminate credit card/retail debt and only use loans to secure the purchase of an asset that will make you money.

I have the ability to margin out funds from my investment accounts if I 'really need to' but my primary source of funding in an emergency would ideally be savings accounts/money market funds.

Well, I'm not in the ideal situation yet so I decided to take a small 'risk.' Instead of leaving my money in a savings account that is earning 4% interest, I flushed most of the funds out of one of my accounts in order to wipe out the balance on one of my credit cards charging me 11.75% and used the rest to pay down a card chargineg me ~14%. While I could have paid more towards the card charging me 14%, I decided to fully pay off one of my cards so that I have one less thing to worry about.

I wouldn't recommend flushing your saving account unless you have another source of emergency funds (like your parents/family or my margin account) but in some cases, it just makes more sense to use that $1,000 towards a debt costing you $100/yr as opposed to letting it earn you $40/yr. For me, I think it was the right decision.

One more step towards financial independence.

Until next time,
Thor