In Financial Peace, Dave Ramsey recommends that you have an emergency fund.
Details are hazy, but it seems to me that until you’ve built up an EF of 500-1000.00 (depending on your family size/financial situation) he recommends paying the minimum due on your bills – the logic being that if you’re focusing on paying off credit instead of building an EF, you’re gonna end up dipping into the credit to cover unanticipated emergencies….
Once you’ve gotten a “small” EF, work on paying off credit cards, and once that’s done, you should focus on building your EF to cover 3-6 months worth of expenses (please, ANYONE correct what I’ve gotten wrong).
We’re still building our EF, and it’s slooooow going. But, it’s really a cool feeling to actually start growing a savings account where once there was none. I do dip into ours to pay for dental visits, but deposit the checks from our insurance company right back into the fund as we are reimbursed ~ we have decent insurance, but our dentist demands payment up front.
I started the EF with a $25.00 check that I got from Qwest for signing up for their long distance service. I added to as I received checks from half.com for books sold. DH has done some bicycle repairs for friends that he’s gotten paid for and that money goes into the bank as well. He’s also sold some stuff on e-bay & contributed that as well. I keep a jar in the cabinet above my washer for ALL change that is left in the laundry, and I try to deposit that on a monthly basis as well.
Every little bit helps. You can do it!