Need a push - Eliminating Debt by Draining Savings

[Colgate_Toothpaste]

Hello all,

I'll keep this short and simple- I can eliminate $500/mo in debt by draining my checking account to around $5000.  Normally I try to keep my checking account in the $15k-$25k range (since I have all bills drafted from it), but my wife and I took on some debt to furnish our house and get extremely necessary repairs done. 

I know it is very sensible to eliminate this debt, but I am having a hard time thinking about the savings account balance going down.  On paper it makes sense, but my brain is being stubborn and finds a [false] sense of security in the 5-digit checking balance.  We had a huge setback earlier in the year when a pipe burst in a wall and destroyed an entire room- otherwise we'd have completed the 2014 goal months ago.

I need a push or a kick in the pants to make this happen.  Any critique is welcomed!

[wtjbatman]

Do you have an adequate emergency fund? If yes, you should pay off the debt. That's why the emergency fund is there, right? In case a pipe bursts in your house you have the money saved in a high interest savings account that will cover it.

If you don't have an EF, then you should determine how large of one you need based on your income/expenses/job stability, and transfer the money out of your checking account and into a high interest savings account. Then work on the debt.

[Colgate_Toothpaste]

Do you have an adequate emergency fund? If yes, you should pay off the debt. That's why the emergency fund is there, right? In case a pipe bursts in your house you have the money saved in a high interest savings account that will cover it.

If you don't have an EF, then you should determine how large of one you need based on your income/expenses/job stability, and transfer the money out of your checking account and into a high interest savings account. Then work on the debt.

We have about $4000 in an emergency fund right now, excluding the checking account I described above.  It's not as high as I'd like it to be, but our monthly expenses are keeping us from getting ahead.  Once I obliterate the remaining debt, we can save upwards of $1800 a month. 

[RichMoose]

With the $5000 remaining in your chequing account and $4000 in your e-fund you should be ok to pay off those debts if: your job is stable right now and S.O. is also working. Don't forget, at a savings rate of ~$2000/mo, you will be able to ramp up your e-fund in no time to get to 3-6 mos expenses. No need to make your creditors rich off your hard-earned money.

[lackofstache]

With the $5000 remaining in your chequing account and $4000 in your e-fund you should be ok to pay off those debts if: your job is stable right now and S.O. is also working. Don't forget, at a savings rate of ~$2000/mo, you will be able to ramp up your e-fund in no time to get to 3-6 mos expenses. No need to make your creditors rich off your hard-earned money.

I agree. Pay off the debt; you'll have your $ back in no time. I personally don't keep that large of a buffer in the first place, but with that debt, I definitely wouldn't do so.