extra debt payments on hold

When I laid out my goals for the year I had wanted to push everything I could at the remaining cc debt to try and pay it off this year. This is a lofty goal and will require some major sacrificing and work, and it may not be achievable depending on what unknowns occur throughout the year. I was able to make a fairly sizeable payment in January but it doesn’t look like I’ll be able to pay any extra for February which has me wanting to re-examine the goal. Another factor I recently wrote about was upcoming medical expenses and whether to take on new medical debt in order to put our tax returns towards the cc.

The more I thought about it the more I felt like increasing the medical debt and putting the tax to our cc was not the best solution. Potentially raising our monthly minimum payments for some unknown amount of time would make our tight budget even tighter and probably make it harder to pay extra towards the remaining cc. This decision also got me thinking about our current medical debt.

While paying off the cc this year is a pretty tall order, paying off the remaining medical debt is totally achievable and will free up $86 per month to throw at the cc and give us a little more breathing room in our budget to deal with the unknowns. On the other hand, the promotional 0% interest rate on the cc expires in June. The longer it takes to pay it off the more we will pay in interest. I ran a conservative scenario were we increase the pay-off time on the cc to the end of 2016 and it will cost around $345 in interest.

For now, I’ve decided to take a wait and see approach. My reasoning is that neither the medical debt nor the cc are accruing interest, so only making the minimum payment for a few months will not cost us. Another driving factor here is the unknown cost of the upcoming medical expenses, I want to make sure we can cover every bill as they roll in. All additional payment money will go into our savings account and once all the new medical bills are paid, we will make a decision on which debt the remaining lump payment should be distributed to.