I’d pay on the car.

That’s what Dave recommends to. All the bills including the car, then the build up to 3-6 months of bills in savings
then the house.
That being said, I’m such a security freak I’m adding to my savings a small amount each month as I snowball. So I currently have about $2,500 in savings–about one month of our bills. I add 1/4 of any extra money I make each month to the savings account. I know it slows down my debt reduction, but I NEED that little security, especially in today’s economy. If I’m looking at the baby steps correctly, put the money on the car loan, as you are still in BS2 as long as you have the car loan.Paying off the house is BS6, although I like the way you think. Owning your home free and clear is tempting. I think I’d want to move that to BS4, once the EF is fully funded–6 months worth of expenses. My 2 cents.

What do y’all think?

Over the last few days, my hubby and I have learned that he will be getting a nice bonus at work. We also got some “surprise” money on an insurance settlement. With those two checks, we’ll be able to pay off the last of our debt with the exception of my car and our house. We have the $1,000 emergency fund in the bank (it’s actually about $1,200) and we know that my husband’s job is secure.
So, my question is….should I take the money we’ve been throwing at paying off the bills and put that towards the car and the house? Or should I add to our emergency fund and keep paying what I have been on the car and the house. At the rate I’m going right now, my car will be paid off in two years. The house will be paid off October 2010
I have to admit, the thought of having the house, car and all bills paid off is mighty tempting. At the same time, I like the idea of having a cushion in the bank.