alexj99•3d agoTop Commenter

Debate: Should a freelance gig income go straight to debt or into savings first?

I had a convo with my buddy Mike last night after we both landed small freelance projects - his was $400 for a logo design, mine was $350 for some copywriting. He swears you gotta throw every extra dollar at debt first, like that 18% APR credit card balance I have. But my sister in law argues you need a $1,000 emergency fund before touching debt, or else a car repair could wreck everything. Which side is smarter though? I get his point about interest eating you alive, but I also remember last year when my laptop died and I had no savings and had to borrow from my parents. Has anyone else dealt with this debate in their own budgeting? What do you do when extra cash shows up - debt or savings first?

2 comments

2 Comments

green.jessica3d ago

Mike's right about that 18% APR eating you alive... I had a $500 freelance check last month and sent it straight to my credit card, just feels like you're actually getting somewhere instead of treading water.

the_uma3d ago

Hold up, is 18% really that urgent if you don't even have a grand to your name if something goes wrong? I'd lean more towards your sister in law just from seeing people get wrecked by small emergencies.