Pay credit debt with savings?

[martinb5]

Here is my situation. I have $3,000 in credit card debt spread over two cards.

WF $1480 at 14.65%
USAA $1550 at 9.9%

I'm 20 and live at home with my parents, and accumulated the debt over the past few years mostly just being an irresponsible teenager and living beyond my means. I make around $1k a month working part time and just recently tried to start putting away some $ in a savings account, with an automatic withdrawal of $25 twice a month from each paycheck. So far I have just $350.

My question is, should I continue this method of saving and try to pay off my debt at the same time? Or should I focus only on paying off my debt and take the $350 I've saved so far to one of the cards (probably the WF first). I'd hate to see nothing in the savings account but having this debt keeps me up at night. I'm not sure what to do, especially since my "savings" will only take a small chunk out of my accumulated debt.

[darryl]

Pay off your credit card debt first. You are paying more in charges every month you don't pay up. Your school loans are tax deductable and does not incrue taxes until you graduate.

[amyschiff]

What sorts of bills do you have each month? It makes sense to put as much as you can each month towards your debt, but you also need to be sure that you have some sort of padding just in case.

[martinb5]

I am working part time because I am enrolled in the local community college, hopefully I will be transferring to a 4 year school soon. My monthly expenses are

$190 Car payment
$180 Car insurance

And my parents have been kind enough to take care of everything else since I made the decision to go back to school. The rest of the money I have left over seems to be used up by random expenses, gas and food primarily.

[flipchick1127]

I say put the money to your first credit card, especially since you don't have to worry about rent right now. Also, try to start budgeting your money so you can save a bit more from your paycheck. You will be glad you did in the end.

[hermione]

I agree with the others; pay off your credit card debt as fast as you can. Living with your parents takes a lot of pressure off not having savings and being able to pay rent and utilities, etc. so take advantage of this opportunity to get debt-free.

Also, I'd advise finding ways to save more of your paycheck. While life shouldn't be devoid of all fun and pleasure, you could probably save more than $50 out of $1,000 a month by cutting back some since your regular monthly expenses only add up to $370.

[Booksalemanager]

Pay off the credit cards, unless your savings give you better rates (which I highly doubt)

I would recommend keeping enough money for monthly bills in a savings account though, just in case you have a hard income month, you don't have to pay the late fees.

[SouthShoreGirl]

What kind of food are you buying? Do you eat out all your meals? You can save a TON buy bringing food from home.

[amyschiff]

It may be a good idea to track everything you spend money on each month and see where you can cut down.

Like SouthShoreGirl said, eating at home saves tons. Do your parents usually cook dinner? I lived at home while trying to find a job and was offered whatever mom and dad were having for dinner (I also helped cook dinner a lot since I wasn't paying rent or anything).

Skipping some social activities can help you pay off your debt faster. It won't be fun at the time, but the interest rates on your CC will make it hard to get ahead if you don't buckle down and tackle the debt as fast as possble

[DSAMO]

Lets see here:
Monthly income: $1000
car payment:-$190
Insurance: -$180
_________
$ left over $630

Yikes! You have used 40% of your income just to pay for your car. That's a lot.You might want to consider not having a car for now and maybe use public transportation? You are doing well as far as putting aside $50 bucks each month but you need to try to save on other things to increase your monthly saving. Living with your parents means that you save money on rent, utilities and food. Eat at home and if you do need to spend money you need to write down your spending.

I do agree with the others that you need to pay off your credit card debts ASAP. I suggest paying WF cc first since it has higher interest rate than USAA.