So today was pretty much awesome. It was exhausting (my son woke up at 7 this morning crying, both kids are still sick AND teething, and Kirk woke up from his afternoon nap absolutely miserable) but it had enough good parts to make it a wonderful day. My mother-in-law (love her!) graciously agreed to bring my 9-year-old sister-in-law over and hang out with the munchkins for a little while so I could finally tackle some chores around the house. Once she got here, she insisted on doing my dishes, so I was free to get laundry and other stuff done. It was sooooo nice!!
Anyhoo, the reason for my post was to do a quick poll on something my husband and I are trying to decide on. In short, we have about $3K of credit card debt that we've been slowly chipping away at for about a year. (It was accrued mostly from Kirk's birth and when Avery was in the Academy and took a huge pay cut for 7 months.) I had hoped to have it all paid off in a year's time, but that hasn't happened at all. (In fact, we've really only brought it down by about $1K in a whole year.) We got a nice big tax refund this year, but stuck it all in savings to put towards the bigger vehicle we will need when Baby #3 comes in June/July. So right now we have $3K in debt and $5K in savings. My question is, should we keep splitting our extra money between the credit card debt and savings or just bite the bullet and pay off all the debt right now? My gut instinct is to wipe the debt clear and then work towards rebuilding the savings account...it really irks me to be paying about $40 a month in interest fees. BUT we may not have much car money to work with by the time July rolls around if we did that.
So what do YOU think? If this was your financial situation how would you handle it?