A Question for Gail

I submitted this question to Gail Vaz Oxlade today, I hope she answers it (of course if you have any advise - please feel free to chip in):

Good Morning Gail!

I hope this note finds you well.

My question is about priorities – and how to sort them all out.

A bit of context for you:

I have a small credit card debt ($2,500) and a relatively small student loan ($9,000) in terms of debt. I put $250/bi-weekly (bw) towards my credit card and $150/month towards my student loans.

In terms of TRUE savings I have goals including: an emergency fund ($10/bw), & my RRSP ($50/bw)

My planned spending funds include: House down payment ($150/bw – this is matched by my partner), a Christmas fund ($37.50bw),a buy company shares fund ($50/bw), & an annual expenses fund ($35/bw).

As my fixed expenses (rent, utilities, cell, insurance - ect) are about $750/month, and debt repayment is $650/month, and my planned spending accounts get $550/month - that leaves me with about $400/month for variable expenses from groceries, to gas, to fun.

Okay! Enough Context.

Here’s my question – in terms of figuring out priorities, what is the most important? Is getting my emergency fund to 6 months worth of hearth & home expenses number one? Or is paying of my debt number one? You blogged about this a bit today – but I guess my question goes further then that. What about all the other ‘savings funds’ and ‘planned spending’ funds that people have – where do they fall into the mix of priorities. I’ve spoken with some people (friends) who think the planned spending should just go towards debt. I think however; that if I have no money tucked away for planned spending – I’ll still spend the money – which is why I owe what I do on a credit card. If I have the money saved – in theory, I won’t use my credit card.

What I think might work best is if I try your debt-snowball technique as a savings-snowball technique. For this to work, I have to have a priorities plan.

I appreciate any tips, or advise you would have for me and those in my situation.

Thank you,


  1. I've been thinking a lot about priorities lately too. The way I think about it is that I need to first get a small emergency fund ($1k-done) and then pay off my debt, then start some serious savings, all the while contributing to my retirement. Some disagree with that and go straight for fully-funded EF. As for the little things, I think that depends person-to-person and you can certainly make small monthly contributions to reach your goals.

    Let us know Gail's response!

  2. Hey there!

    I will defn. post Gail's response if she write back to me - I'm sure hoping she does.

  3. For me, when I didn't have a "planned spending" account, whenever I needed something (or wanted, really, really bad ;)) I had to back to my credit card every time. So, even though I was making payments to my credit cards every month - and considerably more that the minimum payment - I put those things on my credit cards. Its like taking one step forward, two steps back.

    Now that I have an emergency account and planned spending account, I don't put nearly as much on the credit cards, actually nothing so far this month!

    What I did was lower my payments to the minimum for three months and put all the extra money I was putting towards the debt - split 50/50% - towards emergency savings and planned spending accounts.

    Now that I feel I have a decent cushion, I still put some money towards those goals but most if it has gone back towards the debt. And, since I don't need to use the credit card as much, its actually going down! :D

    Hope that helps, let us know what Gail says!

    ~ Jamie

    BTW, I love the new look for the blog, its pretty awesome! :D

  4. looks like other people do what you have been doing, it is interesting to see what other peoples priorities are in regards to consumer debt.

    I wonder if Gail will respond

  5. It is really tough to select your priorities. Currently I have an emergency fund of $2000 but i am not contributing to it at all while I pay down my debt. Thankfully I have worked super hard over the last 6 months to eliminate $7000 remaining on my LOC and this month i will pay off the last $400 to be debt free! and so now I am planning to use the money from my debt repament to map it out to other areas -keep growing the emergency fund, but also build a planned spending fund as well as a vacation fund.
    i'm all about the debt repayment but I know Gail feels you should have a suitable emergency fund as well. I think if she does answer (based on past responses) she will encourage you to cut out at least a third of your debt repayment money and put it towards an emergency fund. good job!

  6. Thanks for commenting!

    I have $1000 in my E-fund currently, which is why I dropped the b/w savings amounts to $10 - so that I could re-direct $$ to other goals.

    I think it will be really interesting to see what she says, if she reponds.


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