Here's what I determined would happen if I used the emergency fund that I have built up right now (while still contributing 10% to it at the same time) vs. not using it to pay off credit card #1 before June 1st.
Option 1: Use emergency fund to pay down credit card #1.
$3,400 balance - $2,300 emergency fund = $1,100 remaining balance
Jan contributions= $100 emergency/$100 payment
January balances= $100 emergency fund/$1000 credit card balance
Feb contributions= $200 emergency/$300 payment
February balances= $300 emergency fund/$700 credit card balance
March contributions= $200 emergency/$300 payment
March balances= $500 emergency fund/$400 credit card balance
April contributions= $200 emergency/$300 payment
April balances= $700 emergency fund/$100 credit card balance
May contributions= $300 emergency/$100 payment
May balances= $1000 emergency fund/NO BALANCE
SUMMARY: Credit card will be paid in full by the first part in May, remaining payments can be transferred to credit card #2.
Option 2: Continue to pay down credit card w/o using emergency fund.
Adding up all payments plus an extra $300 for May = $1,400 paid towards credit card with a remaining balance of $2,000. YIKES! While my emergency fund would be $3,300. NICE!
Now, obviously I'm not counting any contributions from boyfriend, so I'm just looking at what I can contribute at the moment. I really don't see why I shouldn't use my emergency fund because obviously if I leave the remaining balance of $2000, credit card 1 is going to charge interest for the past year. This could be anywhere from $200-600. OUCH. At the same time, I AM building my EF back up slowly but surely so when I'm done, I should have a solid $1,000 plus interest.
Any thoughts? Advice?