In my honest opinion, my tax refund is the only way I can amass a savings account. I tried the monthly auto-deposit feature of the ING Direct Orange Savings account. Most of the time, I didn’t have enough left in my checking for the monthly transfer, so they closed my account.

Dave Ramsey’s Baby Step #1 says to start an Emergency Fund of $1,000. I don’t know if $1,000 is going to help me very much if I get laid off, but I’ll go with the flow. Step #2 says to pay off all my debt. Step #3 says to save 3-6 month’s worth of expenses. Since the risk of  a layoff is still lingering, I feel Step #3 should be switched with Step #2 in my situation. What do you think?

I also signed up with a layoff protection plan from CitiCard. It pays me $1,000/month for 3 consecutive months. The insurance plan costs me $30/month charged to my Citi Mastercard. I think it’s a much better deal than other cards where they only pay your minimum payment if you get laid off. They charge a  fee for every $100 in your balance, which works out to be almost the same as the minimum payment. I will cancel the insurance when I start to see an improvement in our revenue. Don’t you worry.

So what do you think I should do? Use the entire tax refund to slap around my Discover balance or deposit it into my savings account as Dave Ramsey’s Step #3?

P.S. – My student loan interest paid in 2008 is no longer deductible due to my income level and my tenant moved out yesterday (-$900/month). Muy malo.