Before You Get Out of Debt

Congratulations!  You’ve made the decision to get out of debt. So now what? Before You Get Out of Debt

Some people never get beyond this point because they don’t know where to start. The big picture is overwhelming, so people often quit before they ever write the first check to pay off a debt. You don’t have to worry about that, though, because you’re about to discover the first step toward saying goodbye to debt. Before You Get Out of Debt

Before you learn this secret, you need to be forewarned: this step may surprise you. It will seem like the wrong thing to do. You won’t guess it offhand because most people don’t think it has anything to do with debt reduction. Are you ready? Before You Get Out of Debt

The first step is this: Save $1,000 as fast as you can.

You weren’t expecting that, were you? Why would you put money in a savings account instead of using it to pay off bills?

Because life happens. Your car has a busted transmission. Your husband ends up in the ER. You bury a loved one. There’s an unexpected pregnancy. Mayhem and surprises are a part of life. If you have the $1,000 emergency fund, you won’t have to go deeper into debt when the inevitable but surprising happens. Think of your emergency fund as a safety net.

Jump-start Your Fund

If you’re serious about getting out of debt, work as hard as you can to put away $1,000 speedy quick. Sell the mysterious items in the attic. Get rid of the jewelry you bought to keep up with the Joneses. Switch to store-brand products. Work overtime. Find an extra job. Sell the boat. Save every penny, nickel and dime you find. Everything adds up.

Once you’ve reached the magic number, take your money to the bank. Don’t keep it at home because you’ll use it. On what? You forgot to get cash for the school trip. The pizza driver needs a tip. Your coworkers are pooling money for a farewell gift. Instead of tempting yourself with cash on hand, open a savings account that’s separate from your regular checking account and put your $1,000 in it. And then leave it aloneDon’t touch it. It’s for emergencies. (And a clearance sale at your favorite store is not an emergency.)

Proof You Can Do It

The safety net for the unexpected isn’t the only plus in starting your emergency fund. This first step also gives you confidence, a feeling of accomplishment and a sense of control. This step proves you can save money. You can control your behavior. You’ve discovered the power of intense focus and determination. Now keep using those skills to tackle the next step—getting rid of your debt.

You can do this!

By Dave Ramsey
http://www.daveramsey.com

Before You Get Out of Debt

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KimberlyJohnson

As a co-owner of Senior.com, Kimberly Johnson is passionate about providing Seniors with the resources and products to live well.  Kimberly is a seasoned caregiver to her family and breast cancer survivor.  Her father battled ALS, Lou Gehrig’s disease, for 13 months before passing.  Today Kimberly lives in Southern California near her 102 year old grandmother, widowed mother, a mentally disabled sister and second sister who is also a breast cancer survivor.  She is happily married to her husband of 22 years and they have 3 children.

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