Debt Elimination Step 5: The Importance of the Emergency Fund
May 18, 2006 by Erik Folgate
Filed under Credit and Debt
This is the last step to eliminating your debt. If you have followed the first four steps, then you are already debt free. But how can you STAY debt free? The same concept of losing weight and KEEPING the weight off applies to getting and staying debt free. You must change your habits. It does you no good to lose 50lbs if you are going to stop working out and eating right as soon as you lose the pounds. The pounds will be back sooner than you lost them!ÂÂ
Getting and Staying Out of Debt: Step 4
April 22, 2006 by Erik Folgate
Filed under Credit and Debt
Many of us do not have a ton of disposable income, because our debt payments suck up all of our money. It would be nice to think that I could find an extra $1,000 per month to put towards paying off debt if I tightened up my budget. But in reality, there is only so much money that one can squeeze out of their budget to put towards savings or paying off debt. So what if you only have an extra $100 per month to put towards paying off debt? Do not use that as an excuse for living in debt the rest of your life.ÂÂ
Five Steps to Getting and Staying Out of Debt (Step 3)
April 13, 2006 by Erik Folgate
Filed under Credit and Debt
Step #3: List your debts smallest to largest, and start aggressively paying off the smallest debt, and working your way up to the largest debt.ÂÂ
This method of debt elimination is contrary to how many people believe that debt should be paid off. The most popular way to set up a debt elimination program is by listing the debts from smallest interest rate to largest interest rate and then paying off the smallest rate first. First, I will explain the method that I use, and then I will show you why I disagree with the smallest to largest interest rate method.ÂÂ
Five Steps to Getting and Staying Out of Debt (Step 2)
April 12, 2006 by Erik Folgate
Filed under Credit and Debt
The second step is drafting and sticking to a written budget. The reason that this is the second step is because you will never know how much money you can contribute to getting rid of your debt without writing out your projected budget. There are two kinds of budgets. One kind of budget is merely just a tracking budget. You keep track of what you are spending and where you are spending it, and then you try to make adjustments at the end of the month to areas where you spent too much money. The other kind of budget method is when you project your monthly expenses and stick to that projection. This is the method that I like to use. It is very simple.
Five Steps To Getting and Staying Out of Debt (Step 1)
April 6, 2006 by Erik Folgate
Filed under Credit and Debt
My next five posts will be a five step process for getting and staying out of debt. I am trying to follow this process right now, and I am currently still in involved in steps 2,3, and 4. Here are the five steps to getting out of debt and staying out of debt.
1. Save $1,000 for a small emergency fund
2. List your Debts Smallest to Largest and attack one debt at a time.
3. Get on a written budget.
4. Find creative ways to boost your income.
5. Create an emergency fund of 3 to 6 months worth of expenses.
