Emergency Fund, Debt Reduction and Cash To Live
Filed under Debt
If you’re smart enough to have already started an emergency fund, you might want to opt for two. You should have some emergency cash at home but you should also have an emergency fund in an account.
Try not to make that fund too easy to access. For instance, don’t have a debit card for it. If you have to go to the bank during regular business hours and stand in line to access your money, you’re much less likely to impulsively spend it.
If you want to start saving money in an account and don’t think you’re going to be militant and dedicated enough to go to the bank every pay day and put money in, consider splitting your direct deposit so that the money goes in automatically. If your employer doesn’t offer this option, consider talking to your bank about doing an automatic transfer for you on specific days of the month; preferably payday when the funds go right in.
Debt Reduction
When some people get aggressive with their debt, they don’t leave any wiggle room. Don’t put all your money into your debts. You need to save for that emergency and have a wage you can live on as well.
Debt reduction becomes like a little addiction. Finding ways to cut corners and save money can be an adrenaline rush as you watch your credit improve and your debts shrink.
Don’t be so aggressive that you are struggling to put food in the fridge. Make a realistic budget. This way, you’ve got money going towards your debt but you’ll have money in case of emergency as well.
Too often, people put every spare penny into debt reduction and run into problems such as a car repair or other unforeseen situation and then jump into debt to fix it. Instead, put away some rainy day money as well as paying off your debt.
Related posts:
