Be prepared for emergencies!
1 out of 3 Americans can’t even cover a $5,000 emergency (this is even worse now because this stat came before the economic collapse). Money
management is a skill like any other and unfortunately most people in
the U.S. have not been taught to develop that skill. Everyone knows
they are supposed to save money, but almost no one actually does it!
Just like our Government, most people are spending more money than
they are actually bringing in. Unlike our Government, you can’t take
your neighbors money by force to keep paying for all of your wasteful
spending. You need to take control of your own situation and stop
spending money you don’t have. Stop piling on tons of credit card debt
for things you don’t even really need.
Your basic plan is going to be a simple one, but one that will
require you to start living a disciplined life. You either do this now
or you are going to end up old and
broke in debt for the rest of your life. Your intermediate goals are going to consist of:
1. Having an emergency fund
2. Paying off your debt
3. Saving for your future
I’m a big fan of the Dave Ramsey approach so I see no reason to
change anything here. Your first and only goal after reading this
article is to save up $1,000 for an emergency fund. This money is to
never be touched, it is what it’s called, for emergencies only. If
something breaks in your house, your car breaks down, etc. Start it in a
different bank account if necessary, but never touch this money for any
other reason.
Now, you might be thinking, how am I supposed to save up $1,000?!
Glad you asked, it’s easier than you think. You can save up $1,000 by
having a yard sale, getting a part time job, don’t eat out for the next
month, whatever it takes! This should only take you about a month to
do. This first step is an important one. It will start you on your
path to discipline and you can build from there.
Get this step finished quickly because next time we are going to start tackling debt.