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Even though I do not get near the credit card offers that I was getting before the economy tanked I still have one too many credit cards that can screw up my debt free life in and instant. I like to think that I am above using that card regardless of how bad I want that thing-a-ma-jig. But then I wake up and that thing-a-ma-jig is hanging in the closet or is in my tackle box. Learning to live on less in order to build our emergency fund up is a mind-set we must get into and stay into at least until we have three to six months of total living expenses set in our emergency only fund.
Get it through that thick skull of yours that this has to be the number one goal of your savings life if you want to be financially free. Always better to have a complete year of living expenses set aside so once you reach that first goal continue to set an amount aside to continue to build that fund. Here are a few steps you should take to get free.
- Figure out what you have coming in and what you have going out. Yes, you will have to track it for an entire month at least to get a good accurate picture of your income and outgo.
- Make a list of your non-negotiable costs such as, Mortgage or rent–you need to keep a roof over your family. Auto payment–eventually you will learn to never have one again. Health and other insurance that is necessary–not all insurance is. Basically go over your bills and decide what you cannot live without—by the way one phone is enough for now and do you really need all those movie channels that you pay premium prices for? It is amazing the things we count as necessities. TRIM THE BOOKS!
- Get one month’s emergency fund in the bank before you pay any more than minimum payment on all other bills such as credit cards. Once you get that first month put away we then need to begin to snowball your debt. That lesson will come in a couple of weeks.
- Cut all of your frivolous spending that you found after doing step one. You know what they are—eating out five times a week when you could brown bag your lunch, special flavored coffee that only steals from the pocketbook and puts pounds on and the list goes on.
- Clean out the basement and garage and have a garage sale. Do not buy something new with the proceeds of the sale put it in your emergency fund. You will be surprised how quickly you can get that first month set aside if you set your mind to doing it.
You can learn to live on a dime in order to save the 90 cents at least until you are set for unexpected disasster with a fully stocked up emergency fund. By the way emergencies come less often when we are prepared for them.Click here for a Thrifty Living ebook
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