It is best if I refer you directly to them: The 7 Baby Steps
The 1st is to establish a $1000 Emergency fund and get current on all bills. Check!
The 2nd is to pay off all debt other than your house. This involves paying the minimum on every loan but putting every bit extra towards the lowest balance until it is paid off. As you pay off each loan, you use a snowball technique to use the money and add it to the next loan and so on.
This step is supposed to take us 3-4 years according to the Gazelle Budget Software from My Total Money Makeover.
The 3rd step is to save a 3-6 months living expenses in the emergency fund.
You can read the other steps for yourself at the link above.
2 comments:
Pay off all debt before you establish a 3m cushion? hmmm... as you are changing jobs it might be wise to contribute half to 3m savings and half toward your bills, this way you have a reserve if something should happen.
What you said sounds a little more like the Crown Money Map, which I have nothing against. We are going to keep a slightly larger emergency fund, and add to it with our tax return this spring until after the move to the new job. I have full relocation benefits and we will be renting so we anticipate most of our costs of changing jobs to be covered. But stuff always comes up so we might add a little to savings here and there.
Post a Comment