I set up a savings account last year, and put a whole $1 in it last year. When I sold my bike a few weeks ago, I put $300 in. My emergency fund, you could say. I’ve decided to put any adsense $ all into this fund. So, any checks from google will go strait into here. As much as I need cash right now, I need to learn to save at the same time.
my savings account at emigrant direct
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I wonder which is more important: saving, or paying back. Since you have zero interest on many of you bills, you are probably right to establish some kind of emergency fund. This will take some stress off of you in many situations — you cannot operate on a shoestring all of the time. But try not to beat yourself up when you drain the fund. This is likely while you owe so much money.
Hey, I’m doing the same things – except with my coins. I’m putting the change from purchases into a jar and then rolling them up and putting them into an account.
It’s a bit fun to watch the pennies add up.
Dave Ramsey recommends establishing a $1000 emergency fund before trying to pay down any debt. Now, I don’t agree with everything the guy says, and actually find him kind of annoying, but do agree with that part. Also, bills that aren’t monthly but come every 6 or 12 months need to be saved for on top of the emergency fund (things like property tax, some insurance premiums, etc.). And, I’d advocate a larger “starter” emergency fund (maybe more along the lines of $2k) for someone who is self-employed.
I would “cap” the emergency fund at a certain point, and start paying down debt, unless you plan to use savings as a tool to settle debts–i.e., call a company and tell them “I owe you $10k and am behind on payments. I have a negative net worth and am close to bankruptcy. I can give you $7k now if you will settle the debt for that amount.”
Step 1 of Dave Ramsey’s plan (I’m going to keep mentioning him until you give him a listen
is to save up a mini emergency fund of $1000. When you are in a situation like yours, every $ is going out the door. Life is such that small emergencies happen all of the time, and you’ll need some spare cash to deal with those situations. Not having any saved up cash means that a $200 or $300 emergency can derail your entire get-out-of-debt plan, and that can be demoralizing.
Dave Ramsey has helped tens of thousands of people get out of debt and stay out of debt. I really hope you get his book out of the library or listen to his radio show or podcast. His show is all about this – dealing with foreclosures, debt collectors, non-stop phone calls, etc.
Sorry to nag about the Dave Ramsey thing, but I want to see you succeed because I think you are a stand up guy for trying to do the right thing and face your problems head on. I respect that.
Hey, an emergency fund is great, and use it when you need to, and replenish it when you can. Kudos.
Ya ya. You’re just trying to show up Casey Serin and get sympathy from the exurban haterz like DC Economist (one of the assholes who got us into this mess to begin with)