Now,
if you’ve taken my advice and set up your mint account it will be child’s play
to draft your first budget. I recommend
pulling out your last few months of debit card and credit card statements and
averaging out how much you spent in each category monthly. These categories include items like
utilities, groceries, car insurance, cell phone, mortgage, car loan etc. Hopefully once you have listed all your
expenses it adds up to less than your income.
The amount left over should immediately go into a money market account
to begin your $1000 emergency fund.
I
think a money market account is the best place to house your emergency fund
because it grows your savings with a small interest rate and it is
easily accessible. My husband and I have
our money market account through Sallie Mae.
We can withdraw funds up to six times per month and earn 1.05% interest
on our balance. It is also easy to
transfer funds from our checking account to the money market account. Why start your journey to debt free living
with an emergency fund?
Murphy,
the little devil that shows up to wreak havoc on your good intentions. You’re paying off small debts left and right
and then bam, your tire blows or your timing belt breaks or you have an
unexpected mini disaster. If you’re
prepared with an emergency fund, you won’t have to rack up more debt on your
credit card. You’ll be able to escape
the vicious cycle. Murphy’s law: If it can go wrong, it will go wrong. But a $1000 will usually get you out of the
worst of anything murphy brings your way.
Summary: Step one, write out your budget plan
somewhere you will see it frequently.
Step two, open a money market account and stock it with $1000 as quick
as you can. Step three, get to that debt
snow ball.
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