Step One: Emergency Starter Fund
It is never too late to secure your future and you can work on your money goals by knowing your financial status by doing a budget. A budget includes your immediate expenses without accounting for the unexpected which is going to happen. Car breakdown, sickness and virtually many life events can lead to a spiral of debt because the options that are left to us are overdraft, loans or credit card. Other foreseeable expenses such as holidays, potential car repair and bills should be in the list.
Once you know where you stand financially, it will be easier to save $/£1000 as an emergency fund.
Debt is largely related to behaviour and although it makes sense to pay off the debts first, saving an emergency fund will keep us in a positive state of mind to SAVE.
How can you do this?
Start with a budget. Break it down to only the essentials or necessities, expected expenses and subtract it to your income.
Work on a plan to save $/£1000 as an emergency fund.
If your income do not even cover your bare essentials, then work harder, longer or find additional sources of income.
Emergency starter fund is for emergency. Birthdays, weddings, anniversary is not an emergency. It is something that can be anticipated.
If emergency funds are used, replenish it quickly.
Next Page: Step 2 - The Debt Snowball