Debt Reduction, Debt Story, Emergency Fund, Savings

Get Out Of Debt – The Emergency Fund

I recently wrote about our debt reduction process – a simple one-page guide to getting out of debt. Over the next few days, I plan to elaborate on each of the steps mentioned in the article, starting today with a few notes about step 1 – and the emergency fund. My wife and I have our primary checking account with our local bank.  This allows us to deposit our paychecks locally – and is a great place for my son to find coins for his collection.  The account is interest bearing and is free. Our saving account is online – and that’s where we keep our emergency fund.  Withdrawals from our checking account and deposits into our savings account take…

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Savings

A Plan To Increase Our Savings Account Balance

At one time – after getting out of debt and before we purchased our new home – we had enough cash in our savings account for six months’ worth of expenses.  We dipped into our savings account when we purchased our home, to purchase new appliances and some furniture. The time has come to rebuild our savings account balance.  We have created the following plan to increase our savings: We set a goal. Our goal is to stash six months’ worth of expenses in our savings account.  We took a look at our budget, removed any obvious unnecessary categories, and then used that amount to calculate our savings goal. We created a time-table. One year.  We have give ourselves one…

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Savings

Make The Payment To Yourself

My wife and I have been saving up for a new-to-us automobile. Instead of financing the purchase of a newer car, we have been making monthly payments to ourselves. Each month I initiate a transfer from my local checking account to my online savings account.  (ING Direct makes these transfers super-simple to set up.) The amount transferred is equal to the estimated cost of the vehicle, divided by the number of months until the purchase will be made. This approach works for any major purchase – and helps to keep us out of consumer debt. Obviously, we all know that we should save.  However, most folks never get to the point where they do save.  We look around and see…

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