CONSUMER DEBT
&
COMPLETING THE EMERGENCY FUND

Unlocking the Ball and Chain

Dumping Debt

"The borrower is slave to the lender."  "Be not a borrower, nor a lender be." These are timeless sayings that have held true.  Debt is a shackle that weighs down the most industrious person and keeps them from getting traction in their own finances.  We cannot get ahead while we are paying others 18%, 24%, or more to make them wealthy.

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You can wander into debt, but you have to be intentional and fight like a dog to get out (then stay out).  We do this through a "debt snowball".  Once those payments are behind you, you can use your money to reach your goals.

Finishing the Defensive Game

Complete the Emergency Fund

The $1000 in your emergency fund is a great start for small emergencies.  However, when an unexpected illness or layoff happens, you need to have more breathing room.  That is why after the consumer debt is paid off, it is time to complete the emergency fund to 3-6 months of expenses.  Then, when that layoff happens, you are not just one paycheck short of disaster, you have some breathing room to get another income stream coming without going into panic mode.

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There are other reasons to having this amount in your emergency fund (like increasing the deductible on your insurances to lower your premiums and be more self-insured).  The level of relief and peace you will have with this buffer between you and Murphy will be worth it!