If you’re in debt, of course you want to get out as soon as possible. Of course you want to have money in savings.
But just thinking that is not enough. You need to set a specific plan, with a timeline, to get out of debt and start saving.
First you have to figure out how much you owe. You need to gather all of your bills together and go through them and figure out the grand total. You also need to figure out what your monthly payments are for each bill and add them all up.
If you literally can not pay them, you need to call up the lender and negotiate a lower monthly payment. And as a last resort, if you need to, you may have to turn to a non-profit credit counseling agency to help you get out of debt.
You need to figure out how long it is going to take you to pay off your debt. You may need to change something about your circumstances to pay it off; live in a cheaper house, get a second job until your debt is paid down and more manageable, sell things that you own and put it towards debt, etc.
And you also need to save some money every month, no matter how small the amount. If you set up a savings account, even if you literally are saving only $20 a month, you still are getting ahead rather than behind. And you will find that once you have that savings account set up, you are going to find ways to put more money into savings.
It’s ideal if you can set up a long term retirement savings account and then several shorter term savings accounts. The shorter term ones are your reward accounts – an annual vacation account, a trip to the spa account, a Christmas account, whatever will make you happy and keep you from feeling deprived as you cut back on daily spending.
So start planning today, because every day that you don’t have a master plan in place is a day that you still mired in debt with no way out.
