STEP 4 – SAVE A LITTLE CASH
Now that you have planned for the future, it’s time to save a little cash.
If you are in debt, your #1 goal was more than likely your desire to eliminate it. A key step in eliminating your debt is to make sure that you do not accumulate more. To combat this, you need to have a small cash cushion in place to handle those “unexpected expenses” that we all seem to have.
You know what I am talking about. Those times when the tires need replaced or the roof starts to leak. When you do not have cash stashed away to pay for these unexpected expenses, you probably find yourself paying with credit.
I recommend you save at least one month of your fixed expenses before you start attacking your debt. In other words, look at your monthly spending plan and save at least the required expenses you have. For example, if your rent, groceries, utilities, debt payments, gas, etc. come to $2,500 per month, you should save that amount.
I can guarantee you that these “unexpected expenses” will come. When they do, there will be no need to stress because you will have the cash to pay for it. You will no longer worry about credit limits or that the rent will not get paid. Just pay for the expense, move on and save the cash again.
The one month of expenses should be pretty easy to save. You may already have the money. If not, you need to get creative in saving for it. Buckle down and reduce expenses. Sell some of the crap that you has been accumulating in your house. Get a part-time job. Just get it done.