Getting Started

To be out of debt requires a change in the way you live. Until you see that you are the problem with your money, little or nothing is accomplished.

In our last study, we set up a budget (hopefully). We listed all our debt and expenses. We are not ready to begin living on our budget. There are two things we must do before we begin our budget. We must set up an emergency fund and secondly, we must find money from our budget to pay on our debt.

The first priority is building an emergency fund. To start with, our goal is to build an emergency fund of $1,000. To some this seems almost impossible. To others, they carry that much in their wallet. This fund will grow larger after some of our debt is paid off. This is a rainy day fund and, as Dave Ramsey says, “It is going to rain, so you need a rainy day fund”.

This fund will not be enough to meet every need, but it is a tremendous help. Emergencies are the biggest enemy of your budget. Things happen. The washing machine quits! This $1000 goal is so very important! We all like to win and this gives you your first opportunity to have a victory in your new challenge of becoming debt free! The emergency fund is not for purchasing things or for going on a vacation, it is for real emergencies!

For most families ($20,000 year income or more) the emergency fund can be raised in one month! If it takes two months - go for it! Here are some suggestions to help raise the $1000: (1) Work extra hours. (2) Sell items on Craig’s List. (3) Have a yard sale (4) Sell the extra clunker which is often the third vehicle no longer driven. (5) Deliver pizzas on Saturday night. (6) Work a part-time job. (7). If necessary, sell a big item which you can do without.

When you have $1000, you need to put it in a secure place - that meaning a place where it is not easy for you to get it. Deposit it in a savings or money market account. Online banks (FDIC Insured) give better rates of interest. If you keep this $1000 in cash around the house, it will be too much of a temptation to use this money for “non-emergency” items!

If your car has an emergency, unexpected break down and it costs $400 to fix it, replenish the fund before you go back to paying off debt. If your washing machine fails, etc. use this fund! But remember, I must replenish my emergency fund to $1000. This may seem juvenile and over simplified, but we are unthinking money!

One reason we want to be debt free is because a recent survey found that 49% of Americans could not pay one months expenses if they lost their income.

Remember, we want to control our money. Again, Proverbs 22:7 tells us that the “borrower is servant to the lender” meaning VISA, SEARS, J.C. PENNEY, CHASE, etc. are in control of our money! We are determined and dedicated to regaining the control of our money!

At the beginning of our study, we stated there were two goals we must accomplish before we set out living on our budget. Our first one was the $1000 emergency fund. Now our second goal is to “find money” in our budget.

We will now examine our budget work sheets to find money which we will use to pay off our first targeted debt.

It is important that the husband and wife work together on every aspect of your new financial goal!

“To be set free from financial bondage is being liberated from this world’s hold.”

UnTHINK MONEY:
Ways to Waste Your Money: BUY ON IMPULSE!
When you buy before you think, you don’t have time to shop around. Impulse buying is usually a result of the “lust of the eyes” or the “lust of the flesh” or maybe both! A night to sleep on the buying decision often reveals it was not really needed. Check your budget and then comparison shop!