![]() (If you’re a one-income household, aim for six months of expenses. Figure out how much money you’d need to live for three to six months if your regular income went away. Now, you’re going to build up that emergency savings fund so it’s strong enough to stand up to bigger problems, like job loss. It’s not forever, and when you’re living free from debt, you’ll look back and see the work was totally worth it.īaby Step 3: Save 3–6 Months of Expenses in a Fully Funded Emergency Fund In fact, really challenge yourself and see just how thrifty you can get while you’re on this step. How: Remember those money-saving tricks from Baby Step 1? Use those, and then put all that extra cash toward paying off your debt. Pay off one debt at a time from smallest to largest, building your momentum until you’re debt-free. Now it’s time to attack debt with a vengeance using the debt snowball method. You’ve got $1,000 saved up so you can use that money instead of going deeper into debt when an emergency hits. You want to thrive-and the thriving starts here. Pick a few and start saving up now.īaby Step 2: Pay Off All Debt (Except the House) Using the Debt Snowballĭebt’s good for one thing and one thing only: holding you back. The ways to earn or save $1,000 are nearly endless. Try selling stuff, clipping coupons, saying no to extra expenses, planning your meals, eating out less, using or selling old gift cards, and downloading money-saving apps. It just takes a little focus and some hard work. You can save $1,000 quicker than you think-really. How: Start saving more money and spending less. ![]() Your washing machine won’t live to spin again. Your kid busts his chin and needs stiches from the ER. Your car’s catalytic converter gives out. 1That means 68% of them are borrowing, selling or going into debt when life happens. Only 32% of Americans say they can pay cash for a $400 emergency. But how do you climb a mountain? One (baby) step at a time.īaby Step 1: Save $1,000 for Your Starter Emergency Fund You might feel overwhelmed, like you’re staring up at a mountain of hard work. If you want to do better, be better, and live better with money, you might not know where to start. The 7 Baby Steps are the proven plan to paying off debt, saving money, and building wealth. We’ll bring the budget part in at the end, but first let’s learn how to get ahead with money in just 7 Baby Steps. You can too! You need a budget and the Baby Steps. Listen, I love spending money, and thankfully I can do that and still reach my money goals.
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