Hammering Out a Debt Reduction Strategy: First Things First
I've been doing a lot of reading and thinking and calculating as I try to come up with a debt reduction/savings plan that will actually work in real life and not just on paper. Boston Gal suggests in the post Saving Yourself that before you start tackling debt with push payments, you should have at least one paycheck in savings. I think that is a wise idea. What good is it to apply every available cent toward debt if we're only going to have to use the cards when an unexpected expense arises? I'm taking action one step at a time, so here we go:
1) Save one paycheck for each of us and deposit it in the HSBC savings account.
Once we have accumulated a paycheck's worth of savings, I'd like to schedule a reasonable deposit for every week. Does anyone have any suggestions for a percentage of our earnings that should go toward savings rather than debt reduction?
posted by Mountain Girl @ 7:32 AM
2 Comments:
10%? I have about 10% going to a 401K right now and I am building up my emergency fund with 10% per month. However, I am free to lower that as I see fit. It's taken me a long time to save up this money, but it's been worth it for the peace of mind.
You might just do a fixed amount to make sure you've got room in the budget for the regular savings. That's how I started and slowly built up saving 10%. As soon as my emergency fund is complete, I will stop saving that 10% and pay down my debt.
10% sounds like a good target. Thanks for the advice.
Post a Comment
<< Home