First Step To Getting Out of Debt: $1000 in savings, DONE!
Posted on by Forest in Debt, Saving Money & Finances
This is going to be a short post but some news that I think is worth passing on to you lovely readers.
If you don’t know, I am in quite a lot of debt. Around $38,000 to be precise. Luckily for me this debt is tied up in a system set up by a charity linked with the UK government. I’m on a debt management plan that means for now all my debt is frozen of any further interest and I pay an equal amount to all creditors every month. This means 100% of my payments go towards paying down debt. On my current plan it will take 18 years to pay off at approx $200 per month…. I don’t want to be paying debt for 18 years so I am working hard to getting a large wad of savings to pay off the debt in one big bulk payment as soon as possible.
If you want to know more about why and how I am in debt see the post Me, My Debt and I.
First Step Achieved, $1000 in an Emergency Fund
If you are trying to get out of debt or have been in debt and have been reading then no doubt you have been hearing about the method of getting $1000 put aside for any emergency that might pop up. This idea of The Emergency Fund is very much pushed by the likes of Dave Ramsey and many others. Personally I am not dead set on calling it an emergency fund but I do see it as a good buffer fund to have as a minimum in savings whilst paying down debt. This can really help you avoid getting any additional debt.
Yesterday I finally received some money I was owed and after working all my budget out I had enough to finally fill my savings account with it’s first deposit, $1000! I can’t tell you how good it felt to finally put that sum in the account and see the 00′s gone.
I’m winning the battle, what now?
I have been reading blogs like crazy, some real life books and generally keeping myself motivated. My hard work on my online business and cheap living in Egypt are allowing me to start getting my life together.
Next month I want to deposit at very least another $500 into the savings account and really start to get those numbers up. I don’t own property, I don’t have any large bills so I can see no reason to have to take any of my savings back unless something really serious happens (fingers crossed this won’t be the case).
How are you doing? I would love to know how you are winning the battle against debt.
If you think my $1000 this month was good then I am nothing compared to Red over at Girl With The Red Balloon. She was able to pay off over $3300 in debt this past month!!!!
Jolyn also just published a post with links to many other blogs showing debt payments and their monthly net worths. Great inspiring read! Read it here: Debt Snowball Update. She will be doing this every month.
For those needing help you should check out Money Help for Christian’s excellent debt snowball spreadsheet.
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28 Responses to “First Step To Getting Out of Debt: $1000 in savings, DONE!”
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August 5, 2010
[...] is to avoid using your credit cards for such things as they just re-enters you into the debt cycle. I recently started my savings / emergency fund with $1000. Dave Ramsey would be proud! Obviously though the more cash reserve you have the [...]
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Red
03. Aug, 2010
Thanks for the shout out! $1,000 is great! I can imagine the relief you feel having that emergency money set aside!
And gosh no, who wants to be paying off debt for 18 years? Geez…
Red recently posted..Julys debt wrap-up
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Forest
04. Aug, 2010
No probs Red, no way do I still want that debt in 18 years!! Will blast it in a few years I hope!
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Jason @ Redeeming Riches
03. Aug, 2010
Yeah!! Does Dave Ramsey do a “save $1,000 scream” ?
Great job!! Keep it up.
Jason @ Redeeming Riches recently posted..What’s Worth More – An Old Family Farm- Or a Vintage Comic
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Forest
04. Aug, 2010
I did a little sitting down dance when the money was being transferred
Thanks.
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Jolyn@Budgets are the New Black
04. Aug, 2010
Great job! You’re on your way!
I just did a round-up of a bunch of Yakeziers who posted their debt updates recently, but I missed this one! I’m planning on doing a link-up every month for people to share their debt and net worth post updates… Would you do me a favor and go to my site and link-up this post? I’ve never used inlinkz before and I’m anxious to see how it works! (Hopefully I did it right and it Will work!
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Forest
04. Aug, 2010
Hey Jolyn, I tried the inlinks but it just took me to a blank page after I submitted… Let me know if it came through.
That’s an excellent post you have done, I am adding it to this post now.
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Jolyn@Budgets are the New Black
04. Aug, 2010
Thanks for trying. *sigh* Back to the drawing board. Any suggestions? I am so not a techie guru.
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Jolyn@Budgets are the New Black
04. Aug, 2010
Wait- it did work! Yea! Isn’t this the second time I’ve done this with you? Thought I didn’t do something right but I really did?
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Forest
05. Aug, 2010
Ahhh cool. I’m not sure, it’s ringing a bell but I can’t remember what it was!
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Financial Samurai
04. Aug, 2010
Sweet! How did you get the gov’t to freeze the interest on your debt? What did you take it out for? Would love to read a “how to” post and stuff!
Good stuff building up your EF.
I loved Budgets New Black’s debt round up post too.
Financial Samurai recently posted..Millionaires Need Love Too Ya Know
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Forest
04. Aug, 2010
I went into a debt management plan with a company recommended by the government sponsored charity…. Been meaning to write up about it for a long while so will try and move it to the beginning of the queue. The debt itself started from borrowing money for family members…. I wish I could have at least had some fun with the money I owe but sadly I spent none of it
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Ruth - Web Career Girl
04. Aug, 2010
Congrats Forest that’s great news! I think everyone, whether in debt or not, should have an “emergency” fund.
Ruth – Web Career Girl recently posted..Building Links Back to Individual Pages
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Forest
04. Aug, 2010
Thanks Ruth, yes I agree…. I’m going to grow it as large as possible too.
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Jackie
04. Aug, 2010
Congrats on getting that $1000 in savings! You are on your way
Jackie recently posted..Seven Ways to Attend College Without Taking Out a Student Loan
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Forest
05. Aug, 2010
Thanks a million Jackie
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simply stephen
04. Aug, 2010
Forest…well hot dog! I’m not there yet with the savings but manage to erase a tiny bit of debt each month.
You inspire me to set aside something every month (a habit I have not practiced for a few years now) that can be applied as a long term debt payoff. Every little bit helps.
simply stephen recently posted..how to mobilize your life
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Forest
05. Aug, 2010
Thanks Stephen, that’s prob the best way to get some savings racked up. Mine was a lump sum but I have been planning it for a few months. Next month should be another lump sum but then will likely be down to smaller monthly installments for a while.
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Joe Plemon
04. Aug, 2010
Forest,
Congrats on your $1,000 “buffer” account! You are on your way! How long do you think it will take you to save the entire $38,000 needed to pay off all your debt?
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Mysti
04. Aug, 2010
Great job! Don’t diminish your accomplishment…$1000 bucks, is $1000 bucks!
The small victories help fuel the fire (a la Dave Ramsey style). We took a Dave and Man vs Debt Debt Tsunami approach and paid off a debt that was emotionally draining, and it was fantastic. We are going to pay off one more smaller debt, then tackle the larger ones, in interest order.
I am proud of ya!
Mysti recently posted..Bliss – August 4- 2010
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Forest
05. Aug, 2010
Thanks Mysti
…. Sounds like you have everything under full control!
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youngandthrifty
05. Aug, 2010
Wow, that’s great!
Congratulations on paying $1000 off!
living in Egypt I’m sure will definitely help you pay off your debt- that’s a good idea.
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Forest
05. Aug, 2010
Thanks, yes Egypt does help but on the flip side it’s pressuring to go and do touristy things as you always think “I will probably never come back once I leave!”.
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Khaleef @ KNS Financial.com
05. Aug, 2010
This is a great accomplishment! I can’t wait until you hit your next goal.
I can’t wait to make a similar post. We are actually doing one month of expenses before we tackle debt, so it’ll take a little longer.
Khaleef @ KNS Financial.com recently posted..How to Create a Budget – Setting Goals
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Forest
06. Aug, 2010
Thanks very much Khaleef, Good luck with your debt and keep us all updated.
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Danny @ Frugal Quack
08. Aug, 2010
Way to go, Forest. Another thing you will notice is that when you start to save, it gets easier with time. And the awesome “peace of mind” you will get from just having it there, will totally motivate you to add more and more and more.
Keep it up and in no time that $1,000 will be $5,000 and so on.
Happy to hear of your progress, as usual will keep following to hear more.
Danny @ Frugal Quack recently posted..Freebie Friday- Lotion- Pet Stickers- Cheetos and More
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Forest
08. Aug, 2010
Hey Danny, thanks very much for your comment. I am already looking forward to the end of this month so I can pile some more cash in there…. Every payment is like dropping a little stone of the weight that i carry on my back.
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Carley Burtner
16. Jan, 2011
I don’t claim to be an expert in the field, but I do see some inconsistencies in your logic. I do, however, appreciate the fact that you took the time and effeort to address this sensitive topic. Thank you.
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