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.