The Total Financial Transformation (TFT) Continues…

Posted: July 6, 2007 in challenge, change, creating a budget, credit card debt, credit card diet, credit cards, debt, experiment, finances, investment, living poor, long range plans, Me, wisdom

Why don’t you make your savings automatic- that is after you finish paying off those high interest credit cards? Let me address the latter before tackling the former.

It makes no sense to put your savings in a bank account with less than 2% interest while your credit cards accumulate debt at 16-20% interest. Plus, if a true emergency occurs (i.e. your car breaks down) you can access that money on your credit card just as easily, if not more so, as if it were in your savings account.

Once you’ve paid off those high balance credit cards set up at least one savings account. Give them names based on your financial goals: New Car (well new to you), Trip to Hawaii, Rainy Day, etc. Once you’ve put away $1,000 or more you should start considering other investments with higher returns like stocks, mutual funds, IRA’s, etc.

Either make contributions to your savings accounts automatic on the day after pay day or make sure you write the check to these accounts (or transfer funds) first thing BEFORE paying even a single bill.  Trust me, you’ll learn to live on what is left over.

Now you are climbing out of debt and building up a financial future- both freedom and security.  I don’t know about you, but I cant wait to experience the feeling of being debt free!

  1. Michelle says:

    Good pointers! You said “trust me, you’ll learn to live on what is left over”. That is so true. I think the more money you have available to you, the more you spend. Right now we are going to be helping my bro in law & wife/baby by having them move in our basement. They will be paying next to nothing for rent. The point is that they save up some money to stand on their own two feet. Luckily, they don’t have cc debt. But what they do have are really bad spending habits. He has a job making hardly anything and she is a stay at home mom. Somehow they have top of the line clothes for themselves and their daughter and she goes and gets pedicures. Then they complain they have no money!! No wonder they can’t even afford an apartment. So my hubby and I are going to let them stay here, but on the condition that they sock some money away and get their own place. We don’t want to be caretakers forever! I’m just hoping they learn that they can live without the extras for now.

  2. krislinatin says:

    is dave ramsey one of your links?
    he is really good, i listen to him on talk radio.
    smart guy.

  3. You should always put your money towards the highest interest rate, whether in savings or paying off debt.

  4. isaacme says:

    Paying off debt is def. the best way.

  5. Ms. Green says:

    I may have missed it, but have you mentioned actually have a “budget”? I have a weekly spreadsheet that I allocate our earnings to by category – and I stick with it. If there is nothing in the “clothing” category, then no money for clothes that week! Same goes for eating out, entertainment, etc. etc.

    I pay God first and myself second. Then the only debt we basically have is the mortgage and utilities. I also believe in having an “emergency fund” for …well…for emergencies!

    This is a great topic you’ve got going here. Christians especially should learn to manage their money responsibly (good stewardship).

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