How To Prioritize Emergency Funds, Savings and Paying Off Debt

[KStevenson]

@Shermy05   I would urge caution on using a debt consolidation company.  First, a debt consolidation company is not applying all the money paid to them to the debt itself. I'll use your example below of the $100 payment. Please bare in mind I am making up numbers to illustrate a point.  ** Please also realize there is nothing a debt consolidation company can do that you cannot do for yourself. **  You too can negotiate, although it may be intimidating, you can do it!  

This company negotiated a $100 per month payment for their client to send them. This same company has negotiated perhaps only $75 total payment due to debtors, pocketing $25 of your hard earned money in their pocket. That is generally how debt consolidation works. So the $100 you thought was going towards debt is really only $75, prolonging everything. Something to think about.  I have helped any number of my clients negotiate with their debtors.  We literally have a 3-way conversation. 

In my experience people generally feel a short-term sense of relief getting the debtors off their backs and stopping those collections calls. But the deeper issue is to understand 'why' you end up in debt in the first place.  Sometimes it is due to circumstance beyond our control (extreme medical crisis), but in most cases it has to do with living beyond our means, and not making wise choices with our money.  <-- been there, done that - which helped me change my life and become debt free in all things, and saving for the future. 🙂

Need help with your finances? Contact me at here. 

[KStevenson]

@Alison - will do! Always interested in learning about other people's experiences. 🙂

[Alison]

Thanks @KStevenson,
Your feedback means a lot to me. My husband and I have worked very hard to research, experiment with, document and share the tools we have devised these last ten years as part of our SUCCESSFUL FINANCIAL SURVIVAL KIT. Our ultimate goals are to continue to survive ourselves and to share how we have done it with others in need.

Sincerely,
Alison D. Gilbert, https://www.facebook.com/SavvySavingSurvivalist/
@Alison

[reynoldscf95]

I suggest paying yourself first! When I first started budgeting, I created an online savings account that was at a separate bank from my checking/credit card. I put an automatic direct deposit in and never really saw the money because I was typically concerned with my checking/credit card bank. Eventually, I started increasing the amount I would save ($10 to $15 to $20...).

When an emergency did come up I had the amount saved up and I didn't have to change my budget that much!

[cassro0319]

USED MY EMERGENCY FUND TO PAY MY DENTAL BILL,NOW I HAVE TO START OVER

[KStevenson]

@cassro0319  - wow !! Sorry to hear, but thank goodness you had this in place making your emergency inconvenient (miserably so sounds like), but not a financial crisis causing you to reach for a credit card.  This is really a great example of the precise reason this fund is SOOOO incredibly important.  I'd like to share this elsewhere if that's ok?  I'll keep you anonymous. 

Thank you for sharing!

[Mviscaina]

YouNo thank 

[Mviscaina]

No thank you 

[Hard Truths]

You have experience regarding the importance and impact the emergency fund role plays in your life. Your attitude toward making mature decisions about your own life and future are paramount to your successes. Not only did you get your emergency handled but you also created a plan that reduced your stress in what could’ve been a very stressful situation. A virtual hug just for you!! Let’s focus, once again, on your future and rebuild that e-coverage. Congratulations! I would be interested in your method or system you use to recover your e-fund.

[MsMonroe1973]

My Fiancé and I have been able to put a lot back and it does make a huge difference, every chance we get we put back or pay off more debt. 
And we still have plenty of money to play with. 

[KStevenson]

@MsMonroe1973  - good job!  I would encourage you to keep paying off your debt and equally important, before you get married, have money discussions about your future as a married couple. What goals would you like to accomplish? How will make your money continue to behave for you? Create a budge together. When you get married it's not so much your money or his money, but your together money. 😄  Keep some fun money built into your budget for each of you. Maybe agree to a dollar amount that if it's more than a $250 purchase we will agree to talk with each other first: do we need this or want this? is it further our financial goals? is this a good price? can we postpone buying or is this a good time to buy? etc.  

Congrats too on your future marriage!

[Hard Truths]

Congratulations on your future marriage! It’s always nice to read about a mature minded couple who are on the same page with life’s journeys. Maybe you would be kind enough to share with other readers in the community your financial planning strategy that has provided you with your current status. Sharing those steps you feel got you there can possibly help trigger someone else to follow in your wise footsteps. Enjoy the honeymoon!!

[MEG817]

I use an app called Qapital. It's what helps me save for an emergency fund. Super easy and basically does the work for you. Helps you create goals too! I think what i need to work on is consolidating my debt.. student loans and credit cards!

[5919Valva]

KristineS5, you are AWESOME! It sounds like you took a Class!

[KStevenson]

@5919Valva  Thanks!   And yes.  I went to the school of hard knocks!!!  Took me several tries before I finally passed class.  ;D   

Now I help others out through this forum (and others), as well as through my work here!