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Level 7

How To Prioritize Emergency Funds, Savings and Paying Off Debt

These suggestions work better the younger a person is and the more gainfully employed a person is. Personally, for a senior living on a fixed, limited income who barely makes ends meet, I do not find most of these suggestions especially pertinent. For example, here are my specific reactions to your suggestions:
1. Save a mini emergency fund of $1,000. HOW CAN WE DO THAT?
These days $1,000. might as well be a million dollars. There are constant emergencies i.e. car repairs on our 2003 vehicle. We have to come up with loans for that. A new A/C unit was needed when we moved from a studio apt to a one bedroom. We actually had to seek assistance from a nonprofit community organization for that.
2. Fortunately, we do not have any debt that is official. We have an informal payment plan for services and purchases that we pay down monthly. So there is no need for us to refinance credit card debt.
3. Focus on  Saving
How can we save when we barely make ends meet on a monthly basis? I admit that we do make self-indulgent purchases. But they are small and one of the few pleasures we have in life. Even though it would be a good habit to save even $5-10/month, that will not take us very far. So we've opted for the short term pleasure of small purchases rather than the long term goal like investing in a hobby or taking a vacation.
4. Create A Debt Payoff Plan
As I mentioned in #2, we have our informal arrangement for a debt payoff plan. Although we have been diligent with it, I find that the suggestions your article makes are clearly for much younger people.
In conclusion, we were Middle Class, gainfully employed, living in a house, owning two cars free and clear, and having investments. Then 2008 came. We lost just about everything. As a result, we went 'from Middle Class to One Day From Homeless'. To find out more, go to our story in a three eBook Amazon Kindle series, The Former Middle Class eBook Series.

Level 7

How To Prioritize Emergency Funds, Savings and Paying Off Debt

KristineS5 In theory, some of what you say makes sense. But there is one major point that does not work for us. It also is the foundation of our expense reduction program. The 'responsible and profitable' use of credit cards is essential to our lives.

The system I have developed for us is not easy and not doable for many people. But it is actually a 'part-time job' for me. The fact that I have over an 800 credit score means I am doing something right. Between new card promotional bonuses and cash rewards, our expenses are reduced by about $100/month.

We are seniors in our 70s with much less energy to be physically productive. So we need to look at life differently and take different actions. 

I'm not saying we have it down perfect or that there is no room for improvement. There always is room to learn and grow. But given where the ball landed in 2008 into 2009, 'From Middle Class to One Day from Homeless', we are building a new life with very different 'rules' from the other life we had before.

Level 2

How To Prioritize Emergency Funds, Savings and Paying Off Debt

Hi I’m 31, have worked constantly since I was 16 years old. I have never had an emergency fund it seems like a pipe dream to me. I have had to live paycheck to paycheck every day of my adult life. The one time I did actually have decent credit, tragedies happened and forced me to use my credit cards to provide for my family. Now I am riddled with crushing debt, barely scraping by every month(coin star king). Oh on top of that I was let go from 2 jobs in 1 month and was late on rent. Now my family has received our final eviction notice and have 48 hours before the sheriffs will throw us out in the street. There is no emergency fund.
Level 7

How To Prioritize Emergency Funds, Savings and Paying Off Debt

It’s almost impossible to save anything with rents so ridiculous. But my method of madness has always been to give up food if I want to attend a concert. (We don’t have any extras like cable, home phone, internet.) When I fell a bit short for my last field trip, I thought ‘Hey, if I can give up food for a few more months, I won’t owe anyone a cent!’ 😁🎶🤔

Level 2

How To Prioritize Emergency Funds, Savings and Paying Off Debt

You say you're retired, and I know the last thing you want to hear is to maybe go back to work. But consider a part time job at a hobby shop or home improvement store. Even 10 hours a week can add up at the end of the month especially if you both find something. Not to mention the discounts, try to get a simple job at a place you regularly shop at already, the discount could pay back quite a bit. 

Level 3

How To Prioritize Emergency Funds, Savings and Paying Off Debt

 Can closed accounts be removed 

_D
Level 7

How To Prioritize Emergency Funds, Savings and Paying Off Debt

That was my problem i e dipping into savings until I opened an investment account at Schwab. A trade in my preferred stock EAST will total plus or minus $50 including the $5.00 broker commission and if I budget $30/mo it will build without easy access.

_D
Level 7

How To Prioritize Emergency Funds, Savings and Paying Off Debt

That was my approach as well but alas I am a compulsive eater so I. started going to the State Food Bank to save money for saving which translates to I owe Meals and Wheels $7K (an option if you are old as whilst they bill you, they don’t stop your lunches if you can’t pay) and  stingy I.e. 10% tithe to St Andrew’s Episcopal Church for the food bank and the point is make a budget and do without to save money.  As needy as I am, it’s the only way.

Level 3

How To Prioritize Emergency Funds, Savings and Paying Off Debt

Does anybody have a recommendation on a good debt consolidation company that will gather up $10,000 in debt and allow me to make one monthly payment for it all? Any comments appreciate.

Level 2

How To Prioritize Emergency Funds, Savings and Paying Off Debt

 
Level 2

How To Prioritize Emergency Funds, Savings and Paying Off Debt

I have found the best way to save is do set up an auto save type account. Like a roll-up. Fir example if I spend $25.67 it auto-rolls up my debit card payment to $27 - and puts the $0.33 in an account.  There are multiple apps that can help with these. Stash, Acords, Robinhood (I use all three)

There are also apps for rainy day fund and student loan (Chipper and Digit) payoffs that roll-up too.  It’s minor amount each transaction. But over this year I’ve saved/invested nearly $11k in rollover funds. I say invested because some use your roll-over money to invest in small amounts of stocks - which can also help by paying off dividends. 
fir example I have 1 share of KO (Coca-cola) in Robinhood app. Last time I got a payment back of 1.06 in dividend ‘free’ money - the. I reinvest. 
just ideas that with four ideas that work for me. 
Kirk 

Level 2

How To Prioritize Emergency Funds, Savings and Paying Off Debt

I started a savings account through the company’s preferred bank I put30.00 in it

monthly

i never use it and into second year I have 600.00 for an emergency fund 

Level 2

How To Prioritize Emergency Funds, Savings and Paying Off Debt

With an 800+ credit score you could probably charge others for a tradeline.

Level 2

How To Prioritize Emergency Funds, Savings and Paying Off Debt

Good info in general👍

Just a few thoughts/hindsight from content I have gathered, in Podcasts/Books including (JL Collins/Ramit Sethi/Choose Fi/Dave Ramsey/The mad Fi-entist/The money guy show/Chris Hogan/John C. Bogle) Who all have fantastic and unique angles on personal finance/investing.

1.   Save a Mini-Emergency Fund

Absolutely a cornerstone.Not one of the experts stated above will disagree.As Uncle Dave would put it "it keeps murphy from knocking on the door". It was also in my case, the spark/challenge for me to actually "save" and alter my professional spending lifestyle.I worked to play,and burn up every paycheck on the next venture.Believe me there were a lot of bogus things that I just couldn't live without!!

EMERGENCIES ONLY!! I know that your favorite band is important too and need some support..Draw the line in the sand...

During this time, I also took the plunge to add up my total debt/net worth..Yikes.Needless to say,I also added up how much I paid in interest on "dumb debt"..And a spark turned into a small flame.No more!

Step 1 is a fantastic time to see where your at, good or bad..gather up every bill/cost/debt/headache.Bring it out of the darkness and lay it out.GET A PLAN to escape..Don't be like me,and wait until its a code red emergency!😥

 

2.   Refinance Debt

Ehhh..Sure.True,putting a bunch of small bags of debt into one big bag of debt,makes you less prone to forget or lose a debt bag along the way...Again True, a lower interest rate takes off a little weight on the consolidated ruck sack of debt.Nonetheless, you still have a bag of debt on your back.I targeted the "heaviest" little bags I could find..and made sure those left my bag first.The biggest takeaway I got from all this..I'm tired of packing a bunch of bogus weight on my back!

Now here's where the line gets drawn in the sand with #2...

"After you refinance, keep making the same payments you were previously. Doing so will shorten how quickly you pay off your debt without forcing you to make any changes to your lifestyle."

If your big and strong and you like packing heavy things around..Fantastic..But as you grow older..Its not all that fun anymore.This is the key time to alter your spending lifestyle and really question/challenge what is essential or not.

 

3.   Focus on Saving

All great things here..Dave Ramsey is big on 15%. savings..The FIRE guys are big on "as much as you can" so you can retire early.JL collins is "keep it simple" Ramit the same..John Bogle has forever changed and has been a blessing for us "average joes" with index funds.But my problem was..I owed everyone and their dog money plus interest.How can I invest!!?? Well if I could have invested what I paid in interest over the years into a Roth IRA...Sure would have been nice..😓Quit paying banks! Pay them off first.If you have a 16% interest credit card..Pay it off.Its a guaranteed ROI of 16% on your hard earned after taxes dollars that year with no capitol gains.Think about that one👍 Get your people paid off before you jump in head over heels investing.However if you company has a vested match...DO NOT leave money on the table.Although i'm not 100% out of debt..I will do whatever it takes to leave no "free money" on table. 4. Create a Debt Payoff Plan

I feel like this should be step #1..A PLAN! You cannot build/create or really do much without a plan.With a basic financial plan..Spending/Cutting costs/extra income are no brainers.. The debt snowball/avalanche is just a preference on how you would like to attack debt and win one cut at a time. How do you eat an elephant? One bite at a time.This was also a fun time for me personally to listen to the various experts strategy's and decide what fit me best.

 

I am by no means a finance expert nor am I giving financial advise.I just started paying attention to the mud hole I was about to slide in. Sparks turn into flame,that turn into a large fire.Take control of your future! YOU are in control of more then you think..It took me too long to figure this out! Good luck👍

Level 2

How To Prioritize Emergency Funds, Savings and Paying Off Debt

There are many opportunities to make a little (or sometimes a lot) while working from home. If you have a hobby, you might make things like candles, soap or woodwork to sell on Etsy. If not, there are other jobs like data entry or telemarketing that you can do while making your own hours. Not as fun but money is money. The opportunities are there if you look for them! Best of luck!