So lets talk about The Baby Steps….
Step 1 : I know it says save €1000 this is for your Emergency Fund . I think this is personal. For me I saved this amount for the reasons that this is a single income family and when something goes wrong it can really go wrong. I really think you should adapt this to your own situation and keep an amount of money for emergencies that your comfortable with. I will go into this further in a separate post.
Step 2: Pay off debt it does exactly what it says on the tin there are 2 different methods that I would suggest for you to pay off your debt but it really does depends on the type of debts you have. First we have the Snowball method which lists your lowest debt figure to the highest. Then you have the Avalanche method which starts with the debts with the highest interest rate to the lowest. I chose the Snow Ball method as I thought it would be perfect for me as my loans were low interest and I’m a sucker for instant gratification so clapping myself after every repayment at the start really kept up the momentum. By the time I was onto the big repayments, I knew the ropes.
Step 3: This is where I currently am now. So I’m aiming to save 4 months emergency fund. I already have €1000 that only exist for emergencies. I’m going to add €5000 to that this year. This is also my emergency fund but it’s extended now for bigger emergencies. If something happened to me for example I loss my job atleast I know i’ll be okay for 4 months. I will always add a tiny amount to this to keep up the habit of saving even after I’ve reached this target.
Step 4 : This is where you start looking ahead. Do you have a pension? I am looking into this as I’m interested in compound interest. As of now I won’t go into it too much but will probably update this post when the time comes.
Step 5: I’m looking forward to doing this so. It would give me such joy to know I have a little money to give my babies to pursue whatever they are passionate about. If it’s college then so be it, if it’s a house deposit then so be it or maybe they want to see the world. I’m down for whatever they choose to do within reason ha ha.
Step 6: Pay off your mortgage. This one kind of scares me. However when your in The Debt Free Community you see so many ordinary people like myself do extraordinary things. My mortgage situation is complicated. So that’s another I’ll see when it comes to it.
Step 7: This will be my favourite thing to do and I’m telling you I’ll be so sneaky with the things I’m already planning he he. I heard it can be addictive and to be honestly I can see why.