No. of Recommendations: 1
I've learned a lot so far--there's a large stack of credit cards living in my freezer that I've stopped using--the snowball idea is really helpful-- but now it's time to ask my first question: How do I start figuring out how much to pay myself? I usually pay whatever bills are due and then live on whatever's left over but I'm trying to switch over to the "pay yourself first" idea. Where do I start?

Well, if you're still carrying a lot of credit card debt then you won't be able to pay yourself first because you need to get rid of that anchor that's dragging you down. However, you will need a budget. It will show you what you've got coming in and what you've got going out and will force you to prioritize. If you've paid all the credit cards but you don't have any money for food, then you've done your budget badly. Right now, the only paying yourself you should do is to get a small emergency fund of say, $1000, in the bank in a checking account. This money will cover you when you are working your way out of debt and your transmission falls out of the car. It won't cause new debt because you'll have a small cushion. After that and necessities, put all the money you can on your debt and get rid of it as quickly as you can. If you need help, feel free to post more details and we'll get to work on them :-)

Print the post  


UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.