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Author: Leviathan Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 310999  
Subject: Re: 1st Post/Newbie starter question Date: 6/19/2002 2:34 PM
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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 :-)

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