I posted here about your first step to getting out of debt. Essentially, it was recommended that you track all your spending for 30 days. At the end of those thirty days sit with your spouse, if you are married, and decide if you like the financial direction you are heading or if it’s time for a change. This second step will not mean anything until you first make the decision that something needs to change.
Steps To Get Out of Debt #2
While I called the first step “simple”, this second on is not so simple. Over the next 30 days, accumulate 10% of your monthly gross income. As an example, if you typically get paid $4,000 you would want to accumulate $400 in the bank at the end of this 30 day period.
How could I possibly accumulate 10% of my monthly income in 30 days?
1. Save the money. Since you know exactly what you are spending see what you can remove from your budget for 30 days. During this step we are not talking about a lifetime away from a restaurant – just 30 days. For 30 days can you cut your grocery budget? For 30 days can you stay away from the movie theater? Think about ways to slash your budget for just 30 days.
Rules: You cannot save your money by discontinuing paying someone. In other words, if you have been paying your credit card bills, electric bills, or whatever, don’t stop during this 30 day period just so you can save your money. Find somewhere else to squeeze out that money.
2. Earn extra money. If you are convinced there is no possible way to save 10% then go out and earn an extra 10%. In this example, you would need to try and think of a way to earn an extra $400 in 30 days. Get a job delivering pizzas, deliver newspapers, cut grass, have a garage sale, sell something on Ebay, sell something on Craigslist. Again at this step you are not being asked to commit years to this work schedule, just 30 days.
Here is a review of the first two steps for getting out of debt:
Steps to get out of debt: Step One: Track all your spending for 30 days. Decide if you need to change.
Steps to get out of debt: Step Two: Over the next 30 days accumulate 10% of your monthly gross income.