When I first started getting serious about paying down our debt a few months ago, I searched for solace in other people on the Internet. I mean, I knew debt was a huge problem in our country (nay: the world) and I needed to know I wasn’t alone in making debt repayment a priority. This is how I found the awesome personal finance community. Real people, making real changes to their life style, and being really *gasps* honest!
Reading about how in debt some of these people really are and how much they have been able to pay down is so inspiration! But I was confused when people started discussing their emergency funds. I mean I knew what an EF was but I was and it’s purpose but I thought that the luxury of having a few thousand dollars just lying around was only something that could happen once you were out of debt. The more and more I read, the more I understood: if I really wanted to be truly debt free I need to stop having to rely on credit in case something happened. How is the debt ever going to go away if any progress you make gets racked up again? We need a safety net. So after discussing a bit with my husband we agreed each paycheque we would set up automatically transfers to a savings account we would open. If we didn’t see the money we wouldn’t be tempted to spend it. Now if you told me last year I would have close to $5000 in savings I would say your insane, and then tell you I need it to pay off my credit cards – which I would then max out again in a few shorts months, never learning any lesson.
I’m hoping by the end of this month we will have met our first goal of having $5000 in our savings account. We are pretty happy with that number and won’t be making extra payments to that account until we get our line of credit completely paid off (by extra payments I mean before if we every got any additional money we would split it 50/50: half going to debt and half going to our savings). We will keep those automatic transfers though as we’ve gotten into the habit of not having that money available to us and I don’t want to get used to it again, lol. And that’s just it, saving isn’t as difficult as I thought it was going to be. Saving is just a habit, and I really am kicking myself for not realizing this earlier, but alas hindsight is 20/20.