Look at my debt.

We live in a world with our bank accounts on our finger tips, but it’s so easy to pretend like its not there. My debt is a lot and hard to look at directly. I’ve laid it all out here.

Create a budget.

This is huge. I have always tried to live by a budget, but I never really felt like it was something I could every live by. budgets for groceries or eating out felt like suggestions, not rules. I have my whole budget planned for every upcoming paycheck.

It’s best not to plan too far in advance because things change, but every cent needs to be accounted for. Change things as you go. Doctor’s appointments, cavity fillings, laundry detergent, all of these things that cost a little extra some months.

Get a mini-emergency fund.

$500. That’s my goal. It needs to be in cash, and it needs to be stashed away so I can’t spend it.

37% of American’s can’t afford a $400 emergency. That’s a car insurance deductible, a trip to the ER, an emergency house repair. It is vital that I have something that is not a line of credit to fall back on.

Snowball my debt.

There are two ways to pay off debt, the avalanche or the snowball. Both work, but I am unmotivated and need instant gratification like everyone else on the internet, so snowball it is. Pay off the smallest debt first, get some easy victories in.

My smallest debt is less than -$100 and my most expensive debt is more than -$5000. It’s gonna take time to get to all of them.

Treat myself like the child I am.

Cut cards, freeze credit, lock up emergency funds. I cannot trust myself. I will not ignore history in the face and pretend like I can magically do this now.

A lot of people (myself included) are against cutting cards, not out of some respect for big oils contributions to the the little rectangles in our leather pouches, but because we think we need them. or can take advantage of some offer. I think it is important to cut up most of your cards with one cavate, keep a lager line of credit until you have a fully fledged emergency fund. Once that is complete, I can go sans plastic.

Get an adult emergency fund.

After I pay off all of my debt, (I do not expect to reach this step for 20-24 months), I will save for 6 months of expenses. That’s around $2,000 per month sans debt. $12,000. This will need to go into a high-yield savings account, but we are getting ahead of ourselves.

This is a huge step, it is financially security. it’s knowing if you get let go? You are okay. Health emergency? No big deal. Car broke down? I can handle it. This is probably the most influential step to financial recovery.

Start retirement.

15% of my gross income needs to go into retirement accounts. This needs to be my companies 401K match and once that is maxed out, I need to add an IRA account as well.

I’m not going to talk in “if you are XX old and you save $XX every year for XX years you’ll have $XX by the time you retire” language. Statements like that help maybe 10% of the population if that. It is only discouraging to 70%. It’s never too late to save.

Save to spend.

I want to make one thing clear. I do not plan on not living my life before this step. I am still going to restaurants, seeing movies and going on trips. All of these things bring happiness in my life, and I’m not denying myself of them.

However, I do know that I need to get these things under control. So from now on, I will be limiting myself heavily from going overboard. One drink when going out with friends, splitting an appetizer and going for a center-priced entrée, eating out 2-4 times per month.