If you haven't yet read and done the things discussed in my earlier post titled "The Starting Block," I suggest you go back, read, and do those things before continuing on with this one. We're about to start drawing the line from point A to point B, so you'll need to catch up first. For everyone else that's ready to move on, here's step #1: Save $1000 cash as a starter emergency fund.
I've taken step #1 directly from Dave Ramsey's book "The Total Money Makeover." After just having to replace two tires and a refrigerator within a 6 week time frame, my emergency fund definitely came in handy. I hated to have to use it, but it was better than racking up more credit card debt. Think of a time when an emergency expense came up that you couldn't afford. Now, imagine how different the situation would have been if you had the cash to cover it. It probably would have been a lot less stressful and would have had less of an impact on your finances, right? That's why you'll need to prepare for emergencies now before we our next step.
I will add this, be mindful of minimum balance requirements for your savings accounts. For instance, if your bank has a $500 minimum balance requirement, you will be charged fees if your emergency costs you more than that amount. In theory, out of the $1000 that you save, you will only have access to $500 without incurring a penalty. In which case, you would actually need to save $1500 so that you have access to the full $1000. Make sense? Just keep that in mind before you get started.
Now you have your first step. It's suggested that you complete the first step in about 4 weeks. You will need to budget in order to reveal the "extra" money. It will take some hard work, discipline, and commitment, but you can do it. I think you'll surprise yourself. So get going. Your first step to freedom awaits!
Change requires action!