Dave Ramsey teaches in The Total Money Makeover that the first baby step to getting out of debt is to establish your emergency fund. Your emergency fund must be a minimum of $500 or ideally $1000 cash that is strictly reserved for life’s unexpected scenarios. It’s imperative that all members of your family or your partner fully understand that this fund is NEVER to be touched unless agreed upon by both partners and ONLY in an emergency.

I have clients who argue that this action delays them from getting their credit cards paid off. “But that $1,000 can almost eliminate one card! Why shouldn’t I just put it toward that card?” This is tempting to do, for sure, but consider this: You have no emergency fund and your transmission blows, you break your arm, you have to fly home suddenly for a family emergency. One could argue that since you paid that $1,000 to your credit card, you can just use your credit card to pay for these emergencies. Guess what, you just used your credit cards – you broke the cardinal rule to seriously getting out of debt. And you HAD to use your credit cards to pay for the emergency because you had no other funds to rely on. Now you have interest building on this emergency and you are back in this nightmarish debt cycle. You are back to square one.
Simple choices are the key to eliminating your debt, getting rid of money-based marital or relationship stress, and to begin seriously building wealth. Simple choices get you into debt and simple choices will also get you out, depending on your level of intensity. I can help you understand how to make the RIGHT simple choices dozens of times a day to get you off the treadmill and actually on the path to eliminating the debt cycle in your life! Call me today at 877–477–6450, and let’s get started.