If you want to know how hard it is to get out of debt, until you try to get out of it.
It’s not that you don’t do what you are supposed to or that you are a bad person, but the same pop up situations still appear regardless of whether you have decided that your life will change or not.
You suddenly need a car that runs, and then there are holidays and birthdays etc… Then later there are taxes and you suddenly owe a few hundred to them because you didn’t take enough out in your retirement savings.
The one thing I have noticed that every month, there suddenly comes a new expense. Something else I had conveniently forgotten.
We all do! Who the heck wants to remember that you suddenly have fire wood to buy or new winter tires to put on your vehicle and factor that money in that won’t be coming out of your debt this year. You want to make sure that all your money gets you out of debt as quickly without a hitch.
We all become super optimist when it comes to that. Myself included.
So having done this for almost a year and realizing that this stupid stuff will keep popping up, I am now putting aside about $400 a month for these sudden changes of things.
You would think $400 is a lot, but really in the end it’s not. Four new tires, $400. Five cords of wood $400 if not more. That’s 2 months already. You can call it a sinking fund or whatever, but I have realized the importance of it. Especially when you are trying to stop the dipping in and out of the credit you are trying to pay off. If you don’t use it (which won’t happen, trust me on this) you can always use it for a vacation or put part of it in your debt.
An emergency fund is good, but sometimes just doesn’t cover it. And you would think $1000 would take you far, but in today’s world with the price of things as it is you need to be realistic.
If you are realistic with your budget today, you can make sure that your pay off rate can stay consistent and you will eventually see the end of a debt.
It’s all organization and planning for unforeseen/or conveniently forgotten things that may pop up and take you by surprise.
Do you have sufficient money put aside for the stuff that dips in your wallet every year?