Dave says that in order to pay off debt, we need to assess our current regular income and expenses. Then we should locate where we can increase what we bring in and/or decrease spending. Next, he recommends saving a starter emergency fund in order to ensure that we will not add to our debt if or when a situation arises (this is what he calls Murphy - Murphy's law). Once the emergency fund is built of $1,000, we need to list out all of our debts from smallest to largest amount and begin putting any additional income to the smallest debt. Continuing down the list, we use the same process until the very last debt is paid off. This is called the snowball effect.
Looking at 2017, I have decided to increase the amount used for entertainment and clothing. I have also decided to add into my budget a small amount for home decor. YOLO, right? (What can I say? ... I had to find a way to use this term - I'm a millennial after all!). I had given on up adding more furniture to my home, buying new clothes and going on big outings with friends and family due to the intensity I felt of needing to pay down the debt immediately. Well, one thing I failed to realize is that there should always be a balance in life. It is a simple idea and yet so crucial to happiness. This year, my focus is on having a great balance of financial success, healthy living, increased knowledge, building a closer relationship with God and enjoying a robust, fulfilling lifestyle.
Here's what I am doing to make this all happen.
1. Focus on Finance. I will continue to pay down debt and will cut spending on unhealthy foods (think packaged and already prepared foods... Ramen your time is up). I have also cancelled my Netflix subscription to save an additional $120 a year to use towards paying debt.
2. Healthy Options. I will begin reading more health information. I have also begun eating more raw veggies, being stricter with meal prep and becoming more active by taking daily walks.
3. Plan something fun every week/weekend. I will budget for fun activities. Some activities costs, others cost little and others are completely free. I have been focused on planning at least one event or activity each week to do for fun with friends and family. So far, so good!
4. Learn something new each week. I am dedicating time each week to read a new book, explore a specific topic or study an area of interest. Right, now I am reading The Shack for fun and brushing up on HR law and immigration policy. I am also learning sign language (ASL) at my local church.
5. Dedicate time each morning to pray and thank God for a new day. This one is pretty self explanatory. One on one time with me and the Creator when I awake in the morning.
Let's continue strong into 2017 and make it a great year!