Quote:
Originally Posted by LuxLiving
Only advice I'd give is to set a minimum for what you NEED in the checking/cash to last till end of month to feel secure, for some it's $500, for others $2500 or more, whatever that magic number is? Set it in there and keep that balance in there as your buffer then throw down all else you can free up on that debt!!
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This is a great idea. Personally, my "buffer" is no less than $500, preferably keeping at least $1000 in checking at all times. That buffer has saved me many times from overdraft.
The other side of making sure you don't over-run your accounts is to know exactly how much you spend each month. Save receipts for absolutely everything over a 2-3 month period, and keep track of them on a spreadsheet at home (at least, this is what I did. Alternately, you can just carry a running tally in a notebook you keep with you). Once you know how much you spend each month on everything from housing to groceries to soda at the vending machine, you know how much of your paycheck you need to live on. The rest, you can allocate to savings and debt repayment.
One final note -- make sure that you
are saving. Debt repayment is great, but if you don't have savings to back you up, you can find yourself going right back into debt if an unexpected expense comes up. Allocate a certain percentage (start small, and eventually build up to at least 20%) of your gross income to savings (this includes your EF, IRA, TSP, and also general savings and investments). If you need help figuring out how to allocate your money between expenses, debt repayment, and savings, post the details of your situation and we'll be happy to help you out.
Welcome to the boards, and congratulations on starting to eliminate your debt! Keep it up!