A few years back I was struggling to teach myself to manage money better. I made a decent living but was never satisfied with the rate at which I was paying off my school loans and other debt. I rarely had any money left over at the end of the month to save. I was living like millions of others: month-to-month. I tried various finance applications, read various books on the subject but nothing seemed to really help me get control of my finances. Then I came across one book in particular which changed the way I thought about budgeting and debt. More about that later.
My basic strategy was as follows:
- Write down all my monthly expenses, savings, assets, and debts
- Every payday withdraw cash for groceries, entertainment, and spending money: put into envelopes
- Build an emergency fund of $2,000 for unexpected things such as car repairs
- Finally, concentrate my extra money every month on debt, starting with the smallest balance
