January 28, 2011 13 Comments
I mentioned in my last post that I’m going to go at the Baby Step #1 with full force. To this end I want to get my $500 Emergency Fund set up by the end of February. Here’s how I’m planning on doing it:
Current E-fund balance: $140
Fetus Step #1: Continue to transfer $50 per paycheck in to E-fund via direct deposit.
I have 3 paychecks between now and March 1st. This will net me a total of $150 in my E-fund to being my balance to: $290.
Fetus Step #2: Reduce payment on credit card to minimum for one month.
Right now I’m only paying $100 over my minimum, so this will get me to $390 in one month.
Fetus Step #3: I’m reducing the amount of money I give myself for toiletries and food every two weeks by $30.
I’ll do this for 3 pay periods, giving me an extra $90 dollars. After this fetus step my Emergency Fund will be at $480.
Fetus Step #4: Reduce payment on mattress to minimum for one month.
I have a 0% interest loan on my mattress I needed/wanted to buy when my sister moved in with me. I have my automatic payments set to pay this off in 11 months and my 0% interest ends after 12 months. Skipping one month won’t put me behind schedule, and I have a feeling I’ll target this bill and then snowball the payment once I get my E-fund in order if Dave Ramsey has his way. 😉
My minimum on this is $40/month, so I’ll reduce my payment from $105/month to $40/month and put the remainder ($65) into my E-fund.
Which means after one month the value will be $545. HUZZAH! A little E-fund pot that is full of money. Yes, it is over $500 – I’m totally okay with that. I’m leaving a buffer in case the $30 decrease every two weeks is too much for me. 😉
I’ll be rearranging my automatic payments to arrange to do this immediately. It will be awesome to have a nice full E-fund in a MONTH rather than just slowly building it over time like I have before. Then I can concentrate my efforts on my debts.