It’s not as difficult as you think

Dear Dave,

I’m single, and I make $35,000 a year. Next year, my salary and bonuses should be around $50,000. I have a little over $30,000 in debt right now, including student loans, and I’m not sure how I’ll be able to keep up with bills and everything else right now if I have to save $1,000 for a starter emergency fund like you recommend. Can I get by with a starter emergency fund of $500?

Jonas

Dear Jonas,

I really think you’re making this whole thing sound a lot harder than it really is. They key is making and living on a budget, and that’s not rocket science. It’s a simple, written planning process where you give a name and a job to every dollar you make before the month begins.

Food, shelter, clothing, transportation and utilities are necessities, so they come first. After that, make sure you’re current on your debts. Once all that is out of the way, put every spare dollar you can into your emergency fund. If you do this with a sense of urgency, and limit spending to necessities, you’ll be surprised by how fast it will happen. And you’ll love the newfound sense of security.

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