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Casual Articles - Debt Relief: Emergency Fund vs. Paying Down Your Debt
One of the most effective advertisements for a product or service can be a customer testimonial or a review from an objective source. With all of the hyped up advertising copy out there, consumers are skeptical of marketing efforts.This can be difficult to overcome, but as an affiliate, your job is to pre-sell the offer and initiate the relationship of trust between the consumer and merchant. And a recommendation from a satisfied client or industry publication serves as a very persuasive sales tool.The testimonial as affiliate text link provides tangible proof to your site visitors and newsletter readers that the company you are promoting is capable of doing what they boast about. This sort of creative can be as short as several words, or as long as a paragraph or full page.You'll notice that most affiliate programs do not offer testimonials as affiliate text links, but that doesn't mean you can't use them. It's actua
So what did I do? I became more responsible of course!
I quickly cut back on most of my frivolous expenses and started building up my reserves. By the end of the year I had several months of living expenses set aside and today I can sleep at night with no worries of missing a payment or defaulting on my loans.
WINNER: Funding your Emergency Fund
Tie Breaker
So we have a tie. How do we break it?
You decide what's best for you.
So what option is best for you?
So which of the above three are most important to you? If you want to get out of debt as
One of the great advantages of advertising and marketing on the web is it’s cheaper than traditional print based promotions. No printing or photocopying fees. No postage costs.And with email you can communicate to your prospect almost instantaneously.So why bother with promoting your site offline?The biggest reason is that most people are getting overwhelmed by the amount of email they receive, especially spam.They may delete your message thinking it’s unsolicited email even though they have given you permission to contact them.Also, the increasing use of anti-spam software to filter out unwanted mail is unfortunately targeting legitimate email as well.I’ve been hearing a lot from other online publishers about the decreasing response to their email offers and how many of their customers and prospects aren’t getting their ezines anymore.That’s why I suggest you supplement your online mar
Picture this debt nightmare. You have just created your first net worth statement and you have decided that priority one is to pay down your debt, but you agonize over sending every last cent toward your outstanding debts because you have nothing in savings. You also have read 68 books on personal finance and know that you are supposed to have at least 3 to 6 months set aside in an emergency fund just in case you have, well, an emergency.
So what do you do?
I come across this question so frequently, that I had to write an article addressing the situation.
An emergency fund is definitely a must have in terms of financial security. You really should NOT start investing in anything until you have set aside some money for the unforeseen expenses that are part of life.
On the other hand, you also know that paying down high interest loans and credit card debt is also an important step toward building your secure financial house.
So which is better: paying down your debt or building your emergency fund?
And which is best for you? Read on to find out.
In order to answer the question of which option is better, paying down your debt of funding your emergency fund, I think you have to look at three main areas: Return on Investment, Stability and Peace of Mind
Return on Investment
If you pay down debt with your extra monthly cash flow, you will get a better return on your money than if you funneled it into a low-risk, low interest paying savings or money market account. When you pay down high credit card debt you are effectively earning whatever rate of interest your credit card charges you.
If you are paying 15%-20% interest on your cards, I hardly think there is anyone who could come up with an investment option that would provide those returns guaranteed.
WINNER: Paying down your Debt
Stability
What do I mean by stability? I mean to ask you how stable your financial life is and can you weather a storm of unforeseen expenses.
You do not want a blown boiler or doctor bill derailing your financial freedom plan. Having a kitty of cash set aside is important to pay for those unforeseen expenses. But getting your debt to income ratio lower is just as important.
If you lower your total outstanding debt, you should be lowering your monthly minimum payments, thus increasing your free cash flow. WINNER: TIE
Peace of Mind
For years I lived paycheck to paycheck and I was miserable. Instead of having a well-funded emergency fund, I decided to invest a set amount each month into mutual funds and then I spent whatever was left over. I had maybe a month or two of living expenses set aside in a savings account.
One winter my car died on me and I had to buy a new one, which wiped out my savings and added a new monthly expense. Several months later I barely had enough cash for a wedding present for one of my closest friends. It was then that I realized that I had to make some changes.
So what did I do? I became more responsible of course!
I quickly cut back on most of my frivolous expenses and started building up my reserves. By the end of the year I had several months of living expenses set aside and today I can sleep at night with no worries of missing a payment or defaulting on my loans.
WINNER: Funding your Emergency Fund
Tie Breaker
So we have a tie. How do we break it?
You decide what's best for you.
So what option is best for you?
So which of the above three are most important to you? If you want to get out of debt as
All over the world, thousands of people ask the question : Is it possible to make money with an online home business?They have a dream of a life in freedom. They dream of being able to get loose from the nine to five ball and chain. They want to get free from the daily mind-numbing commute. They want financial independence.The dream is about working from home, or to be able to work at the beach in a tropical paradise. The question is still unanswered. Is it possible to make money with an online home business? Or is it just a dream?From time to time, some doom-sayer comes out from the shelter and predicts the end of small business on the Internet. It will be only the big businesses that can make it on the Net. Small home businesses will not stand a chance. Is there any reason to listen to these prophets of doom?Let me answer that question with an example. Some years ago, the end of the Internet itself was predic
On the other hand, you also know that paying down high interest loans and credit card debt is also an important step toward building your secure financial house.
So which is better: paying down your debt or building your emergency fund?
And which is best for you? Read on to find out.
In order to answer the question of which option is better, paying down your debt of funding your emergency fund, I think you have to look at three main areas: Return on Investment, Stability and Peace of Mind
Return on Investment
If you pay down debt with your extra monthly cash flow, you will get a better return on your money than if you funneled it into a low-risk, low interest paying savings or money market account. When you pay down high credit card debt you are effectively earning whatever rate of interest your credit card charges you.
If you are paying 15%-20% interest on your cards, I hardly think there is anyone who could come up with an investment option that would provide those returns guaranteed.
WINNER: Paying down your Debt
Stability
What do I mean by stability? I mean to ask you how stable your financial life is and can you weather a storm of unforeseen expenses.
You do not want a blown boiler or doctor bill derailing your financial freedom plan. Having a kitty of cash set aside is important to pay for those unforeseen expenses. But getting your debt to income ratio lower is just as important.
If you lower your total outstanding debt, you should be lowering your monthly minimum payments, thus increasing your free cash flow. WINNER: TIE
Peace of Mind
For years I lived paycheck to paycheck and I was miserable. Instead of having a well-funded emergency fund, I decided to invest a set amount each month into mutual funds and then I spent whatever was left over. I had maybe a month or two of living expenses set aside in a savings account.
One winter my car died on me and I had to buy a new one, which wiped out my savings and added a new monthly expense. Several months later I barely had enough cash for a wedding present for one of my closest friends. It was then that I realized that I had to make some changes.
So what did I do? I became more responsible of course!
I quickly cut back on most of my frivolous expenses and started building up my reserves. By the end of the year I had several months of living expenses set aside and today I can sleep at night with no worries of missing a payment or defaulting on my loans.
WINNER: Funding your Emergency Fund
Tie Breaker
So we have a tie. How do we break it?
You decide what's best for you.
So what option is best for you?
So which of the above three are most important to you? If you want to get out of debt as
New Yorker, Mike Filsaime started in the auto industry over 14 years ago as a car salesman, because of his ethics when it comes to work, by 1993 he found himself to be in the management position. He was making money and doing what he was best at. He had started another venture in a real estate investment firm that, unfortunately due to a massive financial hit by his partner, wound him up with foreclosures and dooming the venture.Instead of just giving up on his dreams, Mike Filsaime took the concept that this was only a minor temporary set back, and if you had made money once in the past, you can regroup and make money again. These positive outlooks on things led him to the world’s biggest growing entity, Internet marketing.You would never think that a person in a position such as his, having gone through countless let downs throughout this period in his life, would be so quick to pick up and look for a “way out”. Even thou
If you are paying 15%-20% interest on your cards, I hardly think there is anyone who could come up with an investment option that would provide those returns guaranteed.
WINNER: Paying down your Debt
Stability
What do I mean by stability? I mean to ask you how stable your financial life is and can you weather a storm of unforeseen expenses.
You do not want a blown boiler or doctor bill derailing your financial freedom plan. Having a kitty of cash set aside is important to pay for those unforeseen expenses. But getting your debt to income ratio lower is just as important.
If you lower your total outstanding debt, you should be lowering your monthly minimum payments, thus increasing your free cash flow. WINNER: TIE
Peace of Mind
For years I lived paycheck to paycheck and I was miserable. Instead of having a well-funded emergency fund, I decided to invest a set amount each month into mutual funds and then I spent whatever was left over. I had maybe a month or two of living expenses set aside in a savings account.
One winter my car died on me and I had to buy a new one, which wiped out my savings and added a new monthly expense. Several months later I barely had enough cash for a wedding present for one of my closest friends. It was then that I realized that I had to make some changes.
So what did I do? I became more responsible of course!
I quickly cut back on most of my frivolous expenses and started building up my reserves. By the end of the year I had several months of living expenses set aside and today I can sleep at night with no worries of missing a payment or defaulting on my loans.
WINNER: Funding your Emergency Fund
Tie Breaker
So we have a tie. How do we break it?
You decide what's best for you.
So what option is best for you?
So which of the above three are most important to you? If you want to get out of debt as
Soon after I finished a brief seminar on how to accomplish more in less time every day, Roger shook my hand and said, “I can use what you said. But there is one thing you didn’t talk about. It is something that drives me crazy. I can’t get anything done because I’m in meetings all day long. We have gone overboard on meetings. We discuss practically everything as a team before making decisions.” I asked Roger for his card and I called him later that afternoon with some ideas that could help get him and his team out of their meetings trap.Don’t let meetings keep you from getting your work accomplished. It’s not uncommon for meetings to claim more than 50% of a business owner’s or manager’s time, especially when you factor in waiting time, discussion that is unfocused, and appointments that have to be rescheduled. Many key businesspeople claim meetings are their biggest time waster. Can anything be done? Yes. Here are five smart ti
If you lower your total outstanding debt, you should be lowering your monthly minimum payments, thus increasing your free cash flow. WINNER: TIE
Peace of Mind
For years I lived paycheck to paycheck and I was miserable. Instead of having a well-funded emergency fund, I decided to invest a set amount each month into mutual funds and then I spent whatever was left over. I had maybe a month or two of living expenses set aside in a savings account.
One winter my car died on me and I had to buy a new one, which wiped out my savings and added a new monthly expense. Several months later I barely had enough cash for a wedding present for one of my closest friends. It was then that I realized that I had to make some changes.
So what did I do? I became more responsible of course!
I quickly cut back on most of my frivolous expenses and started building up my reserves. By the end of the year I had several months of living expenses set aside and today I can sleep at night with no worries of missing a payment or defaulting on my loans.
WINNER: Funding your Emergency Fund
Tie Breaker
So we have a tie. How do we break it?
You decide what's best for you.
So what option is best for you?
So which of the above three are most important to you? If you want to get out of debt as
During the late 1950s there went the story of Lycra that remained almost unknown until 20 years further. Inventive things mostly have the lengthier period of commencement. But the most fortunately the people over the world have now adopted cotton fabrics that are specially designed to protect the bodies from the commuting strain.For easy and comfortable travel conditions these days we have Waterproof, wrinkle proof and in some of the case even the temperature proof Travel wears. The fabric that adjusts according to the wearer's body temperature makes the traveling between the different climatic areas comfortable. Now we can have many necessary things from fabric like the material of running shoes that allows the feet to breathe freely, stockings or the socks saturated with vitamin C for keeping legs healthy during winter seasons and the healthy / restorative fabric from milk protein fibers.Innovative Fabrics from Japan
So what did I do? I became more responsible of course!
I quickly cut back on most of my frivolous expenses and started building up my reserves. By the end of the year I had several months of living expenses set aside and today I can sleep at night with no worries of missing a payment or defaulting on my loans.
WINNER: Funding your Emergency Fund
Tie Breaker
So we have a tie. How do we break it?
You decide what's best for you.
So what option is best for you?
So which of the above three are most important to you? If you want to get out of debt as fast as possible and don t care if you have an emergency fund, you would be best served if you use all available funds for paying down debt.
If you toss and turn at night thinking of that mountain of debt you are carrying every day, you might sleep better knowing that if you lost your job you have cold hard cash set aside to pay your bills for the next six months.
Why not do both?
So why bother choosing either one? Why not do both?
This is what I did and I am sure it seems like a copout, but you get the best of both worlds when you attempt to do both at the same time. You also get the satisfaction of knowing that you re paying down your bad debt and you get the peace of mind that comes with having a little change in your pocket.
Hey, You don't need to save 3 months right now!
When I first work with people on cleaning up their financial house, they instantly gasp and make this funny look on their face when I suggest that they need to set aside 3 to 6 months of living expenses. "I can't save that much" or "What about paying my debt off?" they'd ask.
Yes, it s true that 3 or 6 months of expenses is a lot to set aside, but the truth of the matter is that you do not have to set the 3 months aside tomorrow. You can do it over time.
Start small by immediately saving enough for one month's expenses. This is an arbitrary number of months, but it is a good starting point to shoot for. In the meantime, pay the minimum on your credit cards if you have to, but save enough for that one-month's worth of living expenses.
Then when you have got that saved up, deposit a set amount each month into your emergency fund and plow the rest of your free cash flow into paying down your debt.
Building your emergency fund dollar by dollar
If you skip a night out on the town, put the money you would have spent into a cash can (a plain old empty coffee can or jar will do). When you cook dinner instead of going out, put that money into your cash can. Every night put your spare change and a little extra into your emergency fund. Repeat often.
Every weekend, go to the bank and deposit that money into your emergency fund account. You can choose to wait until you have enough money to roll your change into packs that your bank likes. Avoid those change machines at the shopping center. They charge you close to 9% for the privilege of counting your money i.e., doing something you could easily do.
Now you are well on your way to building your emergency fund and paying down your debt. Once you have three or four months of living expenses set aside, start accelerating your debt repayment plan.
I am Paying Down My Debt, But I Have NO Free Cash Flow
What if you are living right to the edge and don't have much money set aside?
Hold the mother of all garage sales, take on another temporary job, scale back your living expenses, move to a lower cost neighborhood,
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