So it is February 2018 and as part of the ongoing effort to create the website I thought I would share with you how much it costs and how much income is earned from the website and the other things that we do. I am initially just going to share the income and expenses from the website. Eventually I will try and add other income and expenditure so we can share a wider picture of what we earn and what the outgoings are. So here we go month two
Now that we have our emergency fund set up so if those inevitable problems happen it is now time to start setting ourselves up for the long term. For people who do not own a property for themselves this is the stage at which we start saving for a property to live in.
Really we want to save a large deposit so that we do not have to take on a big mortgage, most mortgage companies will be looking for a deposit of at least 15-25% so that you can access the lowest possible mortgage rates.
Now that you are free of all debt apart from any mortgage that you may have it is now time to super charge your emergency fund so that you have 3-6 months of expenses saved. This money again should be placed in a saving instant access account so that in an emergency you can withdraw the money if required without any penalty. Again this money should not be used unless it is a genuine emergency. You should not invest this money in any type of investment as we are really not concerned about this money making you money it is purely to be used for its purpose.
Rather than continue talking about debt I thought it would be a change to look at housing again and how much we should be spending on our housing. I have written quite a lot about debt and paying off debt but housing is one of those things that people wish to buy that will more than likely require the taking on of some debt. This is mainly due to it requiring several years to be able to pay for a house out right so it is more than likely that you will need to take on some debt in the form of a mortgage. But one of the most important things to consider when buying a house is your ability to afford the house payments. If you are struggling to save money when you are renting and your rent is not equivalent or more to the proposed mortgage payment then you will need to look at either saving more money or probably not looking at buying but continue to rent.
Now that we are set up with an emergency fund and budget in place it is now time to start getting rid of all your consumer debts and paying off any loans that you may have along with paying off car payments and if possible any student loans.
You can really start with whichever debt you like.
You could start paying off the smallest debt as this will allow you to see some debt repaid early this quick pay off of one of your debts can provide good motivation early on, that will allow you to stick to your debt reduction plan. Once this first debt is paid off this will then allow you to concentrate the money saved on the first debt to repay your next biggest debt. You can then continue this method to pay off all your remaining debts until they are all paid off. This should leave you with plenty of income to spend to build up your retirement or to save towards a house or other goal.
The debt bubble burst many years ago,
The next bubble is growing,
Where is it going to go,
Will it keep inflating,
Till the bubble pops,
Or will we come to senses,
Will it come to a stop.
Bubbles in housing,
Bubbles in stocks,
Bubbles in bonds
Will it ever stop.
Let me know what you think in comments below.
This is the stage we need to make sure that we have enough money for those small inevitable emergencies that happen in life this could be anything from an unexpected car breakdown to some sort of medical problem that you need to pay for. Really this need to be £500-£1000 it may take several months to build up this small emergency fund but it will be one of the keys that will stop you from having to rely on debt again. The whole idea of this stage is that it stops you from having to get in debt ever again.
Even though you may not think it, this is the most important stage to becoming debt free and sorting out your finances it is. This is the time when you need to look at how much money you are making from your work, your business and any assets you may have attained that create an income stream so you can then look at what your total income is.
We have been looking at getting a new car recently as we have two cars one is a Honda Civic the other is a Citroen Picasso. Both are over six years old in fact one is approaching ten years old. Both are still running well as far as I can tell but the older car will probably need some money spending on it soon. So I thought I would look at the different way I could finance a new car.
So it is September 2017 and the site has been active for two months as part of the ongoing effort to build the website I thought I would share with you how much it costs and how much income is earned from the website and the other things that we do. I am initially just going to share the income and expenses from the website. Eventually I will try and add other income and expenditure so we can share a wider picture of what we earn and what the outgoings are. So here we go month three.