Tuesday, September 16, 2008

Back to Basics Post 8 A Few Parting Words

For the final post in this series I just wanted to talk about what to do when all the debt is gone.

First of all, you need to think about the future. Dave Ramsey suggests continuing to save until you have 3 to 6 months worth of income in savings. This will cover you if you lose your job unexpectedly.

After that it is time to think about retirement. You should be able to max out an IRA at this point. If your job gives matching contributions for a 401K contribute the maximum amount.

If you are fully funding the retirement accounts each month then you can think about saving for a house, or kid’s college, etc.

I have also made it very clear to everyone that once my debt is paid off the first thing I am going to save for is a trip to Disney. I ran the numbers recently and by the time we are done paying off our debt we will have $1600 coming in free and clear each month. In two months we would be able to have enough money for a great vacation. (We don’t pay that much in debt each month but we do have two kids in daycare and they will be out by that time.)

So, once you start really working at it you will see your debt clearing up and many possibilities for the future. I hope if you are not already using the steps in Back to Basics that you will start soon!! I hope you have enjoyed this series!! Thanks for reading!

No comments: