How would you do it ?

[tonttu]

I am trying to decide , what to do with my finances and savings and I need some opinions !

These are my options 

Would you , apart from the normal monthly bills like electricity , car insurance and that sort of thing 

a ) try to put as much money as possible in savings to build up a cushion for bad times ( or worse times than I already have now ) and only pay the minimum on my other debts until I have about 2-3 months of reserve built up 

or 

b ) try to pay as much off as possible in the shortest amount of day and only put a basic amount of money into savings , until all is paid - off 

And how much would you put aside , about as much as I would need for 2 - 3 months  if I have NOTHING coming in and would have to survive on that or more ? 

And what is the " envelope " method , I was reading about somewhere else , but can´t find that thread anymore ! Anyone knows about it , tried it and it has worked for them ? Or other ideas !

[larablue]

I would recommend building a cushion of 3-4 months living expenses.

After that, pay off as much as you can, as fast as you can.

Debts will weigh you down otherwise (you always know that they are there, so get rid of them as soon as possible!).

The envelope method works for me: I take 5 envelopes, 4 for every week of the month and one for extras like dining out.

I divide the money for one month onto the envelopes. You will know exactly, when you overspend. If there is money left at the end of one week, I transfer the money to the extra envelope (sometimes in the next week envelope, depending whether I know there will be higher costs).

[micah_mae_]

Dave Ramsey is the guy with the envelope system. He also has his "baby steps" for financial success.
1) $1000 emergency fund.
2) Pay off debt smallest balance first.
3) 3-6 months emergency fund.

There are more steps but these are the ones you mentioned..look him up if you're interested!

[Staceyy]

You could always pay a little extra on the credit cards and put the rest in savings. I would also be sure to stock up on food when it is on sale. A lot of utility companies will give you a discount if you pay ahead.

[EmsMom]

If (and when!) I live close to the edge, financially, I think it is more important to have some cushion than to pay debt,but i would say a couple of months bare bones spending and then split it up between debt and savings.  and always be on lookout for ways to increase your income.
 

[A&A]

With the envelopes, you literally get yourself some paper envelopes.  You label them with whatever you want them to be for.  Gas, entertainment, groceries, clothes, whatever.  (They are usually for variable categories, not fixed amounts like your mortgage or rent.)   You put cash in them, and carry the envelope around with you to the store.  When the cash is gone for the month, you don't spend any more money in that category, unless you allow yourself to "borrow" from another envelope.  It really helps you pay attention to how much you are spending, and for what.   

[lilacvioletiris]

http://www.daveramsey.com/new/baby-steps/ is where I started with saving $1000.  It took awhile for me and my DH to save the $1000 but it really did relax me to know if the transmission died, or something else that generally I would have used a credit card to "save" our finances.  At the same time, my DH and I created a zero dollar based budget and started using the envelope system for the areas of money that vary - groceries, gas, clothing, and blow (money to just blow for whatever we want).  This goes over the envelope system in a pretty good way http://www.daveramsey.com/article/dave-ramseys-envelope-system/lifeandmoney_budgeting/

There is a thread called "Getting out of Debt" that has others that are working on the Dave Ramsey plan to get out of debt.  One step at a time.

[tonttu]

Originally Posted by EmsMom 

If (and when!) I live close to the edge, financially, I think it is more important to have some cushion than to pay debt,but i would say a couple of months bare bones spending and then split it up between debt and savings.  and always be on lookout for ways to increase your income.
 

That´s kind of how I feel too ! If all goes to hell and I have nothing left , even if there is debt left , at least , I have something under the mattress , so to speak ! 

The income increase is hard for me right now , since am on maternity leave at the moment . Plus , I just shoved my low-life , no good for nothing bf out the door permanently ( and I am so PROUD of myself for finally doing it ) , but that also means , I have to make do with what I got . 

So every month , I have the same exact income , with a small increase coming hopefully soon , since I am getting a single parent bonus on the government children´s allowance , but it sure as hell won´t make me rich 

Better than nothing though , plus I am hoping , that he will at least pay a little bit for his kids , but knowing him and his non-existent working moral , that´s probably wishful thinking on my part .

Dave Ramsay is a good tip , that´s the name I was looking for , gotta get my things in order , it drives me crazy to not be on top of things , plus I still remember , when I had some money stashed away , how safe it made me feel 

Sorry for the rant , but I am having a hard time with life right now , we are at the point , where the boys and I go digging through recycling containers to find bottles and cans with deposit on them , so we can cash them in at the store