I just watched my dad's business go under and he is laid off now. (Lost contract after inbev took over)
It has added an emotional oompf to really get cracking.
We have an EF. We are on a cash only system. Our only downfall is a pile of student loans. And to maintain our debt repayment levels, we are taking out about $1k each more in student loans this year.
These are the Baby Steps:
Pre-Step 1: Get current on your debts and do a budget
0.1 Commit to NEVER borrow $$$ again-DONE
0.2 Talk with spouse and get him/her on the same page as you concerning finances. DONE
0.3 Do a written budget DONE
0.4 Temporarily stop all retirement contributions DONE for me, but DH still does an auto 401K. It's only 35 a paycheck so I think I will leave it for now.
0.5 Get current on all the basics (Shelter, Food, Utilities, Basic clothing) DONE
0.6 Amputate "toys" (bikes, boats, ATV's etc) if they will keep you from completing the snowball within 12 months. DONE
0.7 Cut lifestyle (Cut CATV, Cellphone, Regular phone "extra's", Internet, Eating out, etc) and/or take second job if $1000 EF will take more than 30-90 days. *sigh* We cut eating out. I cut out all but the basics for our phone. We have internet.
0.8 Get current on ALL bills DONE
BS1 $1,000 to start an Emergency Fund
1.1 Chop up/freeze CC's (You have an EF now) DONE
1.2 Get Health insurance NOW if in the US (chances of getting sick w/ major medical bills are larger than that of death)DONE
1.3 Get Life insurance NOW if you have considerable debt/your family couldn't make it financially if you died. DONE
1.4 Amputate cars that you can't pay off within 24 months. All cars paid off, but we could probably sell a couple.
1.5 Consider raising insurance deductables to $500 or $1000. DONE
BS2 Pay off all debt using the Debt Snowball
2.0 Do the debt snowball, paying all your debts from lowest BALANCE to highest. WORKING ON IT!
2.1 You can take your first vacation since finding Dave if you can pay cash for it (no using the EF !!!) Already bought the tickets to Disneyworld!
BS3 Three to six months of expenses in savings
3.1 Start car replacement fund.
3.2 Save up 20% for home purchase OR pay down existing mortgage to the point you can drop PMI. Starting
3.3 Start furniture or other non-essential stuff replacement fund.
BS4 Invest 15 percent of household income for retirement
BS5 College funding for children
BS6 Pay off home early
BS7 Build wealth and give! Invest in mutual funds and real estate