Use a monthly budget so you can execute your STG/LTG (short/long term goals) because without a target you’ll miss every time. Paper vs digital each have its pros and cons so whichever you find yourself being consistent with is the one you should use. Set up an Emergency Fund. Establish some Sinking Funds. Sinking funds are savings for specific things that you plan to spend someday. For example: a Christmas fund (it comes every year why are we not preparing for in in January vs waiting until oct where now it breaks the monthly budget because you aren’t preparing in enough time where it didn’t make such a large impact on the monthly budget, another example is a car replacement fund. YES, you can absolutely buy a car in cash. For the record I’d never recommend buying a brand-new car because the amount of value you lose as soon as you drive off the parking lot is insane, buy new to you, used with low mileage car for 15k or less. If one can discipline yourself to pay a lender monthly $425.00 plus interest for 5 years you can absolutely pay yourself $425.00 minus interest for 3 yrs and build up your own cash to buy outright.
Interest free is a no brainer, right? Well not exactly and here’s why; interest free or not you still owe someone money and if you don’t pay there are consequences that include late fees, default and repossession for long term default in monthly payments. I warn against deferred APR too. It’s a full-time job staying on top of how long you have and how much is needed to be paid so you don’t get hammered for the full amount of interest given you don’t comply to paying if off by the deferred date. I see this over and over because most people don’t just have one debt they have multiply and overseeing them all is challenging on top of the daily distractions we all have. Most of don’t remember what we did last week let alone what deferred APR loan we took out 9 months ago. That my friend is exactly what the lender is hoping for. If you forget they get a BONUS!
Let me keep it real for you so you don’t get a false sense of net worth. Your net worth total is of all your assets minus your debt. So, if your total assets are 500k and you owe 500k you have a $0 net worth. If your assets are 250k and you owe 150k your net worth is 100k. Asset examples include:
*Retirement and other investment accounts (401k, 403b, IRA’s)
You can check out your own net worth with Dave Ramsey free net worth tool at www.ramseysolutions.com/retirement/net-worth-calculator