2020 was a year for the record books. This past year has brought many issues for many people, from job losses, reduced wages, not to mention healthcare issues. If this past year didn’t convince you that you need an emergency fund, I am not sure what will.
For us personally, we have had job furloughs and reduced hours – therefore less income. Luckily, we have an emergency savings to help us out. In addition, we took on part time weekend jobs for additional income. What about you, how are you surviving?
Our goal for 2021 is to get our finances back on track – replenishing our emergency savings and eliminating debt. Fortunately, we are back at work and earning income (and we have kept the additional part time work). So here is our plan:
- We continue to automatically save a portion of each paycheck.
- We have made a plan to pay down some debt we accumulated.
Notice that we are doing both at the same time. Personally, I don’t believe that all your money should go to paying down your debt while not saving anything. If you have an unexpected expense, then what will happen? You will go into more debt. That’s why I believe in doing both at the same time.
For us, we are using the snowball method to payoff the debt we have accumulated. What is your plan to get back in track in 2021?