This year I want to do it right

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  • #80693 Reply

      Okay long story short from 2018-2023 once a year I got a check from a lawsuit due to my dads passing anyways I have beyond screwed up every year in the past. This year I want to do it right because I know my dad wouldn’t want me to struggle and feel like I’m drowning trying to work so many hours and so many jobs to barely pay minimum payments. I am thinking this is what I’ll do but I just need reassurance I’m doing this right.

      1. Pay all credit cards off and call to close the account once payment processes.
      2. Pay my taxes I owe.
      3. Start a sinking fund with the rest so I can move on to paying off my car with all my extra income I’ll have with no minimum payments ever again.

      If put the extra money all towards the car and I need new tires or an expensive fix of plumbing or whatever else I will know I can cover it with cash and I cannot put myself in debt again.

      I feel like starting a sinking fund with the rest will help if life gets flipped upside down because I cannot and will not put myself in debt again and I’m embarrassed to know I messed up every year before paying my credit cards falling back into debt shortly after then using shopping and spending as a coping method when really I just was too afraid to heal properly and get help when I needed it to be able to not turn to spending money when I felt sad. Please let me know if you think this is a good plan.

      #80694 Reply

        Yes! Use the money to pay off loans and close out those loans. That is financial freedom. No more enslavement to banks.

        #80695 Reply

          2. Should be first. 1. You can close the cards even if they are not paid off so dont wait. But then id say follow the steps. Smallest to largest. 3. I dont understand what you mean, you dont need a sinking fund to pay off the car just pay on the principle.

          #80696 Reply

            Nice that you get a check BUT income and debt seem to be issues. Address both. Follow the BabySteps. It’ll get better. You may need to use the check to cash fund a car and sell the one you have.

            #80697 Reply

              Are you up to date on all bills? If not get caught up.

              $1000 emergency fund if you don’t have it.

              Pay taxes first then as much debt in full as you can. Pay the rest towards the car.

              Start small sinking funds as you pay the car off. But the emergency fund is there for major oops.

              Way to make awesome decision

              #80698 Reply

                Its so great that you’ve recognized your need for change. Commit to make it better and you can do it!

                Budget. Close the CC account! (Yes you can close it when you still owe on it) this helps prevents further debt.

                Save a 1k emergency fund.

                Pay off taxes then snowball your CC debt.

                #80699 Reply

                  Sorry about your dad.

                  Save $1000 as your emergency fund, then pay as much debt as you can with the rest.

                  Then you work the next debts smallest to largest (except mortgage) until they are paid off.

                  Then 3-6 month’s emergency fund.

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