Posted by: Brian | April 25, 2010

Recession Proof Debt Snowball

I recently read an article from Frugal Dad that addressed a very sensible debt snowball plan that works in today’s recession atmosphere. I won’t go into details because the article is a really good read, as are many other of his articles. Basically, to help with unexpected expenses you would save an emergency fund of $1,000, and then save your balance amount plus $1,000. when you have accumulated the needed amount, you pay off the debt.

I like this because in the very near future I might have to start supporting my parents and I don’t want to be stuck with my pants down. I think it will work great for small debts (under $5,000) because the amount is quickly obtained. If the balance is larger than $5,000, I know for myself it will be difficult to see all that money sitting there and not being able to spend it. I haven’t conquered my spending habits completely, so that would be way too much temptation.

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