Pay Off Debt And Build An Emergency Fund

So I wanted to use this time and this video, to break down how to do it exactly and the best way to get it done. So by the end of this video, I’ll teach you how to pay off debt and how to build a solid emergency account. Including where to put the money and how to payoff the debt exactly.

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1. How to Pay off Debt, Why Pay off Debt, and How to get the Money to Pay it off
– Believe it or not, the hardest part about paying off debt, is not paying off debt
– But its the mind, and convincing yourself that paying off debt is a good idea
– Especially for people who claim to be smart

For example:
– It took me almost 5 years to payoff my student loans
– Not because the amount was so much
– But because I kept telling myself I could invest and make more money ( that was a very stupid reason honestly )
Why Pay off Debt ( top Reasons )
– The borrower is a Slave to the Lender ( the bible says this and it is true, when you owe someone money, especially family, that changes the relation from family to slave and master almost )
– Less Friction Living: I paid off my debt, beucase I wanted to have fewer things to worry about in my finances, no payments, means I kept all of my money
– Less Stress: The thing about debt, it’s always hovering over you. It does stress

How to pay off debt
– I recommend the Snowball method for 99% of the people watching a video, although it’s not the method I used
– This basically means, you organize your debt from smallest to largest
– And you have to know the minimum payment on each of them if you can call the company and have them pause payments and everything
– But also call them and ask them to lower the interest rate
– Once you have done all the work, just pay the minimum on all the debt and then use the remainder of the money for paying the smallest debt

Where is the Money going to come from to payoff the debt Tommy
– Budgeting and cutting things out
– Making some extra cash by side hustles
– Selling things off

Tip: try to set aside atleast 20-50% of your income for this task

2. Building up the Perfect Size Emergency account
– Why you need this is pretty obvious and I won’t spend that much time explaining it
– You need it for when bad things happen
– The amount of money you need can be anywhere from 3 months to as much as 5 years depending on the type of work you do

For example:
– People who have jobs that are pretty stable can get away with 3 months and most people can do with 6 months
– People who have already made a ton of money and want to build up something massive can if they want to
– But even if you have an unstable job, unless you have a paid-off home, a bunch of money invested ( I wouldn’t go past 6 months at first )
– Because that in itself is going to take a long time to accomplish

Where to save the Money and How Much to save
– Find a high-yield saving with no fees, competitive yields of the time, and FDIC insured
– If your monthly expenses are for example $2000, on shelter, utilties, groceries and transportation etc
– Then you would need about 6k for 6 months and 12k for 6 months
– It’s a good chunk of cash you see ( it’ll take a bit )

3. How Cool is this
– I want to give you guys some motivation to finish this goal
– Once you become debt-free
– And you have a fully funded emergency account
– It’s like you’ve been driving at full speed because someone has been chasing you, and you had no seatbelt and you had a knife at the steering wheel point at you ( how dangerous does that sound )

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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