Personal finance basics, part 1

This will be the first in a series on personal finance. The first thing that has to happen is you need to stop digging the hole you're living in, and begin to fill in that hole.

If you're really wanting to get serious about paying down debt, you need to have more income. If you can't go out and earn more income, then you need to reduce expenses. Ways to do that include cooking at home, bargain shopping for everything even food, and getting rid of frivolous expenses. You can save a ton of money not eating out. Cable is expensive, so cutting the cord is a good plan. Select one or two streaming services that can give you the entertainment you want, and keep costs low. Basically, the idea is to squeeze as much out of your income as possible, so that you can then use it to dig yourself out.

As you are consolidating your expenses, you need to be evaluating your debts. My advice is rank them from highest interest rate to lowest. The lowest are going to be the cheapest in the long term, while conversely the highest will be the most expensive. Those are usually credit cards and things like that. Never pay the minimum payment on these, as you will never get ahead. Look at your statement on the credit card, and you will see various different totals you can pay. Minimum payment will have you paying forever. Look for the payment that is how much interest you are paying that month. The idea is to pay more than the interest for each month, so that you pay off the principle. Only then will you start to reduce your debt load. A good way to go about paying things down is to reduce your payment on your cheaper debt to the minimum payments to free up money that you can use on your most expensive debt. So combined with your savings from the expenses, you throw the maximum amount you can throw at your higher interest debt account. Pay that down as quickly as possible. Once that has been completed, you take that money and combine it with the the minimum payment from the next highest interest debt and pay that down as quickly as possible. Work your way down that way and get each paid off in succession. This process can take a few years of work, but it's worth it to be out from behind that mountain of debt. Once you've got that handled, it's time for phase two which is protecting yourself from life's issues. I'll cover that in the next installment in this series, found here - https://abstractions.avgrump.com/2019/04/personal-finance-basics-part-2.html