Getting Back on Track

What do you do when your plan goes South and you need to get back on track (aka: where do you start if you already have debt)?

We’d encourage you to look at a few options to improve your overall financial wellbeing.

Pick and choose what makes sense for your and your situation from the ideas below:

Financial Security:

  1. $1,000 Emergency Fund (if you don’t have at least one-thousand dollars of cash in a savings style account make this goal number one!) This will keep you from needing or reduce the need for credit card debt when an emergency occurs. Each time you use your emergency fund you are on "beans and rice" until the money is replaced!

  2. Put aside insurance copay/deductibles: Insurance costs have gone up. Consider saving beyond the $1,000 emergency fund to cover copay expenses until you reach your deductible.

  3. Save 3 to 6 months of expenses: This will keep you from relying on Credit Cards or Personal Loans if you loose your job or need time to transition to a new job.

Reducing Debt:

  1. Debt Snowball your Credit Card Debt: In a note, arrange your Credit Card debts from the smallest balance to the largest. Apply the new paycheck money to the Card with the smallest balance while continuing to make the minimum payment on all the rest. Once that card is paid off, take all of the money that was going towards that card and apply it to the Card with the next largest balance (now the card with the smallest balance). Continue this pattern until all of your Credit Cards have been paid off.

  2. Consider adding your car payments to the Debt Snowball and pay your cars off early. Warning: some loans come with an early payoff penalty (usually for paying it off within the first year.) It's something to consider but probably isn't an issue.

    1. Paying off Student Loans and House may not be a priority. Why not add my student loans and house payments? You could, but some of the interest on these is tax deductible making the interest almost free. If the balances are large you may want to just keep working on them until the balance is something that you could pay in a year or two of snowballing.

Growing your Money:

  1. Increase or Start contributing to your 401k, Roth 401k, Roth IRA, or Traditional IRA account.

  2. Put some of this money into a Target Date Index Fund. These funds have no loads or fees and will automatically move into bonds (safer) investments over time. They can be found at Fidelity, Vanguard, Charles Schwab, etc.

  3. Of course there are some larger or more exotic options such as buying Rental Properties, Dividend Stocks, Cryptos, or NFT/Memorabilia.


You can also spend it. You work hard for this money, please make sure that your spending is deliberate and on things that will bring you lasting joy and happiness. Set some goals, create an Electronic Budget, and make life the most impactful that you can.

In short, Go Be Great!

Additional Resources:

Video on how to use the Electronic Budget

Clark Howard Podcast (Credit Card/Envelope Method info starts at 14:17) (long form finance podcast)

Popcorn Finance (short form finance podcast)

Finance in the Classrooms (Fin. Lit. course materials)