Eliminate Debt and Build Savings

Continuing with a look at each of the eight points of the Modern Victory Movement. Today is point number five, Eliminate Debt and Build Savings.

Eliminate Debt and Build Savings 

We are facing difficult economic times. It will be especially difficult for the folks who are living paycheck to paycheck, in debt up to their eyeballs and with little or no savings. Debt – whether personal, business or government – is bad. It creates stress and makes one much more vulnerable to economic downturns.

In your personal life, work towards eliminating consumer debt – credit cards, car loans, payday loans, personal loans and installment plans. This will mean you have to put yourself on a budget and stick with it. It will probably mean putting off major purchases, avoiding impulse purchases and denying yourself luxury items. It may mean taking bag lunches to work. It may mean selling your car to get out of the loan. It may mean having a major yard sale to raise some money. It may even mean taking on a second job. It will take some sacrifice to eliminate debt in your life, but the benefits will be more than worth it.

Building some emergency savings will have to be done at the same time. Yard sales are a great way to bring in extra cash to do this. So is a second job in the evenings or on the weekends. Put the money somewhere safe, such as an insured CD or money market account in a stable bank or credit union (do your own homework or check with several companies that offer ratings on the soundness and safety of various financial institutions). Don’t worry about getting top interest. Safety and liquidity is your goal for your emergency savings, not growth.

Once your debt is paid off and you have accumulated some emergency savings, you can then turn your attention to savings for long-range goals such as the purchase of a car, a new home, children’s education, or retirement. Use common sense, avoid overly-risky investments and seek professional advice of someone you can trust.

No investment is perfectly safe. Cash savings are subject to losing value to inflation. Stocks and mutual funds are subject to the ups and downs of the market. Land is subject to property taxes and eminent domain. Converting all your money to gold & silver and burying it in the backyard is subject to thieves. There are no guarantees in life. The best you can do is use reason & common sense, to remain vigilant and to take responsibility for ensuring your own future.

The single most important thing you can do now to survive any future chaos is to start taking responsibility for your own life.