Use it to Catch Up

Dear Dave, We just received a small inheritance of $5,000. We have about $21,000 in debt, and one of the creditors is calling every day because we aren't current with them. Do you think we should go ahead and start the Baby Steps or deal with this guy first? Laura Dear Laura, Let's get current before we start the Baby Steps. That way, you can focus on getting out of debt without someone hounding you all the time. Once you're current, get $1,000 in the bank for an emergency fund as fast as you can. Then, start on your debt snowball and pay off all of your debts - except for the house - from smallest to largest. Make sure you're doing a written monthly budget to help you stay on track, too. On paper, on purpose before the month begins. I'm proud of you guys, Laura. Taking control of your money instead of letting it control you is the first step toward financial freedom! Dave
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