It should probably go without saying. But if you’re trying to get out of debt, it’s really not all that complicated; Maximize income, reduce expenses, apply remainder towards your debt. Read any debt-reduction manual and it’ll pretty much come down to that concept. The problem is, it’s not always so simple.
Our household income tends to fluctuate. This makes it very difficult to even do rudimentary financial things like making a budget and sticking to it. There is a certain amount of income that is reliable. But that money isn’t enough to cover all of our regular expenses. So, when there isn’t enough money coming in to cover all of the bills, some of those bills get paid for with credit. Which means more debt. That was our case last month and it’s likely to be the case this month, too.
And that brings me to the subject of this blog entry. I think there’s one rule that’s missing from nearly all of the popular debt-escape plans. A hidden “rule zero.” And that rule is: Have a steady income that’s enough to cover your basic living expenses. It’s so obvious that I think all of the Ranseys and Ormans of the world tend to overlook it. But it’s the ultimate foundation for any kind of financial success.
And it’s not as easy to achieve as it may seem...Read More