Michelle Singletary is a financial columnist for the Washington Post. She has two or three columns a week, plus a web chat. She is EXCELLENT for discussing the sort of problems most people have.
Her basic guidelines for saving:
1) set up a "life happens" fund. This should have around $2,000 - $3,000 in it. This money would be to cover stuff like you suddenly need new tires, or the furnace gives out, or you have an unexpected medical or vet cost. Cuz "life happens" to all of us, and if you have the funds, then you don't have to put these minor emergencies on a credit card.
Do I pay off old existing bills at the same time, or do one before the other?
Try to do both at the same time. Even if you only put a small amount into your savings account, say $25 a month, that's better than nothing and gets you into the habit of putting that deposit in just like any other bill. It's the "pay yourself first" principle.
2) Emergency savings. This should be a sum large enough to cover 3 to 6 months of living expenses, should you lose your job or have a serious emergency (your house gets flooded, say, or you have a kitchen fire that does serious damage, that sort of thing). This money should be in a CD or other vehicle that is accessible, but not TOO accessible, because the idea is that this is for SERIOUS emergencies only. Not "gotta have this newest, greatest, PC, pair of shoes, handbag," sort of emergency.
Same question here. Do this at the same time when paying off, or pay off first then do this, or do this and then pay off?
Pay off your bills and get the "life happens" account funded first. As soon as you have $1,000 in "life happens," and your bills are paid off, then start funding the long-term emergency account, as well as putting in enough into "life happens" so you eventually have at least $2,000 in there.
3) Retirement savings, through IRAs, or work-related plans, whatever. Whatever your age, start saving for your retirement as soon as possible.
Hubby has this, but stupidly, he used his to move back to Florida. I never had one.
If at all possible, start now. Again, even $25 a month is better than nothing. You can have a "spousal IRA" if your husband is working.
Then in addition to that, depending on your lifestyle, you might have savings accounts to buy a car, or for family vacations, or to fund your kids' education, that sort of thing.
Luckily, we are working on a saving account, but it gets used once a month when paychecks are short. It was son's with me joint, but he cleaned out all his money already.
I hope it was just his money he took, and not what was rightfully yours.
Then, hurrah! If there's anything left, you can spend it!
--------------------------------
Slowly but steadily, you can do it. My mom was in debt for a while, after my dad died and she was raising four kids and going to college to get her teaching degree. Family finances were exceptionally tight, and she used to charge our "going back to school" clothes in September on her Sears card, which got paid off usually in December, just in time for spending more money on Christmas!
We learned to live pretty frugally, but she was not able to avoid all debt at all times - it came and went. After she finally got her degree and started teaching, though, everything was paid off and she was never in any debt after that, for anything. Got the house and car paid off, never took out any additional loans, and as I mentioned in another thread, she saved up enough so that eventually, she could spend her final years in a very nice assisted living place. It took discipline to do all that on a teacher's salary.