Yes, I Am Cheap

Author: Tahnya Kristina

  • A Few Ingenious Ways You Can Decrease Your Debt for 2017

    A Few Ingenious Ways You Can Decrease Your Debt for 2017

    Having to decrease your debt is an unenviable task, and with the economy looking the way it is for 2017, it is unlikely that the government or the Bank of England are going to be able to give us any good news to help. You can use companies like CMC markets to manage some of your money online, but looking to the future can be incredibly hard for people that are still trying to recover from debt they may have acquired in harder times, or even trying to set up there own company to invest for their future.

    There are, however, a few ingenious ways you can decrease your debt for 2017.

    Look at paying off your debts by interest rate

    There is always an element when you have a lot of debt that makes you feel like you are ‘robbing Peter to pay Paul’, but having a set structure to your debt repayments really is an ingenious way to decrease debt. If you are meeting all of your minimum payments, you may find that you are able to afford a little more each month towards your debt when you get a bit better off.

    If this happens, you can save yourself money by listing your debt by interest rate and paying off the highest one first.

    Create yourself a personal budget

    Sometimes, you don’t realize how much you are really spending until you sit and write it all down. Once you work things out, you may be able to free up a lot more money to pay off more of your debts. The ingenious thing about this is, it will be the smallest of adjustments that end up saving you big time at the end of the months. Look at the smaller things you do not even think about. The morning coffee on the way to work. Lunches. Foods that just sit in the fridge until they are thrown. That bundle of newspapers you buy ever Saturday morning and never read. All of these things add up and could go towards a debt-free 2017.

    Look into balance transfers

    Due to needing to entice people in at a time when the economy is struggling, there are many credit cards who offer 0% balance transfers. Although transferring debt to other debt is not generally advised, if you are sensible and you know you can meet the payments and stay on an even keel, there is no reason you shouldn’t take advantage of this offer.

    Remember to shop around, and ensure that you read all of the finer print to make sure the balance transfer offer isn’t hidden in among any hidden charges that may not be obvious when you sign up for the card.

    Consolidate

    Consolidating your debt can either mean one of two things: getting a further loan or using a debt management company. If you are already in quite bad credit, then a debt management agency may be the only option available to you.

    If not, you can get a loan and pay off all of your debts. The great thing about this one is that clearing near enough all of your debt in one go will actually have quite a big impact on your credit rating. This should help you further down the line if you ever need to get a mortgage or a small business loan.

    Check your credit rating and look for errors

    Most of us just go through life accepting what the credit agencies say about us on their files and presuming it’s our fault for not keeping up with payments. This isn’t always the case. Sometimes there can be genuine errors on your credit file which affect your credit rating. Getting a copy of your current credit file through Equifax or Experian should be the starting point for anyone looking to clear their debt.

    Not only could you find errors, but you could find something that hasn’t been communicated to you as a consumer, in which case you would have a right to complain to the company and possibly even get some charges back. We all remember when Wonga sent out letters that were not factual to customers and had to pay them for the inconvenience. This is just one company that was caught out and had to pay the price. There could be others no one knows about.

  • No Holiday Budget? No Problem!

    No Holiday Budget? No Problem!

    It’s the time of year that’s full of joy, happiness, and gift-giving. That all sounds expensive. Let me ask you a question, how’s your holiday budget? It seems everywhere we turn during the month of December we’re being invited to a party, a dinner, or a holiday get-together. With blended families, in-laws, friends, and co-workers the cost of attending holiday festivities can quickly add up and wreck havoc on our holiday budget.

    I used to be the “Yes” girl. I would always RSVP for dinner and be the first to put my name into the hat for a Secret Santa gift exchange, but not anymore. I came to realize that (selfishly) I would rather do other things with my money – like spend it on myself. After all, I am buying my first home. Is that terrible?

    Why spend $25 on a gift-exchange with co-workers you barely talk to at the water cooler or sit through a grueling three-hour dinner with old friends whom you no longer have anything in common with – other than the occasional #ThrowbackThursday post on Instagram? Last year I decided to drop the mic and say no to it all. This year I’m doing it again.

    If you’re not up for spending a boatload of cash this year during the holidays use these tips to survive the festivities and have fun without going over your holiday budget.

    Find alternative (cheaper) activities

    Being invited to a festivity above your price range doesn’t mean you can’t go, it just means you need to get creative. If you’re invited to an outing where the cost is beyond what you would like to spend you have two options, the first option is to make alternate plans. Suggest a cheaper activity, it can be just as fun and you won’t have to stress out when the bill comes at the end of the night.

    Tell the truth – you’re broke

    The second option is, to be honest. Maybe you aren’t comfortable using the word broke, but tell your friends and family that you truly can’t afford it. Talking about money isn’t as taboo as it used to be and a lot of people have a lot of expenses during this time of year. If you’re honest about the cost your friends and family should understand.

    Offer your time in lieu of gifts

    If your holiday budget doesn’t include buying gifts for everyone on your list, then I say don’t do it. There are several other ways to celebrate that don’t involve shopping, spending money, and racking up credit card debt. Give your time. If you have family members or friends who have children, offer an afternoon of babysitting so they can get out of the house. That gift is priceless – or so my parents say.

    Turn down invitations – it’s OK

    If you’re invited to a holiday party and you truly don’t want to go then RSVP no, it’s OK and the host should understand. Tell the host you’re sorry but can’t make it due to conflicting schedules. This time of the year is busy and sometimes it’s impossible to make it to every event. You truly could be double booked or your conflicting schedule means binge-watching Netflix in your Christmas pajamas. Either way, if you don’t want to go then I say do what makes you happy. After all, it is Christmas.

  • 6 Ways to Pay Off Your Credit Card Today

    6 Ways to Pay Off Your Credit Card Today

    Credit cards. We love them when we need them, but hate them when our monthly bill comes. Have you ever tried to pay off your credit card? If so was it a success or epic fail? I’m a prime example of how overspending and under managing your money can lead to hundreds of thousands of dollars in debt. But that’s all in the past. I’ve paid off a lot of my debt and am on my way to becoming debt free. Today I’m sharing the secret of how I did it.

    Here’s how to pay off your credit card sooner than later:

    Use a balance transfer

    Some people think that balance transfers are a scam to get new clients to apply for the credit card. Although that may be true, balance transfers can also be very helpful if you use them correctly. The key is to read the fine print.

    High interest rates can make paying off your credit card much harder and longer. Transferring your credit card balance to a new card with a zero or lower interest rate helps pay off your credit card sooner. If the low interest rate is available for six months then make sure you pay off the balance within that time period, otherwise the interest rate could skyrocket.

    Consolidate your debt

    It’s much easier to pay, manage and track one monthly payment than it is several payments on different credit cards. Consolidate all your debt onto the credit card with the lowest interest rate and watch your debt get paid off a lot faster.

    Make larger payments

    Minimum monthly payments never helped anybody. They may keep your credit score in good standing, but high outstanding balances are counterproductive because they harm your credit score. It’s just simple math, the more payments you make the faster you will pay off your credit card.

    Make more frequent payments

    Interest on your credit card is calculated daily and tallied up at the end of the month so waiting until you receive your monthly bill could be costing you big time in the form of high interest payments. It’s much better to make payments weekly or biweekly. I like to schedule debt payments that coincide with my pay schedule, that way I continuously keep paying off the balance and save on interest charges.

    Stop spending

    I know this is easier said than done, but once again it’s about the numbers. There is no point in making payments to your credit cards if you keep spending. Leave the credit cards at home and stop spending until your balance is at zero. Once your debt is under control you can start spending again – within limits of course.

    Create a debt free plan

    Becoming debt free is hard, it takes planning and discipline. If you truly want to pay off your debt sooner than later, it’s a good idea to create a debt free plan with affordable monthly payments and a debt free date. Paying off debt is like going on a diet, you need to make cuts and work harder if you want to achieve the results.

  • 4 Simple Ways to Make Extra Money

    4 Simple Ways to Make Extra Money

    Are you looking for a way to make extra money? I think it’s safe to say that we can all use a little extra cash in our wallets. That’s why some of us freelance outside of our day jobs, why others start a side hustle and some others work two or three jobs. Having extra cash in our pockets can help make our lives easier from paying off debt to building up an emergency savings fund and saving for retirement.

    If you want to increase your cash flow, here are some ways to make extra money:

    Drive with Uber

    If you have a car, like being on the road and want to meet new people, becoming an Uber driver is a good way to make extra money. I don’t like driving and being in traffic makes me angry so this isn’t one of the ways I make extra money. However, I do know a few people who drive with Uber part time and they love it.

    Working part-time lets you control your hours and your earning potential is unlimited. When you set the price and terms of each ride you can make as much money as you want, depending on how often you want to work.

    Freelance your skills

    A passion can be a real cash cow, that’s how the world of blogging exploded into a multi-million-dollar business. Nowadays bloggers are influencers and often partner with national brands to sell everything from soda to shampoo in traditional media and print ads.

    If you have a marketable skill, why not turn it into an additional income stream. If you have a passion such as baking, creative design, writing or fixing cars – whatever it may be, if you love doing it then it won’t seem like work and you’ll make extra money at the same time.

    Apply for a cash back credit card

    This is one of the easiest ways to make extra money part time. If you have a credit card and you’re using it, why not get something in return – other than a bill at the end of the month.

    A credit card should always offer a form of rewards from travel perks to cash back. It’s a simple way to make extra money because you’re just being rewarded for something you’re already doing i.e. swiping your credit card.

    Sell your unused stuff

    Why keep a closet, attic or basement full of unused items? I don’t’ want to say unwanted because if you didn’t want them then you wouldn’t still have them. If you haven’t used an item in six months (two seasons) then it’s time to get rid of it.

    If listing items on Craigslist and inviting people into your home isn’t your style and dragging all of your stuff out to the driveway for a garage sale doesn’t seem like you, there are other ways to sell your stuff. You can post ads in local Facebook groups and Facebook Garage Sale groups – yes that’s a real thing, I promise. You can also use aps such as Letgo to list your unused items for sale.

    How to do you make extra cash?

     

  • Are You Maximizing Your Employee Benefits?

    Are You Maximizing Your Employee Benefits?

    Employee benefits are an important part of your overall compensation package. Benefits help us relax when we need time off, see a doctor if we need medical attention and in some cases let us spend quality time at home with our newborns. As the time to enroll in benefits for the New Year approaches at my workplace, it’s got me thinking about what’s really important in life. To my surprise, it’s not the bottom line – did I just say that?!

    Maybe it’s because I just turned 36 (on October 9th) or maybe it’s because I enjoy my career, but either way my focus isn’t on money. As I look over the employee benefits offering I’m prioritizing the option to work from home and paid time off. Of course a bigger paycheck is always nice, but it’s no longer the only thing that’s important.

    How to maximize your employee benefits:

    Health and dental insurance

    I have a slew of medical conditions (that we won’t get into here) that require monthly prescriptions and weekly doctor visits (to the chiropractor), so basic health care coverage isn’t an option. I don’t mind paying a little bit out of pocket every two weeks to ensure I have maximum coverage because it would be a heck of a lot more if I didn’t take advantage of what’s available through employer benefits.

    If you’re not sure which benefits to choose or how to get them at the cheapest price, the best thing to do is look at your spouse’s employee benefits and choose the best from both worlds. Coordinating benefits with your spouse can save big bucks on health and dental care.

    Take all your vacation days every year

    Vacation is there to be taken. When I took this job I negotiated an extra week of paid vacation because for some reason that’s easier to approval than a salary increase. I’m not sure why because both options have a cost to the employer, but it’s good to know if you’re negotiating a hiring agreement with a new employer.

    Sometimes we just need time off. Time off from work, from life, from a routine. Paid vacation (and paid sick days if you’re lucky to have them) makes it a reality. I take advantage of it every year. This year I’m considering buying extra vacation days. I know it would be at my own expense, but at least it gives me extra time off. Do you have that option with your employer benefits?

    Workplace flexibility

    This is a new benefit my employer introduced this year as part of a work-life balance initiative and it makes a HUGE difference in an employee’s quality of life. The ability to wake up and work from home ensures a few extra minutes’ sleep – depending on your commute – and I will do anything for 15 minutes more in bed. Anything.

    It’s nice to finish work at 5 pm and already be home, it extends your personal time with family and friends which is always nice. I also find that working from home two days a week increases productivity because there are no interruptions and coffee breaks with colleagues. I love my colleagues, but sometimes we just need a break.

    What’s your favorite employee benefit?

  • Why You Need to Buy Life Insurance – And How To Do It

    Why You Need to Buy Life Insurance – And How To Do It

    Let me ask you a simple question, do you have life insurance? It’s an easy question, the answer is either yes or no. If the answer is yes the next question is, do you have enough insurance to protect your family? If the answer is no the next question on your mind should be, what’s holding you back from purchasing life insurance?

    Many people think they don’t need to buy life insurance because they don’t have kids or don’t have a high net worth. When in fact the truth is those are two good reasons to buy life insurance – to protect your loved ones in case you pass away. Could your family afford to pay for final expenses and pay off your debt if something happens to you? The answer for many people is no. This is why life insurance is an important part of a financial plan.

    Some other people think they don’t need to buy life insurance because it’s too expensive and they can’t afford it. That’s another common life insurance myth. The truth is the cost of life insurance can fit into any monthly budget, if you want it to. It’s a smart idea to make room for life insurance in your budget because the real question to ask is can you afford not to have it?

    The importance of life insurance

    I currently have life insurance through my employer. The amount is equal to the amount of one year’s salary. Since I am completely debt free this amount is more than enough to cover the cost of final expenses and help my husband adjust to life on one income if ever something should happen to me – or vice versa. However now that we are buying a house, I have started to look at life insurance with a whole new light.

    Life insurance is a way to help protect your family from financial devastation if something should happen to you. It’s a legacy that you can leave for them once you’ve passed on. My biggest concern is the mental, emotional and financial well-being of my husband. I don’t want him to have to worry about the mortgage on his own because financial obligations don’t stop upon death – money is still owed. Buying life insurance can help eliminate financial stress.

    What is term life insurance?

    I’ve been researching the different options and how to buy life insurance and I’ve decided that term life insurance is the best financial solution for our needs. A term life insurance policy provides protection over a time-period such as 10, 15, 20, or 30 years.

    It only pays out the benefits if death occurs during the term of the policy. I want protection to pay off our mortgage balance is something should happen to me or my husband so we chose a 30-year term life insurance policy because that will also be the term of our mortgage.

    Shop around and compare prices to get the best rate

    I take my finances very seriously and always look for the best deal. When it comes to buying life insurance this means shopping around and comparing prices. I went to SelectQuote.com to shop for life insurance rates because I am not a big fan of talking on the phone – and the internet is always open so you can get a quote at your own convenience. It only took a few minutes to enter in all my information such as my age, location, gender and the amount of insurance as well as the type of insurance I want to buy.

    From there SelectQuote does the rest – that’s right, they do the work for you. If you want to buy life insurance you don’t need to spend hours on the phone calling different providers because SelectQuote are experts in finding the lowest cost life insurance option for your needs. Within a couple of days they will contact you by email with the results and you can make your decision. Buying life insurance was that easy.

    Bundle all your insurance products for big savings

    Insurance is one of those financial products that you may not always need, but if you have an emergency, accident or unforeseen event you’ll be happy you have it. One way to save on the cost of life insurance is to bundle all of your insurance policies together. Consider having your home, auto and life insurance with the same provider to save big bucks.

    Life insurance isn’t a product we can enjoy during our time here on Earth, but it gives us the peace of mind that our family is taken care of after we pass. It ensures we don’t leave our loved ones with a financial burden from final taxes, funeral expenses and outstanding debts.
    This article was sponsored by SelectQuote, but all thoughts and opinions are my own.

     

     

  • How I Paid Off $50k of Debt in 3 Years

    How I Paid Off $50k of Debt in 3 Years

    Here’s a financial confession: I used to be in debt. I was a financial planner and I was in debt – and I lied to everyone about it. If you’ve ever been in debt you know how stressful it can be and how it can take over every other aspect of your life – including your relationship and your health.

    I was ashamed that I let my financial situation get so out of control at such a young age (I was only 27) that I lied about it. To everyone. But that’s all in the past. Now I’m 36 years old (as of last Sunday), I paid off my debt and I now live completely debt free.

    Being in debt is only a temporary situation – if you let it be. If you’re in debt I have two pieces of advice: 1. Don’t ignore it and 2. Start paying it off today.

    Here’s how I paid off my debt, and you can too:

    Find a new source of income

    This was the single best thing I did to get my debt paid off. I had a good bank job as a financial planner, but the income wasn’t enough to live and make more than the minimum monthly payments on my credit cards, line of credit and car loan. I got a second job working nights and weekends in a retail clothing store. Where? Ssshhh it’s a secret. ß See what I did there.

    I took all the extra income from my second job and put it towards paying off my debt. As I saw the balances get paid off I was motivated to do it faster so I got a third job working as a freelance personal finance writer.  This turned out to be the best career move I ever made – and it all came from being in debt.

    Pay off the smallest balances first

    I know some experts will tell you to pay off the balances with the highest interest rates first, but that’s not how I did it. I paid off the smallest balances first because seeing a $0 balance gave me motivation to keep going. Once I no longer had those payments I allocated the money towards other outstanding balances. That helped the remaining balances get paid off faster with bigger monthly payments.

    Negotiate your interest rates

    You may be surprised to learn that if you’re in dire straits (and explain your financial woes), lenders may be willing to negotiate the current interest rate on your loans and credit cards. It’s hard to pay off a large credit card balance with a 19% interest rate.

    Lenders will negotiate because getting a lower interest rate is better than getting nothing back at all. If you default and the debt is written off the lender gets nothing, so it’s definitely in their best interest to help you set up a payment plan and negotiate the interest rate.

    Cut out every unnecessary expense

    This was the hardest part of being in debt because it meant admitting defeat. I made some major lifestyle changes that included selling my car and moving to a cheaper apartment in a not-so-great part of town. These changes made my financial mess a reality and that was hard to deal with. However, I did it and thanks to this decision I am now debt free. Trust me when I say I’m never going back.

  • Why I’m Buying My First Home at 35

    Why I’m Buying My First Home at 35

    Here’s a personal confession, I’m 35 years old and I still rent an apartment. I know what you’re thinking, “Isn’t she a financial planner?” Yes, I am and let me tell you that I would continue to rent forever if I could because in my personal opinion buying a home isn’t for everyone.

    However, with all that being said, our (I live with my spouse Nick. He’s not my husband, we aren’t married, but we’ve been together for 17 years and honestly I’m sick of calling him my boyfriend, but no hard feelings) living situation has changed and instead of looking for another apartment we decided to buy our first home.

    Do you own your home?

    According to Zillow.com the average age of a first time homebuyer is 33. At what age did you buy your first home? My parents were married at 19 and bought their first house at 23. Who can afford to buy a house at 23?

    When I was 23 I still had student loan debt, had no idea what life or financial responsibility was all about and I was definitely not in an emotional state to buy my first home. To tell you the truth I don’t really want to buy a home now, but I don’t think there’s another choice.

    Is becoming a first time homebuyer a good choice?

    I always associate buying a home with becoming an adult and I have no interest in doing that. I like paying one bill every month – in the form of rent – and I enjoy living carefree. If the roof starts to leak (which it did last winter) I can call the landlord, if there’s a weird smell coming from the laundry room (which happened last year) I can call the landlord. When I’m a homeowner I have to deal with all of that and it’s of no interest to me. Doesn’t renting seem like the much easier choice?!

    Buying a home isn’t always a good investment

    When I met the real estate agent and explained we want to buy our first home, the first question she asked was “why do you still rent? It’s such a waste of money.” I couldn’t disagree more. According to Bloomberg 1.5 million Americans have lost their homes since the housing crisis. I think all of those people would agree that buying a home isn’t always a good investment.

    Paying rent is giving someone else money for a service, since when is that a waste of money? If I was paying rent and not living in the apartment it would be a waste of money, but Nick and I are getting something out of it so I’m not sure why that’s a waste of money.

    The real estate agent continued on her home buying rant and said “When you leave you’ll have nothing in your pocket.” That’s true, I won’t have a large chunk of change from selling a house, but I had a nice place to live for the past few years with a roof over my head. That’s a win-win in my book.

    We’re moving because our landlord sucks – I’ll tell you all about it later – and his behavior has pushed us towards homeownership, that combined with the need to avoid living in an apartment beside neighbors.

    My question to you is, how did you know when it was time to buy your first home?

     

     

  • Should You Coordinate Benefits With Your Spouse?

    Should You Coordinate Benefits With Your Spouse?

    The short answer to that question is yes.  As long as it’s in your best financial interest as a couple you should definitely coordinate benefits with your spouse.  Having health, dental and life insurance through your employer is part of a total benefits package that also includes your salary, paid vacation time and retirement savings plan options.  Employer benefits are a way to save money on the costs of healthcare for you and your spouse.

    When you coordinate benefits with your spouse you use your employee insurance options to cover your spouse.  This is beneficial because it gives your spouse access to insurance – that they may otherwise not have – at a lower cost because you’re buying the coverage through a group plan.  Benefits coordination is extremely helpful if your spouse stays at home, is currently unemployed or doesn’t have health insurance coverage options through their own employer.

    Although the ability to coordinate benefits with your spouse is extremely beneficial for you and your family, it’s very costly for employers.  For this reason, benefit coordination is on the decline in group insurance plans.

    “By 2018, more than half of employers are planning to “significantly” cut what they chip in for insuring spouses and dependents, according to a survey by human resources consulting firm Towers Watson.” Says Bankrate.

    Here’s how to coordinate employer benefits with your spouse:

    Purchase life insurance

    If your spouse doesn’t have the option to purchase life insurance through their employer, you may have the option to purchase it through your group benefits plan.  It’s a good idea to purchase life insurance on both spouses to help pay for final costs and loss of income in case of an unforeseen event.

    Choose the best health and dental plans

    Your spouse may have the option to purchase health and dental insurance through their own employer, but you may have better coverage or lower rates.  This is where coordination of benefits with your spouse becomes part of your financial plan.

    Review the coverage from each plan and choose the cheaper option with the best coverage.  Of course overpaying for insurance coverage that you don’t need is a waste of money.  So make sure you buy what you need, but be careful not to double up on coverage.

    Contribute to retirement savings

    Many employers offer retirement savings accounts such as a 401(k) as part of their total benefits package.  Through a 401(k) an individual can defer paying taxes on contributions up to $18,000 (2016).  Therefore, a couple can defer paying taxes on up to $36,000 if you each have a retirement savings plan with your employer.

    It’s also a good idea to check if your employer offers matching contributions, i.e. your employer contributes $1 for every $2 you contribute to your 401(k).  You and your spouse should maximize contributions on the employer savings plan that offers the highest matching option.

    In addition to 401(k) employer savings plans, workers can also contribute up to $5,500 into an Individual Retirement Account (IRA). If you don’t work, i.e. have no income, you aren’t allowed to contribute to an IRA.  The exception to the rule is unless your spouse has income.  If one spouse works and the other doesn’t you can open a spousal IRA and contribute on their behalf.  It’s a great way to coordinate benefits with your spouse.

  • 3 Ways to Become Debt Free

    3 Ways to Become Debt Free

    If you have debt hanging over your head, what’s stopping you from paying it off?  It’s time to become debt free.  As a financial planner I can tell you the most common answers are: I don’t want to withdraw from my savings, I3 Ways That I Used to Get Out of Debt don’t have enough savings to pay off the debt and I don’t make enough money to afford more than the minimum monthly payments.  Do any of those excuses, I mean answers, sound like you?

    The truth is we can all afford to become debt free, the question is how much are you willing to sacrifice to make it happen?

    Trust me when I tell you that I know just how stressful debt can be.  I was over $50k in debt by the time I was 30 thanks to student loans, credit cards and a new car.  I definitely should have known better because like I said, I’m a financial planner.  But that’s all in the past.  Now I’m 35 and live debt free.  Believe me when I tell you that I’m not going back to being broke.

    Here are three things I did to become debt free:

    Increased my income

    When I hit rock bottom, like sitting in a bankruptcy office rock bottom, I decided that I was going to change my life around.  Not by wiping away my debt and ruining several future years of my professional and financial life with bankruptcy, but by making changes.

    First I got a second job (in addition to my job at the bank) in retail and then I got a third and forth job as a freelance writer.  All my extra income went towards making additional debt payments.

    Reduced the interest rates

    I contacted every single credit card company (there were five) and begged them to lower the interest rates.  I pulled out the “I’m a financial planner in a global economic crisis” card and the “isn’t it better to get paid a little bit of interest rather than have the entire outstanding balance written off in a bankruptcy” card.

    I did whatever I could to get the interest reduced because 19% to 10% on a $10,000 balance is a lot of money saved on interest.

    Paid off the lowest balance first

    Some people like to pay off the credit card with the highest balance first or the card with the highest interest rate.  I chose to pay off the credit cards with the lowest outstanding balances first.  That way I could be done with them and reallocate those payments towards tackling the bigger balances.

    Seeing a $0 balance also gave me a sense of accomplishment.  I hated having several different payments and eventually just focused all my extra income on the last credit card standing.

    This is only the beginning of my story – and oh boy does it get better.  I’ll share an additional four tips on how to become debt free next time – so be sure to come back.

  • Your Investment Account Savings: From $0 to $10,000

    Your Investment Account Savings: From $0 to $10,000

    Saving for retirement is a nice thought, although not always put into practice.  Have a look at your investment account savings, is the balance where you want it to be?  A better question may be, are you on track to retire at your target age?

    For some people the answer may be yes and for others it’s no.  Why is that?  As a financial planner I can tell you from experience that it’s most likely because people don’t think about retirement savings until they start approaching their retirement.  When in fact we should always be thinking about our investment account savings, no matter how old or young we are.

    Saving $10,000 a year equals $833 per month or $384 bi weekly.  That sounds do-able doesn’t it?  If you want to increase your investment account savings there are some very easy things you can do throughout the year to boost the value of your account such as:

    • Make savings a part of your budget
    • Set up affordable contributions
    • Add in your yearly bonus
    • Contribute your tax refund

    If that’s still not enough to bring you to the magic $10,000 number don’t worry, I have some more ideas.  You can save even more money each year by making these three small (and painless) changes/cuts in your daily habits that won’t disrupt your life.

    $1,460 on coffee.  Ah Starbucks, the indulgence and weakness many of us have. I’m guilty of it, but now that I’m saving for a house (more about that another day) I have cut back to visiting the coffee-love-of-my-life once a week.  If you spend $4 a day for 365 days a year it adds up to $1,460.  That’s definitely money that can be saved.

    $2,600 on eating out.  Think about how often you grab take out food for dinner on your way home from work or go out for dinner with friends.  If you cooked at home and avoided eating out in restaurants just one day a week you could save $50 per week which adds up to $2,600 per year.

    $4,000 on vacations.  According to the Latin Post, Americans spend approximately $2,000 per vacation.  If you stayed home for one year you could save an extra $4,000 every year.

    That’s a total savings of $6,746.

    Now let’s add that up with 3% compound interest over the next 20 years.  Do you want to guess how much you can save for retirement just by making three small changes in your life?

    If you cut out one coffee per day, skipped the restaurants once a week and didn’t splurge on vacations you could save $1,798,058 according to Chase Bank.

    Notice that I didn’t even mention bad habits like drinking and smoking.  If you have some personal vices ask yourself how much a bottle of wine or a pack of cigarettes costs.  Before you pull out your wallet, think about how that money can be put to better use.  Kicking bad habits can definitely kick your investment account savings into high gear.

     

     

     

  • 3 Stupid Financial Mistakes I Don’t Regret          

    3 Stupid Financial Mistakes I Don’t Regret          

    Trust me when I say that I’ve made my share of stupid financial mistakes in my 35 years on this earth.  Also believe me when I say my life would have been a lot easier if I didn’t make any mistakes with money in my teens, then again in my 20s.  But you know what?  I learned from them and they’ve made me the financially responsible person I am today – and that’s why I have no regrets.

    I made some mistakes, but I only made them once and that’s pretty cool.  I’m not ashamed of my past because I learned from my mistakes, I did whatever I had to (literally) do to pay off my debt and now I live a very different life. 

    I’m a better person for my stupid financial mistakes and I like to share my story because if I can help even one person avoid making the same errors with their money then I will be happy.  I like to think that I’ve helped more than one and hopefully that number goes up after you finish reading this.

    Here are three stupid financial mistakes I made, but don’t regret:

    I bought a new car

    Worst.  Decision.  Ever.  But you know what I’ll probably do it again.  However next time I buy a new car I will be prepared for the financial commitment.  I wasn’t ready the first time around.  In 2007 I purchased a brand new Honda Civic for no reason other than I didn’t have one.  Yes, I know, stupid.

    I was 27 years old, had a good job as a financial planner, never had anything of my own and all my friends had cars so I wanted one too.  One day on my lunch hour I went to Honda and bought a new car.  A year later when the market crashed I couldn’t afford the $500 monthly car payment.  I did the best I could, but three years later I ended up selling the car with less than 30,000 miles on it.

    Financial lesson number one: don’t ever buy something just because you’re keeping up with the Joneses.  You can’t afford to be in the Jones family.

    I took money for granted

    When you work in investments and the market is booming there is a lot of money to be made…A LOT OF MONEY.  However, when the market crashed globally there was NO MONEY to be made.  In 2007 I was making a six figure income and I never thought that a year later I would be dead broke. 

    I never saved a single penny (or should I say nickel because we don’t have pennies in Canada) because I was young and stupid and thought there would always be money to be made.  I was wrong.

    Financial lesson number two: always save because you never know what’s going to happen in the world, in your life or with your job.

    I used credit card cash advances

    Oh good Lord this was a stupid idea.  When I was 28 I got my first platinum MasterCard with a $10k limit and I thought I was on top of the world.  I used it to purchase expensive electronics, go on vacation and put gas in my new Honda – remember how expensive gas was in 2008? 

    After the market crash my income dropped by half and I couldn’t afford to pay rent.  Some people would get a second job, some would move, but not me.  No sir.  What did I do?  I took out cash advances from my shiny new platinum MasterCard to pay my rent.  That’s a mistake that helped me rack up over $50k in debt by the time I was 29.

    Financial lesson number three:  Don’t take a cash advance on your credit card because the interest rate is higher than on purchases and there is no interest free grace period.