Why I’m Not Making Any Extra Debt Payments: Debt Repayment Update

Summer vacay on hold for a day. Hopefully for good reason.

Summer vacay on hold for a day. Hopefully for good reason.

For at least this month there won’t be much extra for debt payments.

My life has been kind of up in the air, professionally speaking anyway. Part of the reason I haven’t had as much time to commit to this blog. I still have a job that I love but very long story short I have been looking for a change. There are literally 100 reasons why I can’t imagine leaving my current job but 101 why I need to. It’s been an emotional battle but I really started revving up my job search a few months ago.

It wasn’t that long ago that I was torn about possibly taking a great job that wouldn’t jive with my family life. In the end my husband and I decided we just couldn’t make it work, extra money and all. Months later the same position became available again, at the same office and I decided to contact them about the job and their willingness to change some of the constraints I didn’t like (ie: the hours). To my surprise they were willing to chat.

I’ve already had the formal interview and, as it sometimes goes in my industry I’ve moved onto the ”working interview” stage where I basically go to work for them for half a day and see how it goes on both ends. As you read this post I’m likely spending my vacation day working, likely for free, in hopes of landing this job.

The reason I’m not making any extra debt payments for the next month or two (aside for a few hundred I already made, I usually wait until the end of the month/first of new month to make a lump sum large payment) is because this new job is paid on a commission basis and quite frankly that scares the shit out of me. Basically I get a percentage of every code I bill rather than an hourly rate. In the end I’m confident the commission will work out for the better (likely much, much better) but until I know if I got the job or how my pay will be affected, I’m hoarding cash.

July was a decent month for me, especially freelance work. I would have been able to put a total of about $750 over and above what I normally do (about $1,500 for a total of almost $2,300) towards debt which would have made me SUPER happy but until I know the situation with my job, I’m going to hold onto the extra payment.

If I get the job I still plan on holding onto the money for a few months until I know exactly how my income will vary but if I don’t get the job I’ll make the extra debt payment as per usual. And so, my extra debt payments are temporarily on hold hopefully for good reason and hopefully this new job allows me to make significantly more money. I’ll have updates later for now cross all your finger and toes :)

What Type Of Home Should We Buy Next?

When we bought this house we knew we wouldn’t live in it forever. It was purchased with intent of it being our starter home and the moving up into a larger, or at least more functional, family/forever home.

While some think this mentality is nuts, it has worked out well for us. I’m so glad we had the opportunity to live in a home and get a feel for homeownership and what we like and don’t like, stuff we want and need in our next home. Four years in and our list is still changing.

When we first bought a home I didn’t understand the need for an ensuite bathroom. Kids changed that pretty much immediately. While I still don’t want double sinks and marble from floor to ceiling, I’d like my own bathroom where I don’t step on bath toys and where I can leave my stuff on the vanity when guests come over. The type of home we buy next is also changing. While I thought for sure our next home would be brand new built by hired contractors now I’m not so sure. Kids have a way of changing everything don’t they?

New Build

A new build is still an option but I’m moving further and further away from it. The thought of buying land alone stresses me out. There is a lot of really nice land for sale but now we have things like school zones to consider and the land in the zones I’d like to be in are sparse and expensive.

Foreclosure

It’s funny, this is something I never thought I would consider but honestly I totally would now. I know of a foreclosure property that recently sold for pennies in a great area. We may do something like buy a dilapidated foreclosure, demo entirely and rebuild or look for a good deal on a decent home. There are pros and cons to this obviously and would require a lot more homework than a standard real estate purchase but it’s nice to know things like a HomePath Loan available for such transactions.

Buy Used

Realistically I think this is where I see us. We’ll buy a nice ‘’used’’ family home in a few years. We need more space, not a ton more but we have zero storage and would like a space for office. I really like our current school zoning so staying in the same general area is very much a possibility. The neighbourhood we live in has a home variation price of over 400k. Some homes start around 200k while others are running well over 600k (McMansions here). There is a lot of option.

Having a kid has refocused my priorities. While I used to want a move in ready perfect kitchen, now I need a proper entry way with storage so we can get in and out efficiently. The kitchen needs to be function and clean, that’s about it, we can eventually reno if need be.

What was your home buying process? Any experience with any of the above?

Life Updates: LifeHacker Edition

Every time I feel like I’m not as ”present” with my day-to-day blogging I feel a twinge of guilt. I would never let blogging dictate my life or stress about getting five posts out a week, it just ain’t going to happen. Not with a full time job, freelance career and personal and family endeavors. Yet, when I’m not even able to read as many blogs as I like and my commenting starts decreasing I always get at least one concerned message about well-being :) Apparently when you don’t tweet on mass everyday people think you have died.

I’m hear to tell you that I’m still alive and kicking, just swamped with life.

I had a decent month with freelancing so that kept me away from my blog a bit. There are only so many writing hours in the week and ones that pay me usually trump my own. We’re also approaching my vacation week so that has it’s own bit of insanity as you prep to walk away from work for a week. I realized about a week ago I forgot to do my June debt payment recap. Sorry, I’ll get July’s done in the next week I promise!

Even though I had limited blogging time I did manage to pump out this post which ended up getting quite a bit of traffic (why is it the most unassuming posts get the most traffic?!). I awoke last Friday to an email from J$ that he was featuring me (aka ”being pimped”) on the front page of Rockstar Finance which is always fun and mucho appreciated. By dinnertime Friday I got another email from J with nothing other than ”Bam!” and a link. My post was picked up by Lifehacker.wpid-screenshot_2014-07-28-15-53-30-1.pngSo that was fun. Thanks again for featuring me J!

I’ve also been busy attempting to pursue a prospective new job. No news as of yet but we’ll see what the next few days bring ;) I put myself out on a limb recently by contacting someone and it worked more than I expected but nothing to talk about as of yet. I’m happy with the process so far though.

As I mentioned we have some vacation coming up this coming week so I’m not sure how that will affect my blog. I have things in line to get up but if I don’t get around to finishing everything that’s why. I’m probably busy building sand castles with my kid or taking her to the zoo. Happy August :)

How is everyone else doing??

 

 

Why I Like to Budget into the Future

Last week I completed our budget until first week of January 2015. Having our budget done at least five months into the future is the only way I like to budget truthfully. My husband created a spreadsheet a few years ago that is calculated so that as I change a number to reflect all through the spreadsheet, I love it! A huge reason I bought a new computer was that this spreadsheet (aka my lifeline) was in danger of getting lost. I honestly don’t know what I would do!

Though it takes some time to do this, there are so many benefits to budgeting into the future. For me the biggest benefit to budgeting multiple months at a time is that when changes or unaccounted things come up (and they always do) I can go to my spreadsheet, input the change (like the wedding gift in September I forgot to budget for) and see how it affects everything else. Sometimes I just need to make minor adjustments like skim a few dollars from other areas to make up the unaccounted for difference and other times I make note of months I may need to ask to pick up an extra shift sort of thing. The advantage to us budgeting on me working four day work weeks is that I can often easily pick up that fifth day to make up any shortcomings.

When I’m making my spreadsheet I also do it based on predicted income so when we actually do get paid and it’s more or less than my prediction I again, input the actual amounts and see how it affects things. Obviously getting paid less than expected is always a bummer but it doesn’t happen often and in my case usually not a detrimental amount, I’m usually good at predicting to about to about a $40 difference.

Both my husband and I are paid bi-weekly and though I have tried monthly budgeting it just doesn’t work as well for us as bi-weekly increments. I think it’s because our pay can vary, I like being able to adjust as we go. At the end of the day it doesn’t make a huge difference but there are two months of the year were we both have ”extra” pays. Because we budget in two-week increments, the entire ”extra” pay isn’t exactly ”free” per se but there are two months where there is a surplus. Budgeting  into the future allows me to see exactly where these surpluses are, how they affect everything else and how we will allocate the money. Our extra pay in the fall is used to pay my licensing fee and fund Christmas. This year it will also be allocated to some vehicle stuff as well like tire change, registration and new brakes. Because I know we have these months of extra pays, we use our surplus months in this manner rather than budgeting these items in every month as most people do. It works for us!

Do you budget one month at a time of months into the future like me? What do you like about it?

 

 

If You Have to Justify a Purchase, You Probably Didn’t Need It.

Do you ever find yourself buying something, telling someone about your purchase, and before they say anything, you start explaining why you needed it?

I know I have.

And 99% of the time, it was something I didn’t need.

Scenario One

ME: ”Hey Babe, I went to the store and bought some ingredients to make dinner tonight”; HIM: ”Sounds great, I can’t wait to try it!”

No explanation needed. Obviously if you need something there is no justification required. My husband wouldn’t retort with ”Why did you buy ingredients we needed for a meal we need to eat”. We need it, so that’s why bought it.

Scenario Two

ME: ”Hey Babe, I went to the store and bought some ingredients to make dinner tonight and I also bought a massive jar of Nutella, a five pound bag of apples and some nail polish…BUT before you say anything! I needed this stuff. I know I only went for the dinner ingredients but the Nutella was on sale, even though we have 6 apples in the fridge I’ll bake (something else we don’t need) with this bag and I haven’t bought new nail polish in f-o-r-e-v-e-r so really, I needed that too” HIM: ”eyeroll”.

I can’t even convince myself with scenario two as I type it out, yet I have done it a gazillion times. I go to the store with a list and convince myself that there are other items that I needed.

If you really have to justify a purchase to yourself or someone else, you probably don’t need it and your money will be better spent (or saved) somewhere else.

There is a difference between thinking about a purchase and justifying it. You need to make the distinction. Take my recent laptop purchase as an example. Initially I didn’t need a new laptop. I spent weeks convincing myself a million reasons why I did though. In the end my head won and for two years I didn’t buy one. When she finally did stop working I no longer had to justify it, rather think the decision though and decide how much  I would spend and where I would buy it from. Two years ago I would have had to justify to my husband why I needed it. After it stopped working, and needed to be replaced, no justification was needed.

I have so much honest regret about crap I’ve wasted money on in the past and 100% of the time I had to justify the purchase to myself or someone else. Though I have come a long way, the struggle between wants and needs is a real thing.

When making a purchase on a want (the new shoes, the video game, the nail polish, the gym membership…) think about how much justification it’s going to take and then decide if it is worth it.

Life is too short to not be enjoyed. I’m not suggesting you don’t enjoy your money. What I am suggesting is that you value your money and make sure it is appropriated in the best manner. If something makes you genuinely happy, that is justification enough but if three days later you’re convincing yourself you still need ”it”, return it and rid your conscious of guilt.

How To Face Your Debt For The First Time

This topic seems so silly on the surface but for people who are in debt and avoiding it, it can be a very real issue. They just don’t know how or where to start. Part of the reason the issue of debt is such a massive problem worldwide, is that it is simply easier to avoid it then deal with it. Like so many other things in life, avoiding it won’t make it go away and only compound the issue. Your mind can be very powerful and if you force yourself to forget about something, even for a temporary reprieve, you can. But as I already talked about last week, there are many reasons why ignoring your debt is a bad idea and you need to face it!

To start, prepare yourself mentally to face a challenge. You need to be in the right mind set and have time to dedicate to it. Don’t decide at 11pm on a weeknight that you’re finally going to come up with a plan. You need to make the commitment to change and get the debt paid off.

Sign up for online banking. It’s 2014, I don’t know of a single bank in the world that wouldn’t have online access but it may be something you have to register for. Before your ”debt date” make sure your online banking is established and working.

Pick a date. Set aside dedicated time for yourself (or you plus spouse) to sit down. If you have children, make sure they won’t be a distraction. You need full attention the first time you try to work through this problem. Be comfortable in general. If the day you have set aside ends up going to hell in a hand basket, reschedule but don’t give yourself too much time in between dates, urgency is key.

Gather Info. This includes locating all account numbers and contacts for each account. If you can’t access the information online, be prepared to call the loan issuer to get the relevant information. This also requires basics like having pens and paper around. When you’re getting the information make sure you find out original balance, balance owing, interest rate and minimum payment. With the first phone call just get basic information. Once a plan is in place you may be required to call them back with more precise questions but for now basics only, after all this is a baby-step process

Make the calculations. This can often be the toughest part but it needs to be done. Sit down and finally calculate what the final number is. There are a number of online calculators that can help you if you’re unsure about calculating stuff like interest rate but it’s not as difficult as you may think.

Come up with a plan. Once you know the final number you need to come up with a plan to get it paid off ASAP. This will include looking into your budget and seeing what needs to be done. You may not have to do much other than reallocate some money but more likely then not you’ll need to make changes, cut things out or make extra money and put any extra funds towards your debt.

Facing your debt for the first time can be daunting but a very necessary thing to do. Once you have a plan in place you will feel much better, trust me :)

Any other tips for someone preparing to deal with their debt for the first time?

 

Pssssst: My bloggy friend Pauline is having a pretty sweet giveaway…head on over to enter to win some serious cash and prizes!!

If I’m over 50 what should I do about Life Insurance?

The best time to purchase life insurance is when you are young and healthy; the premiums you pay will be lower as the insurance company’s risk in insuring you will be low.   But you may not be young when you need insurance.

As more people decide to start a family later in life so more people apply for life insurance at this point too. Many of the commercials you see on the television, which advertise life insurance for people over 50, make it seem as though this is a really advanced age. In reality it’s not uncommon for people in their 50s to have young children.

If I have a young family what should I do about Life Insurance?

Essentially there is no difference between someone who wants to provide for their partner and children when they are 50 and someone who wants to do the same when they are 30. The reason behind the decision to apply for life insurance is the same. You have a young family and you want to make sure that they are provided for should you die; costs such as school fees and mortgage payments don’t die with you.

When you are 30 the usual path to follow is to apply for term life insurance which will cover you for a number of years to allow time for your children to grow and make their own life. When this happens you will not have the same financial responsibility. In the majority of cases people can do this as they are young and relatively healthy. This means that they can get a term life insurance policy quite easily and with affordable premiums.

Although you may have similar circumstances when you are 50 the insurance situation changes because you are obviously closer to average life expectancy of 78 years. This does not mean you can’t purchase term life insurance but you will usually be subject to a medical and your premiums may be significantly higher than they would if you were younger.

What are my options aside from term life insurance?

Over 50s insurance policies are a specialized purchase and are for your whole life. You will pay premiums for the rest of your life and an amount will be paid to your dependents when you die. The good things about over 50s insurance are that it is a way of protecting those that you leave behind, in a financial manner, and that there is no medical involved.

If you apply for over 50s life insurance you will be accepted but you do have to pay high premiums to reflect this. Realistically, in the vast majority of cases, life insurance is cheaper when you are younger. This is not ideal if you are starting a family, and setting up home, later in life but you do still have options to get yourself insured; it just may cost you more money.

Why Ignoring Your Debt is a Bad Idea

For a few years we ignored our debt. Not totally ignored but made our minimum payments faithfully each month on our student debt and hoped to wake up one day and have them be gone, except it wasn’t happening that way. Each month we’d send in our bank checks and hope to wake up to a zero balance. You know those Visa commercials where the guy shakes his bill and the balance is magically zero? Yeah, tried it and doesn’t work.

I was so not interested in figuring out exactly what we had to do to get our debt paid off that I just ignored it all instead. It wasn’t until I was pregnant and realized we were now responsible for another person that I clued in that something more needs to happen and guess what? It wasn’t easy. It was ugly.

Taking charge of your finances, especially when debt is involved is hard but you need to do it. Ignoring your debt is never the answer. YOU need to control your own finances and I promise you your life will improve a million percent.

You’ll sleep better. I’m not an easily stressed person but I found myself not being able to sleep restfully at night because I was constantly thinking about money. How we were going to make it work, how we were going to get the debt paid off in a reasonable time and how we were going to afford the life we wanted for our child. We had good paying jobs but didn’t know they best way to make our money work for us. As soon as we sat down together and had an in-depth conversation about everything I slept better. Getting on the same page and coming up with a plan of attack was the first step to feeling better about the whole situation.

You will become a calmer, happier person. Because you’re not constantly thinking about money, your stress level will be decreased and less stress always makes for a happier person. Being a calmer person will lead to better overall decision-making which will have positive effects in all areas of your life.

You’ll gain confidence. Making a purchase and knowing you have the money set aside for said purchase is a great feeling. When you’re ignoring your debt and making uninformed purchases it only aggravates the situation.

If you continue to ignore your debt you’ll never reach your goals in life and what fun is that? We only have a finite amount of time on this earth so we need to make the most of it. Paying off debt is one of the first steps to reaching the goals you have set out to accomplish.

Being in debt sucks. I am a much happier person since coming up with a plan to get rid of our debt while still meeting other life goals (such as some vacations). I talk about money and no longer worry about finances. I have a pretty good idea about what our life is going to look like in five years and what we need to do to attain it. I’m not going to ever go back to ignoring debt and hoping it just gets figured out, because I know it never will.

Lowering Your Car Insurance Premiums by Increasing Your Credit Score

Did you know that you can save money on your car insurance by improving your credit score? While it may seem odd that your credit score and your auto insurance rates are connected, there is a correlation between the amount that you pay for coverage and your credit score. How does improving your credit lower your auto insurance rates?

People With High Credit Scores Are Seen as More Responsible

Those who have a high credit score have that score because they have been responsible with their money. Those who are considered to be responsible with their money are generally responsible with other aspects of their lives as well. This means that there is less of a chance that a driver will commit insurance fraud or file a frivolous claim to get money to pay for bills or to support an addictive lifestyle.

Drivers With Higher Credit Scores Are Older

Drivers who are over the age of 25 tend to be the people who have the higher credit scores. People who are over the age of 25 also tend to be married, have children and have steady jobs. These are things that younger people with lower credit scores may not generally have due to inexperience, maturity or other factors.

Drivers With Good Credit Drive Cars With Safety Features

A driver who has good credit can generally get a loan amount and an interest rate that enables him or her to drive a newer car with safety features such as airbags and anti-lock brakes. Features such as these reduce the odds that a car is going to be involved in an accident. Modern features such as back-up cameras and lane assist make it even less likely that a car will be involved in an accident because of the driver being unable to see or being drowsy.

Those who are seeking the lowest Winston-Salem car insurance quote should look into improving their credit score. Doing so makes it possible to save hundreds or thousands of dollars per year in premiums. This money can then be put into a savings account where it can grow even more.

The Great Laptop Steal!

wpid-20140713_232643.jpgThis day has been coming for quite some time. The day has finally arrived that I can write a post out on a computer of my own. Since I started blogging I have been using my husbands laptop. His work provides him with a computer and I was relying on either his current computer (ideal since it is new and actually works) or his six-year-old laptop that was on its last legs. With increase in freelance work and my husband having his own deadlines to meet professionally and for his own blog, I was using the old computer more and more….and it just wasn’t working.

I have been delaying buying my own computer for some time, I was just too cheap but when the ”P” and ”Ctrl” button on the old laptop stopped working…and it may or may not have started smoking from overheating…I did what I could for two weeks before finding a sale decent enough to drop some cash down and I am more than happy with what I was able to get.

Honestly I don’t need any bells and whistles and I would never use an Apple product to its potential. All I wanted was internet connection, something I could run Microsoft office on since there’s no way I could live without my excel and, in a perfect world, a numeric keypad since I use it quite frequently.

This past Saturday a local drugstore chain (of all places) had a good sale on a cheap, very basic computer for $350 also offering 20x in store collectors points. Not only did I end up getting a new laptop for a steal but I now have almost $200 in points to use at this store which sells everything from high-end makeup to bacon. It’s basically a small department store which I will have no problem spending money in. I’m excited to ‘shop for free’ at this store but for now I will hold onto my points until we figure out how we’re going to use them but I’m thinking we’ll likely use some at Christmas time.

My hope is that I will not only have a little more time to blog but it will be more efficiently used not wasted trying to get the buttons to work or even to turn on. I honestly don’t know what took me so long but I’m glad the day has finally come!

What was the last great sale item you scored??