6 Steps to Pay Off Debt

Over the past few weeks I have made the mistake of using my credit card *shrill*. I have been planning some upcoming trips and using my card to go ahead and purchase everything I’ll need in advance but with it has come that terrifying bill in the mail. I did plan ahead and already have worked out how I will quickly pay it off but it made me sit down to consider what I would do if I did have major debt looming overhead. Here are a few tips to help anyone pay off debt.

6 steps to pay off debt

Image Source : Images Money flckr

1. Pay off your credit cards
There are plenty of sites out there that will talk about credit card churning for the points and for the benefit of improving your credit. I agree with them for the purpose they serve but there is also a danger to doing so. If you are not someone who immediately goes home and pays off your credit card you are likely to end up paying interest on those charges. Once you have a decent amount charged up on your card and it starts taking the interest hits your debt can go spiraling out of control. Take charge of your charges and get them paid off as quickly as possible. My suggestion if you have multiple is to pay off the card(s) with the highest interest rate while paying the minimum and then roll all of the extra money you were paying off the initial one to the next one until you have them all paid off. This is a Dave Ramsey method and has worked for tons of people.

2. Lower your monthly payments
Do you have car insurance? A phone bill? Cable? These are all bills that you could potentially have lowered in order to put towards debts that you cannot. If your contracts are running out soon, call around or skim the internet for better prices. If you are adamant about staying with your current provider call them and ask to speak with a manager and tell them you’re a loyal customer and would like to see if they have a better rate they can offer you. The savings from doing so for any of these contracts can be used to pay down your other debts.

3. Make more money
There are a multitude of ways to bring in additional income. You can go get a second job at a store or food establishment you like. Doing so would not only benefit you in bringing in additional income but also save you money on purchases you would have already made thanks to employee benefits. Any additional money you earn could be automatically deposited into your savings or you can make an agreement to yourself to pay at least a portion of your additional earnings towards getting rid of debt.

4. Make smart spending choices
Do you really need that latte? If you’re spending $5 a day on a fancy latte that means you’re dishing out an extra $1825 a year. $5 a day might not seem like much but little purchases truly add up. If you were to make the same beverage at home for around $1 or less you would save $1460 to put towards your debt per year!

5. Lower your interest rate
If you have been with a company long enough and in good standing you should have no issue with getting them to lower your interest rate. I say so because I have done so recently. All you have to do is call and ask. The worst they can say is no and you can call back in a few weeks or months and try again.

6. Borrow from your savings
If you only have a small amount built up in your savings I would suggest by-passing this option. However, if you are like me and have a surplus beyond what you would need in the case of an emergency then borrow some of that money and pay off your debts. You are going to earn far less interest in your savings than you will be paying on your debt so pay off your debt first and you will be able to quickly replenish any money you have borrowed from your savings.

Suggested Reading : The Total Money Makeover

Top 5 Personal Finance Blogs

personal finance

Image Source : 401(k) 2012 flickr

One of the main focuses in my life as I’m sure you have noticed in previous posts is personal finance. I’ve been in completely broke, in debt and living paycheck to paycheck, and it’s not a life I would wish upon anyone. I was happy to discover the concepts behind personal finance when I did because it allowed me to quickly dig myself out of the hole I had so willingly allowed myself to fall into.

The following personal finance blogs were and still are a big help in my journey to financial freedom and I hope they provide the insight you need to get your to a better financial state.

 

Without further ado and in no particular order…

Budgets are Sexy

J$ is my man! This is the first financial blog I ever came across courtesy of a pin I found on Pinterest. He writes about a broad range of topics all somewhat related to personal finances. My favorite of his posts are his Side Hustle series where he interviews someone with a unique side hustle to give you insight on a possibility to earn some extra cash. This is a great site if you are looking for fun reading with a lot of personality.

Young Adult Money

DC’s is another one of the blogs I lost my PF virginity to. His posts on ways to save money are killer. Another favorite of mine that he does is on Friday he does to Weekly round-up posts. One is a post with all of the current giveaways that are running on various blogs and the second is his favorite posts of the weeks. I was lucky enough to have my Tropical Green Smoothie recipe featured on his roundup post. Is it lame that I completely went geeky fan girl when I woke up to the email notifying me?

Project Ikonz

Project Ikonz is a relatively new blog but is full of great insight into the world of personal finance. Ikonz takes difficult concepts and breaks them down to you in an easy to understand fashion and covers a variety of topics. I actually find it ironic that on many occasions I’ve gone to visit his site and found his newest post was something I was recently looking in to. (including yesterdays post, but more details on that later)

The Broke and Beautiful Life

This blog that is helpful in the PF department but being a young adult female is one I can also very closely relate to. Her blog is primarily focused on finances but she also adds in very interesting opinionated posts and some girly stuff to boot.

Frugal Rules

John over at Frugal Rules has a very mature writing style. I read his blog regularly but the ones that stand out to me that have been very resourceful have been his posts on investing, real estate and credit card churning. He’s also recently written some posts on frugal travelling tips that I plan on utilizing very soon!

I hope you are able to find some time to check out a few or all of these blogs, they are definitely worth a gander!

 

What is your favorite personal finance blog and why?

Goal Updates 3/21

Goal Updates 3/21

smart goals

Image Source : Celestine Chua

1. Read at least one new book a month
This month has been filled with mostly class time so my reading has been used up on reading my textbook. My book for the month has been Adobe Illustrator CS6 Classroom in a Book. It comes with a cd that includes files to work on that are labeled per chapter to help you along with each of the lessons in the book. It has been a great help in gaining my skills in Illustrator and I would recommend it to anyone interested in learning to use the program.

2. Make $800 in side hustle income by May 1st
I have a feeling I’m going to have to extend the deadline for this one. I have started earning some additional income and been able to tuck it away in savings but not at the rate I was hoping for. My earnings have come from tutoring, blog consulting and affiliate income. I’m hoping to be up and selling on eBay or Craigslist soon as well. I have a storage unit full of things that I could probably do without.

3. Work out at least 3 days a week
I haven’t been able to get in 3 workouts at the gym but I have been doing some workouts throughout my day to keep me in decent shape and not put on any weight. School is finally over this week so I will be going back full force starting this weekend into next week. I’ve found a routine that I’m going to try out on Bodybuilding.com.

4. Eat breakfast at home and bring my lunch to work every day
I have finally had some success in this goal. I was sick quite a bit last week and missed some work so I was able to eat at home for my lunch and breakfast thanks to that but I also remembered to prepare a few lunches and took my breakfast most mornings. My waistline appreciates the diligent efforts

5. Blog at least 4 days a week
This has been a pretty sad week for 20 Something Syndrome. I’ve been overwhelmed with school and some personal issues and haven’t been much in the mood to talk to people much less blog. I’m getting in better sorts though and hope with the coming weeks things will just continue to get better.

No Spend Challenge

As far as going out to eat goes I’ve been doing pretty great. Not shopping has proven to be the challenge though. I’ve had some events and car troubles come up that have had me dipping into savings, noooo!

Disclaimer-*Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”

The Cost of Pet Care

cost of pet careEver since I was a little girl I’ve always grown up with cats and dogs in the house. Into adulthood I couldn’t go long without starting the search for pets of my own. I started out with one cat, then two, then two cats and a dog. I love all of my pets dearly but being the young enthusiastic adult that I was I didn’t take into consideration the high cost of pet care.

I like to think I’m a relatively frugal person that is able to seek out great deals and even with doing so animals will set you back a pretty penny.

For my precious girl Winnie I’ve already put out nearly $250 on vet bills including her first rounds of shots and getting her fixed. There are low cost sterilization clinics, you just have to seek them out and be flexible on scheduling. I was able to get her fixed for $60 which is way cheaper than most veterinary clinics and we saw no complications.

In addition to medical expenses you also have to consider the cost of food, shelter, toys and other necessities. I probably spend about $21 a month on food and at least $10 a month on new toys to replace the ones that get destroyed. One thing that I’ve been blessed with is not having to put out money on shelter. I have very wonderful family and friends that have been willing to keep an eye on her when I’ve gone out of town.

Cost breakdown per year:
Medical expenses : $250
Food: $252
Toys: $120

Total cost: Approx. $622
And that’s just for one pet!

If you are considering getting a pet you should definitely consider the costs of caring for one. Adopting a new family friend is wonderful but you need to make certain you are going to be able to provide.

How have you pets improved your life?

Why it is Important to Have an Emergency Fund

emergency fund

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Years ago when I graduated high school and started to earn a substantial income I had no concept of savings. I spent money as I earned it and lived paycheck to paycheck. It wasn’t until I read Dave Ramsey’s book Total Money Makeover that I learned my mentality on money was foolish. I was only 21 years old and had drowned myself in credit card debt and a terrible credit score to boot. I felt overwhelmed, like I had dug my own financial grave. It’s scary to feel as if you have no control and can’t get ahead. It is these obstacles that help us grow though. I knew I had to come up with a solution and Dave Ramsey’s book proved to be the key to my salvation.

Dave Ramsey has seven baby steps to financial freedom in his book and the first and most important in my opinion is to start building an emergency fund. The amount you should shoot for is dependent on your personal expenses but he recommends at least $1000. I found this goal to be fairly easy to reach in a short period of time and it has proven to be a good amount for my circumstances. Once you have that money saved away your emergencies won’t feel like emergencies. They will merely feel like a small bump in the road.

Why is it important?

For starters, if you get fired or “let go” you’re screwed without it. You can always resort to charging up all your credit cards, but that’s just going to get you into a sea of financial trouble. Don’t be a dummy.

You get socked in the face at a bar. Insurance only goes so far, beyond that you’re going to need to cough up some money to cover the extra expense to get your teeth fixed.

Your tire blows going down the highway. These things happen more often than we’d like them to.

For the average person with no money in savings these scenarios would cause anyone to go into a huge panic.  With a savings account built up these all become inconveniences. Savings give you peace of mind and financial security. $1000 may not be enough to live off of if you lose your job but it will give you some time to come up with a solution. If you feel more comfortable having more than aim for a higher goal. Even if you feel that you are currently living paycheck to paycheck, you can find ways to cut out non-essentials to slowly grow your savings account. If an emergency comes up, think carefully about the situation and be sure it is actually an emergency before you spend money out of your savings to fix it.

What changes have you made to help grow your savings?