Christmas can get pretty overwhelming, from the traveling, cooking, and gift giving. With the excitement of the holiday season in full swing, we can easily go overboard especially in gift giving. No matter what your childhood upbringing was like we all can agree that [Read more…]
Financial Lessons I Learned From My Grandfather
If you’ve followed the blog for several years, you know I’ve spoken about my grandfather. The end of June marks his birthday and it is a time I always wind up reflecting on his life, the things he taught me, and the imprint he left on so many people’s lives. He was someone who was smart with money and level-headed about, well, everything. Anyone looking for solid, non-biased advice could always look to my Pawpaw. Where finances were concerned, people could stand to take notes. Here are a few lessons he taught me.
Take Time to Think
One of the biggest things my Pawpaw taught me was that you need to take time to think about big decisions. While spontaneity is good (and he had plenty of that), he would take a moment to think about any life-altering decision that needed to be made. Case in point: when he and my Nana decided to adopt my mom, he took a few days to consider all of the factors and make an educated choice. He looked at their finances, learned a little more about adoption, and that had a baby girl in their arms later that year.
Leave It to the Pros
There are some things better left to the professionals. My Pawpaw hired people to help with the things he wasn’t good at because, chances are, if he tried doing them it would just cost more money. For instance, he hired landscapers to come and do the yard. He also hired an advisor to handle some of his investing. When it came to tax time, he was the professional everyone came to. This is just a good reminder that just because you can DIY doesn’t mean you should.
Find a Supportive Partner
Another thing my Pawpaw taught me is that you need to have a supportive spouse/partner in your corner. When he approached my Meemaw, his second wife, about wanting to retire early she went out and bought him a retirement mug. “Go for it,” was her response. They were such a great team and understood each other well.
Secure the Life You Want to Live
My grandfather knew that he wanted to retire to Florida and he did just that. It took hard work and planning, but he made it happen. Around the time I was five years old, they moved from North Carolina to Florida. He and Meemaw purchased a beautiful new home in a 65+ community. They lived out some of their best years together there and it is where she still resides.
Have a Plan
Securing the life you want to live isn’t possible without a plan. Every step of the way, he knew what the end goal was. He wanted to be able to have financial freedom and enjoy his life on his terms. We would always joke around that Sinatra’s “My Way” was really about him.
His planning didn’t stop with his life either. Pawpaw had a plan up to the very minute he died. He didn’t leave anybody holding the bag after he passed away. Instead, everything was already handled. The will had been written, money where it needed to be, and everyone was able to process their grief.
Don’t Sweat the Small Stuff
Last, but certainly not least, something my Pawpaw always said to us was this: “Don’t sweat the small stuff, and it is all small.”
That is the truth! There isn’t anything in the world you can’t come back from. In the grand scheme of things, it is all small stuff. When he lost a sizable amount of money in 2008, he kept moving forward. It sucked, but he recovered from it. At the end of the day, even the market crash was small stuff. If you keep that mentality, you can overcome anxiety and reach your goals.
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I’m Learning a New Craft to Save Us Money
I haven’t talked about it much here on the blog, but I’m big into crafting. I starting knitting when I was about five years old and, after that, I wanted to learn every craft I could get my hands on. One thing I never learned how to do was use a sewing machine. I can hand sew all day long, but I’ve never touched a machine. Until now, that is.
Yard Sale Finds
First, sewing machines can be pretty pricey (we’re talking $100 for the most basic and an average of $300 for a decent machine). When my husband saw that my neighbor was selling one during the community yard sale a few weeks ago, he immediately called me. On his way back from grabbing our Saturday morning breakfast, he got $50 cash back. If she’d take $50, I would have a new sewing machine. ]
I walked over with my little one shortly after breakfast and found myself chatting with the woman. She was glad to sell the sewing machine for $50 and I happily lugged it back home. For a fully functioning Pfaff sewing machine, I got a steal. However, the real savings hasn’t even kicked in yet.
How Sewing Will Save Us Money
Before we dive in too deep, sewing can be an expensive hobby. If you are purchasing new fabric, buttons, and only buying from the “fabric section” of your local craft store, you won’t likely save any money. Your sewing machine will save you money if you are willing to be thrifty and think outside of the box. Here are some ways it will help us save money.
- Stockpile clothing. If you’re like me, there are plenty of clothes in your closet right now that you haven’t worn in over a year. This clothing stockpile is actually a gold mine when it comes to sewing projects. Rather than go out and buy an entirely new outfit, I can create a new one with the fabric from older clothes.
- Thrift shop for vintage pieces. Vintage clothing can have interesting patterns and design ideas that you wouldn’t have come across anywhere else. The best places to find vintage outfits or fabric are yard sales in established neighborhoods. You might also be able to find good vintage pieces at your local consignment/thrift store.
- Adjusting our current clothing. As my body continues to adjust to life after giving birth last year, it will be nice to have a sewing machine to make adjustments to my clothing. I’ll be able to take things in (and possibly let them out) when we need adjustments to be made.
- Kids clothes. When it comes to larger items that are hanging in the closet (like that $300 bridesmaid dress I’ll never wear again), I plan to make some outfits for our little one. This can be a great thing to do with extra clothes you have – just downsize it into a child’s outfit.
- Making blankets. The biggest reason I got the sewing machine is because I enjoy making blankets. My first project will be a quilt made from my baby’s onesies from her first year of life. While this doesn’t technically save us any money, it does help us reuse items that would just get dusty in a box.
These are just a few of the ways my newest hobby will help save my family a little money. Not to mention, no one will ever have the exact clothing we have on (and that’s kind of cool).
Readers, do any of you sew or tap into your crafty side to save money? Tell me about it in the comments!
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Why You Need to be Using Sinking Funds
Recently, I have seen a lot of other personal finance bloggers talking about sinking funds. Vacation sinking fund. New car sinking fund. Dream home sinking fund. At first I was like, why don’t they just call it saving money? However, if you aren’t using sinking funds, you should be. Here’s why.
What is a Sinking Fund?
A sinking fund is a method of saving money each month to go towards a specific purchase. Each month, you set aside some money in one or multiple categories to be used for a purchase or event at a later date. This makes it so that you are saving small increments of money over time instead of forking up everything all at once. You can create a sinking fund for just about anything. People have used them to reach financial goals, take dream vacations, and even buy homes.
You may be thinking to yourself, “what is the difference between a sinking fund and a savings account?”
The biggest difference is that sinking funds are more intentional than just general savings. You are saving your money to work towards a goal. If all of the various things you are saving for are kept in the same account, things are bound to get confusing eventually.
Benefits of Using Sinking Funds
There are a lot of benefits to using sinking funds. Think about it. If you take your family of four to the beach, that is easily $1,500. Christmas gifts for the same family can rack up some serious cash too. Here are some of the specific benefits of sinking funds:
- Save for literally anything you want. You make the decision on what your goals are and what you are saving for. A sinking fund simply makes your saving more intentional. You know exactly what it is going towards and, in some ways, that can be motivational.
- Plan extravagant trips or events. Whether you are planning your dream wedding or a trip to the Bahamas, a sinking fund can come in handy. You can make them as extravagant as you want, just set the monetary goal you want to reach.
- Stop feeling guilty about big purchases. If you are like me, there is a lot of anxiety around making expensive purchases. When you have a sinking fund designated for specific big purchases, however, you don’t have to feel guilty. The money was there and saved specifically for that purpose.
- Be prepared for inevitable expenses. Every year, we have to get the car registered and pay the taxes on it. Why does it always catch me off guard? October again? Having a sinking fund where a set amount goes away each month to reach the $500 that we need to cover that annually will help me be prepared for that expense.
My New Sinking Funds
Our family is saving for a number of things. Once we have our emergency fund flush with cash, we will be starting a few sinking funds of our own. Here are the categories:
- Car maintenance/registration fees
- New clothes
- Vacation
- Dream office
- House
- Christmas
As you can see, these are purchases many people would be willing to take on debt for. They would either swipe a card or take out a line of credit, possibly even a loan. Sinking funds are great for anyone trying to be debt-free. It helps you avoid taking on debt for large purchases. Instead, you can plan and save. Sounds like a win to me!
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Slow Progress is Better Than No Progress
When it comes to our debt freedom goals we are pretty far off from where we’d thought we would be a few years ago. Of course, life has thrown some unexpected curve balls our way. We moved to Atlanta for a job that didn’t quite work out and then the COVID-19 pandemic rocked the entire world. Through it all, we have been able to maintain at least the minimum payments on everything and have avoided taking on new debts altogether. So, slow progress is better than no progress, right?
Our Slow Progress
If you read last month’s debt freedom update, not much has changed. We’ve made a payment on each of our accounts to stay current but there are not any huge changes. In June, we will make a little bit more money, but most of that will be stashed away in savings as we prepare for our firstborn child to arrive at the end of the summer. There are only 10 short weeks before she makes her appearance!
While the slow progress can be a bummer at times when we consider where we wanted to be by now, there are times we sit back and think to ourselves, “Wow, look how far we’ve come.” Just a little over four years ago we were living in a motel. We were trying to pay off rental debts to get into an apartment. Things looked pretty bleak and we were taking on new debt just to improve our lives.
Flash forward to now when the only significant debt we hold is our car and my student loans. We’ve paid off accounts in full, moved four times (once four hours away to a different state). Debt or no debt, we love the lives we are beginning to create for ourselves.
A Few Motivational Thoughts
Sometimes this slow progress can be discouraging. However, slow progress is better than making no progress at all. Or worse, we could be going backward. Thankfully, we are trucking forward. Here are a few reasons even slow progress is a reason to pat yourself on the back.
- Slow progress doesn’t mean you are failing. Progress is progress. You are not failing just because you are moving slower than the person to the left or right (or how fast you think you should be going).
- It adds up over time. As mentioned above, my husband and I have come a long way. We were essentially homeless living in a motel a little over four years ago. Every financial change we’ve made has been for the better, even if the progress has been slow for us.
- Slower progression allows you to adapt to more things. If there’s anything I can attest to it is that we’ve both become adaptable to changes as they come. We have a tight week financially? No problem! I’ll just trim the grocery budget. We’ve learned to roll with the punches.
- You become resilient. Slow progress will make you more resilient. You will learn not everything is the end of the world and that, eventually, you’ll reach the goals you have your sights set on.
- It teaches you not the give up. Most importantly, slow progress teaches you to keep pushing forward. Things don’t always work out according to plan and that’s okay!
Readers, how do you monitor your debt freedom progress? Share your methods in the comments!
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Debt Update: June
It has been a little while since I posted a debt update on the site. As mentioned in my blog post “Is Your Outlook Holding You Back?” we’ve been able to pay down a significant amount of debt over the past year or so. Most of this has been done by snowballing our debt (to the best of our ability). Here’s a debt update with detailed numbers…
Debt Update
The major three things that have happened since our last debt update on the blog are…
- We paid off my husband’s car! That is $175 per month that we now have available to help pay off other debts.
- My N.C. state taxes has been paid off. This will free up about $463 per month.
- At the end of July, I’ll have paid off my higher-interest credit card. We’ve been paying $175 per month since April to get this done. So, the last payment in July will free up another $175.
Altogether, these three things will free up around $800 per month to go towards paying off other debts and saving.
On top of paying those three things off, we have decided NOT to pull out a loan for my wisdom tooth extraction. Instead, we’ve decided to save and pay in cash for it. With the additional $800 or so per month (starting in August), we should have the money to pay for that in the early fall.
Other “wins” when it comes to our debt freedom progress have been paying down the amount on my husband’s tool bills. Each of them has been paid down significantly each month. We should see them disappear in less than a year (nearly $600 per month). Now that a few other items are paid off, we should be able to reallocate the funds to get these paid off faster.
Earning Extra Cash
We’ve both been searching for ways to make additional money as we continue snowballing our debt as well. My husband has been picking up quick mechanic jobs within the community for extra cash (i.e. putting in a battery on the weekend, or jumping someone’s car).
I’ve been looking for things around the house to sell and picking up a freelance project from time-to-time. More recently, I discovered an old coal bed warmer we’ve had collecting dust. Online it says these can go for between $250 and $1,000. I’m hoping to visit an antique store and sell that soon. That extra cash will go directly into paying for my wisdom tooth extraction.
All in all, our debt update for June is looking pretty good. I’m happy about it and can’t wait to see how it progresses in the future. Of course, I’ll keep you all updated here.
Readers, do you have any easy side hustles that have really helped you decrease your debt? Let me know in the comment section below!
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Jumbo Student Loans Increasing — What Indebted Students Should Do
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You Might Be Underinsured. Ethos Can Fill in the Gaps.
Helping the Underinsured, Ethos Makes Term Life Insurance Affordable
No other financial product provides the kind of security you get from life insurance. It helps beneficiaries during truly painful circumstances. Sadly, most adults either don’t have life insurance or have insufficient coverage for all of the things that arise in bereavement and its aftermath.
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The Current State of Student Loan Debt
America has reached a new economic milestone – or maybe a millstone – of $1.52 trillion. Which of the following does this number represent?
1. The latest contract for a professional athlete
2. Your current credit card balance
3. America’s collective student loan debt
While the first choice sounds strangely plausible, and some days you may feel like the second choice is correct, $1.52 trillion represents America’s total outstanding student loan debt as of March 2018 – according to the new consumer credit report from the New York Federal Reserve.
[Read more…]
Recovering From Crisis: What You Should Avoid
In November of last year I was faced with moving into a hotel until I could pay off some debt and get approved for an apartment. It was a struggle and one of the lowest times of my life. I lived there for six months! While I was there, I was able to pay off some debt and finally save for the moving expenses to get myself into an apartment, which I’m now able to call home. Though things are certainly better than they were, I’ve found that recovering from crisis can be just as difficult as the crisis itself.
Recovering From Crisis
You would think that the time after crisis would be the best part but you’re getting used to living in life… without crisis. You’ll need to adjust different parts of your life to make sure that you are still on the right track, financially and mentally. If you don’t, you run the risk of landing yourself back in a mess. So, what should you avoid when recovering from crisis?
- Don’t spend too much! Seriously. It is so easy to go out and buy all new stuff for your new place, start going out with friends or even buying yourself new clothing after you’ve climbed out of a financial crisis. Don’t! Of course, allow yourself some leeway but be vigilant about saving money and insuring that your crisis never happens again.
- Don’t buy anything you can’t afford. For me, this was difficult. I was moving out of a hotel room into a 2-bedroom apartment and virtually had nothing. It would have been easy to take everything out on credit and rack up debt but instead I opted for used furniture and gifts, which saved a ton. If you’re coming out of a crisis the last thing you want to do is send yourself back into one by being irresponsible with your money.
- Don’t confuse needs and wants. Do you need that 65” television? Probably not. Confusing needs with wants can send you down a rather scary financial path. If you are constantly buying things that you don’t need but want, you’ll wind up either really needing something or in debt getting the things you need.
- Which reminds me, don’t take on new debt. If you’ve just recovered from some sort of financial crisis don’t come out of it and open a new credit card account. Take a while, pay off some debt and establish a new financial routine. After you’ve gotten comfortable with your finances, then apply for credit.
- But also, don’t forget to have fun. While recovering from crisis is usually very serious, you need to make time for yourself. Don’t forget to spend a little money doing things that you enjoy, like going out with friends or seeing a movie every once in a while.
Personally, recovering from crisis has been trying for me at times. However, being able to build yourself back up will be the best feeling in the world! So, don’t give up and remember that there is a lesson to be learned through everything.
Have you recovered from a crisis (financial or otherwise)? How did you handle it?
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