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Our Debt Free Family

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Now Is The Time To Prepare A Summer Spending Plan

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Our Summer Spending Plan

It may seem a bit early to you, but I’m ready to start prepping our family’s summer spending plan. Generally speaking, the warmer months tend to be more expensive for us. We go out more. This year, we may even get to take a day trip or two to the beach. Not to mention, the cost of cooling our home in the South can be shocking at times.

So, now that spring is officially here and warmer weather is on its way (it’s 85 degrees and sunny today), I’m ready to start plotting out some of our plans for the summer.

How Does Summer Impact Spending?

As I briefly mentioned above, the summertime tends to bring along some additional expenses for my family. Nobody wants to stay inside when it’s a beautiful warm day. So, there are often additional expenses that pop up.

Namely, our electric bill usually goes up to about $200/month from $100 or less during the winter months (we have gas heat). On top of that, it is generally a time of year when we take more trips, have more day adventures, and living is easy. We simply don’t always pay as close attention to our finances as we should from June to September.

That being said, we started tackling a summer spending plan a few years ago that helps us map out necessary expenses as well as things we’d like to do during the warmer months.

Our Summer Spending Plan

I haven’t written out our summer spending plan in its entirety yet, but I know we are planning to do a few things…

  1. We would really love to take our daughter to the beach. She hasn’t been yet and both of us would love to be able to do that this summer. We live within a 3-hour drive of several great beaches here, so that is doable on a budget. If necessary, we wouldn’t even have to stay overnight.
  2. Another small pool needs to be purchased for the backyard. Last year, we bought a baby pool for the backyard and, even though it cost about $10, it provided our little one with countless hours of fun!
  3. We need to adjust our monthly budget to account for the increased electricity and water costs for our home during the summer months.
  4. Our little one is also going to need new clothes. We don’t have any spring or summer clothes that fit her currently.

Right now, we are working on nailing down what our budget for the summer needs to be and how much money we will need to save for certain holidays, trips, etc. For instance, Father’s Day falls in June, we will budget a little extra money for the holiday and find something my husband would like to do.

We are still hashing out the details, but these are the four things impacting our summer spending plan right now. Readers, do you construct a different budget or spending plan for different seasons? I’d love to hear about how you manage it.

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The impact of exchange rates on expat finances

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A fluctuating exchange rate can greatly affect the finances of individuals, businesses and countries. If a currency weakens relative to another, then it will cost more for people to buy things from outside their country; similarly, it also means that goods from their own nation will become relatively cheaper to overseas buyers. 

While this will only be an issue for most people when going on holiday or doing international business, for those planning a permanent move abroad, fluctuating exchange rates can have major implications on their long-term financial health. It’s important for any person dealing with foreign exchange to understand how the rate of exchange works so they are able to adjust their behaviour in order to protect their financial interests. 

In this post, we explore the importance of understanding exchange rates and provide some top tips to help you stay on top of your financial affairs as an expat.

Overview of exchange rates and their impact on expats

Exchange rates can have a significant impact on the cost of living for expats, especially if they’re reliant on savings or are earning money in one currency, but spending it in another. While some countries have fairly stable exchange rates, there are others that tend to fluctuate as supply and demand for a specific currency moves. It’s important for expats to keep an eye on the exchange rate because it can significantly affect how much money they can spend on daily goods and services. 

If the local currency gains in value compared to their home currency, this helps them stretch their resources further. On the other hand, if the home currency strengthens against the local one, expats may need to rethink expenses or adjust their budget accordingly. Ultimately, managing exchange rates and understanding what drives them is essential for expats in order to ensure they are making financial decisions that are suitable for current market conditions and provide them with the most value while abroad.

How to minimise the impact of exchange rates

For expats living abroad, managing their finances and dealing with exchange rates can be daunting. Fortunately, there are strategies available to help minimise the financial impact of changes in currency conversions. One such strategy is to set up a budget that accounts for future fluctuation in exchange rates. A budget allows an expat to plan out what everyday costs they can realistically afford, with a buffer accounting for any uncertainties in the market.

Additionally, opening a local bank account in your host country provides access to funds without the extra costs associated with regularly exchanging money. Finally, it pays to shop around for the best rate when converting currency and look for opportunities to transfer money back home at little or no cost when possible. With some planning and organisation, expats can successfully manage their finances and reduce the impacts of unfavourable exchange rates.

Tips to budget effectively while living abroad

Setting up a budget and sticking to it is often easier said than done. The key to budgeting effectively while living in a foreign country is planning ahead. Consider using specialised budgeting apps that allow you to track your expenses and ensure receipts are stored digitally for easy access. Create a full list of recurring costs, such as groceries and utilities, plus any additional activities you may be passionate about. 

Furthermore, keep up to date with any fluctuations in the exchange rate; this will help you create an accurate budget you can stick to. Knowing how much everything costs and setting aside money each month towards these expenses will ensure you avoid any unwanted surprises at the end of the month. 

With good planning and responsible spending habits, a successful and enjoyable journey abroad awaits you.

Our 4th Wedding Anniversary Reflections

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Our Fourth Wedding Anniversary Reflections

Our fourth wedding anniversary was on Saturday. Normally, your fourth anniversary is celebrated with flowers and fruit. We had planned to have a few baby-free hours, grab some lunch, and maybe head to a strawberry patch where you can pick your own fruit and flowers. Unfortunately, I came down with a bad cold Thursday and wasn’t on the mend. So, we had to stay in. However, when has anything gone perfectly to plan? It suited us well.

Despite being down for the count for a few days, I’ve taken some time to reflect on our first four years of marriage. Wow, have we come a long way!

How We Celebrated Our Wedding Anniversary

As I mentioned above, our plans didn’t exactly work out. I caught a pretty bad cold and didn’t feel up to going out. So, we improvised, which has gotten us where we need to be in life so far.

There was a UFC fight airing at a normal time on Saturday. Generally, the fights don’t start until way after my bedtime. However, Saturday’s fight was over by 8 p.m. My husband is a pretty big fan of the sport, so we decided to spend the money to watch the fight here at home.

Additionally, we ordered takeout so I didn’t have to worry about cooking food and spending energy I didn’t really have. We stayed on the couch and I read bits of my book in the commercial breaks. While it was far from what we had planned, it seemed to be the perfect way to spend the day.

Reflecting on the Last Four Years

Even though our initial plans didn’t wind up happening, we still had a perfect (for us) celebration. It always seems to work out that way for us, honestly. No matter what happens, we always have what we need.

When we got married, we’d actually planned a huge ceremony in November. Instead, my husband wound up getting a job offer in Atlanta. We got married in March and high-tailed it down 85 South to whatever waited for us in ATL. Unfortunately, things were pretty crazy there. The job my husband was offered was essentially a scam, the house we were supposed to stay in had holes in windows (and ghosts), and we weren’t sure what was going to happen next.

Things worked out though. We found a high-rise apartment, my husband found new work, and we kept things afloat. When life threw us more curveballs, we always seemed to find a way to hit it out of the park. Our first Christmas together married we had bed bugs in the building. Our first anniversary together was the day everything was shut down in the U.S. due to COVID-19. Despite that, we found ways to rise above everything and still celebrate our love.

All of this to say, I hope that you find someone in your life whose love truly conquers everything else. It is nothing short of being magical.

Readers, do you have any advice for us on our fourth wedding anniversary? 

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Creating A Personal Finance Calendar

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Creating a Personal Finance Calendar

I’ve come to the blog to talk about how we manage our money month-to-month before. I manage most of the money for our family, paying the bills and making sure we have cash where we need it when we need it. It’s not an easy task all the time, but it is well worth being able to live without scrounging paycheck to paycheck. However, I wouldn’t be able to do any of it without our personal finance calendar.

When I started talking about my financial calendar to some of my friends, I realized I’m the only one taking this approach to money these days. For the most part, the people I talk to are plugged into some kind of app or tech solution that helps them keep an eye on their finances. While I’d love for that to be my life (so much less paper involved), it just doesn’t work for me. So, if you’re wondering about how you can create your own personal finance calendar, here’s how I organize mine.

What is a Personal Finance Calendar For?

A personal finance calendar will help you organize your financial life. Initially, I started using my PF calendar to get my budget down on paper. I marked down the days I’d go grocery shopping + the budgeted amount for the said shopping trip. I also jotted down the bills and what days they are due, plus the amount. Additionally, I added in the days we were getting paid and how much. Seeing everything written down on paper helped a lot.

That didn’t give me a full-picture view of my finances though. While it helped me pay my bills on time and stick to a budget, bigger expenses and other things tended to creep up on me. So, I decided to make some changes by adding bi-monthly, quarterly, bi-annual, and annual expenses to the calendar as well. This included things like car maintenance, property taxes, registration fees for the car, doctor’s bills, birthdays, holidays, vacations, celebrations, etc.

Going through and adding all of those things really made my financial calendar more well-rounded. It gave a full view of what we had going on, where our money is going, what we have planned, and what we are saving for.

Creating Your Own PF Calendar to Use

If you’re interested in creating your own personal finance calendar, it’s fairly easy. First, you need to gather a few things…

  1. Get a planner or a calendar to write all of your financial information down in. This doesn’t need to be fancy. You can get it at Dollar Tree!
  2. Scrap paper for lists, etc. is also a good idea. You will want to list out monthly expenses as well as other costs throughout the year before they go into your personal finance calendar.
  3. Buying a nice pen to write with might make a difference. I just love writing with a good pen. It makes me feel organized.
  4. Stickers and fun items can make the process more fun. You may even find some that correlate to your bills. For instance, we have “payday” stickers for the days we get paid.

Once you have what you need, it is time to start organizing your calendar. The first thing you want to write down is all of your expenses that don’t change month-to-month. For instance, we pay $1,767.50 in rent every month. That won’t change until the end of the year when we renew or move. The number $1,767.50 is written down along with “RENT” on the 1st day of every month. Similarly, our car payment of $698 is written down on the 14th of every month. Until we get it refinanced, this is the monthly cost. It won’t change.

After you do that, start listing the expenses you have each month that may vary. For example, you have to pay utilities every month. However, our electric bill goes up in the summer due to running the air conditioning. In the winter, the gas bill is higher. Make an estimate for how much you’ll spend on these items (it’s a good idea to round up).

Following the addition of those costs, you can start adding in the less frequent expenses. For us, this includes our annual registration fees for our car, property tax on the vehicle, car maintenance, paying our taxes, renewing annual subscriptions, celebrating birthdays, holidays and vacations, and ensuring we have enough money to pay for annual check-ups.

That’s it – once you’ve jotted down all of the financial “things” you have a reference point for managing your money throughout the rest of the year.

Readers, how do you stay on top of your finances? Do you use a personal finance calendar or other methods of organization? 

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Getting Ready For Tax Day

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Getting Ready for Tax Day

I’ve talked about tax season on the blog before. As you know, the closer to Tax Day we get, the more anxious I become. However, this year looks a bit different for our family. Thankfully, I’m not feeling very anxious about filing this year and we should have all of our paperwork soon to get things done.

Anxiety Around Tax Season

If you’re like me and feel anxious around tax time every year, we are not alone! In fact, surveys have shown that at least 69% of Americans feel anxious around this time of year. The pressure differs from generation to generation too.

I happen to fall in the category of millennials. Seventy-eight percent of this demographic reports feeling anxious around tax time. Additionally, 82% of Gen Zers, 69% of Gen Xers, and 50% of baby boomers report some kind of anxiety about filing.

This year, it seems the top concern for most people is that they will not get a refund that will make a difference in today’s economy. Many people are reporting refunds of only a few hundred dollars when they may have been expecting thousands. The average refund so far in the 2023 tax season has been about $1,997. That’s a startling 14% lower than last year. For some families, this makes a huge difference.

On top of that, there are worries about refunds being delayed for an extended period of time. Of course, everyone is concerned about getting audited because who wants to go through that?

How To Ease Your Tax Time Anxiety

I’ve been able to relieve some of my tax time anxiety this year by doing a few things to better prepare myself, mentally and otherwise, for Tax Day. First, we’ve been slowly gathering our paperwork since January 1. We both worked at a few different places last year, so there are a few things to sort through.

Next, give yourself time to file. The government is going to take its time getting you your refund either way. So, make sure you leave yourself room to go over your return a few times before submitting it to the IRS. Remember, if you need more time, you can file an extension as long as you do so before April 18.

Don’t ignore the IRS or the fact that you have to file. It’s part of life. Accept it. Grab some snacks and file your taxes! When you are done you can sigh a breath of relief and treat yourself to a nice meal. It can be stressful, but Tax Day doesn’t have to rule your life at this time of year.

Readers, do you have Tax Day anxiety? How do you cope?

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Confession: We’ve Taken On A Little More Debt

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Confession We've Taken on a Little More Debt

This update isn’t one that I’ve been looking forward to sharing on the blog. In general, everyone here in the debt-free community is making strides to decrease their debt, no matter the cost. While I really have made some fantastic progress in our debt freedom journey, debt is sometimes necessary in today’s world. We’ve been trying to build our credit to buy a home – which requires taking on some debt. Additionally, we desperately needed a new car that fit our new family.

So, without further ado, here’s my confession and a look at the latest debt numbers.

Why We Took on More Debt

There are a number of reasons our family decided to take on more debt after we’d paid a generous amount off. First, I recently talked about how we’d like to buy a home this year. To do that, we need to have a good payment history. As you know, in the past, many of our bills went into collections before they were settled. So, keeping things current is relatively new for us.

It’s exciting because, after time, it will allow us to build the life we want. However, taking on more debt wasn’t ideal. It never is.

On top of needing to build up some credit, we also had some medical emergencies that needed to be paid for. That went on the credit card! Things are tight and that’s how it is sometimes.

We also desperately needed a new car. Our little hatchback Golf GTI was no longer cutting it, especially on road trips. Between the car seat, stroller, highchair, and any luggage we needed, the car was slammed full. If we wanted the dog to tag along, forget about it! So, we decided to upgrade to an Audi Q3. It’s nice, reliable, and something our family will be able to drive for some time. Most people will say we didn’t need to spend that amount on a car, but we’ve got a good plan for paying it off early.

A Look At The Numbers

Now, the moment you’ve been waiting for. Here’s a look at the updated numbers…

  • Credit cards: $1,108 (up from $0 last year)
  • Collections: $1,205
  • Car loans: $34,640 (up from $16K)
  • Student loans: $24,185

Two notes here – our credit card balances are higher right now due to paying for a medical emergency, as mentioned above. Additionally, I have not made any payments on my student loans as the Biden Administration is still figuring out what is going on there. Tentatively, I will have 50% of my loans forgiven, which would be fantastic. So, we are just waiting on the decision from the state of NC now.

Where the car loan is concerned, we are paying more than the required monthly payment. We will also be looking into getting it refinanced within a year or so.

Our Philosophy Moving Forward

We definitely have more debt than we did this time last year, but things have changed drastically for our family. Our new philosophy moving forward is to change with what our family unit needs. Whether that is a bigger, more reliable vehicle that is still under warranty, or it is buying our own home (hopefully later this year), we are willing to bend and change for whatever is needed.

Readers, have you ever found yourself taking on more debt when you didn’t expect to? Let me know about your experiences in the comments.

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Valentine’s Day: Money and Marriage Reflection

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Valentine's Day

My husband and I haven’t ever really celebrated Valentine’s Day in the past. Early on in our relationship, our finances were an absolute mess and we were homeless together. While that’s thankfully no longer the case, we’ve always looked at it for what it was: a retail holiday. However, with our little one becoming more aware of holidays and other things, this year was a bit different. Honestly, this Valentine’s Day was great for our family and fantastic for our marriage.

Why We Didn’t Do Valentine’s Day

In the past, as I mentioned above, Valentine’s Day was typically a day that came and went without any fuss. Of course, we’d both say “Happy Valentine’s Day,” give the other one a kiss and go about our days. That’s not any different from any other day throughout the year though.

Our reasons for this varied. We had a lot of past relationship trauma from previous partners that made the holiday hard to enjoy. Not to mention, there were several years when celebrating some in-between holiday was not possible. We were broke and there was no room in the budget for any of it.

On top of that, Valentine’s Day always felt like a big deal for nothing. I’m not something who wants to be showered in flowers or candy – neither is he. We both enjoy more practical gifts and don’t like to buy into retail holidays (unless we are cashing in on the sales afterwards).

This year was a little bit different though, all thanks to my husband.

How We Celebrated This Year

The past couple of weeks have been tremendously stressful in our household. My husband and I are both working on multiple projects at our jobs. Our little one is cutting more teeth and, to top it off, our dog got very sick. After a few months of health issues myself, everything piling up made the world feel like it was on fire.

Being the man he is, my husband knew how to turn that around, at least a little bit. He snuck out of the house during the day, grabbed me some roses and grabbed our daughter a small present. We both got little Reese’s candies. Then, he revealed he’d planned to order dinner in so that I didn’t have to stress over dinner after a busy workday.

In truth, it was absolutely perfect. It was a nice pick-me-up from the weeks and months of stress piling up. Even more than that, the gesture brought a spark back into our marriage that I hadn’t realized fizzled to begin with.

All of this to say, if you’re against V-Day, I understand. But don’t let a single day go by without telling your spouse you love them or making some small gesture to brighten their days. Don’t go way out of your budget or do anything crazy, but the smallest things can make a huge difference.

We’re people that celebrate Valentine’s Day now. What about you? Do you celebrate?

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How Much Money Do You Need To Put Down On A Home?

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How Much Money Do You Need To Put Down On A Home

Our family has started talking about potentially buying a home in the near future. Rent prices have gone through the roof, along with everything else, and we are tired of the anxiety that comes along with living in someone else’s home. That being said, we’ve had to do some digging into what it will take to make a huge move like this for our family unit. So, that has me wanting to answer a popular question: How much money do you need to put down on a home?

What is a Down Payment?

Before diving into how much you need for a down payment, you should know what a down payment is and why you need one to begin with. Simply put, your down payment is cash that you put out upfront to make a large purchase. Generally, these purchases include homes and cars, maybe even boats (but I wouldn’t recommend that). Other larger purchases, like appliances, etc. are usually bought on credit if the cash isn’t available.

Typically, a down payment is a percentage of the purchase. For example, if you are buying a $500,000 home you may be asked for a 10% down payment. That means you would need $50K down. The mortgage lender then provides you with the remaining $450K to make the purchase and you pay them back, with interest.

Most lenders will require some kind of down payment when you are buying a home. However, not all lenders are the same. So, it will depend on who you are working with when it comes to how much you’ll have to put down.

Is 20% Down on a Home Necessary?

During my research on mortgage and homebuying, I saw many people suggesting that you put 20% down. That isn’t the requirement in many cases though. Most traditional mortgage lenders will require you to have 20% if you want to avoid paying for private mortgage insurance (PMI). You don’t need that amount to put down to buy a home though.

Actually, when you take a look at the most recent data, most first-time homebuyers like us are only putting down an average of 7% on their houses. Repeat homebuyers are more likely to have more to put down on their next home, thanks to the sale of the first (or other factors). On average, these individuals put down about 17%.

How Much Money Do You Need To Put Down On A Home?

So, what is the minimum down payment you can have to buy a home? Really, how much money do you need to put down on a home? Well, it will depend on where your mortgage loan is coming from. Here’s a breakdown:

  • VA loans that are guaranteed through the U.S. Department of Veterans Affairs typically have a 0% down payment.
  • Some conventional mortgage loans will require as little as 3%, but this is based on your household income. These are not backed by the government but they follow many of the same guidelines as those that do.
  • Loans backed by the Federal Housing Administration (FHA) may require as little as 3.5% down with a credit score of 580+. People with scores between 500 and 579 must pay 10% down.
  • Jumbo loans, or loans made by lenders that do not conform to FHA guidelines, will allow for a down payment as low as 10%. This can be great for people who do not qualify for the other types of loans listed here. Keep in mind, they may require a higher percentage down.

A larger down payment can garner you a few perks, including not having to pay PMI as mentioned above. You’ll have more equity in your home right away and the lender may even give you a better interest rate too. Not to mention, you’ll have lower fees and lower monthly payments overall.

However, at the end of the day, it is about choosing what is best for you and your family. If you qualify, get into a home by putting 7% down and get in there! Rent prices are crazy and paying rent isn’t doing anything for you financially.

Readers, how much money did you put down on your home?

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Repair Projects to Maintain a Happy Home

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Regular maintenance and repair projects can boost your home’s value and make it a more comfortable place to live. According to Comfy Living, approximately 80% of family homes were built no less than 20 years ago, making them overdue for updates! If your home could use some TLC, these repair projects will help you improve the space.

Add a Fresh Coat of Paint

Repainting is one of the simplest and most effective ways to revitalize a drab-looking home. A neutral coat of paint can revitalize any room inside your home. You can even use color to create a sense of cohesion inside your home and improve the flow from room to room. If your home lacks curb appeal, why not try repainting your home’s exterior or replacing the siding?

Not sure which colors to use? When selecting paint, neutral shades, such as gray, tan, and cream, are always a solid choice. You should also pick a type of paint suitable for the part of the home being painted. Paints with high sheen value, like semi-gloss or satin paint, are more resistant to moisture, making them an excellent option for exteriors and bathrooms.

Install New Flooring

Do you have old carpeting or tile floors that are past their expiration date? Updating your floors could enhance your home’s appearance and make it easier to maintain. Many flooring materials are available, ranging from traditional options like hardwood flooring to more modern choices like bamboo floors.

According to America’s Floor Source, vinyl flooring is a resilient option that can last between 10 and 20 years if properly installed and maintained. Less conventional options, like porcelain tile and cork floors, are also worth considering. Look at different flooring materials so you can find the best choice for your home.

Apply a Sealcoat to Your Driveway

There’s no shortage of ways to improve the interior of your home, but you may also want to consider some exterior improvements, like asphalt seal coating for your driveway. The driveway of a family home goes through a lot of wear and tear. Extreme temperatures, stormy weather, and other conditions could leave your driveway with chips or cracks.

Applying a seal coat can protect your driveway from damage and keep it looking great for longer. Once the coat is applied, it’s more difficult for water to penetrate the driveway’s surface. Since the seal coating leaves behind a smooth surface, it can even make your driveway easier to clean.

Improve Your Home’s Insulation

A lack of insulation can make it challenging to keep your home hot or cool, leading to higher energy bills. If your home is poorly insulated, replacing your windows is one of the most effective solutions! According to the University of Massachusetts, windows are where the typical home loses around 30% of its heat. Consider finishing your attic or basement to reduce the air escaping these spaces.

Make Some Bathroom and Kitchen Updates

When evaluating future home projects, it’s wise to consider how you use your home. Kitchens and bathrooms are some of the most frequently used spaces in any home, making them an ideal spot for improvements. If you don’t have the budget for a full-scale renovation, you can still update these rooms and increase their utility.

Adding new hardware to your kitchen cabinets and bathroom vanity is a simple improvement that can make a big difference. A tile backsplash is something that can enhance both rooms. Think about the issues you run into when using your kitchen and bathroom, and try to make improvements to address these problems.

Whenever you make updates, repairs, or other improvements to your home, you make it a better place for your entire family. Taking on a few repair projects will improve your life in many ways. Being proactive about repairs can help you avoid future problems and give you peace of mind. Get started today on the repairs and improvements that you want to make.

Options for Handling Tax Debt

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No one wants to think about paying taxes. The idea of owing money can lead to tax anxiety. It can be even worse if you think you owe money for back taxes. You see a new tax bill coming up, and you still owe money from previous years. The stress of it can feel suffocating.

As much as it can be stressful, tax debt is a problem you need to face head-on. Trying to push it to the side will only make matters worse. There is also a lot you can do to manage the situation if you just pay attention to it. If you are responsible and do your best, there is usually a lot you can do to clear your back taxes. 

What are your options for handling tax debt? Read on to find out! [Read more…]