Buying a home is a huge deal. When you need a mortgage loan to finance your house, the process can be quite stressful. To get approved for a mortgage loan quickly, you need to start thinking like the lender and know the right steps to follow and how to qualify for a mortgage loan first before even applying for one.
7 of the Best Money Management Tools You Need to Control Your Finances
In 2019, only 29% of people in America considered themselves financially healthy.
The good news is that there are several things you can do that will help you save money and improve your financial situation – and one of those things is using the right money management tools.
If you want to learn how to manage money in the easiest of ways, keep reading and discover more about seven useful apps!
What is True Financial Freedom and How Do I Get It?
My goal is to help you take control of your money, so you can pay off debt and work toward true financial freedom.
But what is true financial freedom?
Financial freedom can be somewhat of an elusive idea. Let’s define it so we know where we’re headed.
When my husband Mike and I decided that we needed to be more intentional with our spending, I dove in to learn as much as I could about personal finance.
I realized that there are actually three stages to financial freedom.
The three stages are financial security, financial independence, and financial freedom.
Economic Security
Economic security is defined as “the condition of having stable income or other resources to support a standard of living now and in the foreseeable future.”
What does this mean?
This means that one feels reasonably secure that his or her current income stream(s) will continue so that they can maintain their current lifestyle.
When I was growing up, I was the only child of a single mom. Money was tight, and we lived paycheck to paycheck. My mom worked two jobs for most of my childhood, and as the end of each month neared, we would frequently have to put off grocery shopping. When the last day of the month rolled around, we would go shopping in the evening so that my mother could write a check knowing that it would not be cashed until after her paycheck had hit her account the following day.
I always knew that money was a stressful subject for my mom. She never wanted to disappoint me, and she always wanted to provide the best for me. Because I was a good student in school, we had high hopes that I would one day break free from the weight of living paycheck to paycheck.
As I transitioned to adulthood, I longed for the day when I would feel financially secure.
From 2006 to 2008, I paid off the credit card debt that I had accumulated from college through my mid-twenties. Slowly but surely, I began to feel more secure in my financial situation. I was earning enough money in my job to cover my expenses and save up for our wedding in 2009, but I knew I still wanted more.
What I wanted was financial independence.
Financial Independence
According to Wikipedia, “financial independence is generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities. Financially independent people have assets that generate income that is greater than their expenses.”
Financial independence takes it up a few notches from financial security.
My interpretation is that someone who is financially independent has enough income-producing assets such that they could quit working for a prolonged period of time and still be able to maintain their standard of living.
Therefore, to achieve financial independence, one must have several pieces of their financial puzzle in place.
Financially independent people have the following:
- a fully-funded emergency fund,
- little or zero debt, and
- income-producing assets, such as stake in a business or investments in real estate and/or stocks.
Currently, my husband Mike and I are working toward financial independence, but ultimately we aspire to become financially free.
Financial Freedom
Financial freedom signifies that one has accumulated enough wealth or income-producing assets (likely, a combination of both) such that they never need to work again.
(It is important to note that while financially free people do not need to work to survive, many will continue to do so because they have found work they love.)
Financial freedom builds on the three aspects of financial independence listed above and takes them a step further.
Here are the three pillars of financial freedom:
- Financially free people maintain their fully-funded emergency fund.
- Financially free people have no debt. Why would they need debt when they are building wealth? Debt is just a weight on their bottom line.
- You have probably heard of the benefits of diversifying your investments. Well, wealthy people diversify their income streams. Income streams may include a day job, owning and running businesses, and having multiple investments including real estate and stocks.
According to the authors of The Millionaire Next Door (really great book, read it if you get a chance), financial freedom is something you need to work hard on.
“If your goal is to become financially secure, you’ll likely attain it…. But if your motive is to make money to spend money on the good life,… you’re never gonna make it.”
― Thomas J. Stanley
My husband and I are working toward true financial freedom so that we can live the life we have always dreamed about. We are not concerned with acquiring a lot of material possessions, but we long for the day when we can travel the world and give generously to others in need.
If my husband were to lose his job for whatever reason right now, we would be scrambling to figure out how we would make our mortgage payment for the next few months. Thinking about that possibility is extremely stressful.
For that reason, the only logical and responsible path for our financial future is to pay off our non-mortgage debt as quickly as possible so that we can increase our emergency fund and then focus on paying off our mortgage early. Once our mortgage and other debt are paid off, imagine how quickly we’ll be able to save and invest.
We are no longer settling for the status quo of living paycheck to paycheck with unneeded stress. We are taking responsibility for our financial situation.
We are looking forward to the day when we no longer have any debt payments, we are sitting on a fully funded emergency fund, and we are able to maximize our retirement savings. That is when we’ll be on our way to true financial freedom.
How to Find Everything You Owe (And to Who)
When you are reviewing your debt freedom progress, you are likely looking at how much you’ve paid off month-to-month. However, if you want the most accurate number (interest included), it is a good idea to know how to find everything you owe.
How to Find Everything You Owe
The first and best place to find everything you owe is your credit report. This will help you see both current and past debts you have yet to pay. You can get one free annual credit report each year and you should do so to get a picture of how much you owe and to who. Most loan companies and creditors report to the three main credit agencies (Experian, TransUnion, Equifax).
Another way to find out who you owe money to is taking a look at Credit Karma. The website and app will give you a snapshot of open and closed accounts with amounts. Credit Karma is not always as accurate as an annual credit report but it can be a good, free way to follow your progress and track your repayment efforts.
For specific accounts, many creditors have dashboards where you can see how much you owe, payment due dates, and other account information. Some credit cards will give you a forecast on how long it will take you to pay the account in full. If you’re wondering if this is something your loan provider offers, contact the company’s support services.
Why Having an Accurate Number is Important
So, why it is important to know how to find everything you owe?
Because it gives you an idea of where you stand and what moves you need to make next! For instance, looking at our credit report, we are able to identify what account needs to be next in our debt snowball.
Knowing how much you owe and to who is also important for tracking anything unusual. If someone used your social security number to take out a loan or credit card, you will know by keeping tabs on how much you owe.
In your debt freedom journey, it is extremely important to be able to find exactly how much you owe, how to locate interest rates, and know that those numbers are accurate. It could make or break your financial success!
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We Are Officially Credit Card Debt Free!
COVID-19 definitely put a damper on our family’s debt freedom journey (at first). However, my husband has since gotten a new job and we encountered some windfalls that have allowed us to pick up some of the slack and refocus on our debt-free goals. Now, (insert trumpets) we are credit card debt free!
Being Credit Card Debt Free
Prior to this, we had about $2,000 in total credit card debt. We only had about $500 left to pay off though. So, once we got a windfall, we paid off the last account balance of $498.21, and just like that, we are free of credit cards once and for all.
Honestly, it feels pretty weird! I know it will take of lot of dedication to continue being credit card free. Now, we are one step closer to financial freedom and the ability to put that money towards other debts.
What’s Next
And that is exactly what we have planned next!
Because we no longer have credit card debt to pay off, we are going to refocus that money on paying off the tool loans, the car loan, and student loans. To do this, we are going to focus on them in this order…
- Tool loans – roughly $10,000 owed
- Car loan – $19,216 owed
- Student loans – $24,185 owed
Once these things are severely paid down, we will focus on paying off tax debt and getting any other financial needs situated. Now, you’re thinking, how long will this take?
I’m hopeful it will take us between two and three years to be debt-free. The plan is to add some additional funding to our emergency savings over the summer and then attack our debt full-on. Every extra penny we have will go towards paying off each of these accounts (in that order). Any windfalls, such as cash gifts, bonuses, and over time will also go towards debt repayment.
Once we are debt-free, we will be looking to buy a home. Initially, that will be more debt, but because we are going to be financially free, it will be easy to swiftly pay the house off. Being credit card debt free has us both optimistic and thinking about our debt-free future! Readers, how did you feel after paying off all of your credit card debt?
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Are You a First-time Landlord? Here are 5 Important Things to Know
Many people dream of becoming a landlord. Putting a property up for rent can be a highly profitable venture for property investors. However, being a landlord can be challenging. [Read more…]
5 Smart Ways to Build Credit
Bad credit can prevent you from getting a job, financing your education and even buying a home. That is why building good credit as early as possible is so important. Beginning with your first credit card, your credit history is part of everything you do that involves credit. If you want to maintain and build a good credit history, using the credit in a responsible way is a must. [Read more…]
Does Afterpay Help Your Credit?
Over 220 million Americans shop online every year. Because of this, digital wallets and virtual ways to pay have increased in popularity. Programs like Afterpay even allow you to make payments on your online purchases. But does Afterpay help your credit?
What is Afterpay?
If you haven’t already encountered Afterpay at checkout, it is a payment option that allows you to pay for your online purchase in four equal installments. Payments come out every two weeks, which works well for many people on a bi-weekly pay schedule.
All you have to do to use it is choose “Afterpay” at checkout. Link your Afterpay account to a U.S.-issued credit or debit card where they can process future payments. Then, you are ready to go!
Afterpay does limit the amount you are able to finance at first, but they increase it over time after seeing your ability to pay it back. It is also important to note that not everyone will be approved for Afterpay or the full amount you may need. It all depends on your repayment history.
Where Can You Use Afterpay?
Afterpay can be used at more than 25,000 online retailers. Anywhere you spend $35 or more and see the Afterpay option at checkout, you can use it. Some of the bigger names offering Afterpay include Jeffree Star Cosmetics, Shein, Armani, Ray-Ban, Carhartt, Bare Minerals, and more.
You can visit the Afterpay website to see a full list of retailers they work with.
Does Afterpay Help Your Credit?
Unfortunately, making on-time payments with Afterpay does not help your credit. The company doesn’t pull your credit to approve you for payments either. When you successfully pay off an Afterpay loan you get a kind of “in-house credit” and Afterpay will agree to lend you more in the future.
Customers who are unable to pay their bill on time are hit with an $8 fee the day after the bill’s due date. Then you accrue an $8 fee for every seven days the bill goes unpaid. Although Afterpay doesn’t technically charge interest, these late fees can stack up quickly.
Thoughts About Programs Like Afterpay
If you are making all the payments on time, Afterpay can be a good interest-free alternative to a credit card. However, it is important to remember that your debt freedom journey has a lot to do with reforming your behavior. Continuing to buy things with payment installments may put you back into a debt mindset (and you definitely don’t want that).
Anyone choosing to use Afterpay should be sure they can pay all four payments. Otherwise, it will be in your best interest to just save the money for the purchase instead.
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Giving Can Be Toxic Too: How to Focus on Yourself
There is so much turmoil in the world right now and, as an empath, I feel it pretty heavily. I’ve spent a lot of time reflecting and, honestly, just crying recently. But, it is important to know when you have nothing left to give, and I’m emotionally spent. So, here are a few tips (from yours truly) on how to focus on yourself without feeling selfish.
Yes, Giving Can Be Toxic
First of all, you need to realize that not every source of giving is beneficial. You can give too much of your time, mental resources, and money to people, things, etc. Listen to your body and take a look at your mental state.
Be sure to assess the why behind you giving your time, money, or attention to something. If it is draining you emotionally, take a step back. Don’t ever feel bad for caring about your own mental health. Giving too much of yourself to anything (a cause, a person, a topic) will result in your having nothing left.
How to Focus on Yourself Without Being Selfish
You may be thinking, “how can I focus on myself with so much going on in the world?” I’m right there with you. But you can focus on yourself without being selfish. In fact, you can practice self-care while still giving back to the community. Here’s how…
- Make time for your loved ones. If you are really trying to figure out how to focus on yourself without feeling selfish, call your loved ones, talk to them, and just see how they are doing. You’ll be amazed by how good it will make you (and them) feel.
- 2. Continue practicing a healthy lifestyle. Between COVID-19 and the civil unrest in the country, it has been difficult to focus on healthy living. It is still important to get regular exercise even at home and take care of your body.
- Try new things. When everything has been topsy-turvy for a while, it is easy to feel stuck in a rut. Switch up your routine or try something new. Just having something different (or something to look forward to) can greatly improve your mental state.
- Practice self-love and nurture your self-esteem. Offer yourself positive affirmations and stay away from negative self-talk. These things can have a profound impact on your overall self-esteem and how you interact with others.
- Keep a journal. Journaling has personally helped me a lot through this time. Think about getting a notebook or starting a digital journal to just write things out. For me, I am able to write out my thoughts, positive affirmations, and record what I was able to accomplish throughout the day. No matter what you are jotting down, having a journal can be a spectacular release.
Be Patient With Yourself and Others
Finally, it is so important to be patient with yourself (and others) during these tough times. Everyone is living through some pretty major turning points in history. Cut yourself some slack if you are feeling a little less motivates and are preoccupied. Everyone is. Just strive to do the best you can each day.
Readers, how are you emotionally dealing with everything going on in the world right now?
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What are Bad Credit Loans?
Whenever people are unable to finance a certain project, they refer to the banks and online lenders for a credit loan. Online lenders are more famous for handing out smaller amounts of personal loans, while the banks deal with much bigger numbers. People often apply for these loans when they buy an apartment, car, or when they send their kid to college. Whatever the reason may be, the bottom line is that they don’t have the finances required at the moment.
Of course, not all credit loans are approved. The lenders do a background search on each client to see his or her credit score, their history with paying them off, and whether they caused any trouble. If a potential client has a low credit score, then the chances of being approved are low. Luckily, there is an alternative for those people and it goes by the name of bad credit loans. Although the name might not be the catchiest, it allows many to apply for a credit loan, even though they don’t have the best credit score.
We wanted to introduce you to this type of credit and that’s why we are willing to dig a bit deeper and give you an overview.
The Difference Between Bad and Regular Credit Loans
As you may have figured it out by now, people who apply for bad credit loans are seen as risky borrowers. That is why you may be faced with more interest rates and higher fees, which is not the case with regular loans. The only mutual thing that these two types of credit have is the application process.
The lenders check your credit history, your financial status, and with that information, they decide whether you’ll be eligible to repay them. If you are looking to read the tiniest details, like the credit score categories, best lenders, as well as guides to get a better loan, head over to bestloansforbadcredit.com – they have everything that you need to know.
Are Scams Possible?
The Internet opened up many possibilities for us. Unfortunately, not every outcome can be positive. Scams are happening much more often than they should since many people see the Internet as the best place to rob people of their money. So, to answer your question, yes – scams with bad credit loans are possible.
But, if you follow a couple of simple steps, you will be safe. First off, if the lender is asking you to register in a different state, rather than you home state, then the chances are that you are contacting a scammer. Guarantees without approval, lack of communication skills, and advertising methods are also some factors.
Extra precautions are always welcomed, especially if your financial status is not the best. On a side note, we wanted to mention that if you are struggling to pay off your debt, there are a few side jobs which can be helpful and provide you with a good income.
Types of Bad Credit Loans
Lastly, we wanted to cover some of the bad credit loans. There are 4 types in this section: instalment loans, payday loans, cash advances, and bank agreements. Payday loans and cash advances are the easiest to get, since they are considered short-term loans, but they have greater interest rates.
The bigger interest rates and more detailed background checks that we are witnessing today, especially when dealing with banks, are the result from the 2008 world crisis when the banks around the world were handing out loans without having a plan of action.
For more great articles, read these:
Yes, You Can Buy Someone Else’s Debt
The Effects of Financial Stress On Marriage
Image Source: Cafe Credit.
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