Our Debt Free Family

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Planning for Unexpected Expenses

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planning for unexpected expenses

There is no doubt we’ve made strides in the right direction as far as our finances are concerned. However, there is still one area in which we are failing: planning for unexpected expenses.

This week I got the bridesmaid dress for an upcoming wedding in the mail (two weeks out from the wedding) and my worst nightmare occurred. It didn’t fit! It was far too late to return it for the correct size, so I decided to take it to a local alterations place. The total for the changes needed came out to $250.

The price definitely threw me for a loop and, because we aren’t using credit cards, it came directly out of savings. I was frustrated with myself for not planning ahead for alterations costs.

Why is Planning for Unexpected Expenses Important?

Planning for unexpected expenses is key to becoming debt-free. If we weren’t so devoted to not swiping our credit cards, I could have easily racked up another $250 in debt without batting an eye. The same is true for other expenses that may come your way out of the blue.

Failing to prepare for this is can lead to you hindering your debt progress. Not to mention, it can have an impact on your emergency savings and take away from paying off your debts. It can also put a dent in your emergency savings. Then you have to readjust your finances to refocus on padding your savings accounts once again instead of using the money for my debts.

How to Plan for Unexpected Expenses

Thankfully, there are things you can do to plan for the unexpected things in life. Here are a few tips to help you avoid the mistake I’ve made.

First, identify your unexpected expenses. Of course, we can’t always see into the future, but if there’s something that comes up with some regularity, you can try to plan ahead for it. For instance, property taxes, medical expenses, birthdays and holidays, and car repairs can all be planned for.

To identify other unexpected expenses, you can take a look at the past year’s bank and credit card statements. Note any irregular purchases and try to budget for that. You can add up the total of all the expenses and then divide it by 52 weeks. Set aside that amount every week moving forward. This can help you have the money set aside when something unexpected comes up.

Doing this will help you plan ahead and (unlike me) have the cash set aside when something may pop up. Do you have any additional tips you’d add? Leave them in the comments below!

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Tips to Help You Find Financial Focus

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financial focus

There is no secret that becoming debt free requires a fair amount of focus and determination. Sometimes it can seem like the entire universe is against you getting back on track or paying off your loan, credit card, whatever it may be. Here is how I’m able to re-center and find my financial focus after a setback.

Recent Setbacks

If you’ve been following our family for the past couple of years, you know I am no stranger to setbacks. After living in a motel for six months, getting into our apartment, racking up some debt, and losing one of our incomes for six months, you think I’d be ready for just about anything, right?

In the midst of wedding planning and my regular busy schedule, I got intensely ill in January and it really set me back. First, I was ill with the flu and then I was in the hospital for possible appendicitis (yikes). Then, when I returned to work I got a notification that the state would be garnishing my wages for my 2017 back taxes. I’d been attempting to work out a payment plan but didn’t owe much so they’ll be taking $460 a month until about May or June.

When this happened I spiraled a little bit. Forget the wedding, forget our savings plan, forget all of it. However, before I completely overreacted, I decided to take a step back and reset my financial focus.

Finding Financial Focus

Obviously, this isn’t the first time this has happened. Sometimes, it is hard to focus on the big picture when everything seems like it is going wrong. Because I have the tendency to overreact, I need a go-to list of things to do to recenter my personal financial focus.

  1. Set small, obtainable, short-term goals. If you put your mind in the now and set more immediate goals you won’t be able to be bogged down by the “what ifs” of six months from now.
  2. Write it down. After you’ve set these smaller goals, write them down. We do this with everything. Whether it is our debt payoff plan, weekly budget, or savings goal. Writing it down helps us set our mind to the task at hand. Then we walk by it daily and are reminded of what we’re working towards.
  3. Search for inspiration. I cannot say enough about following fellow debt-free folks! If you follow the hashtag #debtfree or #debtfreecommunity on social media, you will find loads of inspiration. People will share their stories with you, favorite inspirational quotes, and motivational tips to help you continue on your journey.
  4. Spend time doing things that make you happy but also make you feel responsible. I like to try and avoid spending money when I feel I need better financial focus. To do this, we have a list of things we enjoy doing that cost little-to-no money. For instance, we have favorite walking trails where we take the dog or scrape for free coupons and grab a coffee together.

Lastly, if you’re really struggling to manage your finances, consider speaking with a professional. There is no shame in reaching out for help if you need it. Some financial advisors will even offer up their services for free (or cheap) if you qualify.

Readers, how do you recenter your focus when it comes to your finances?

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How Often Should You Review Your Budget?

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Budgeting can be a huge pain, especially if it seems like you are constantly revisiting it. With my other half out of work, I feel like we are constantly examining our budget for places to trim and save more money. Even if you’re not in the midst of a financial crisis, you should review your budget on a regular basis to make sure you’re saving as much as possible. So, how often should you review your budget?

how often should you review your budget

1. When There’s a Change in Your Finances

First, you should absolutely take a look at your budget every time there is a major change in your financial situation. So, you’ll want to review your budget when you’ve gotten a raise, lost income, paid off debt, or add an expense. If there’s a major change in cash flow, you’ll likely need to make major changes to your budget. For individuals earning more or paying off debt, you’ll want to increase your savings and retirement investments once you have more cash flow. If you’ve lost income, you’ll want to trim unnecessary costs in order to save money.

2. Monthly

We are currently looking at our budget on a monthly basis because we need to identify places to trim constantly. Many others take a look at their budget on a monthly basis as well, especially if they are attempting to pay off debt. The best time to do this is generally at the end of the month. Take a look at the previous month’s budget and determine how well it worked for you and your family. Adjust certain aspects of your budget as needed.

3. Quarterly

Another great way to review your budget is quarterly. Many of us make financial goals at the beginning of the year. Revisiting those goals, and your budget, every three months can help you stay on track. It can also help you review where you may be able to trim costs on a larger scale. For instance, if you notice you’re spending a lot on entertainment the first quarter of the year, you can make a concentrated effort to scale back in the second quarter.

4. Every Four Paychecks

Every four paychecks or every six, or however many makes sense to you. Usually, we take a look at things each billing cycle (monthly), which is every two paychecks for me. However, expanding that timeframe can be beneficial and give you a larger snapshot of your overall finances. If you decide to set up your budget review schedule this way, just be sure it makes sense for the way your finances are set up.

5. Annually

Some people thrive on an annual budget and only review it throughout the year if there is a major change in their finances. For me, this simply wouldn’t work, but if you are already debt-free and have a great savings plan in place, an annual budget review may be perfect for you.

If you’ve ever asked yourself how often should you review your budget, you’re not alone. It is a question I’ve struggled with occasionally. Keeping constant tabs on your finances can be exhausting but the financial freedom it can lead to is motivating!

Readers, how often do you review your budget? 

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Save Money on Home Entertainment With These 5 Tips

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save money on home entertainment
It’s easy to feel like your entertainment budget is out of control. The things we pay for in this budget category are nowhere near being a necessity, however, everyone needs to have fun, right? If your budget has got you down, here are just a few ways to save money on home entertainment…

How to Save on Home Entertainment

You may have noticed it says “to save money on home entertainment.” While entertainment costs usually occur outside of the home, if you truly want to save cash you’ll want to stay home and have fun (though there are a few here that involve going out). Going out costs more because you pay extra to have someone making your food, and you pay for ambiance as well as convenience. Staying at home is really the way to go.

That being said, here are ten great ways to save on home entertainment:

1. Netflix

Netflix became a great way to save on home entertainment years ago. Before Redbox gained a ton of popularity, Netflix began a monthly DVD mailing subscription. You received a DVD in the mail for your monthly price and once you returned it, you’d receive the next movie on your list. Slowly but surely, Netflix turned into the giant entertainment source it is today. Overall, it is still a great way to keep your home entertainment costs low (especially if it is the only streaming site you subscribe to). Netflix monthly subscription prices start at $7.99 per month.

2. Amazon Prime

Amazon Prime is another great way to trim the cost of home entertainment. Many people use Amazon’s video services to replace their current television services. This can save you hundreds of dollars a month if your cable bill was steep enough. Prime offers tons of television and movie options as well as the option to purchase individual channels, like HBO and Showtime, if you desire to do so. If you’d like to watch a new movie, you can rent it through Amazon. You’ll also get free shipping on many items and other great Amazon Prime perks. (See: Is Amazon Prime Worth It?) You can purchase Amazon Prime services for $99 per year.

3. Sling TV

Another great way to trim the cost of home entertainment is joining Sling TV. Sling TV prides itself on being “a la carte” television where you choose what channels you want. Packages start at $20 a month for basic live television. This includes many of the regular television channels you receive with basic cable at a much cheaper price. The more channels you add to your package, the higher the price will be. However, Sling TV can save you a ton of money, especially if you’re switching from traditional cable.

4. Consider a Movie Pass

This doesn’t necessarily pertain to “home entertainment” but you can save a ton of money on monthly entertainment costs by considering a Movie Pass. If you’re an avid moviegoer, Movie Pass may be a perfect option. For $9.99 a month you can attend unlimited movies at various theaters throughout the United States. Of course, you’ll want to be sure that there is a theater near you that accepts the Movie Pass. If they do, you’ll save a ton on going to the movies.

5. Skip Redbox

When most people think about skipping the movies, they think Redbox. However, Redbox can actually cost you more money than it saves you. Sure, it’s only $1 and some change to rent the movie for one night. More often than not, you keep the movie for multiple days or until you have a chance to drop it off again. This usually winds up costing you $5 or more (up to $35 if you keep it out long enough). Skip Redbox and rent movies online, through Amazon or YouTube.

Whether you decide to take these tips on how to save money on home entertainment or find new ways to save for your home, discovering ways to trim your budget and save is always great!

You may also enjoy this article on Free Home-Based Workout Videos. 

The 5 Categories Missing From Your Budget

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Are you struggling to make your budget work but keep coming up short?

If your budget isn’t working, you might think that you’re just not trying hard enough to stick to it. But I don’t think that’s always the case.

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