Who can’t use a raise? Did you know that with just a few simple adjustments, you can give yourself a raise? Here are just a few examples.
1. Increase your insurance deductible. Did you know that if you increase your insurance deductibles that you could save anywhere from 15% to 40%. Increasing your car insurance deductible from about $200 to $500, it’ll save you about 15% to 30%. And, if you increase it to $1,000, you’ll save 40%. So, as long as you can afford to pay that kind of a deductible, it’ll be worth it to save the money.
2. Pay off debt. If you are paying 14%, 15%,or even 18% interest on a debt and you pay it off, then you will earn yourself that percentage every month. In reality, you actually give yourself a raise by both eliminating the cost of the interest every month and putting the money you had sent off to your creditor every month into your own pocket, or into your bank account. Do your best to pay off those debts; that’ll be money you can save (or spend as you like) as soon as you do.
3. Re-evaluate (or create) your budget. Are you spending money on things you later regret you bought? Are you wasting money eating out too much? Do you tend to spend money on the items on display at the check out lane? Take an itemized look at what your dollars are being spent on and decide whether those items (whether that’s candy, gum, magazines, or the “advertised specials”) are really worth the amount you are spending. Make the cuts and put that extra money back into the bank.
4. Take advantage of your company’s 401k. A 401k is a great opportunity to earn extra money. If your employer offers any matching contribution take advantage of that! It’s basically free money towards your retirement savings.
Many of us don’t get rid of debt because it seems like such a daunting task. After all our debts are often as large as a year’s income. We may be able to remove debt but it may not work well with keeping up the lifestyle we have chosen. However, that debt needs to be paid off, so here are a few ways to make going debt free a little less painful.
Sometimes it just isn’t possible to pay off your entire consolidated debt at once. Even if you have the means your mind goes to all sorts of “what if” places about if you spend all that money at once. Instead start by paying off your smallest debts. Then take the money you were paying into your smallest debt and let it snowball into your next smallest debt. Continue this process until you no longer have debt payments. Use the money you paid for debts to start saving and investing towards your future.
Get Rid of Temptation
Cut up old credit cards and tear up new credit card offers. Don’t let them be a temptation to spend money you don’t have. If you do need a credit cushion have an overdraft account on your checking account (usually $500) that will protect your payments should you spend more than you should.
Get a smaller house. Get a smaller apartment. Have only one family car. Downsize your insurance coverage from full to liability. Bring a homemade lunch to work. Move closer to work to reduce gas usage. Use blankets instead of turning up the heat. Get rid of cable. Remove useless entertainment and replace it with useful hobbies such as creating clothes or blankets or trying new recipes. You could use these things for your family or sell them to earn some extra money on the side.
What are your best tips for getting out of debt?
Money comes and goes, but it feels like debt is always with us. It’s something that I know most people would like to change. It can be confusing though, when trying to juggle bills while paying off bills. What should we pay off first? Here is how we dealt with debt as a family.
Perhaps it’s a twenty dollar tool bill at work or an arrears balance in our health care. Paying off little items often goes a long way financially. We may only have to pay twenty dollars per paycheck, but depending on how frequent the paycheck comes out, it can save forty to eighty dollars monthly. It’s also good to pay off personal debts, such as money that a friend loaned us as soon as possible. It doesn’t just keep our debt low, it acknowledges our friend’s financial help as well as their potential financial issues.
Nothing feels more horrible than a company representative calling about an overdue bill. It’s important, however, not to avoid these calls. Let the person on the other end know what your financial situation is. They may be able to grant you a grace period. Then pay the bill off as soon as possible. It’s not just financially healthy. It keeps the lights on and water running.
There are many deals out there for credit cards that include a limited amount of time without interest, but then the interest goes up quite a bit. Interest can be a financial killer. We always ended up owing at least 10-20% more than we borrowed. It may not sound like much, but it can add up when the money is borrowed to begin with. The first bills we tried to pay off were those that had a high interest rate. For us these were our credit cards. High interest items can also include mortgage and vehicle payments. It might be tight for a few months, but it’s well worth getting these items out of the way.
I currently have a friend and her husband who are trying to buy a house. After years of renting, they want to own one of their own. However, it’s been difficult. Bankruptcy stays on your credit report for 7-10 years making getting anything credit related, including a house, very difficult.
Bankruptcy may seem like a good idea during desperate times, but there are some things to consider. First, it will be on your credit report for a long time. Like I said it’s a minimum of 7 years, but could be up t0 10. Second you may be able to get credit during that time period, but you are going to pay higher interest rates which means you pay more for the item. Getting a job could be hard as some employers will ask if you’ve ever declared bankruptcy. They want to know if you are responsible. And lastly, bankruptcy doesn’t get rid of all debt. Secured debt like a car loan or home loan will still have to be paid if you plan on still using them or staying in them.
Depressed yet? Well there are some pros to bankruptcy. First you get to start all over. Maybe the mistakes you made were right out of high school and now you have a better head on your shoulder but no way to dig yourself out. This could be a good start for you. You won’t have any more harassing phone calls from creditors. And lastly you can’t be sued. Bankruptcy protects you from creditors coming after you.
Regardless of your decision, it’s important to be informed and to know the facts. Bankruptcy is very serious. It’s probably the most serious financial decision you can make. It’s definitely a last resort option and shouldn’t be taken lightly.
Any advice for those thinking of declaring bankruptcy?
If you’re like hundreds of thousands of Americans, you’re struggling with school debt. We struggle with it. Seems weird to pay for something you aren’t in right now and for us it’s been a while since we graduated. Nonetheless, until we pay off the loans, we’ll have to pay them. However, we’ve been incorporating some techniques to pay it off more quickly.
1. Don’t defer you payments. It’s not hard to put your student loans off. Remember that you’ll eventually have to pay for them. Start now if you financially can. Deferment programs are there for a reason, but if you have the money, start paying it off.
2. Make a plan. Figure out how much you owe, how long you want to pay for it and divide that by months. Make those payments like you would a house or a car.
3. Set up automatic payments. This way you won’t get any late fees and you won’t miss any payments. I LOVE this option. I never have to worry about it and it’s always on time.
4. Don’t extend your payment schedule. It may seem appealing to extend your loan to 20 years instead of say 10, but you’ll end up paying for much more interest, plus you’ll be in debt longer.
5. Make large chunk payments. Wondering what to do with your tax refund or maybe some inheritance? Think about putting it toward your loans and getting out of debt!
My husband and I want a king size bed. The older we get, the more children we get, the bigger the bed we need. However, we just don’t have the expendable income to get what we want right now. Buying a king size bed means a whole new frame, new bedding and if we can’t find a matching frame even a new set. It’s a pretty big expense. And after talk of financing this large purchase at zero percent for 4 years, we decided the debt wasn’t worth the purchase and we can get a little more cozy in our queen.
And why? Because debt is bad, here’s why.
1. It affects your credit. The more debt you have the more it lowers your score. This really comes into play if you’ve maxed out your credit resources. Low credit scores affect most anything you want to qualify for. Higher interest rates for poorer scores and of course a lesser probability of being approved period.
2. Debt will cost you more. That’s how debtors make their money. They don’t want you to pay off their debt. They want you to keep accruing interest and in turn make them money. So your purchases ends up costing you more.
3. It’s an endless cycle. Once you start accumulating debt, it’s hard to get out of it without a concrete plan. Most people just keep accruing it. It’s hard to stop living above your means because it usually means more self discipline and less of the “I want it now mentality.” That can be hard for a lot of people.
4. No house! My husband ran into this problem when we wanted to buy our first house and we had a lot of debt. We had more than they allowed. We had to pay it down before we could buy. Our debt was actually keeping us from our dreams of owning a home. It was a long hard road and I wish someone would have told us before we got so much debt.
5. It ruins relationships! I heard that money is the number 1 thing that couples fight about. I am sure it’s not because of an abundance, but because there’s not enough or this funds are misappropriated. Less debt will mean less arguments about money.
That is the most untrue statement ever made here on Thrifty Divas. Americans accumulated over $11.31 trillion in debt in 2012.
I promise, with those statistics, you are NOT alone. One of the hardest things about paying down debt is feeling alone. You feel like no one else is in your place and that it’s hopeless. Again, another lie! There is also a sort of stigma that goes with people who are in debt.
Just a few are, “You are irresponsible with your money,” “You don’t pay your bills,” “You just want everything now and you don’t want to save for it.”
Those are some pretty strong words that some of us in debt have heard. So if you keep your debt a secret you’ll never have to hear those things. However, how about coming into the light and be honest, then get the help you need to get out of it.
One of the biggest ways to get out of debt is to bring it into the light and get into a support system. Get with other likeminded people who want the same thing you do. If you’d like to pay down your debt with the help of likeminded peers, join the members of AFullCup (for free) http://www.afullcup.com/forums/frugal-living/656663-big-debt-payoff-2013-a.html. These guys are serious about getting out of debt and helping each other through it.
Those guys are talking about everything from paying off huge home loans to smaller credit card bills. Regardless they aren’t going at it alone and neither should you!
Go kill some debt in 2013!
I am SO excited about this program. We all know about getting rewarded with cash back or points or sweepstakes entries, etc. for shopping online, but with SaveUp you get rewarded for choosing to save your money instead of spending it! What a cool idea!
How does SaveUp work?
After registering savings and debt-bearing accounts with SaveUp, users earn credits by making deposits into their savings account or paying down debt. Credits can be redeemed for a chance to win prizes and users can earn additional credits by participating in daily challenges, engaging with educational content on the site or participating in social actions to help others save.
What kind of accounts can be linked to SaveUp?
Users can register any savings or debt-bearing accounts with SaveUp, including IRAs, 401Ks, mortgages, student loans or credit cards at more than 19,000 US financial institutions.
Get started now with SaveUp!
And let us know if you win a prize. 😀