You are reading Week 49 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

The end of the year is almost upon us.  It is time to really start making plans for the future. This week take the time to Set Long Term Financial Goals. You have navigated through this year focused on the immediate needs of getting rid of debt, but you also need to look at what your long term needs will be. We have pulled together a list of things to consider when making your long term financial goals.

1. Savings for future emergency needs. We all have various needs that can crop up from time to time that don’t fit into our immediate budgets. One important long term goal is to build a savings account that will be available for future emergency needs. This can pay for things like car repairs, medical expenses or new appliances in your home.

Work in baby steps, so you stay on track and don’t get frustrated.  Start with a goal of having $500 in your savings account.  Then move to $1000.  Once you have hit that milestone, strive to have one month of expenses in your savings account.  Look at your budget.  How much money do you need each month to day bills, put food on the table and pay for incidentals?

The end goal is to have 3 months – 6 months of living expenses saved. This is your fully funded emergency fund.

If you are still paying off debt, start with having an emergency fund of $1000.  You need to determine the amount best for your situation, but having enough money in the bank to pay for an emergency without incurring further debt is key.

2. Sufficient retirement savings for yourself and your spouse. This is one of the most important long term goals you will have. As we have mentioned many times this year, social security benefits are not typically enough for anyone to live off of. Focus on providing yourself with a solid income for the rest of your life. As you plan for this retirement fund, keep in mind that inflation and fluctuations in the economy can play into what is needed later on, so always plan for more.

Once you’re out of debt and have built up your emergency fund, it will be time to move on to this next phase of saving.

Sufficient college funds for your children. If you have children you will likely want them to have the best opportunities for education. Planning ahead and saving for their college education is a choice that many will need to make. While you hope your child will receive scholarships, not every one does. Having a fund available to care for their education needs is very important for both their happiness and success, but their individual financial futures.

Remember that your child’s education is important; however, your financial future is more important.  Don’t start funding an account for college expenses until you have your own savings and retirement funds in good standing.

These along with many other long term financial goals are things you should begin considering as you work down your debt and make more room for savings in your budget.

Week 49 Challenge:

Where are you in your journey?  If you’ve crawled your way out of debt, start with fully funding your emergency fund then move onto retirement savings.  If you still have debt, continue working toward your goal of being debt free, but remember your long-term goals of financial success.

Resources:

• When should I start savings for retirement by CNN Money.
• 10 ways to prepare for retirement by US Department of Labor.
• An interesting look at paying for college in thirds by Time.com.

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

You are reading Week 48 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

As we near the end of this year toward getting rid of debt, it is time to evaluate and Motivate Yourself To Change Financial Habits. Over the course of this year, a few things have probably happened to change your outlook on your finances. Now it is time to focus on creating new and healthy financial habits, so debt doesn’t become a problem in your future.

Motivate Yourself To Change Financial Habits:

Acknowledge your failures and successes of the year. Make a list of all of the things you have struggled with. Next make a list of all of the things you have changed and improved. Include every small accomplishment on this list. Acknowledge to yourself where you have made better choices and changes for the better.

Document changes you wish to make in the future. Take the time to look at your failures and make notes of what you should change in the future. These changes are important to you long term financial success. They may be the same things you wanted to change at the first of this year, or they could be different areas you have struggled in.

Encourage yourself by looking at even the smallest of differences made. Don’t skip acknowledging the small things. If you set up a savings account this year but didn’t contribute as much as you wanted that is okay. You still set up the account and that is better than where you were at in the beginning. Lowering parts of your budget, stopping impulse purchases or even getting back in good standing with accounts are all small changes that add up to a lot.

Even tiny changes are changes. Even a $5 savings is more than $0. Every effort you have made over the course of this year hasn’t been without reason. Changing your finances is hard work, but worth every second of your time. Spend some time this week taking an honest look at your successes and motivate yourself to change financial habits for good.

Week 48 Challenge:

This week you have 3 challenges from the points above.  Get your notepad and pen ready. Start making the lists right away, so you don’t put it off.

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

You are reading Week 47 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

An easy way to help your over all financial success is to let interest accounts make money for you. While we have spent much of this year talking about how to get rid of debt, this week we are going to talk about one way you can make easy passive income. This income can be rolled back over into your accounts to pay off debt, or simply be a part of your savings plan.

Let Interest Accounts Make Money For You:

Choose an interest earning savings account. One of the easiest ways to earn money on your money is to choose an interest earning savings account. Shop around at your local banks for the best options.  Most will have similar or identical interest rates, but it’s always important to shop around.  Remember to ask about monthly account fees to make sure you are getting the most for your money.  Avoid accounts that charge fees if at all possible.

A Money Market Savings Account at your bank can earn more money than a traditional savings account.

Use credit and debit cards with cash back rewards programs. Not only do credit cards offer cash back rewards, now many of your debit cards do as well. The Paypal Debit Mastercard currently offers a small percentage of cash back earned on purchases made with the card using funds in your account. This is a great way to make money by spending money you normally would be using anyway.

Do NOT charge more than you can pay off per month on credit cards.  If you will be tempted to spend more, stick with debit cards and cash only!

Open a CD (Certificate of Deposit) at your bank.  A CD is a great way to earn a higher interest rate on your money.  The catch is you can’t access your money for an allotted period of time without incurring penalties.  This would directly counteract the point of trying to earn money from a CD.

The interest rate will vary depending on the length of time you choose from the CD.  Typically, three and six months, one, two, five or more years.  IF you have a fully funded emergency fund and have enough money to tie up for a specific amount of time, then this is a good option for you.  Remember, you don’t want to withdraw the money before the term expires!  If you don’t have enough money in savings to cover an emergency or you are still trying to get your debt and spending under control, stick with the traditional accounts for now.

Invest in 401K or Roth IRA programs through your employer. This is a wonderful way to easily invest your money with little effort. If your employer offers a retirement program through a 401k or Roth IRA take advantage of their offer to match your investments. This retirement savings offers great interest or money making stock options that increase your savings with little to no effort on your part.

No matter what type of account you choose, let interest accounts make money for you this year. As you continue working to pay off your debt these small efforts may not seem worth it but can easily add up over the course of time to create an excellent savings for you.

Week 47 Challenge:

Start researching savings plans at your local banks.  Make an appointment and open an account.  Start depositing money into your new savings account on a regular basis to fund your emergency fund.

Resources:

• Detailed information on CD’s.
• Understanding savings account interest rates.

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

You are reading Week 46 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

When you are looking to find new and different ways to get rid of your existing debt, you may find that bartering to pay off debt can work wonderfully for you. No, you can’t typically barter with your creditors, but you can barter in other areas of your life that will give you income to go toward your goal of getting rid of debt.

This week we are going to give you some simple ideas for bartering items that can help increase your income or budget toward debt repayment.

Bartering is an exchange of goods or services for other goods or services without using money.

BARTERING TO PAY OFF DEBT

There are multiple things you can offer as a barter for services. The list below is a great start on items you can barter with or for. All of these things offer you or the other party a savings on a needed thing in your life without costing a lot of extra monetary expense, if any.

• Fresh garden produce. This can be fresh during summer months, or can be a canned or frozen product in winter months.
• Babysitting services
• Pet sitting or pet walking services
• Lessons for guitar, piano, dance, voice or other arts
• Housekeeping services
• Personal chef services
• Nutritional counseling
• Physical Training or Fitness training
• Household repairs and maintenance
• Vehicle repairs and maintenance

To put these ideas into an example, your car needs the oil changed.  You have absolutely no idea how to do this or the tools to complete the task.  Instead of taking your car to a mechanic and paying a shop to change the oil, you ask your neighbor to do it for you. In exchange for this service, you offer two hours of babysitting.

You save money by not having to go to a mechanic and your neighbor saves money by enjoying an evening out without having to hire a sitter.

Almost any service you would typically be paying out of pocket can be bartered for in your community. Bartering to pay off debt is a classic method from centuries ago. Even in the last century it was known that many people who couldn’t afford a doctor would pay by trading with food or services.  The same method applies here but in different circumstances.

Using your skill set to create extra funds in your budget is not just an easy choice, but a smart choice you should use for years to come. Whether you have debt or not, bartering is a great method to pay for things you need without hurting your budget.

Week 46 Challenge:

Write down a list of products or services you could barter.  Then look around your community to find someone that you can exchange these goods or services with.

Resources:

•  Craigslist has a section for bartering.    Search to see what is available in your area.
• Modern Day Bartering by Forbes.
• Purchase or borrow a copy of No Cash? No Problem! for more ideas. The book has excellent ratings.

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

You are reading Week 44 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

One excellent way to save money and help eliminate debt is to stop spending money. No, that isn’t a joke at all. This week we are going to give you some Tips For Going On A Spending Freeze. This is one method that forces you to think about how you are spending your money. Not only can it help create extra room in your budget this month, it can become a great way to save money in the future toward paying off debt.

TIPS FOR GOING ON A SPENDING FREEZE

Be realistic about your needs and ability to provide for them. A spending freeze is a time where your bills are paid as normal, but you eliminate any other spending for a period of time. This means you must be focused and know what your needs actually are.

If you are eliminating your grocery budget and going to eat only from what is in your pantry and freezer, make sure that it is actually feasible. If you don’t have any foods stockpiled, you will be hungry. Make sure that your spending freeze is focused more on using what you have on hand, and less on making things difficult for you and your family.

Start with one week, then move up to one month or longer. Make gradual changes, and force yourself to go outside your comfort zone. For your first spending freeze start with a simple one week challenge of not spending money on any groceries, clothing or impulse buys. Your only expenses should be regular household bills, gas for transportation and things like medical expenses as needed. After you manage your first spending freeze, you can work on building up to longer periods of time.

Get a buddy.  It helps to have someone to hold you accountable and to share your successes and struggles.  Ask friends or family if they want to go on a spending freeze together.  Set check-in times to help motivate each other to stick with the freeze.

Determine what to do with the savings.  Before starting the spending freeze, determine where you will invest the money saved.  Is there a bill that you want to put the money towards?  Does your savings account need fattening up?  This will help you have a goal to work toward during the freeze.

Track progress.  Put a chart on the fridge or in your office to keep track of your savings.  Seeing progress can help you get through the tough times.

A spending freeze is designed to help you focus on needs versus wants. Sometimes you want chicken for dinner, but reality is you already have a freezer full of beef, pork and fish. What is your need? You need to feed your body, but your want says you should spend more money on chicken. This is just one example of many that a spending freeze will give you and help you to understand and manage your debt better.

Week 44 Challenge:

Are you will to go on a spending freeze?  Determine if you will stop buying groceries, clothing or all unnecessary expensive for a set amount of time.  Pick a day to start and stick with it!  Come back and share with us your spending freeze success (or struggles.)

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

You are reading Week 43 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

As you are getting closer to paying off your debts, Knowing When To Close Credit Accounts is important. There are a few factors to consider once a debt is paid in full. This week we want to focus on making the best choices with your accounts that are now resolved or paid off.

Do you have a large number of credit accounts open? Sometimes when you are paying off debt you realize that you have an unusually large number of credit card accounts. When you have more than 10 credit card accounts, you may want to evaluate as they are paid off and close some accounts. Accounts in good standing can help your credit score, but an account that had many dings can be closed and will only be removed that much faster from your overall credit score.

Do you no longer have access to the store the card was issued from? Sometimes we get those specific department store cards because they offer a great discounts on signing up.  Who wouldn’t love a little extra time to pay off a debt? The card from the jewelry store you bought your wedding rings from is something you don’t need to use again. Closing that account will make sense in your overall financial plan.

Is the interest rate significantly higher than other credit accounts? If you have an option of using an account with a much lower interest rate to maintain and build your credit, close the higher interest account and focus on paying off other existing debt. When you feel comfortable using credit again, you can then use the account you chose with lower interest rates instead.  It’s also wise to pick cards to close that have an annual fee vs cards that don’t make you pay each year just to use the card.

When deciding whether or not to close credit card accounts, think about how it could negatively affect your credit. If you’re going to make a large purchase soon, closing accounts now might not be a good option.  It’s also wise to keep some cards open with a zero balance and use them occasionally.   It looks good on your credit report to have active accounts in good standing.

As you navigate your way toward being debt free, knowing when to close credit accounts will come in handy. Ideally you want to pay off your debt in a reasonable manner so your credit account will be in good standing, but sometimes closing an account just makes sense for your overall big picture credit and debt plan.

Week 43 Challenge:

Evaluate all your current credit cards.  Research your specific cards and determine if closing some accounts is the best option.

Resources:

• The Do’s and Don’t of Closing Credit Cards from US News.

Note from Tori regarding closing accounts:

Speaking from experience use caution when closing accounts. If you close older accounts, it will appear that all of your credit cards were opened recently (less years of credit history – bad thing). If you close accounts that have a positive reporting history, they will drop off your credit history in 10 years . At that point, they will not longer be contributing positive information and it will also shorten the length of your credit history (bad thing). If you close accounts, it will lessen the overall credit that is available to you which means you have a higher percentage of credit having been used (utilization). (Such as you have a $8,000 cc and a $2,000 cc. You normally have about a $1,000 in cc debt so are using about 10% of your available credit. If you close the $8,000 cc, continue to have $1,000 of credit being used, you now are using 50% of your available credit. Bad thing.) Closing accounts seems like it would be a good thing but, it can actually harm your credit.

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.

You are reading Week 42 of 52 Weeks to Eliminate Debt & Curb Spending. Please read the overview here to learn more about the series & get your FREE financial planner. If you just joined us, please start with week 1.

One thing to do before you begin a new year, is to change your bill pay method for debt relief. As you have struggled through this year, you have likely noticed how you paid your bills made a difference in how timely they arrived, late fees assessed and how easy it was to remember.

It also means that you will be writing & mailing less checks each month.  You won’t have to purchase checks as frequently or pay for postage.

Here are some options for changing your bill pay method to work better for you and your goals of getting rid of debt:

Use banking bill pay feature. Most banks now offer a simple online bill pay feature. You can set up your bills with the bank so that a check will be cut from the bank and mailed directly by them to your creditor before the due date. This takes away your need to write a check or call and make a payment.

I have all my bills set up through my bank.  Some of my bills I can even get sent directly to my bank as well.  I get an email to notify me when a new bill is available.  I simply login and select to pay.

Request automatic draft from your bank account. Ask for the forms to set up automatic draft from your bank account to the creditor. Many utility companies, credit cards and mortgages will allow the auto draft feature. This is a fee free method of making sure your bills are always paid on time.

Online payment service through biller.  Most companies also offer an online payment option.  You can login to your account and pay your bill for free.  While there is nothing wrong with this method of payment, I personally prefer not to have my payment information on file with a lender.

Create a weekly bill paying routine. Create a routine that you use on a weekly basis of going through your current outstanding bills to make sure they are paid on time. Set up a schedule on your calendar and create a bill pay station so it is easy to keep track of.

Pay large bills once per year when tax refunds arrive. When your income tax refund arrives each year, make an effort to pay some things in bulk. Auto and health insurance payments for six months to a year are excellent choices to help loosen your monthly budget and put that refund to good use.  Sometime you can even get a discount for paying in advance.  Just make sure to crunch the numbers to see if paying the amount down on a credit card is a better value.

Changing your bill pay method for debt relief simply means making it a bit more routine and steady. This helps you to avoid accumulating late fees, and will in the end result in better success in paying off you debt and remaining debt free.

Week 42 Challenge:

Review the automatic payment methods available to you.  Start switching your bills over for added convenience and to save money.

Disclosure: I am not a financial adviser nor do I have formal financial training. All articles are for informational purposes only and should not be interpreted as financial advice or consultation. Please consult your account and/or financial adviser before making changes to your finances. All situations are different, so please consult a professional to determine your individual needs.