Debt Free Life Hacks: Managing Money Like a Boss

Isn't it interesting how in our world, you need debt to show you're creditworthy, but having too much debt can actually hurt your chances of getting more credit? So, what steps can you take if you feel overwhelmed by your debt? 🤔  Fortunately, there are plenty of ways to tackle your debt and start working towards financial freedom. Two popular approaches are the debt snowball and the debt avalanche methods.  Let's dive into these strategies a bit more, shall we? 😊 What is the debt snowball?☃ The debt snowball is a helpful strategy for gradually paying off your debts while staying motivated. Essentially, you start by paying off your smallest debt first while making minimum payments on your other debts. Once you eliminate each debt, you can focus on the next smallest one by adding the amount you were paying on the previous debt, plus any extra you can afford. This way, your payments build momentum, and more money goes towards paying off larger debts until they are al...

"Money Explained - Credit Cards" Do you pay off your credit card balance in full every month? If so, your credit card company may consider you a deadbeat. According to the Credit Cards episode of " Money Explained," a Netflix series, transactors are deadbeats. So what exactly is a transactor? The episode's narrator defines a transactor as "someone who pays their bill in full every month." 😲Shocked? I know I was. But, once I learned what a transactor was, I realized I am a deadbeat, and I guess I'm alright with that.😂 Credit card companies don't want people who pay back their money every month and they don't want people to never pay back their money. It's OK to be a Deadbeat😮😉 What's wrong with paying your bill in full every month? While bankers and creditors may benefit from you carrying debt from month to month ( they call these customers revolvers ), how does that actually benefit you? It does not.  Typically it's better...

Have you ever really looked at your credit card bill? Carrying a balance, even a small one, can add up over time when you consider the interest. Sometimes, statements will include your balance, the minimum payment due, the interest/intersest rate, and the amount of time it will take to pay off the debt if you only pay the minimum - granted, you don't make any new purchases. It can be a little scary and even more reason to pay it off sooner than later.  Take a look at the example below: It’s a good idea to pay attention to your bill - in this case, the creditor is very transparent. Here’s a card with a relatively small balance, a high-interest rate (25.24% ), and a disclaimer. Highlighted in green, it states, “ If you make only the minimum payment each period, you will pay more in interest and it will take you longer to pay off your balance .” Given the facts - it would be in my best interest to pay more than the minimum - even if I can’t pay it all. Why? Because paying just the mi...

Maybe the best motivation to get your finances in order is when you really take a look at your finances. Knowing how much you make and how much you spend is only a piece of that puzzle. Considering all of your assets and liabilities, are you looking at a positive or a negative difference? If  the difference is negative, than that is motivation to pay down debts. If the difference is 0, that’s good because you have no debt, but motivation to build assets up.  If the difference is positive, you’re definitely headed in the right direction. Keep it up! What is net worth? Most simply speaking, net worth is the difference between your assets and liabilities. If all your loans and debts were paid, how much money remains? Consider that your net worth.  Examples:  Betty has a total of $10,000 in savings, $40,000 in retirement, $30,000 in student loans, and a $10,000 car loan. Betty’s net worth is $10,000 ($50,000 - $40,000). Jackie has a total of $50,000 in ...

Check out this week's video post on zero-based budgeting. 

When you know better you do better! First, I would like to commend you for visiting this blog and reading this post. Why? It says a lot about who you are and your interest in your finances. A big part of " Managing your Money Like a Boss " and being debt-free is knowledge. If you're reading this, that means you're actively learning and growing or reinforcing the knowledge you may already have. Have you ever heard the phrase "Knowlege is power"? It's true. Now, knowledge without action/activity is somewhat useless, but acquired knowledge gives you the power to make informed decisions.  When it comes to managing your money, you want to be knowledgable and in power. The best way to do this is to learn as much as you can about finances, budgeting, money management, debt management, investing, etc. No one expects you to be an expert in all topics, but knowing a little something can take you far.  Here are some ways to increase your financial know...

I'm sure we've touched on this in other posts, but this week I want to talk about the importance of having an emergency fund. Trying to save money when you're drowning in debt is unlikely, but once you can start putting money away, you want to make that a priority. Show me what you're working with. Are you living within your means?  First review your expenses. Do you know what your total expenses are each month?  Next, calculate your net income. How much are you bringing home?  Now, do the math. Subtract your expenses from your income. Do you have a positive or negative balance?  If you have a negative balance, it's important to carefully examine your expenses.  If you have a positive balance, that's great. There still may be room for improvement, but you're definitely on the right track.  Track your spending for a few months. This will help you get a clear picture of what's going out to what is coming in. Create a budget - Once you ...

I was chatting with a colleague during our afternoon walk and we discussed her AC needing to be repaired and the possibility of it needing to be replaced at some point in the future. Her hope was that it would be years down the line before it would need replacing stating she did not have $5,000 to replace the entire system. My recommendation? Start preparing now. Do some research, price the parts and labor and then start saving specifically for that expense. Do it before you need it so that when it does go out completely you won't have to go long without air, scrape to find the money, borrow the money, or add it to a credit card that's already close to being maxed out.  Even if she doesn't have the full amount saved by the time it goes out, something is surely better than nothing.  This method can work for just about anything. You begin with the end in mind ( a strategy for course design that happens to work in other instances ). Decide what you want, how much it cos...

DEBT- Nobody wants it, nobody likes it, but lots of people have it. According to Debt.org , " American household debt hit a record $13.21 trillion in 2018 ".  That's a whole lot of money! So what does this tell us? This means that if you are in debt or have debt, you are not the only one. While this may not be a reason to celebrate,  it may offer some comfort knowing you're not alone in the battle to be debt free. Some may argue the benefits of "good debt", but that's for another time.  For now, it's important to focus on reducing and eventually eliminating your consumer debt.  There are many sources of debt including but not limited to the following: Credit Card Debt Automobile Loans Student Loans Personal Loans Mortgage  Medical Bills Will I ever get out of debt? As Sherman Klump said in The Nutty Professor "Yes, I can"!  So yes , YOU can ! 😉 Depending on the amount of debt you have, it's sometimes hard to...