Jun 29, 2015 | Finance
During our parents and grandparents’ generation, the experience of buying a car, a house or even clothes and food was totally different from how we (our generation) makes a purchase. Why? Because they lived on the principle of “if we do not have it, we can’t get it” and “we’re not going to get it, until we have the money for it.” And for them “having the money for it” meant “having the cash for it”. They paid cash for everything. Loans and credit cards were relatively taboo in those days and most of them were steadfast on living within their means. Fast forward to 2015 and we have credit cards falling out of our wallets. We use it for everything—from buying the new “Red bottoms” as Saks Fifth Avenue to getting a Big Mac at McDonalds. We use it even when we have the cash to purchase it.
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Courtesy of dollarphotoclub.com
Now, unlike many financial gurus, I do not believe in completely getting rid of ALL credit cards (read next week’s blog). I believe that if you are responsible and have self-control, you should have ONE credit card for travel (purchasing flights, renting cars, paying for hotels). The problem is, we get tons of credit cards, use it for EVERYTHING, get in all types of debt, cannot pay the debt (or any of the other expenses we have) and take a hit (or multiple hits) to our credit report; thereby, obtaining bad credit.
Being irresponsible with debt causes years of damage and have long lasting effects that could take years to remedy. And in 2015, having “good credit” matters because it affects our ability to have some of your basic needs met. In short, it impacts:
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Jun 22, 2015 | Finance
I love reading and since our family is trying our best to get out of debt, I have become passionate about acquiring as much knowledge of personal finances as possible. Since I have been on this journey, certain books have stood out and completely changed our perspective of money.
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Courtesy of dollarphotoclub.com
Here is a list of my Significant Seven financial books that I believe everyone must read to start their journey in obtaining financial freedom.
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Jun 8, 2015 | Finance
The best way to succeed in anything is to first, believe. Believe you can do it, believe you will do it and believe in the plan to getting it done. Yes, planning your way to success is the recipe to actually acquiring the success you desire. This holds true in every area of our lives, be it relationships, careers, parenting and even in our finances.
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Courtesy of dollarphotoclub.com
Successful people do not just fall into success. They are very intentional and goal oriented; they set high standards and do everything in their power to meet or exceed their goals.
If we can plan our weekends, family vacations, or even what we will wear to work for the week, then certainly, we can put that much time and effort in planning how successful we will be in our finances.
Someone once said, “show me a man who fails to plan, and I will show you a man who will never succeed in life” (Unknown).
If you are like me, I want to be successful in every aspect of my life–including my finances. That is why my husband and I set annual financial goals (what we will pay off, how much we will save, etc…) and create our monthly budget to align with those goals.
Statistics say, “43% of Americans spend more than (they) earn (each month)” (Bureau of Economic Analysis). So to ensure we are not a part of the statistics, we plan and try our best to follow the plan. Why? Because when there is not a set goal, standard or objective, we all tend to spend our money frivolously. As long as there is money in the bank, we can spend (so we think). The problem is, without a “plan”, the following tends to happen:
U.S. household consumer debt profile:
- Average credit card debt: $15,609
- Average mortgage debt: $156,706
- Average student loan debt: $32,956
(Source: Nerdwallet.com)
DEBT
DEBT
AND MORE DEBT
So the best way to not overspend (or get into more debt) is to create monthly budgets at least one month prior to spending. Here’s how:
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Mar 10, 2015 | Finance
Yes, I said it right. According to a report from Pew Financial Security, Generation X (those born between 1965 and 1980) are less wealthier (or poorer) than our parents.
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Courtesy of dollarphotoclub.com
How is that possible?
We make FAR more than our parents could have ever imagined even with inflation and cost of living adjustments.
But, according to Pew, it is not what we make that is contributing to this statistic, it is what we spend. We have nearly six times more debt than our parents had when they were our age. Six Times! Grant it, most of this debt comes from student loans, but other reports show:
We spend more money on vacations
We spend more money on eating out
We spend more money on clothing
We spend more money on electronics
We just spend money overall!
So the problem is not just all of the student loans some of us had to get, it is the spending we continued to do once we received that new salaried job with the big title.
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Mar 1, 2015 | Finance
I could not believe we did it AGAIN.
How could we have been so irresponsible?
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Courtesy of dollarphotoclub.com
It’s not like we did not know the implications of our actions. We were (or at least I was) just caught up in the emotions of wanting what I wanted, when I wanted it, and I always seemed to have wanted it NOW.
After we had paid off thousands of dollars of debt (car loans and credit cards), we found ourselves right back in the same position—back in credit card debt!
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