Category Archives: Set up for Success

Mythbusters: How to Make Your Debt Payments Count

Lies and MoneyCongratulations! You’re doing great on your debt snowball…paying off loans like it’s your job and suddenly the last loan on your list is your student loan managed by Navient (the old SallieMae) or some other federal student loan company. Unlike most of your other debts, you don’t have the choice to click a button that says, “I want to allocate this payment toward my principal balance” which forces you to pay your OLD interest rate without making a dent in your principal balance.

The Problem: When you pay online or call to make a payment, you’re unable to allocate extra payments the way YOU want to allocate them. When you make an extra payment online or over the phone, your payment is applied to outstanding interest.

What That Means: You are paying down your already accrued interest without making a dent in your principal balance. Your goal should be to decrease your principal balance as much as possible because the interest accruing will end up being LESS because the interest charged is based off of a smaller number. Confused yet?!

The Solution: If you search and search and search on your federal student loan service providers website, you will see a little tiny line that says, “you can allocate your payments differently if you mail in your extra payment with a WRITTEN notice describing how you want the payment allocated”. Tricky, tricky, tricky.

AVOID: What you don’t want to happen is make extra payments that results in payment due dates that get pushed further and further in the future. You want your extra payments to go toward your principal balance ONLY! That means, even when you make an extra payment, your normal balance is due the next month.

The LIE: If you call Navient or your federal student loan provider, they will tell you over and over again that, “your extra payments are applied toward your accrued interest”. They will not even mention any other option, even if you tell them that you read online that you can allocate payments differently. They are out to make money and the more money you pay in interest, the more money they make. DO NOT settle…this is YOUR hard earned money and you want to do what’s smartest and will eventually save you THOUSANDS!

If you’re confused, extra payments should ALWAYS go toward principal balance.

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How have you been allocating your extra payments? Have you seen a drastic decrease in your principal balance? What’s your “trick” to making your payment count?

For more information on how to gain control of your finances check out our info on Getting Started by clicking the link in the menu bar at the top of the page.

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Sam

Disclaimer: This blog post is based on my personal experience with my student loan service company. Not all student loan companies have this policy.

Sam’s post is also found linked up with other brilliant folks on Financially Savvy Saturdays. Click the button below to head on over!

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What to Ditch in December for Less Stress this Holiday Season

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Experiencing the season of sleigh bells and the scent of pine (ahhh it’s so good) as an adult is a little different from the visions I remember seeing through my childhood eyes. Times have changed and so have my Christmas-Colored glasses. Sometimes when I get really overwhelmed I start hearing a cheering squad of elves chanting…

When you say “Christmas Tree” I say “Vacuuming”!

When you say “Cookies” I say “Weight Gain”!

When you say “Parties” I say “More Sleep”!

So that cheering is a bit exaggerated, and overall I really do like the Holiday season, but man it can become S-T-R-E-S-S-F-U-L if you let it. Luckily, I know that I can make little changes in my daily life during the month of December to save money and decrease stress (more often than not, those two go hand in hand) so that I can ditch the Grinchy Vibes and allocate the majority of my brain power can be spent thinking about really important things like …

  1. Hitting every Holiday Party. There are so many parties this time of year. It’s completely acceptable to turn a few down. It saves money on the inevitable grab bag gift and potluck item, but it also leaves more time for other important life things…like sleep. 😉 This year I am attending 3/5.
  2. Going out to Eat. Seriously, this time of year I feel like every time I turn a corner I stumble upon another holiday dish. People are baking and sharing constantly, so enjoy those as your eating “treats” and forgo eating out so you can put your money to better causes—like returning the cookie-baking favor or scoring amazing gifts for your family and friends.
  3. Last Minute Shopping. If you are one of those people who gets their shopping completed only when it’s preceded by the countdown-clock adrenaline rush, move right on down to number four. Last minute shopping can’t exist in my happy place. It just can’t.
  4. Trying to bring the Best Gift for the White Elephant Gift Exchange. It cannot be held against me to promote humility during the holiday season can it? I’m not advocating for you to bring the worst gift either, but it is important to remember that physical gifts are just one teeny tiny part of the whole face-stuffing, hug-giving, mistletoe-hopping holiday party scene. Let your love be louder than your gift (consider my token holiday cheesy comment completed—but you guys know I’m right). 😉
  5. Shopping for Yourself. Put your own shopping wants on the backburner so you can focus your time, energy, and money on others. I’m sure you’ve got plenty of friends and family that are doing the same for you!
  6. Going for Best Dressed. It is 100% okay to wear clothes that you already own to your holiday party despite what the beautiful holiday ads are telling you. But you already knew that, didn’t you?
  7. Guilt.  Don’t beat yourself up for not saving every penny you wanted to keep in your bank account, missing a few parties, wearing the same holiday ensemble twice, or eating a couple dozen extra cookies this holiday season. Santa ain’t got no time for that!

These are all simple tweaks that I can survive without for a short amount of time in order to enjoy the holiday season in a way that would make Buddy the Elf proud.

What change-ups in your typical routine do you make so that you have more time and money for others during the holiday season? What are you not willing to compromise on?

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 Brittany

Holiday Blasts from the Past: Holidays on a Budget & Conquering 9 Budget Busters this Holiday Season

If you are feeling ambitious (or like an iPad scrolling couch potato) you can find this post and many other DIY, food, and frugally based posts from the past week at The Frugal Friday Link Up Party & as *Part of Financially Savvy Saturdays on brokeGIRLrich*!

7 Days to a Debt Payoff Plan

Starting your debt snowball or a plan to pay off debt, can be overwhelming, scary, and frustrating. Procrastination is a major roadblock for many people who are faced with the task of paying off debt because it can make a person feel like he is staring up to the summit of Mt. Everest and being asked to climb it!  If sitting down and trying to tackle the job of getting organized to pay off your debt makes you want to put on your tennis shoes and run in the opposite direction, you are not alone. I’ve been there too. That’s why I’ve come up with 7 days of “jobs” that will have your debt payoff plan feeling less like climbing Mt. Everest and more like stepping over an anthill :)

debt snowball defined7 Easy Steps to a Successful Debt Payoff Plan

Day 1: Gather it up. Find all of your student loan/debt paperwork (including the car, mortgage, etc.) and put it in one spot/folder/pile.

Day 2:  Protect it. Find all passwords, and create a word document labeled (something like “debt payoff”, “debt snowball”, “hello financial freedom”) for all of your usernames and passwords. Create accounts if you don’t have one.

Day 3: Get technical. Log on to all of your debt accounts. Make sure that you save them on your web browser as a “favorite” so you can easily click and go.

Day 4: Create your DEBT SNOWBALL. Either write down or start a word/excel document listing your debt totals in order from smallest to biggest. Include interest rates.

Day 5: Schedule it. Write on a paper calendar and in your phone all of your payment due dates. Set an alarm to alert you of a payment 2 days or 1 week before each payment is due to ensure on time payments and avoid fees.

Day 6: Plan ahead. Use your budget to decide when (month and year) you will make your first EXTRA payment.

Day 7: Easy access. Make a filing bin, cabinet, or folder for your debt paperwork ONLY! Put it in a spot that is easy to access. Most people are more willing to do something more often if it’s convenient (i.e. fast food, pre-packaged foods, etc.). Make it easy on yourself and make your debt snowball information easy to access and organized!

debt snowball picThere it is. In just 7 days you will go from, “I just pay the minimum and forget about it because it’s too overwhelming to look at” to “My first extra payment happens on 12/1”! Congratulations on taking years off of your total debt payoff time!

debt snowball congratulationsHow did you begin your debt snowball journey?

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Sam

Your Wishlist and Your Budget

We’ve all been there. Looking at a long list of “wants” that seem far away and totally out of reach. Sigh. I’m a big “Wishlist” person. I keep a list of items/activities that I want in my phone so that if I have some leftover spending money or when Holidays are coming up, I can refer to the wishlist of things that I’ve been wanting  but just haven’t scraped together enough spending money outside of my budget to pull the trigger on a purchase.

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Here are a few things that I do to keep my urge to shop for all the items on my wishlist and feelings of constant sacrifice at bay:

  • Narrow it Down. Edit your wishlist if it’s getting too long. It’s likely that there are several items on your list that you no longer want or you can push down toward the bottom. I go through my wishlist about once a month and I delete at LEAST one item from the list every time I check it.
  • Upcoming Holidays. Look ahead to see what holidays are coming soon. Christmas, Birthday’s, etc? Typically things on our wishlists are just “wants”, so it’s likely that we can wait a couple (or seven) months to get it as a gift and save ourselves from totally smashing our budget.
  • It Just HAS to Happen. What if you need it sooner? What if it’s something you can’t pass up? Ask yourself these questions:

1. Do I have money for it? 

2. Will I go into debt to get this?

3. Is this purchase worth decreasing the amount I can put toward debt this month?

If you answered “yes” for #1 & 3 and “no” for #2, maybe last minute tickets to a concert that a friend offered you won’t bust your financial plans or maybe your running shoes are so worn out that you slip on the gym floor and can see your socks through your shoes. Try not to make a habit of spending outside of your budget on wishlist items, but random events are materials may be worth if every once in a while.

If you answered “yes” for #2, STAY AWAY! SAY NO! Do not go into debt for wishlist purchases. Just plain old “NO”! Debt is not worth whatever it is that’s on  your wishlist. Start putting together a Christmas list and counting down the days!

You can find this article and more financial posts from some of our favorite bloggers over at the Savvy Saturday Link Up by clicking the button below!!

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What’s on your wishlist? How do you keep your wishlist expenses in check? Let us know and leave a comment!

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Sam

Budget Basics – Wiggle Room in the Budget

Photo Credit: www.keepcalmomatic.com

Photo Credit: www.keepcalmomatic.com

When it comes to allowing wiggle room in the budget, there are two main and drastically different styles: Those who wiggle, wiggle, wiggle and those who are rigid, rigid, rigid. Despite being able to “go with the flow” across most areas of my life, regarding my budgets I do not like to bend—which has resulted in some seriously over dramatic breaks when the numbers don’t work themselves out exactly, I have to put less than I planned toward my debt, or I spend more money that I originally intended and/or planned to. As I accumulate more life experiences (and monetary moments that don’t go along with my perfectly budgeted plan) I keep noticing that my life—financially and otherwise—tends to be a little bit better when I loosen my grip on my extremely detailed, overly analyzed, and fiercely capped budget to embrace a little wiggle—where some wiggling is warranted of course.

After years of drawing a maximum budget line and never crossing it, I have finally convinced myself that I’d be better off with a new found mindset—determined to interweave the rigid budgeting strategies that help me stay on track and achieve my financial goals while incorporating some cushions that increase my ability to stay calm and happy on my journey to accomplishing them. While rigidity is the backbone of any budget, there are some specific types of sub-budgets that can greatly benefit due to some built-in wiggle room.

When Looking at our Sub-Budgets we must ask ourselves:

To Wiggle or Not to Wiggle?

Photo credit: Disney

Photo credit: Disney

Since setting a specific budget and saving the funds to pay for my upcoming wedding with cash, I have spent MONTHS refusing to add some wiggle room. It literally makes my stomach turn when I envision myself saving (not even spending—because that is how crazy I can be) $10 more than the reasonably budgeted amount my fiancé and I agreed upon. Through my rigid-budget-ice-queen-glasses saving more than the set budget looks like planning not to reach the goal we set for ourselves—so then what’s the point of the budget anyway!?!?! However, after much research, listening to firsthand accounts of others, and reflecting on my own personality downfalls differences when I’m stressed about money I realize that a wedding budget—or any other budget that is large in sum and typically created over several months—is a prime place to leave some wiggle room. The reality is that not planning on a having any “surprise expenses” doesn’t ensure that there won’t be any “surprise expenses”. Hence, the very definition of the word “surprise”.

definition of surprise

photo credit: Google

I encourage Type A Budgeteers (not a typo, I just invented that word. Go me.) to relinquish delusional grips on what can’t be controlled—the inevitability of surprises—when budgeting for a wedding or any other large scale event, and make good decisions regarding the matters you can control—which in this case is saving above the budget to give yourself room to wiggle during the process. When it comes to big money, it’s better to be safe than sorry. And if you are like me, feel free to give yourself a daily reminder that just because you save that extra does not mean you will end up spending it.  “I’m not a budget failure. I’m not a budget failure. I’m not a budget failure…”

Related Posts: Wedding Planning on a Budget: Shifting your PerspectiveWedding Budget 101: A Step-by-Step Guide to Wedding Budgets for the Financially Unprepared Bride-to-Be

gft-givingWhen it comes to gift-giving, I am a firm believer in over-budgeting and leaving room for the wiggle. While I struggle to leave a buffer on budget areas that are directly related to me, myself, and I; I actually would much rather over spend on others than under spend. Not only do I believe cheap gifting to be tacky behavior, but not letting my gifts represent how much I care about my loved ones leaves me with a “yucky” feeling in my stomach (truth: I was literally scrunching my nose up while typing that sentence—physical manifestation of “yucky”). That being said, the budget can’t be completely thrown out the window because my income is not limitless. When I know that birthdays, holidays, babies, and housewarmings are in the near future, I always over save to create a buffer. Then when I meet my girlfriends on their birthdays I can bring a gift and chip in with everyone else to cover the old lady’s tab 😉 My peeps are worth it a hundred times over. <3

Related Post: Holidays on a Budget

traveling - wiggle

I believe that the traveling budget deserves a little wiggle room for a few different reasons. The first reason is that “traveling” is a very broad term—are you traveling to Costa Rica or are you traveling to your grandmother’s house for Thanksgiving? If you are going on a big trip to an unfamiliar destination you are going to need to create more wiggle room than if you are traveling a short, familiar trek that you’ve conquered many times before. For a short trip, you’d be wise to establish a budget and then be sure you have access to additional buffer money just in case an unfortunate scenario, like car trouble, leaves you stranded in a Motel 8 for a night (that actually happened to me once). For big-time trips I usually create a buffer that totals about one-fourth of my entire travel budget just to be on the safe side. The most difficult part for me  regarding travel wiggle room is to detach myself from “vacation mode” after I get back and actually do something responsible with the buffer I’ve created and didn’t have to spend—hello impulse coffee table purchase that was the main catalyst in scaring me into better spending habits nearly two years ago…

Related posts: Saving Money on your Road Trip across the USofA

 Caution: No Wiggling Recommended Beyond this Point!

Groceries – I think food is one of the areas that people overspend on, and I really think my grocery budget has cut out more mindless spending more than budgeting any other area. Creating a buffer for your grocery budget is simply not necessary. It will open you up to being less aware of using what you already have, throwing away unused/spoiled food, and buying overpriced junk. It just makes you forget to be appreciative of food. Don’t wiggle!!

Monthly spending money – No buffer needed. Period. Start finding ways to spend your time that don’t involve spending all of your money. Trust me, it’s easier than you think.

Shopping – If you let yourself wiggle a little bit when you head out shopping (especially if you don’t tote around shopping bags too often) your wiggle is very, highly likely to snowball into a full-blown Harlem Shake. Before you know it your “buffer” has doubled your original budget and that’s not what “wiggle room” is all about. Set a shopping budget, grab some cash, and never look back.

Bills – Take advantage of the consistency that comes with bills—it might be the only good thing they’ve got going for them, right? Set those automatic withdrawals and forget ‘em. No wiggle room needed.

Head on over to BrokeGIRLrich to see more posts featured in this week’s Financially Savvy Saturday!

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For more information on how to gain control of your finances check out our Getting Started page by clicking the link in the menu bar at the top of the page. Which “sub-budgets” do you allow wiggle room in and where do you hold your ground mercilessly?

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 Brittany

Intertwined Lives, Separate Bank Accounts: How to Cohabitate with a Happy Financial and Emotional Mindset

Time and time again studies have shown that money is the number one instigator of problems between couples. Sidenote: I want to know where exactly “farting” ranks on those lists because it definitely should be close to the top… Okay, okay, back to money: While it seems to be common sense that relationships with our significant others should be prioritized above money, an uncountable number of failed relationships have proven that it’s easier said than done.

San Fran

So I am coming to you equipped with a few years of experience in the area of lovebird cohabitation and zero years of joined bank accounts under my belt to share what has and has not worked for my better half and I when it comes to splitting the tab of life from two separate bank accounts.

STEP ONE: Get on the Same Page—or Get Out Now!

golf pic

We have similar values and interest across many aspects of life, but likeness in monetary values creates a strong foundation for our relationship…just a tad more than mutual okay-ness at golf.

If you are living with your significant other in hopes that you will one day be walking down an aisle together, you better make sure you are on the same page when it comes to money values. It’s okay to have different styles and desires, but if your spending habits are completely opposite of each other (i.e., he saves every penny he earns, and she maxes out credit cards on shoes every month) you either need to find a compromise that keeps both of you satisfied or get the heck out of the relationship before one of you milks the other dry. The hardest part of step one is taking an honest look at the facts, but doing so immediately will save you a lot of heartache and money woes in the future.

STEP TWO: Divide and Conquer the “Easy-To-Split-Stuff”

Taken just as our cohabitation officially began

Keeping the simple stuff simple, has helped us smoothly transition into sharing our lives together.

We treat the payment of our rent and household utilities as if we are roommates (which we are in the sense that we are 2 individuals with 2 separate incomes and 2 separate bank accounts). That means we split rent, gas, electric, and cable straight down the middle each month. There are a few ways to do this with little hassle and near guarantee that everyone is living up to his or her end of the bargain:

OPTION ONE: Put all utilities in one person’s name (this is the time to let the organizer of the relationship showcase those responsibility skillz) and have the second person write the “organizer” a check each month to cover his/her half of the costs.

OPTION TWO: Put roughly one half of the utilities in each person’s name so that each person directly pays about half of the monthly expenses without ever needing to deposit or wait on a check from the other. This option is better for those who are a little more flexible and will not spitefully bring up owed pennies during an argument about what’s for dinner on Tuesday night.

STEP THREE: Create a Strategy to Tie up All Loose Monetary Ends that Leaves Both Parties Financially Satisfied and Comfortable

skidate

Money strategy and agreement are key factors to enjoying a nice vacation.

After the big expenses that occur regularly each month are equally distributed, you need to make a plan of action for all other expenses that occur in your shared life. These expenses can be regular—like groceries—or more varied—like vacations. The key is to be sure each person (in the loving relationship that you cherish very very much) knows the plan and is comfortable with the plan. I’ve listed some general strategies and helpful tips that help us avoid money spats on a daily basis, which is excellent because less fighting means more loving :)

Each Little Love Bird Must: 

♥ Know and respect how much money each person wants/needs to spend each month.

♥ Know and respect what each person likes to spend money on each month.

♥ Agree on a plan to tackle groceries.

Grocery style

♥ Be happy with a plan outlying how to pay for dates.

Date Style♥ Be happy with a strategy to pay for vacations and weekend trips.

Vacay Style

♥ Communicate with each other EVERY GOL’ DARN DAY about your money and your feelings about how your money is being spent (or not spent).

anni pic

Remember to keep a level head because at the end of the day, you love that beautiful face you wake up to each morning much more than Benjamin or Andrew…unless of course it is Benjamin or Andrew you are waking up to 😉

What strategies have helped you transition into and successfully conquer being in a serious relationship with molded lives but separate bank accounts?

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 Brittany