Lets start today by talking about special deals that you may see with the start of a new year. Take for example this deal that T-Mobile is doing. They are offering a jump program, what this means is that if you have another one of the major phone carriers you can come in and have it switched to their network and they will pay for you early termination fee and up to $350 for each phone you bring in to go toward one of their new phones. This happens a lot with other retail stores and dealerships. At the beginning of the new year they will offer you a much lower price to get rid of their older models to make room for the brand new ones. Well T-Mobile hasn't done that, they are not the top carriers for cell phones or for coverage area. But people have mixed feelings about them. If you ask, some people love T-Mobile and have had no problems and others wont ever try them or go back because of a bad experience. People can have this same experience with just about anybody or any company. What you need to do is to check it out and see if its right for you. If you are worried about dropped calls and spotty service, check out their coverage map and see if your area, and the areas you visit frequently are covered. Also remember that is you are on WiFi that you don't need to have service, using WiFi will allow you to send texts and call.
The biggest question is how much will this cost me. It sounds all good that they will pay my early termination fee but is my monthly payment going to go down? That all depends on what you pay now and what plan you want to get. But no matter what plan you get, you will not pay any extra charges for roaming or going over data. What I mean by this is if you have 2GB data use for a month and you use all 2GB then you will just go from 4G to 2G but you will not pay any overage fee. Not to mention that all plans come with unlimited text and calls. Another cool feature is that when you get a new phone you don't have to pay for it up front, it can be added to your bill, with no interest, and you will pay over 24 months. I think this is a great option for some because when a new phone comes out, all you have to do is go into the store and give them your old one, if you still owe anything you will have to pay it, but they will pay for the phone you are giving them, so you will only have to pay a small amount. So every new phone that comes out you can get with this option.
Did I mention there is no contracts!! That's right if you don't want to use them anymore all you have to do is say "Im done" and you will not have to pay any early termination fee. Now that is one of the best things I have heard. So not only will they pay to end your old contract but they don't make you sign a new one!! Not having a contract is a great feeling, i have shopped around at a lot of different carriers and they always make you sign a new 1-2 year contract, but not here.
I made the change, from what I read and the reviews that I have seen, it was a good match for me. But if might not be for everyone. I changed to save more money and that's what I got, more money in my bank account. I saved about $60 a month. Every little bit counts.
Let me know if you make the change and before you do make sure you research everything you can about the pros and cons.
If you have any questions please Email me at Thetightdollar@gmail,com and follow me on Twitter @Thetightdollar
Thursday, January 16, 2014
Wednesday, January 15, 2014
Knowing your worth for a new job
Finding a new job can be very exciting but it can also be very scary. When looking for a new job you need to know your worth to an employer. You need to look at your educational background, training and past history in the field you are wanting to work in. It doesn't matter if you are just out of college or just switching jobs to better your career. A good website to check out on what a person is expect to make for the area you live in is www.bls.gov This website will help you find out what jobs are good for you and what training and education you may need to work in certain fields.
When you do find the job you want and apply, you need to research the company and find out everything about them. Find out the history of the company and how they have grown. Find out if they offer benefits like insurance, stock options, paid leave and retirement plans. You also want to learn about the industry that you are going into. Look at how it has done in the past and what it plans to do for the future. Knowing this will also help you when you sit down for an interview. The more that you know about the company and industry the better. You also want to find out if the company is fair on their salaries. Some companies will look to low ball people if they know that they need a job and they need a worker. Make sure you learn as much as you can to help you have a good understanding on this.
Some good questions to ask during an interview are; What is a normal day in this type of position? What do you expect from me and what can i expect from you? How is advancement for this type of position? These are just a few questions I like to ask. Find what works best for you and sit down with someone and practice the interview before going in.
If you are applying for a position in sales or another which you have kept track of in the past, bring all of that information with you. Most employers always ask the question, Is there anything you would like to tell us about yourself or what makes you the best qualified for this position? When asked these questions, this is your time to talk yourself up and make them feel like you should be the only person right for the job. Use past experience and achievements. Tell them what you are doing now and what you plan on doing in the future to make you a better, well rounded employee. You always need to be prepared for an interview. Being able to tell them about their company and the industry along with how awesome you are, will help set you apart from other applicants. Remember to always dress nice and to make eye contact with everyone in the room. During the interview you need to act yourself. Be professional but talk like you normally do.
If you have any question please feel free to Email me at Thetightdollar@gmail.com or leave a comment. Don't forget to follow me on twitter at @Thetighdollar
When you do find the job you want and apply, you need to research the company and find out everything about them. Find out the history of the company and how they have grown. Find out if they offer benefits like insurance, stock options, paid leave and retirement plans. You also want to learn about the industry that you are going into. Look at how it has done in the past and what it plans to do for the future. Knowing this will also help you when you sit down for an interview. The more that you know about the company and industry the better. You also want to find out if the company is fair on their salaries. Some companies will look to low ball people if they know that they need a job and they need a worker. Make sure you learn as much as you can to help you have a good understanding on this.
Some good questions to ask during an interview are; What is a normal day in this type of position? What do you expect from me and what can i expect from you? How is advancement for this type of position? These are just a few questions I like to ask. Find what works best for you and sit down with someone and practice the interview before going in.
If you are applying for a position in sales or another which you have kept track of in the past, bring all of that information with you. Most employers always ask the question, Is there anything you would like to tell us about yourself or what makes you the best qualified for this position? When asked these questions, this is your time to talk yourself up and make them feel like you should be the only person right for the job. Use past experience and achievements. Tell them what you are doing now and what you plan on doing in the future to make you a better, well rounded employee. You always need to be prepared for an interview. Being able to tell them about their company and the industry along with how awesome you are, will help set you apart from other applicants. Remember to always dress nice and to make eye contact with everyone in the room. During the interview you need to act yourself. Be professional but talk like you normally do.
If you have any question please feel free to Email me at Thetightdollar@gmail.com or leave a comment. Don't forget to follow me on twitter at @Thetighdollar
Friday, January 10, 2014
How to keep the small daily expenses down.
Lets talk about short term and long term goals. Like I said before planning is the best thing you can do for most anything. When planning for short and long term goals you need to make a time frame for when you want to accomplish these goals. Short term goals can be to save up and take the family on a nice vacation or buy something that you have really wanted. Long term goals can range from saving up for a down payment to a house or how much you want to retire with. Either way there needs to be a plan with time frames. Sit down and figure out, based on if you get paid weekly, Bi weekly or monthly, how much you need to save every time you get payed and how much needs to be put away for these goals. This will help you figure out how much you can afford to put away and when you will be able to meet your goals.
When it comes to expenses that you have to pay every month or choose to pay every month, you need to shop around. Call your cable company and see if they can lower your bill. Same goes for the phone bill, insurance, gym membership and subscriptions. Things that can help on utility's can range from just unplugging appliances when you aren't using them, to remember to turn off your lights, and a big one is to check your thermostat, if you can find other ways to warm your house instead of turning the furnace on, then try it. Same goes for the summer, open up some windows and let the breeze come in. You could also look into refinancing your house or car. Banks tend to run specials through out the year and when you see a good interest rate then hop on it.
If you love to go out and watch every new movie or feel that you have some connection to that movie, think twice, it will come out on DVD or it seems that most people just order movies from their TV now. To go to the movies today can cost a lot of money and everyone know that a bag of popcorn and a medium drink shouldn't cost $22. It also might be time to give up those $4 lattes you love so much. Drinking these drinks, no matter how delicious they are can add up very quickly if you go on a regular bases. Try to carpool to work or use the bus. Doing this can help you meet new people and change up your daily schedule, as gross as some public transportation buses are, it is a good way to save money. Try to avoid cabs, I have been to NY City and in one day of traveling spent over $100 in just cab fares. But if you do drive to work, find the cheapest gas prices you can. Most news stations post the gas prices from lowest to highest in the area on their website so check it out.
When you do save up for that vacation or plan on taking a trip to see the family for the holidays, don't book the flight the last minute. The airlines know when you book a flight for Sunday and its Friday that you need to get there and you will pay more just to be on that plane. So plan ahead, look into taking a train ride to where you are going. Trains are much cheaper and if you get the window seat, they are the scenic route.
When you go out on the town with your friends, those nights can get really expensive. When you start to drink, you start to say to yourself, I just want to have a good time so I can spend a little more to do that. We all need to have a good time its what makes memories and great stories for later, not to mention the things we will tell our kids not to do. Well if you are not driving then drink a little at home before you go out this on average can save $20 to $40 when you go and pay that final bill.
I know these things are obvious, and easier said than done. But take the time to try some out, you never know who you might run across taking the train or bus.
If you have any questions please Email me at Thetightdollar@gmail.com and follow me on Twitter @Thetightdollar
When it comes to expenses that you have to pay every month or choose to pay every month, you need to shop around. Call your cable company and see if they can lower your bill. Same goes for the phone bill, insurance, gym membership and subscriptions. Things that can help on utility's can range from just unplugging appliances when you aren't using them, to remember to turn off your lights, and a big one is to check your thermostat, if you can find other ways to warm your house instead of turning the furnace on, then try it. Same goes for the summer, open up some windows and let the breeze come in. You could also look into refinancing your house or car. Banks tend to run specials through out the year and when you see a good interest rate then hop on it.
If you love to go out and watch every new movie or feel that you have some connection to that movie, think twice, it will come out on DVD or it seems that most people just order movies from their TV now. To go to the movies today can cost a lot of money and everyone know that a bag of popcorn and a medium drink shouldn't cost $22. It also might be time to give up those $4 lattes you love so much. Drinking these drinks, no matter how delicious they are can add up very quickly if you go on a regular bases. Try to carpool to work or use the bus. Doing this can help you meet new people and change up your daily schedule, as gross as some public transportation buses are, it is a good way to save money. Try to avoid cabs, I have been to NY City and in one day of traveling spent over $100 in just cab fares. But if you do drive to work, find the cheapest gas prices you can. Most news stations post the gas prices from lowest to highest in the area on their website so check it out.
When you do save up for that vacation or plan on taking a trip to see the family for the holidays, don't book the flight the last minute. The airlines know when you book a flight for Sunday and its Friday that you need to get there and you will pay more just to be on that plane. So plan ahead, look into taking a train ride to where you are going. Trains are much cheaper and if you get the window seat, they are the scenic route.
When you go out on the town with your friends, those nights can get really expensive. When you start to drink, you start to say to yourself, I just want to have a good time so I can spend a little more to do that. We all need to have a good time its what makes memories and great stories for later, not to mention the things we will tell our kids not to do. Well if you are not driving then drink a little at home before you go out this on average can save $20 to $40 when you go and pay that final bill.
I know these things are obvious, and easier said than done. But take the time to try some out, you never know who you might run across taking the train or bus.
If you have any questions please Email me at Thetightdollar@gmail.com and follow me on Twitter @Thetightdollar
Thursday, January 9, 2014
Who Wears the Pants
Who wears the pants? This is a question that most men would like to answer with "ME", but is that always the truth? If you are married, who makes the financial decisions in your household? Let me talk about my experiences. My wife and I have been pulling ourselves out of debt for some time now but when we started it was a battle on who makes the decision on how much money goes where. After reading a lot of books and talking with other financial people we had to deiced. The first thing we talked about was who was the spender and who was the saver? I quickly found that we both were spenders and not much of savers. We both make impulse buys on things that we don't need. So how could 2 spenders start to save? We came up with a plan. A plan is the best thing you can do to for a lot of things. If you are going to start your own business or buy a car. Everyone has something they know about. I happen to be good with cars and before I bought my SUV I spent months researching it and I knew based on millage how much I wanted to pay. Well the same applies for a budget. Who has the time to sit down and create this budget and set goals? That person happened to be me. Not having money or being able to save can make people lose sleep or be so stressed out that the do crazy things, so when I learned that we decided that I was the best candidate for the job. So for me and my family I make the financial decisions for my household. But I don't make all of them alone. I had mentioned that before you start to pay off debt that you need to make an emergencies fund, I came up with $1000 as a good number, but my wife wasn't having that, so we both set down and talked about our worries and why she thought we needed more money in that account, so we agreed on $2000. So for the most part I make the decisions. But i'm here to tell you that your partner is just as involved in this as you are. They will see you doing the budget for the week and ask, how are we doing or should I be worried? As a husband I always reassure my wife we are fine and everything looks good. A happy wife is a happy life!! We have always been able to pay our bills on time and over the course of 4 month payed off more than $5,000 in debt using the snowball effect.
The moral of this story is that No one wears the pants! We both do. I couldn't have paid off our debt, make an emergency account or have invested our money without my wife. To become financially independent it takes a team effort. It is great to bounce ideas off of each other and for you both to keep each other in line. I do research, make our budget for the month (she made the spread sheet), and set goals and plan for the future. My wife's job is to make sure that I keep doing this and to put in her opinion.
Leave a comment and let me know how your family works their budget and who does what, and why?
If you have any questions please Email me at Thetightdollar@gmail.com and follow me on Twitter @Thetightdollar
The moral of this story is that No one wears the pants! We both do. I couldn't have paid off our debt, make an emergency account or have invested our money without my wife. To become financially independent it takes a team effort. It is great to bounce ideas off of each other and for you both to keep each other in line. I do research, make our budget for the month (she made the spread sheet), and set goals and plan for the future. My wife's job is to make sure that I keep doing this and to put in her opinion.
Leave a comment and let me know how your family works their budget and who does what, and why?
If you have any questions please Email me at Thetightdollar@gmail.com and follow me on Twitter @Thetightdollar
Wednesday, January 8, 2014
Saving on Clothes and Food
Being thrifty can mean different things to different people. Some people have a lifestyle that is well above their means, and when they see a sale they will go and buy all the stuff they can, but is this always the best? Buying cloths or food on sale can be a good thing when you need these things. I will take my budget for example, Me and my wife have 2 kids and as kids grow they outgrow their cloths (it feels like every month). Well if you have ever bought kids cloths it can be as expensive to buy them clothes as it is to buy yourself cloths. I budget for about $75 every few months to get them new clothes. When we first started a budget we got excited that we were able to put money away just for clothes but when we went to the store that we usually shop for we realized quickly that $75 dollars did not last long even when there was a sale. We needed to find a different way to find the kids new clothes without shopping a thrift store. I felt that if we needed to I would buy my own cloths at a thrift store but i wanted better for my kids so I wouldn't do that to them. Well after a little research and talking to other people who have kids, we found what we were looking for. There was a kids store that sold clothes from newborn to about 10 year old, the best part is that you could sell your kids old clothes and get money or store credit. Not all of the clothes in the store had been worn before, some still had the tags on it, and all of the clothes were very discounted. $75 never lasted so long. This store also sold toys, car seats, bikes and all the other things that kids want or need. Some people, like myself, get skeptical about places like this, but after trying it i understood that i was buying my kids better clothes than if I had bought them on sale at a department store.
Food is one of those things that you have to live with and when you go shopping you get to the check out and the bill adds up and your only thought is, well we have to eat so i have to spend a little more. Most people when making a budget and sticking to it forget this part, making better shopping lists for the grocery store. Im sure you all have seen the TV show "Extreme Couponing" I watched this show and took notes. But soon found out that if i was going to save like these people do I would need to quit my job and do that full time. So I took some of the ideas they used and applied them were I could. My wife started to clip coupons and we told our family that if they aren't using and coupons that when we see them if they could give us their magazines. newspapers and coupon packs that they got. After a few months of trial and error, we were able to save a lot on food and body care products. We also started shopping at places that accepted manufacture coupons, this helped because if can be stacked on the stores coupons. On top of all of this we started to buy the store brand food, which is a very big difference even if you didn't use coupons.
Im going to talk about things that I pay full price for (but always look for deals). I might be tight with my money but when you start to budget and see what money you are saving, then you will hesitate to buy things that you once looked at and didn't think twice about. But there are still somethings that I didn't want to buy store brand. My poison was toilet paper and underwear. My wife asked why do you need to care its the same thing, well I didn't think so, plus when you are budgeting you are going to want to buy some of your old stuff. With this being said, you need to understand that you cant say this about everything or you will not be budgeting. If you can live with store brand everything like my wife then great you wont have any problems. But remember not to get out of hand with this. If you happen to be in the military or have access to go the commissary then do so.
I hope this gives you some ideas on saving more money. If you have any questions or have anymore ideas let me know at Thetightdollar@gmail.com and dont forget to follow me on Twitter at @Thetightdollar for more ideas and saving tips.
Food is one of those things that you have to live with and when you go shopping you get to the check out and the bill adds up and your only thought is, well we have to eat so i have to spend a little more. Most people when making a budget and sticking to it forget this part, making better shopping lists for the grocery store. Im sure you all have seen the TV show "Extreme Couponing" I watched this show and took notes. But soon found out that if i was going to save like these people do I would need to quit my job and do that full time. So I took some of the ideas they used and applied them were I could. My wife started to clip coupons and we told our family that if they aren't using and coupons that when we see them if they could give us their magazines. newspapers and coupon packs that they got. After a few months of trial and error, we were able to save a lot on food and body care products. We also started shopping at places that accepted manufacture coupons, this helped because if can be stacked on the stores coupons. On top of all of this we started to buy the store brand food, which is a very big difference even if you didn't use coupons.
Im going to talk about things that I pay full price for (but always look for deals). I might be tight with my money but when you start to budget and see what money you are saving, then you will hesitate to buy things that you once looked at and didn't think twice about. But there are still somethings that I didn't want to buy store brand. My poison was toilet paper and underwear. My wife asked why do you need to care its the same thing, well I didn't think so, plus when you are budgeting you are going to want to buy some of your old stuff. With this being said, you need to understand that you cant say this about everything or you will not be budgeting. If you can live with store brand everything like my wife then great you wont have any problems. But remember not to get out of hand with this. If you happen to be in the military or have access to go the commissary then do so.
I hope this gives you some ideas on saving more money. If you have any questions or have anymore ideas let me know at Thetightdollar@gmail.com and dont forget to follow me on Twitter at @Thetightdollar for more ideas and saving tips.
Monday, January 6, 2014
Lose the car payment
I want to start this blog today by saying that I have read a few articles that go over paying off debt in another way. It covers paying off debt by starting with the bill with the highest interest rate instead of the way I suggested by paying the one with the lowest debt first. Let me start by saying that either way is not the wrong way. Its going to be a personal preference. I personally like to make a board or use the fridge and put all the bills that I have paid on that board or fridge when I am done. If I take the bill with lowest debt and pay it off I put it on the board, this helps with visually seeing your progress and it helps keep you motivated. I feel that if you pay the bill with the highest interest first it can take a little longer to see your progress and help keep you motivated.
OK now lets talk about paying your vehicles off, if you follow the budget that I talked about or any other budget that works for you, than you need to think about your vehicle. Your vehicle is a debt kinda like your house, it usually cant be bought by saving money up. Most people take out car loans and pay them over time. Well if you are sticking to a budget and get to your vehicle than there are a few decisions you can make. I personally don't like to pay monthly for my vehicle, these payment can range from $100 to more than $600 a month. Once I started to find out how my friend I mentioned payed off his car and bought another car with cash, I started to get the picture on how to do this. I would start by seeing if you owe more money than your car is worth, this is called being upside down on an asset. After figuring this out if you are upside down then start putting more toward your monthly payment until you can break even. If you are already even or your car is worth more money than you owe then your in a good spot. There is a few options that you can choose. I started to realize that my current vehicle had every option that it could have. I personally don't need any of this. I wanted to downgrade and have no payments but still have a reliable vehicle that was better on gas than my SUV. The other option is to keep up with putting more toward that monthly payment until it is payed off. If you really like your vehicle this might be the best option. If you have ever read the book The Millionaire Next Door, the 2 authors go over how they interviewed millionaires and how they bought vehicles and how much they payed. First lets me start by saying i'm not a millionaire (yet) but the principles are a great way to learn from. They go over that the average millionaire pays between $15,000 and $30,000 for a new or used vehicle. They also pay cash for these vehicles. Most all of these vehicles are just the standard fuel efficient normal vehicles. Why is this? Well people who buy vehicles with cash and don't need to take a loan out, don't care what other people think about them and their financial status. This is a great mindset to get into in every aspect of what you buy. I'm not saying to start shopping at goodwill (i sometimes do) but cutting back on designer cloths and objects can help out a tremendous amount.
The issue most people bring up with not having to pay credit card bills or car payments is how will I keep establishing credit? I have done a little research and this is what I have come up with. The first thing is lets look at what you need credit for. First and most important is to buy a house, maybe for some jobs or background checks. But look at what you use credit for now, getting a new credit card, buying a new car, ETC. I can tell you that when I was in debt, that after I started to pay off all my credit cards that my credit score went up a lot. If you were worried that your credit wasn't good enough to buy that new car then save up for it and buy it with cash. Credit, in my opinion is not needed for anything other than to buy a house. The other way that is popular that i haven't tried, but it sounds and looks good on paper, and would fit people who must keep tabs on their credit score, is to get a credit card with rewards. The theory is that you only buy stuff with this card that you have budged for and have the cash for in your account. When you buy something, you walk out the door get, on your computer or smart phone and pay the bill immediately. Well this will establish constant credit use and you can get rewards from it as well. Like I said I haven't tried this but I would be open to trying it.
Remember to stick to your budget and use the snowball effect to pay off debt quicker. In the next blog I will go over the do's and don'ts on being thrifty.
Please leave a comment or if you have any questions Email me at Thetightdollar@gmail.com and follow me on twitter at @Thetightdollar
OK now lets talk about paying your vehicles off, if you follow the budget that I talked about or any other budget that works for you, than you need to think about your vehicle. Your vehicle is a debt kinda like your house, it usually cant be bought by saving money up. Most people take out car loans and pay them over time. Well if you are sticking to a budget and get to your vehicle than there are a few decisions you can make. I personally don't like to pay monthly for my vehicle, these payment can range from $100 to more than $600 a month. Once I started to find out how my friend I mentioned payed off his car and bought another car with cash, I started to get the picture on how to do this. I would start by seeing if you owe more money than your car is worth, this is called being upside down on an asset. After figuring this out if you are upside down then start putting more toward your monthly payment until you can break even. If you are already even or your car is worth more money than you owe then your in a good spot. There is a few options that you can choose. I started to realize that my current vehicle had every option that it could have. I personally don't need any of this. I wanted to downgrade and have no payments but still have a reliable vehicle that was better on gas than my SUV. The other option is to keep up with putting more toward that monthly payment until it is payed off. If you really like your vehicle this might be the best option. If you have ever read the book The Millionaire Next Door, the 2 authors go over how they interviewed millionaires and how they bought vehicles and how much they payed. First lets me start by saying i'm not a millionaire (yet) but the principles are a great way to learn from. They go over that the average millionaire pays between $15,000 and $30,000 for a new or used vehicle. They also pay cash for these vehicles. Most all of these vehicles are just the standard fuel efficient normal vehicles. Why is this? Well people who buy vehicles with cash and don't need to take a loan out, don't care what other people think about them and their financial status. This is a great mindset to get into in every aspect of what you buy. I'm not saying to start shopping at goodwill (i sometimes do) but cutting back on designer cloths and objects can help out a tremendous amount.
The issue most people bring up with not having to pay credit card bills or car payments is how will I keep establishing credit? I have done a little research and this is what I have come up with. The first thing is lets look at what you need credit for. First and most important is to buy a house, maybe for some jobs or background checks. But look at what you use credit for now, getting a new credit card, buying a new car, ETC. I can tell you that when I was in debt, that after I started to pay off all my credit cards that my credit score went up a lot. If you were worried that your credit wasn't good enough to buy that new car then save up for it and buy it with cash. Credit, in my opinion is not needed for anything other than to buy a house. The other way that is popular that i haven't tried, but it sounds and looks good on paper, and would fit people who must keep tabs on their credit score, is to get a credit card with rewards. The theory is that you only buy stuff with this card that you have budged for and have the cash for in your account. When you buy something, you walk out the door get, on your computer or smart phone and pay the bill immediately. Well this will establish constant credit use and you can get rewards from it as well. Like I said I haven't tried this but I would be open to trying it.
Remember to stick to your budget and use the snowball effect to pay off debt quicker. In the next blog I will go over the do's and don'ts on being thrifty.
Please leave a comment or if you have any questions Email me at Thetightdollar@gmail.com and follow me on twitter at @Thetightdollar
Saturday, January 4, 2014
The Snowball effect
In the last blog I went over how to set up your budget, and pay yourself. Lets talk about how I save money and how I pay my debt down. I first start by looking at my budget and paying all my bills on paper, I also put away the money for my spending cash, groceries, gas and whatever I need to buy that month. The money I have left over after paying all of this on paper is money you can use to save or pay off debt.
Lets take a look at saving it first. When I first started to make budgets I wanted to have a very big savings account, and I expressed this to my friend that was helping me. Well he told me that I needed to think of a few things. First if you owe people money and have enough in the bank then why not pay it off. You will end up paying more in interest to that credit card over time by paying the minimum monthly payment. I thought well if I do have that money and I spend it, then I wont have any money in the bank for emergencies. Well what he said would open my eyes and scare me to death. In the past whenever I did have money saved (which didn't happen much, and didn't last) I got really scared that if i had an emergency I wouldn't know what to do. He asked me a question, when was the last emergency were you needed to spend more than $1000? Well I thought about it and I couldn't answer it. I haven't ever had an emergency that cost me that much, but I always thought that maybe I had just been lucky and haven't had one yet. He told me, for him, he only keeps $1000 in an emergency savings account for a car repair or hospital bill.
The emergency savings account number is going to be different for everyone. I talked to my wife and we came up with a number of $2000, just to be safe. Whatever number you come up with should be a comfortable number were you don't lose sleep over it. I'm sure your thinking what if I lose my job and now I only have $1000 in an emergency account. Well I want you to know that when you pay off your debt the goal will be to save enough money to pay your bills for at least 6 months, but we will cover that later.
If you don't have a emergency savings account I would start with making that first with left over money. Once you have this or if you have more in there than you need its time to start paying off that debt.
The first thing to do is to make a list of bills that can be payed off and put them in order from owing the least amount on the top and the most on the bottom. Take for example, if the lowest one is a credit card with a balance of $500 and a minimum payment of $40 and you have $350 left over, then take the $350 and put it toward that credit card. You will end up paying $390 for the month because the payment of $40 should already be in your budget for monthly payments. In the next month use the left over money to pay off the rest of that credit card. And congratulations you have payed off your first debt.
Now lets not stop there, if you take that $40 from the first credit card and add that to the next one in line you will change the minimum payment of that bill, adding the left over money for the month on top of that. This is called the snowball effect. You will keep doing this until you are all debt free. If you owe a lot of people money when you get toward the end you will realize that you will be paying over $1000 to one bill because all of those minimum payments added up. It can be exciting to think that when you pay off all of your debt that you will be able to save all of that money.
Keep in mind that you need to stick to the budget you make for yourself and if you need things to budget for it. If you have to buy stuff for birthdays, anniversary's, Christmas, ETC, then you need to budget for it or save a little every month.
In the next blog I will go over owning your own vehicles and how paying off your debt will raise your credit score.
If you have any questions or want more in depth explanations please email me at Thetightdollar@gmail.com I will answer everyone questions.
Friday, January 3, 2014
Paying yourself
In the last blog I went over how much money you have coming in and how much money you have going out. There are few different things to keep in mind. Lets take for example you have more money coming in than going out, then you can make your budget work better for things that you want. I had to budget for Christmas and had to put a certain amount of money away or budget for a certain amount to spend on it. This number should be a comfortable number so you don't over spend for things. My wife also likes to get her hair done every other month (used to be every month until we talked about how much we can save). Also if there is a birthday or maybe something you want or need to buy. Now when I say need to buy I mean your computer broke and you need one for work or a cellphone broke and you need a new one.
OK this is what I did to help get me out of debt. I took my monthly income and my monthly expenses and minus the income vs the outgoing. I was left over with more than I thought, I thought, where is this money going. I started to look at my bank statement and saw that I was spending money on the most random things like food,cloths and just stuff I don't need. I couldn't go a day without swiping that card. I fixed this by paying myself after I payed my bills. I gave myself $200 a month CASH to spend on things however I wanted to. This is hard to get used to but spending cash will help you understand how much money you have left in your pocket and that thing you really want isn't that cool anymore.
Sticking to a budget that you set is really hard at first but gets easier over time. I know I am not telling you the exact number you need to set aside on just spending, but this is going to based on what you feel comfortable with. It might start bigger, but try and work it down as much as you can. You might realize that you have to much spending money and not enough for gas, so next month fix it and move on. The best way that I have used is to look at you bank statement, this will give you a better idea than making up a number that you think you need.
In the next blog i will go over how much money you should save each month and what to do with the money left over after paying your bills and yourself.
OK this is what I did to help get me out of debt. I took my monthly income and my monthly expenses and minus the income vs the outgoing. I was left over with more than I thought, I thought, where is this money going. I started to look at my bank statement and saw that I was spending money on the most random things like food,cloths and just stuff I don't need. I couldn't go a day without swiping that card. I fixed this by paying myself after I payed my bills. I gave myself $200 a month CASH to spend on things however I wanted to. This is hard to get used to but spending cash will help you understand how much money you have left in your pocket and that thing you really want isn't that cool anymore.
Sticking to a budget that you set is really hard at first but gets easier over time. I know I am not telling you the exact number you need to set aside on just spending, but this is going to based on what you feel comfortable with. It might start bigger, but try and work it down as much as you can. You might realize that you have to much spending money and not enough for gas, so next month fix it and move on. The best way that I have used is to look at you bank statement, this will give you a better idea than making up a number that you think you need.
In the next blog i will go over how much money you should save each month and what to do with the money left over after paying your bills and yourself.
Thursday, January 2, 2014
The Beginning to the budget
Lets start this thing off with a bang. First you need to sit down and really come to terms with how much money you have going out and how much money you have coming in. I first started by making an excel spreadsheet to make it easier for me to track it. But if you are not good with that sort of thing than use paper and pencil. First I wrote down in the first column how much my monthly income was. For example I made about $2500 a month and my wife made about $3000 a month, so together we made $5500 a month. This is about the normal amount most Americans make a month, some less, some more, but the budget will work either way.
Once you write down how much money you have coming in then its time to see how much is going out. Put all expenses, for example: Cable, water, rent, car payment, credit card payment, student loans, etc. When you have this then compare the 2. If you have more money coming in then going out then you are in a good place. But don't forget about other things that are apart of our everyday life such as gas, food, clothing and misc stuff. The first time I added these numbers up I about had a heart attack. Well you need to make those things an expense, money that is still going out.
If you don't bring in more money than you put out every month then you need to change some things. There is odd things that I was subscribe to, like magazines, credit checks, game subscriptions, shooting range memberships, etc. Well those are the first to go if you need to get yourself back to more income than out going.
To budget for gas, and groceries you need to first look at you bank history and take the medium of what you usually spend each month on each. I started with $200 of gas and $500 on groceries since I had to feed a family of 4 and we didn't drive much or far.
This is a good start to figure out what you have coming in and what you have going out. Remember to you exact numbers to the cent and don't over look anything, no matter how small.
In the next blog i will go over how to take this budget to the next level and modify it to fit your lifestyle.
The Tight Dollar a New Year
The New Year for most people means New Year resolutions. This is your year to get in shape; financially that is. This year I am starting this blog to share what I have learned from reading various books and pulling myself out of debt. I want this to help you do the same thing and help you achieve financial freedom.
I will discuss things that apply to the everyday family, and the single person as well. Help yourself by reading everything you can about your finances and understanding them. Many of people I've talked to simply don't know were to start. Well wait no further....
I start by telling you my story. I have been in debt since I was 18. What I mean by that is, ever since I was able to get a credit card I thought that money was mine and that I could spend it whenever and however I wanted. I spent most of my early 20's buying cool clothes and an SUV with all the extras. I always felt that if I had these nice things, people would see me and say "Look at that guy, he is in his 20's and has all that, he must be smart and successful." It made me feel good, but while I had all these nice things and great dinners, I hated to pay that bill at the end of the month.
If only people knew that I was living paycheck to paycheck. I was working a job not a career. I thought that once I started my career I would make more money and still be able to live this lifestyle and have money left over. I was seriously wrong. Once I did start my career and started making more money, I just increased the way I lived and soon I was back in the same spot; living paycheck to paycheck. But one day, like most people in life, I met my wife and started to realize that I was not as bad off with money as I thought.
My wife had a really nice car and spent more on her hair than I did on dinners every month. She also had a 4 year old at that time that wore nice cloths and went to preschool. She made more money than I did and had more debt than me, so I looked good until we got married and then we had a lot more debt together. With 2 car loans, student loans, 5 credit cards, all the best cable stations and services we could buy, eating out almost everyday, etc. We had a plethora of debt and needed to find a way out.
After I found that my wife was pregnant and realizing that we were in more than $40k in debt I thought I would try and save more money and get ready for the new little one. I knew a guy at work that had a really nice house and drove a really crappy car, at least it was to me. So I asked him if he saves money or budgets? What he told me would change my life and confuse me at that time. He told me that has a very strict budget but doesn't really have a traditional savings account. The money he saves is for specific things and when he isn't saving for those things he only has a few thousand in the bank. I figured this guy can't help me.
He went on to tell me that he invests about 20% of his salary. I asked him how many credit cards he had and he said none. He told me he had only had one credit card and will never have one again. He was excited to tell me these things and went on about how all of his cars were payed for and that he was paying cash for his wife to go to college. Now, I knew how much money this guy makes because we worked together and had the same position and here he was, completely debt free except for his mortgage. I asked him to teach me everything, and he did. And the best thing he ever taught me is that if I really wanted to be financially independent that I needed to read, study, and really stick to a budget. So that's what I did and before I knew it, in a few months iI was 1/3 out of debt.
This blog will be a list of resources and strategies that I used to get myself out of debt that you can apply to your own life to do the same for you.
I will discuss things that apply to the everyday family, and the single person as well. Help yourself by reading everything you can about your finances and understanding them. Many of people I've talked to simply don't know were to start. Well wait no further....
I start by telling you my story. I have been in debt since I was 18. What I mean by that is, ever since I was able to get a credit card I thought that money was mine and that I could spend it whenever and however I wanted. I spent most of my early 20's buying cool clothes and an SUV with all the extras. I always felt that if I had these nice things, people would see me and say "Look at that guy, he is in his 20's and has all that, he must be smart and successful." It made me feel good, but while I had all these nice things and great dinners, I hated to pay that bill at the end of the month.
If only people knew that I was living paycheck to paycheck. I was working a job not a career. I thought that once I started my career I would make more money and still be able to live this lifestyle and have money left over. I was seriously wrong. Once I did start my career and started making more money, I just increased the way I lived and soon I was back in the same spot; living paycheck to paycheck. But one day, like most people in life, I met my wife and started to realize that I was not as bad off with money as I thought.
My wife had a really nice car and spent more on her hair than I did on dinners every month. She also had a 4 year old at that time that wore nice cloths and went to preschool. She made more money than I did and had more debt than me, so I looked good until we got married and then we had a lot more debt together. With 2 car loans, student loans, 5 credit cards, all the best cable stations and services we could buy, eating out almost everyday, etc. We had a plethora of debt and needed to find a way out.
After I found that my wife was pregnant and realizing that we were in more than $40k in debt I thought I would try and save more money and get ready for the new little one. I knew a guy at work that had a really nice house and drove a really crappy car, at least it was to me. So I asked him if he saves money or budgets? What he told me would change my life and confuse me at that time. He told me that has a very strict budget but doesn't really have a traditional savings account. The money he saves is for specific things and when he isn't saving for those things he only has a few thousand in the bank. I figured this guy can't help me.
He went on to tell me that he invests about 20% of his salary. I asked him how many credit cards he had and he said none. He told me he had only had one credit card and will never have one again. He was excited to tell me these things and went on about how all of his cars were payed for and that he was paying cash for his wife to go to college. Now, I knew how much money this guy makes because we worked together and had the same position and here he was, completely debt free except for his mortgage. I asked him to teach me everything, and he did. And the best thing he ever taught me is that if I really wanted to be financially independent that I needed to read, study, and really stick to a budget. So that's what I did and before I knew it, in a few months iI was 1/3 out of debt.
This blog will be a list of resources and strategies that I used to get myself out of debt that you can apply to your own life to do the same for you.
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