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Is It Time to Give Up Your Debt Free Dream?

May 17, 2017 By MelissaB 3 Comments

From the time my son was three, I’ve been a big Dave Ramsey fan. When my youngest children were young (two under two), I quit my job to stay home with our three kids. We decided to get gazelle intense with our debt. Since my husband was working part-time and attending graduate school, that meant I had to work from home. Work I did. I worked a lot, and I compromised my health.

While we reduced our debt a lot, we never got debt free.

Then we had a cross-country move.

We also had significant medical bills this last year when one of our children had a medical crisis, the treatments of which were not all covered by insurance.

Our income, while more than it was years ago when I was gazelle intense, has never really grown much.

My husband and I were talking about finances recently, and I mentioned that I’d like to get gazelle intense again.

But, my husband, not so much.

Give up on your debt free dream — Is there a better way?

He sees our children growing up, and he doesn’t want to work, work, work trying to pay off debt. Instead, he wants to spend more time with the kids, take vacations with them, and just enjoy them before they fly the nest. As fast as time is going, that will be all too soon.

Turns out, my husband is not alone in this sentiment.

Recently, I stumbled upon a Daily Worth article where the author’s husband felt exactly as mine did. He didn’t want to spend all of his time working and penny pinching, not enjoying life, in the hopes that he would one day be debt free. The author writes of her husband, “He didn’t want to wait another five years to take our first family vacation. He didn’t want to give up a decade of our lives in order to live my extreme version of the American dream. He wanted a house in a better neighborhood that was actually big enough for our family. He wanted to spend some of the money he had worked so hard for. He was done.”

So, too, is my husband.

That doesn’t mean we’re going to go crazy spending. What it does mean is that we will save money to take a vacation with our kids. (The only vacations we’ve ever had were when we took the kids along when my husband attended conferences. I took the kids to see fun things while my husband worked—not exactly a family vacation.)

We’ll finally start putting money in the kids’ college funds, and we’ll also start funding our Roth IRAs. (We didn’t want to do these two things until we became debt free.)

My husband is expecting a substantial raise soon, and we will use some of that money to pay down debts, but we’ll also use some of that money to enjoy now. After all, you’re never guaranteed tomorrow. . .or retirement.

If you’re in debt, is your goal still to be 100% debt free, or are you choosing to live and enjoy your life now while paying down debt?

Lending Club Is Now Offering Business Loans

August 28, 2014 By MelissaB Leave a Comment

You likely know Lending Club is a peer-to-peer lending site that offers personal loans to individuals as well as the chance for personal investors to invest by lending money to individuals.

Now, however, Lending Club is expanding their services and offering business loans. This is of particular interest if you own a business.

If You’re Looking to Lend Money to a Business

If you’re already investing in Lending Club, you may want to lend money to a business as well. However, ordinary investors cannot yet do that. “For now. . .the program is limited to institutional investors such as hedge funds, insurance companies, and family offices that manage wealth for the very rich, but eventually the company plans to let anyone invest” (Bloomberg Businessweek).

How to Qualify for a Lending Club Business Loan

Business funding can often be very difficult to get, so Lending Club’s business loans offer businesses a nice alternative to traditional funding options. In order to qualify for a loan, a business must meet these minimums:

At least $75k in annual sales,
a personal guarantor by at least one 20% or greater owner of the company, and
the guarantor’s personal credit must be at least “Fair”

What Are The Loan Details?

Businesses that apply for a loan can borrow up to $100,000 for 1 to 5 year terms.

The interest rate is fixed for the life of the loan and can be as low as 5.9% to as high as 29.9%. The rate your business gets depends on a variety of factors including:

how long your business has been established,
how financially strong your business is, and
the credit worthiness of the business, among other factors.

“Lending Club Chief Executive Officer Renaud Laplanche says the average interest rate will be 12.5 percent” (Bloomberg Businessweek).

Lending Club offers a “check your rate” button on their website. Simply enter how much you need and what you plan to use it for and then you’ll be taken to a form to fill out that will check your potential rate. (Filling out this form does not affect your credit score in any way.)

One of the best perks of the Lending Club Business Loan is that you can pay it off early with no pre-payment penalties.

The Fine Details

When borrowing, checking the fine print is always best. There are a few other fees attached to the loan.

Borrower Origination Fee

The origination fee can range from 1 to 6%. That money will be taken off the top of the loan. If you borrow $10,000, for instance, and your origination fee is 3%, you will receive $9,700 because the $300 origination fee is taken off immediately.

The borrower must pay the origination fee to cover the cost of issuing the loans as well as the screening process.

Unsuccessful Payment Fee

If your automatic payment fails, you’ll be charged $15.

Late Payment Fee

A borrower is given a 15 day grace period. If your payment is later than that, you will be charged either $15 or 5% of the unpaid monthly payment, whichever is greater.

Check Processing Fee

If you opt to pay via check, you’ll be charged a $15 fee. If you use direct debit, you are not charged a fee.

Funding your business can be difficult, especially if you go through traditional channels. Lending Club is expanding their business to offer business loans, which is one more way you can potentially find money for your business, whether you’re using it for debt consolidation, marketing, or another purpose.

If you have a business, would you look at Lending Club as a potential lender? If you invest in Lending Club, would you like to invest in their new business loans?

The 1,700 Mile Move: 5 Lessons I Learned

July 15, 2014 By MelissaB 5 Comments

I come from a family of non-movers. For example, my mom, once she married, became listless and lost her appetite and quite a bit of weight. The doctor diagnosed her with homesickness. She had moved less than five miles from her family home to her home with my dad. (Yes, this is a true story!)

We moved one other time less than a 1/2 mile away, and even that was traumatic for her.

I have ventured farther in my lifetime, going 400 miles away to graduate school, but a 1,700 mile move is something else entirely.

While long distance moving companies can help ease the process, here’s what I’ve learned so far as we prepare to move from the Midwest to the Desert Southwest:

1. We had way more “stuff” than I thought. I knew we had a lot,
but wow, I didn’t know how much. We’ve sold, thrown away, or donated at least half of our stuff. Every time we think we’re almost done packing, more “stuff” seems to appear. I wonder if we’ll ever be done!

2. Plan for a long-distance move as early as possible. We started selling our stuff back in early May, and so far, that stuff has brought in over $1,000. However, even though I started selling items 8 weeks in advance of our move, it still wasn’t early enough. We’re less than 5 days away from our move, and I am still waiting for our treadmill, file cabinet, and office desk to sell.

I was surprised to see that sometimes listing things to sell on eBay, Facebook, and Craigslist is like planting seeds. I’ve listed some things, and there was no interest. But then, say two or three weeks after I listed them, someone discovers the listing and buys the item. Allowing enough time for things to sell is essential.

3. Exercise equipment has no resale value. Many people want to buy exercise equipment, but selling that equipment later is difficult. Luckily, I bought our treadmill second hand for less than $100 a few years ago. I don’t think it’s going to sell before we leave. I think I’ll be taking it out for trash pick up.

4. Moving 1,700 miles is expensive! Luckily, my husband’s employer is paying for our move. Still, even though we’ve seriously pared down our belongings, the move is going to cost over $6,000! (We’ve paired down so much that the mover estimated two other families’ household goods could fit on the semi-truck with our small load.)

If my husband’s new employer wasn’t paying, I think the smartest financial decision would be to sell everything before we move and buy used once we’re in our new location.

5. Determining the cost of living in a new location isn’t easy. Since Tucson, Arizona (where we’re going) has a lower cost of living than Chicago, Illinois (where we’re leaving) and my husband received a substantial raise with his new employer, we thought we’d be in a better position financially. That’s before we looked at the new company’s health insurance plan and saw how much worse it is than our current plan. Most of my husband’s raise is going to cover the difference in the cost of insurance.

Have you moved a thousand or more miles away? If so, what lessons did you learn?