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2 Best Places to Start Fixing Your Finances

April 7, 2015 By Jeff @ Sustainable Life Blog 1 Comment

When I first started trying to get my finances under control, I had no idea where to start. I tried to follow a patchwork of ideas like pay yourself first and only spend X percent of your income on rent, but at the end of the month there would always be more month than money. I couldn’t figure out what I was doing wrong until someone asked where my money was going every month. Aside from food, rent, cell phone and credit card payments, I had absolutely no idea. It was such a simple question and the answer ended up keying my turn-around financially but it took me a while to realize that mattered.

So if you’re trying to turn your finances around and save a bit of money every month instead of wondering where it all went, here are the 2 best places to start fixing your finances.

Fixing your financesTrack What You Spend

As I found out, the most important thing is tracking your finances. When I started turning my ship around, there wasnt a lot of good financial tracking software like their is now. I started with a blank sheet of paper and a stack of bills, working those and my online logins to figure out how much I was spending every month. It’s much easier now, with the online trackers for your finances such as mint and apps that are more investment focused, like personal capital. Once you start tracking your income and expenses, you’ll know where you need to cut and how much you can use to save or pay off debt each month.

Cut the Excessive Expenses

Once you get your expenses written down, I’ve found it’s most valuable to lower your structural expenses as much as possible at first. This includes things like rent, car payments, car insurance, electricity, water, cell phones and cable tv. I’ve found that many people way overpay for cable TV (Calling up and getting a discount usually works wonders) and if they switch to an MNVO like ting or republic wireless they can usually lower their phone bill by 66% or more per month. For a family of 2 if they switched phones and totally ditched cable, that’s an immediate savings of 200+ per month. Once that’s done, add all that money to your savings or debt repayment. Then it’s time to move on to your car expenses. Consider selling your car and trading in for a cheaper one that you own outright, and can carry less insurance on. This will get rid of your car payment completely and hopefully lower your insurance by a significant amount as well. Better yet, try getting a bike and getting rid of your car completely.

In my opinion, those are the low hanging fruit – things you can easily change and your day to day existence wont be changed much one way or the other. The best part about this is you can spend a day or 2 over the course of a week and you should be able to easily pocket 500+ per month in savings – that’s 6,000 per year! Like you, I could use the extra 6k per year.

Once you get your structural issues fixed in your finances, it’s time to move on to your habitual purchases. Is there anything that you spend too much money on and dont get a lot of value from? Do you spend too much on fast food, or alcohol? Or maybe you buy too many books you’ll never be able to read, or too many movies on blue-ray you cant watch?

Now is the time to deal with those, and the easiest way that i’ve found is to get a budget set up and spend that in cash every month. Say you want to limit your blu-ray purchases to 25 bucks per month – get that amount in cash at the beginning of the month, then when the cash is no, no more blu-ray until your cash re-ups at the beginning of the month.

Filed Under: budget, Frugality, Personal Finance Education, Saving, ShareMe Tagged With: finances, Personal Finance, savings

Save Money and Eat Healthy: Rent an Apple Tree

September 3, 2013 By MelissaB 10 Comments

When my health began to suffer a few years ago thanks to stress, being overweight, and having some intestinal issues, I started taking much better care of myself.  That meant eating organic foods, following a Paleo diet, and losing over 70 pounds.

I used to always say I didn’t have money to buy organic foods, but my health issues weren’t cheap, so I decided in the long run, eating the best food I could was a priority, even if it was more expensive.  Over the years, though, I’ve found ways to cut costs on eating organic.  One way is renting an organic apple tree.

How Does Renting an Apple Tree Work?

I simply Googled “rent an apple tree” to find one near us.  Then, I rented one apple tree for $55.  All the apples on that tree were mine.  I paid in the spring, and the Paula Red apples were ready in August.

Rent an Apple Tree

The farm called me to tell me when the apples were ripe, and then I and my family headed out to the orchard to pick the apples.  It took less than 45 minutes, and we left with 94 pounds of organic apples.

What Did We Do With All Those Apples?

Paula Reds don’t stay good for long, so we turned them into applesauce.  (And we ate a lot of them fresh.)  We ended up with 28 quarts of applesauce, which I stored in the freezer.  It took me, my husband and son working together 7 hours to process all of the apples.

We didn’t have to add any sugar because they were naturally sweet.

How Much Did We Save?

The lowest price I have been able to find for organic applesauce is $2.50 for 16 ounces at Trader Joe’s.   Just like our applesauce, Trader Joe’s applesauce only contains organic apples.  There are 32 ounces in a quart, so one quart of Trader Joe’s applesauce is $5.00.

One quart of our homemade applesauce from apples on our rented tree is approximately $1.96.  Overall, we saved $85 and will have enough applesauce to last us through the winter.

We also signed up for another apple tree in October for apples that are suitable for storage.  We’ll be able to keep them in our refrigerator for several months and eat them fresh.  If we get another 94 pounds, we’ll be paying just 58 cents a pound, which will be a significant savings over the grocery stores where I can never seem to find organic apples for less than $1.99 a pound.

It’s Not Just About the Savings

Still, it’s not just about the savings.  What matters is that we know exactly where the apples came from and how they were processed.  In addition, they are local, in season, and organic, which is the best way to eat food.

If you want to feed your family healthier foods but feel that they are out of your budget, don’t despair.  There are several unique ways to feed your family organic food on a budget.  Renting an apple tree is just one of those ways.  We’ll be sure to do this again next year.

Have you done something like this? Do you buy food direct from the farmer?

Original Photo Credit:MetaphoricalPlatypus, on Flickr.

Filed Under: Frugality, Saving, ShareMe Tagged With: frugal, frugal grocery, groceries, grocery, saving money, savings

Signs You Are Carrying Too Much Debt

May 13, 2013 By Gary Dek 15 Comments

Some of life’s necessities, like homes and arguably cars, cost more than most people can save in 5 or 10 years. This means they have to borrow money to be able to pay for their needs. Unfortunately, if you are like many Americans, you have probably borrowed money for things you want and cannot afford. The average American family carries more than $10,000 in high interest credit card debt. This is in addition to other loans like mortgages, car loans, student debt, and home improvement loans. It is important to spot signs you care carrying too much debt before the burden of interest rate payments starts eating into your savings and investments for retirement.

Are You Paying Down Your Debt?

If you are only able to make the minimum payments on your credit cards and other loans every month, it may take years to become debt free. If you are missing payments or just scraping by with the minimum payment, this is a sign of too much debt. A credit counselor may be able to help, or you may be able to negotiate with credit card companies for lower payments and interest rates. Companies will often alter interest rates and payment schedules for customers with a good payment history and credit score, but it is essential that you negotiate these terms before your credit dries up, your score is affected, or the company doesn’t want to lower their rates for you.

Another way to lower credit card interest and pay debt faster is to transfer balances to cards with 0% to 3% APR introductory offers on balance transfers. Look for cards with offers of 12 to 18 months of reduced interest on balance transfers which will give you time to make higher payments on balances without accruing interest. A low interest rate means that even if you continue to pay your current minimum payment, you will be paying more on the principal/balance so you can reduce the amount you owe, and therefore the interest payments, faster. However, don’t rely on transferring balances between companies – this is not a substitute for financial discipline and wise money management.

Have You Have Been Denied New Credit?

Carrying too much debtToo much debt can affect your credit score even if you make all your payments on time. Banks and other lenders look at both your credit score and your debt to income ratio when deciding whether to approve loans like mortgages. If your debt to income ratio is too high, meaning you would have difficulty paying additional debt, lenders will not approve new credit.

If a bank or other lender has rejected a loan application, they will send a letter explaining their reasons for denying your loan. The most common reasons are a poor credit score, unacceptable debt to income ratio and no credit history. While it is necessary to use some credit to establish a credit history and score, too much credit can make it difficult to get new loans, especially when those loans could be financing an investment opportunity that would contribute to your long-term financial security and wealth. Never let a new luxury car loan or excess spending impede your ability to take advantage of an investment opportunity.

If a high debt to income ratio is your problem, consider simultaneously lowering your debt while finding ways to increase your income. Like many financial bloggers explain, a side hustle can be crucial to meeting your future financial goals. You can research ways to make money from home, including freelancing, consulting, and teaching classes, or pick up a part-time job on the weekends, many of which offer health benefits that can save you thousands on premiums each year.

Does Every Paycheck Go Towards Paying Bills?

If everything you make is going toward paying off your debt, with very little or nothing left over, it is a sign that you are carrying too much debt. There should be some money left after paying monthly expenses like rent or mortgage payments, utilities, phone and groceries, for savings and small, unexpected costs called emergencies. If all the money left after paying your monthly expenses is going to pay credit card bills and other loans, you have too much debt.

No Savings

Financial experts counsel individuals to have at least 3 to 9 months expenses in a savings account to provide a safety net in case you lose your job or are injured and unable to work. This is in addition to retirement accounts and other savings and investments. Those with no savings or short term investments have to depend on personal loans, or worse, cash advance companies, if an emergency arises.

If you do not have enough left after paying creditors to put aside money for savings, consider taking a temporary part time job to help pay down debt and accumulate money for emergencies. Talk to creditors about reducing interest payments and start putting any extra money in a savings account or types of safe investments. The best advice is probably to change your spending habits. Avoid buying unnecessary items like expensive clothing, jewelry or the newest electronics until you have provided yourself with enough savings to cover emergencies.

Do You Pay Your Bills On Time?

If you do not pay your bills on time because you need to wait for another paycheck, you definitely should avoid overspending for a few months to catch up on your payments and avoid completely ruining your credit history. Living pay check to pay check is stressful and leaves no margin of error if you lose a job or even a day or two of work. Paying your bills after the due date costs more since most creditors and utility companies add a late fee as a penalty for late payments.

Talk to creditors about rescheduling due dates so you can make your payments more easily and try to consolidate and reduce as many payments as possible until you get your debt under control. Imagine how much happier you would be if you didn’t have financial stress to compound all the other obstacles in life you already face.

Is Your Debt Making You Sick?

If you are struggling with debt, you may be experiencing stress leading to physical and emotional illnesses like ulcers, depression, headaches, high blood pressure and heart attack. It may also be taking a toll on your personal relationships, especially your marriage. Financial problems are one of the leading causes of friction and arguments in marriages. It can also cause people to avoid friends and family because they are embarrassed by their financial difficulties or because they can no longer afford to participate in activities with their friends.

While getting your finances back on track will help alleviate many of the symptoms of stress, talking to family, friends and/or professional counseling can help you get back into the life you once enjoyed. You may be surprised to find that other people in your circle are not as prosperous as they seem, and the support of friends and family can help you through difficult times until you get out from under your debt.

Final Word

In America, debt has become a way of life for most families. Instead of trying to keep up with the neighbors, try paying off bills, putting money in savings and keeping debt to a minimum. You may not have a new luxury car, but you also will not have the large payments and the stress that goes with buying things you cannot really afford.

Original image credit: Carrying a heavy sack of potatos by canorus, on Flickr

Filed Under: Debt Reduction Tagged With: debt, Debt Reduction, savings

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