Monday, July 14, 2014

Financial Freedom Week Five

Cleaning Your Budget and Tackling Debt
 
 
 
1. How to live by your budget
 
  • Tracking throughout the month
  • Cut back on spending if a category runs out
  • Balance your budget
 
2. How to control your money
 
  • envelope
  • go cashless
  • control the flow of cash by not having extra on hand
 
3. How to tighten up your budget. (Look for ways to save)
 
  • Down grade cell phone/drop home line
  • Cut cable TV
  • Shop for deals - avoid impulse buying (48 hour rule)
  • Couponing
  • Menu planning
  • Grocery shopping less often (once or twice a week)
I am at Redners five of the seven days. It's too convenient.
 
  • Cut back on driving
  • Cut electric & water waste
  • Tackle oversized car payments & downsize homes/apartments
  • Consolidate debt to lower interest rate
  • For go immediate gratification for long term goals
  • Spouse accountability
  • Learn to say no to others & yourself
 
4. Dumping Debt
  • No new debt
  • Cut up credit cards
  • Sell stuff you no longer need
  • Sacrifice short term comfort for long term goals
  • Anything extra goes toward paying down debt
 
5. The Debt Snowball
  • List your debts from smallest to largest
  • List your debts from highest to lowest interest rate
  • Dave Ramsey Baby steps 1 & 2
    • Have a small emergency savings
    • Debt Snow ball 
 
Homework:
  1. Write down a debt snow ball plan (I didn't do this).
  2. Figure out where you can cut back on spending to pay down debt faster (groceries).
 
 
We don't have car/truck payments or a school loan. We have a mortgage. The credit card can be a source of annoyance. I need to just stop using it. It is currently at $472.28 because I used it to gas up for our Kentucky vacation. We have been using our Lowes card as well. It is at $293.45. Boo!
 
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Debt Snowball by Interest Rate (example given)
 
DEBT            APR                    AMOUNT            PAYMENT
 
Credit card                12.99 %                            $10,000                                $600
 
Car Loan                   6.99 %                              $11,000                               $300
 
School loan              5.99 %                              $10,500                                $100
 
 
Debt Snowball by Loan Amount
 
Credit Card             15.99%                             $5,000                                  $800
 
Car Loan                 5.99%                               $10,000                                $300
 
Student Loan           6.99%                              $16,000                                 $200
 
 


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