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Our Debt Free Family

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5 Financial Hacks for Every Startup

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Every startup’s goal is to reach financial stability in order to generate real profit, establish a fierce base in the competitive business world, and upscale their corporation. Although these may seem hard to reach, many of these objectives can be attained through a few simple steps early on. A systematic approach to your business management will allow you to better your time, capital, and other efficient resources. In order to do so, every start-up entity must understand and realize the following financial hacks. [Read more…]

Learning to Live on One Salary

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live on one salary

In my last update, we celebrated having paid off $20,000 or so in debt within one year. However, there have been a lot of changes with our cashflow in the house that has hindered the speed of that continuing. Mostly, we are down to one (main) salary.

My husband is breaking off on his own a bit and has been considering starting his own business. Because of this, cash flow on his end hasn’t been consistent. We’ve lived on one salary multiple times in the past, but every time it is different. Here’s how we’ve learned to live on one salary (and benefits of doing so).

Learning to Live on One Salary

Living on one income isn’t as hard as it sounds. First, you have to come up with a budget that only requires a single budget. For us, it is my income because it is more stable. Your family may want to choose the larger (or smaller) income, depending on your financial goals.

If you are over budget when you tally up your expenses, see where you can cut costs. Do you really need Hulu, Amazon, and Netflix? Or, if you’re looking for a bigger decrease, consider downsizing to a smaller home to better fit your new one-income budget. Others may find it beneficial to move to a more pedestrian-friendly area to cut down to one (or no) car payment or walk more places. If you’re comfortable doing so, you may even consider taking in a roommate or renter.

Consider giving up your indulgent behaviors like going out to eat, junk food, and other items as well. You certainly don’t need to eat out every Friday and spend tons of money on junk foods. This will help cut down the cost of food in your budget as well.

Why You Should Live on One Income

You’re probably thinking, why would anyone willing to live on a single income? It can be difficult and, at times, hinders you from being able to do everything you want to. It can also help you achieve some of your financial goals and feel more secure with your finances as a result.

  1. It makes saving money easier. Simply save your spouse’s income instead of spending it. If you can live on one income, why not bank the rest? You can create a strong emergency fund.
  2. You can use the cash for debt repayment. If you want to focus more on your debt payoff plan, living on one salary can make that more doable as well. Learn to live on one spouse’s income, then use the second to pay off what you owe.
  3. Financial security increases when you have a surplus of cash flow. You have more money than you need, why wouldn’t you feel more secure? You have the ability to invest in your future, pay off debt, and increase savings. It can truly pave the way for financial freedom.

Not to mention, if you live on one salary, you will always be ready if something happens to one of your jobs. You’ll have some savings, and you will be able to continue your current lifestyle until your spouse finds a new job (or starts earning more).

Our Debt Freedom Progress

live on one salary

So, while we are adjusting to living on a single income again, our debt freedom progress has been slow. However, today we paid the final $175 payment to completely pay off a credit card. That will free up an additional $175 for us each month to redirect towards other debts and savings.

In the next few months, we will be paying off other accounts and see our debt freedom progress continue. I will be in a wedding in October, which will be a small cost (around $200 total). We have prepared for that cost though. Both of us are planning to spend the holidays at home as well, to cut down on travel costs.

Readers, have you lived on one income? Tell me about your experience in the comments!

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Does Afterpay Help Your Credit?

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Over 220 million Americans shop online every year. Because of this, digital wallets and virtual ways to pay have increased in popularity. Programs like Afterpay even allow you to make payments on your online purchases. But does Afterpay help your credit?

What is Afterpay?

If you haven’t already encountered Afterpay at checkout, it is a payment option that allows you to pay for your online purchase in four equal installments. Payments come out every two weeks, which works well for many people on a bi-weekly pay schedule.

All you have to do to use it is choose “Afterpay” at checkout. Link your Afterpay account to a U.S.-issued credit or debit card where they can process future payments. Then, you are ready to go!

Afterpay does limit the amount you are able to finance at first, but they increase it over time after seeing your ability to pay it back. It is also important to note that not everyone will be approved for Afterpay or the full amount you may need. It all depends on your repayment history.

Where Can You Use Afterpay?

Afterpay can be used at more than 25,000 online retailers. Anywhere you spend $35 or more and see the Afterpay option at checkout, you can use it. Some of the bigger names offering Afterpay include Jeffree Star Cosmetics, Shein, Armani, Ray-Ban, Carhartt, Bare Minerals, and more.

You can visit the Afterpay website to see a full list of retailers they work with.

Does Afterpay Help Your Credit?

Unfortunately, making on-time payments with Afterpay does not help your credit. The company doesn’t pull your credit to approve you for payments either. When you successfully pay off an Afterpay loan you get a kind of “in-house credit” and Afterpay will agree to lend you more in the future.

Customers who are unable to pay their bill on time are hit with an $8 fee the day after the bill’s due date. Then you accrue an $8 fee for every seven days the bill goes unpaid. Although Afterpay doesn’t technically charge interest, these late fees can stack up quickly.

Thoughts About Programs Like Afterpay

If you are making all the payments on time, Afterpay can be a good interest-free alternative to a credit card. However, it is important to remember that your debt freedom journey has a lot to do with reforming your behavior. Continuing to buy things with payment installments may put you back into a debt mindset (and you definitely don’t want that).

Anyone choosing to use Afterpay should be sure they can pay all four payments. Otherwise, it will be in your best interest to just save the money for the purchase instead.

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It’s Okay to Need Help

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<p>Sometimes the biggest thing standing in the way of my own progress is my pride. Over the years, people have offered to help us monetarily and otherwise. In almost every instance (unless it was life-or-death), I’ve turned the help down. Something in me would rather count dimes at the Aldi checkout counter than accept help from a friend or family member. But, through the pandemic, I’ve realized something: It is okay to need help. Even more importantly, it is okay to accept help.</p>::Pexels

Sometimes the biggest thing standing in the way of my own progress is my pride. Over the years, people have offered to help us monetarily and otherwise. In almost every instance (unless it was life-or-death), I’ve turned the help down. Something in me would rather count dimes at the Aldi checkout counter than accept help from a friend or family member. But, through the pandemic, I’ve realized something: It is okay to need help. Even more importantly, it is okay to accept help.

Giving Up Power

A lot of the struggle with receiving help from friends or family is giving up the power behind the situation. If I receive help from someone, they are now involved and I owe them something in return (or at least that is how my mind has always worked). I also have to admit I’ve lost control of the situation at hand and need help.

For those times, I have to step back and give up wishing for power over the outcome. Then they can be allowed to help to the best of their abilities, whether it is monetarily or otherwise.

Reaching Out When You Need Help

That being said, most of the time people are not going to offer up help unless they see you are struggling. You may have to reach out and ask your loved ones for assistance. Here are some things you need to consider doing when you reach out for help…

  • Show that you have tried to help yourself. If you need help, your friends and family will be more likely to assist if you have tried to solve the issue on your own.
  • If they have given you advice, demonstrate that you’ve taken it prior to asking for more help.
  • Think about the timing of your request and consider how it may impact them.
  • Don’t make them guess. Just ask for what you want.

These four tips will help guide your discussion in a productive way. Remember, if the answer is no, don’t be upset. No one is obligated to assist you financially or otherwise. Simply tell them you understand.

Conclusion

When it comes down to it, more people need help now than ever. The global pandemic, in conjunction with several other national crises, has made it difficult.

I wanted to share these reflections with you all today because I’ve spoken with a lot of people who are feeling defeated. More of my friends are being forced to move back home or significantly change their lifestyles just to scrape by. There is no shame in it.

There is no shame in packing up and moving home if that is what you need to do to get further ahead.

There is no shame in receiving money from a relative in a time of need.

There is no shame in needing someone else’s help.

Readers, can you think of a time where you had to rely on others to get by? How did it change you? 

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5 Smart Ways to Build Credit

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Bad credit can prevent you from getting a job, financing your education and even buying a home. That is why building good credit as early as possible is so important. Beginning with your first credit card, your credit history is part of everything you do that involves credit. If you want to maintain and build a good credit history, using the credit in a responsible way is a must. [Read more…]

What is the Best Way to Manage Financial Stress?

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<p>Throughout my pregnancy, I have been attending yoga classes. Since I started attending these classes a lot of my stress levels are just lower, in general. On top of being good for my physical health, each class has helped improve my mental health as well. I’m less likely to freak out if I can remember the most important part of yoga: to breathe. That got me thinking about how people manage their financial stress and what we do to cope in our own family.</p>::Pexels

Throughout my pregnancy, I have been attending yoga classes. Since I started attending these classes a lot of my stress levels are just lower, in general. On top of being good for my physical health, each class has helped improve my mental health as well. I’m less likely to freak out if I can remember the most important part of yoga: to breathe. That got me thinking about how people manage their financial stress and what we do to cope in our own family.

How We Deal With Financial Stress

This isn’t to say you can breathe your way through your financial hardships (though a yoga class or two may help you refocus). However, you can use some things from yoga to help yourself deal with financial stress.

  • Breathe: Sometimes you need to just step back and take a breath. This isn’t the end of the world and a nice cleansing breath can help with your stress levels.
  • Balance: Search for a way to balance out your finances and bring your stress down. Planning helps me a ton!
  • Set your gaze: Consider your goals. Is what you are stressing about really going to hold you back?
  • Drown out distractions: What things are distracting you from reaching your goals? Find a way to drown those things out.
  • Just unplug: Every once in a while, you need to just unplug. Cut off social media, emails, and maybe even your phone for the day. Recenter and come back with a fresh attitude.

Now, my husband doesn’t do yoga. He is more of a jiu-jitsu guy. Thankfully, we have ways of working through our own financial stress together. Normally, he is the calm and collected one. He makes phone calls, mends things when they are broken, and makes the problem (even if temporarily) go away. I am the planner. I sit down and figure out how we can avoid finding ourselves in that situation again.

For many couples and families, this is a great way to manage financial stress. You assign “jobs” to the people in charge of finance. My husband isn’t the best with planning, so bill pay and mapping out our finances each month is my job. He’s a better spender. So, when there is a big purchase to be made, he does the research. It works for us. For the most part, it is about what works for you.

Other Ways to Cope

What works for us won’t necessarily work for you. Thankfully, there are plenty of ways to cope with financial stress. Here are three ways I’ve seen be beneficial for other families.

  1. Have a true understanding of your financial situation. Oftentimes, stress stems from not knowing exactly where you stand financially. Take time to get to know your money and where you stand with your debt and long-term financial goals.
  2. Take a social media detox. Social media can be great, but it can also leave us looking at everyone else’s lives and saying, “That could be me.” People start envying one another and, sometimes, overspend trying to keep up with the Joneses. Turn your social media notifications off for a week (or more). It can do wonders!
  3. Consider counseling. Financial counseling can be a great tool if you are really struggling with managing your stress. Look into low-cost and even free options in your area.

Dealing with financial stress can be a killer. Once you find a way to manage your own stress, it can make a world of difference. You may even find you are meeting more of your goals and seeing more progress in your finances.

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Repair Projects to Maintain a Happy Home

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Regular maintenance and repair projects can boost your home’s value and make it a more comfortable place to live. According to Comfy Living, approximately 80% of family homes were built no less than 20 years ago, making them overdue for updates! If your home could use some TLC, these repair projects will help you improve the space.

Add a Fresh Coat of Paint

Repainting is one of the simplest and most effective ways to revitalize a drab-looking home. A neutral coat of paint can revitalize any room inside your home. You can even use color to create a sense of cohesion inside your home and improve the flow from room to room. If your home lacks curb appeal, why not try repainting your home’s exterior or replacing the siding?

Not sure which colors to use? When selecting paint, neutral shades, such as gray, tan, and cream, are always a solid choice. You should also pick a type of paint suitable for the part of the home being painted. Paints with high sheen value, like semi-gloss or satin paint, are more resistant to moisture, making them an excellent option for exteriors and bathrooms.

Install New Flooring

Do you have old carpeting or tile floors that are past their expiration date? Updating your floors could enhance your home’s appearance and make it easier to maintain. Many flooring materials are available, ranging from traditional options like hardwood flooring to more modern choices like bamboo floors.

According to America’s Floor Source, vinyl flooring is a resilient option that can last between 10 and 20 years if properly installed and maintained. Less conventional options, like porcelain tile and cork floors, are also worth considering. Look at different flooring materials so you can find the best choice for your home.

Apply a Sealcoat to Your Driveway

There’s no shortage of ways to improve the interior of your home, but you may also want to consider some exterior improvements, like asphalt seal coating for your driveway. The driveway of a family home goes through a lot of wear and tear. Extreme temperatures, stormy weather, and other conditions could leave your driveway with chips or cracks.

Applying a seal coat can protect your driveway from damage and keep it looking great for longer. Once the coat is applied, it’s more difficult for water to penetrate the driveway’s surface. Since the seal coating leaves behind a smooth surface, it can even make your driveway easier to clean.

Improve Your Home’s Insulation

A lack of insulation can make it challenging to keep your home hot or cool, leading to higher energy bills. If your home is poorly insulated, replacing your windows is one of the most effective solutions! According to the University of Massachusetts, windows are where the typical home loses around 30% of its heat. Consider finishing your attic or basement to reduce the air escaping these spaces.

Make Some Bathroom and Kitchen Updates

When evaluating future home projects, it’s wise to consider how you use your home. Kitchens and bathrooms are some of the most frequently used spaces in any home, making them an ideal spot for improvements. If you don’t have the budget for a full-scale renovation, you can still update these rooms and increase their utility.

Adding new hardware to your kitchen cabinets and bathroom vanity is a simple improvement that can make a big difference. A tile backsplash is something that can enhance both rooms. Think about the issues you run into when using your kitchen and bathroom, and try to make improvements to address these problems.

Whenever you make updates, repairs, or other improvements to your home, you make it a better place for your entire family. Taking on a few repair projects will improve your life in many ways. Being proactive about repairs can help you avoid future problems and give you peace of mind. Get started today on the repairs and improvements that you want to make.

How to Find Everything You Owe (And to Who)

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When you are reviewing your debt freedom progress, you are likely looking at how much you’ve paid off month-to-month. However, if you want the most accurate number (interest included), it is a good idea to know how to find everything you owe.

How to Find Everything You Owe

The first and best place to find everything you owe is your credit report. This will help you see both current and past debts you have yet to pay. You can get one free annual credit report each year and you should do so to get a picture of how much you owe and to who. Most loan companies and creditors report to the three main credit agencies (Experian, TransUnion, Equifax).

Another way to find out who you owe money to is taking a look at Credit Karma. The website and app will give you a snapshot of open and closed accounts with amounts. Credit Karma is not always as accurate as an annual credit report but it can be a good, free way to follow your progress and track your repayment efforts.

For specific accounts, many creditors have dashboards where you can see how much you owe, payment due dates, and other account information. Some credit cards will give you a forecast on how long it will take you to pay the account in full. If you’re wondering if this is something your loan provider offers, contact the company’s support services.

Why Having an Accurate Number is Important

So, why it is important to know how to find everything you owe?

Because it gives you an idea of where you stand and what moves you need to make next! For instance, looking at our credit report, we are able to identify what account needs to be next in our debt snowball.

Knowing how much you owe and to who is also important for tracking anything unusual. If someone used your social security number to take out a loan or credit card, you will know by keeping tabs on how much you owe.

In your debt freedom journey, it is extremely important to be able to find exactly how much you owe, how to locate interest rates, and know that those numbers are accurate. It could make or break your financial success!

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How Much Money Do You Need To Put Down On A Home?

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How Much Money Do You Need To Put Down On A Home

Our family has started talking about potentially buying a home in the near future. Rent prices have gone through the roof, along with everything else, and we are tired of the anxiety that comes along with living in someone else’s home. That being said, we’ve had to do some digging into what it will take to make a huge move like this for our family unit. So, that has me wanting to answer a popular question: How much money do you need to put down on a home?

What is a Down Payment?

Before diving into how much you need for a down payment, you should know what a down payment is and why you need one to begin with. Simply put, your down payment is cash that you put out upfront to make a large purchase. Generally, these purchases include homes and cars, maybe even boats (but I wouldn’t recommend that). Other larger purchases, like appliances, etc. are usually bought on credit if the cash isn’t available.

Typically, a down payment is a percentage of the purchase. For example, if you are buying a $500,000 home you may be asked for a 10% down payment. That means you would need $50K down. The mortgage lender then provides you with the remaining $450K to make the purchase and you pay them back, with interest.

Most lenders will require some kind of down payment when you are buying a home. However, not all lenders are the same. So, it will depend on who you are working with when it comes to how much you’ll have to put down.

Is 20% Down on a Home Necessary?

During my research on mortgage and homebuying, I saw many people suggesting that you put 20% down. That isn’t the requirement in many cases though. Most traditional mortgage lenders will require you to have 20% if you want to avoid paying for private mortgage insurance (PMI). You don’t need that amount to put down to buy a home though.

Actually, when you take a look at the most recent data, most first-time homebuyers like us are only putting down an average of 7% on their houses. Repeat homebuyers are more likely to have more to put down on their next home, thanks to the sale of the first (or other factors). On average, these individuals put down about 17%.

How Much Money Do You Need To Put Down On A Home?

So, what is the minimum down payment you can have to buy a home? Really, how much money do you need to put down on a home? Well, it will depend on where your mortgage loan is coming from. Here’s a breakdown:

  • VA loans that are guaranteed through the U.S. Department of Veterans Affairs typically have a 0% down payment.
  • Some conventional mortgage loans will require as little as 3%, but this is based on your household income. These are not backed by the government but they follow many of the same guidelines as those that do.
  • Loans backed by the Federal Housing Administration (FHA) may require as little as 3.5% down with a credit score of 580+. People with scores between 500 and 579 must pay 10% down.
  • Jumbo loans, or loans made by lenders that do not conform to FHA guidelines, will allow for a down payment as low as 10%. This can be great for people who do not qualify for the other types of loans listed here. Keep in mind, they may require a higher percentage down.

A larger down payment can garner you a few perks, including not having to pay PMI as mentioned above. You’ll have more equity in your home right away and the lender may even give you a better interest rate too. Not to mention, you’ll have lower fees and lower monthly payments overall.

However, at the end of the day, it is about choosing what is best for you and your family. If you qualify, get into a home by putting 7% down and get in there! Rent prices are crazy and paying rent isn’t doing anything for you financially.

Readers, how much money did you put down on your home?

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