Commit. Plan. Take action.
We are continuing our journey to free you from debt by diving in to the much-loved topic of budgeting!
We have come a long way on this journey.
We started with a promise and getting your spouse on board. Next, we clarified your current financial picture and reviewed the checklist for a strong financial plan. Then, you got clear on your goals, started tracking your spending, and created your payoff plan.
But we’re not done yet!
As a driver, there will come a time where you’ll be looking at changing your vehicle for a newer one. Whether that’s because your current vehicle has become a bottomless pit of repair and running costs, or you’re starting a family a need something bigger than your current model. Unless you have the savings to cover it, it’s more than likely you’ll be looking at financial help to make this purchase easier. But where to begin? It can be difficult knowing which is the best option for you with so many different types of finance available. Here are some pointers to help guide you and why the alternatives may be better.
With a new year means many great deals on vehicles available. It was reported that 27% of all vehicles sold in October 2019 where brand new 2020 models, meaning many more people went for slightly older plates. This is because of the large drop in prices seen on models between 1-3 years old, even if they have low mileage. You should be able to take advantage of the dealerships wanting to make room for newer cars by moving on their current older stock. Based on that statistic, many people seem to agree. But to truly make the best of reduced costs on a nearly new vehicle, you need to choose your finance options carefully.
It can be easy to find understanding the various details of higher purchase motor finance agreements a little confusing. After all, they come with many different terms that you need to stick to avoid any extra charges. For example, if you were looking to lease a car, this will come with various details such as limited mileage to stay within or condition when giving the car back. For this reason, you could end up agreeing to pay a monthly amount that could end up being much more. Opting to purchase a car outright has far been the cheapest option for many years, as you’ll only pay the value of the car. Easy if you have the savings available, so how can you still do this without having the available funds? Fortunately, there are various alternative motor finance options available that will help.
There are many lenders who are willing to provide low-interest car loans that will provide you with the interest charge upfront and combine it with a flexible repayment length for low monthly repayments. This way you can avoid the dealerships and pay them outright, leaving you to pay a manageable, low rate loan instead. This also means you’ll own the vehicle, meaning you can decide to sell or keep it for as long as you want.
This one will depend on how great a rate you can get on a credit card. Otherwise, you could end up paying a lot more in interest than with any other option available. Credit cards are great for flexible lending, only using when you need it. But if they are not managed well, they can rack up high-interest charges and can quickly create an expensive debt. If you’re thinking of using a credit card, it’s worth looking for 0% interest-free deals that will mean you can, for a period, pay no interest on the amount you spend. The trick is to remember to move the balance to another credit card before the 0% period finishes, with ideally the new credit card having the same promotion.
The great thing about this is you can continue to do this for as long as you have the debt to pay. The only stumbling block would be your credit rating, as you’ll need to maintain the monthly payments to ensure this doesn’t drop and you can’t get approved for another credit card. If done successfully, you could pay no interest at all on your vehicle amount, apart from a balance transfer fee each time you move the funds.
This one is much less used than a loan or higher purchase agreement but can work out to be a great money-saving option. Peer to peer lending involves borrowing from other people who are willing to lend to you. This means not borrowing from a bank or car dealer or other direct lender company. Instead, you would go into an agreement with someone just like you; your peers! Now what differs this from just borrowing money from friends or family is that it is done through a peer to peer platform. By using it, you’ll be matched with other people willing to lend the money you require and will still need to undergo a credit check. Interest rates can be much lower, but this will depend on how good your credit rating currently is.
Whichever option you choose to go forward with for motor finance should be carefully considered. Not all options will work for everyone and nearly all will require you to have a good level of credit. You should only enter into an agreement you can afford to maintain. This way, you can focus on enjoying your new vehicle, rather than worrying about how to pay for it and how much interest you’re paying back.
For more of our great articles, read these:
Yes, You Can Buy Someone else’s Debt
I recently started a new series on the blog called Monica’s Two Cents where I answer questions from my readers.
A few weeks ago, I kicked off the series with a question about what to do with your old credit card.
If you have a question for me, I would love to hear it. You can fill out the form on the Contact page or send me a message via Facebook or Twitter.
I’ve chatted about being uninsured on the blog in the past. It can set you back if you wind up needing to go to the emergency room or require any other type of health care. For instance, last year I learned I’d need all four of my wisdom teeth out (they are still in my mouth as you read this). Many hospitals and doctor’s offices require upfront payment, but there are options for the uninsured.
Believe it or not, there are multiple payment options for the uninsured. I’ve come across the following ways to help resolve your medical debt.
If the payment options don’t quite fit your budget, ask about a discount for uninsured patients before you receive the doctor’s services. Sometimes they will give you a discount because you don’t have insurance.
During a recent visit to the ER here in Atlanta, I asked about this. They required a $250 copay for uninsured individuals. However, once I got my bill, I also saw that (because I was uninsured) a 70% discount was applied to my visit.
Another thing for uninsured people to consider is going to a clinic. Some clinics are privately owned and able to give people more of a break when it comes to the cost of their visit.
I went to a local clinic for an emergency allergic reaction a couple months ago. The visit cost $150 upfront and they offered treatment a-la-carte. I needed two steroid shots, which cost $80 each. If I had gone to the emergency room or doctor’s office, this would have likely cost more than $1,000. Instead, I paid cash day-of and didn’t have to worry about it after that.
Lastly, when all is said and done, it is important to communicate with the billing offices. This goes for medical and non-medical bills. Getting on the phone with them and discussing your payment options or what you can do to resolve your bill will be the best thing you can do for yourself. If you don’t, it will wind up in collections and killing your credit in the long-run
Mike and I spent almost $2,000 on gifts this year.
$1,979.24 to be exact.
And that was under budget.
That amount doesn’t include the tithes we gave to our church and other donations.
$1,979.24 only includes how much we spent on gifts for birthdays, Christmas, Father’s Day, Mother’s Day, and a few weddings. Since we have been focusing on paying off our debt, we gave gifts only to close family and friends.
No one has gone completely untouched by the coronavirus pandemic. Half of Americans say they’ve been financially affected by the virus. However, many states are beginning to reopen businesses and some folks are going back to work. What many people aren’t considering is how to begin setting themselves up for their own financial recovery.
Before you can start preparing to recover from this pandemic financially, you need to consider how you’ve been impacted. Everyone’s finances are set up differently. Some individuals have been hit way harder than others during this time. Certain folks are out of work, while others haven’t been financially impacted (much).
If you’ve been out of work, the first thing you may do when you get back to your job is get caught up on your bills. Others may want to focus on revamping their emergency funds or savings accounts. Many will look at how they can mend their retirement accounts after the market crash.
Depending on how you were impacted by the global pandemic, what you focus on will be different. So, think about how you have been affected by COVID-19 and what your first steps need to be.
For us, our financial recovery will focus on re-establishing our emergency fund and focusing on rebuilding our credit. We decided to take a break from a few payments during this time so our finances wouldn’t be as tight.
This will undoubtedly have an impact on our credit scores and the length of our debt freedom journey, but it was something we thought would decrease our current financial stress. (Worth it, in my book!) Once we’ve rebuilt some of those areas, we will refocus on snowballing our debt with everything we’ve got.
On top of that, we are also going to be looking into some hustles to help us earn a bit more to make these things start happening sooner. My husband is looking at becoming a delivery driver and I’ve looked at some additional hustles as well.
For now though, we are continuing to stay in and stay safe! Readers, how are you prepping for financial recovery post-COVID?
There is a big change coming to Our Debt Free Family!
Recently, I’ve had a huge revelation and because of this revelation, I have decided to sell Our Debt Free Family.
That means that there will be a new owner and writer on the site.
Image Credit: PxHere
With the cost of education skyrocketing ever upward, it’s no surprise that prospective students are looking for any and all alternatives to student loans. Who could blame them? Is any degree worth putting yourself in five or more figures of debt at the start of your career?
I certainly don’t think so. The good news is that there are alternatives! They aren’t always easy, but they beat 20 years of student loan payments every time.
Before you take out tens of thousands of dollars in student loans to go to that one school because it’s more prestigious than the rest, know this: Employers don’t care where your degree comes from as long as it’s accredited.
All that extra debt won’t give you a leg up on the competition for employment either. There’s nothing at all wrong starting school at an affordable two-year college and transferring to a university later. The degree you end up with is the same as if you’d spent all four years there.
Get a job, even if you’re taking a full course load. You’ve got time to work a little. Besides helping financially, previous work experience of any kind looks good on a recent graduate’s resume for multiple reasons.
It shows that you’ve got the drive. And it shows that you’re already familiar with the expectations and social intricacies that come with any job. Sure, you get a little less sleep and a little more stress, but the payoff is worth all of it.
There are tons and tons of scholarships and grants out there for just about every career path you could think of. You can’t get them, though, if you don’t apply for them! This is where good grades pay off.
Several states will pay for your first four years completely as long as you go to college in the state and stay above the minimum GPA they set. You’d have to be crazy not to take advantage of that! Many employers are starting to offer grants to their workers as well. It never hurts to ask!
The bottom line here is that there are ways around the crippling debt of student loans when it comes to pursuing higher education. They may not always be easy, but nothing worth having in life is. There is no replacement for the feeling of accomplishment you get when you do something complicated on your own.
Student loans should be a last resort instead of the norm they’ve become. Two-thirds of people who graduate with student loan debt claim that it wasn’t worth it. Don’t be them. You shouldn’t have to be stuck paying for education well into middle age. You should be someone who owns one of those beachfront Miami homes before thirty years old because you chose the more difficult path early on. You may not get everything just right, but in my experience, the path of action leaves the fewest regrets.
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Did you know nearly 30,000 Americans commit suicide every year? Although there are many reasons someone may choose to take their own life, in many cases, finances play a huge role in suicide. More specifically, individuals in debt are more likely to have suicidal thoughts. So, as a part of the 3rd Annual Suicide Prevention Awareness Month blog tour, I wanted to share some more of my personal debt story.
According to research performed by the Money and Mental Health Policy Institute, there is a clear tie between finance and suicide. Individuals who’ve experienced a major financial crisis within the last six months are eight times as likely to have suicidal thoughts than those who aren’t holding any financial stress. The study went on to say that people with multiple debts, or individuals who are unemployed, are especially at risk.
As you all know, I’m currently holding about $65,000 in debt with my other half. Although we already steadily work on paying things off, it gets heavy. Every time money comes in, it is going out on yet another debt repayment or bill.
If you’ve been following the blog for a while, you know that $65,000 in debt is still an improvement upon where I once was. At one point, I was homeless (living in a motel). I needed desperately to pay off a $1,600 debt in order to be able to have a home again. During my six months of being homeless, I hit some of my lowest of lows and, yes, even contemplated taking my own life.
I felt like life was a constant struggle with no relief. On top of feeling like I had no way out, I also felt as though my debt was burdening others. My other half just relocated nearly five hours to start a life together and I felt as though I was holding everything back – for him, for both of us. Not to mention, I was so broke and so tied down with finances that I couldn’t see many of my friends. I didn’t have a vehicle. I didn’t have money to go out. I felt alone.
We got a windfall that allowed us to pay off the $1,600 initial debt that was holding us back and got moved into an apartment within two months. After I got that paid off, I realized that things could (and would) improve as long as I remembered I wasn’t alone. More importantly, I remembered my life was more important than the debt I carried.
Debt is exhausting – emotionally and physically at times – but it is something most people have faced in their lives. If you feel like you are alone in this, you’re not. Millions of people are in debt, but it does not have to be a death sentence. I am living proof!
Because this month is about raising suicide prevention awareness, I wanted to leave you all with a few statistics and resources.
However, everyone is at risk for suicide if you experience depression or are feeling overwhelmed in life.
I have lost family members and friends to suicide and I personally know the pain it can bring. Whether you’re up to your eyeballs in debt or feel like you are a burden financially, suicide is never the answer. In many cases, it leaves your family to pay for unexpected funeral costs. Not to mention, your family will experience an unbelievable emotional burden that will never be lifted.
Losing someone to suicide is absolutely heartbreaking. Speaking out about the link between money and mental illness, like depression, can help reduce the stigma and prevent further suicides.
This blog post is part of the 3rd Annual Suicide Prevention Awareness Month blog tour. If you are feeling suicidal, please call the National Suicide Prevention Lifeline at 1-800-273-8255 or text HOME to 741741.