Individuals in some cases say that western countries have “free” medical care, yet they end up paying for their medical care through various taxes and charges. In countries like the US, people usually pay for medical care in insurance premiums. Medical care is rarely truly free. Financial experts have opined that medical services, governments, and insurance agencies determine how a normal citizen pays for healthcare. [Read more…]
How to Pay Cash and Still Have the Wedding of Your Dreams
When I introduced myself on Our Debt Free Family blog I wrote that my husband and I paid for our wedding on our own. With our 6 year anniversary coming up I wanted to share a bit more about how we did that.
Why did we pay for our wedding? [Read more…]
Why Asking For Help Is Still One Of My Biggest Challenges
To round out Mental Health Awareness month, I thought I’d talk about one of my biggest challenges (mentally, financially, etc.). Not unlike many people, I have a really hard time asking for help, even when it has been previously offered or received. At times, this has cost me a lot. It has cost me relationships, friendships, and plenty of money. There have been moments I didn’t ask for help and took out a loan instead. Why?
I’d like to say it is pride getting the best of me, but there are probably a lot of reasons I don’t ask for help. One of the biggest is that I’m certain other people will let me down or I’ll let them down in some way. If I do it alone, no one can be disappointed with me but me. There are some other reasons you might have trouble asking for help.
Why You Feel Like You Have To Do It Alone
First, people who are overgivers often have a difficult time asking for help. Because they focus on giving so often, they don’t always know how to accept help. You may also be codependent, which has been a large part of my problem. A lot of my own self worth has been tied up with what people think of me. So, I spend time taking care of other people instead of tending to my own needs. People ask me for help, I say yes. When it comes time for me to ask for help, on the other hand, it is nearly impossible.
It is also possible that you are trapped in a victim mindset. Maybe you’ve had bad luck in the past, it doesn’t always have to be that way. Don’t stay in the mindset that you are alone and have to handle everything alone. Counterdependency is also problem. It is the opposite of codependency. These people often say things like “I don’t need anyone or I can do it myself.” At times, this may make you seem strong and stable, but you often feel lonely and have no real connections in the world.
Trust, self-esteem, and intimacy issues have all contributed to my own personal difficulty with asking for help. Some people truly believe they need to suffer and others are beaten down by their inner critic. Whatever the case may be, it is okay to ask for help. In fact, you should do it more often.
You Should Ask For Help More Often, Here’s Why…
Generally speaking, people are reluctant to offer unasked help. They don’t want to potentially offend you by offering and it can create an awkward situation. So, if you truly need help, you won’t get it unless you ask. You won’t come off as needy and it won’t harm your relationship. In fact, asking for help has actually been shown to strengthen relationships.
So, next time you’re down on your luck, remember that you can ask for help. Give yourself some grace! I’ll try to remember that too.
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Powerful Financial Lessons to Teach Kids in Each Stage of Life
As parents, it’s so important to teach our kids about money, so when they leave the nest we can feel confident that they won’t learn many money mistakes the hard way like [Read more…]
No More Debt, 3 Radical Debt Reduction Strategies You Can Do
You know the saying, “When you hit rock bottom the only way to go is back up.” I’m sure that this is where many of us begin our journey to becoming debt free. This is when you truly want to live a life with no more debt. What does rock bottom look like to you? Maybe you don’t really know how much money you owe in total because you are in denial about the whole thing. Every month you are making the same amount of money but you are short every single time. You are stressed out to the max that you are moody and snappy at everyone around you. Maybe you haven’t had a good night sleep in months because all you can think of is how you are going to pay all the bills. You wonder how the heck got to this point in the first place.
It seems so easy to get in these types of situations, yet so tough to get out of. That is why it takes drastic and radical changes to begin to dig yourself out of the hole that you created.
Here are 3 radical ways to dramatically reduce your debt.
1. Liquidate
Have you ever gone to a store liquidation sale? This is exactly what you need to do with your life. In this day and age, you have countless ways to try and sale items. If you have nicer items you can post on Ebay, apps like Poshmark, and even local Facebook groups. For everything else, you can have a huge garage sale and even try to sell to consignment shops too. Not only will this put major money in your pocket, but this will help clear the clutter from your life and give you more breathing room. Go through your house with the entire family. If you think you have a lot of “junk” guess again. Sometimes the junk is what other people are most interested in at garage sales. It’s worth a shot to try and sell everything you don’t need.
Many people even take drastic steps by selling their vehicle/s that are not paid of. Buying something cheap with cash and putting the extra toward their debt. Sounds pretty lame, until you realize you won’t have that huge care note hanging over your head every month, your car insurance will decrease too.
If you are really overwhelmed with your debt. Consider selling your home and get in a rental. See what your local housing market is doing. If you have been in your house for several years, you might have some equity built up. Even if you are paying a couple hundred less than your mortgage now you also won’t have to deal with house insurance and any maintenance issues that can put a dent in your monthly budget. If you downgrade to smaller square footage your utility bill can reduce drastically and other expense can decrease as well.
2. Cut Expenses to the Bone
Sit down and figure out all your bills you have for the month. What can be cut out? Cut cable completely or downgrade package, cut pest control maintenance. Monthly subscriptions are very popular. If you are signed up for several monthly subscriptions like razor clubs, IPSY, bark box, any magazine subscription, as well Netflix and Hulu. It’s time to cut them all. Even if they seem relatively inexpensive they do add up so serious cash. Don’t forget to cut out that gym membership as well.
If you have anything set up under a contract consider calling each of them and asking what the cancellation fee amount is. If it’s not worth to cancel and pay the fee ask them if you can drop your package deal to anything else less expensive until you can cancel. Call you credit cards to see if they can lower your interest rates. Lastly, this is also a great time to call your insurance company and shop around to see if you can get a better rate for home and car insurance rates.
Why do you want to cut all this out? Because you will be too busy doing step #3.
3. Bring in More Cash
After cutting out all items that you don’t need you’ve made a little bit of breathing room. Now, to really get the progress rolling you need to bring in more income. Many people opt for a second job or even start a profitable side business. Many people opt for a part time gig in the evenings and weekends like a grocery store, delivering pizza, clothing store, or a restaurant. If your family is keeping you from going out to the work force in the evenings and weekends you can also look into part time stay at home jobs. Just be sure to do your research before signing up for any jobs online. Make sure they are legit and that the company is legit. Also, keep in mind with some of these businesses the income is not immediate.
Another way to bring in more cash is to reduce your expenses. A classic way to do this is to refinance your debt. There are a number of reputable companies which might be able to help. A lot of these are pretty new, but they might be worth your time. Here is a short list.
Lending Tree – Is a loan “supermarket” type of exchange. The business pretty much links up borrowers and lenders in a single platform. Its bigger than most of the lenders out there and can offer loans for all needs and credit levels.
SoFi Loans – SoFi is a newer company, but they’ve been sucking up a lot of business due to having good rates and a low fee model. These guys are definitely work checking out.
Many times we try to look for quick fixes or to “cheat” our way through paying debt off faster. Yes, you can pay off debt fast, but it will be hard grueling work and require a lot of sacrifices. Not only sacrifice from you but from your family as well. Once you get some momentum and get the debt pay off rolling it will all be worth the sacrifice once you can live free from the shackles of debt.
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What about you? What is the most radical thing you’ve done to pay off debt?
How Much Does It Really Cost to Be in a Wedding?
I was recently asked to be a bridesmaid in a friend’s wedding. I’ve never been asked before, so I was thrilled. She and I have become extremely close and I was honored. However, I didn’t realize how much it may cost to be in a wedding.
Debt-Free Living and Big Events
Sometimes I’ve found that our goal of being debt-free keeps us from doing things. Many of our friends and family don’t hesitate to swipe a credit card or take out a small loan for just about anything. (Seriously, one friend has $20,000 in credit card debt because traveling is more expensive than financial health).
Oftentimes, this means we turn down invites to go to larger events that may cost more money. We’ve turned down group trips and music festivals, which can run in the hundreds of dollars for a single ticket.
When my friend asked for me to be in her wedding though, I had months to get things ready and didn’t have to worry about swiping a credit card (because we aren’t doing that anymore).
How Much Does It Cost to be in a Wedding?
So far, the wedding will be costing me about $512. That isn’t including any additional money I’ll need during the bachelorette weekend for food, bar entry, etc. It also doesn’t include the wedding gift. When all is said and done, it will probably wind up costing me close to $800 to be a bridesmaid.
After doing some searching, that’s about the average cost for anyone to be a bridesmaid these days (seriously). Of course, I said yes before we had a TON of financial changes in our lives and pulling everything off has not been easy. If you’re thinking about being in a wedding and want to remain debt-free, consider these tips to keep cost low.
- Be honest about your financial situation. If something is too expensive, speak up about it, but don’t be negative. Come forward with more affordable solutions.
- Suggest the bridesmaids get different dresses in the same color. This can help you shave down the cost of your personal dress while still having uniformity.
- Consider skipping out on the spa day and doing some of the beauty items DIY. Do your own hair and makeup. Skip the nail appointment and do them yourself. While it is fun, it isn’t necessary.
- Stay in an Airbnb. If you’re traveling for the wedding or bachelorette party, stay in an Airbnb. You may even want to consider getting a group together to do so.
Lastly, don’t be afraid to say no. While the bride may be disappointed, if you can’t afford the cost of being a bridesmaid, it isn’t worth the stress you’ll put yourself (and the bride) through.
Readers, have you been part of the wedding party? How much did it cost you? How did you plan for it?
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What is the Best Debt Advice?
People are pretty much always willing to offer up advice, even when you haven’t asked for it. Throughout my debt freedom journey, I’ve received advice from a number of individuals, but how do you decipher what advice is good and what you should let go “in one ear and out the other?” Here’s how to determine if the debt advice you’re receiving is something to consider or not.
What is the Best Debt Advice?
So, there’s no best advice when it comes to paying off debt. Everyone’s finances are different, therefore, their approach will need to be different. However, there are certain pieces of debt advice that have consistently helped people.
- Make a budget and stick to it. Believe it or not, budgeting for repaying your debt makes it easier to stay on track. Not to mention, having a solid budget will keep you from overspending, which is what causes most people to go into debt in the first place.
- Avoid taking on any new/additional debt. If you have become accustomed to swiping your credit card for things, this can be difficult. Consider hiding it or even cutting it up. Additionally, you shouldn’t take out any loans to consolidate your debt. It will almost always prevent you from making significant progress towards your goal.
- Set realistic goals for yourself. Many people fail at making realistic goals when it comes to their finances. If you stretch yourself too thin, you’ll cave under stress. Be sure to budget money for fun things and set realistic time frames for debt and savings goals based on that.
- Contact your lenders if you’re having trouble paying. We’ve all had issues making payments at some point. The best thing you can do if you’re struggling to repay a lender is to give them a call. Most will work with you on repayment and some will even give you a break on late fees, etc.
- If you can’t pay cash, you can’t afford it. Cash is king. If you don’t have the money in the bank, or you haven’t budgeted for the purchase, you can’t afford it. It’s that simple.
While these five pieces of debt advice are solid, not everything everyone tells you is going to help you pay off your debt. Here are a few things to consider.
How to Determine What Advice is Good
Be wary of anyone telling you there’s a “cure-all” to your debt problem. No single approach is good for everyone. You’ll need to cater your debt freedom journey to your personal needs. It may be worth looking into certain approaches if what you are doing isn’t working, but what works for someone else won’t always necessarily work for you.
Additionally, don’t listen to anyone telling you that taking out more debt to consolidate or further your progress is a good idea. You will only be hindering your ultimate goal of being debt-free. Instead, consider ways you can cut spending or earn more to help pay off your debts.
The Best Piece of Advice I’ve Ever Received
Since starting my own debt-free journey, I’ve received all kinds of advice from several different people. Some individuals have suggested consolidation loans, others have said to use all of my savings to pay off my debt, and one person even told me that I didn’t have to pay certain debts off (seriously).
The best piece of debt advice I’ve ever received, however, was this: be patient with yourself. There is no roadmap to debt freedom. The journey looks different for everyone and we all have to feel our way through things. For us, we’ve had to learn to live on one income, hide the credit cards, and focus on living a cash-only lifestyle. That may not work for everyone, especially for families with children.
It is easy to get frustrated when you aren’t seeing progress and it is even easier to simply give up. Finding patience for your journey and yourself is key to becoming debt-free.
Readers, what is the best piece of debt advice you’ve ever received?
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Planning for Unexpected Expenses
There is no doubt we’ve made strides in the right direction as far as our finances are concerned. However, there is still one area in which we are failing: planning for unexpected expenses.
This week I got the bridesmaid dress for an upcoming wedding in the mail (two weeks out from the wedding) and my worst nightmare occurred. It didn’t fit! It was far too late to return it for the correct size, so I decided to take it to a local alterations place. The total for the changes needed came out to $250.
The price definitely threw me for a loop and, because we aren’t using credit cards, it came directly out of savings. I was frustrated with myself for not planning ahead for alterations costs.
Why is Planning for Unexpected Expenses Important?
Planning for unexpected expenses is key to becoming debt-free. If we weren’t so devoted to not swiping our credit cards, I could have easily racked up another $250 in debt without batting an eye. The same is true for other expenses that may come your way out of the blue.
Failing to prepare for this is can lead to you hindering your debt progress. Not to mention, it can have an impact on your emergency savings and take away from paying off your debts. It can also put a dent in your emergency savings. Then you have to readjust your finances to refocus on padding your savings accounts once again instead of using the money for my debts.
How to Plan for Unexpected Expenses
Thankfully, there are things you can do to plan for the unexpected things in life. Here are a few tips to help you avoid the mistake I’ve made.
First, identify your unexpected expenses. Of course, we can’t always see into the future, but if there’s something that comes up with some regularity, you can try to plan ahead for it. For instance, property taxes, medical expenses, birthdays and holidays, and car repairs can all be planned for.
To identify other unexpected expenses, you can take a look at the past year’s bank and credit card statements. Note any irregular purchases and try to budget for that. You can add up the total of all the expenses and then divide it by 52 weeks. Set aside that amount every week moving forward. This can help you have the money set aside when something unexpected comes up.
Doing this will help you plan ahead and (unlike me) have the cash set aside when something may pop up. Do you have any additional tips you’d add? Leave them in the comments below!
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Why Does A Hard Credit Inquiry Affect Your Credit?
If you are trying to better your credit score, most sources tell you to stay away from applying for new credit cards and loans. However, if you are building your credit from scratch or had no credit, you’ll need to apply for a line of credit.
The reason most advise against applying for new credit is that hard inquiries can actually hurt your score. But how and why does that happen?
What is a credit inquiry?
Before you find out how and why hard inquiries can impact your overall credit score, you should know what an inquiry is exactly. When you apply for any new line of credit, you give those lenders permission to acquire your credit report. Some companies may pull an inquiry about you without you asking, these will have no impact on your score. Your score only has the potential to be affected if you are asking for more credit. You can check your credit scores with CVS Ltd, or other similar services.
Will your credit score change after applying for new credit?
Your credit score will go down a few points when you apply for a new line of credit. This is because your risk level goes up for lenders if you are actively looking for more available credit, especially if you apply for multiple sources of credit at one time. However, hard inquiries like auto loans, student loans or a mortgage will not impact your score much (if at all).
Lenders consider you to be a high risk if you apply to several lines of credit within a short period of time. For example, if you apply for five new credit cards in one week your score will likely lower due to the fact that you are seeking so many new lines of credit. A lender may see this and wonder why as well as wonder if you’ll be able to pay all your new inquiries back.
How much does a hard credit inquiry affect your credit score?
The impact on your individual credit score after applying for new credit will vary, depending on your own personal credit history. If you have very few accounts or a relatively short credit history, credit inquiries will have a more serious impact on your score.
Not all inquiries are treated the same either. For instance, if you are shopping around for a good mortgage rate, the inquiries will not impact your credit score while you are looking. It will count the inquiries made within the same time period as one inquiry instead of multiple (about 45 days time).
Improving Your Credit Score
Knowing that making hard inquiries can have an impact on your credit score can make you want to avoid opening new credit lines. If you’d like to improve your credit a bit more before applying for new credit, here are a few things you can do:
- Make sure you pay your bills on time. Looking at the graphic above, you can see that payment history makes up more than a third of your credit score.
- Keep the balances low on your current credit cards. Available credit is a key contributing factor when it comes to your credit score makeup.
- Open new accounts responsibly. Don’t take credit you don’t need and be sure to always pay your bill on time.
- Check your report regularly. You can use an app like Credit Karma to check up on your score weekly and be sure everything looks the way it should as well as track your progress.
Building and improving your credit can be extremely difficult if you aren’t 100% sure how different factors impact your credit score. Avoid making multiple hard inquiries on your credit within a short time period and, of course, stay on top of your finances by regularly monitoring your score.
Photos: airpix and CafeCredit.com
When Can You Be Taken To Court Over Debt?
Repaying your debt is stressful enough without having to deal with debt collectors and, even worse, lawyers. You may have heard horror stories of people being taken to court over debt. If you’re like me, you probably push those to the back of your mind. In some cases, those stories don’t even seem real. However, you can be taken to court over debt and millions of people have been.
Are You in Danger of Being Taken to Court Over Debt?
You can be taken to court over a number of different kinds of debt, including medical debt, auto loans, business debt, and even credit cards. The only debt you’re not likely to be taken to court for is a foreclosure. In most cases, the mortgage company is able to resell the property and you won’t be taken to court for that.
One of the best ways to stay on top of whether you are in danger of being taken to court or not is to open your mail. Believe it or not, many people just throw away mail that comes in. Sometimes people throw away important notices regarding debt. If you do that, you could land yourself in court to settle those debts.
What To Do
Finding out that you are in danger of being taken to court over debt is enough to send your anxiety through the roof. The first thing you should do after you find this information out is to contact some kind of legal aid. Some lawyers will offer you a discount or even a free consultation for your problem. In some cases, lawyers will provide their services for cases like these pro bono.
Next, be sure you do research on what the statute of limitations is on the debt you owe is. For different debts, the amount of time changes. It also varies from state to state. Additionally, your “time” can restart in some cases. You’ll want to be sure you’ve educated yourself about these limitations before getting too upset. It may turn out that you are no longer responsible for the debt (though you should never have that mindset).
Once you’ve done those two things, decide on how you wish to move forward. If you cannot pay the debt, you may be able to work out a settlement or payment arrangement within the court. Take a step back and assess what the best plan of action will be for you.
Readers, have you ever been taken to court over debt? How did you handle it?
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