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…]

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.

Read More

• What To Do If You Fall Behind
• Do These 3 Things And You’ll Have Bad Luck With Your Finances
• Financial Lessons That I Hope to Teach My Daughter

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…]

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.

Our Best Articles

If you want more practical resources for getting out of debt, consider our most popular articles:

Yes, You Can Pay Off Debt When You’re Behind On Your Bills
Ron and Thu Paid Off $137,000 in 7 Years
In Just 7 Years Alice and Scott Paid Off $200,000 In Debt
Save a Ton of Money With Paribus

What about you? What is the most radical thing you’ve done to pay off debt?

If you can avoid it, now is not the time to buy a new car. Hold on to yours, be sure to perform regular maintenance and take care of it. The car market is crazy right now. Here’s what we recently found out.

Why We Are Considering a Car

My husband and I have been discussing getting a new car, especially since the arrival of our little one. Currently, we own a 2015 Volkswagen Golf GTI. It has less than 86,000 miles on it and, though we haven’t been the kindest to it, it runs well. That being said, with the car seat in the back, stroller in the hatch, and us in the front two seats, there is very little room for anything else. Not to mention, we have to bring a diaper bag and anything else the little one may need while we are out. While it may help us save money in some cases, it doesn’t make family trips to the grocery store very easy unless we want to go every two days.

That made us consider looking at a bigger vehicle, either a station wagon or an SUV. One look at the car market made us change our minds though. Most of the vehicles on the market right now are double their regular price, that is if you can find what you are looking for on sale. Cars are hard to find right now, which is why their prices are through the roof. This helps the resale value of our car currently but, because we don’t have a second vehicle, simply selling the car wouldn’t be feasible for us.

We would be trading our car in, receive a higher-than-usual trade-in credit but also be paying higher-than-usual prices for any car we find. As you know, we aren’t trying to add a ton of debt to our family’s tally. In fact, we are trying to do the opposite.

Our Decision

After taking the time to review the market and even chatting with a car salesmen at VW, we decided to keep our cramped car and make it work. We are going to invest some money into getting a few things fixed on the car. Then we are going to get it fitted with a roof rack and pod for the top. This will help us be able to take longer trips and go shopping with the whole family.

On top of that, keeping our car and continuing to work on paying it off will help us reduce our debt. Once we pay it off, we can save and pay cash for the next car. With the car market looking the way it does right now, we are happy to keep our little VW.

Readers, have any of you bought a car recently? What was your experience like in the current market?

Read More

• Financial Lessons I Learned From My Grandfather
• I’m Learning a New Craft to Save Us Money
• Dave Ramsey vs. the Rest of the Debt-free Community: Why Some Fin-Influencers Hate Him
• Why You Need to be Using Sinking Funds

When it comes to budgeting, there is no “one size fits all” method that works for everyone. However, over the last several years, it seems like budgeting has gotten more and more difficult. Financial influencers seem to make the act of budgeting a 10-step system. While that may work for them, I am someone who needs a simple approach. Here are three straight-forward budgeting methods that have worked for me.

Zero-Based Budgeting

This is the budgeting method we are currently using. It makes you feel a bit like you are living paycheck-to-paycheck because you do bottom out your checking account. The biggest difference is that a portion of that money is put into savings – either a sinking fund, investment account, or emergency savings fund. Our budget also includes money allotted for entertainment and fun so that we don’t feel like we are sacrificing everything sticking to a our budget (something that has hindered us in the past).

To make this work, you need to figure out your take-home income each month. Subtract your necessary expenses like rent/mortgage, utilities, groceries, car, insurance, etc. Take away any debt payments, medical expenses, savings, clothing purchases, and going out money. Determine how much money is leftover after taking those things away. This should go into a savings or investment account. You can also use this cash to pay off debts.

The 50/30/20 Method

The 50/30/20 method is another popular way to budget. It is straight-forward and requires less work than most budgeting methods. Like zero-based budgeting, you are using your take-home income to determine how much you will spend in different budgeting categories. Fifty percent of your income should go towards necessary purchases as described above. The next 30% are discretionary expenses. This includes things like paying for Netflix, going out, your gym membership, and general life expenses. The final 20% of your take-home should go towards savings and debt.

‘No Budget’ Budget

Rather than creating a budget, consider doing a few things to monitor your finances instead. Honestly, for a long time, I avoided budgeting. It gave me a bit of anxiety to sit down and look at my finances for an entire month (or even week). The “no budget” budget involves tracking your spending, knowing when bills are due (having them on automatic draft, preferably), setting aside money for savings, and whatever is leftover can be spent.

Before you think about adopting this kind of budget, it is easy to go off the rails. You shouldn’t try to go with no budget until you have established good spending habits and know that you are in control of your finances. For me, the “no budget” budget worked to help me start tracking my spending better, but it didn’t help me save or pay off debt faster. I’d say that if you go with this method you should be debt-free (or close to it) and have an established savings.

Readers, do you go by any of the budgeting methods above? If not, how do you budget your money?

Read More

• Why You Shouldn’t Buy a New Car Right Now
• Financial Lessons I Learned From My Grandfather
• I’m Learning a New Craft to Save Us Money
• Dave Ramsey vs. the Rest of the Debt-free Community: Why Some Fin-Influencers Hate Him

P.s. If you’re looking for a bonus way to make money – consider religiously using cash back sites.  There are a number of good ones which reliably help you save, Dollar Dig, Rakuten and Swagbucks are some good ones.  Cash back sites are under utilized, but nonetheless work well and reliably reduce the cost of buying everyday goods.

If you have been following the news at all recently, you know that the housing market is on fire. Many millennials like us are scared that they won’t ever get to buy a home (if they haven’t already). A few of our friends were lucky enough to buy homes during the height of the pandemic when prices were low. However, since then, the prices have just continued to climb.

A Look at the Housing Market

There is some good news for people looking to buy a home. The housing market is finally starting to cool off. Yahoo Finance recently reported that if you’re like us and have been priced out of the housing market you may be in luck soon. It may mean relocating for some folks though. Cities that saw big jumps in the price of housing over the last few years will be the ones to decline the most. Here’s a look at the cities where they are expecting the number on the price tag of homes to go down:

• Austin, TX
• Boise, ID
• Nashville, TN
• Phoenix, AZ
• Sacramento, CA

That being said, the price drops won’t really start happening until 2023 some time. So, if you were planning to buy a home this year, it may still be too soon.

Time to Save

The good thing about the market being so crazy right now is that it gives you more time to save money for a down payment and work on your credit score. Go through and pay off everything that you can and save as much money as you can with sinking funds for your down payment. With FHA loans, you will only need to put 3.5% down. Where conventional mortgage loans, good rule of thumb is to have 20% to put down so that you don’t have to pay PMI (private mortgage insurance).

Taking a look at the housing market here in N.C., the median listing price is around $254,000. With that in mind, we need to save about $50,000 to have 20% to put down. Honestly, there aren’t many places cheaper than that anywhere else we’d like to live either. So, that is our goal now. By the time we have that saved and a good chunk of our debt paid down, the housing market will likely be cool. If not, we are happy to wait for our turn to buy.

Extend Your Plans

Anyone feeling like we do right now and wondering if they’ll ever be able to buy a home, breathe. The market will eventually calm down. Now is the best time to practice the flexibility that we’ve leaned on so much over the years. Be flexible with your plans and long-term goals. It’s possible that you may have to put off buying a home for another few years. The same goes for any goal that was thrown off by the pandemic or the impending financial collapse. Patience is key. You will reach your goals, but give yourself some grace. Just about everyone is having a tough time right now.

Readers, have you had to delay any of your financial goals due to the housing market and economy?

Read More

• 3 Straight-Forward Budgeting Methods That Actually Work
• Why You Shouldn’t Buy a New Car Right Now
• Financial Lessons I Learned From My Grandfather
• I’m Learning a New Craft to Save Us Money

What Happens If You Can’t Pay Your Taxes?

Tax season can be a headache, and the thought of owing the government money can put a damper on anyone’s mood. Unfortunately, circumstances can occur that might render it impossible for an individual to pay their taxes. If you find yourself in this situation, it’s important to address it head-on.

Ignoring the issue won’t make it go away. The government takes tax nonpayment seriously and will take action to collect the funds. However, there are alternatives to consider. By being proactive and communicating with the IRS, you may be able to work out a payment plan that fits your budget.

Don’t let tax debt drag you down. Take action and explore your options.

 

Understanding Your Tax Liability

Taxes can be a confusing and overwhelming topic for many people, but understanding your tax liability is crucial to avoiding unpleasant consequences. Your tax liability is simply the total amount of taxes you owe to the government, including various state and federal taxes.

This figure includes not only income tax but also property tax and self-employment tax in some cases. You can use the Taxcaster tool from TurboTax to get a better idea. Knowing your tax liability is essential for staying compliant with tax laws and avoiding penalties. So, take the time to carefully calculate your tax liability and ensure that you are on track with your tax obligations to avoid any unexpected surprises down the road.

 

Consequences of Not Paying Your Taxes

 

1. Accruing Interest and Penalties

When you can’t pay your taxes on time, the IRS (Internal Revenue Service) and state tax agencies will begin to charge interest and penalties on the unpaid balance. These additional charges can quickly escalate your tax debt.

 

2. Tax Liens

If you continue to ignore your tax debt, the government may place a tax lien on your assets, including your home, car, and bank accounts. A tax lien can make it challenging to sell or refinance your property until the debt is satisfied.

 

3. Wage Garnishment

According to Ideal Tax, the IRS has the authority to garnish your wages if you owe back taxes. This means a portion of your paycheck will be automatically deducted to repay your tax debt, making it even harder to meet your living expenses.

 

4. Seizure of Assets

In the most extreme cases, the government may seize your assets to cover your tax debt. This means that they could take possession of your property, vehicles, or other valuables as a means of debt recovery.

And if you thought that your bank account was safe, think again. The government has the power to issue a bank levy, which freezes any withdrawals or transactions from your accounts. It’s a harsh measure taken to recover the funds owed, and one that should be avoided at all costs.

 

Options When You Can’t Pay Your Taxes

 

1. Installment Agreement

One option to consider is setting up an installment agreement with the IRS. This allows you to make monthly payments towards your tax debt, making it more manageable over time.

 

2. Offer in Compromise

In some situations, you may be eligible for an Offer in Compromise, which is a settlement that allows you to pay less than the full amount of your tax debt. However, this option is typically only available if you can demonstrate financial hardship.

 

3.   Currently not collectible (CNC)

If you are currently facing significant financial hardship, the IRS may temporarily designate your account as “currently not collectible.” This means they will halt any collection actions until your financial situation improves.

 

Seek Professional Help

Filing taxes can be an intimidating process, filled with endless forms and complex regulations that seem to be in a constant state of flux. Trying to navigate these waters alone is a daunting task, but thankfully there are professionals who can help. By seeking the advice of a tax attorney or certified public accountant (CPA), you can rest assured that your tax issues will be handled with the expertise they require.

These professionals have spent years studying the intricacies of tax law and staying up-to-date with the latest developments, meaning they know how to guide you through the process while minimizing your stress and maximizing your potential savings. Don’t let tax issues weigh you down: seek out professional help today, and take control of your financial future.

 

Conclusion

Facing tax debt can be a challenging and stressful experience, but it’s essential to address the issue promptly. Ignoring your tax debt can lead to severe consequences, including accruing interest and penalties, tax liens, wage garnishment, and even the seizure of assets.

However, there are options available to help you manage your tax debt, such as installment agreements, offers in compromise, and Currently not collectible (CNC). It’s crucial to consult with a tax professional to determine the best course of action for your specific situation.

 

READ MORE:

• Self Lender Reviews: Building Credit With a Loan from Self Inc
• Cash App Glitch 2023: Is the Free Money Glitch Real?
• Try This $10000 Biweekly 26 Week Money Challenge to Crush Your Debt
• Why You Need A Personal Mid-Year Budget Review and 5 Things to Do Now
• How Often Should You Review Your Budget?