Tag Archives: debt management

Super simple plan to save $63 this month

Super simple plan to save $63.54 this monthAccording to the Financial Industry Regulatory Authority (FINRA), nearly 60 percent of Kansans do not have a rainy day fund. That’s a whole lot of umbrellas we’re going to need in a downpour.

And 21 percent of us spent more than we earned last year!

This is probably why 30 percent of Americans are in debt collections.

It doesn’t have to be this way. Here’s a super simple plan to save $63 this month.

Just save.
Set a savings goal of $1.25 per week: $5 per month.

Generic vs. name brand.
Buy generic spaghetti sauce: $1.98 per month.
By switching from Classico spaghetti sauce to Wal-Mart’s Great Value spaghetti sauce, you can save $3.78 per month (based on using 66 oz of spaghetti sauce per month).

How we came up with $1.98 per month:
Classico: $3.82 for 44 oz, 0.08 per oz
Great Value: $3.50 for 66 oz, 0.05 per oz
If you use 66 oz per month, you’ll spend $5.28 per month using Classico or $3.30 per month using Great Value. Using a generic brand will save you almost $2 per month just on one item!

On-time payments.
Make your payments on time: $34.18 per month.
This one should be a no-brainer. The typical bank in Kansas charges $34.18 in late fees.

Lunch.
Twice a month, swap eating out lunches with brown bag lunches: $11.38 per month.
This is based on the Big Mac meal at McDonald’s which is $5.69 per meal. Here’s another example: If you ate out twice for lunch at Applebee’s, you’ll spend $16.98 (based on the cost of the classic + signature option lunch combo).

Dinner.
Order water instead of a soft drink twice during your dinners out this month: $4 per month.

Use a credit union.
Use a credit union instead of a traditional financial institution: $7 per month.
On average, a consumer can save $84 per year simply by using a Kansas credit union (or $159 per household). Divide $84 by 12, and you’ve saved $7 a month. And those late fees? If you bank at a credit union, you’ll reduce your late fee from $34.18 to $24.56, a savings of $9.62.

  • Total savings per month: $63.54.
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Seven Debt Warning Signs

7 Debt Warning SignsCNNMoney reports “Americans have a debt problem.”

Yeah, well, we could have told you that.

Every third person in America  owes so much in payments, that their account is considered “in collections.”

The good news is the debt might only be $25. The bad news is the average amount owed is just over $5,000, with some debts as high as $125,000. The super duper bad news is delinquent debt can put your credit score in the toilet…for years…even if you’ve paid off the debt. And a wrecked credit score can hurt many things from employment opportunities to securing loans.

While it may seem that your debt crept up on you, there are warning signs…here are just seven of them:

  1. You hide bills from others.
  2. You use a credit card for most purchases, and only pay the minimal balance.
  3. You have little or no savings.
  4. You believe that checking account overdrafts are a normal part of everyone’s financial life.
  5. You don’t know what your living expenses are because you have never tracked your spending.
  6. The loss of a job in the household would cause an immediate financial crisis.
  7. You borrow money from payday loan offices, pawnshops, or title loan companies.

More debt warning signs included in the Money Possible workbook. (pdf, page 13)

Need help getting your debt under control? Consider a credit union, where some offer financial education programs and have financial counselors on staff, or contact your local non-profit credit counseling agency like Kansas Consumer Credit Counseling Service.

Money Possible Produces Debt Destroyers

Debt Destroyers photo all participants-no logoRaquel, Fredica and Lisa and Bryan made it. Sixteen weeks of rigorous budgeting and saving and heavy financial lifting.

OK, maybe not that intense…but our three families did make a commitment, met with a financial counselor and made major changes in their financial life. And lived to tell about it.

Here’s what they learned:

“Say no to frivolous spending.”
“Live within your means.”
“Don’t overwhelm yourself with credit.”

Each participant started out with a different financial issue. Lisa and Bryan wanted to bulk up their retirement savings. Fredica needed to control her spending. Raquel’s payday loans were spiraling out of control.

But the outcome for the three was the same: a lighter debt load, and more importantly, less stress in their lives.

The takeaway is that financial stress can cause problems in your daily life…which is in line with this recent survey that says employee financial problems or stress can reduce worker productivity.

What did our participants accomplish in 16 weeks? Here’s the skinny:

Financial Literacy is a family affairLisa and Bryan

  • paid off four of their credit cards
  • learned the difference between needs and wants
  • involved their children and developed a family budget

credit cardsFredica

  • stopped using credit cards
  • is paying down her existing credit card debt
  • learned to live within her means, and work with what money she does have

emergency money jar - compressedRaquel

  • paid down 30 percent of her debt
  • is current on all her bills and has stopped using payday loans
  • started an emergency fund

If you only remember one thing from this post, remember this: Your household budgets and finances are up to you. It’s a life-long process, not just something you can do once and be done.

But don’t feel like you need to do it alone. Get help from the Consumer Credit Counseling Service or a credit union. Financial education is a primary focus of Kansas credit unions, and credit unions nationwide. Credit unions promote financial fitness, and their goal is to make your financial life easier. Get started on your own by downloading the Money Possible Workbook.

Thank you to Lisa and Bryan, Fredica and Raquel for sharing their stories for the world to hear. Using a public venue to air your dirty laundry can be intimidating. These three credit union members took it in stride to promote the importance of financial literacy, and learned a little something along the way.

Quick Tip: On Time Payments

Destroying your debt doesn’t have to take hours. Watch our 15 second tips and then be on your merry way. These tips also air on KAKE-TV’s (ABC, Wichita, KS) regularly.

View all our quick tips.  Follow along on social media at #moneypossible.

On Time Payments

By making credit card payments on time, you can save $30-35 per month in late fees which could free up an extra $500 a year.

Our Debt is Embarrassing

Money MindWe know we suck at money management…we just gave ourselves a C or lower in personal finance class. But then we say we are spending more and basically not doing anything about it.

Yet, we are embarrassed about our credit card debt…more embarrassed about that than our weight, age, credit report or how much money is in our bank account.

It’s embarrassing and we stress about it. We’d like to say “don’t sweat the small stuff,” but your finances aren’t “small” and maybe sweating it would do you some good.

If you’re this far, the good news is you CAN find the light at the end of the tunnel. It’s called “saving money.” And it can be the answer to all your financial woes.

The bad news? It’s going to take some work. For the rest of your life (or until you don’t have to worry about money anymore). Money management doesn’t just “go away” once you have it in order. It takes lifelong tending and growing.

Go Girl Finance has some ideas to get you started saving money and living stress-free:

Identify the problem. Be serious…what is the real issue? Spending too much on fancy-schmancy stuff? Too much activity on your credit card? Or is there just not enough income coming in? Find out why you are stressed about money, then make a plan and start getting organized.

Stay positive in the present. Nobody likes a Debbie Downer. But it’s easy to become one and jump on the “woe is me” bandwagon. Focus on what you are doing now and give yourself a daily pep talk. Remember what Stuart Smalley used to say: “I’m good enough. I’m smart enough. And doggone it, people like me.”

Put yourself in the power seat and know that you can change your situation. Above, we said you need to make a plan. This is when you put that plan into motion, little by little. Remember, it’s a marathon not a sprint. One small change (like saving $25 a month) can have a snowball effect, and encourage you to do even more.

Exercise! Yes, move your body more than just lifting the remote. Exercise is a great stress buster. Just a regular old walk around the block can put you in a better mood, and relieve stress.

Savvy Money says to track your spending. Maybe not forever, but this is a must for a few months. Here’s how it should pan out:

  • 35% for housing
  • 15% for transportation
  • 15% for debt
  • 10% for savings (this is NON-NEGOTIABLE!)
  • 25% for any other living expenses

If you feel like housing can be a lesser expense, use it towards another category. It’s your choice! You can borrow from any category EXCEPT savings.

Managing your money smartly takes time, effort and dedication on your part. But we know you can do it…because you’re good enough, you’re smart enough, and doggone it, people like you.

Money Brain

money brainThere’s “mommy brain,” “senior moments” and “blonde moments.”

Well…now there’s “money brain.”

Experts say being a spender or saver depends on your brain. What you’ve been taught at home has something to do with it too, but in this post, we’re talking about that gray matter between your ears.

Recent research shows that while parents do have an effect on your financial habits, your brain’s chemistry plays a role too.

We won’t bore you with case studies, focus groups and medical gobbledygook, but here’s the deal: some of you get a thrill from instant gratification (buying that super cute pair of shoes NOW) and some of you get excited by “the deal” (think shopping sales or seeing your savings grow).

Think about it: When you get a free meal, doesn’t it taste better? Or if you find those super cute pair of shoes HALF OFF, aren’t they all that much cuter?

If you want to read the research, read The Psychology of Money-How Spending and Saving Habits are Programmed in Your Brain or The New Science Behind Your Spending Addiction.

Now that you know “you can’t help spending” … well, actually, you can…but if you feel you are one of those people like our friend Fredica (who had a spending problem, but now realizes she can control it) here’s some tips:

  • Use cash. The simple act of seeing the dollars can help. A credit card is just a plastic card, right? You can’t see the money being spent until it’s too late (and $300 later).
  • Use an ATM or branch office to withdraw your money, and make sure you get a balance inquiry. This helps you see your dwindling account.
  • Never “put it on my tab.” Pay as you go so you keep track of how much you are spending. Wait…the only place we know of where you say “put it on my tab” is a bar, and you shouldn’t be wasting money there anyway.
  • Don’t be swayed by “the big sale” or sales people! Remember that Friends episode when Joey bought all that stuff for his new apartment and racked up a major credit card bill?

Ross: What… what’s that?
Joey: It’s my VISA bill. “Envelope one of two.” That can’t be good.

No Mr. Tribbiani, it’s not good.

Don’t buy things because they’re on sale. Buy them because they are a need.

  • Know the difference between needs and wants. Read this “Needs vs Wants” from a recent post.
  • We’ve said it before. Tell someone you are trying to control your spending. A good friend will stop you from buying too much. A great friend will buy it for you. JUST KIDDING. Don’t think we want you to be a charity case. A great friend will help you and may even suggest a financial counselor at a credit union or non-profit agency.

No matter if you are a spender or a saver, you brain has a lot to do with your money smarts, as well as the habits you learned early on in your fiscal career. The bottom line is all about control, and we know you can control your brain. Well, most of us can.

Quick Tip: Smart Uses For a Tax Refund

Destroying your debt doesn’t have to take hours. Watch our 15 second tips and then be on your merry way. These tips also air on KAKE-TV’s (ABC, Wichita, KS) regularly.

View all our quick tips.  Follow along on social media at #moneypossible.

Smart Uses For a Tax Refund

The average tax refund has been around $3,000. Don’t blow it. Pay off credit card debt. Boost your savings. Build your retirement fund. Or even invest in your home.