Budget Tips, Money

Sinking Funds: What are they and why you NEED them RIGHT NOW

Sinking funds is a term that can be a little confusing. Here is a complete guide to making sure you know what you are doing and help you really get your budget together!

Have you ever known that you have a big expense coming up, but decided to figure it out when you get there? Does Christmas “surprise” you ever year, even though it is ALWAYS on December 25th? Do your January credit card bills make you a little bit of a scrooge? I have been posting on Instagram about my sinking funds lately and a lot of people have questioned what I mean when I use that term. I think the name came from Dave Ramsey, but let’s face it, our grandparents and great grandparents really invented the wheel when it comes to no debt finances. Grandma knew what it meant to save her money for a rainy day. I started my debt free journey on January 1st, 2017 and I have not had to pull money out of my emergency fund once because I have my sinking funds. They are a little confusing, but hopefully this guide will help you get started. Here are the most commonly asked questions I get about my sinking funds: How does it work? A sinking fund is a type of savings for irregular or yearly expenses. For example, you pay $600 every 6 months for car insurance. Instead of ignoring it and waiting until the time comes up to pay for it, a sinking fund sets aside a portion of the payment every single month. In this case, it would be $100 a month. It may feel like you are putting away a lot every month, but I promise that it will save you tons in the long run! When you start getting the hang of looking at sinking funds as an expense, it becomes a lot easier to put money away every single month!

Budget Tips, Money

How To Use The Debt Snowball to Get Out of Debt Quick!

  Imagine yourself looking at the money in your bank account. You have no monthly housing payment. No student loan payment. Your car is paid off. All you pay for monthly is your phone, utilities, food, investments/savings, and your “want” list. You must think that I am crazy. But this is my goal by 25. Debt paid off. House paid for without a mortgage. Money in the bank. Many people love the idea of being debt free, but once they start looking at their bills, they have no idea where to even start. Or, they are so overwhelmed with just the monthly payments that they can’t even imagine paying more on any of the debts. Whatever your case is, if you want to be debt free, you will find a way to do it! I am on a one person income and slowly but surely working my way to being debt free! If you are a Dave Ramsey follower, then you have heard of the Debt Snowball. Some people have heard of it other places as well. In my opinion, it is one of the best ways to keep the motivation to get debt free! The snowball isn’t directly Dave Ramsey’s, but it is the system that he uses in his Financial Peace University. The other day I read a Dave Ramsey quote on Instagram about the “Debt Snowball” that said “It isn’t about the math, it is about the momentum.” If it were about the math, you wouldn’t be paying 25% on credit cards to get the 2% cash back points.  This is such a good thing to keep in mind when starting out. Don’t get caught up in the fear of paying a little more interest of some of your bigger debts when you could completely pay off some of your smaller ones. The whole purpose of the snowball is to clear smaller debts to give you more money towards your bigger ones, like a snowball rolling downhill. There are definitely other methods to paying off debt, so do your research and do what is best for you.…

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Budget Tips, Money

7 Steps I Took to Pay off $7000 in 7 Months

If you have followed me at all, you have heard all about my debt free journey. Maybe reading about my story has made you curious. Didyou stumbled upon my post about Why You Should NOT Start Your Debt Free Journey and it inspired you, or at least got you thinking. Maybe you have no clue what I am talking about when I say “My Debt Free Journey.”  Or you simply want to know how I have paid off $7,250 since the beginning of the year. It is crazy that this has been my life for 7 1/2 months because I feel like it was just yesterday that I started this journey. But some days it feels like I have been at this forever. I have poured my whole life into doing everything I possibly can to speed up the steps. I read some great inspiring stories about how people trade in their brand new car for a 10 year old car and they are able to pay off debt super easy.I am so happy for them, but that isn’t my story at all. All of my debt is student loans and I live in an apartment, so nothing big to sell here. There is no acquired money from relatives, just from working a lot.  I am not married, so I don’t have anyone else’s income to live off, just my own. This year has taught me a lot about myself. I have learned that I have a lot more determination than I originally thought. I can also go days without getting more than 5-6 hours of sleep. This year has been a long one, but I am taking it step by step. I am 22, not married, and no kids. Here are my 7 steps to start paying off your debt: 1) Read Total Money Makeover You can start your journey without this step. I actually tried it a few times before without actually reading the book. But let me tell you, once I read the entire book in just a few days, I was hooked. I couldn’t get enough…

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Budget Tips, Money

The Perfect Budgeting System For A Server Income

I have been a server/bartender for over two years now. It is such great money. It is also super convenient to walk out with money immediately after my shift. While the job itself is not my favorite, I continue for the flexible income. The problem I quickly saw was that I wasn’t actually getting a paycheck. I was just walking out with a part of my  paycheck every night that I worked. The first month, I was so carefree because I had cash in hand. The other servers and I love to go out for drinks after work, which quickly became my second problem. On a good night, I find myself tipping the bartender $10-15 on a $5 drink.  It quickly became a little excessive. Even if I wasn’t drastically over tipping, I was spending $10-20 of the $100 that I just earned working. I looked all over the internet to find anything that had ideas for how to budget as a server. Turns out that there isn’t as much as I thought there would be. Apparently not many people are writing about budgeting as a server. Probably because not many of them have an effective system. When you have the opportunity to make that good of money in one weekend, budgeting isn’t necessarily a must. Then I turned back to Dave Ramsey. Of course, the envelope system. Here are 9 Steps to Budgeting as a Server (or any irregular income jobs) It took me a little while to get into a routine, but once I did, it was a lot faster process. Don’t get discouraged if it takes you an hour the first time you sit down to try to do this. Keep going because I promise that having a ton of extra money is so worth it! Soon, it will be an automatic process! 1) You Need A Reason/Goal I truly believe that when doing anything in life, there has to be a goal. While saving money in general is a good reason to start budgeting, you need a reason to say no to yourself for drinks after…

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Budget Tips, Money

How to find your Missing $5000 in your budget

As a "20 Something," most people aren't worried about a budget. I have learned if there is no budget, I usually don't know where my money goes. Here is a step by step of how to create a budget to save money.

In 2016, I spent 3-4 full weeks traveling to a ton of different places. I wandered through Wyoming, Idaho, Utah and Colorado. I flew to Florida to see my sister before she moved. There were Christmas lights in Texas that I just HAD to see for my birthday! It was probably some of the best experiences of my life and I would not trade it for the world. After I own my home, I hope to travel like this again, but I would never have been able to take a full month off work to travel like that if I wouldn’t have had a plan. “A budget is telling your money where to go, instead of wondering where it went.” When I work two jobs and pick up extra shifts and my second job, it really isn’t to pay rent or the electric bill. When I turn down people for dining out and getting drinks because I am “broke,” I don’t mean that I don’t have money.   I mean that I haven’t put any money aside in my budget for drinks and dining out right now. I limit what I spend going out because I am have other priorities for where my money is going. Without my budget, I would have never been able to travel that much while still paying all of my bills. Now I am planning to pay off all of my debt. Check out my updated debt numbers!