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  #1  
Old 05-02-2017, 08:23 AM
onedayatatime13 onedayatatime13 is offline
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Default Financial Freedom

Is anyone else working on becoming debt free, budgeting, etc whole your LO is away?

This is my pet project for myself. My own personal finances, so I don't feel like I am choking on debt. I hate it so much. We can't control what is going on with them, but we can control how we move forward during this time.

We are not married so I am not working on his stuff, but my own for myself, my children and when he comes home. I figure it will help with the stress once everything is over.

I'm working on a plan that has me in great shape in 2- 4 years if all goes well. Of course life happens, which is why I have it going on for up to 4 years. My kids are on board.

I would love it if anyone wants to do it with me. This way we motivate one another and celebrate successes.
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  #2  
Old 05-02-2017, 08:45 AM
str82daheart str82daheart is offline
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In all honesty I have thought about it. I am not so much into debt however just getting better established credit and building my savings is something I would like to do. I feel like when my LO comes home there will be a lot of help he needs and not so much for him but I don't want him feeling stressed because my ish is messed up. I want him to have little to no worries because he already will have a lot to deal with getting back into society. I also talked to him about budgeting his commissary and things of that nature. I opened up an account with my name but his name is on it and he is the beneficiary of that account. When his family puts $200 on his books he makes them give me $50 and or a certain percent of it. Which I let him decide. The point im teaching him is not about the amount its about consistency. I then will put the money in that account. That is his money only. I don't use it. I am teaching him little things that he can do so when he comes home not only will he have the money that the prison collect (which is only 1000) he will have money that he has been saving + interest. I tell him just because you are in prison doesn't mean you cant manage things as you would if you were home. So I have to lead by an example and get my things on the right track too! I think its a good idea. Just start small.
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  #3  
Old 05-07-2017, 08:10 AM
onedayatatime13 onedayatatime13 is offline
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Sorry! Been handling my stuff and such it is becoming full time job. Budgeting is the most important. It into spending every dollar on a piece of paper because the month begins based on your income.

The plan I'm following:
1. 1k in savings for emergencies
2. Debt smallest to largest paid off
3. Save 3-6 months of household expenses for emergency purposes.

To build credit, I have seen people pay certain bills (electric bill, gas, and food shopping) on their credit card and pay it off right away. This keep your credit active and in great standing. Only do this if you have a budget and can stick to it.

For him, if 50 is going to you, you can choose to save that for him every no th for his home coming to buy necessities or just so he has cash on hand until he finds a job.

Let me know if you have questions or need help. It keeps me motivated. I'm one to practice what I preach or I am a hypocrite. This is my big project while he is gone. I'll worry about his homecoming later on. Right now, I'm taking care of me and my kids.
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Old 05-07-2017, 09:14 AM
yourself yourself is offline
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Quote:
Originally Posted by onedayatatime13 View Post
Sorry! Been handling my stuff and such it is becoming full time job. Budgeting is the most important. It into spending every dollar on a piece of paper because the month begins based on your income.

The plan I'm following:
1. 1k in savings for emergencies
2. Debt smallest to largest paid off
3. Save 3-6 months of household expenses for emergency purposes.

To build credit, I have seen people pay certain bills (electric bill, gas, and food shopping) on their credit card and pay it off right away. This keep your credit active and in great standing. Only do this if you have a budget and can stick to it.

For him, if 50 is going to you, you can choose to save that for him every no th for his home coming to buy necessities or just so he has cash on hand until he finds a job.

Let me know if you have questions or need help. It keeps me motivated. I'm one to practice what I preach or I am a hypocrite. This is my big project while he is gone. I'll worry about his homecoming later on. Right now, I'm taking care of me and my kids.
I'd change this to "highest interest rate to lowest interest rate". It accomplishes the same thing - all debt is paid off - but it emphasizes the best practices for actually paying off that debt.
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Old 05-07-2017, 09:17 AM
CenTexLyn CenTexLyn is offline
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Putting utilities on credit is not always even just about 'building credit'- I and many others do it to maximize rewards. HOWEVER, the thing to watch out for are the utilities that run credit cards through third-party vendors and their fee outweighs the rewards. If you only get 2% back on the rewards, then it doesn't make a lot of sense to put a $100 utility bill on a card if it is going to cost $2.95 (by example, using one of my electric carriers). If the bill is being put on the card for convenience and NOT rewards, then it is still something to be wary of.

Depending on amount of debt, one can ALSO actually be helped by ADDING a new card that has a 0% balance transfer offer. The money saved on interest will more than offset the potential 3% fee that may be charged. Some cards are doing fee-free transfers but usually only with shorter terms. Balance transfer arbitrage can still be done and is becoming easier the more distance exists between today and the market crash in 2008.

The other benefit to opening new cards is that utilization goes down which helps to INCREASE the score. Scoring models look at credit mix and utilization in addition to overall debt and other factors.

The WORST thing to do is go all Dave Ramsey and think that credit is bad. The other potentially poor decision is to focus on getting the small debts paid first. If the larger debts have higher interest rates, then getting rid of them first is often a good priority. Minimum payments on a high APR because you are putting larger chunks towards a small APR debt costs you more in the long run...

Other things beyond savings to potentially consider are the direct stock purchase programs. You can find MANY of those online, with some allowing you to invest as little as $25 or $50 per month. The amounts may not seem substantial, but over time, those fractional shares with dividend re-investments can add up. Many of the stocks they offer are ones that are established companies and have a track record of growth that outpaces inflation. And no, the dividends won't be an amount that screws up tax preparation since in most years, you are looking at amounts under $50. Further, many of them have no commissions on the purchase because the company agrees to pay those fees.
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Old 05-07-2017, 09:17 AM
onedayatatime13 onedayatatime13 is offline
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Quote:
Originally Posted by yourself View Post
I'd change this to "highest interest rate to lowest interest rate". It accomplishes the same thing - all debt is paid off - but it emphasizes the best practices for actually paying off that debt.
I have seen the argument for both of these. The smallest is supposed to help more psychologically then anything else. This way people see small successes and it helps keep motivated. Paying off 3 small debts quickly feels good where a large debt with a higher interest rate may take a long time.

My interest rates are all about the same, so it doesn't matter per say. Based on the charts I made..nerd I am.. It is a few months difference.

Overall, having a plan someone sticks to is most important.
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  #7  
Old 05-07-2017, 09:26 AM
onedayatatime13 onedayatatime13 is offline
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Quote:
Originally Posted by CenTexLyn View Post
Putting utilities on credit is not always even just about 'building credit'- I and many others do it to maximize rewards. HOWEVER, the thing to watch out for are the utilities that run credit cards through third-party vendors and their fee outweighs the rewards. If you only get 2% back on the rewards, then it doesn't make a lot of sense to put a $100 utility bill on a card if it is going to cost $2.95 (by example, using one of my electric carriers). If the bill is being put on the card for convenience and NOT rewards, then it is still something to be wary of.

Depending on amount of debt, one can ALSO actually be helped by ADDING a new card that has a 0% balance transfer offer. The money saved on interest will more than offset the potential 3% fee that may be charged. Some cards are doing fee-free transfers but usually only with shorter terms. Balance transfer arbitrage can still be done and is becoming easier the more distance exists between today and the market crash in 2008.

The other benefit to opening new cards is that utilization goes down which helps to INCREASE the score. Scoring models look at credit mix and utilization in addition to overall debt and other factors.

The WORST thing to do is go all Dave Ramsey and think that credit is bad. The other potentially poor decision is to focus on getting the small debts paid first. If the larger debts have higher interest rates, then getting rid of them first is often a good priority. Minimum payments on a high APR because you are putting larger chunks towards a small APR debt costs you more in the long run...

Other things beyond savings to potentially consider are the direct stock purchase programs. You can find MANY of those online, with some allowing you to invest as little as $25 or $50 per month. The amounts may not seem substantial, but over time, those fractional shares with dividend re-investments can add up. Many of the stocks they offer are ones that are established companies and have a track record of growth that outpaces inflation. And no, the dividends won't be an amount that screws up tax preparation since in most years, you are looking at amounts under $50. Further, many of them have no commissions on the purchase because the company agrees to pay those fees.
I'm not against credit at all. Yes, I do follow a modified DR plan. I did years ago and paid off 40k in debt in 2 years without selling anything. Divorce and natural disaster hurt, so it is time to start over.

I mentioned paying utilities if they can be paid off write away as if you were paying cash. Most people right now are living pay check to pay check. Many on here may find they lost an income or they have a new budget line to take care of their loved one.

Everything you said in regard to credit is true only if someone is trying to build their credit. If it is in the toilet, they are not getting a new card or anything until they bring down their debt to income ratio. Plus, they need to keep things current.

There are many plans out there and I don't believe there is a one way to fix it.
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Old 05-07-2017, 10:15 AM
AndyS AndyS is online now
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I agree you need some credit. I had to file bankruptcy due to my stupidity of paying for medical expenses on my credit card and the loss of a small business. I was so against having any credit cards and used just cash. I did get a car loan 3 years ago hoping it would increase my credit score and it basically did nothing. A couple of months ago I finally broke down and got a credit card with a $1000 credit limit. After the very first billing cycle my credit score went up 43 points on transunion and 23 points on equifax. I went from fair credit to good credit in the span of a month. Before that my score hadn't moved but a couple of points in five years. I have my cellphone to autopay from my credit card and my credit card to autopay from my bank account the day after. I pay no interest doing it this way. I plan on doing this for six months and applying for another card and doing the same thing. I won't use the card for anything other than a bill I'm already paying monthly.

I honestly have so much more disposable cash now that I just use cash and the stress and guilt of being in debt has been completely taken away. I've even managed to save a few thousand for emergencies.
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  #9  
Old 05-07-2017, 10:19 AM
onedayatatime13 onedayatatime13 is offline
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Quote:
Originally Posted by AndyS View Post
I agree you need some credit. I had to file bankruptcy due to my stupidity of paying for medical expenses on my credit card and the loss of a small business. I was so against having any credit cards and used just cash. I did get a car loan 3 years ago hoping it would increase my credit score and it basically did nothing. A couple of months ago I finally broke down and got a credit card with a $1000 credit limit. After the very first billing cycle my credit score went up 43 points on transunion and 23 points on equifax. I went from fair credit to good credit in the span of a month. Before that my score hadn't moved but a couple of points in five years. I have my cellphone to autopay from my credit card and my credit card to autopay from my bank account the day after. I pay no interest doing it this way. I plan on doing this for six months and applying for another card and doing the same thing. I won't use the card for anything other than a bill I'm already paying monthly.

I honestly have so much more disposable cash now that I just use cash and the stress and guilt of being in debt has been completely taken away. I've even managed to save a few thousand for emergencies.
I don't want to file for bankruptcy but if I keep doing what I doing I would be there in a few years. Most of it is modifying behaviors and impulse buying. In two years ill hopefully be syraight again with a lot of discipline. Took time to get here and will take time to repair it!

At this stage of the game I only need good credit to redo my mortgage to get my ex off the mortgage. Aside from that there is no need for credit really.
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Old 05-20-2017, 07:27 AM
Jelly_Belly Jelly_Belly is offline
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Back in the 1980s I read a book that changed my life. The book is called The Wealthy Barber. The book, now on its third edition, was written by David Chilton. Please see:

https://smile.amazon.com/Wealthy-Bar...s%2A=0&ie=UTF8

If you can't find a copy of this book at your local library, let me know. I will gladly send a copy to you. Good luck.
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