Too Thrifty Chicks

Think.Thrift.Create


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Doing Better: Christina’s Story, Part 3

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Christina and her hubby, David, are celebrating three years of marital bliss and financial fortitude. They’ve slayed more than $67,000 in debt. In this last installment of Christina’s story she tells us her top tips for taking control of your finances. ICYMI: Check out Part 1 and Part 2 of Christina’s story.

Christina’s Top Debt Slayer Tips:

  1. Pay yourself first.   I don’t care if it’s $10 or $250.   Open a separate account, aside from your spending account, and make sure you pay yourself.  It can be a Roth IRA, a money market account, a high yield or regular savings account, or another checking account.  Just make sure you have access to the money but not easy access.  Turn paying yourself into a bill.   Our emergency fund payment is a bill to us and we never touch that money unless we have to.
  2. Track your spending for a whole year.  I know this is a huge pain but you’d be surprised at what you spend and what you spend it on.   Keep receipts and don’t buying anything unless you can get a receipt.  You can try keeping your receipts for the month in envelopes labeled with that month’s name on it. Knowing what your monthly expenses are will help you know how much you need in your emergency fund, which should ultimately should cover around three to six months living expenses.
  3. Write down every debt you own. List what the original amount was and what the amount is now.  If it has an interest rate, write down what the rate is, what your minimum payment amount is and what you’re paying now.  All of these amounts should be in columns next to each other.   This will give you a good idea of what you owe and it will get your debt snowball rolling.  Pick which debt you want to start paying off first and write down how much you are going to overpay on that bill (e.g. overpaying $25). Add your overpayment amount to your minimum payment in the column next to your minimum payment column.  My advice would be to pay off the smallest debt first to get a win in your column.  When you pay that debt off take that over payment of $25 plus the minimum payment you had on the debt you just paid off and apply all of that money to the next debt.  This is called a debt snowball.  Google or Bing it because there are a ton of examples on how to do it.
  4. Read as much about finance and investing as you can.  Whether it’s blogs or columns, it’s time to get educated. I always keep up by reading Yahoo, CNN and MSN Money, CNN Fortune, The Wall Street Journal, and finance blogs.
  5. Keep yourself encouraged. A goals list, a vision board and reading ‘debt free’ stories help keep me motivated.   Put your vision for financial freedom on paper and be inspired of how others are getting it done to remind yourself that what you want to achieve is possible.
  6. Turn to your local credit union for help or a financial advisor.  David and I went through three advisors before we knew which one was perfect for us.  They can help coach you through the rough moments so you can reach your goals.
  7. Don’t start spending like crazy once you’ve paid off a lot of debt.   Change your goals to match your changed financial situation.  Constantly search for ways to revamp yourself and create extra income (passive income, extra job, freelance, etc.).

Getting closer

We’re closer than we were before to meeting our financial goals.   Our student loans are monstrous since the hubby went to two expensive art schools.  But we’ve managed to free up over $1000 a month in ‘free income’ so we don’t foresee our student loans taking more than 3 yrs since we are saving up for a bigger home and cash funding a new business.

We’re not sure what we will do once we’re completely debt free other than screaming it from the mountain tops!  Once we are rid of this consumer debt we are going to focus on funding our savings to the max and our retirement accounts too so we can retire early.  We also plan on giving more than what we give now to charities. It’s really important to us to give back when you are finally able to do so.

The Too Thrifty Chicks and the Operation Do Better Clique celebrate Christina and David and we look forward to your mountain top celebration! That is going to be one heck of a party!


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Body Art and Green Jeans: Resisting Temptation

Guest Contributor: Valerie V. Reed

Anyone who knows me well knows I have a fascination with all things involving ink. Yes. I’m the tattoo’d teacher and proud.

Last tattoo...isn't it pretty?!

Last tattoo…isn’t it pretty  I’m thrifty when it comes to almost everything I spend money on. Tattoos are the exception. I have 11 (or is it 12? I lose count!) and they range from $50 for the itty-bitty stars behind my ear to $350 for the cherry blossom tribal on my thigh.

It’s been over a year since I last went under the needle so it’s time for another…*sigh*… but I can’t. What I want is too big, too expensive and simply does not fit in my Total Money Makeover budget. That makes me kind of sad, but I’ve had to keep it in perspective. I could easily take the $400 out of my savings and splurge. I could rationalize the expense and convince myself that it’s something that will last a lifetime (literally), so it’s worth the money. But I’m not going to do that this time. I GOT GOALS! And my goal is to get from under the credit card debt that I’ve been buried in for way too long. But I know me. I’ll obsess over this next one until I get it. So I’m giving myself 6 months. In June I will have paid off two of the cards that I’m taking on in my money makeover. If I’ve met that goal and I still am obsessing over tattoo #12 (or 13?) in June, then I’ll treat myself. Win-win situation for me!

Last big shopping trip before the spending fast

Last big shopping trip before the spending fast

My next tattoo is a big temptation, but there are small, everyday temptations too. A few weeks ago I went into Marshall’s to make a specific purchase. They have earbuds for $3.99, and I needed some new ones. This particular store has been renovated and the bright lights and pretty colors of the new clothes sucked me in. I was immediately drawn to a pair of emerald-green skinny jeans and an animal print puffy vest. I wasn’t in there for clothes though. It was all about $3.99 earbuds, and they didn’t even have any in stock! I had a proud moment though. Instead of doubling back to get the jeans and the vest so I could feel good leaving out of there with a bag, I left empty-handed.

One thing my Total Money Makeover has shown me is that I’m stronger than I once thought I was resisting temptation. It’s only been a month but I’m doing pretty good. I got goals! I keep telling myself that. For the last 30 days I’ve forced myself to think about every single penny I spend. No ink. No green skinny jeans. No animal print puffy vest. I’m asking myself, “Do I really need that?” and often times the answer is “No, you really don’t.”