1. Not making a solid plan.
We all want to pay off our debt and reach financial freedom and security. We all know we should aim to pay off our bills, but knowing we should, isn’t a solid plan. It’s a goal for what you want to achieve, but not how to do it.
Ever since I had acquire this debt, the goal was to pay it off. I’m sure you’re thinking; then pay it, right? Every time I got paid I would throw money at it, and still it was going nowhere. I’m sure at this point I’ve paid more money than I actually even owed and still I have the debt.
How’s that even possible, you ask? Because there were different factors at work here. Where if I had done actual planning; the right planning, I would have realized this. Which takes me to my next point.
2. Following the advice of others without doing my own research.
Everyone has their own ideas of what they think you should do to solve your problems. If they do not know your specific circumstances and have not been through a similar situation; do not listen to them.
Everyone thinks they are smart; wise beyond their years or wise because of their years. Experience is the best teacher and if these people have not experience this situation; they can’t know what to do. They might sound confident but I assure you, they are guessing. Sure they can make an educated guess, and maybe it will work out. Do you want to leave it up to chance that they might be right?
I’ve gotten advice that I should file for bankruptcy from someone who never had to do it. It sounded like a great idea at first, however upon further research, I realized that it’s not that easy to do. It will destroy your credit and will stay on your report for up to seven years. Which might be fine for some people. Except if you have any goals of buying a home in the near future; then this will set you back a bit.
Another person suggested using a debt consolidation service, which is even worse than bankruptcy, in my opinion. It will destroy your credit as the process involves not paying your bills. Letting them pile up in an effort to force companies to allow you to pay a lower amount than what you owe. It will take 3-5 years to recover but at least you would have paid less.
This is pointless to me, because based on my calculations, with the right planning and sacrifices I would be able to pay off my bills in a year. And have my credit intact and be able to move on to working on my other goals unhindered. Not 3-5 years, not 7 years, 1 year. The downside would be that you have to pay the full amount of your debt plus interest. However for most people, you did accumulate this debt yourself so you should pay it back. For me that’s not the case, but since it is my credit card it’s my responsibility.
My point is, people rarely know your specific situation. This is unless you share every detail about your finances with those people. I promise you they can’t make a plan that will help you. They don’t know your goals. They may not know how much debt you have and where it came from. They don’t know your spending habits. They don’t know how much money you make. They don’t know what responsibilities you have. They only know the perception, and despite what everyone wants you to believe; perception is not reality.
With this lack of knowledge and experience, listening to someone else, is something you shouldn’t do. Unless they are going to pay your debt for you. Then great, go ahead.
This is the same with information you find online and on YouTube. Please understand that people give advice based on their experience. This is better than the first group, at least these people have experienced it; like me. What they don’t know is your situation and so the information is not tailored to you. It’s made for themselves. What you do is use this information as a baseline. With the understanding of your specific situation, come up with a plan suited to you and that will work for you.
Research and learn more from different sources; online, videos and books. Then use that information to make it work for you.
3. Paying off small cards first.
So my biggest downfall was following the advice that I should pay off all my smaller cards first. I had no idea where that came from. I thougt it made sense though because at least they would have been out of the way, leaving me with the bigger cards to focus on. I recently found out that this is the philosophy of a guy called Dave Ramsey. He believes doing this will give people the motivation to continue to pay off their debt. This did not work for me. Now that I understand more about how credit cards work and I have looked at my own finances and my own situation, this was stupid and the worse way for me to pay off my debt. If I didn’t do it this way I would have been in a far better position than I am now, especially since I’ve never lacked in motivation.
Let’s say that I have for example 10 small cards with $1,000 on each, all adding up to a balance of $10,000. And say 5 larger cards adding up to $20,000. Paying off the small cards worked out to be more than at least 2 of the large cards which I was being charged interests on and was a part of the bulk of the debt. I would still have a debt of $20,000 either way, however I would have saved a heck of a lot on interest. What I didn’t realize is that with an average interest rate of 22% for most of my cards, some are more, but we’ll go with the average, I’ll end up paying $4,400 in interest for the year. Imagine now that you’ve had this debt around for 2 years or maybe even three years like I did. Consistently in that cycle of trying to pay off the small cards. Over that time you’ve paid so much money in interest. Almost half of what I owe, and your debt balance stays the same. So in theory paying off small cards could have worked, but it didn’t work for me. Why?
4. Not putting aside money for myself.
If you don’t put money aside for yourself, essentially it will force you to use the credit cards if something comes up or you need something. Put aside just a little for yourself, just a little, please.
5. Not budgeting.
This goes with the previous one of putting money aside. Budgeting however is more than just putting money aside though. It’s looking deep into your finances and this is where you will get into the root of the problem. Where you will begin to gain ideas on how to solve it. Budgeting forces you to look at everything you spend your money on. Now the goal is to remove anything that is not a need.
What is a need? Food and shelter. Okay, fine, you may also need to factor transportation in if you can’t walk. Not Uber or Lyft, those transportation gets expensive over time, check your bank statements.
Some may say clothes, but unless the clothes is for that second job you got, you don’t need clothes. Everyone has clothes, at least I would assume that most people that have a good amount of debt has clothes. Unless the debt is from medical expenses or student loans, I don’t see anyone spending money on a car, house etc and not having clothes. The thing that people buy the most of, other than food, is clothes. Use what you have and don’t buy anymore. Figure out how to use what you have and don’t make excuses to get more. Don’t talk yourself into in; I lost weight or gain weight; it got ripped. If you look for a reason you will find it, don’t hinder yourself.
Your budget will focus on where you need money first. On mine, I have rent, food, and a little extra for myself, and my mother who I help, and Netflix. That’s it.
Everything else I cut. No Spotify, Hulu, CBS All Access. All those unnecessary subscriptions that you think you need but you don’t. Again, do not convince yourself that you need these. Instead of Spotify premium I use the free version, it is annoying. I’ve also used Pandora, which is better than free Spotify because Spotify has been shuffling my songs and Pandora doesn’t. Also, after you watch the one ad, you get to listen to a good amount of songs before the next ad.
I watch mostly YouTube which is free, but Netflix is for my mother and sister in Jamaica. Find other things to replace what you usually use if you need to. If you use Hulu, look at what you’re watching and see if you can find those shows on another platform that is free. And if it isn’t I’m sure you can go a year without Hulu, Disney plus, etc. and save those extra coins. I promise once you start it, you won’t notice that you’re missing anything. Cw is free, Tube tv etc, point is there are other options, you just need to find them.
Maybe you can work out at home, maybe you don't need cable, think if anything you can live without.
Once you cut all the unnecessary debt, then what you have left can go towards your credit cards, student loans, etc.
Stick to the budget. Write it down, don’t keep it in your mind. Make it tangible.
6. Putting everything towards bills.
I was too focused on paying off the debt. So what had happen was. If I got paid $1000, I was paying $1000 on my card, and it felt great. At least one small card would be paid off. Then, I had no money. What I would have to do, was use the card, maybe even the ones that already had a high debt because we’ll get to it.
The problem here is that not putting aside money to take care of your other expenses, means that you will always have to use the credit card. You’ll always have that debt on there, because you’ll either be in a cycle of paying off the small cards over and over again, because you keep having a balance. Or you’re adding to the balance on the big cards, making them bigger and also increasing interest.
Once you do the budget, you’ll leave a small amount for yourself, just in case you need it. Not to go shopping or spend more money. If you don’t use it one week, it roles over to the next. Doing the budget allows you to put money aside for food, rent, etc. first and what's left goes towards the debt. This way you have no reason to pick up that card.
7. Saving too much.
I know what you’re thinking, saving is good, right? Not for me, it wasn’t. The point of paying off the debt is for you to pay off the debt fast, when you’re done, then you can save. Don’t get me wrong, you can save a small amount because everything adds up. You can start with $1000, or more. But you shouldn’t be focused on that.
When I started I was paying a little more than the minimum payments for the credit card, and I was saving the rest. I had saved $10,000 and as you can imagine it took some time to save, I’m not over here balling. All the while racking up on the interest. Eventually I noticed things weren’t adding up, and I knew I add to be paying more. So I took my savings and threw it all on the credit cards. Where I went wrong was, as I mentioned before; I was paying the smaller cards first and so years later I still have the same amount of debt because I did it the wrong way.
Some things are a lesson to be learned. Now I realize I can’t do it that way, and this year, 2020, is the year I pay off all my debt. It will take me an entire year with extreme measures in place. I’m almost done with paying off one of my large cards so I feel hopeful. Only four more to go.
8. Credit Doesn't matter right now
Like most people I enjoy checking my credit and it gives me great pleasure when it goes up. When you pay your debt off this way, with the big cards first, it will take a longer time to see any changes. When I was paying small cards, my credit would go up all the time. That might have something to do with those cards not being maxed out and being able to pay off a couple cards. Paying off the bigger cards first is more to save you money in interest and fees and not so much about getting your credit up. When you pay everything off your credit will go up.
Please be warned that if you had a balance on a card for a long time, when you pay it off, they might reduce your credit as punishment; I’m guessing. This will no doubt affect your credit, but don’t worry about it. You know what happens when you’ve paid off all your debt? It will go up, and they will increase the limit.
There are different factors that goes into a credit score, but this is not the time to focus on that. It can be distracting and can make you feel like you’re not making progress. If your debt is going down; you’re making progress.
9. Shopping too much and Overpaying for things.
Look for deals and coupons, when possible. Check for the products you’re looking for at different stores before you buy.
Return things you don’t need. I was the person who would buy something, not like it but felt bad about returning it. I’ve since change. Don’t tell yourself you will use it one day, or give it to someone blah, blah, blah. Don’t buy things you don’t need, don’t pay extra for anything, and if you don’t like something, definitely return it.
I was also the person who would get charged bank fees the same day payment was due, and would pay the bill and not call to have the fee waived. Don’t do that. Alot of banks have a certain time to send the payment in and after that they charge you a fee. I would remember to pay the bill and wait until after work, but I work late. I will check the account when I got home and they would charge a fee. I’m not talking the day after, I’m talking the same day. Now that I’ve realized this, I wonder if it’s too late to ask for those moneys back. However, if you pay your bill a day late and they charge you a fee, call the bank and ask for a refund. If they charge you an overdraft fee and you are short by a couple dollars, call and ask for a refund. Those bank fees can add up. If they charge you a maintenance fee, call them and ask for a refund. Then close that shitty ass card and ditch that bank because you don’t need to be charged maintenance fees and you shouldn’t have to worry about it either. There are many other options such as;
Find one that works for you, there are so many. It’s not worth it, and it will save you time having to call a bank to waive a fee, if there're no fees in the first place.
Check your bank statement and credit card statements regularly for any charge that doesn’t seem right, and dispute it. Forgot about a subscription? Dispute it and cancel the subscription right away. Sometimes you’ll even get to keep the service; until it expires, of course. And if they say no when you call, be a Karen. Because you know what? Karen gets what she wants. But don’t be rude, obviously. Just be firm.
10. Thinking that I made enough money to pay my bills.
Boy, was I wrong. Thinking my little retail job was enough to take care of myself and pay off this debt in a reasonable amount of time. It’s all about time here. The longer you have the debt, the worse it becomes.
Getting a second job might be important, to getting this debt down. I calculated that an extra $500 a month would be very helpful. So I got a second job. You might need to do this.
It’s based on your situation. Maybe you don’t need more money and need to budget better. Maybe you need to reduce spending and expenses, only you can know. Just be honest with yourself and be relentless.
I have other blogs where I go into reducing food expenses, and cutting other expenses.
Hello Everyone, welcome back.
So the goal of this blog is to give you ideas on how to save money this year. You might want to save money for different reasons, whether it be to; have more money for the things you do want to do maybe like go out more or take more vacations. Or maybe you're like me and you really want to save money so you can pay off your debt faster. Whatever the reason, you have come to the right place.
In my two previous blogs I outlined how to save money by cutting cell phone bill and other expenses, and I went over all the expenses you should be looking to cut, so go check those two out to see that. The reason for that is because it would be too long of a blog otherwise and a lot of people don't like reading super long blogs, so it's broken up for that reason. Today I will go over food expenses.
Depending on your lifestyle, you might spend way more money on food than you need to. That was sort of the case for me but was actually not as much as I thought it would be, nor as much as people around me thought it was. Solely because I have a super bad eating habit.
A lot of people around me would see me order these super large lunches at work, spending over 20 to 30 dollars each day, and a lot of people thought that was crazy. I even had one person mention that I was broke because I spend too much on lunch. This is one reason why a lot of people are opposed to letting others know about their struggles, and was also not true because no one really fully knows my life. You might know I'm broke because I said it but you definitely don't know why.
Was that a lot of money for lunch? Yes. Was it the reason for me being broke? Hell No! This is because lunch was the only meal I ate each day. At the time I didn't cook, which people knew, and I guess they assumed I bought food for breakfast, lunch and dinner, but like I mentioned before I have a really bad eating habit and I only ate at lunch.
So... let me explain. Most of my life I just couldn't do breakfast. Honestly that gave me some anxiety, because when you have to go to school or places early and you have to wake up early, you know you need to eat because then you have to wait hours before you can; but still I couldn't do it. I would have a stomach ache and feel sick when I even tried. Overtime I got use to not eating breakfast. Then as it relates to dinner because I work in retail for a number of years I begin to push back my lunches until between 3pm to 5pm and then when I got home I was either not hungry or I was too tired to eat. The great news is, because I bought large lunches, I would have some for dinner on the off chance I wanted to eat something and that would be anytime after 10pm. The point is, I ate once a day.
I spent on average $20 a day, more or less, because there were times when I spent 15 dollars, it would really depend on where I bought food from. So $20 for 7 days is $140 a week, which was still a good chunk of change. Most single people would spend about $80 a week, maybe $100 at most; when shopping for groceries for the entire week. So that leaves about $40 each week. Which would be around $1920 for the year. Maybe you can even squeeze out $2000 and that can go towards your bills.
For me I wanted to take it up a notch. If I was gonna now have to not eat fast food as much and probably will have to take trips to the grocery store and cook, I wanted to make sure it was really worth it.
After looking into many options, which included buying pre-made, pre-cooked and prepackaged food, so I didn't have to cook. Eventually I realized I will have to cook and this would be the cheapest way. What I wanted was to spend around $50 a week on groceries, which doesn't happen for other reasons.
For me specifically I realized when I went to the store I would spend more than expected and I would buy too much and ended up having stuff in my fridge that goes bad.
This would be like vegetables, seasonings like tomatoes, peppers, etc you know the types. I would buy too much meat or cheese ravioli which apparently expires, who knew? Milk etc. I also have a unique living situated that affects me, so I don't have a big fridge or deep freezer for excess meat and perishables. You might not have that problem, which for you it might work out. But I realized I created a lot of waste when I do try to cook. I tried buying canned products but I'm not gonna live on canned goods alone obviously.
What seems to be working for me right now, is doing a food subscription service where for a decent price they send you the correct amount of ingredients and you just make it. Be careful to compare lots of options and find the one that cost the least. Right now I'm using Dinnerly, and I'll also leave a link below for that at the end.
There are options like Ever plate, Blue Apron, Marley Spoon, HelloFresh, Freshly etc.. I can always do a separate blog on the different options, just ensure you do your research.
I think as I cook more, I will learn how much ingredients to buy that is right for one person, which is cool that I'm learning that with Dinnerly, however when I went to the store they don't really sell meat like that. The chicken would be a whole pack, shrimp is sold by the pound, beef would be a pack more suited for more than one person. The problem here is that I will not eat it all. I like eating different things every couple of days, If I buy a pack of chicken like that I can cook it, but I'll eat some and leave the rest in the fridge and then one day I'll look and go oh crap it as mold. Or I'll leave it uncooked and then three weeks later it's gone bad. At least I think it is, I'm not sure if it's supposed to be grey.
Either way for me it's too much waste. With Dinnerly they send me like 10 shrimp, ok maybe it's 20, whatever it is, it's enough for me. At first I was like nah... they are bugging if they think I'm gonna spend $40 on this, and then I had to go back and tell them to send me less food.
I started off with 5 recipes and then I moved it to the lowest selection of 3 recipes for 2 people, which is like 6 servings. Don't forget most often I'm eatnig once a day so it last for the week. By the time the last day is here, day number seven, here comes the box again.
Like I said, for you this might now be the best option, but consider ways to reduce how much you spend on food, and not just with coupons but something that's going to make a difference.
For me Dinnerly is working great, and sure there are some days when a recipe is so good I feel like I need more, but that's just my greed showing. On average I spend $30 to $40 on Dinnerly a week and it does last the week. However my spending does not stop there for food. One thing I do now that I didn't do before was buy fruits. I figured since I'm cooking now I might as well go all the way and be healthy. So now I buy fruits and they ain't cheap either, but I try to be smart. I also have to buy milk and water but I've found ways to get water very cheap. You can just drink tap water if you want, but I don't want to. One day I might though.
If you are still unsure what Dinnerly is, it's a food subscription company. They send you the main raw ingredients for you too cook at home. They have different plans for different size families. The ingredients comes in a box, frozen things are in a bag with ice packs inside that box to keep them cool. You get the box the same day it ships in a few hours.
I'm sure you are also wondering, but Dinnerly is not sponsoring me, I did not get paid to say this and they do not know who I am. However if you are thinking about doing Dinnerly, please use my link and help a sister out. I can get money towards my box which helps me save more money, so if you are deciding to try it out consider doing that, you'll get a discount so it will be a win win.
The great part about me doing this box, is that during this crisis with CoronaVirus, I don't have to leave my house. I left once to get fruits but I haven't gone out in two weeks. I'm really happy I don't have to. They leave my box at the door, I get it and whip my stuff down and I'm done. I am so glad I decided to do this, because I tried getting fruits by ordering it through whole foods, amazon fresh, and so many others, and none of it worked for me.
I wanted to go over the remaining ways to get expenses but this is getting long so I'll that for next time. Coming up is credit card fees and bank fees, and you won't believe how much money you get charged for those, and that could be the biggest thing holding you back.
Thanks for reading, see you next time.
So I've been working on clearing off my debt for a while now, with little to no traction except for having a great payment history. Though that is amazing, that was not the goal, your credit will still suck. I needed to pay off my debt not because of my credit really but that would be an added bonus, but because I needed to do it. The reason for this being to get to the next stage of my life and to accomplish the things I wanted and needed to accomplish.
What are these things I wanted to accomplish?
There are many things; two of them being buying a house and kick starting my business. Both of which needed you to have a decent debt to income ratio in order to be approved for loans or anything like that.
Initially I wasn't going to write this blog until I had the results to prove that these tips actually worked, but I figured instead of giving pieces of information at a time, I will give you the over view here and as I do these steps and accomplish these goals, I can write blogs going through how they worked or failed, or where I might have gone wrong.
So yes this is a work in progress but these are the things that I didn't do before and after taking a good look at my finances and what needed to be changed. I believe this will work, or at least help.
Let me preface this by saying; I'm not a financial advisor, these are just my opinions and opinions are obviously not facts. I'm just simply sharing my thoughts and plans and if you believe this can be helpful to you, go ahead and think about it, do your own research and make your own informed decisions.
In order to pay off my bills I needed something; Money.
Yes obviously I need money. Depending on how great your debt is, you might not need that much, but I needed a lot of it. A lot. A lot. I'm going to hold off giving the details of how much I owe right now or even why, because that's a longer story. But back to the point I needed Money.
I have a job that pays well enough I guess, just not enough for what I need to sustain a healthy happy life. I pay my rent and other essential bills, I help my mother in Jamiaca and every now and again have those special/surprise expenses. Nothing crazy, in my opinion.
Since I needed more money I would need to do a couple of things.
For some people cutting down expenses might be all they need, however I needed to do both. Most of my expense are essential, like paying rent, there's no way around that, and by all comparisons my rent is a good price, not for the size room I rent, but I have somewhere to sleep.
When I looked at everything even if I threw out my phone, stopped eating and did nothing but work and pay my rent and bills, it would still not be enough. Obviously throwing out my phone or stop eating wasn't an option but just an example, to show how tight my finances are.
Cutting expenses were the easier of the two to do, minus the things you can't really cut, like rent; unless you know how to do that without being homeless. Let me know. Making more money with the options that I had was way harder than I thought it should be, but it was. I can write a separate blog with all the different avenues I looked into for making more money, in more details. I eventually just ended up getting a second job. A second is a really hard thing to balance when you have a full time job, I literally just started so I'll tell you guys how that is working out. The idea however is to have it for a short time and really keeping your eyes on the price. Getting an additional stream of revenue will do wonders for you achieving your goals.
What I want to focus on though is cutting your expenses, which can help a lot, while you wait for this additional income. I wrote another blog previously about ways to save money on your phone bill, its really about alternative options to your mainstream phone companies that might work just as well, and save you tons.
In this blog I'll go over some of the basic ones and leave the others for more detailed blogs.
You know what these are, they are; the dinners, the movies, out with friends, bars and clubs, whatever it is you do for fun expenses. Though fun is good and you need to have fun and take a break and be happy. You must also ensure that you are not spending too much on these things, and only you can determine what is too much. Consider making a budget and deciding how much is okay for you to spend on these activities. There are options to have fun in ways that was not extremely expensive, but again this is something you will have to figure out. For me, I already don't go out, or do anything, so this is not the time to start.
I will end this blog here and go over the other expenses in a separate blog so look out for that.
Thanks for reading.
At the end of 2019 I didn’t want to start the year with another new year’s resolution and set unrealistic expectations like; buy a house or pay off my debt, get rich. Or even worse things that will have no impact on my life whatsoever like plant flowers or vague things like be happy.
Sure I want to one day buy a house and pay off the mounting debt that I have and of course I want to be happy. However instead of setting resolutions I made plans. These plans were geared towards what I needed to accomplish. Eventually I will do something around all the steps I took to accomplish those goals but I just started, it’s currently March, three months into the new year and I feel like I’m on the right track to getting to the goals.