Quick trick to pay off debt faster

Check this out… it’s one of my favorites!

If you do this with your 30 year mortgage, you’ll shave 5-7+ years off of your term and save five-figures of money that you’d otherwise pay towards interest. Jay and I have been doing this for years and we are far ahead of where we should be.

Here’s the math. Let’s say your minimum payment is $300

1. Multiply $300 by the goal of 13 months worth of payments ($3,900)
2. Divide $3,900 by the reality of 12 months (1 year) of payments ($325)
3. If you paid $325 per month instead of the minimum $300… you’d squeak out exactly 1 extra PRINCIPLE ONLY payment every year.

Is shaving years off of your loan term worth $25 per month? You decide…but it’s a no brained, mathematically.

If you can’t quite swing that, try rounding up your payment. If your payment is $236 per month, pay no less than $240, $245, or $250+ per month instead. You’ll still see your payoff date approach much quicker than if you did nothing.

2020 is almost 1/2 over. how’s your 401k?

Just a friendly reminder to check your 401(k) as we are now halfway through 2020.

-If your employer matches your contributions up to a certain percentage, make sure you’re taking their money. Wages are already low enough…don’t leave their free money on your table.

-Expecting a raise? Increase your contributions. If your raises are percentage based (example, 3%)… take at least half of that and add it to your 401k.

-Thinking about switching jobs? Make sure that your investments are fully vested. Your employer may have a vesting schedule that requires you to stay there for X amount of time before you keep 100% of their contributions.

-Double check that your investments fit your goals. Planning to retire soon? Get your money out of the stock market and into lower risk bonds.Not retiring anytime soon? Aim for growth and be aggressive.

-Is your income greatly outpacing your expenses? You can contribute up to $19,500 towards your retirement per year. Aim for it.

you can save $600 by xmas eve. Here’s how.

Starting today, if you saved $20 each week.. you’d have OVER $600 in savings by Christmas Day. Guaranteed.

Jay and I stated saving for Christmas 2020 on New Years Eve 2019 and we’ve got $529 saved specifically for holiday cheer as of this morning.

You don’t have to apply this tip solely for Christmas… give it a try for ANY fixed event that you can predict by estimating how much you want to save, and dividing it by the number of weeks until its due:

-Vacations
-Annual bills like vehicle registration, Amazon Prime, etc
-Charity
-Short term goals

…etc!

So, how’s your holiday fund looking?

do you have life insurance?

Don’t plan on a GoFundMe funeral to bury you or your loved ones. Talk to somebody about life insurance.

Jay and I got life insurance (enough to cover our mortgage + a year of salary & final expenses) when we bought our first home. We probably should have got it before then, but better late than never, right?

When we bought the new house, we increased our coverage to protect us. When dad died, we increased it again, because we both saw the impact insurance can have financially on our loved ones.

Sometimes life teaches you lessons without telling you what chapter to study.

So, this is me telling you to GET LIFE INSURANCE on you, your significant other, ya kids, ya mama, everyone.

If you need a life insurance agent recommendation, let me know.

“I’m tired of always feeling broke. What do I do next?”

When I look back at my Facebook memories, I notice all the various declarations/attempts to become debt free that I posted starting in 2011 before I actually DID it in 2016. Hindsight is 20/20, and the reason I didn’t succeed for so long was that I had no plan.

“It’s difficult to aim for a target you clearly can’t see.”

In 2016, I had two epiphanies that I needed to change my finances (or else). The first one was feeing guilty, yet slightly relieved that our elder dog passed away and we no longer had to spend $140+ a month on his medicine because we were barely affording it. The second wake up call was when I got into a fender bender and didn’t have the $500 insurance deductible in my account.

We had a cute house in the suburbs and tow nice cars, but didn’t have $300 to our name.

Enough was enough. I startling researching budgets and financial plans, and finally found the answer I always needed: a step by step breakdown.

After that, my 4 year debt freedom journey began. I paid off $60,000 of debt on our $60,000 salary, sold a car, our credit scores skyrocketed, and I finally found financial freedom that I never had before.

Getting control of our finances was game changer in our life and a distinct “BC/AD” moment in time. Anyone who was around to see it, can’t deny it.

If you’re tired of feeling broke, but don’t know what to do… you’ve GOT to simply start, and this photo is a great place to begin.

“We have X dollars and Y bills. What happens now?”

More than once in my adult life, I’ve had to sit down and have this conversation with myself and/or with my husband. In my household, we agree that we have “four walls” that we must protect:

1. Housing
2. Utilities
3. Transportation
4. Food

Did I ever tell you about the “doomsday list” that Jay and I came up with in 2018, following my sudden job loss? Did I ever tell you that we revisited the list three weeks ago just in case we needed to use it again?

In 2018 when our household income dropped by 60% with no notice (right after we bought a new house), we had to evaluate what our strategy was. Morally, I am not a person who will borrow money from family/friends, and I also avoid taking on credit card debt if I can help it. So, here’s our action plan to protect our “four walls”.

1. We will end casual spending (things outside necessity food items, and gas)

2. All savings account allotments stop (no more savings for the holidays, vacations, short term purchases, vet bills,etc)

3. All membership services stop (Netflix, Costco, Amazon, etc)

4. Air conditioning turns off (we’ve got portable and ceiling fans)

5. Once we’ve done steps 1 – 4, we’d start draining our savings account to maintain the bare minimums. At this point, we may consider taking on short term credit card debt–but only if we KNOW how we’re paying it off, because credit card debt is actually a brand new payment/expense mixed into the already tight budget.

6. Once we get towards the 20% mark of our savings… we’d sell one of our two cars (We go back and forth on which one. My car is worth much more, but his car would sell faster and already has less useful life in it. Either way, one is getting chopped.)

7. We’d then sell our rental house. This one is low on the list because landlords can’t evict tenants due to a sale, and our buyer pool is larger on a vacant home than it is on a tenant-occupied one. As long as they keep paying, they can stay until the lease ends.

8. We’d then begin selling items of value from the house. The riding mower, grill, TV’s, furniture, etc.

8. We’d then consider the feasibility of selling our own house (can we qualify for an apartment somewhere? Do we have a place to go?)

9. By this point, we should be scraping the bottom of our savings account…leaving just enough to cover deposits on a rental somewhere.

10. Our life should be completely downgraded, all the while…maintaining our four walls of life. If we are still struggling, we will consider hardship withdrawals from our 401k’s/retirement funds…but the goal is to break even by this point.

Personal finance is “personal”. My job is volatile, but my husband’s been on his for 8 years and has stability. Thus, our doomsday list may not look identical to yours, but ultimately… we all have the same “four walls” of life to protect.

Whether you’re already a stage or two into your own list, or you are financially secure right now, it’s always important to know what your next move will be.

Don’t “prep” by hoarding TP and forget about “prepping” your budget, too.

5 tips to avoid being “finessed” during the upcoming economic bailout (the checks being mailed to you).

1. There are 329’ish million adults in the USA. The government isn’t going to contact you via text, Facebook, email, or phone calls to “sign up”. Uncle Sam ain’t got time for that.

2. The government operates with taxpayer funded money (simply stated). They are not going to charge you a fee, ask for a gift card, or conduct a two-way transaction with you.

3. If you’ve ever mistyped your account number when filing your income taxes (like I have), you know that it’s a pain to get the IRS to correct it. They aren’t going to call you to “double check” your banking information.

4. Unprecedented is the word of the month. If somebody has a grand idea to cut losses specifically for you that the entire globe is feeling, be wary. Google Bernie Madoff, for example.

5. Be your own financial advocate. We are fortunate enough to live in a time period where the answer to EVERYTHING is online. Check your sources. Be aware. Pay attention. Dispose of the “better safe than sorry” mentality and adopt a “better safe than insolvent” one.

PSA: Does somebody know where the will, life insurance, passwords, and other items are?

My father passed away suddenly in August of 2019 at age 61.I got one day to properly mourn (which was 2 days before he died) until I found myself standing in a large pair of shoes at age 28… his.

At that moment, my job became helping my mother rebuild her life and finding a “new normal” without the man she’d spent 40 years with. For Adrian, that meant making well over 100 calculated decisions very quickly, before dad was officially pronounced dead.

Only Jay knows this story, but shortly after the doctors told us that his stroke was fatal, I turned to my husband and we mutually understood that we were now on the hook for mom’s mortgage payments (alongside our own life expenses) indefinitely. My father was the breadwinner, so his passing ended his salary and his Marine Corps pension. But, the bills don’t care. They’re still due on the 1st. Oh yeah, and somebody would have to pay for his final expenses, and the medical bills that resulted from a 4 day long ICU stay, etc. That burden fell onto us because we realized we were probably the only people somewhat capable of doing it.

But my father was a smarter man than that. He knew better.

His death was completely random and unplanned even to him, but he planned for it. Three hours after he died was probably the single most “prideful” moment I have ever had for my father. We got home from the hospital and I gained access to his files where we found life insurance policies that we didn’t know existed, vital folders literally labeled with their exact contents, and every other document we needed to notify the VA of his passing and get death benefits to kick in. It was right there, clearly marked, easily accessible.

I was privileged enough to witness my mother’s face when she realized that everything would be okay. You don’t know how that moment felt.

In a lot of ways, I run my household. I solely manage our budget, and make all loan, investment, and insurance decisions. I try to include my husband, but he prefers to yield the floor to me. However, none of these decisions will do him any good if he can’t find them.

So, on the first day of this COVID-19 social distancing initiative, I broke out my filing cabinet and fireproof safe, sat down on the living room floor with Jay, and we organized our documents together. I got revised copies of all active insurance policies, clearly marked any crucial paperwork, shredded out-of-date things, and re-evaluated our life insurance needs. I showed Jay crucial documents that he’d need to sell our house, and where to find it. I gave him a plan.

Jay and I are both betting that I outlive him, but if I don’t… the last gift I want to give him is the same gift my father gave my mother… certainty.

If you’ve got some free time this weekend, lay out your plan. Don’t take the location of the policies, paperwork, and passwords your family needs to survive to the grave with you.

Be the hero they need you to be through life, and death, alike.

Recession is coming. Are you saving money or spending it?

For half of the decade, they’ve been calling for a recession. Not 1929 or 2008 style, but a standard cylindrical cooloff.

I never got spooked, however, last winter I noticed large companies were gearing up for an economic downturn. So I started doing the same to my own personal finances and started stacking my cash in my “recession” fund.

This week, I’ve heard of hundreds of people getting laid off. Sectors of industry are canceling plans, and the federal government just threw a trillion dollars into the stock market to prop it up following the coronavirus pandemic.

I’m not going to pretend to be one of those people who acts like he saw something before anyone else or rubs in your face that if you invested in Apple a hundred years ago you’d be rich… but I’m speaking practically.

You’ve still got time to save money.

I’m not sure what my “goal” is, but I know we have over 6 months of expenses in this one account and I’m aiming for a year. I’m not counting out 401k/investments in our scenario, but rather…just the liquidity we’ve got on hand in a moments notice.

Don’t forget… If I hadn’t been paying off my debt for four solid years and cutting our expenses as frequently as possible, I wouldn’t have as low of expenses as I currently do (as to why I can save so rapidly), but I also have a job where I could suddenly make $0 next month.

I depend on rental income to pay the mortgage on my old place, and the friend who rents my basement to help cover my current mortgage. So, I’m stacking cash because my stability is somewhat dependent on three other adults (besides my husband) outside of my control, and the continued stability of my industry.

Your story may not be the same as mine, but neither are your risks.

Moral of the story. If you aren’t considering streamlining your expenses and saving as much as you comfortably can, I encourage you to think about it.

Don’t hoard toilet paper. Hoard cash.

Can’t afford to make an extra payment? Do this, instead.

Mortgage rates are the lowest they ever been in American history right now, but interest paid is still almost always money lost, right?

Here’s the fix. I have known the tip of “make 13 payments” for ages, but I’ve never had an extra payment just lying around to pay as a lump sum, so I took the same wisdom and cut it down into a manageable size for my own budget.

A x 13 = B.
B divided by 12 = C

Let’s do the math together. So, my current mortgage payment is $1075 per month. But if I pay $1,164 per month ($89 more), I’ll essentially be making 13 payments per year instead of 12.

$1075 x 13 months = $13975 paid per year.

$13975 divided by 12 months = $1,164 that needs to be paid each month to equal 13 payments per year.

Doing this has cut years off of my term, helped me build a ton of additional equity, and pay less interest…all while not really feeling like I’m doing anything. Make sure you specify for the extra dollars to go to your “principle loan balance” only. Most mortgage companies will apply it correctly, but this cuts out any funny business.

You can use this equation and logic with your mortgage, car payment, or any other bill you’ve got. If you REALLY want to get cute, round it up. Instead of me paying $1,164… if I rounded up $1,175 or even $1,200…I’d see my balance fall faster.

Do what you gotta do to secure your financial security, fam.