A Personal Finance Blog for Regular Folks
One of the biggest questions many have when it comes to financial planning has to do with how much life insurance they need.
There are some rules of thumb, such as getting seven times or 10 times your yearly salary in coverage, but, really, how much life insurance you need comes down to your personal financial situation, and what you hope your life insurance will accomplish.
[Read more…] about How to Figure Out How Much Life Insurance You Need
As you know we are living off of one income now. It’s been a bit different but I think we’re doing well so far. One thing we’ve done to help stretch my paycheck is to cut back eating out so often. I didn’t think we ate out too much before the income switch but now I can see that we had a budget leak that could have been more savings for us. And we’ve discovered there are more benefits than saving money!
We were already in the habit of making dinner at home and having family time together. It was the weekends when we usually ate out. Saturdays were probably the worst culprits. We would get up and go to our favorite diner for breakfast. Then as we’d go and take care of things during the day we’d find lunch somewhere. This would also tend to be pretty unhealthy. I’m talking mall food here. Afterward we’d be too beat to make dinner so we go out for dinner or order in. Three meals may not seem like a lot but it would drain my wallet pretty quick! I would usually go to the bank on Friday to take money out for the weekend and often I’d find that I was broke by Sunday!
And that was just eating out on Saturday! I didn’t even get to eating out on Sunday or during the week. Sundays would usually be breakfast and lunch out again. During the week we usually ate in but if we were tired we would easily get food out!
Overall we’re really happy with the fact that we have been eating at home more.
It’s a shame it took our going to one income to take advantage of all of these benefits! Imagine what we could have been saving when we had two incomes?!? Or how much healthier we would have been eating?
We haven’t completely given up eating out. We still have the occasional pizza night. And we’ll get together with friends every now and then at a nice restaurant. But eating out less has definitely benefited our family in more ways than we would have thought!
There may come a time when a financial problem comes up between you and a loved one. Maybe it’s a late payment that runs up some fees. It could be an old debt that rears it’s ugly head again. Perhaps someone did a little too much damage with credit card spending? Whatever it is the issue will have to be addressed so a solution can be figured out.
Here are some things to consider when confronting your loved one about their financial management problems:
Don’t blame or accuse the other person for the problem. Arguing and blaming doesn’t help. When you lay blame and argue it’s like telling the other person that you’re right and they are wrong. It may be that’s the case but nobody likes to hear that. Start off a discussion like this and you immediately turn your loved one off to what you are saying. Remember the situation has already happened. The point now is to figure out how to solve it.
State the facts. Talk about what has actually happened. Try not to get your emotions involved. This means no name calling. It also means talking about the situation at hand and not bringing up any past discretion. The facts will help you find a resolution.
Talk to your loved one about how the problem arose. How did it get to this point? Ask what they think can be done to solve the problem. Offer your help. Suggest some ideas of your own as a solution. Assure your loved one that you are their for them and that you are in this together. This leads us to…
Take accountability for the problem with your loved one. “But it wasn’t my fault” you might say. Maybe not directly but by sharing in the responsibility you let your loved one know that you are there to help them. The fact that this person is a loved one makes their pain yours as well to some extent. Take that extra step with the olive branch and assure them that together you’ll figure out a solution.
Remember you want to open the person up to discussion. Getting into a financial mess is embarrassing for most. Your loved one probably knows they screwed up somehow so they don’t want to be reminded of how bad a blunder it was. Listen to them. Work on finding a way to both fix the problem at hand and prevent it from happening in the future.
Hopefully you don’t have many financial problems with loved ones in your life. If you come across any, these ideas should help you work things out.
photo credit: timsamoff
I was in the hole for thousands over a few credit cards.
I was getting better at paying on time and I was managing to pay more than the minimum due. I was also transferring balances to lower and zero interest rate cards (which had it’s ups and downs). The totals were chipping away but it still felt like it would take forever to pay my credit debt off. At the time I was living on my own supporting myself with a full-time job. What I could save I did.
Then something interesting happened – I lost my apartment.
Seems my landlord wasn’t really supposed to be renting his basement out to tenants. Some funny NYC law that said he wasn’t zoned for it. Great. I had a few dollars saved but really I was still living paycheck to paycheck. If I went and found a new apartment, which would be more expensive and involve moving costs, real estate fees, etc…, I would be completely tapped out and would have to add more to my credit cards to get by.
Fortunately my parents came to the rescue.
They still had an extra room and they were ok with me moving back in with them. Now understand, I love my parents and they were great in helping me out but the last thing I wanted to do was move back into my parents’ place. But I didn’t really have many better options either. So I managed to cram all of my stuff back at their place. My original idea was to stay as long as needed to save up enough to move to a new apartment (I wasn’t paying rent now so I should have enough in a few months or so). It was not fun being back at the ‘rents. All the freedom I had grown accustomed to were gone. But I needed time to save.
After the first month I realized something – by not paying rent or electricity I was able to save a lot more than I had been. By the end of the second month, seeing how my bank account had grown, I decided to put a new apartment on the back burner. I was gonna suck it up and stay at my folks until my debt was gone!
What was the point of moving back out and being in the same debt situation?
With my new resolution I started to pay much more than the minimum on my credit cards.
Soon one card was paid off. Then another. One day I was finally able to get rid of all of my credit card debt! I felt like a slave that had just been freed!! No more of that debt monkey on my back. I was able to look at all of my bills and accounts and finally say that I had a positive net worth! This was not just a financial victory but a huge psychological victory!
I started to save for real. Not saving to pay debt but saving for me. As tough as it was living with my parents I realized what freedom really was. Sure I couldn’t live the same way under my parents’ roof as I did on my own, but freedom meant being free from debt (or free from broke)! It took me being thrown out of my apartment and moving back with my parents to realize that.
Do you have a debt story? Let me know in the comments
