What We’re Doing With Money Now That Student Loans Are Gone

After Debt Free Follow Me on Pinterest At about this time every month I used to let you know how we were doing paying down my wife’s student loan debt. We’re very happy that the student loan beast was slain last month, but we didn’t announce what we’d be doing next in regards to our money.

Curious minds have sent me emails asking what the next move would be for us financially, so I decided I’d let you all in on our plans. I’d suggest that people who just got out of a massive amount of debt follow a similar plan for themselves, although the specific details might change based on your circumstances.

Time To Secure Our Financial Future

Now that our student loan debt is gone, we’re going to secure our future. We talked about working toward total debt freedom, but our only remaining debt is our two mortgages. We ultimately decided against locking our money up in our house by paying down our low fixed rate 30 year mortgages because it didn’t make a whole lot of financial sense. Mentally, it’d be nice to rid ourselves of our mortgages, but it is a poor financial move for us.

Increasing Retirement Contributions

The first thing we did was increase our retirement account contributions. We were saving for retirement while paying off the student loan debt, but not at the rate we would like to. Now, we’ve upped both of our retirement contribution percentages to 20% of our income before any employer matches. After the matches, we’ll be saving even more! This will be a great start to securing our future retirement.

Beefing Up Our Emergency Fund

Instead of becoming completely debt free, we’ve decided to beef up our emergency fund to 6 months of our expenses. This is a top priority for us and while we might loosen up the budget a little bit, we’ll still be aggressively saving for this goal much like we aggressively worked toward paying off the student loan debt.

Once we’re done with this step, we might relax our budget a bit more, but we’ll still have other big goals to accomplish with our money. We already had about 3 months worth of expenses in our emergency fund, but we feel beefing it up to 6 months in cash will really help us weather any potential financial storms that can be thrown our way. However, we realize something bigger might happen in the future, or a one – two punch of financial emergencies could throw us off our game.

So, rather than just stopping at a 6 month cash emergency fund, we’ve decided to up the game and have another 6 months of expenses, 12 total, in our emergency fund. The second 6 months of expenses won’t be like a traditional emergency fund, though. Instead of having this money sitting liquid in cash, slowly losing value to inflation, we’re going to invest the second 6 months in an investment account and allow it to grow!

Whether or not you call our 6 months of expenses in investments an emergency fund or not, it’s money we’re not planning on touching unless something pretty far out of the ordinary presents itself.

We Won’t Stop There

After we have 6 months of expenses in cash and 6 months of expenses in investments, we won’t start spending all of our money. I don’t think we could ever do that! Instead, we’ll continue investing, boosting our retirement savings and we’ll spend a bit more money on fun things we enjoy.

Of course, we’ll have to reexamine our situation once we reach our 12 month of expenses goal to see if there are other opportunities that we’d rather pursue.

What do you think of our post student loan debt goals? Would you follow a similar path once you paid off all of your non-mortgage debt?

Picture by: Josef Grunig Text added by: Lance Cothern

Are Used Clothes Disgusting Or A Great Way To Save Money?

Would You Buy Used Clothes Follow Me on Pinterest One great way to save money is to purchase used clothes. Some people spend thousands of dollars on clothing every year, and because shopping is a pastime for many people, that number just keeps rising.

One way to combat the high costs is to get comfortable with buying used clothes. I don’t mind wearing used clothes at all as long as they are in good condition. I’ve saved quite a bit of money this way (and by avoiding the mall altogether!)

However, not everyone agrees with me, so here are a few things to consider when talking about buying clothes or even buying used clothes in general.

Lasting Power

One thing to consider when buying used clothes is how long they will last but this can be applied to new clothes too. For example, you can get an entirely new wardrobe at a place like Forever 21 and not spend a lot of money, but how many years will you get to wear them?

Sometimes, it really is worth it to buy new clothes that are high quality because they can be “investment” pieces that will last a very long time. Investment pieces should be things like business attire, suits, dress shoes, etc. Things like mint colored jeans are only going to be in style for a little while, so it makes sense to purchase those from a thrift store or from a store with less expensive merchandise.

Also, when you buy used clothes specifically, one concern is that you don’t really know how used they are or if they were taken care of. For example, you might find a great quality brand a thrift store but if the previous owner didn’t follow the dry cleaning directions, you might be buying something that will fall apart after the first use.

Your Level of Queasiness

I’ll be the first to admit it doesn’t bother me at all to buy used clothes. I love to buy Lilly Pulitzer sundresses and Polo button downs off of eBay because they are nice, high quality brands that I know will last despite multiple uses and wearers.

However, the thought of wearing clothes that someone else had on makes my husband queasy. He just doesn’t like the idea. He also likes to just go into the mall and pick up a shirt and buy it quickly or order one online quickly whereas I love digging through the sale racks and thrift stores to try to find a gem.

He completely acknowledges that I’ve found some great gently used clothes. He’s just not willing or interested in putting in all the effort to search for them in stores that appear (at least to him) to be kind of dirty.

Your Finances

Sometimes, you really don’t have a choice what kind of clothes you buy because of your budget. I’ve totally been there, needing a specific type of clothing for an interview but hardly having any money in my bank account. At times like that, you really can’t be picky about brands and prices and whether or not you like wearing used clothes. Sometimes you just have to do it in order to get to the next step!

So, now it’s time to hear from you. Do you like going to thrift stores or shopping on eBay for used clothes? Does it bother you? Do you think wearing used clothes is a smart move or a not-so-smart choice due to the reasons listed above?

Photo by: exfordy Text added by: Lance Cothern

Be Un-American And Save Money When You Dine Out

Save-Money-Dining-Out Follow Me on Pinterest I absolutely love to eat out. It’s just so nice not to have to clean the kitchen at the end of the day and have someone else make food for you. I grew up in a house where both parents had extremely hectic, high-pressure jobs, so we ate out a lot.

My husband, on the other hand, ate at home every single night growing up. So, over the years, I’ve had to learn to eat in more, and he’s had to learn that it’s okay to go out when you’re tired and don’t want to cook!

Here are some of the techniques we use to save money on those occasions when we decide to treat ourselves to a night out on the town:

1. Scour Groupon

Sure, it can get annoying to get e-mails from Groupon every single day, but sometimes they have amazing deals on restaurants. They even have fun date ideas, like trying out 20 different types of olive oil at a specific restaurant and other interesting food-related retreats. Usually you can get meals for about half off, and so it’s definitely worth it to subscribe to the e-mails.

The best part is if you’re one of those couples who want to go out to eat but never know where to go or can’t make a decision, Groupon will help you to plan your dates!

2. Split an Appetizer and an Entrée

Many of you probably do this already but if you don’t, why not split an entrée and an appetizer? Appetizers are typically less expensive than entrees and so you can save some money by sharing with your other half.

Let’s face it; American portion sizes are pretty outrageous. We’ve become so accustomed to getting huge plates of food, and then we often bring the food home in to-go boxes (which to me, never tastes the same one day later!)

So, in the spirit of being healthier and financially fit, next time try to share.

3. Eat a Big Lunch

In many countries, people don’t eat huge dinners like we do in the States. Actually, in Grenada, locals will eat a sandwich for breakfast, grilled chicken and rice for lunch, and a very small dinner. They stack their eating in the beginning of the day, which is actually great for staying healthy and getting the ol’ metabolism charged up.

So, if you know you want to go out to eat that night, why not eat a big lunch so that when you get to the restaurant, you only need a bowl of soup or a nice big salad instead of pricier chicken and steak?

For me, half the fun of eating out is the company and not having to wash dishes at the end. So, every meal out doesn’t always have to include really expensive entrées. Essentially, when we start viewing going out to eat as a more social activity vs. an food-centered activity, it’s easier to save money.

In addition to the tips above, there are also the old standbys for saving money on eating out. These include ordering water, refraining from drinking alcohol, skipping dessert, and in general, picking things off the menu that aren’t the most outrageous or most expensive. Other considerations include picking items that are in season if you want to have something expensive (like lobster.)

I’m sure there are a few that I’m missing so please share your top tips for saving money on eating out in the comments below!

Financing Furniture At 0% Is For Suckers

Furniture 0 percent financing Follow Me on Pinterest Every time I drive by a furniture store I see signage that says something like “THIS WEEK ONLY – 48 Months 0% Financing!!!” I’m always amazed how these deals are for a limited time only because the stores always seem to be running them. Maybe they just change the length of the financing so that the current sale is actually a limited time offer.

The fact of the matter is, it doesn’t really matter how long the furniture stores are offering 0% financing for. Why? You should never, ever finance furniture. Especially if you couldn’t pay for it in cash today.

Why You Shouldn’t Finance Furniture

Furniture is a consumer good and, as you know, I am completely against consumer debt! Of course, if you had cash to pay for it and decided to finance your furniture to use arbitrage and make some money by keeping that cash in the bank, I’d normally say that’s OK. After all, that’s what I did when I bought my first ever new car.

However, in this particular situation I don’t think financing to use arbitrage is a great idea.

Why Using Financing Arbitrage On Furniture Is A Bad Idea

First off, if you miss a payment on your furniture loan, you’re likely going to pay a very pretty penny. Your interest rate will spike from 0% to 20% or more and that interest will be applied retroactively to when you purchased the furniture. It’s a very expensive mistake to make. That isn’t the only reason though.

If that isn’t bad enough, buying furniture on a 0% promo can destroy your credit. Chances are that your credit line will be the same exact amount as your purchase which will result in your credit utilization rate spiking. This will be a big hit on your credit score because credit utilization makes up 30% of your credit score. I’d hate for a 0% furniture loan to end up causing you to have a higher interest rate on a future mortgage. That’d cost you thousands, if not tens of thousands of dollars.

Furniture can be expensive and furniture stores know that. By dragging out the price of the furniture into monthly payments with no interest, it makes the furniture seem cheaper and might cause you to end up spending more than you had planned.

Furniture stores also know that if you finance over a long period of time, any discount they give would only be a few dollars a month at most. Due to that fact, they’re not going to offer discounts to try to get you to buy. Instead, they’ll waive the monthly payment in front of your face as a better way to afford the furniture.

So How Should You Buy Furniture?

There is a way to get a discounts on your furniture at these stores, they just don’t advertise it. Instead of financing your furniture or putting it on a credit card to get 1% cash back, try offering to pay in cash. Many furniture retailers will offer discounts if you simply pay with the green stuff from the ATM. You might be shocked by how much you could save!

Want to save even more money on your furniture? Don’t buy from furniture stores! New furniture is marked up by huge percentages. As soon as you take it home it will lose a ton of value. Much like a new car when you drive it off the lot. So how else can you get furniture?

Easy – Craiglist!

Take a look on craigslist to try to find a piece of furniture that fits your style. If you do a bit of research to make sure you’re buying quality furniture you could easily save hundreds or thousands off what the original owner paid at the furniture store.

Yes, it might have some scratches, but that’s just fine! You would have ended up scratching it anyway and now you don’t have to worry about it because someone else already scratched it for you and it ended up saving you money!

I want to know about your furniture adventures! Have you ever gotten a cash discount at the furniture store? Have you ever scored an amazing deal on craiglist or a yard sale? I’d love to hear about it in the comments below!

Free Credit Score – Credit Sesame Review

Today I am reviewing a product that I personally use myself. I am not paid to write this review but there are affiliate links in the article. On to the review!

So What is Credit Sesame?

Credit Sesame is a great free tool I discovered many months ago. It is one of a couple websites that will actually give you a credit score for free! Do I have your attention yet?

You fill out your information that is required to pull your credit score and answer the questions to verify your identity and *POOF!* your credit score pops up. They pull Experian’s National Equivalency Score which is not your FICO score but my guess is it is going to be in the same ballpark. Don’t worry though, it won’t lower your credit score because they perform a soft pull and those don’t ding your credit score.

Credit Sesame displays your credit score for you to see and they don’t charge you one penny! They don’t even require credit card information so there is absolutely no way they can charge you. On top of this they automatically update your score once a month. So what else does Credit Sesame do?

Your Credit Score Isn’t All Credit Sesame Pulls

Credit Sesame takes the information from your credit report (which they don’t show you, unfortunately) and build all sorts of neat infographs too! Credit Sesame totals up your debt balances and monthly payments and puts them all in one place and even breaks them out by category (mortgages, credit cards, etc). I would have hoped you already know this information but if you don’t this is the easiest way to do it. It doesn’t break out individual debts but it does have the totals by category.

So What Is the Catch?

Of course if this is all that happened they wouldn’t make any money… They do try to sell you a credit report for $9, but as you know from my post How to Pull Your Free Annual Credit Report you can already pull one copy from each bureau once a year for a total of three credit reports for free. Credit Sesame also suggests other types of loans, credit cards and mortgages that they think can save you money.

Should You Apply for Any of the Credit Sesame Offers?

If they make sense and actually save you money it might make sense. However, you need to do your own homework and make sure you can’t get a better deal yourself. They do get a cut from any product that you end up buying through their offers so keep in mind that they may not have all of the best options available.

In Review, is Credit Sesame a Good Tool?

I think Credit Sesame is an amazing tool if you just want to see what your credit score is and have the common sense to not sign up for anything else they offer. However, I bet a lot of people do click on their other offers. You’ll still likely save some money but I am betting you’d be able to find a better deal elsewhere. For me I just check monthly for my updated credit score and leave so it is a great tool for me.

So if you’re interested in finding out your credit score without paying for it head on over to Credit Sesame yourself! I visit Credit Sesame monthly and enjoy watching what happens whenever something in my credit changes.

Have you used Credit Sesame? Feel free to share your thoughts below!