Financial Advice

I've contemplated many times how to write this post as I'm never quite sure how much detail to go into.  I love reading articles about how people got out of debt, however, most of those are written by people who make a decent amount of money so they obviously have more to work with.  I have a bit of a financial background (BS in Finance) but not much of these tips come from what I learned in the classroom😉.  When I started this, I originally had more day to day budget tips as well, but it was way too much so those will be in a seperate post later this week or next week.  This is more long-term financial advice.

I'll start with why this has been such a difficult post to put together and my #1 tip:  Trust the Lord and pray.  To be honest there have been some months in the last year when Howie was out of work that the only explanation I have for how we even had money in the bank is the Lord providing in various ways through the generosity of others to providing side jobs, raises, etc.   

My 2nd tip is cutting the cord!  As a married couple we've never had cable only Netflix, Hulu, and an antenna to get local channels.  All the shows we watch are on those, and while I might have to wait awhile for the whole season to be on Netflix, it's worth it. 

My 3rd tip is using the snowball effect to pay off debt. This comes from Dave Ramsey, and for me it's really more of a mental thing.  We started with my smallest student loan, and paid as much as possible, it was such a great feeling to have one of them gone.  I had 4 total, and will be making the last payment next month! 3 years ahead of schedule!

My 4th tip is to have a plan for extra money.  I prefer to actually write it all down, where literally every dollar is going to go.  The biggest chunk we get is our tax return, and the first thing we do is tithe 10% of it, then build up savings to whatever our goal happens to be, then we use a large portion to pay towards debt. Lastly, we look at what we have planned through the year, and set aside what we need for big things like vacations and birthdays; this also keeps us from needing credit cards.  

My 5th tip is to pay your car insurance 6 months at a time when possible.  I started doing this years ago. Unfortunately, I was using a credit card, because I didn't have the cash set aside and I ended up paying more in interest than I was saving.  Now I have 10% of each paycheck directly deposited into our emergency savings account, which we keep at a certain minimum, and the extra that builds up on top of that is enough to pay the car insurance every 6 months.

My 6th tip is one I've heard for years which is whenever you get a raise, increase your percentage that you contribute to your 401k. This year I got one of the biggest raises I've ever gotten at almost 4% so I increased my 401k contribution from 4% to 5% and plan to do that each year.  The good thing about this is it's not money you're used to seeing in your paycheck, so you don't even miss it.

My 7th tip and last tip is NO credit cards.  I learned this the hard way, I got my first credit cards in college, and it was a great way to pay for books, and it was interest free at the time.  Fast forward to when Howie and I got married; we ended up having to use a good bit of a workman's comp settlement he got to pay off all my credit cards😞 - not a good feeling at all.  The good news is we haven't used them since, and will avoid them at all costs!  If you can't afford to pay cash for it, you can't afford it! That's why an emergency account is so important.  I feel like this last statement might come across pretty harsh, but when you really think about it, there's quite a bit of truth there.  

What is your best financial advice?