Category Archives: She Makes Cents (Money Journal)

{Financial Cents} Is Your Way of Thinking Making You Poor?

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Just as slaves born into slavery can’t visualize freedom, we Americans don’t know what it would be like to wake up to NO debt.
-Dave Ramsey, Total Money Makeover

She Makes Cents

Your alarm clock sounds, alerting you that a new day has come. You awake to find yourself owning a car without a car payment, a home without a mortgage, an education without student loans, and credit card(s) with a zero balance. How did you get to this financial freedom? Did you a) win the lottery, b) rob a bank Sugar & Spice style, or c) align your behaviors with your long-term financial goals? Well, the answer to the question depends on whom you ask.
I told a friend of mine that I was working to become debt free and she looked me right in my face and laughed. I mean laughed to the point of tears while telling me how unrealistic I was being. “Everyone has debt”, she alleged. If this were her outlook on financial freedom, I would guess that she could image a debt free life comes only as a result of a windfall. She will either rob the bank or win the lottery. I, however, understand how even the most minute  sacrifices will help me get closer to my financial goals. I have to think beyond the day-to-day and month-to-month if I want to build  generational wealth. Financial expert, Dave Ramsey adds, “We have been sold debt with such repetition […] that it’s hard for people to imagine what it would be like to have no payments”. Debt shouldn’t be the normal status quo and I am not comfortable adopting that mind-set. When the day comes when I wake up with no mortgage, no student loans, and no credit card balance, I know it will be a result of my financial plan and my commitment to it.

Is Debt Normal? Share Your Thoughts…

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{Financial Cents} 4 Smart Ways to Spend Your Tax Refund

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tax refund

 Have you ever gotten your tax refund and thought to yourself, it’s time to go shopping? I have. Growing up, my mom would take a large part of her refund and she and I would go on a shopping spree…even if it meant driving from mall to mall to find a wider selection or hanging out on a school night. That is how I grew up thinking about refund checks… like some sort of magical windfall of new shoes, purses, and dresses. Now fast forward to the present, I now know it’s better to try to break even than to get a fat refund. In reality, if you are receiving a large refund then you are paying too much in taxes throughout the year.

Divide and Conquer Your Money

If you are like me and you know you will be getting a refund of some sort, it is important to find a better way to spend your money than blowing it on a  new tv or handbag. Before you even receive your refund, you should already have an idea of what you may be getting back. Take this time to divide your money, so when you actually received it, you will be less likely to blow it recklessly because you have already decided where it is going. For some, this will take some serious financial discipline, but in the end, it’s worth it! I plan to make my money work for me by using these four categories below to get me started.

        • Fund your funds. If you don’t have an emergency fund of at least $1000, now is the time to start paying yourself.  You should think of this fund like those Chinese finger traps that kids used to pay with- it’s easy to put stuff in and difficult to take things out!  If you already have at least a $1000 Emergency fund, then you should take a percentage of your refund and put aside for your savings account.

        • Pay Down Debt.  This is the time to give your “snowball” effect an extra boost. Putting a portion of your refund toward your debt with the lowest APR (annual percentage rate) or lowest balance will help you pay get out of debt faster and feel good about your accomplishments.  Remember, you don’t have to have thousands of dollars all at once to start getting out of debt. Every payment above the minimum helps you get closer to your goal.

        • Take Care of Things You Have Been Putting Off.  If you have been meaning to call the plumber over to fix that leak you can’t find (raises hands) or get the brakes on your car checked out (raises hands) or even get the shoes with that weird heel repaired (raises hands) then take this time and money to do it.  These are things that people put off because they don’t have the money or time.  You now have the money, so make the time.

        • Prioritize Fun.  When budgeting your money, you have to remember to prioritize for things that bring you JOY.  Set a goal and when you accomplish it, tap into this category and unleash your fun fund.  This could mean buying those shoes you have had your eye on, a spa day, or planning that impromptu weekend with your loved one(s), girlfriends, or even by yourself!  It doesn’t have to be big, but it does help if it is something that brings happiness and drives you to work toward your goal. 

How Do You Divide Your Refund?

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{Smart Money} Is Education a DEBT Sentence?

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Education

There is a quote that states, “If you think education is expensive, try ignorance”. Unfortunately, this quote is true on SO MANY levels. While many people associate the word ignorant with being dumb or stupid, it’s simply the condition of being uneducated, uniformed, or unaware. After graduating from Spelman College, I made both smart and dumb decisions regarding my student loan debt. I was told by my aunt that paying your student loans is a great way to establish credit. I put in an extra effort in paying Sallie Mae, so much that I had it paid more than year in advance. This was smart, ignorant, and sometimes dumb at the same time. It’s smart because I really never had to worry about forgetting to pay the bill. I felt extremely proud of myself for not being another “irresponsible” 20 something. It also revealed my ignorance because I should have been using that extra payment every month to pay down the balance NOT pay it in advance. I ended up paying interest when I could have been slaying the balance, which ultimately shortens the life of the loan. However, it wasn’t until I was in between jobs and not paying on the loan at all because the next due date was a year from then that I started digging a hole that I am still trying to get out of four years later. For one, my interest was accruing at about $8 a day, so a lot of the money I thought I was saving was now been tacked back on to the overall balance. It got worse when after the year was up, I still wasn’t working and I accepted an offer to postpone my payments for a year. That was back in 2011 and after yesterday’s phone call to Sallie Mae, my decision to postpone is still hurting my finances.
I pay about $200 a month for my student loans and recently got a series of letters saying that if I qualify I should sign up for automatic billing, which would let Sallie Mae automatically deduct money directly from a specified account every billing cycle. The incentive you ask? A .25% reduction in my student loan interest…equaling about $50 a month and $600 per year. I called Sallie Mae on yesterday, only to find out that I did NOT qualify. Apparently, if you post pone your loan at ANYTIME over the life of the loan, you lose eligibility for any interest rate reduction. Had I known this I would have been the never postponed my loan, but this secret penalty was never in any of the documents I agreed to.  Looking back I would have rather roughed it out. So I guess the quote rings true. My education was expensive but my then financial ignorance could cost me more in the end.

We would LOVE to hear your thoughts?

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{Money Challenge Remix} How to Save $1300+ On Any Budget

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Okay, so we are just 3 weeks in and I started falling behind for my 52 week money challenge. I decided at the start of week one to try this challenge in reverse. That means I will be saving more money at the beginning of the year and less the closer we get to the holiday season. In my mind, this worked well. In reality, it could work well. So far, though, my results haven’t been all that great and the fact that the fiscal cliff has chopped a chuck out of my check, hasn’t helped. I thought to myself…”Danielle, how can you find a way to honor the challenge in a way that will not hurt you financially?”  Then I came up with the idea to create a “bingo” style format.  At the end of the year, I would still end up with the same amount of $1378 and if I am having a tough financial week, I can pick a lower amount to save.  I crossed off 52 on week one, and I will cross of 5 and 4 to represent weeks two and three.  I decided to share this to maybe motivate someone who may have been thinking about “giving up”.

52 Week Money Challenge from She Makes Cents

{What’s Your Preference} Numerical Order, Reverse, or Bingo Style?

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{52 Week Money Challenge} The Easiest Way to Save $1,000+

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Click here for update and a “remix” to this MONEY CHALLENGE!

Today I was introduced to the 52 Week Money Challenge by a fellow blogger, DLWinfrey from Pretty Girls Rock Dresses (PGRDresses). The challenge is to make a weekly deposit that reflects the number of weeks of the year. For example on week one you deposit $1.00 and on week 27 you deposit $27.00 and so on. It sort of reminds me of when I was little and my big brother would give me money that corresponded with my age ($5.00 for my fifth birthday and $10 for my tenth birthday). This is week one of 2013, so if you are interested, you better put your dollar to the side. I plan on using the money saved throughout the year for holiday purchases and paying down credit card debt. Just think, by this time next year, I could have saved $1,378 just by participating in this challenge. While I don’t know who came up with this challenge, I do thank them. It’s easy, it’s fun, and it won’t break the back.

52 Week Money Challenge

What Will You Do With Your Savings?

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{Financial Goals} Tackle Your Credit Card Debt Today

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Slow-and-steady-moneyHave you ever heard the phrase, “a goal without a plan is just a wish”? Well I’m starting to think that is true. Like many of you, I always have financial goals… some I have shared on this blog and others I have not. As we start this brand new year, I have to ask myself, were my goals of last year actual goals or just wishes for the future? I started reflecting on this the other day while looking at older posts about financial goals. Sure, I can list some of my goals but without a plan, how can I help you as readers follow my financial journey? Isn’t that the point of all of this? I also started wondering how much is too much to share? The answers to these questions will unfold throughout 2013, but for today, getting a plan together is the priority.

The Problem: In my pre-She Makes Cents life, I worked every month and in a short amount of time, I paid off my credit card. Then the bottom fell out and I was using my credit card to simply…live (very honest moment). Long story short, my balance of about $5300 (rounding up) is nowhere near, where it should be. Why, you may ask? Because I was caught up. I started swiping to get the “cash back” deals that I told myself I would pay it off at the end of the month and didn’t. I wasn’t using my envelopes as I should have and I might not have fully realized the my new financial situation.

The Solution: In reading some of my older post, I remembered a period where I locked my credit card up in a safe deposit box.  Initially, I just wanted to see how long I could go without credit card spending.   I wasn’t swiping, I wasn’t living beyond my means, and the balance was slowly decreasing over time. I am a very goal oriented person, so I know adding the component of an end goal date, one of the tips featured in the post How to Make and Achieve Your Goals, will help.  Thinking back, why did I ever take the card back out?

The Plan: If you are in a similar situation, this is how I plan on making this wish into a goal and a goal into a “been there done that”. While I would like to have this paid off in a year, I know I may need cushion. My end goal date for credit card payoff is August of 2014. That means, with my interest rate, I will need to be making a payment of $294.36 per month to be credit card free by next August (check out the credit card payoff calculator at the bottom of my sidebar to figure out yours).  Instead of paying the minimum, which is NEVER a good look, I will pay the fixed rate listed above or more.  Also, whenever there are cash back deals through my bank, I will use the “rewards” to pay down my credit card. In my research, I have heard the advice to pick up the phone and call your credit card company for a reduced interest rate but depending the company, they may label you as a “high risk” customer and close your account, so do your research first. 

How Are Your Eliminating Your Credit Card Debt?

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{To Buy or To Wait} Is it Time to Upgrade My Phone?

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pink gloves

This is a battle on many levels. Droid vs. Droid. Need vs. Is it Really a Need?. Buy vs. Wait. Gloves are up, the bell has sounded, round one has begun! Before I jump in the ring gloves up, let me tell you how I got to myself into internal battle of buy vs. wait. Last night I was unloading the car at my parents’ house how when I realized the front pocket of my CNN hoodie was wet…that’s right, the same front pocket that held my beloved G2 phone. I checked the phone, which wasn’t that wet since I had a protective case, wiped it dry, and settled in at my parents house for a visit. It wasn’t until I looked at my phone 30 mins later that I realized, I had water damage. I immediately opened the only package of rice I could find (black beans and rice), poured it into a ziplock bag, and put my phone in the bag. Sidenote: rice really is a lifesaver and I will forever keep a bag of plain white rice in my pantry for emergencies. I should have left it there, but listening to the advice of others, I decided to try to blow dry the phone…BAD IDEA. My beloved G2 went lights outL. I buried the G2 back in rice…added a box of Caribbean rice for more absorption and a better scent and went to bed. At the point, there was nothing I could do. This morning when I went to check on the phone it appeared to be dead until a few hours ago when it cut back on. I talked to my carrier who told me it could be good to go or it could unexpectedly die again. I have no room for the unexpected when my phone does triple duty as the cell, the home, and the office. What is SHE going to do?

Droid vs. Droid

galaxy-s3[1]

Technically, I qualify for an upgrade that will force me to change my plan and have to pay $149 for the phone. Actually, $149 is a great deal I found online because the phone retails at $599 and it is in the store for $300+. However, the great deal is through midnight and I hate rushing into financial decisions…especially when my credit card balance has been going in the wrong direction since the holiday season began. While I love my phone, it does has some issues that were prevalent before the infamous water bottle spill…like being able to maintain a call without the phone restarting itself. So droid vs. droid. The allure of the new and shiny Samsung Galaxy III appears to be calling my name. It does everything my phone does, but more.

Pros

Cons
G2
I like it. The phone had issues before the water damage
No additional cost. There are still visible signs of water damage
I know how to use it. My current plan could change (this could be good or bad).
I just ordered 2 cute phone cases that I got for a really good deal on Amazon.com I will eventually want/have to upgrade the phone and it was discontinued last year
Samsung III
It is AWESOME! I will have to pay for the phone.
I can use it as an hot spot for internet of other devices My current plan could change (this could be good or bad).
It doesn’t seem difficult to learn since it is a droid too I feel rushed to make a decision before the sale ends at midnight

Need vs. Is It Really A Need

This is a big girl battle. As college student, the need/need? conundrum was something I didn’t consider because I didn’t have a mortgage and credit card debt back then. Is this really a need or a high priority want? My dad seems to believe this is a want that will be a need in the future. If water had never spilled on the phone, would I even be entertaining the thought of a new device? Truthfully, no. Does it make a difference now? Possibly, I mean I am taking time out to write a post about it, so it is something that has my wheels turning. But what about the other things on my high priority want list? I have been looking to upgrade my computer for the SMC office which in comparison to the oh so awesome Samsung III trumps the phone.

Buy vs. Wait

Normally people email me questions, but this time I am coming to you. You have my thoughts, you have the pros and cons, what would you do?

Love to hear your thoughts!

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Email SMC: shemakescents@gmail.com

{Money & Relationships} 5 Money Questions You Need to Ask Your Significant Other TODAY!

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Okay…so a while back I was researching ideas for the Mr.’s 30th birthday gift, when I came across an article about things couples should discuss before taking it to the next level. I read it, thought about discussing it with the Mr., and lost it. Oh well, I thought to myself, until a similar yet more thorough list came across my Pinterest feed. It’s a list of 100 questions from a book called Don’t You Get Married Until You Read This! The Book of Questions for Couples by Corey Donaldson. Let me now add the disclaimer that I get paid to design and write about weddings and other special event, so this type of stuff pops up in my inbox all of the time. This list, however is the most comprehensive I’ve come across, and it includes questions about MONEY. One of the major killer of marriages is MONEY and a couple’s individual and collective attitudes regarding spending, saving, and basic money management skills.  One easy example is Teresa Giudice from the New Jersey Housewives, who once famously said, “her money is her money and his money is her money”.  If you are in a serious relationship, I recommend you talk through these five questions and the others in the book, which I plan on purchasing today (click here for the book)!

Check out some of the Finance questions below

1. What justifies going into debt?
2. What are all your current debts?
3. How should we prepare for a financial emergency?
4. Do you feel that lack of money is a good reason not to have children?
5. At this point in our relationship (pre-marriage), would you be comfortable transferring all of your money into my bank account?

What do you think about these questions?

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{Looking for Money} Simple Suggestions to Start Saving Money TODAY!

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If I walked in a room and asked everyone who is completely debt free to raise their hands and someone did, I would truly be surprised.  It’s not because I’m unaware of the fact that debt-free people do exist, it’s just because I see an abundance of people from all walks of life trying to get their finances in a better place.  I myself am one of those people.  The inspiration for this post comes after sitting down and looking at my finances for this month.  A wrench was unexpectedly thrown into my financial pattern when a mistake was made on one of my checks (hey, it sucks but it happens).  This caused me to take a closer look at my money.  Where is it going and could I save more?

Here’s what I found:

 I started the morning trying to pay a bill online that I have already paid. What can I say, at the point in the day, I hadn’t gotten my Starbucks fix. Once on the site, though I saw something about saving money with a FREE online Energy Audit from GA Power, so I followed the link. It took less than 10 minutes and it showed me how the changes I have made over the past year have saved me money in a monthly comparison of 2011 to 2012. It also provided some suggestions for home improvements that can increase comfort while lowering monthly bills. According to Energy Star, “a home energy audit is often the first step in making your home more efficient. An audit can help you assess how much energy your home uses and evaluate what measures you can take to improve efficiency.”

After the Energy Audit, I checked out my credit card balance (insert sad face).  Just to give a little background, a few years ago I paid off my credit card by paying a set amount ($200 a month) instead of the minimum payment. During that time, I saw the decrease in the balance move rather quickly. Now, after living off of my credit card for  one year + span of not working, then a complete career change with a different kind of salary, my credit card balance hit an all time high. I’ve been working to pay it and the balance is moving in the right direction, but it’s not moving fast enough.  So, I decided to input my information into a credit card payment calculator to find out the timeframe of being credit card debt free.  I added a credit card calculator on the right panel of SMC, but I really like this one from the Consumer’s Alliance because it reveals just how much that credit card is going to cost you, or how you can pay off your existing credit card debt a bit faster.  Now, i have an exact goal date and I understand better how a few dollars can make a big difference in the end. 

Lets Connect!

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{Money Journal} The Pros and Cons to Credit Card Upgrades

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On a given week, my mailbox is flooded with credit cards upgrade offers that I immediately place in the recycle bin. It wasn’t until about a month or two ago that I received two separate offers that made me go hmmm…, maybe I should find out more. So off to the bank I went to speak with a representative about the Limitless Card and the Cash Back card.

The Limitless Card

The first offer that intrigued me was one the limitless card, known to me as the Discipline Tester. I sparingly use my card anyway, so a limitless card would actually help boost my credit score because it eliminates the debit to credit ratio for that card. There are several downsides to this type of card, though. For those who are not careful, the limitless factor could entice one to live beyond one’s means; thus, putting the cardholder further into debt. Another disadvantage to this type of card is the higher interest associated with the card… like say around 22%, which would skyrocket even more if you were ever late for a payment. In my opinion, this card is a NO GO!

The Cash Back Card

A cash back credit card is one that offers a percentage spent back to the card holder. It’s great because you can get money back for things you would buy anyway, like gas, groceries, and sometimes travel expenses. It’s also great, because you can have the cash received applied to your credit card bill, into a checking or savings, or in some cases applied to your mortgage. It’s downside- some people get so caught up in the cash rewards that they spend more than they were initially planning on saving. Therefore, you are basically spending money to get a deal…again, NOT GOOD!

Between the two cards, I did choose to upgrade to the cash back card. I found myself briefly falling into the spending trap of the cash rewards card. On a positive note, the cash back rewards seem to be accumulating much faster than the reward points system of my previous card and I will use that money to in turn, pay down my debt.  More updates to come as I feel how it is working out.

Questions About Credit Card?  Contact Us!

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