Sweet Frugal Life

Being Frugal Doesn't Make Life Any Less Sweet

Questions To Ask Yourself Before Spending Money

By: Sweet Frugal Lifecomment

Stop spending money by asking yourself these important questions.

You may or may not believe this, but….it’s true….I am a recovered shopaholic.  I use to go shopping every single day, buying everything and anything that caught my eye.  After years of money mistakes, I finally began to change my ways.  It took time, a lot of ups and downs, but I was able to overcome that shopping addiction.  A lot of the change came from learning to ask myself some important questions before spending any money.  These questions have made a huge impact on my life and spending habits, and I think they can help you too!

Asking yourself these important questions before spending money gives you time to pause and reflect so that you can make the best decisions for you and your finances.

Below are the questions I recommend you ask yourself before making a purchase.  Let me know if there are any other questions that you would add to this list!

1.  Do I need this?

The first question you should always ask yourself before making a purchase is, “Do I need this?”  Now, keep in mind that there is nothing wrong with buying things that we want, as a matter of fact it’s healthy to buy your wants occasionally.  But, if you are trying to cut back on spending money, it’s important to truly focus on buying your needs.

So, what is a need?

Needs are the items you absolutely have to have in order to live and survive each day.  Things like, shelter, food, transportation, etc. will usually fall under the need category.

If you determine that you don’t need the item, maybe consider starting a sinking fund so that you can come back and by it another time.

2.  Can I afford this?

The next question to ask yourself before spending money is, “Can I afford this?”  Look through your budget to determine if you have enough money saved and available to make the purchase.  If you will have to make the purchase using a credit card, then it is probably not a wise time to buy it.

Instead, make a sinking fund (which is like a savings plan) in your budget so that you can save up enough cash to purchase the item down the road.  Saying “no” in the moment, doesn’t always mean saying “no” forever.

3.  Will I love/use this for years?

Always consider the long term investment when you are spending money, if you are going to spend money on something, it should be something that you will love and use for years to come.  

True, most purchases will bring instant joy, but not all of them will keep you happy for much longer than that.

I’ve found that when I stop and think about how long I will actually enjoy something, I’m able to make much better spending decisions.

4.  Will buying this bring me closer to or further away from my big goals?

One of the questions that helps me the very most when I’m considering whether to make a purchase or not is to ask myself if buying the item will bring me closer to my big life goals or further away from my big goals.

I have big goals for my future, like I’m sure you do as well.  I want to help my husband retire early, pay cash for my kids to go to college, and provide an inheritance to my children.

When I am considering buying something I will usually ask myself something like, “Would I rather buy this TV or use that money to help me get closer to my goals?”  This question always helps me remember the big picture and puts everything into perspective.

Sometimes, you might rather buy the TV (or whatever it might be), and that’s ok!  But, always give yourself that moment to reflect on your goals before spending money.

5.  Could I buy this item for a lower price?

Maybe you have found something that you truly need/want/love more than anything, and are positive that you want to buy it.  Ok!  Go for it (as long as it’s in budget!)  But, before buying, take a few minutes to brainstorm some ways that you could buy that same product for less (because we all like more for less….right???).  For example, you might be able to:

  • Buy it cheaper at a different store
  • Barter for the item to get the price lowered
  • Borrow something similar from a friend
  • Buy it gently used on Facebook marketplace or a thrift store
  • Use a cashback app or store rewards program
  • Wait to purchase it when it goes on sale
  • Repurpose something you already own to be similar

The extra work it will take to find a lower price is always worth the extra effort for me!

6.  How often will I use this?

Be honest with yourself about how often you will actually use the item you want to buy.  Will it only be used a couple of times and then sit at the bottom of your closet?  Or will it be pulled out over and over for many years to come?

A few years ago I was POSITIVE that I wanted to buy a rice cooker.  We eat a lot of rice, so I thought if I had a fancy-schmancy cooker then it would make my life much easier.

Well.  I was wrong.

As it turns out, I like the rice cooked over the stove much more than rice from a rice cooker (whodathunk!?).

So, the rice cooker sat in my pantry for years, until I finally donated it.

If I would have taken a little bit more time to think about whether I would actually change my regular routine and get out an extra appliance to make rice, I probably would have realized that this is an item that wouldn’t be used very often.  And, I would have saved myself some money.

7.  How am I feeling right now?

Take a minute to reflect on what emotions you are feeling in the moment.  Try to determine if any of those emotions are the cause of you wanting to spend money.  Many times we will spend money because we are bored, hungry, stressed, or anything in between.

If you emotional spending is a common occurrence in your life, make sure to read my article:  How To Stop Emotional Spending for a few tips on overcoming this problem!

Once you focus on the emotion you are feeling in that moment, you will be able to decide if it’s your emotions telling you to make the purchase….or your logic.  I recommend making purchases based on logic!

8.  Could I use this money for something else?

Another important question to ask before spending money is, “Could I use this money for something else?”  It’s always important to be aware of your current needs so that you will know if you need to be spending your money on something else.   

For example:

  • Do you have debt you need to pay off?
  • Have you been contributing to retirement?
  • Are your sinking funds full?

These might (not always, but might) be better uses for that money….rather than what you want to buy at the store.

 

In Conclusion

Taking the extra time to ask yourself a few questions, instead of instantly buying the first thing that catches your eye will save you a lot of money.  I know it has saved me time and time again!  Be thoughtful with your spending, consider each purchase, and make the decisions that will best help you now and in the future.

 

 

Related Articles:

Purpose of a Budget

How To Stop Emotional Shopping

How To Stop Living Paycheck To Paycheck In 6 Steps

 

 

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Purpose of a Budget…and why you need one!

By: Sweet Frugal Lifecomment

All of the reasons you should make a budget.

If you’ve been following here for a while you know that I preach budgeting to everyone and anyone who will listen!  I truly believe that every single person should have a budget, regardless of how much or how little money you earn.  Not sure what the purpose of a budget is???  Well I’ll tell you today, so keep reading!

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The Purpose Of Budgeting

I’ll be honest with you….years ago I did not believe in budgeting.  I felt like it was something that was only for families that were pinching pennies….and my family seemed to be getting by just fine without a budget.

But then my entire thought process changed after I randomly picked up Dave Ramsey’s Total Money Makeover in the library one day.  This book opened my eyes to how our finances could be, if we only adjusted some of our habits….so we started budgeting.

It honestly took about 5 years of trying, failing, giving up, trying again, etc. until we got to a comfortable/confident place when it comes to the budget.

One of the things I learned through this experience is just how much a budget can change your finances.  Before we started budgeting, I really thought that we were fine the way we were spending, but once I had that budget to hold me accountable we were able to find so much extra money….and instead of spending that money on stuff (like the pre budget days) we were able to spend it on things that were much more important to us, like travel, retirement, saving for a car, etc.

If I can change my stubborn ways, anyone can!

1.  A Budget Prevents Overspending

One of the most important purposes of a budget is that it prevents overspending.

If you take the time to make a budget and give every dollar a job, a category, then you will be much less likely to impulse shop and buy things just because they caught your eye (may or may not be talking about myself here….).

Try to get into the habit of checking in with your budget daily.  This daily check in is so important to make sure you are staying on track, and to remind yourself of your money goals.

The days I don’t check in with my budget are the days I tend to impulse buy, because I convince myself we have enough money in the budget.  However, if I take the time to look at the budget then I am more aware of my spending and am able to control my overspending impulses.

2.  Budgeting Reduces Stress

It’s true!  A budget can/will ease your financial worries resulting in a less stressful life.  If you are budgeting with sinking funds (which I recommend!) then you will always be prepared for what’s to come, resulting in less stress.

For example, every year I make a sinking fund for Christmas expenses.  I save into that sinking fund with each paycheck, then when the holidays come along I can buy Christmas presents, Christmas decor, and any other items I need/want for the holidays using the money I have already saved, which completely eliminates financial stress during the Christmas season!

3.  A Budget Helps You Reach Your Goals

Another important purpose of a budget is that it will help you reach your money and savings goals. 

Want to save for a vacation, but money keeps flying out the window???  Make a budget!  Calculate how much you are spending in each area, look at the ways you can cut those costs, and then budget a sinking fund for vacation!  Yay!

Yes, making a budget and cutting expenses will require some sacrifice on your part, but with consistency you will be able to reach those important goals. Budgeting has a way of helping you focus on your priorities.

4.  Budgeting Helps You Spend Money Guilt Free

Most of us like to spend money….but we don’t like the guilt that often comes after spending money.  And this is exactly why I love a budget!  A budget gives you permission to spend money, guilt free!

Don’t believe me yet?  Check out these two scenarios:

Scenario A:

Allie wants new living room furniture.  She has her eye on a couch at a local furniture store and notices it goes on sale one weekend.  Allie excitedly runs to the furniture store to buy the couch.

She doesn’t have enough money to pay for the couch in full, but the store offers her to make monthly payments for a year to be able to buy it.  Allie buys the couch and has it delivered.

The monthly couch bill begins arriving and Allie starts to panic.  She didn’t realize how tight the monthly payments would make her finances.  The stress of paying this bill, along with all of her other expenses begins to set in and she feels guilty for making this purchase in the first place.  She realizes she acted on impulse, and doesn’t quit have the funds available.

Scenario B:

Brooke also wants new living room furniture.  She looks at a few different pieces of furniture at multiple stores and writes down their averages prices.  Brooke then makes a sinking fund category in her budget to help her slowly save the money she needs to buy her new couch.

Over the course of 6 months Brooke deposits money into that sinking fund, using her budget.  After 6 months her sinking fund is fully funded and she excitedly goes into the furniture store to purchase her new couch.  She is so excited to purchase the couch with cash, and pay in full.

The couch is delivered and Brooke is able to enjoy it for many years.  Brooke has zero guilt about this purchase because she knew she already had the money saved in her budget, and there are no surprise bills.

Do you notice in these two scenarios how they both have the same goal, and they both were able to achieve that goal, but one came with guilt and stress, and the other only came with joy??  A budget is so freeing!

5.  A Budget Helps You Get Out Of Debt And Stay Out Of Debt

One of my favorite things about my little ol blog is getting to cheer you on as you reach your debt freedom goals.  There is nothing I love more than receiving a message from a reader telling me how proud they are of themselves for being able to pay off their debt thanks to making a budget.

Budgeting helps you plan your finances in a way that makes debt pay off a priority.  Being mindful of your spending, and prioritizing how each paycheck is spent is one of the most important steps to paying off debt. 

If you are wanting to pay off debt, I recommend making a budget and also reading my article How To Pay Off Debt With The Debt Snowball.

6.  Budgeting Helps You Understand Your Spending Habits

One of the most important parts of frugal living is being able to understand your spending habits, and a budget will show you exactly how you spend your money; including the good and the bad.  

When you sit down to budget each week you will be forced to see the categories you consistently overspend in.  Having this knowledge will give you the tools and motivation you need to reduce your spending in these areas.

When I first started budgeting I had convinced myself I was spending a certain amount of money on groceries each week.  But, after making a budget, I realized the cold hard truth.  I was spending so much more than I had realized.  Once I knew that this was a category I was overspending in, I was able to teach myself some new skills to reduce our grocery spending.

7.  A Budget Gives You Control Over Your Money

Do you ever get to the end of the month (or week) and wonder, “What happened to my huge paycheck I just got???  Where did all of my hard earned money go so quickly”?

I’ve had that thought, and it’s not a great feeling!

Do you want to know what my solution was?  Yep!  You guessed it, I needed to make a budget.

A big purpose of a budget is to help you have more control over your money, so that you don’t have to wonder where it all went at the end of each month.  You’ll know exactly where every dollar was spent, because you made a plan for those dollars and you stuck to the plan.

Want To Start Budgeting?

Have I convinced you yet that a budget is life changing (cause it totally is!).  

If you are ready to make the jump into budgeting, but aren’t sure how to start…..don’t worry!  I have you covered!  First, I recommend you check out my full budgeting tutorial here:  Zero Based Budget.

And then download my free budgeting cheat sheets.  They will walk you through everything you need to know to be able to make your first budget.  You got this!!!

 

 

Related Articles:

7 Simple Ways To Get Your Budget Back On Track (for good this time!)

How To Find Extra Money In Your Budget

Tips For Budgeting As A Couple

 

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7 Simple Ways To Get Your Budget Back On Track (for good this time!)

By: Sweet Frugal Lifecomment

How to fix a broken budget.

Struggling with a broken budget???  We have all been there, and I’ve definitely been there more times then I would like to admit!  It might have happened because we gave into spending temptations to many times, or perhaps we let lifestyle creep sneak in.  Or, there could have been a lot of unexpected expenses arise.  There are so many reasons why we go over budget, it happens to everyone!  Going over budget is normal, not great, but normal….but only if it happens occasionally.  If you are looking for ways to fix a broken budget, I’ve got you covered!  Keep reading for 7 simple ways to get your budget back on track (for good this time!).

how to get your budget back on track - how to fix a broken budget

How To Get Your Budget Back On Track

It is possible to fix a broken budget!  Follow the steps below to get your budget back on track once and for all!

1.  Stop Unnecessary Spending

The first step you need to take to get your budget back on track is to put a pause on all unnecessary spending.  This doesn’t mean you cant pay your bills or buy food.  It means that you will only spend money on things that are necessary for living.  But, things like entertainment. going out to eat, home decor, etc. should be completely stopped.

There are so many ways to enjoy life, without having to spend money.  Try a few new easy recipes at home, enjoy some at home date nights, and be creative about finding things for free!

2.  Track Your Spending

If you aren’t already tracking your spending, now is the time to start!  Tracking your spending is one of the most important (but easily skipped) steps to fixing a broken budget.  Writing down every purchase that you make will hold you accountable to your purchases, making it much less likely for you to impulse shop.  

I recommend taking time every single day to write down what you bought that day.  Then compare your purchases to your budget to make sure you are staying within your goals.

3.  Use Cash Envelopes

Anything thing that really helps me fix a broken budget is to start using cash envelopes.  The cash envelope system is really fairly easy to use!

First, look through your budget to determine the amount of cash you have left to spend for the rest of the month.

Next, you will need to go to the bank and take out that exact amount of cash out of the bank.  Divide the cash into different envelope categories.  Once your envelope is empty, you literally can not buy anything else (no cheating!).  I explain more about how cash envelopes here.

And, yes, you CAN use cash envelopes for online purchases!  I explain exactly how to do so in the video below!

 

4.  Give Yourself A Reward

I’ll let you in on a little secret about me…..I love to reward myself!  It motivates me to work hard and reach my goal.  Whenever I start struggling with my budget, I set up a reward system to help me stay focused on my money goals.

Choose your reward by thinking of something fun, but frugal, that you would enjoy getting.  I love to reward myself with a treat from my favorite pastry shop or by buying myself a new small piece of jewelry.

Set up your reward system in a way that will help you get back on track with your budget.  For example, if you go 10 days without splurging on any unnecessary spending, then you can treat yourself to your small reward.

5.  Return Recent Purchases You Don’t Need

Do you have any recent purchases that you regret buying?  Or perhaps that you don’t regret, but know deep down it wasn’t the best decision to buy?  Return these items to the store ASAP!  This is the quickest and easiest way to fix a broken budget caused by impulse spending.

6.  Sell Clutter In Your Home

Another option for getting more money back in your pocket is to sell clutter around your house that you don’t need or use!  My rule of thumb is that if I haven’t touched it for a few months, it needs to go!

Use the money you earn from selling your clutter to get your budget back on track, don’t spend it on something frivolous, put it to use in a budget category that needs it.

7.  Use An Accountability Partner

One of the best ways to get back on track with your budget is to find an accountability partner to help you reach your goals.  An accountability partner could be your spouse, a friend or everything in between.  Ask the person you choose if they will help hold you accountable to your money goals.  Share with them your desire to fix your budget and what you need to do to get there.

As you go about your day to day routine, make sure to check in with your accountability partner regularly.  Make sure to always call this person to help you when you get the urge to spend, they can talk you through your spending choices to help you make the one that will help your budget best!

8.  Focus On Your Goals

The most important things to remember is to stay focused on your goals.  Set a goal of where you want your budget to be, write it down and then hang it up somewhere so that you can see it regularly.  A bathroom mirror or phone lock screen are great options for this!

When you stay focused on your BIG goals, it’s easier to say “no” to the temptations that come along.

You Got This!

Please don’t beat yourself up for getting off of your budget.  Like I mentioned earlier, it DOES happen, and there IS hope for fixing it.  The fact that you are reading this article shows me that you want to stick to your budget and make it work.  

I know that through a little bit of work, some sacrifice and following these steps you can fix your broken budget!

 

Related Articles:

How To Find Extra Money In Your Budget

How to Make a Zero Based Budget

How To Stop Living Paycheck To Paycheck In 6 Steps

 

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How To Stop Living Paycheck To Paycheck In 6 Steps

By: Sweet Frugal Life2 Comments

How to not live paycheck to paycheck anymore.

Are you tired of feeling like there is never enough money?  Are you ready to learn how to stop living paycheck to paycheck?  It IS possible and I’m here to tell you how!

Why Do I Need To Stop Living Paycheck to Paycheck?

I had someone ask me this question a few months ago.  It all started when I was encouraging my readers to save more money each paycheck, and someone asked me, “Why?  What’s wrong with living paycheck to paycheck?”  I understand this reasoning and think it’s a very valid question!  So, today I’m going to explain exactly why it’s important.

Here are a few benefits of having some extra cash every pay period:

  • Less Stress.  If you have extra money each pay period you will no longer be having to worry during those last few days before you get paid.  You won’t have to wonder whether you will have enough money to get you through to the next payday.
  • Prevent Debt.  Emergencies come up.  Unexpected expenses arise.  This is just a simple fact of life.  If you are able to save a little bit each pay period you will have the cash needed to pay for these emergencies, rather than putting it on a credit card.
  • Save For Your Future.  More money means more opportunities to save for the future.  This might mean being able to save for retirement or grow a sinking fund for a fun purchase.

Follow the easy steps below and you will have more money in your budget, and more importantly, more money in your bank account.

Stop Living Paycheck to Paycheck

Step #1:  Make A Zero Based Budget

The very first thing you need to do to stretch your paycheck is to make a budget.  I highly recommend using a Zero Based Budget.

A zero based budget is when you budget every penny of your paycheck so that your income and expenses are the same amount.  This does NOT mean you spend all of your income.  It simply means that every dollar has a place and a purpose within your budget.

To make a zero based budget you will need to first write down the amount of money you expect to earn this pay period.

Next, write down all of your expected expenses, don’t forget contributions to sinking funds, retirement, etc.

Your goal will be to get your expenses to equal your income.  For a full tutorial on making a zero based budget check out this article.

There are many different ways to budget!  We prefer the You Need a Budget software.  You can also use just plain ol paper and pen. feel free to download my budget worksheet below.  This is a great place to get you started!

Step #2:  Track Your Spending

Now that you have made your budget it’s time to track your spending.  And, when I say track your spending I literally mean to track every.single.penny. you earn.

It’s easy to track your spending, but it does take time.  You will need to write down everything that you buy and what budget category that item falls under.  If you buy a 50 cent candy bar, write it down under the “Food” category.

This exercise gives you a huge amount of insight into how you are spending and exactly where your money is going.  Sometimes, we don’t realize how much a few bucks here or there add up, but they do!

While you are writing down your expenses, look for trends in your spending and evaluate how you could change some of these habits. 

Maybe you tend to always buy items on a stressful day, could you find a new way to deal with stress?

Or perhaps you are constantly picking up a Starbucks on your way to work, could you limit yourself to just one Starbucks a week?

Remember, it’s OK to spend money!  But, if you are wanting to save a little more, you will need to find some ways to cut back.  Tracking expenses is a great way for you to figure out just how to do that.

Step #3:  Cut Out Unnecessary Expenses

The third step when learning how to stop living paycheck to paycheck is to cut out all unnecessary expenses.  Look through your spending tracker and pick out a few items that you could cut out of your budget.  This might be eating out, going to movies, cable TV, daily coffees, etc.

Need some inspiration about what to cut?  Be sure to check out these articles:

How to Cut Your Budget; When There is Nothing Left to Cut

What we cut from our budget to save over $2500 a year

11 Things to do Today to Lower your Monthly Expenses

Don’t forget to look at the expenses that you can minimize on, rather than cutting out completely.  Perhaps you spend $150 a week on groceries, could you reduce that to $130 a week?  That would be an extra $80 a month or $960 a month.

Step #4:  Save Your Bonus

Whenever you are offered a bonus or raise at work, save it!  I know the temptation when getting these raises is to “treat yo self”, but you are already use to living on less.  Use that raise to bump up your savings account, or other finance goals.  I promise it’s worth it!

For example, if you are offered a 5% raise, put that extra 5% into your savings each paycheck.  This is one of the easiest ways to save more without having to sacrifice the life you are use to.

If you truly do not want to save all of your raise, maybe just save part of it.  Put 90% of your raise into a savings account, and use the other 10% for spending.

more money

Step #5:  Automate Your Savings

Set your checking account to automatically take a certain amount of money each month and deposit this into your savings account.  This is an easy way to save for retirement, emergency fund, or anything else you need, without having to actually do it yourself!

When your savings is automatic you don’t ever have to make the choice whether to save or spend on something else, that decision has already been made for you!  You’re saving it.

My husband and I made all of our savings automatic years ago and it has made a world of difference in the amount of money we are able to save each month.  This money doesn’t even feel like it belongs to me, because it goes straight to savings.  It feels amazing to be able to watch that saving account grow regularly and consistently.

Step #6:  Make More Money Through Side Hustles

Last, but certainly not least is to find a way to make more money.  If you would really like to save more each month, you might need to find a way to increase your income.  This doesn’t necessarily mean you have to get a second full time job.

All you need is a few extra hours each week to devote to a side hustle.  If you are struggling finding that extra time, try to give up one thing in your life and use that extra time for side hustling.  This might be your nightly 30 minute TV time, or maybe those few hours you sleep in on Saturdays.

When choosing your side hustle, be creative!  There are so many possibilities!  Look at your talents and interests first to find the perfect fit for you.

Are you crafty?  Perhaps you could make crafts to sell on Etsy.  Do you like to write?  Consider starting a blog!  Maybe you enjoy teaching?  Look into teaching kids in China (all from home)!

If there’s a will, there’s a way!

If you are really wanting to stop living paycheck to paycheck, it is going to require some sacrifice and effort.

I truly believe if you follow the six steps I shared today you will be able to find more room in your budget and you will be able to save more money each month.

Here is your friendly reminder that these steps aren’t easy!  Nothing good in life is easy!  Cutting expenses and finding extra money will take some time and sacrifice on your part.

But, I can also promise you that if you are willing to put in the work and the dedication you will find extra money in your budget each paycheck, and this can change your life!

 

Related Articles:

7 Apps That Will Help You Save Money

The Best Frugal Living Tips You Need to Know

How to Save Money When Eating Out

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Have more money this month by following this simple 6 step plan so you can stop living paycheck to paycheck today.

Best Financial Books For Beginners

By: Sweet Frugal Life4 Comments

Best Books On Money Management.

One of the things I most recommend to others who are trying to learn how to manage their money is to read more money books.  I have spent years studying and researching how to live frugally and I’m excited to share the best financial books for beginners with you!

Over ten years ago I randomly stumbled across a few money management books at the public library, I have always enjoyed self help books, so decided to bring one home with me.  I walked out of the library holding the Total Money Makeover  by Dave Ramsey and my life was forever changed.

I have always been somewhat frugal….but I didn’t ever have control of my money, and my budget was suffering because of it.

If I’m being honest……I used shopping as a hobby, I didn’t have a budget, I spent what we earned without a second thought, and I had no clear plan for a successful financial future.

After reading the Total Money Makeover my mindset completely shifted.  I realized what was possible, with enough self control, and how to prepare my family for a happy future.  This blog wouldn’t even exist with that book!

In the words of Dr.Seuss, “The more that you read the more things you will learn.  The more that you learn, the more places you’ll go.”  Reading is powerful!

If you are looking for encouragement, advice, or direction about money, “look in a book” (anyone else remember watching reading rainbow?).  Here are 9 of the best financial books for beginners!  I hope they will benefit you as much as they have helped me.

 

Best Money Books

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1.   The Total Money Makeover by Dave Ramsey

 

Of course number one on my list is the Total Money Makeover by Dave Ramsey.  As mentioned above, this book changed my life, and I believe it can change yours too!

Dave Ramsey does a fantastic job explaining exactly what you need to do to manage your money.  I love his straightforward real talk and easy to understand concepts.  If you are new to money management and have debt you are trying to pay off then this is the book for you!  It was written for the novice, and the steps are easy to follow and understand.

Be sure to check out Dave Ramseys website here for even more amazing info!

2.  Rich Dad, Poor Dad by Robert Kiyosaki

 

Rich Dad, Poor Dad by Robert Kiyosaki blew my mind, for reals!  This book will change your mindset about what it means to be rich and what it takes to become rich.

If you are looking for a book about how to be more frugal, this is not the book for you.  But, if you are looking for ways to be financially successful, to grow a business, and earn a higher income, this is the book for you.  It is so motivating and makes become rich feel achievable!

3.  You Need a Budget by Jesse Mecham

 

I am obsessed with all things You Need a Budget!  Their budgeting program is my favorite thing ever, and this book has helped propel our finances forward.  I like to brag that I loved YNAB before YNAB was even cool….because I really have been with them since the very beginning!

In his easy to understand writing Jesse Mecham outlines four rules to financial success.  These rules will change your money mindset and help you understand the big picture of budgeting.

And, while we are on the subject, if you are looking for good budgeting software be sure to give the You Need a Budget website a look.  It does cost money to use, but it’s been worth it for me!

4.  The Millionaire Next Door by Thomas J. Stanley and William D. Danko

 

The Millionaire Next Door is one of the best books about money for beginners.  It debunks the myth that the only way to be wealthy is to be born into it or to earn an extremely high income.  This book explains exactly how everyone, no matter what they were born into, can become a millionaire.

It’s not easy and it takes planning and sacrifice, but it is possible!  I love the motivation that this book gives me to reach my dreams!  Anything is possible!

5.  Money Master the Game by Tony Robbins

 

Oh, I just love Tony Robbins.  He has such a great way with words and always motivates me.  In his book, Money Master the Game, Tony Robbins teaches his 7 steps to financial freedom.  It’s packed full with so many great tips and advice.

My favorite parts of this book is when Tony Robbins shares his knowledge about investing.  Investing can feel a little intimidating to the beginner (or is that just me….), but he teaches it in a way that is not only easy to understand but practical to implement.  After I read this book I felt like I could actually start investing with confidence!

6. The Richest Man In Babylon by George S. Clason

One of the very best financial books for beginners is The Richest Man In Babylon.  It gives super easy to follow principles to help everyone save money and build wealth.  The author, George S. Clason, uses fictional characters and short stories to teach each of these principles, which makes the book a very fun read.

This is a very relatable book, perfect for anyone who knows very little about money, or someone who feels like they know it a lot.  The perfect book for financial beginners!

 

7.  The Little Book of Common Sense Investing by John C. Bogle

 

This is one of the very best books out there when it comes to learning investing.  In the Little Book of Common Sense Investing John C. Bogle teaches everything that you need to know to start investing in the stock market.

He uses a conservative, long term approach to give you the tools you need to start investing today.  If you have been wanting to start investing, but haven’t been sure where to start….start with this book!

8.  The Simple Path to Wealth by JL Collins

 

The Path to Wealth is one of my all time favorite books about money for beginners.  It covers all the personal finance topics from debt to investing and everything in between.   JL Collins writing is so easy to follow and fun to read, he makes money feel easy!  (which is not an easy thing to do).

This book is for you if you are new to personal finance and are looking for a good road map to get started.

9.  The 9 Steps to Financial Freedom by Suze Orman

 

I just love Suze Orman, I know her style isn’t for everyone, but I truly enjoy her straight to the point method of teaching.

The 9 Steps to Financial Freedom teaches you more than just the personal finance basics, and that is why I love it so much!  Suze Orman teaches you to have a healthy relationship with your finances and helps you to understand your feelings and emotions attached with money.

There is more to smart spending and frugal living than knowing the numbers, and this book will help you understand just that!  If you struggle with emotional spending read this book!

In Conclusion

There are literally thousands of great money books for beginners out there.  Try to set a goal to read one or two of them each month.  I really think you will be surprised at just how great of a difference they will make in your life!

 

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Tips For Budgeting As A Couple

By: Sweet Frugal Life2 Comments

How to get your spouse to budget when they don’t want to.

Do you struggle budgeting as a couple?  I can so relate!  I have been there!

My husband and I are constantly working on getting on the same page with a budget.

It all started about 10 years ago when I read a book that changed my life, Dave Ramsey’s Total Money Makeover book and I knew it was time to start looking at our finances differently.  I decided right then and there that my husband and I would make a budget, and stick to it faithfully.

Later that night I happily told my husband the good news, “We are going to start budgeting and will be able to save so much money!” I announced.

I looked at his face, fully expecting to see the same enthusiasm that I felt……but instead of joy, I saw annoyance.

“Why do we need to budget?  We spend less than I make every month” he asked me.

I spent a few minutes explaining to him that a budget could help us save for our future, eliminate some unnecessary spending, and set us up for financial success, fully expecting him to be just as excited about it as I was.

But, he just didn’t have the same vision as I had.  Which, in hindsight is understandable.  I had accepted him to jump on board with my new found financial knowledge, simply because I was telling him that it was a good idea.  I wanted him to feel like I felt, without ever giving him the opportunity to form his own views.

Here’s the thing about relationships:  you can not force your spouse to have your same views.  That’s not how a marriage works.  A marriage is a partnership between two separate people.  Each of the partners will, should, and have their own opinions, thoughts, goals, and ideas.  I’m going to say it again, you can not force your spouse to be something they aren’t.

It took me a few months of talking (and disagreeing) to my husband about budgeting before I finally asked, “Can we just try it?  Let’s just try it for one month and see how it goes.  I think it could really help us!”

Fortunately, he agreed.  We sat together one evening and set up a budget.  There were frustrations, we have had plenty of mishaps, and we have had to start and restart time and time again.  But.  A decade later and we still budget.  In fact, my husband is the one that 99% of the time reminds me it’s time to discuss the budget.

So what changed?  I believe there were two main points that changed my husbands mind about the whole budget thing.

  1.  He saw that a budget did in fact make a difference.  My husband needed to decide for himself if he felt that a budget was worthwhile.  Once he saw how much more money we did actually save on a budget, he embraced the vision.
  2. It became a habit.  He really didn’t like the idea of having “one more thing” on his to do list.  But, after a few months it has become a habit and doesn’t feel like an extra chore, it’s just what we do.

Now, I understand that not all situations go like mine.  Some spouses are more willing and others are much less willing to budget together.  Here are a few tips to help you when your spouse just doesn’t want to budget.

How you can get your spouse to budget #budgetingcouples #budgetasacouple #frugalcouple #savingmoney #budgetinghelp

Tips For Budgeting As A Couple

1.  Communicate

Communication is so important in a marriage, and finances is no different.  Communicate with your spouse why you want to budget and your goals and concerns for your future.  Explain to him why this is important to you, and why it is important to you to do together.

In return, listen.  Listen to your spouses concerns.  Ask him why he doesn’t want to budget, ask him how you can help make it easier for them, and genuinely listen and care about his responses.

2.  Make it Fun

Try to make budgeting fun (yes!  budgeting can be fun…..ish!).  Instead of saying something like, “Let’s have a budget meeting.” (I mean, that prob sounds fairly boring to anyone, right!?), invite your spouse to something fun, plus a budget meeting!

You could go on a walk, have a picnic, or bring their favorite foods to enjoy while discussing the budget.  Make the budget meetings a little less boring and try to make it a fun experience for everyone involved.

2.  No blaming

When it comes to the budget you need to work as a team.  Avoid putting blame on your spouse.  Instead of, “You spent way to much this month!” say phrases like, “We spent to much this month.”  Yes!  Even if it truly might be your spouse overspending, work as a team and never ever blame.  The only thing blaming will bring is contention, and contention won’t make a budget.

3.  Be Willing to Compromise

Compromise is a must when budgeting as a couple.  Maybe you are super frugal and your spouse isn’t, this is totally normal!

Find a way to meet in the middle.  Perhaps your spouse wants to get a hair cut and color every month, but you feel that makes the budget to tight.  Ask if they would be willing to get a cut and color every 6-8 weeks instead.  Give your spouse freedom in their budget, while also making sure the budget is kept.

4.  Personal Spending Money

Include personal spending money for both you and your spouse.  This spending money gives both of you the freedom to spend how you want, when you want, with completely no guilt or judgement attached to it.

The amount received for personal spending will vary based on your income and expenses.  However, you and your spouse should both receive the exact same amount.

I love having this guilt free spending money!  

5.  Be the Example

Maybe your spouse just doesn’t get it, and that’s OK!  The whole idea of budgeting might be a little daunting or strange to them, which is exactly how my husband was.  Be an example of living by a successful budget so they can learn from you.

Excitedly show your partner how much money you saved by doing “xyz” that month.  Your positive attitude just might rub off and they will want to join in on your success.

6.  Celebrate the Wins

Positive reinforcement goes a long ways in marriage, and life in general.  When your spouse sticks to the budget, celebrate.  Buy them their favorite treat, genuinely praise them, and let them know how proud you are of them.

Everyone likes to feel appreciated and having mini celebrations can help budgeting feel much more bearable.

7.  Make a Plan Together

Together is the key word in this.  Sit down and discuss your goals for the future and present.  Plan how you can reach these goals and make a plan going forward.  Allow your spouse to give their opinions about the way the plan and budget will look.  It might not be exactly how you think it should be, but remember compromise matters.

When Nothing Works

If you have tried everything you can to get your spouse to budget and it’s just not working, you are not alone.  Financial disagreements are common among all couples.

Focus on the things that you can control within your budget.  Spend wisely.  Budget as best as you can by yourself and do what you can to keep the finances in order.  Alone is never fun, but it can be done.  Lean on support groups through facebook or family and friends to help give you the support you need.

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How To Save Money On Electric Bill In Winter

By: Sweet Frugal Lifecomment

Tips to reduce electricity bill.

It’s time to prepare for the cold winter months (I’m seriously not excited about this!).  The winter months is a time when many households see a rise in electricity costs.  Fortunately, there are some things you can do to help lower these expenses.  Today I am going to share a few ways to help you learn how to save money on electric bill in winter.  I hope they help you as much as they have helped me.

 

Do These Tips Really Work?

I get asked a lot if using the tips shared below will actually make a difference in electricity costs.

The short answer:  Yes!

Every change that you make with your electricity usage can make a big difference in the amount of money you are paying in your utility bills each week.

According to Energy.gov if you turn your thermostat back (tip #2) by just 7 degrees you can save up to 10% a year on electricity costs!  And this is just one of the eight changes you can make.

How To Save Money On Electric Bill In Winter

Here are a few tips to help you save a few bucks this winter.  Remember, every little change makes a big difference.  So choose one, or eight tips to start implementing into your routine.  Let me know if you see any changes in your bills, I would love to hear what helped you!

1.  Wear Layers

As the temperatures start cooling it’s time to pull out your long sleeve shirts and warm sweaters.  These warmer layers will help you stay warm inside without having to increase the thermostat.

If you find yourself tempted to increase the thermostat, add another layer or blanket instead!  I mean, snuggling under a blanket is one of my favorite parts of winter!

2.  Lower Your Thermostat

Like mentioned earlier, you can find big savings in your utility bills simply by changing your thermostat setting.  Every degree you lower your settings will make a difference, but if you set your thermostat 7 degrees lower than you normally have it and you will see up to 10% extra savings a year! 

Another important tip to try is to turn your thermostat even lower when you are sleeping or out of the house.  We like to adjust ours to 55 degrees during these times.

3.    Use your Blinds/Curtains

Curtains and blinds are more than just a pretty decoration.  They are a great way to save money on electric bill in winter. 

When the sun is shining open your blinds and curtains to allow the house to heat naturally from the sun.  But, be sure to close them once the sun goes down; this gives your home extra insulation from the cooler weather.

4.  Change Filters Regularly

Truthfully, when I first became a homeowner I had no idea that my furnace even had a filter in it.  It was a mind blowing moment when someone told me my energy bill would decrease if I would change the filter regularly.

We have been consistent with changing it every 3-4 months since then and have noticed a difference in our bills!  

5.  Caulk Window and Door Cracks

Another important step to saving money on electric bill in winter is to caulk around your windows and doors. 

The first thing you will want to do is check around doors and windows for small air leaks.  This is easily done by moving your hand around the edges of the window and door to feel for cold air seeping through.  Try to check for leaks when your house is warm and the outdoors are extra cold.

When you do find a leak, caulk it well with a sealant, we like this one from Amazon.

6.  Keep Vents Uncovered

It’s really important to keep all air vents uncovered to allow the air to circulate freely throughout your home.  Check all of the vents in your home to make sure they don’t have any furniture or rugs covering them.

7.  Reverse Your Ceiling Fan

Most people assume that ceiling fans shouldn’t be used during the winter months, but they are actually a great way to save money on the electric bill during winter!

The trick is to set your ceiling fan to spin in reverse by turning it to the clockwise setting.  This will push the warm air from the ceiling downward to the ground keeping you feeling much warmer.

8.  Avoid Heating Unused Rooms

If a room doesn’t get used regularly, there is no reason to pay money to keep it heated.  The best way to accomplish this is to close the vents in rooms that aren’t used often.  A guest room, laundry room, and basement storage rooms are all example of places that don’t need to be heated.

 

In Conclusion

You don’t have to pay what you have been paying for your electricity bill anymore!  Try implementing a few of these tricks and you just might be surprised about how much money you start to save!

Do you have another suggestion about how to save money on electric bill in Winter?  Drop it in the comments below!

 

 

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How To Save Money When Moving

By: Sweet Frugal Lifecomment

How to move on a budget.

My husband and I have had plenty of practice moving!  We have been married 17 years and in that time we have moved 9 different times.  This includes 6 different cities and 4 moves across the state border.  We have made many mistakes along the way, and over time have learned a few tricks about how to save money when moving.

I wanted to share a few of the tips and tricks we have learned a long the way to help you on any upcoming moves.

How To Save Money When Moving

1.  Set A Budget

The moment you know you will be moving, make a plan.  Set a budget of how much money you will be able to spend on this move.  Once the budget is made, stick to it.   

It’s so easy to allow small expenses to creep in while moving, don’t let that happen.  Sticking to the budget will most likely be hard work, but it is essential to helping you save money on your move.

2.  Make a Sinking Fund

After you have your moving budget, you will want to set up a sinking fund.  This sinking fund will help you slowly save up cash for your upcoming move.  This way when the time comes to move, you will already have money saved and set aside to cover the costs.

If you know of the move months in advance this should give you plenty of time to contribute to your sinking fund.  If the move is quicker and you will only have a few weeks, still make your sinking fund and try to save as much as you can each day.  You want this sinking fund to be able to cover the cost of your move.

3.  Skip the Moving Company

You can do this!  It won’t be easy, and it won’t be fun, but you can move without a moving company!  I PROMISE.

Begin packing and organizing the MINUTE you find out you will be needing to move.  Enlist a few friends to spend a Saturday helping you pack boxes and another Saturday loading and unloading the moving trucks. 

Make sure to buy these amazing friends some pizza or donuts to let them know you appreciate their time and service.  You will save so much money simply by doing the work yourself.

4.  Shop Around

I get that DIYing the move isn’t the best option for everyone.  Maybe there is a reason you feel you will need to hire someone to help you move.  There is nothing wrong with that!  Just make sure to always shop around before hiring anyone. 

Get quotes from a wide variety of moving companies and check referrals to find the best company for you. 

You could even do half the work yourself and then hire a moving company to do the other half.  Don’t be afraid to barter a little and ask them to beat competitors prices or give you a discount.  The worst thing they could say is no.  My rule is, “It never hurts to ask.”

5.  Do Not Buy Boxes

From the very first minute you find out you’re moving be on the lookout for free boxes.  There are free boxes everywhere, you just need to know where to look!  And I can help you with that!  😉

The first step to free boxes is to start saving any boxes you get from Amazon, or any store you shop at online.  Also, ask all of your friends and family to give you all of the boxes they get in the mail.  Usually a simple Facebook post will do.

The next place to find free boxes is at the grocery store.  Keep an eye open for grocery carts full of empty boxes as employees stock shelves.  If you can’t find anyone ask an employee and they can tell you the best time to come for boxes.

Another great place to look is Lowes.  This was always the jackpot for us!  Some employees were happy to hand out big boxes, but others weren’t so sure….so don’t be shy to ask a few different people!

6.  Organize!

If you decide to move yourself, make sure to stay organized!  This will help the move go more smoothly, and also reduce the amount of broken or lost boxes.

One of the most important parts of organizing when moving is labeling your boxes.  When labeling always include the box contents, the room it needs to go in, and whether it contains fragile items.  Pack items together that will need to go to the same room.  This will save you a ton of time when you start unpacking.

7.  Find Packing Filler at Home

Save money on moving by not buying any packing filler.  Instead try to find free items around your home you can use.  I’m betting you have tons of items that will work as filler!

A few things I have used for packing filler is:

  • Dish Cloths
  • Towels
  • Sheets
  • Clothing
  • Newspaper

It’s all free and needed to be moved anyways, might as well give it a job to do at the same time!

8.  Sell or Donate

Moving is the BEST time to donate or sell items that you don’t use.  The less stuff you have to pack means the less boxes, tape, moving power, etc. you will need.  It WILL save you money!  AND, if you are selling items, you can even EARN money at the same time!  (double win!)

9.  Shop Utilities

With moving comes cancelling/setting up utilities, and these costs can get expensive quickly.

Make sure to shop around and be choosy before setting up internet, cable, phone, or dish..  Many of these companies will give a good discount to new customers, but you have to ask.  This could also be the perfect time to change habits and ditch the cable all together.  It’s a big money saver, just sayin!

10.  Be Flexible

Moving is STRESSFUL, expensive and hard!  Give yourself grace and try to be flexible with all of the ups and downs that will come your way. 

Remember that the hard moments will be temporary, and one of the only ways to get through it is just to grin and bear it.  Be true to yourself and your budget, but also be willing to go with the flow once the time comes.  You got this!

 

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Money Advice For Your 20s

By: Sweet Frugal Lifecomment

Finance tips for your 20s.

The twenties were some of the best years of my life.  It’s a wonderful time when the entire future lays ahead of you and you feel ready to conquer the world.  This is also a time when a lot of personal growth and learning occurs.  You make big decisions that have big consequences on your future.  One of the most important of those decisions how to manage your money.  Oh how I remember being young (and dare I say naive….).  I thought life would go exactly as planned and money would never be an issue…boy was I wrong!  I so wish someone, anyone, had sat me down and taught me more about finances.  Sure, I understood that I should spend less than I made and that you had to work for money….but there were some important things I was very ignorant of.   So today I am going to share those lessons with you.  Here is some money advice for your 20s.

what I wish I knew about money in my twenties - money tips for 20 year olds

Money Tips You Should Know In Your Twenties

Here is a few pieces of money advice for your 20s.  I hope it helps prevent you from making the same mistakes I did!

1.  Start Saving For Retirement ASAP

One of the most important things you should know about money in your 20s is to start saving for retirement asap!

I know in these early adult years retirement feels forever away.

Guess what?  It’s not.  The retirement years are going to come quicker than you think.

The day you start earning money is the day you should start investing into a retirement savings account, such as a 401k or IRA.  Time is your friend when it comes to investing and compound interest (trust me, you want compound interest!).  So, start early!

2.  Budgets Are For Everybody

For about half of my twenties I didn’t think I needed a budget.  I never spent more than we earned, so I felt confident in my money management skills.

After reading Dave Ramsey’s Total Money Makeover my views on money shifted drastically.  I realized that a budget is for EVERYBODY, and we could have more money if we started budgeting.

The next day my husband and I sat down and made our first budget.  We weren’t pros at the beginning….as a matter of fact we failed many times.  But through practice and patience we mastered budgeting and our finances improved.

Everyone should be budgeting, it doesn’t matter how much money you make or save.  A budget will help you help you save even more and help you control your spending.

3.  You Need An Emergency Fund (and probably a bigger one than you think)

In your twenties it’s easy to feel as if all the bad things only happen to other people….never to you.

I’m here to tell you, that they do and will happen to you too, unfortunately.

I don’t know what will occur in your future, but I do know that you need an emergency fund to cover any expenses or circumstances that might come your way.

Try to save a minimum of 6 months living expenses in your emergency fund.  This will give you enough to cover most emergencies without feeling stressed about the distant future.

4.  Debt Is Dumb

You will run across many advertisements trying to convince you to sign up for this credit card or buy that piece of furniture on credit.  You will hear phrases like, “0% down” or “no payments for one year!”  Many people will tell you it’s normal to pay off debt.  It becomes confusing as you try to weed through what’s correct and what’s not.

I’m here to tell you that debt is just dumb.  Period.  It will only bring you financial stress in your future. 

Stay out of debt!  Remember, if you save up and pay cash for something, rather than buying it on credit, you will end up spending less in the long run!  No debt=no interest!

The only thing I recommend anybody going into debt for is to buy a house.

5.  Your Tax Refund Is Not Free Money

I remember the time my husband and I got our first tax refund back in the mail.  It felt like free money just being handed to us.  I basically thought it was the best thing ever and immediately started planning all the fun ways to spend this new found money.

What I WISH someone had told me was that a tax refund is NOT free money.

In fact it is money that you worked hard for and EARNED……and then loaned to the government interest free.

If you do receive a tax return remember that this is not free money, it’s money that you earned and should be used wisely.  I suggest using it to pay off debt, grow your emergency fund, or to help you save for a big upcoming purchase.

6.  You Don’t Need a Fancy Car

In my twenties I truly thought I needed a brand new car to “officially” become an adult (insert eye roll here).

Oh, how wrong I was!

I’m here to tell you that you do not need a fancy car.  If you want one, and can pay cash for it, go for it, but it is so not necessary.  Cars are known for losing their value quickly.  In fact, cars will lose around 15% of their value EACH year, that’s a lot of wasted cash.

Look for a vehicle that will be safe, reliable and fuel efficient.  Look for one that will be able to grow with you as your life changes throughout the years.  Most importantly, look for one that you can afford.

7.  Bills Are Negotiable

Another piece of money advice for your 20s is that your bills are negotiable!  Don’t ever be afraid of asking for a better rate or cheaper amount.  The trick is speaking up, knowing your facts, and being polite.

You will find big savings each month if you begin negotiating your bills.

8.  Just Because You Can Afford It Doesn’t Mean You Need to Buy It

This is an important one so listen up.

Just because you have the cash to buy something right now…doesn’t mean that you need to buy it right now.

Don’t give in to your impulses and the flashy sales that will come your way.  You worked hard for your money and shouldn’t blow it on items you won’t value in the long run.

When choosing whether to buy something or not ask yourself these simple questions:

“Do I need this?”

“Did I budget for this?”

“Will I use this for many years?”

If you can answer yes to all three of these questions, than it is a good buy.  If you answer no to any of them, I would wait a few days before making the purchase.  This gives you the time to make an informed decision, rather than buying on impulse.

9.  Credit Cards Are Great…..If You Use Them Correctly

I am a HUGE fan of credit cards in my own life.  I use them regularly and love the cash back that I can earn from them.  Each of my credit cards are paid off in full every month and I always spend within my budget.

When I was in my twenties, I had heard many people say that credit cards were bad….so I didn’t use them.  Later down the road, as I learned and studied more I realized I was missing out on a lot of rewards.  

I now use credit cards regularly and would never go back.  If you are wise with your money I encourage you to look into a few reward credit cards.  We personally use a Discover Card and love the cashback earned each month.

HOWEVER!  There is a big but here!

If you struggle with constant over spending, are often over budget, and have a history of credit card debt, I would advise you not to open a credit card.  In this instance the rewards are just not worth the risk of overspending.

In Conclusion

The twenties were one of my favorite times of my life.  It was when I truly grew and found myself.  Enjoy this time while you are in it, but never forget that the future isn’t as far away as it might feel, and finances matter.  I hope this money advice for your 20s was helpful for you!

 

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What Is The Debt Snowball Method?

By: Sweet Frugal Lifecomment

Tips for paying off debt with Dave Ramsey’s Debt Snowball.

Are you trying to pay off debt, but have no idea where to even begin???  First, you should know that you are not alone!  According to Debt.org, the average American has over $90,000 worth of debt.  This amount includes all debts, such as home mortgages, credit card debt and student loans.  But, there is hope!  You can become debt free!  It isn’t easy, but it is possible.  There are many tried and true methods for paying off debt, and one that I personally recommend is The Debt Snowball method.  I’m excited to share all about Dave Ramsey’s debt snowball in this article.

What Is The Debt Snowball?

The Debt Snowball method was first made popular by finance expert, Dave Ramsey and focuses on both the psychology and financial parts of paying off debt.  I love that it was designed as a way to help you gain confidence with paying off debt.  The idea is that as you pay off your smaller debts first you will become more excited and motivated to pay off the larger ones, which in turn helps you see more success.

How To Pay Off Debt Using The Debt Snowball

Alrighty, let’s get into the debt snowball nitty gritty!  The steps are simple really!

Step 1:  List debts in order of smallest to largest.

This first step to using the debt snowball is to make a list of all of your debts and put them in order from the smallest amount owed to the largest amount.  Remember, the interest rates of each debt does not matter, only the least amount owed.

This is the part when many people get confused.  It doesn’t always make sense financially to ignore the interest rates, but remember that the debt snowball is about psychology and finances!  The debt snowball is trying to help grow your confidence and motivation.  Choosing to pay off your smaller debt first motivates you to keep working towards debt freedom.

For Example

Here is an example of what your debts might look like when making your list:

  • $800 Credit Card with 7% interest
  • $5,000 Car Loan with 5% interest
  • $25,000 Student Loan with 15% interest

Step 2:  Pay extra on your smallest debt, while continuing to make minimum payments on other debts.

Now that you have put your debts in order from smallest to largest, it’s time to start paying them off.

If we use the above example of debts, that would mean that you would try to pay off the credit card debt first, because it has the smallest amount owed. 

  • $800 Credit Card with 7% interest
  • $5,000 Car Loan with 5% interest
  • $25,000 Student Loan with 15% interest

Keep paying the minimum payments on all other debts, but try to put ANY extra money that comes your way to paying off this first debt.  The more money you can throw at this debt, the sooner you will be able to pay it off and move to the next debt on the list.

A few ways you can find extra money to pay off your debt include:

  • Starting a side hustle to earn more money
  • Cutting a few items out of your budget

Related:  101 Ways To Save More Money

Step 3:  Pay extra on next smallest debt, while continuing to make minimum payments on other debts.

Once your smallest debt is paid off, it’s time to move to the next debt on your list.  You will now focus on paying off debt #2, while paying the minimum payment on all other debts.  

This is where the “snowball” effect starts to happen!  To pay off debt #2 you will use all of the extra money you were paying towards your first debt and the minimum amount you were already paying for this loan.

For Example:

  • $800 Credit Card with 7% interest:  Paying $200/month
  • $5,000 Car Loan with 5% interest:  Paying $100/month
  • $25,000 Student Loan with 15% interest

Again, referring to the debt examples from above, the next smallest debt will be the car loan.  You were paying $200 to the credit card and $100 to the car loan each month.  Combine these totals together to pay $300 each month towards the car loan.  You are officially “snowballing!”  Yay!

Step 4:  Repeat step 3.

Continue to repeat step 3 until all of your debts are paid off.  You got this!!!

Step 5:  Celebrate!

Once you have paid off all debts it’s time to celebrate!  Yes!  Celebrating your debt freedom is a very important part of the debt snowball method! 

Paying off debt is NOT an easy task, it takes a lot of hard work, patience, and sacrifice.  You deserve to be celebrated for this huge effort!  Go out to your favorite restaurant, invite some friends over, or do something that makes you happy!

Pros of the Debt Snowball Method

There are so many wonderful benefits to using the debt snowball when paying off debt. 

The debt snowball:

  • Motivates you as you watch the small debts disappear quickly.
  • Builds confidence as you find success with paying off your smaller debts,
  • Is simple and easy to implement.

Cons Of The Debt Snowball Method

While, I do love the debt snowball and highly recommend it, it does come with one big con.

The biggest con to using the Debt Snowball is that there is a possibility you will end up having to pay more money on debts.  This is all because you aren’t paying off the debt with the highest interest first.

If you choose to pay off a debt with only 2% interest and wait to pay off the debt with 15% interest, you are having to pay that extra interest rate longer, making it cost more in the long run.

This big con doesn’t make sense for a lot of people, and that’s ok.  Not everyone needs the psychology that the debt snowball offers.  Personal finance is personal, and if you need to adjust debt payoff methods to make them work for you, do it!

Is The Debt Snowball Right For you?

The debt snowball method is for you if:

  • You are trying to pay off debt.
  • You keep losing motivation with your debt free journey.
  • You need an easy to follow and understand debt free method.

Let me know if you any other questions about this debt payoff method.  I’m always happy to answer them in the comments or through a message!  It won’t be easy, but I promise your hard work and effort will be worth it!  There is no better feeling than that debt free feeling!

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I hope this article answered your question what is the debt snowball method!

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