Goal Setting

Goal setting for financial freedom is an often overlooked aspect of getting out of debt and being able to hold on to your money. One of the most common mistakes with setting goal's is setting them to high and failing. So how can you avoid setting your goals to high?

Lets say you want to save $1200 a year can you afford that? well just ask yourself can you afford $50 a paycheck? If you say yes then you are on your way to completing your savings goal. If you don't like long term goal setting you can set monthly goals of saving $100 a month. In order to save that if your income barley cover's your expense is see were you can cut back spending.

Maybe you want to put $3000 down on a car the january so you set that as your goal can you really save $750 a month? so maybe you should put your goal off for another year that way you can have 16 months to save. If you put it off for 16 months you would only need to save $187.50 a month. Now that sounds like its alot easier to do the the $750.

The key to goals is to not rush them. That's why they are called goals and not overnight savings. You can set short term goals like pay off my credit card in 4 months. You just need to figure out what you can afford and see if the goal you want to achieve is a long term or a short term goal.

Were to save nickels and dimes.

Today I am going to talk about were I was able to save a little bit of money here and there. Were I first started to save a small amount of money. Was by walking to the gas station or grocery store instead of driving. Its only 1 block to the gas station and the store was only about 4. So I was able to save a small amount by not being lazy.  This was the easiest way for me to save not much but about 35$ a month.

I also started packing lunch for work mainly just what is left over for dinner. But I no  longer have to drive out of the way to a fast food restaurant or anything like that. I use tupperware  instead of sandwich bags. Another thing that I did was quite smoking well I have stopped for 5 days now so I am not in the clear.

I was spending 5.80 on a pack and I was smoking 2 packs a day thats 11.60 a day and 174$ a paycheck or $4,234.00 a year now I know alot of smokers dont pay that much a pack or smoke 2 packs a day. But this will just show you how much money I saved so maybe you should do the math and see how much you save. The amount of money I spent on cigarettes is why I quit not because I wanted to. So maybe the amount you spend smoking will make you want to quit also.

I drive 34 miles round trip to work and home. I live in a small rural town so I am not able to walk or ride a bike to work. So the next way I plan on saving some money is by moving closer to work. That way I can just buy a bike and just be gone with the car all together. Then I will save gas and insurance payments.

I know that not all of what I have done a feasible for everybody but I just thought I would share what I have done and maybe you could get some ideas implement them to save some money yourself. Thanks for reading and check back for my advice.

Snowball debt repayment.

Today I am going to talk about the snowball method of repaying your debt. I will also include a link to a spread sheet that explains it and also lets you put in your own debt to see how much you can save.

The "Snowball" method is were your minimum payments are $100 across all five of your credit cards. So you pay $110 so instead of paying $20 on all you pay $30 on one and $20 on the rest. You should either start with the lowest balance so you can feel like you can get a boost of confidence when it is paid off; Or you can start with the highest interest rate first so you pay less interest in the long run.

When you pay off your first debt you take the $30 you were paying towards the now paid off debt and pay $50 to the next debt. So that you are still paying the same you always were so you don't notice a difference in your finances. It also give you a sense of accomplishment because your paying more then you have to and getting your debt paid off that much sooner.

This is the link to the spreadsheet you can download it from as google docs does not recognize all the formulas in the spreadsheet for some reason. Leave a comment letting me know what you think of the spreadsheet.

The myth behind authorized users.

Alot of people say adding your wife to your credit card or vice versa will help your credit. Well that is more false then true. Because many scoring models do not score authorized user accounts, so they may not help the other person.  But they can just more then likely they will not help.  When adding somebody as an authorized user the only change will be the addition of the authorized user account to their credit history.

The biggest risk is that the authorized user will abuse the privilege and make charges that you cannot afford to repay. If you can’t make the payments on time, the late payments will appear in your credit report and will hurt your credit scores.  Although authorized user accounts are not always included in credit scores, they will result in a credit history being established and eventually can help your wife qualify independently for her own accounts.

If you are on somebody's account as an authorized user and the account becomes delinquent It can have a negative effect on your credit score. The good news is that it is easy to fix and get removed from your credit score since you are only an authorized user and not joint account holder you are not responsible for the debt. 

You may contact the credit card company and request to have your name taken off the account. Because an authorized user is not responsible for making payments on an account, they normally remove you upon request. You can then contact Experian and request that the account be removed from your report.

I hope this was helpful as i wanted to keep it short and not long and drawn out. If you have any questions just leave them in the comments and I will answer them as soon as possible.

Introduction to my blog

I am married with 4 kids and to your surprise I just recently figured out what credit was and how important it was in the last few years. I always thought that if you wanted a car loan you just had to ask and they would give it to you. I did not understand what all it took for the bank to actually say yes. I wish that I would of known more about credit a lot sooner in life then now.

My credit is far from perfect as anybody elses by the time I realized what credit was I had a score of 360. I had several accounts in collections because I never thought that “oh I dont want this so I will stop paying for it” attitude would ever hurt me later in life But oh I was wrong.

My credit score 1 year later is 590 Still not the greatest credit score banks would like to see. However I am on my way to credit redemption. In later articles I am going to talk about how I achieved a 200+ point jump in my credit score in just 1 year. I will also be talking about programs, apps, websites, and life changes I made that have helped me.

I will also explain how to use the the website, program, or app when I talk about them so you can benefit from them as well as I have. I hope to see you reading my later articles.