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Budget

Why You Need Sinking Funds
Money Management

Why You Need Sinking Funds

Why You Need Sinking Funds

When I found Dave Ramsey about 3 years ago I was all about it and I loved that there were steps for me to follow. Fast forward a few years and I have definitely tweaked the system to fit my needs, but generally follow them. The scariest part for me was only having a $1,000 emergency fund for baby step #1. I mean, I live in New Jersey, a trip to get an oil change one time ended up costing me $1,000. The first thing I did was bump up my emergency fund to be $2,000, it just makes me feel so much better just in case something were to happen. Eventually I found sinking funds, too. This was actually life changing for my budget and my stress level.

What is a sinking fund?

I had no idea what a sinking fund was when I started this journey. I mean you heard about my car situation and literally blowing my entire emergency fund just on a trip to the mechanic, which never would have happened if I had a sinking fund. A sinking fund is when you set money aside each month for an upcoming expense. This is for things that you know are coming and have time to prepare for. By setting aside small amounts of money each month, the large expense doesn’t hit your budget as hard when the time comes.

How to start a sinking fund

This was tricky for me in the beginning. I knew it would be better for my budget in the long run to put small amounts aside for my upcoming expenses, but it was hard not putting that money to debt. However, the first time I actually used money from a sinking fund, it was a total game changer for me. In order to set up a sinking fund you need to figure out how much you are going to need and when you will need the money. For example, I know I’m going to need new tires and was told probably around the end of summer. I’m over estimating my tires to cost me $600 because I would rather have money left over and just put it towards debt after, then not have enough and scramble trying to find money. I started the sinking fund in February, so I have 7 months to save. I divide the total cost, $600, by the amount of months I have to save, 7 months, and I know I have to set aside $86 each month for my tire sinking fund. $86 is a lot easier than $600 in one month. Or, I save $3,000 for the summer when my income is not set, since I am a 10 month employee. I divide $3,000 over 10 months and put aside $300 each month. By the time summer comes around I have $3,000 in my account to use in case my income is lower than expected. At the end of the summer, I make a loan payment with whatever is left over.

Sinking funds have completely changed my finances because I no longer have to pull from my student loan extra payment when something major comes up. Now, my emergency fund is truly for emergencies and not just for big items that come up, like tires or brakes. How have sinking funds changed your budget?

Switching to Generic Brands
Money Management

Switching to Generic Brands

Switching to Generic Brands

I was always a die hard name brand girl for as long as I could remember. I’m not sure if it was because of my parents, or just I felt like it was what everyone did though. For some reason, if I was grocery shopping or shopping in the pharmacy, I felt like I had to buy the name brands. Then, I started getting my financial life in order and wanted to find all the ways to lower my monthly expenses. That’s when I realized how easily I could save money just by switching to the generic or store brands. So, I quickly made the switch and realized my life continued on as normal.

Saving Money with Generic Brands

If you are like me, I never used generic brands. I’m not sure why, but I always thought the quality wasn’t as good as the name brand products. I was completely mistaken though. I have pretty sensitive skin and I assumed the generic would cause my skin to get irritated, but that wasn’t the case. The generic brands are exactly like the name brands, but so much cheaper. Of course, for some people, it’s not going to work. But that comes with anything, even name brands. I also have found that I can get a lot better deals on the store name brands. I’m constantly finding buy one get one free on the generic and store brands, totally worth it!!

More Coupons on Generic Brands

I was very surprised to find that a lot of stores offer extra coupons when you buy their brand products. I don’t know why I found this surprising, the store is making more money by offering you that coupon! For example, I shop at Wegmans and they regularly offer a coupon for any Wegmans Organic purchase. I’m going to buy my organic groceries regardless, by buying the store brand it is usually cheaper and now I get to add an additional coupon. The savings are wonderful just by sticking to generic brands instead of the name brands.

Like I have recently been sharing, I’m all about finding ways to save money within my different areas of my budget. I tried tackling my entire budget in the beginning and totally failed. Once I started focusing on single categories, I was so much more successful. One way I have saved money in my grocery and toiletries budget is by switching to generic brands and this didn’t require any change to my life style. Have you switched to generic brands? Did you notice any difference?

Why You Need to Meal Prep
Money Management

Why You Need to Meal Prep

Why You Need to Meal Prep

Trying to tackle buying food can be quite the task. I’m just buying for my self and I find it challenging at times, so I can’t imagine what it is like for a family. When I started my debt free journey, my grocery spending was out of control, price wise and being just total junk. It was bad and I definitely needed to make over my entire grocery budget and what I bought. I decided to switch to organic and knew that it would increase my budget (but lower other budget categories, find out more here), so I had to find ways to save money in other ways. That’s when I found the wonderful world of meal prep and here’s why you need to also meal prep.

#1 Healthier

There is no doubt that when you meal prep you will eat healthier. Whenever I get home from a long day of work and side hustles, the absolute last thing I want to do is cook a meal. Before meal prepping, I’d end up eating whatever took the least amount of work to make, which usually meant junk. Once I had meals prepped, I’d just have to pop it in the microwave or oven and I was eating a well balanced, healthy meal with minimal work.

#2 Lower Grocery Budget

Of course, you’re going to save money if you meal prep in your grocery budget. I wrote a whole post just on lowering your grocery budget, but it is obvious that you would with meal prepping. When you meal prep, you no longer wander aimlessly around the store, but shop with a list of items you need for the meals you are going to prep. I personally go to Wegmans and through their app I can make my list, which also tells me where to find the item and organizes it in the order it is found in the store. This has seriously saved my budget because I go directly to those sections and don’t wander the store looking for what aisle everything is found in.

#3 Eat Out Less

This was huge for me because if I wasn’t throwing together some junk food for dinner, I was definitely stopping on my way home, or getting delivery. When you have all of your meals prepped at home, you’re going to eat them because you don’t want them to go bad. Once again, you’re going to save money by not eating out or ordering food by meal prepping.

#4 Save Time

Not only will you save money by meal prepping, but you will save so much time throughout the week. Of course, you’re going to need to spend some time making your meals, my day is Sunday. But when you’re making large amounts of meals it saves time then cooking each night. For example, I will cook a bunch of tofu that will last me a few nights on Sunday instead of cooking a small amount each night. I save time throughout the week by spending time cooking on Sundays.

When I learned about meal prepping and how to meal prep, it completely changed my life. I know this sounds a bit dramatic, but I was able to get a handle on my health, my money, and my time. It really is a wonderful way to help with a crazy schedule, get healthy, and save some serious cash. Do you meal prep? What is your opinion of meal prepping?

Homemade Cold Brew Coffee
DIY, Money Management

Homemade Cold Brew Coffee

Homemade Cold Brew Coffee

I strongly believe in focusing on one part of your budget at a time when you’re trying to cut expenses. When I first started this debt free journey, I tried to cut from my entire budget. Boy was this a total fail. I got too overwhelmed and felt deprived, so I would splurge on items not in my budget. It was terrible. Then, I started trimming smaller sections of my budget and was so much more successful. One area I needed to drastically cut was my spending on coffee. I was definitely that person that would stop at Starbucks or Dunkin’ on my way to work before I started paying off my debt. My first way to save money was to simply use the Keurig my parents had, which saved money, but I knew there were ways to do this even cheaper. That’s when I stumbled upon cold brew coffee and let me tell you, this has been life changing for me.

The first thing you will need to do is get a quality coffee blend, I recommend getting a flavored one, I find it tastes a lot better in the cold brew. I get an $8.00 organic one from Wegmans, I know I can save even more if I went for a cheaper one, but I buy organic due to food sensitivities. I’m able to get about 30 cups of coffee from this one bag, which is about 6 weeks for me. This amounts to about $0.26 per cup, which is huge savings compared to my old habits.

Once you have the coffee ground, combine 1 cup of coffee grounds with about 3 cups of water. I tend to just fill the rest of my mason jar with water and call it a day. Once it is combined, stir it with a wooden spoon until it is mixed and put the lid on. Let the jar sit on the counter for 12 hours.

After 12 hours you need to separate the coffee grounds from the coffee. I do this by placing a coffee filter in a funnel and then place that over a glass. There are many ways to do this, this is just how I do it. Once the coffee is strained, I put the coffee in a clean mason jar, this is your coffee concentrate. I keep this in the fridge during the work week taking from the concentrate each morning.

To make my cold brew coffee each morning, I take half a cup of the concentrate and half a cup of water and combine it with ice, almond milk and a bit of no sugar caramel sweetener. I stir it all together and enjoy! I have found this to be a great way to save money in my budget and a huge time saver for this teacher as I’m flying out the door! How do you save money on coffee?

6 Tips for 20-Somethings on a Debt Free Journey
Money Management

6 Tips for 20-Somethings on a Debt Free Journey

6 Tips for 20-Somethings on a Debt Free Journey

This post may contain affiliate links. Check out my Disclosure Policy for more information.

It can be hard being in your 20-somethings and on a debt free journey. Basically every time you get on social media someone is jet setting somewhere new, everyone is trying Orangetheory and SoulCycle, and you’ll find everyone at brunch on Sunday. It’s tough, especially when you’re trying to dig yourself out of debt. But, don’t give up, you can enjoy your 20s and still be on a debt free journey. Here are some frugal tips to follow for all 20-somethings.

Tip #1: Acknowledge your Sacrifices

Always, always, always acknowledge the sacrifices you are making for your debt free journey, especially if you’re a 20-something. You’re doing a lot to get yourself out of debt, so acknowledge that! You’re getting your financial life together very early on, and that’s something to celebrate. Being on a debt free journey is all about sacrifices now for a better future, but that doesn’t mean you need to live under a rock and do nothing. Remind yourself of the things you are giving up to help yourself out of debt. For me, that’s reminding myself that I’m living with my parents instead of in an apartment in a fun city.

Tip #2: Budget for Fun

It’s important to budget for the fun things you enjoy in your life. You might think if you’re on a debt free journey then you can’t budget for any fun, absolutely not!! You’re going to drive yourself crazy and probably end up spending money you don’t have, if you don’t budget for fun things. The important thing about getting out of debt is not adding any new debt. If you don’t plan for fun, then you’re more likely to put it on a card and spend money you don’t have. If it’s in the budget, then it’s okay! Plan for fun money so you don’t drive yourself crazy on this journey.

Tip #3 Sinking Funds

If you haven’t heard of sinking funds, you need to get on the band wagon ASAP. Sinking funds have been a total game changer for me and have allowed me to still enjoy my twenties while paying off my massive debt. Sinking funds are when you have a set amount you are saving for something in the future so you have the cash when you need it. This is how I was able to go to Punta Cana, San Francisco, and Florida during my debt free journey. I knew I wanted to go on these trips, so I started saving for them months in advance. When it came time for the trip, I had the cash ready and it didn’t take away from my snowball.

Tip #4 Happy Hour

Happy hour has become my best friend on this journey. Happy hour allows you to still go out and enjoy time with friends, but at a much lower price. This goes back to tip number two, make sure you budget for these types of things, if they bring you joy. For me, I enjoy attending happy hour on Fridays with my coworkers. It’s a great time to unwind and have fun outside of work and I probably wouldn’t be as sane without all the laughs.

Tip #5 Cut Spending for Necessities

Unfortunately things like toilet paper, shampoo, soap, and groceries have to be bought and there really is no way to get rid of these expenses. But there are ways to get creative and cut spending in this area. For me, I have moved to a more vegetarian lifestyle to lower my grocery budget, used coupons, used loyalty cards, and switched to generic brands. These switches aren’t going to make me rich, but they have all lowered my spending each month, which means I have more money at the end of the month to go to debt. Look at what you buy each month and see if there are ways to make switches to save money. One of the biggest ones for me was switching to baby wipes from make up removing wipes.

Tip # 6 Plan your Debt Free Journey

Make sure to plan for your journey and have a set date you want to be debt free. This can be tricky, but once you sit down and create a plan for yourself, it will be easier to stay on track throughout the process. My recommendation is to use undebt.it to create a plan for yourself. They make it super easy to put in all of your debts and choose the plan that works best for you. This way you will be able to see when you’re going to be debt free and this will keep you motivated when you’re tempted to go off budget.

The important part of being on a debt free journey is to not go into new debt and focusing on creating a better financial future for yourself. This doesn’t mean that you have to completely miss out on your twenties while you get yourself together. Make sure to plan, budget and keep enjoying your twenties, and then you can really enjoy your thirties! 🙂 What tips do you have for 20-somethings on a debt free journey?

How I Save Money on Contacts
Money Management

How I Save Money on Contacts

How I Save Money on Contacts

When I was in grad school I started doing a lot of research on personal finance, budgeting, debt payoff, and all the other fun stuff that comes with personal finance. I wanted to create better spending habits, not just a quick fix to my situation. So, I decided to focus on different areas of my life one at a time. This way I hoped to make these habits last. I started with my grocery budget and how I was going to keep eating organic while cutting my spending. It was tough, but it was doable once I got creative. Then, I went on to my toiletries, and once again I found some creative solutions to save money in this area. The one area that I figured was easy was to save money on contacts, boy was I wrong. This took some research and definitely some poor choices in regards to my eye health.

My Original Plan to Save Money on Contacts

When I first started focusing on my budget and trying to trim it I was using monthly contact lenses because they were the cheapest when I originally started using contacts when I was in 8th grade. Yes, I kept doing the same thing for 12 years simply because that was what I was used to. My senior year on high school I ended up being allergic to the proteins in my eye, so I needed to start using hydrogen peroxide solution. This was obviously more expensive then basic lens cleaner. When I started on my debt free journey, one way I saved money was switching to the generic brand of the solution, it helped, but not enough.

I started getting frustrated by how much my contacts were for the monthly lenses plus my little science experiment I needed to complete each night to properly clean them. So, I made an extremely poor choice and started wearing my lenses for as long as possible. I’m talking like months wearing the same lenses, just cleaning them with the hydrogen peroxide each night. I figured I could still see with them, they weren’t ripped, so why throw them out? I did this for about 3 years and made a year supply of contacts last me those 3 years, talk about savings right!? It is true, I did save money, but what I didn’t know is that I was practically suffocating my eyes because the contacts break down at that monthly mark and no longer allow your eye to breath. I also was setting myself up for a greater risk for eye infections.

My New Plan to Save Money on Contacts

After 3 years of doing this I realized I needed to take better care of my eyes. I started researching and found a much better solution for myself. One of the most frustrating things about wearing monthlies is that no matter what, at that month mark, I had to throw them out. Even if I only wore them 15 days that month. I felt like I was throwing away money some months if I didn’t wear my contacts much. I finally realized that my best bet would be to switch to dailies and wear my glasses more. Even though the yearly cost is more than monthlies, I can stretch out my year supply and its still healthy for my eyes. For example, no matter what my monthly contacts are the same price for a year supply because I have to throw them out. Now that I have dailies, I can stretch my yearly supply by wearing my glasses. It’s also a great idea to check for rebates on contacts, you can basically find a rebate for any of them by doing a quick search. How do you save money on contacts?

Debt_Free_Journey_Update
Student Loans

Debt Free Journey Update: $70,733.11 Paid Off

Debt_Free_Journey_Update

I graduated from graduate school in August 2015 with about $200k in student loans from undergrad and grad school.  My private loans went into repayment on November 2nd, 2015 and my private loans in March 2016. My debt free journey has been going on for two years now. I truly can’t believe it’s already been two years and I think it’s super important to reflect on my last two years of repayment to see ways I can improve my current plan.

Total Principal Paid Off to Date: $70,733.11

Current Payoff Date: October 2021

Debt Free Journey: How I Paid $70,733.11 towards my Student Loans in Two Years

  1. Sacrifices. As a twenty something who recently graduated from grad school, the first thing I always wanted to do was rent my first apartment and start my teaching career. However, I knew that wasn’t the best choice for my current financial situation. Instead I found a teaching job 20 minutes from my parents house and moved back in with them. This was the biggest way I have been able to pay off so much in two years.
  2. Budgeting. These past two years I have really cracked down on my budget and tried to be very strict with it. This has helped me immensely to pay down my debt.
  3. Side Income. This was huge for me in the last two years. Throughout the year I managed to add 4 different streams of side income through 2 different after school programs, private tutoring, and babysitting. At this point, I can completely cover my monthly expenses through my side income with some left over, my entire salary and some of my side income go straight to my loans. Find out how I make on average $1,200 per month in side income.
  4. Debt Avalanche. Since I have such high interest rates, I have chosen the avalanche method. This allows me to focus on my highest interest, largest accounts first and then apply that payment to my next account. This continues until all accounts are paid off. This has been working out wonderfully for me. I paid off three accounts in two years and was able to apply those payments to my next account making that payment even larger. This has helped my loans get paid off even faster.

Debt Free Journey: My Plan to Make Even Larger Payments

  1. Selling Items. Recently I have started purging my belongings that I don’t use anymore, like clothes and purses. It is crazy how much stuff we accumulate and don’t even realize it. In the next year I am planning to get more serious about selling my items I don’t use anymore to apply that money to my debt.
  2. Side Income. In the last year I have added many new students to tutor, it is now getting hard to schedule new clients because my schedule is so booked. I’m now going to focus more on creating income streams from my computer. I plan to find new ways to make money from home, since I have reached my maximum amount of babysitting and tutoring I can realistically schedule.

I’m very proud of myself for being able to make my money work for me and pay off so much of my student loans in two years of repayment. My goal was to finish paying off these loans by my 31st birthday, which would be April 29th, 2023, since I have clearly met that goal, my new goal is do everything I can to pay these off before my 29th birthday, which is April 29th, 2021. I’m so excited to improve my strategy and plan to pay off even more in the next year to pay off my debt even earlier! How much were you able to pay off in two years of repayment? What was your strategy?

Healthy Lifestyle on a Budget
Money Management

Healthy Lifestyle on a Budget

I began my debt free journey in November of 2015. It truly became a reality that I was in over $200k of student loan debt while I was completing my graduate studies. During grad school I completely changed my life to save as much money as possible. I started meal planning and got my grocery budget down to under $150/month. I was proud to get my groceries this low, but I also was dealing with my chronic sinusitis and migraines at the time. Eventually those two things wore me out, especially the migraines. I had sinus surgery in 2012 and was taking so much preventative medicine, only to still feel congested, always have headaches and averaged 1 migraine every week, sometimes up to 5 per week. I was over it.

Healthy Lifestyle on a Budget

Around this time my coworker mentioned to me that her daughter’s doctor recommended they cut out dairy from their diet when they had chronic sinus problems. She also suggested I do some research to find out what else caused inflammation in the sinuses. So, I went home and did my research. The two major things I knew I could quickly change was dairy and switching to organic. But, I knew my budget was going to suffer drastically from the organic. Desperation to get rid of my migraines pushed me to ultimately try the new diet.

Yes, my budget jumped to being under $200/month once I switched to organic. I expected at least this, but a lot happened that I didn’t expect. After about a month, I no longer needed my migraine medicine or my allergy medicine (I wasn’t even allergic to anything, my doctor told me I was sensitive to everything), this saved me about $50/month. And look at that, I just made up my grocery budget going up 🙂 Eventually, I stopped seeing my ENT all together, I was no longer getting sinus infections, and it was very rare that I got sick. I went from seeing doctors more than once a month, to seeing them once a year for a physical.

I used to have a medical sinking fund, that’s how much money I used to spend consistently on my medical expenses. Between the co-pays and medicines I consistently took, it was a ton of money. I no longer save any money for medical expenses because I’m no longer needing to do any of the things I used to do daily just to still feel awful.

Some people might argue that it isn’t frugal of me to be spending so much money on my food, or spending money on my at home work outs. Everyone has a different definition of frugality and mine has definitely changed over the last few years. What I realized was that even though I was spending an incredibly small amount for preventative health (nutrition, exercise, etc.), I was spending a ton of money on my reactive health, medicines, doctors appointments, surgeries, etc. In the long run, I feel that this is going to save me the most money, so that’s why I made the change.

Healthy Lifestyle on a Budget

I shared my reasons why I switched to a healthy lifestyle and how it has changed my budget. If you’re interested in even more tips, follow this link and I’ll happily add you to my private Facebook group 🙂

Using Gift Cards to Get Through the Hard Months
Money Management

Using Gift Cards to Get Through the Hard Months

When I began this debt payoff journey I was $200k in student loan debt, just starting my first year teaching, moving back home with my parents, and had no idea how I was going to manage this whole thing. I had a plan, I had a job, and I was starting to create some great side income streams. Then, the summer started. This should be the best time for a teacher, right? Wrong. No paycheck for 2 months when you have a $1,400 minimum loan payment to make each month is stressful. Of course, I had saved money throughout the school year for those two months in order to make at least my minimum. And of course I had some side hustles going on to bring in some income, but it was no where near my salary. That’s when I discovered using gift cards to get through the hard months.

Using Gift Cards to Get Through the Hard Months

When you don’t have your income like you’re used to, but you know it’s going to happen, it’s great, solely because you can plan for it. I was able to save enough money each month to cover my bills in the summer and start thinking creatively about my money. That’s the crazy thing about being in crippling debt, you start to think super creatively in order to get more money in your pocket.

About the same time I started to panic about not having my paycheck, I was also doing a huge purge of my things. I was hoping to sell some things to make some extra money. In the process, I found a TON of unused gift cards. That’s embarrassing to admit HA! I literally stashed them probably years ago and totally forgot about them. But, that got me thinking, why don’t I use these to help me in the summer?

So I survived my first summer without my salary and knew what I needed to do for the following summer. I saved each month for the summer so I could pay my bills and I hoarded every single gift card I received. Now, to clarify, if it was a restaurant one, or clothing, I didn’t necessarily keep it. The ones I kept were the ones that could be used anywhere, like Visa or Mastercard gift cards. And I absolutely kept Target gift cards because this teacher loves that place for back to school! So, what are the creative ways you have come up with to make ends meet when your pay isn’t consistent?

July Debt Payoff
Student Loans

July Debt Payoff

I started my debt payoff journey in November 2015 officially. That’s when my student loans officially went into repayment and I started throwing all of my money at my debt in order to pay it off as soon as possible. Since then, I’ve made many changes in order to increase my payments every month. When I first made my plan, my debt payoff date was just before my 31st birthday. My goal is to get that date closer and closer every month by improving my budget and increasing my income. I’m going to share with you all a breakdown of my loan payments and how I increase my monthly payment. I’m also hoping that by sharing with you all my goals, it will hold me more accountable to work towards them.

 July Debt Payoff

Income

The summer is tough for teachers, I don’t receive my normal paycheck in the summer, I’m on a 10 month salary. That means my income is strictly from my side hustles. However, I do save $300 every month during the school year, so I can afford my debt payoff on a 10 month salary. Here’s a breakdown of where my money came from this month.

Fitness Coaching: $100.00

Tutoring/Babysitting: $1,129.76

Summer School: $506.83

Ibotta: $30.50

School Year Savings: $1,500.00

Total: $3,267.09

Expenses

I save a lot in my expenses by living at home. I don’t have rent or utilities to pay each month, which saves me a ton of money and allows me to put a lot more towards my debt. My expenses here do not include my loan payments or my investment accounts. In July my expenses were $693, which includes my groceries and gas.

Loan Payments, Savings, & Investment Accounts

It might come as a surprise, but I actually contribute money every month to my savings and investment accounts. I know this is not typical for most people on their debt free journeys, but for me, while I am living at home, I am contributing $100 each month to my high yield savings account and investment accounts.

My current debt payoff date is September 2021, I’ll be 29 years old. I have been able to make significantly greater payments then I originally thought I could thanks to my side hustles. In order for this date to stay the same, I need to at least pay $3,166.71. My loan payment for the month of July was $2,473.92. This means I came in short this month, but considering I was working strictly from side hustles, I’m pretty proud of this number. This just encourages me to work even harder come September when I’ll have my salary back.