This week we have had some guest visiting and it's been fun. There is something nice about having guest come and visit, I don't know if it's the chance to do nice little extras to bless somebody or the change of pace but I enjoy it. Being an animal person, I've especially enjoyed our guest little dog who has made herself comfortable. She is an adorable little girl who is fascinated by the chickens and our cats! The chickens are not nearly as thrilled with her although they are starting to relax a little and the cats, well, they keep an eye on her at all times!!
It is hard to keep up with everything when you have guest. Work, supper, writing, animals, schedules, they all become a bit more chaotic. I am getting behind on quite a bit of things but that's OK :)
There will always be tomorrow and if there is no tomorrow then I can say I prioritized the right things on the last day of my life!!
Saturday, September 22, 2012
Thursday, September 13, 2012
Finding freedom in debt elimination-part 4
To Save or not to save?
Having a savings is a key part of staying out of debt after you have cut your debt down. With savings, if something happens, you don’t have to use that dreaded credit card to handle it. But the real question is whether you should save first before you start paying down debts. As with most debt reduction ideas we’ve discussed, this has a lot to do with your particular situation. If you are in so much debt you can hardly pay your bills every month, putting savings aside may not be your best first step. .
When deciding about a savings account consider your interest rates versus interest earned. Most savings accounts only earn around 1% but the average credit card charges 18% interest. By paying off a credit card you have “saved” 17% more then the same amount in a savings account and permanently freed up a payment from your monthly debt load.
So when should you think about savings? Setting aside savings is a very important step along the way. If you can set aside a little savings while still paying on debt reduction, that can really work out to your benefit. That way you are making progress on your debt payoff plan while putting aside a little for emergencies. The key to savings is finding a balance that gives you an emergency fund while not interfering with your debt reduction plan. Setting up goals can really help, you may want to pay two or three high interest debts off first, then work on a savings.
How much should you save?
Sometimes answering this question feels like trying to answer the question, how much money is enough? It’s been my experience that there is never “enough” It depends wholly on what your saving for. When working towards financial freedom keep in mind that every bill you don’t have is a savings. I think everyone should go into retirement debt free so they can enjoy there retirement years with far less stress and money worries. There is nothing more sad then seeing a senior lose there home or struggling to eat well. When planning for retirement, getting rid of our debt should be a huge priority!!!
But right now, while your sitting here possibly drowning in debt with the worry of not being able to ever get ahead, a small saving is all you need. When you get to a point where you can put aside a little for savings start with a small goal. Just enough that can help you through a small unexpected bill, end of the year taxes, or a minor vehicle repair. Basically enough to help you through life's unexpected cost without using that credit card or taking out a loan! Then you can get back to paying down some more debt. When you get to where you can add to your savings again try to put aside enough where you could live comfortably on it for a month, then try for 3 months, then 6 months!
Something I would like to mention that is a huge help in a debt reduction plan is a checking account cushion. When, and only when, you get to a point where you have a few bills paid off and a little savings put aside, you should consider building a cushion for your checking account. A checking account cushion is an amount of money that is in your checking account but not considered in your budget. You know it’s there but you don’t consider it usable. It is an invaluable tool to protect your checking account, savings account and make sure bills are paid on time! We only recently started doing this again and it has proven itself over and over. It can be just $100 or $500+. It should be enough where if you get hit with a small unexpected bill or someone in the household accidentally makes a budgeting mistake your account is not overdrawn and you have time to correct it. If you do dip into your cushion, put it in your budget as a deficit and replace it ASAP just like it was a bill.
Having a savings is a key part of staying out of debt after you have cut your debt down. With savings, if something happens, you don’t have to use that dreaded credit card to handle it. But the real question is whether you should save first before you start paying down debts. As with most debt reduction ideas we’ve discussed, this has a lot to do with your particular situation. If you are in so much debt you can hardly pay your bills every month, putting savings aside may not be your best first step. .
When deciding about a savings account consider your interest rates versus interest earned. Most savings accounts only earn around 1% but the average credit card charges 18% interest. By paying off a credit card you have “saved” 17% more then the same amount in a savings account and permanently freed up a payment from your monthly debt load.
So when should you think about savings? Setting aside savings is a very important step along the way. If you can set aside a little savings while still paying on debt reduction, that can really work out to your benefit. That way you are making progress on your debt payoff plan while putting aside a little for emergencies. The key to savings is finding a balance that gives you an emergency fund while not interfering with your debt reduction plan. Setting up goals can really help, you may want to pay two or three high interest debts off first, then work on a savings.
How much should you save?
Sometimes answering this question feels like trying to answer the question, how much money is enough? It’s been my experience that there is never “enough” It depends wholly on what your saving for. When working towards financial freedom keep in mind that every bill you don’t have is a savings. I think everyone should go into retirement debt free so they can enjoy there retirement years with far less stress and money worries. There is nothing more sad then seeing a senior lose there home or struggling to eat well. When planning for retirement, getting rid of our debt should be a huge priority!!!
But right now, while your sitting here possibly drowning in debt with the worry of not being able to ever get ahead, a small saving is all you need. When you get to a point where you can put aside a little for savings start with a small goal. Just enough that can help you through a small unexpected bill, end of the year taxes, or a minor vehicle repair. Basically enough to help you through life's unexpected cost without using that credit card or taking out a loan! Then you can get back to paying down some more debt. When you get to where you can add to your savings again try to put aside enough where you could live comfortably on it for a month, then try for 3 months, then 6 months!
Something I would like to mention that is a huge help in a debt reduction plan is a checking account cushion. When, and only when, you get to a point where you have a few bills paid off and a little savings put aside, you should consider building a cushion for your checking account. A checking account cushion is an amount of money that is in your checking account but not considered in your budget. You know it’s there but you don’t consider it usable. It is an invaluable tool to protect your checking account, savings account and make sure bills are paid on time! We only recently started doing this again and it has proven itself over and over. It can be just $100 or $500+. It should be enough where if you get hit with a small unexpected bill or someone in the household accidentally makes a budgeting mistake your account is not overdrawn and you have time to correct it. If you do dip into your cushion, put it in your budget as a deficit and replace it ASAP just like it was a bill.
Monday, September 10, 2012
Finding freedom in debt elimination-part 3
My budget is a flexible budget, it is not your typical locked in stone budget as my income and outgo from my pet sitting business varies constantly. Every time my income changes, the budget changes. We use it to scratch out an estimate of what we think the month will look like and fix as needed. If you have a steady income, you can work out a much more structured budget.
A budget is a great tool to keep tract of how much money is coming in and how much is going out. It helps you set limits on expenses such as food and gas, see what bills are causing budget issues and is a wonderful resource to plan for changes in your finances. Again, there are a lot of great websites with budget plans and even software that may be perfect for your situation, when starting your budget you may need to try a few types before you find something you can work with easily and fits your lifestyle. For this article I’m going to assume you will be trying to bring in extra income to pay off bills and therefore will be working with a flexible income.
Just like our Payoff List, we have our budget set up in a word document on our computer so we can easily make changes as needed. My income is sporadic, so our budgeted month often changes as more people call for my services in that month. I write out a weekly budget for an entire month. I start the top with the current amount I have and the dates for that week (the dates help me know which bills are going out each week) Then on the top of the list I put all known income and below that I put all expenses for that week. I then add the income to my current balance and minus the outgoing from my income to find how much I have left over or how much in the minus I am for that week. Then I use that total to roll over into the next week. With this budget, I know if I’m going to be in the minus by week three I need to make changes, cut corners and find sources of income to correct that negative balance. I find a weekly balance a lot easier to work with then a monthly.
Fictional example:
$232.00 starting 9/3-9/9
+$400.00 Spouse income
+$52.00 farm
+$234.00 business (smith)
+$65.00 business (Jones)
+$500.00 Other income
-$50.00 food
-$40.00 gas
-$1,000 mortgage
--------------------------
$383.00 left over
When your planning to pay down debt, it’s very important to know how much you have left over on your worst week. For instance, if you have a weekly balance for the whole month you can see what you have left over on your worst week, that week where there seems to be more going out then coming in. If you’ve budgeted correctly, you will have been able to make adjustments to your budget earlier in the month and prepared for that bad week.
Decide how much to pay down on your bills for the month based on the balance of your very worst week. If you have $500-$600 leftover on most weeks but only $150 on your worst week then you really only have about $100 to pay down debt with that month. It’s a good idea to leave a tiny bit of leeway in case you’ve forgotten a bill or an unexpected need comes up. Make sure to be realistic with your expenses, if you budget $30.00 for food but you spend $100.00 your going to be in big trouble!! It is better to budget what you really need and prepare for it, then to under budget and spend more. If you can spend less then your budgeted amount, thats great! Next we will take a look at the positives and negatives of starting a savings before paying down debt.
A budget is a great tool to keep tract of how much money is coming in and how much is going out. It helps you set limits on expenses such as food and gas, see what bills are causing budget issues and is a wonderful resource to plan for changes in your finances. Again, there are a lot of great websites with budget plans and even software that may be perfect for your situation, when starting your budget you may need to try a few types before you find something you can work with easily and fits your lifestyle. For this article I’m going to assume you will be trying to bring in extra income to pay off bills and therefore will be working with a flexible income.
Just like our Payoff List, we have our budget set up in a word document on our computer so we can easily make changes as needed. My income is sporadic, so our budgeted month often changes as more people call for my services in that month. I write out a weekly budget for an entire month. I start the top with the current amount I have and the dates for that week (the dates help me know which bills are going out each week) Then on the top of the list I put all known income and below that I put all expenses for that week. I then add the income to my current balance and minus the outgoing from my income to find how much I have left over or how much in the minus I am for that week. Then I use that total to roll over into the next week. With this budget, I know if I’m going to be in the minus by week three I need to make changes, cut corners and find sources of income to correct that negative balance. I find a weekly balance a lot easier to work with then a monthly.
Fictional example:
$232.00 starting 9/3-9/9
+$400.00 Spouse income
+$52.00 farm
+$234.00 business (smith)
+$65.00 business (Jones)
+$500.00 Other income
-$50.00 food
-$40.00 gas
-$1,000 mortgage
--------------------------
$383.00 left over
When your planning to pay down debt, it’s very important to know how much you have left over on your worst week. For instance, if you have a weekly balance for the whole month you can see what you have left over on your worst week, that week where there seems to be more going out then coming in. If you’ve budgeted correctly, you will have been able to make adjustments to your budget earlier in the month and prepared for that bad week.
Decide how much to pay down on your bills for the month based on the balance of your very worst week. If you have $500-$600 leftover on most weeks but only $150 on your worst week then you really only have about $100 to pay down debt with that month. It’s a good idea to leave a tiny bit of leeway in case you’ve forgotten a bill or an unexpected need comes up. Make sure to be realistic with your expenses, if you budget $30.00 for food but you spend $100.00 your going to be in big trouble!! It is better to budget what you really need and prepare for it, then to under budget and spend more. If you can spend less then your budgeted amount, thats great! Next we will take a look at the positives and negatives of starting a savings before paying down debt.
Sunday, September 9, 2012
Finding freedom in debt elimination-part 2
Making a payoff list was a crucial step for our success in finely seeing our debt go down instead of up. I highly recommend it to anyone who is wanting to work towards financial freedom. It is a simple list of every debt we had. It only has those debts which can be paid off however, no reoccurring debts!
We made our list in a word document on our computer so we could easily make changes as needed and always have everything up to date if we needed to make a debt decision.
For our list we started with the name of each debt in the first column, the interest of each debt in the second column, the payoff amount of each debt in the 3rd column and the monthly payment amount in the 4th column. A quick note on the interest column, we chose to list the actual dollar amount of interest each bill was charging us instead of the percentage, even though the dollar amount varied with the amount due it was such a small change for most bills that we only had to update it once every few months or so. We found that seeing the actual dollar amount we were paying for interest really helped us make wise decisions on how to attack our debt.
We put our debt in order from most expensive to least expensive and numbered them. Then we added up all of our debt pay off amounts and beside the date put the total. Every month after the bills had been paid I gathered all the bills and updated the payoffs of each bill, totaled them and wrote a new date and total beneath the old total, we would then put in parentheses beside the new total how much our debt had gone down or up for that month.
A fictional example:
Bill name Interest Payoff Monthly
-------------------------------------------------------------
(1)Mortgage $568 $100,000 $1,000
(2)Car $134 $23,000 $325
(3)Credit Card 1 $56 $5,000 $90
(4)Credit card 2 $24 $1,000 $40
(5)Interest free Loan 0 $500 $50
-------------------------------------------------------------
Total 8/2/12 $130,223
Total 9/2/12 $129,500 (-$723)
HOW TO USE THE PAYOFF LIST
Using the payoff list you can quickly see how each bill is effecting your finances and make individual choices on that information. I have found that each household needs to take a different attack on there bills depending on what is priority at the time. For instance, considering the chart above we know our smallest bill payoff is only $500 but is costing us $50 a month, however we also know it is interest free and will be paid off in 10 months even if we pay only the minimum. If freeing up that $50 would make a big difference in your monthly budget, help you pay your bills on time or pay off the next bill much quicker then go for it. However if the $50 is not critical, then attack a bill that is charging you interest because your basically throwing away money when you pay interest. It is important to keep the payoff amount, interest and monthly payment in mind when deciding which bill you want to tackle. If you have two debts that are very close in payoff and similar in interest but one has a monthly payment of $150 and the other $75 then it would be to your advantage to pay off the one with the higher monthly payment and free up that money from your debt load. Only attack one debt at a time, you will pay them off quicker and save in interest this way. Eventually you will get a snowball effect and find it easier to pay down debt as more of your money is going to bill principle and not interest. The monthly balance will help you see the effects of your efforts overall and keep you motivated. After you have picked out your first debt to eliminate then just put whatever you can on that debt, even if it’s only an extra $10 or $15 a month, it all makes a difference!
We made our list in a word document on our computer so we could easily make changes as needed and always have everything up to date if we needed to make a debt decision.
For our list we started with the name of each debt in the first column, the interest of each debt in the second column, the payoff amount of each debt in the 3rd column and the monthly payment amount in the 4th column. A quick note on the interest column, we chose to list the actual dollar amount of interest each bill was charging us instead of the percentage, even though the dollar amount varied with the amount due it was such a small change for most bills that we only had to update it once every few months or so. We found that seeing the actual dollar amount we were paying for interest really helped us make wise decisions on how to attack our debt.
We put our debt in order from most expensive to least expensive and numbered them. Then we added up all of our debt pay off amounts and beside the date put the total. Every month after the bills had been paid I gathered all the bills and updated the payoffs of each bill, totaled them and wrote a new date and total beneath the old total, we would then put in parentheses beside the new total how much our debt had gone down or up for that month.
A fictional example:
Bill name Interest Payoff Monthly
-------------------------------------------------------------
(1)Mortgage $568 $100,000 $1,000
(2)Car $134 $23,000 $325
(3)Credit Card 1 $56 $5,000 $90
(4)Credit card 2 $24 $1,000 $40
(5)Interest free Loan 0 $500 $50
-------------------------------------------------------------
Total 8/2/12 $130,223
Total 9/2/12 $129,500 (-$723)
HOW TO USE THE PAYOFF LIST
Using the payoff list you can quickly see how each bill is effecting your finances and make individual choices on that information. I have found that each household needs to take a different attack on there bills depending on what is priority at the time. For instance, considering the chart above we know our smallest bill payoff is only $500 but is costing us $50 a month, however we also know it is interest free and will be paid off in 10 months even if we pay only the minimum. If freeing up that $50 would make a big difference in your monthly budget, help you pay your bills on time or pay off the next bill much quicker then go for it. However if the $50 is not critical, then attack a bill that is charging you interest because your basically throwing away money when you pay interest. It is important to keep the payoff amount, interest and monthly payment in mind when deciding which bill you want to tackle. If you have two debts that are very close in payoff and similar in interest but one has a monthly payment of $150 and the other $75 then it would be to your advantage to pay off the one with the higher monthly payment and free up that money from your debt load. Only attack one debt at a time, you will pay them off quicker and save in interest this way. Eventually you will get a snowball effect and find it easier to pay down debt as more of your money is going to bill principle and not interest. The monthly balance will help you see the effects of your efforts overall and keep you motivated. After you have picked out your first debt to eliminate then just put whatever you can on that debt, even if it’s only an extra $10 or $15 a month, it all makes a difference!
Saturday, September 8, 2012
Finding freedom in debt elimination- part 1
True freedom is found in the absence of debt! I don’t know anyone who, when asked if they would like to be debt free, would decline. We all dream of that possibility and it seems so unattainable. Two major problems we come up against when trying to reach financial freedom. #1 life is expensive #2 stuff happens.
But I have good news! It’s not impossible if your really dedicated to the task.
There are several great websites and articles on the best way’s to eliminate debt. Some start with the smallest bill and working your way up, others start with the highest interest bill and then there are those that start with a savings stash before starting to attack your debt. Each way has it’s own positives and negatives, we’ve tried them all.
At one time, a long time ago, my husband and I were debt free. Once you get a taste of such a freedom it is depressing to find yourself back in debt. We thought we were pretty set up, no debts and a hearty savings account. If we did finance something, we were careful about the payments, interest rate etc. But like many people we were not nearly as prepared as we thought we were when life got hard. Through a series of unfortunate events covering everything from sickness, unexpected bills and a property dispute we found ourselves swimming in debt within a very short period of time. By December of 2010 we were in more debt then we had ever been in and every day was a struggle. Would we have enough to eat this week? Could we scrape together enough for gas to get to work? Could we pay our bills? Although we tried our very best to be responsible bill payers sometimes there just wasn’t any money in the bank so bills were paid late or split into two, that hurt our credit. It was a terrible time! We knew we needed to get rid of these debts but how in the world do you pay off bills when you can hardly pay the minimum??
December of 2010 was a turning point for us. We stopped trying to consolidate our debts which, for us, only made things worse and starting putting to paper a plan of attack. First up? A debt pay off list. We needed to see what debts we had, how much we owed on each, how much interest each had and how much we were paying per month on each bill. Then we needed a budget to keep tract of our monthly expenses, we needed to aggressively eliminate any debt we could live without even temporarily and last, we needed to open our minds to other sources of income.
We will take a deeper look into each of these debt elimination steps and how to apply them in future articles.
But I have good news! It’s not impossible if your really dedicated to the task.
There are several great websites and articles on the best way’s to eliminate debt. Some start with the smallest bill and working your way up, others start with the highest interest bill and then there are those that start with a savings stash before starting to attack your debt. Each way has it’s own positives and negatives, we’ve tried them all.
At one time, a long time ago, my husband and I were debt free. Once you get a taste of such a freedom it is depressing to find yourself back in debt. We thought we were pretty set up, no debts and a hearty savings account. If we did finance something, we were careful about the payments, interest rate etc. But like many people we were not nearly as prepared as we thought we were when life got hard. Through a series of unfortunate events covering everything from sickness, unexpected bills and a property dispute we found ourselves swimming in debt within a very short period of time. By December of 2010 we were in more debt then we had ever been in and every day was a struggle. Would we have enough to eat this week? Could we scrape together enough for gas to get to work? Could we pay our bills? Although we tried our very best to be responsible bill payers sometimes there just wasn’t any money in the bank so bills were paid late or split into two, that hurt our credit. It was a terrible time! We knew we needed to get rid of these debts but how in the world do you pay off bills when you can hardly pay the minimum??
December of 2010 was a turning point for us. We stopped trying to consolidate our debts which, for us, only made things worse and starting putting to paper a plan of attack. First up? A debt pay off list. We needed to see what debts we had, how much we owed on each, how much interest each had and how much we were paying per month on each bill. Then we needed a budget to keep tract of our monthly expenses, we needed to aggressively eliminate any debt we could live without even temporarily and last, we needed to open our minds to other sources of income.
We will take a deeper look into each of these debt elimination steps and how to apply them in future articles.
Thursday, September 6, 2012
Predators in the chicken coop
When you have chickens or any livestock for that matter, you tend to have predators. This snake we found enjoying our eggs is just one of many creatures that find chickens and eggs an easy and delectable meal. We relocated this fellow down the road so he could get off from our chicken welfare and go back to work eating mice and other pest.
Something recently has been enjoying eggs in our chicken coop again, all of the eggs our hen Abigail was sitting on has disappeared! We have not caught any critter, snakes usually are not quick to run off. Raccoons are bad about killing the actual chickens plus some eggs disappeared while the coop was shut up tight. If the chickens were eating them we would see other eggs being pecked at or destroyed. We are currently at a loss. Whatever it is, it's not bothering the chickens but instead just wants the eggs.
A weasel maybe? We haven't seen one. Oh well, I guess we won't have any new baby chicks hatching this month but honestly we didn't really need anymore.
Tuesday, September 4, 2012
The fun of cows!!
Isn't he a cutey!
Cows are great, well, most of the time! My husband and I plan to have a few cows when we finely move out to our homestead, we are interested in the milking Devon Breed which is on the endangered list. It's said to be hardy, a good forager, friendly, gives a good amount of milk but not too much and is priced reasonably, not to mention it is a beautiful mahogany color. We talked about miniature cows, Guernseys and other popular homestead breeds but think the milking Devon Is the right one for us.Where we currently live we are not allowed to have a cow but I still get to see them at a neighboring farm. The past 5 days I have had the privilege to care for a local quarter horse farm that also has cows, short horns I believe. They are raised for the owners personal meat and seem to be a very hearty breed. The calves are quite silly tho in the way they like to escape and then can't figure out how to get back in!! I have had "fun" herding little stubborn calves who did not want to go where they needed to, two times in the past 4 days. I can honestly say I have gotten my exercise! Weight lifting, cardio, crunches, stretches, all part of just caring for a farm. Who needs a gym?
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