Financial Spring Cleaning: What do do first?

Welcome to our April Blog Hop!

This month we are so excited to help you reach your business and life goals, featuring articles, how-to’s and resources for you today that have helped each consultant, blogger and business owner on the hop in their own lives and businesses. Get ready to be inspired for a fabulous month ahead of you as you move along through the blog hop.

You may just be starting the blog hop or may have come from 3. Kim McDaniels at iBiz Design Duchess on Natalie Bradley’s Blog Hop. If you get off track at any time, the full lineup below will help you move along from blog to blog so you make sure to see and learn from all of the articles featured here today.

Financial Spring Cleaning: What should you do first?

Have I ever had credit card debt? Yes! There have been times in my life when I haven’t been able pay my balance in full when the bill arrives.

Credit card debt is the enemy of a good budget, but life happens. Even the best budgeter can have unplanned expenses.

According to a recent study by Trans Union, the average US adult carries $4,878 in credit card debt. That doesn’t include zero percent balances. That means the average US adult owes almost $5,000 plus the additional interest.

If this is you, I want you to take a deep breath. Debt repayment is just financial housework. There’s nothing to be afraid of here.

Do you know what’s really scary? Having company due in 5 minutes when the bathrooms aren’t clean. When that happens, do you lock the front door and pretend you’re not home? No! You walk into the bathroom and decide which part needs to be cleaned first (just in case you run out of time before the doorbell rings).

That’s right. I just compared paying off credit card debt to scrubbing the toilet. That’s because you want to use the same thought process with your credit cards. Some cards will need more attention than others, so you need to make a list of your debts which includes the interest rate and minimum payment amounts.

There are two methods to setting priorities on your credit cards.

Option 1: Pay the highest interest rate first. Your list will look something like this:

This is the best option if you want to save money. Using the example above, you pay as much as your budget will allow on card #1, and only the minimum on cards #2 and #3. When #1 is paid off, you make card #2 the highest priority. Rinse and repeat until all cards are paid in full. When you pay the highest interest rate first, you pay less overall.

Option 2. Pay the smallest debt first. Your list will look something like this.

This option is good if you need to see results to stay motivated. Receiving a bill with $0 due is really satisfying. A positive emotional boost can really keep the momentum going. You can compare it to housework, dieting, or exercise. We like to see improvements.

Bottom line: You have chosen to get out of debt (your goal) and the actions that will get you there (your plan). You’ll know the best option for you and your family, and you can change tactics whenever you want as long as you’re moving forward.

Let us know which option you choose and how you are doing.

The next stop is 5. Robin Hardy at Integrity Virtual Services on Natalie Bradley’s Blog Hop! Thanks for visiting and I hope to see you again next month!

Blog Hop participants lineup:

Natalie Bradley at Natalie Bradley Consulting
Deb Brown at Touch Your Client’s Heart
Kim McDaniels at iBiz Design Duchess
Jill Russo at JillRussoFoster.com <<– you are here!
Robin Hardy at Integrity Virtual Services

Clutter: It’s time to let it go

Stuff.

It’s easy to come by and we all have too much (including me). But is it hurting you? It could be. Clutter is a budget breaker. I won’t go into details in this article, but trust me that having more makes you spend more. You’d think that once you had everything you’d stop spending. You’d be wrong.

Are you using that?

When you’re busy, things get messy. So how do you know if you have clutter or a mess? According to my friend Matt Baier, of Matt Baier Organizing, you should ask yourself whether it has a pulse:

Here’s an example of a living mess and an example of true clutter. If there is a playroom full of toys, all over the floor and they will be moved around and played with tomorrow, that’s a living mess. If, however, there’s a room full of toys and the kids have moved out and have kids of their own now, that’s true clutter. It has stopped moving. The heartbeat is gone. It’s dead.

Unfortunately, we had a lot of dead clutter.

Save it for a rainy day… I mean the project not the object

We needed to tackle our clutter, but I wouldn’t waste a sunny day on it – or even a whole day.

This is what we did on snowy weekends this past winter.

Scanned documents from the file cabinet, then shredded and recycled the paper (medical records, income taxes, etc.)

Digitized the notes, workbooks and CDs from conferences we attended – now it’s all filed in the computer and backed up.

We did a major cleaning of the basement. In our house that is where things get put that don’t have a place. Plus, living in a family home, we have stuff from our parents – photos and memorabilia that I wanted to preserve. It’s not all done, but it’s well on its way. We are tackling the basement one box and one shelf at a time.

Donated some useful items. We found several old cell phones that we donated to an organization that gives cell phones to battered women. We cleaned out the books for a donation to the library.

We cleaned out the pantry and got rid of foods we no longer choose to eat. Some was donated to the local food pantry.

The bittersweet goodbye is mostly sweet

There are so many positives with decluttering. It’s not all heart wrenching goodbyes and worries about being caught without “that thing we were saving in case”. The house feels bigger and brighter. It’s a place where we feel more alive because we’re not clinging to the past or the future. We’ve benefited from sales and donation tax breaks. We feel closer to each other because we’ve processed our feelings and made plans for what we really want out of life.

We’ve found that we’re actually more ourselves without our stuff. And our spending is more focused on the things we really want – like travel.

How to Choose the Best Rewards Card

Last issue we talked about zero percent financing. Now, I want to talk about the benefits of ‘rewards cards’. You know, those credit cards that offer cash back bonuses, airline miles or other rewards that accumulate with each purchase.

Get the facts to determine if rewards cards are right for you.

Annual Fee and Interest Rates

First, rewards credit card generally have an annual fee and a higher interest rate than non-reward credit cards. You have to be absolutely certain that you will pay your balance off each and every month in full or the reward won’t be worth it.

Can You Use the Reward?

Nothing is worse than carefully accumulating points for a year, only to find you can’t use the reward. Ugh!

You need to find out what rewards are available, how many points and/or miles are needed, what are the exclusions? I was just reading an application for someone and for 25,000 points, they could get a free coach airline ticket valued at up to $400. That seems great on the surface, but what does that actually mean? Can you book that reward when and where you want to use it? How much do you have to charge to earn those 25,000 points?

If you were a part of my Nearly Free Travel Group, you know that we don’t have an airline miles rewards credit card. We earn our miles in more direct ways. We used to have several different types of rewards cards (airline miles, cruise points, etc.) but not anymore. But with everything in life, this is a choice we made. You may want to choose differently.

The Terms and Conditions

So what should you look for?

How the interest is calculated – single or double cycle billing?
How long is the grace period?
What percentage is the minimum payment (typically 2 to 2 ½ %)?

Take your time and ask questions before applying. Make a pros and cons list – does it work for your future plans and current spending habits? To start your research, go to Nerd Wallet’s Best Credit Cards of 2015 for a comparison chart that will help you determine if a rewards card could benefit you.

Is there good credit card debt?

Is there such a thing as good credit card debt? I believe the answer is yes, but you must be able to use the debt to your advantage.

For example, have you ever used zero percent financing to make a purchase?

This is how we did it. Back in November, we purchased a snow blower. It cost approximately $600 and we were offered zero percent financing for 1 year. It was a great offer and well worth it if as long as we paid in full before the free financing period ends.

We did pay it off with $100 installments, so it was all ours before the snow stopped falling. That was a good use of zero percent financing.

Zero percent financing is an expensive mistake if you don’t pay it off on time. But let’s say you still had a balance at the end of the finance period. What would happen?

You would have interest charges going back to the original price on the original date. So, for our purchase of $600 at the regular credit card rate of 18.99%, the minimum payment would be $15.00 per month. If you only paid $15 each month for 12 months, you would have only paid $180 of the $600 balance. If you continued this, it would take you 63 months and cost you $954.27. That’s a lot for a snow blower that’s only worth $600.

This is why it’s so important to know what you can actually afford to pay. We knew we could have the snow blower paid off in 6 months with a series of over payments. Each over payment was like insurance, giving us extra time should something else unexpected come up. Let’s face it, life is great at delivering unexpected surprises.

So, use the zero percentage financing options wisely. They can be a great deal under the right circumstances.

The Last Word on Student Loans

The last word on student loans for this series is about repayment. There are lots of things you need to be aware of. I am speaking about government loans. It may be the same for private loans, but not necessarily. You will need to check with your lender.

Never ignore any debt, especially student loans. Student loans are not included in bankruptcy. They have to be repaid. Interest charges add up, so sooner is better than later.

Student loans are deferred while you are in school. If you plan on taking a year or a semester off, you will have to start making payments. Will the loan go into deferment again when you return? Contact the lender to find out.

If you are having trouble repaying your student loans contact your loan servicer. Yes, this can be a scary call. Trust me, lenders want their money and most of the time they are willing to work with you to find a solution that works for you and them. Never promise to pay more than you can afford.

Some students have no idea what they owe or how many loans they have. This is not uncommon. As students scramble to make tuition, they may take out loans with several lenders over the years. They may also consolidate some loans while leaving others intact. If you feel like you’re missing the full picture, check your credit report at AnnualCreditReport.com to see a complete list of all outstanding debts. If you only want to see your government loans, you can go to the National Student Loan Data System (NSLDS).

Stay on top of all your debt to keep your finances in control.

What You Should Do Before Taking Out A School Loan

Let’s talk about paying for tuition. Last issue we discussed financial aid – specifically, the importance of submitting your FAFSA application as soon as possible. While it’s nice to get financial aid, many students don’t qualify. I am one of them. So what can you do?

Apply for a Scholarhip

Many scholarships require a FAFSA application, so get moving on it.

What scholarships should you apply for? Look for ones that meet your skills, interests or living status. For example:

Extra-curricular achievements like sports, music, theater, or technical competitions. If you have a talent, there may be a scholarship for you. Schools stay competitive partly through their extra-curricular programs, so they’re willing to pay. Look beyond the school as well, because there may be an outside group interested in advancing your particular skill set.

Potential major or field of study. These scholarships are created to draw interest or excellence to a particular field. It may be initiated by the school, a group of professionals, or a single wealthy donor. If you know what you want to study, look for a matching scholarship.

Your living status. Often initiated by a person or a group who has “been there,” knows that’s where you are, and wants you to succeed regardless. It could be for students who come from a particular town, a particular ancestry or ethnic group, whose parents are veterans of foreign wars, who have a particular medical condition, or who are single parents. It could be anything, really. Who knows how many scholarships like this are out there?

Read over the requirements carefully to make sure you meet them. Don’t waste your time, or theirs, by applying for a scholarship you won’t get because you aren’t Polish American or haven’t studied dance.

Be prepared to write essays, get references and provide any proofs required. This will take time and effort, but if you receive a scholarship – Yay! You got free money!

Student Loans – The Last Resort

According to US News and World Report, 69% of graduating students in 2013 had an average of $28,400 in student loan debt. Depending on the college (state or private), the actual range was between $2,500 and $71,000. This is a huge amount of debt to start your career with.

How to choose a loan:

Always start with subsidized loans versus unsubsidized student loans, and take government loans before private. Student loans are always changing, so do your research for the most up-to-date rates and conditions.

Use a student loan calculator to determine your future payments (US Department of Education Online Repayment Estimator).

Understand your student loans before you sign to protect your future financial well-being.

Move Faster on Your FAFSA

It’s that time of year again! I’m not talking about taxes.

You DO need your tax return, but that is only part of it. Any guesses?

It’s FAFSA – Free Application for Federal Student Aid. I personally applied last year at this time and here are some of the things I learned. If you are returning to school or have a child in going or in college, you need to read this.

Deadlines: There are several deadlines that you need to take into consideration – federal, state and the college you will be attending. The federal deadline is June 30. The Connecticut deadline is February 15. Deadlines for your state can be found at fafsa.ed.gov.

How to Apply: First, you need to go to the FAFSA.gov and start your application. Online application are easy, but as with anything, take your time and enter your information correctly. Don’t hit enter yet.

Double Check Before Submitting! If you didn’t qualify, it could be because of wrong or inaccurate information. Did you know that incorrectly filled out applications is the reason why most government grants are denied?

Do Your Income Taxes Right Now: You will have to link your tax return to the application.

“Sign” Your Application: How can you provide your signature on an internet document. You will use a PIN that is provided for you when you start the application process.

Need Help? Either contact the college or university financial aid office, read the instructions directly on the FAFSA’s website or call the number listed there.

First Come, First Served: Remember, that sometimes award monies are based on first application in – first application out. The earlier you submit your application the better, as the money goes fast.

Where will you go this year? Free Travel Class in February

Learn how to travel for Nearly Free!

-> Sign up here for the full free package including handouts

-> Sign up here if you want to go directly to the Facebook group.

Learn more at jillrussofoster.com/nearlyfreetravel

See My Vision Board for 2015

I always make time during the holidays to take an assessment of my life.

How do I feel about my life in general?
Am I on track with my long term goals?
Did I complete last year’s goals?
What should I add to enrich my life?
Where can I cut back to simplify my life?

I use that to determine what I want to accomplish so I can set meaningful goals for the year. I am a visual person, so I make an outward expression of my goals with a vision board. I love giving an outlet to my creative side, and a large poster is a great reminder all that I want to achieve.

Here are my steps to creating a vision board:

List what I want to achieve this year in different areas of my life. For example, I might set separate goals for my business, my personal life, family relationships, fun and recreation, and spirituality.

Next the fun starts: I look for pictures that reflect the feeling behind my goals. I also look for words in large and colorful type face. The image has to resonate with me to earn its space on my board. I use magazines, newspapers and images that I’ve found online. Then, I cut them out (or print them) and set them aside.

Then I arrange, and rearrange, the images on the poster board until I’ve achieved an overall image that speaks to me.

Finally, I glue everything in place and display it.

Now, this is the end result for my 2015 vision board.

Start Flexing Your Financial Muscles to Make Your Dreams Come True

Welcome to our very first Blog Hop for 2015!

This month we want to help you start the year off with a fresh start featuring articles, how-to’s and resources that have helped each consultant, blogger and business owner on the hop in their own lives and businesses. Get ready to be inspired for a fabulous year ahead of you as you move along through the blog hop.

You may just be starting the blog hop or may have come from Deb Brown at Touch Your Client’s Heart on Natalie Bradley’s Blog Hop. If you get off track at any time, the full lineup below will help you move along from blog to blog so you make sure to see and learn from all of the articles featured here today.

Start Flexing Your Financial Muscles to Make Your Dreams Come True

It’s the New Year and you may have goals related to your appearance and business, but what about financial fitness? When you strengthen your “core” you’re improving your center of balance, and your money is the main center of movement for your lifestyle. If it’s in balance, everything flows from dream stage to the “I can do it” stage.

So how can you start flexing? Try these exercises:

You may not be great at them at first, but just remember how you felt in your favorite exercise class the first time you tried it – a bit slow, out of synch, not sure what came next. Now you love it, and you’ll love these too because they feel good and get you what you want most: a lifestyle that serves you.

1. Keep your credit score as high as possible.

First get your credit score for free (CreditKarma.com, Quizzle.com, CreditSesame.com). Then, take little steps over the next 12 months to increase your score. This is a new exercise, so take it slow. You can do one small thing each month to improve your score: pay extra on a debt; earn a little extra income; or, check your official credit report for errors. Just like training your muscles, your task is to nudge that score higher over the course of a year. Patience and diligence will pay off and your higher score will reap big rewards in respect and savings when you enter into a new financial agreement.

2. Live under your means.

Yes, I mean spend less than you earn. I know it’s hard when everything you buy feels like something you need – so don’t go cold turkey! Instead, each month look around and see if there’s one thing that can be replaced with something cheaper. Have you tried the library lately? They’ve moved beyond print. You can borrow the DVDs for Game of Thrones, or download an audio book. Some people are saving $1,000 per year by disconnecting cable TV and replacing it with services like Netflix, Hulu and Amazon Prime. You may be able to get cheaper car insurance or move your phone service to a “friends and family” plan. You might find out that you love using your pressure cooker to make amazing soups from leftovers, or that you love having a vegetable container garden.

There are a number of ways to save that actually enrich your life, giving you a bigger benefit, and making you feel the opposite of poor. To find your biggest budget leaks, I recommend tracking your spending for a month. I offer a tracker when you sign up for my newsletter.

3. Having savings for times of need.

Again, take it slow. Just like you won’t get fit in a day, you won’t have a big savings account in a day. It’s all about moving a little money over on a regular schedule. If you receive a paycheck, you can have it deposited automatically. If you’re an entrepreneur, you can schedule a monthly transfer from checking to savings. Out of sight is out of mind. It’s just like hiding the snacks in the back of the cupboard.

I don’t want to to scare you, but without a savings, you are one step from financial disaster when the next unexpected expenses occurs. Having a savings account is a lifestyle and it’s one you want to work your way into.

Turn these steps into regular exercise and you’ll have healthy finances to support your dreams.

The next stop is Kim McDaniels at iBiz Design Duchess on Natalie Bradley’s Blog Hop! Thanks for visiting and I hope to see you again next month!

Natalie Bradley at Natalie Bradley Consulting
Cari Vollmer at PassionIntoProfit.com
Wendy Bottrell at Lifestyle Transformation
Janet Slack at Solopreneur.Biz
Vicki Heise at Live Your Healthy Life
Rochelle Togo-Figa at Speaking Breakthrough Strategist
Lisa Ivaldi at InsightClarityGrowth.com
Robin Hardy at Integrity Virtual Services
Sandra Gardner at Tall Red Poppy // Marketing, Magic, & Design Sanctuary
Deb Brown at Touch Your Client’s Heart
Jill Russo Foster at JillRussoFoster.com <<– you are here!
Kim McDaniels at iBiz Design Duchess
Sharon Lewis at Questiam Leadership Development
Chérie Ronning at Chérie Ronning, Consultant-Mentor-Speaker

Jill’s Financial Tracker and NearlyFreeTravel

To Receive Jill’s Financial Tracker and her bi-weekly newsletter (only 26 issues a year) AND register for her free Travel Class in February, follow the link below:

In Nearly Free Travel: Lessons in Travel from Jill’s European Vacation, Jill shows you how she plans her trips and ups her miles & travel perks – without actually flying! This is Jill’s latest free class and it starts in February. You’ll also receive her bi-weekly newsletter and her Financial Tracker.

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