Free Money (Pt. 2)

We all want more money and more freedom in our lives. Getting out of debt is step one for financial freedom and personal health. With more money comes peace of mind and better living habits, better food, and more time spent doing the things you love doing. Even if all you love doing is walking on the beach or reading a book. How much do you pay for your car? Getting it paid off can free up A LOT of cash and help you even further. Once it’s paid off, hold onto it for as long as possible without dumping tons of money into upkeep. Look up the best and worst car brands online and what models last the longest. From what I’ve seen, Honda and Toyota hold up longer than GM and Ford. Ford and Toyota trucks hold up better than Nissan and Dodge.

Do your research. Look around and see what old cars and trucks are still running. Avoid brand new technology. No one knows how long they last because they haven’t been time tested yet.

Also, you shouldn’t buy a car that’s less than 3 years old because of depreciation in value in the car. I know someone with a ten-year-old Honda accord and only needed to put about 600 dollars into it this year alone. 600 dollars is a lot cheaper than a car payment of 400 or 500 a month. Using the Honda as an example, there are tons of parts for them because it’s a popular model and gets good gas mileage being a V-6. Because of its age, minimum car insurance is needed (saving more money if you feel comfortable with less than full coverage).

Working on your own car can really help save money. Just doing the oil changes and brakes yourself can really save a lot of time and cash that can be used for paying off debt. Anything basic can be found online and on a lot of DYI sites.

Using less electricity can help as well. Trying to cut a monthly bill of 250 down to about 180 is doable. Again, how far do you want to go with it? I’ve used low wattage CFL bulbs or LEDS. When walking around the house at night, I’ll use the light on my phone, and I charge the phone in my car when I’m driving. I turn off lights when I don’t use them and unplug any chargers when not in use.

Clothing is very important. You can always use cheaper detergent, but I use the more expensive ones because the clothing seems to come out of the wash better and the colors don’t fade as fast. Have three sets of clothing if you can – one for work, one for hanging out around the house or doing chores, and one set for going out. Learn how to sew and use it for older clothing with holes in them, like socks and work pants. It’s a skill that will save you especially in times where it seems like everything is getting more expensive (because it is).

Try to budget everything based on a four-week month. For example, if you make 600 a week and your rent is 1000 a month, try to break down the rent throughout the month and pay things off earlier in the month. 1000 over 4 weeks is 250 a week. That leaves you 350 a week for other things. Your first week could look like this. 600-250 for rent= 350- 140 for car insurance= 210. You can set aside 80 for food and gas, leaving 130 for savings or other bills. The second week- 600-250 for rent=350-90 for cable=260 take the 260- 80 for food and gas= 180 for savings or other bills. The third week- 600-250 for rent=350-30 for phone=320 320-200 for electric=120 120-80 for food and gas=40 left over for savings or other bills. The final week- 600-250 for rent=350-200 for credit card=150 150-80 for food and gas=70 left over for savings or other bills.

Being able to budget will help you see your picture in a better light. If you find that you don’t have enough money at the end of the month for basics, then you need to cut back. This isn’t easy or comfortable. I know because I’ve done it.

There are 4 months out of the year with 5 weeks in it. Use that 5th week as a bonus to pay off something or get ahead. Take 20 dollars out of it and treat yourself. Packing your lunch for work is ideal. Pay attention to coupons and local deals. Saving a few dollars here and there can add up. If you cut back everything and still feel like you need a second job to get out of debt, then do so. Whatever you make from the second job should go towards paying off your debt and nothing else. As soon as the debt is gone, the second job can end. Don’t get comfortable with that extra cash coming in if you are planning on quitting one job. However, if you pay off your debt and still feel like keeping both jobs, you can start saving the extra cash that’s coming in.

The point is to get out of debt. Do what feels comfortable to you. Once the debt is gone, and your spending habits are under control, then it is time to move forward with growing your money. Remember this is up to you and no one else. It’s not easy and very uncomfortable. Downsizing isn’t fun. However, in order to become free from debt, it has to happen. No excuses. No putting it off.

-KRB

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