Archive for August 2014

Get Out of Debt: Your Personalized Plan

Get out of debt

ID-100175536Greetings, Wise Dollar friends! If you’ve been following along with our monthly series on how to get out of debt, you’ll know that we started with a post on the importance of having the right attitude regarding your journey to debt free.?We followed that up last month with a post on?assessing your financial situation.?At this point, you should have a good idea about what your debt and asset situation is, and a clear understand of what kind of mindset you’ll need in order to make your journey to being debt free successful.

Today, we’re going to talk about the importance of formulating a plan for getting out of debt. Yep, here’s where the fun work begins. No sarcasm here; getting out of debt truly can be fun. Once you formulate your plan and start seeing those debt numbers go down, you will indeed be having more fun than a day at a Disney theme park could ever bring you. 🙂

Get Out of Debt – Your Plan, Your Way

One quick Internet search and it becomes crystal clear: there are many, many ways to pay off debt. This is why customization of your get out of debt plan is so vitally important. Only you know what makes you motivated to keep striving for a goal and what causes you to want to give up.

For instance, two popular methods of debt repayment are the Debt Snowball and the Debt Avalanche. The Debt Snowball works by paying off your debts in order from smallest to largest. Financially, the snowball is not usually the best way to go, but emotionally, seeing those debts crossed off the “I owe” list faster brings huge emotional wins, which often encourages a person to keep on that journey to debt freedom.

The Debt Avalanche requires that you pay off the highest interest loans first. On paper, you’ll still see the same list of debts you’ve always seen, but the numbers will be getting smaller. From a purely mathematical standpoint, getting rid of the highest interest loans first will allow you to become debt free quicker – provided you can avoid discouragement from not seeing those debts crossed off quicker like you do with the snowball method.

The take-away here is that you need to discover a plan that will allow you to be the most successful in your debt payoff journey, and customize it to your specific income, payment and debt situation. Once you discover that plan, feel free to modify it when necessary based on changes in your financial situation as well. Regularly assessing what works and what doesn’t is key to taking your debt payoff plan through to the finish line.

Your “Get Out of Debt” Budget

Spend tracking and budgeting are crucial to your debt payoff plan. Those two steps will help you to find all extra money possible to put toward debt repayment. So, the first thing you need to do in this process is to commit to tracking all spending.? This will help you to discover any financial leaks that might be punching a hole in your plan to become debt free. Second, you need to make a……budget.

Don’t panic: although budgets often conjure up images of balls and chains, I’m here to change your views on budgeting. You see, what budgeting, and spend tracking, truly offer you is FREEDOM.

How?

By giving you a crystal clear picture of your spending habits, and allowing you to then make future spending decisions based on what means the most to you. With budgeting and spend tracking, you can see that you’ve been spending a lot more than you thought at happy hour, and you can take that $500 a month you’ve been spending on happy hour and put it towards that home you’d like to purchase. Or that trip to Australia. Or that early retirement fund.

Budgeting and spend tracking, as a part of a complete debt payoff plan, allows you to manage your money in a way that ensures you are spending it on the things that mean the most to you.

So, when you make your budget, the plan is to make a line item for every bill you owe each month, for any savings funds, and then put extra toward debt. This is called a zero-sum budget. A zero-sum budget ensure each dollar that comes into your account has a place and a purpose, like this:

Joe’s Monthly Income: $3,000

Mortgage pmt:??????????????? $1,000

Gasoline:????????????????????????? $100

Groceries:??????????????????????? $200

Entertainment:????????????? $200

Clothing:???????????????????????? $50

Utilities:????????????????????????? $125

Insurance:???????????????????? $75

Gifts:?????????????????????????????? $35

Pet Costs:????????????????????? $30

Home repairs:??????????? $40

Visa minimum:????????? $210

Mastercard min.:????? $175

Student loan min.:??? $85

401K:?????????????????????????? $150

Emergency fund:??????? $50

Total needed each month:? $2,525

Okay, so our fictitious consumer, Joe, has an income of $3,000 a month and monthly expenses totaling $2,525 a month.? This leaves an extra $475 floating around in Joe’s budget. In a zero-sum budget world, Joe would take every dime of this $475 and put it toward his debt in the manner he’s deemed most efficient for his personal and emotional needs. That extra $475 a month will allow Joe to put an extra $5,700 a year toward his debt, not including the massive amounts of interest he’ll save in the process.

By having a plan,?a personalized plan,?Joe will be able to knock out his debt much, much quicker than he would have by simply making the minimum payments. And this fast track to debt free was all made possible by a simple budgeting and spend tracking plan that was customized to fit Joe’s specific personality and situation.

 

Do you have a budget and spend tracking system in place for your money? If so, how has it worked for you? When you’ve paid off debt, do you attack the lowest balance or highest interest rate first?

 

 

 

Photo courtesy of:??Free Digital Photos

US Airways Mastercard Review: Get 40,000 Miles Now!

US Airways Mastercard

US Airways MastercardThe US Airways Mastercard is quite possibly one of the easiest credit cards I have churned. Since I like to keep things simple, that?s saying a lot. Many credit cards require a certain amount to be spent in order to earn those fat sign-up bonuses. That?s not the case with the US Airways Mastercard. In fact, you only need to make one purchase on the US Airways credit card in order to qualify for the bonus miles. A transfer works as well, but I just prefer the purchase.

Before I get on with my US Airways Mastercard review I will give you a warning that this card will be going away at some point in 2015. So, if 40,000 bonus miles are something you?d like then act now before it goes away. This is due to their merger with American Airlines, which will be finalizing at some point in 2015. I?ll also add that if you?re trying to pay off debt or struggle with overspending, then churning credit cards is the last thing you should do ? plain and simple. With those disclaimers out of the way let?s get on with the review of the US Airways World Mastercard.

Things I Like About the US Airways Mastercard

There are many things I like about the US Airways Mastercard, such as:

You get 40,000 bonus miles. Like I said above, you get 40,000 bonus miles by using the US Airways Premier World Mastercard once. That?s it, once. No minimum spending to deal with at all. I bought two gallons of gas for our mower with the card and that?s all I needed. Easy peasy. You do have to pay the $89 annual fee, but that?s not bad at all.

You get two companion tickets. These can be used for up to two people and allow you to buy their ticket for $99 plus fees and taxes. I just got mine in the mail a few weeks ago and am looking forward to using them!

You get a 5,000 mile discount. This is a somewhat common one among airline cards, but is still nice to have. So, if it costs 30,000 miles to secure a ticket you get it for 25,000.

Your miles can be used on either US Air or American. This is a nice little feature thanks to the merger. So, if you?re earning points on the US Airways Mastercard you have the option of redeeming the miles on American.

Your first bag is free. This is for domestic flights, but you get the first bag free for you and up to four people with the US Airways credit card. US Air charges $25 for the first bag, so if you fly with a partner this is an instant savings of $50 each way.

Double miles on US Air purchases. With the US Airways Mastercard you get two miles per dollar spent and one mile on everything else. This is fairly common, but is still a nice feature to have.

This covers the majority of the things I like about the US Air Mastercard. There are other things like first class check-in and complimentary day passes to the US Airways Club that are nice, though I don?t see us using that much.

What I Don?t Like About the US Airways Credit Card

There are no perfect credit cards and that?s the case with the US Airways World Mastercard. What I like least about the card is there is an $89 annual fee attached to it. In order to get the bonus miles you will have to deal with the annual fee. That said, I still think it presents a great value even given the annual fee.

What Does the Merger with American Airlines Bring About?

With the finalization of the merger with American pending, there are a few changes that have happened, or will impact the US Airways Mastercard at some point, such as:

This card will be going away. This is a no brainer. The US Air credit card will go away once the merger is complete in 2015.

More possibilities to use the miles. With the merger with American Airlines, you now have the ability to use your US Air dividend miles not only on American but also on any of its 14 other OneWorld member airlines that include airlines like British Airways, Cathay Pacific, Iberia and more.

Some privileges will be going away. After the merger with American Airlines is complete, certain privileges will be dying off. As far as I can tell those will include the annual companion pass, first class check-in and 5,000 mile discount. Keep that in mind when you apply for the US Airways Mastercard.

Where Can You Go With Your US Air Dividend Miles?

The thing that got me to sign up for this credit card is the abundant possibilities of where you can go with the 40,000 miles. If you?re going to fly on US Airways, you can find the mileage chart here. As you can tell, you can go anywhere in the U.S., Canada, the Caribbean, Mexico, Central America, South America as well as Europe. A few of those destinations will require you to travel during their off peak period, but you can?t complain about that.

The options to use US Air miles isn?t quite as nice on the OneWorld member airlines, but still gives plenty of options. You can find that mileage chart here. Using this option still allows you to get to Hawaii, Mexico, the Caribbean and Central America.

I think for the right person the US Airways Mastercard could be a great option to consider if you?re looking for a new card to churn. With it only requiring one purchase or transfer to earn the miles, it?s hard to complain about this card. It?s also nice that they offer the different transfer opportunities with the OneWorld member airlines. If you?re looking for an easy card to churn that offers decent miles, the US Air Mastercard could be a solid one to consider.

 

What is the latest credit card you?ve been churning? Where are you planning your next trip?

 

 

 

Photo courtesy of: Aero Icarus

Easy Ways to Get Fit for Less

Get Fit

Get FitEveryone setting a goal to live healthier, get fit or lose weight generally starts out with lots of energy and good intentions. A few days and then weeks go by as people start looking into gym membership offers, and find that even with the special deals and introductory rates, many are still too expensive, especially for those?trying to live?on a budget. At this point, many would-be health enthusiasts simply lose heart. Rather than give up on your goals of eating healthy?and getting in shape, explore?better, less expensive ways to improve your life than purchasing an expensive gym membership.

Get on Your Bike

If you don’t already have a bicycle, the?initial cost to purchase one?may be slightly pricey, but just like high-priced gyms have lower cost alternatives, so do high end or specialty bike stores. Buy used bikes or end-of-season models to save money?on your bike purchase. The two-wheeled fun and fitness?of bicycle riding is?worth shopping around for a bike in your budget. Not only that, bicycle riding is?a hobby that you can turn into a lifelong pleasure.

Run Down the Expenses

Maybe less people run because it’s painful and can be hard to get into. However, it’s one of the easiest and best ways to get in shape. It’s also one of the cheapest. All you really need to run is a good pair of running shoes. If you have a smartphone, you can create a playlist to keep you motivated while you’re pounding the pavement and can download any number of free apps to track your mileage, pace and progress. Look for local, well-lit, popular running trails, or just head out your front door and try to go a little farther or faster each time.

Roll Away the Pounds

Rollerblading is another great way to get in shape. While it requires more balance and finesse than running, and a bit more skill than biking, once you master the art of this physical pastime, you can burn off calories at an amazing rate, and without all the impact of running on your knees and joints. All you really need to start rollerblading is a pair of rollerblades (even good used ones will do),?a helmet, kneepads, arm pads and a sense of balance (lean forward slightly to stay upright!).

Using Outdoor Facilities

Many cities and neighborhoods realize that not everyone can fork out for a gym membership. They?ll set up facilities such as pull-up bars in local parks and, at some beaches, even weights. Make the most of facilities like this to sculpt your physique and get yourself into top shape for free. If these aren?t available, you can still plan your own workout at the?park with calisthenics like?push-ups, sit-ups and core work and a good cardio routine in the beauty of the outdoors and the fresh air.

If none of the above appeal to you, you can always take a walk. Anytime the weather is nice, head outdoors and walk where you need to go. Save your bus fare for a rainy day.

 

Ross Clitheroe is a personal fitness trainer and takes part in several marathons and triathlons each year. He loves the challenges of fitness.

 

 

Photo courtesy of: Kris Krug

Three Tricks to Avoiding Spoilers on Twitter

Spoilers on Twitter

Spoilers on TwitterSpoilers are the norm in this fast-paced, information-laden society in which we live. So much so that it may make you long for the days before the Internet created a 24 hour news and information cycle. Back then, you could have a life?that didn’t require you to go dark on social media just to avoid learning about what happened in your favorite TV show before you’ve had a chance to watch it.

Take for example, the ever-popular and much loved HBO series, Game of Thrones. If you’re a fan?but?don?t have Sky TV?or some other cable or satellite network subscription and have to wait to watch the latest episode, Twitter can make your life really difficult.?From the second an episode airs, Twitter begins overflowing with spoilers, revealing major plot developments (like which major character is now unexpectedly dead).

Short of actually unplugging yourself from the Twitterverse, what can you do avoid letting this social media channel ruin your enjoyment of your favorite TV shows? Here are some things you can try but – spoiler alert – avoiding spoilers on Twitter isn’t?easy. 🙂

1. Mute the Biggest Spoiler Risks

The ability to mute people is a feature many Twitter users might not be aware of but it’s a handy one to use when you’re trying to avoid finding out what happened on your favorite TV show before you have a chance to watch it.?If you follow someone who you think is a spoiler risk – a big fan of a series you?re watching or someone with prior form – mute them, and they?ll disappear from your timeline.

Unfortunately, doing this means you won?t see any of the muted?s tweets, which could be awkward if it?s a family member or friend. But shows before bros, I say – if your pal?s a spoiler-er, mute away. 😉

2. Filter Out Spoilers

While it might be since if?Twitter gave you?the ability to block specific words?in its?basic desktop version or app, unfortunately that’s not a reality, at least not yet. In the meantime, you can filter out spoilers by using?a Twitter dashboard like TweetDeck, which it lets you filter out posts containing certain words or phrases.

The downside is that tweets containing spoilers, but not the words you?ve filtered out, will still get through, and the context alone could be enough to tip you off. Whether or not it’s worth the risk is for you to decide.

3. Don?t Go on Twitter

Oh, it?s irritating and draconian, but, in this case depressingly appropriate. The best method for avoiding spoilers on Twitter is to not go on Twitter until you?ve seen the show or film you?ve been waiting to see. While avoiding Twitter for a day or however long it takes you to catch up with your favorite show might feel like going through withdrawal, you can do it.

Really, you have a choice to make about what you value more – Twitter or a pristine, unspoiled version of your show. If you find that you simply can’t go without Twitter for any length of time, spoilers may just have to be the price you pay for your addiction to being on Twitter.

 

 

Photo courtesy of: Chrisjtse

3 Avoidable Mistakes of Selling a Home

selling a home

selling a home

The following is a contribution from Tali Wee at Zillow. If you’d like to contribute to Wise Dollar, please contact us.

Homeowners sell their properties for a variety of reasons, sometimes willingly, other times under pressure or on short timeframes. If you’re selling your home, regardless of your motive, you want?the highest return possible on your?investment; you want to get the best price possible on your home. Get the greatest resale price on your?property by?cleaning up, making necessary upgrades and professionally marketing your home.

That’s what you should do. Here are three ‘don’ts’ to keep in mind when you’re trying to sell your home.

1. Don’t Ignore Basic Home Improvements

Homebuyers look for the best deals they can afford. Almost every buyer hires an inspector to evaluate the structural integrity and safety of the homes they are interested in buying. If water damage is prevalent, homebuyers eventually find out and either back out of pending sales, negotiate seller credits or reduce their offers. Therefore, it?s in your?best interest as a seller to hire an inspector to examine your property before you list?it. If the inspector uncovers damages, you have an opportunity to correct them?and charge higher prices for newly-updated components.

Repairs might include minor fixes, such as loosening jammed windows, patching a hole in the wall, cleaning out air ducts, shampooing carpets or replacing a screen door. These corrections cost less than $500 each and might help you?avoid a few thousand dollars of credits for buyers requesting new carpet, window replacements or new air duct installments. Even larger fixes such as septic system cleaning and electrical corrections are worth the costs. By making home improvements prior to selling, you?broaden your?audience of potential buyers and ensure a better price for your home.

2. Don’t Disregard Professional Advice

Although For Sale By Owner properties can be successful selling opportunities without real estate agent commission costs, navigating a successful selling process without professional advice can be detrimental. Real estate agents know their markets well, and can help you set your home at an?appropriate and competitive listing price. A real estate agent can help you avoid unrealistic pricing strategies that sometimes arise from?emotional attachments your home. Overpriced homes sit on the market without offers. Buyers then assume stale listings must be poor purchases if they?ve been unpurchased for weeks.

When homebuyers visit open houses, they want to visualize their futures there. If current owners are present or showing spaces, it makes honest consideration awkward. It?s hard for buyers to imagine spaces as their own when they see current owners? lifestyles, including residents, family photos and pets. Plus, honest conversations about home details between couples buying homes is challenging without offending owners showing their homes.

Beyond real estate agents, you?should consider hiring a professional photographer to take high quality, flattering?images of your home. Again, homeowners become attached to their houses, often unable to highlight features buyers are looking for without personal bias. Plus, most sellers don?t own the equipment to properly illuminate small spaces or translate the true dimensions into photographs. Because most buyers start their house searches online, quality marketing images can be the difference between buyers visiting an open house or skipping it.

3. Don’t Assume?a Lengthy?Sale Process

You?might have owned your home for more than 30 years before deciding to sell it. You may have?experienced?enormous costs of mortgages, paid for continual upgrades and maintained your property through long, cold winters and dry, stifling summers. Between the happy memories of raising kids, the pride of ownership and major financial investments, it can be an emotionally conflicting experience for homeowners to sell their properties. Unsurprisingly, many sellers list their homes expecting sale process to take time.

When sellers receive quality offers immediately, they?re often unprepared to accept sales so soon. One misconception sellers have is that more buyers will offer even higher prices if they wait a while longer. Unfortunately, the first offer is often the best offer from extremely serious buyers. Passing on the first offer can leave you?disappointed and force you to accept a lower offer later. Instead, be?prepared to show your home within 24 hours of listing it.

Make?all the necessary property improvements, get professional photos taken of your home?and list your property?online. In competitive markets, agents might recommend listing homes online mid-week, opening homes on the weekend and accepting offers the following Monday. Although fast, you?can yield an impressive return on your home?if you?wait to list it until you?re fully prepared to let it go.

 

Have you ever sold?a home? What things caught you by surprise? Would you ever consider selling a house on your own or would you prefer to go through a real estate agent?

 

 

 

Photo courtesy of:?Daniel Moyle

 

 

*This post was featured on Home Money Easy?and His Finance.