Eliminating Debt – Pay off High Interest or Low Balance


Eliminating debt is hard.  You have to be disciplined and strategic in order to pay down your debt and deciding which method to use is even harder.  Should you pay off the higher interest rate first or should you pay off the lowest balance first.

Eliminating Debt

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Many financial gurus such as Suze Orman recommend paying off the highest interest rate first, is the best when eliminating debt then moving to the next highest interest rate and so on.

Other financial gurus such as Dave Ramsey recommend paying off the lowest balance first when eliminating debt, then moving up to the next lowest balance and so on until you’ve paid off all of your debt.  Yes you are paying more in interest but you are seeing your debts eliminating faster… helping you keep your motivation.

What’s your preferred method?

As for me, I personally like Dave Ramsey’s method.  It’s like dieting… If I’m on a diet, I want to make sure it’s working and seeing my debt eliminating is like that little bit of weight dropping off.

The key with any “diet” is to ensure you continue at it!  Losing weight isn’t easy neither is eliminating debt.  But with proper planning and discipline it can be done!

Is eliminating debt on your goals this year?  What steps are you taking in eliminating your debt?

Love this post?  Check out my other post:  I could have saved 50% while eating out!

Teach My Kids about Money: Piggy Bank vs. Bank Account

teach my kids about money

Teach My Kids about Money

 

How to teach my kids about money is hard.  My boys have a gizzilion piggy banks around our house and they also have their very own savings accounts.

My boys are very “fortunate”, I use that word ironically  because their grandparents give them money ALL the time and it’s unfortunate.  Why do I say that?  Because they are given money all the time, they have no respect for it.  It’s hard to teach my kids about money when they lack respect for it.

Here’s how it starts out.  Grandma comes over and gives them money.  They place it in their piggy bank and done!   Later after grandma leaves they start looking at all this stuff they could buy.  Video games, clothes, etc..   Then they pull out their money and count it.  While they are counting it, they rip it out from the bottom of the piggy bank and their money tears.

Then they don’t want to put their money back in their bank.  So they shove it – here and there.  I find money on the ground, behind things, coming out to dryer if I don’t catch it before the wash and this drives me crazy!  It doesn’t bother my kids if money gets lost.

I’ve started taking and using their money when I don’t have cash on hand just so I can transfer money from my checking account into their savings.  Secretly I’m doing this just so they don’t lose or waste it.

I’ve tried several different ways to teach my kids about money.  How would you handle this situation?  Would you continue to let your kids use their piggy bank or would you instantly make them put it in their bank account?  How would you handle the grandparents?

I’ve thought about getting Financial Peace Junior to teach my kids about money.  Have you tried this program?

Teach My Kids about Money

 

Kids Allowance Wasn’t Good Enough

kids allowance

 Kids Allowance

Do you have kids?  Do you make them do chores around the house to earn an allowance?

My question for you today is…With your kids allowance, does that keep them motivated to do their chores?

In my household, we tried giving the kids allowance in lieu of  them tending to their chores, that didn’t keep them motivated.  So we decided to do something a little different and have them earn a commission on chores they did.

For our younger kids they were all excited.  It was the motivation they needed.  (Check out previous post about Commission Chore Chart)  But for our teen that didn’t motivate her.    She didn’t want to earn a kids allowance or be paid commission, so we didn’t pay her, but we still required here to help out around the house.  No Kids Allowance and No Commission!  Why wouldn’t she want that.  I couldn’t wrap my mind around how she was just doing chores anyways just missing out on the money.  Instead she decided to get a part-time job.

Guess What!  Her part time job, motivates her to earn money and in fact, she works harder now, than had she done chores at home.  Why is that?  Do you think it’s because as a parent  we don’t pay them enough?  My daughter gets paid $8.25 for an hour of work.  For about an hour or two of work at home, she would have made $20.00 bucks for the week.

I guess the amount per week isn’t motivating or not enough to buy “stuff” in our economy.

Had I provided 10-15 hours of chores for the week, maybe that would have been more motivation for her to earn a kids allowance.  I seriously doubt it.

Does your children have the same thoughts?  How do you keep them motivated with

Kids Allowance

Money Monday – Make Saving Money a Priority

Saving Money

It’s Monday and it’s time to make a list of all of the things we want to get accomplished for the week.   Get out your journal for today’s Money Monday topic and tell me what’s on your list.

What’s on my list for the week is Savings!!

Saving money is one of the hardest thing to do.   I know for me, it’s really hard to put this as a priority in my life.  We  pay our bills first, then afterwards I feel so strapped that I often tell myself their is not enough to save.

I really need to think of saving money, just like dieting.  If you want lose weight, you’ve got to diet and exercise.  It goes the same way with saving money.  I will never be able to save money unless I tell myself I cannot spend that and put it away.  Exercising my spending and money differently is the key and what it comes down to is DISCIPLINE!

How much to save is always been a concern, the financial experts tell you to save 10 to 20 % of your gross monthly income.  If you’re not use to that or if you have a lot of debt that can be really hard.  So I say deciding on the amount to save is up to you.

Some of us can save 10-20% of our income with no problem.  Other’s cannot.  I happen to be one of those families that cannot.  With living on one income and having some debt we are working to pay off, the way I save is a little different.

I’ll pay all of my bills first,  then what ever is left remaining is what I work to save.

Here’s an example:

$400.00 left after paying all of my bills

-$40.00 (10%) to go into savings

$360.00 left remaining to use for groceries, gas, etc.

Some weeks I may be able to save 20% because it’s the week I don’t have to pay our mortgage.  Having that flexibility is what make it easier to save.  Saving is extremely important, because it helps prevents you for charging things on your credit cards.

Saving Money

Do you save?  What’s your biggest savings tips?

To check out all of our Money Monday’s topics go HERE

 

 

Money Monday ~ Budget List

Budgeting Tips

Monday’s seem to be the day to make a list of all of the things we want to get accomplished for the week.  We make lists for meal planning, activities, appointments and so forth.

But what about our money?  Do we have a list for that?  I think we need to get one. Starting today, let’s all get out a journal and call it Money Mondays.  Each Monday, let’s choose a task of what we are going to do with our money.

This week Budgeting is on my list.

I’ve been spending way too much “unaccounted for” money and when I do this, I always overspend.  My To Do this week  on budgeting is to  pin point out every dollar I’m going to spend.

Here’s my breakdown.

  • $60 Gas
  • $25 Hubby’s Birthday Present
  • $60 Groceries / Toiletries
  • $10 Kids Lunch Date
Those are the only things I need this week.  I don’t need to spend anymore than what I have accounted for.  So when I’m in Target and I see those deals on school supplies, I just need to keep on walking by.  It’s not on the list.
I learned these budgeting tips when I took Dave Ramsey’s Financial Peace University Class, implementing this practice is the hardest thing to do.
What’s on your list?

 

 

 

5 ways you can take control and manage your money

Imagine you’re the CEO of your household, (which you are).  Based upon on how you manage your money, would your corporation survive?  Let’s go a little deeper in fact, would you hire yourself?

If you are answering NO, you need to really think about how to make some changes in the way you manager your money.

You have the choice right now to decide whether you want to control your spending or let your spending control you.

Now that you’ve had the chance to answer that question, I hope all of you are answering that you want to be in control of your spending.

Here are 5 ways to get your started.

  1.  Create a Budget –  Every dollar is accounted for in a corporation.  You need to incorporate that within your household and create a budget. When you create a budget, you’ll have to say no to unplanned purchases if not within the budget.
  2. Make it a priority to save – Saving is important.  Having extra cash on hand will help for emergencies. Not having cash will lead you to charging your emergencies
  3. Say no to debt – Your corporation cannot prosper if you carry the burden of debt.
  4. Make it a family affair – Your family should be a part of your finances.  Hold an accountability meeting each month and create goals that each member is working towards.  Celebrate when each milestone is reached!  Kids can be a great asset in these meetings.  Be open to their ideas and watch how these meetings will be lifelong lessons for the entire family.  Check out my post Family Finances: Make it a Family Affair
  5. Plan for the future. – Christmas and Birthdays happen each year.  Cars and appliances will eventually need to be replaced and the list can go on and on.  Planning for these events will help you stay out of debt.
Whether you like it or not, you are the CEO!  A good CEO is willing to make hard changes so their corporation will succeed.  Which one do you feel you need to work on the most?
MomsLifeboat ~ Las Vegas, NV
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