Category: Frugal Finance Management

A custom debt-reduction budget that fits your own family’s size, needs, etc., is crucial to debt reduction success.

Overcoming Poverty After Divorce

Today we have a guest post for you. This is the story of how Lila Donovan’s mother overcame poverty after divorce and the lessons she taught Lila along the way.

Many people hate making budgets and paying off debt because they start thinking about all the things they can’t do. Growing up my mom taught me that budgets and being debt-free actually frees you.

When my first step-dad and my mom couldn’t work on their marriage anymore, they decided to get divorced. Mom was a former teacher who had quit her job to stay at home but my step-dad proved to be emotionally abusive towards mom and me.

Although mom hadn’t intended on becoming a single mom (again), she eventually became one. After my mom filed divorce from my step-dad, we moved out to an apartment in a less than stellar neighborhood.

Education is Key

A friend of my mom’s that was a hairstylist advised her to go to cosmetology school because training was quick and it was affordable. When we were moving into the new apartment  my step-dad had told both of us that we’d never live in a nice home again.

He also told my mom she would fail. My mom didn’t have much in savings from her former teaching years but with the little she did have, she decided to enroll in cosmetology school.

When she wasn’t at cosmetology school, my mom decided to take on a low-wage job and started side hustling. Her side hustles included selling home baked cakes & she made stuffed animals which she sold at an independent toy store.

Separate Your Finances

Around this time my mom was still using the joint bank account she had shared with my step-dad. Originally my step-dad had told my mom she could have the money on this bank account which was roughly $10,000.

He went back on his word and transferred the entire amount out of it. She never thought he’d ever do anything this degrading. He basically cleaned it all out so my mom didn’t have any money to her name. He was still listed as the co-owner of the bank account which is how he was able to do that.

When she called the bank they treated it as a case of he said, she said. There was nothing they could do. Eventually my mom decided to get her own bank account at another bank and told the bank to remove her from the joint account. She doubled down on her side hustles and took extra hours at her minimum wage job.

Hard Work

After she graduated from cosmetology school, she landed a job at a barber shop, and started to work crazy hours. She was working at least 60-70 hours each week.

With the money from her day job and the side hustle money she started racking up her emergency savings pretty quickly. Mom had always derided debt as evil and as a result she never took on any debt. After the divorce was finalized, mom didn’t get any alimony or financial help from my step-dad except for their used car he had bought during their marriage.

There wasn’t any child support either. A few months after the divorce was finalized he actually came to our apartment and wanted to talk to my mom. He wanted to get back together with her and have us be a family again! She told him to go away or she’d call the police. We never saw him again afterwards.

Living Frugally

During this time we couldn’t afford the type of vacations a two-income household often takes. My mom found a solution by putting me in the local Boys & Girls club during the summers.

After a couple of years mom was able to move us out of the lower-income apartment complex and we moved into a middle-class apartment complex. She also bought a new Honda with cash.

After five years of working for the barber shop she decided to squirrel away money to open up her own barber shop. I asked her once why she didn’t want to open a hairstyling salon for women. Mom explained that cutting men’s hair was quick and she got fast enough where she cut it quickly with quality.

She told her current customers she was opening her own shop and many of them followed her. In addition she decided to promote the new shop by passing out flyers in person and she put them on car windshields as well.

Building a Business and Buying a Home

Her own shop got going pretty quickly and quit her side hustles as the business reached a point where it was out earning her side hustle money.  One day she was talking to a male barber who encouraged her to buy her own home. Mom wanted her own home but wasn’t sure she could afford one. After running the numbers she decided she could actually afford it and got a realtor to help her find a home.

She eventually found a detached home for roughly $120,000, a 3-bedroom and 2-bathroom home. There was actually a bidding war when she and her realtor went to make an offer, and interestingly enough mom won the home. Eventually she bought the home for $150,000. It was a nice home in a middle-class neighborhood.

Within roughly five years of her divorced my mom had managed to: get trained for a new job in a new field, bought a car with cash, opened her own barber shop, and bought her own home. We eventually were able to take nice vacations to Disneyland (several times), Kauai, the Grand Canyon, NYC, etc.

Being Self-Reliant

My mom knew that there wouldn’t be anyone to rescue us. There was only her. You hear it all the time how single moms and their children are statistics, my mom refused to give in and I did too. I focused on school, got great grades, and avoided in getting into trouble.

I graduated high school without ever becoming a statistic. Mom focused on providing a living and getting out of poverty. In my mom’s eyes there were no excuses and no time for pity parties. It wasn’t a picnic at all, she had many hard and lonely days. She often likes to say that pity parties don’t pay your bills.

When I graduated from high school my mom said, “Always be independent even if you marry Mr. Wonderful.” As for my mom she eventually found a nice guy who cared for both of us and they got married. He became my second step-dad.

She found her own happy ending eventually, but he didn’t rescue her. Mom rescued herself.  My second step-dad had his own home and they decided to sell both of their homes (after I moved away to college) and bought a new home of their own.

If we just get out of our own way we can achieve more than we can imagine. Financial freedom doesn’t have to remain a fantasy. Too often people get depressed and think about all the money and opportunities they don’t have. It’s not about all the things you can’t do, it’s about all the things you can do.

Lila’s a writer who wants to inspire and empower people through the written word. Her home right now is Nebraska where she’s enjoying the heartland. You can find out more about Lila on her website.

Why is an Education in Personal Finance So Important?

There is tremendous value in education, notably a sound education in managing personal finances. Believe it or not, the world is comprised of two types of people: savers and spenders. The economy relies on both groups for growth and development. Without the spenders, commerce would grind to a halt, and without the savers, investments would not be possible and the economy would stagnate. A happy medium needs to exist between the two for an economy to develop, evolve, and prosper.

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What Is the FTSE 100 Index (Footsie)?

Today we have a guest post for some of our UK readers. Enjoy!

Since 1984, the FTSE 100 (Financial Times Stock Exchange), also known as FTSE or ‘Footsie’, has been the principal index of the London Stock Exchange (LSE). It is an important indicator for investors around the world, providing insights into the overall health of the UK economy, one of the most important in Europe.

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How to Save Money on Your Water Bill

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Doing everything you can to reduce your monthly water bill payment accomplishes two things: it enables you to allocate more finances for your other needs and helps prevent the depletion of the world’s supply of water. However, the above can only happen if you do the following things highlighted below.

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How to Handle Multiple Debt Balances at Once

Today we have some advice about how to handle debt for our UK readers. Enjoy!

Managing your money isn’t an easy task. Every month you need to ensure that the money you have coming in can cover all of the essential outgoings in your household, paying for everything from bills to the grocery shopping.

For many people credit cards, loans and store cards add to the monthly mix of payments we need to make. Each of these can, of course, be a sensible way of paying off a big ticket purchase such as a car or home improvement, but things can start to get tricky when you’ve got several debt payments to juggle at once. One in four families owes money on a personal loan, while there are about 60 million credit cards in use across the UK. A lot of people, therefore, are likely to have both of these forms of borrowing to pay back.

So, what do you do when you have multiple debts to handle? Here are some top tips to help you to stay on control.

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How a Family of Six Keeps Healthcare Costs Low

 

***Disclaimer: We are not medical doctors and are simply sharing our opinions here and what has worked well for us.  Consult your doctor before changing your health care plan or the way you manage your health.

Four years ago, in our quest to cut expenses,  we changed to a higher deductible health insurance option with lower premiums.  We realized this was a bit risky with 4 kids, so in order to ward off some of this risk, we’ve put some practices in place to help minimize our need for medical care.  We’ve found that by optimizing our health, we rarely go to the doctor now, and have saved several hundred dollars, at least, in our healthcare spending each year.  And it’s working. In fact, in 2016 we only spent $139.55 out of pocket for medical expenses not including our monthly premium, even on our high deductible plan. We’re no longer those people that the doctor’s office knows so well. We show up every year or two for our annual physicals, and that’s about it. Here’s some of what we’re doing to keep healthcare costs low. : Read more

Building on a Budget: Living Your Log Cabin Life at the Lowest Cost Possible

Scarlett Sinclair runs a small construction company. She also enjoys sharing her experiences by posting on various DIY and homeowner websites.

If you’ve ever wanted to build your own home far away from the hustle and bustle of the city, but weren’t sure if you could afford it, a log cabin may just be your answer. Log cabins are durable, can provide all of the modern conveniences that you’ve grown accustomed to and, if done right, can be very affordable. Read more

Three Actionable Steps to Stop Worrying About Money

Only 3 out of 10 Americans think that they are financially secure not to be worried about money. Hence, 7 out of 10 Americans have reasons to be worried about money at a time when wages are not growing to meet the rising cost of living. If you are reading this piece, chances are that you have slight fears about your financial security – in fact, it is quite possible that you are battling with sleepless nights because of money worries. Read more