Reduce Debt Increase Wealth

Reminders For Personal Finance

August 07, 2022 MIsterchuck Season 3 Episode 125
Reduce Debt Increase Wealth
Reminders For Personal Finance
Reduce Debt Increase Wealth +
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Show Notes Transcript

What to do when getting debt reduced, many may not know what to do with the money. Do not do wasteful spending but instead set up for success. The things everyone should consider having to make sure finance is never a problem. 

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Charles McDonald:

Hello, I'm your host Mr. Chuck, I retired accountant turn truck driver, I reduce my debt in a relatively short period of time. debt reduction to achieve financial freedom takes commitment, confidence, determination. reminders for personal finance, what to do when getting debt reduce many may not know what to do with the money, do not do wasteful spending, but instead set up for success that things everyone should consider having to make sure finance is never a problem. I'm gonna start out with clever girl important reminders, you can find a link in my show notes. Nine important reminders for your finances. He should do these things no matter what if you have a lot of debt, or he got your debt under control, but he should still consider continuing doing these things for the rest of your life. The Hustle and bustle of life can make time pass too quickly. And before you know it, your bills are late and your financial goals have been put back on the back burner. Not staying on top of your finances can cost you hundreds of dollars and late fees and overdraft. Don't fall back into the old trap. If your bills piling up what to do when you can't pay your bills. Find yourself paying bills late not keeping up with your budget and not reaching your financial goals. These important reminders can help you start taking back control of your finances. By setting up Porton reminders, you can stay on track with your finance, start good money habits and prevent financial mishaps. And it doesn't have to be difficult. You can set up financial reminders on your electronic devices, or use a planner or a spending journal. That being said below are nine financial reminders, you definitely want to set up. Now some of these you set up on your bank account. And some of them you set up in your maybe your personal calendar. But just a reminder, so that you don't forget to do these things every so often. Number one, automate your savings. Saving money is something you should be doing every single time you get paid. This would include saving for retirement and your emergency account. And for other goals, you might have set reminders to coincide with your pay dates. So you remember to make the transfers, better yet, automate the transfers and set up reminders. So you can check your accounts to ensure that transfers took place for the right amounts. Setting up important reminders to save money is crucial to your financial future. So once you get your emergency fund up to three months or six months worth of expenses, you should get yourself a high yield savings account. Generally, they're an online bank. And you can then set up a transfer once a month to transfer money from your current bank savings account. And to a high yield savings account. I do that every month. So instead of getting 25 cents, once a quarter, I'm getting eight to $9 every month from my high yield account. And you can still use that as an emergency fund. If you have an emergency, I had a drain problem in my home. And I had to use the money from my high yield account to pay for it because it was about $1,000 They had to take out my drain pipes tear up the floor and replace it because it was all clogged up. I'm in a house that was built in 1961. So it's about 60 years old to schedule bill payments. I do that on a regular basis and I set it up through my bank online. I automate my bill payments for my utilities, everything that I pay on a regular basis. I set that up. So if you you can do it two ways. You can set it up to automatically pay on the due date and a set amount to your utilities. Or he can go into each utility, which is what I did and set it up To be an automatic payment, that way, the payment is always the correct amount. And it's always paid on time to schedule bill payments. This is usually where things get annoying, with different due dates. Bills do monthly, quarterly and annually it's easy to forget when something is coming up. Plus mains your money as a busy person can be challenging. A good way to get around this is to Bill all your bills into a budget and then set reminders to alert you a week or a few days before they are due. Your financial reminders to include all your bills including utilities memberships, prescription insurance payment, and many times these bills are forgotten in a monthly budget. Check your credit for errors. That's your automation process. Check your credit for errors at a bare minimum, you should be pulling your full credit report once a year which you're entitled to for free via the annual credit You should be also monitoring your credit score often. And you can do this for free tools via tools like credit Set monthly and also an reminders to make sure you keep up with your credit, credit errors and identify theft are all too common. Having reminders in place to review your credit will help you stay on top of your credit and avoid these issues. To avoid theft from your credit cards, you need to check your credit balance statement your credit statement least once a month. I do mine probably every week. And I've identified charges that I did not make. I had contact the credit card company, they blocked them so they didn't get paid. And they sent me a new credit card with a different account on it count number is the same account. But the card has a different number on it. So if you're using that credit card to pay some bills every month like I do occasionally, then you have to go in and update all those places that you're using that credit card to pay the monthly bills for a file and pay your taxes on time, be sure to set reminders in advance of April 14, tax filing deadline to complete your tax filing and also pay any taxes you may owe. It's a good idea to get this done a couple months in advance. So you don't find yourself scrambling a few days before tax deadline. And if you're self employed, and you gotta make estimated tax payments, set up reminders on what are the first ones due April 15, June 15, September 15. And I genuinely pay my final one on December 15. But for the federal, I believe is due on January 15. But I always pay it to same year. So I don't get confused of what year that payment was for. Five, shop around for the best rates at least once a year is definitely worth taking some time out once a year to shop around for the best rates for things like your insurance, cell phone and cable plans. He shouldn't have a cable plan, if you have internet service was a lot of people do. You need to maximize your internet service because you're paying for it and stream your TV and only stream the things that you watch. Try to keep your streaming services at a minimum no more than two, it can go to three, but try to keep it the two. And by doing that, you will save a bunch of money that you can put into your savings center in minor to do some comparisons across different service providers. So you know what else is out there, you never know them, you may be able to find some really good savings. If you change plans like for cell phones and cable and streaming services. And you never use that service before you usually get two months three months or six months discount and then the full rate would kick in. So you can save some more money by doing that. Also, six set reminders to review your budget. Having a budget is vital to financial stability. However you need to review your budget regularly to ensure you're are budgeting correctly. If you bills increase or decrease or if you have a change in your income, you need to make sure you update your budget to reflect these changes. I do that weekly, every time I get paid, I track my expenses, I put in the new amounts. And then current month, I do a report from my tracking software, which is generally an online software, it's count about about $10 a year, create a report by category, print it out, and then update the actual amounts in your budget. That way, you can see if you're on track by category, and if a category is if you're overspending in any one particular category, you can look at the detail and see was this something that happens on a regular basis, or was this a one time event. It's a one time event, there's no need to update your budget. But if your cable bill went up five bucks or your phone bill went up three bucks or whatever, you update your budget amount. That's never ending process. When you do away with subscriptions. When you do away with something, you're no longer using it you need to update the budget amount, because now that budget amount, it could be a little bit lower. Set reminders to review your budget seven, remember to track your spending, you may think balance and checkbook is outdated since everything seems to be electronic these days. But one of the most important reminders is to track your spending, you should do that weekly if not daily. tracking your spending helps you stick with your budget and shows that what you're spending your money on, you can do this on a spreadsheet. But writing down your expenses make more of an impact. A spending journal is a perfect way to track your spending. And what helps you with your money habits too. I do that online with my tracking software. And I do it weekly. Or if I do a lot of spending in one day, I'll go in and update it that day. And it's always reconciled to the balance and my checking account, or the balance on my on my credit card. Because you can go online for all your credit cards, you can see the detail of what's going on what happened the last couple days, you get entered in your tracking software, and you're up to date, it only takes a few minutes and not a whole lot of effort. Just got to do it. I do it generally every pay day because I got to put in my pay. I'm out review your expenses frequently, much too easy to let unnecessary spending creep into your budget. cutting expenses from your budget such as eating out, ditching cable and canceling prescription can help you save money. Make it a goal to review your spending every month to see where you can cut spending. This is one of the most important reminders You can do because it will decrease your spending and increase your bank account fast. And if you're doing that on a regular basis, and you can control some of your spending, say that you budgeted $200 for dining out and then you're in a middle of a month you're at $210. But you got to do two things, increase your budget or quit dining out to stay closer to your budget amount. We know with inflation, expenses are going up regularly. So you need to do this on a regular basis, weekly or monthly is what I would suggest become financially savvy. Setting up important reminders for your finance will make you financially savvy in no time. It's easy to get sidetracked. And scheduling financial reminders can keep you on the course to financial success. All those things you need to be doing on a regular basis. And again, I'm going to repeat it. It should be doing this at least every pay day. Every pay cycle that you have. I get paid weekly, so I do everything weekly. If you get paid every two weeks, you should do it every two weeks, semi monthly or monthly. It all depends how often you get paid. If you get paid monthly, you should be entering your expenses no less than once a week because you only get that paycheck once a month. So you gotta make sure you don't overdraw your checking account or overspend using credit cards. It's easy to do and you'll get you off track. Remember, if you're trying to reduce debt, the first thing you need to be doing and my debt management plan or debt reduction plan is to quit creating new debt, increase your emergency fund, keep track of your spending and try to reduce it as much as you can, without going without it don't want to punish yourself. But you don't have to, if you can keep your spending under control, if you have bad spending habits, this will help you identify where you're spending money that you shouldn't be. Remember, needs come first, once come second needs are housing, transportation, and food, everything else is considered a want. If it's something you can do without don't buy it at something you can put off to a later date. If you have hobbies that take a lot of money that you spend a lot of money on, that's a good place to start keeping it under control, set yourself up a budget and try to stay within that dollar limit. Because I know hobbies can get out of control and a hurry. The next thing we're going to talk about is once you get your debt paid down, and you get your emergency fund up to least six months worth of expenses, and you have a high yield savings account, and you got maybe 10 to $20,000 in there. So your emergency fund should have roughly four to 5000. And then the rest of it should be in your high yield account, especially if you don't use it on a regular basis. Remember, an emergency is something that happens that's unplanned for that normally doesn't happen. And if you have the money available to pay for it, you can keep your credit spending down. Because you can use your emergency fund to pay for that particular emergency. Whether it's a car breakdown an injury to yourself or to a child, or anything, you have the money to cover it without creating more debt. If you want to contact me to request my spreadsheet for the budget, or leave a comment or ask a question, he can send it using my email, reduce debt, increase reduce debt increase wealth is all together no spaces. If you'd like to ask a question, put question in the subject. If you'd like to request my monthly budget, put that spreadsheet in the subject matter if you want to leave a response of any kind is put a comment in the subject manner. I will get back to you as soon as possible. Okay, the first thing you need to do once you start getting your debt paid down and you got a little bit more money, take a look at your retirement plan. If you have some type of retirement plan through work, and you're not maxing it out, you need to at least increase what you're putting in there. Nobody's ever retired and never complain about having too much money. So the more you can save for retirement, the better off you kind of be. That's would be the first thing you should be looking at. The second thing is if you have children, and you're starting a family, you need to have some type of life insurance. That way, if both spouses are working, the spouse with the largest income should have a life insurance policy on them. In case something bad happens, we're always planning for the worst and hoping for the best. So if you have one income earner, and you have two children and a spouse, and you have two $300,000 owed on your home, you need to have a life insurance policy that would lease pay off the home and give them some living expenses. Because if you have a $2,000 a month payment that's gonna be an extra $202,000 A month your spouse would have available to live on in case something bad would happen. If both of you are working and both area make a decent income. Consider a life insurance policy on both of you. You never know what's gonna happen. A car accident can happen any day. And one of you could be gone tomorrow for the people with children, and if you're thinking they're going to go to college, now's the time. If you don't already have one, a college savings plan for your children, if you think maybe they're not going to go to college, then set up a savings plan for that child to go to a vocational school, or to get started in life later on, when they're in their mid 20s. They may be needing help with a down payment for a home, or whatever the case would be, make sure they use the money for something long term, and not for something they need want. But for something they may need in the future. The next item, were stolen insurance. I personally don't like insurance. That's why I'm not going to do a whole episode about insurance. You have an insurance agent, they can explain things to you better night camp need to have some type of disability insurance, short term disability insurance and Long Term Disability Insurance again, you never know what's going to happen if you get sick, and you're unable to work for six months or a year that this short term disability insurance kicks in after six months. And it should be enough to cover your expenses. For the time that you're not able to work. If you never able to go back to work, then after a year, the long term disability would kick in, and make sure you have a plan that's gonna pay you enough to pay for your needs at the current time when you take out the plan. So now we're talking about life insurance, short term disability, long term disability, and a next insurance policy. If you have a history of dementia, or other illness, where you need care, assisted living, for instance, then you may want to consider a assisted living insurance policy, because that is fairly expensive. If you don't want to be a burden on your spouse, or your children, or any other family member, then long term assistant living care or long term insurance plan can help you cover those costs. Even if it only pays half of it, or three quarters of it. Assistant living is roughly five to 8000 a month. So you should have a plan to cover at least that amount. If you plan for your future, it should be a larger amount, because it goes up every year. And that's going to help you so we got more going in retirement we have insurance to cover things, bad events if they happen. And when we get older, we have an assistant living plan to help take care of of you or your spouse if it's ever needed. Again, he may think it's a waste of money until the time you need it, then you'll be glad that you have that type of insurance. The other insurance once you get your house pay down more and maybe get better, more expensive bars is an M brother insurance plan that covers your home owners and your auto insurance and gives you a larger amount of liability coverage. And that you can talk to your insurance agent. It's fairly inexpensive like couple $100 a year depending on how much you get. But it's well worth the money again. We're planning for the worst and hoping for the best. I'll be back in one moment with my final thoughts. I have a yearly spreadsheet to has each individual month has got the basics needs and once already set up along with your credit cards so that you can do your budget on a spreadsheet. If you wish to have me send you that file, send me an email again, reduced that increased I'd be happy to send it to you the purpose of having the different types of insurance is to make sure when something bad happens, you don't have a financial nightmare. Because if you if a spouse is accidentally killed, or dismembered or unable to go back to work, to have the proper insurance to keep your financially stable is important. It's bad enough that you had that event happen. You don't want to lose your home where you live, because that'll make matters much worse by what you can afford at the time you initially get this insurance policies. And once a year, set up a reminder to check with your insurance agent if you can increase the amounts and how much extra is gonna cost you. And remember, once a year if you get a pay raise at work to increase your retirement plan at work. As I said before, nobody ever retired complaining about having too much money, plan for the worst and hope for the best. You'll be glad you did. So