Money Management

Apache is functioning normally

Last Updated: April 6, 2020 BY Michelle Schroeder-Gardner – 45 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

Lately, I’ve been hearing more and more about families relying on credit cards for their emergency savings fund.

This is something that scares me as while credit cards may work for some, I believe that emergency savings funds are a better solution for the average person. Whatever emergency fund amount you decide on, it’s better than nothing in my mind.

As I stated in the article Everything You Need To Know About Emergency Funds, 26% of Americans have no emergency fund whatsoever.

Also, only 40% of families have enough in savings to cover three months of expenses, with an even lower percentage having the often recommended six months worth of savings.

There are many things you should think about when it comes to whether or not you should use a credit card as your emergency fund.

What’s your financial situation?

Different people need a different emergency fund amount.

Some of the things you will want to think about when determining your emergency fund amount is the stability of your job, your income when compared to your expenses, whether you own a house and/or car or not, your health, and more.

Basically, the “riskier” your situation, the larger the emergency fund you will most likely want. If your situation is quite risky, then using a credit card for your emergency fund may be a bad idea because there is a large chance you may rack up credit card debt that you are unable to pay off whenever an emergency arises.

How much risk are you willing to take on?

By relying entirely on credit cards, you are going to be taking on a lot of risk.

You never know if something may come up, how big the expense may be, and whether or not you will have enough credit to fund the expense.

Plus, the interest rate on your credit card may hover somewhere near 25%, which can make for an expensive bill if you are unable to pay your credit card bill before interest accrues.

When does using a credit card for your emergency fund amount make sense?

Now, I understand that different techniques work for different people. There are situations where using a credit card for your emergency savings fund may not be a completely bad idea. If you know that you can pay off a large expense within one month (such as if you have a large income but a low level of expenses), if you have a lot of credit card debt at high-interest rates that you are trying to pay off (your money may be put to better use by paying off your debt first), and so on.

However, the problem with this thinking is what happens if you lose your job? Many have emergency funds that exist so that they can support themselves if they were to lose their job. What would happen if you relied on credit cards but lost your main source of income?

It would lead to a lot of credit card debt. Unmanageable credit card debt…

Having a “real” emergency fund can be much more worthwhile.

There are many other reasons to have a fully-funded emergency fund:

  • An emergency fund can help you if you lose your job. No matter how stable you think your job is, there is always a chance that something could happen where you may need money fast.
  • An emergency fund is wise if you don’t have great health insurance. This is another reason why we have a well-funded emergency fund. We do not have the greatest health insurance, with our deductible being over $12,000 annually. Having an emergency fund can help protect us if something were to happen to either of us.
  • An emergency fund is a good idea if you have a car. You just never know if it may need a repair.
  • An emergency fund is a need if you own a home. One of the lucky things that homeowners often get to deal with is an unexpected home repair.
  • An emergency fund can protect you in many other areas as well. This can include if you have a medical cost for your pet, if you have to take time off work for something, you need to go somewhere far to visit someone who is sick, and so on.
  • An emergency fund is always good to have because it can give you peace of mind if anything costly were to happen in your life. Instead of building onto your stress because of whatever has happened, at least you know you can afford to pay your bills and worry about more important things.

As you can see, there are plenty of positives of having an emergency savings fund. However, I know that different things work for different people and that some prefer to use credit cards in the case of an emergency.

What do I think?

I think everyone should have some sort of emergency savings fund. Even if you can only manage $500 to $1,000 right now, that is better than nothing. $500 to $1,000 can still most likely help you by for at least a little bit. Plus, you can still put money towards high-interest rate debt after you build up your specific emergency fund amount.

My problem with using credit cards as your sole source for an emergency fund is that it may lead to more debt in some situations.

Do you rely on credit cards for your emergency savings fund? What do you think of relying on credit cards for your full emergency fund amount?

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Source: makingsenseofcents.com

Apache is functioning normally

While I no longer have debt after paying off my student loans, I am always striving to save more money, to save for retirement, to find financial motivation, and more.

Even with how much I love saving money, every now and then it can be easy to get unmotivated and want to SPEND ALL THE MONEY!

I’m sure I’m not alone either.

While many do choose to live a frugal life, it’s not always easy. Some have large amounts of debt to pay off, others find it hard to understand how to stick to a budget, and more.

Finding financial motivators will help you continue to work hard towards your goal, even when it seems impossible.

Without motivation, one might give up on a financial goal quite easily. This is why it’s so important to learn how to stay motivated.

Whatever your financial goal may be, there are many ways to stay motivated so that you can reach it. Here are my tips on how to stick to a budget and find financial motivation.

Make your financial goal visual.

Making your goal visual is a great way to find motivation. Having your financial goal displayed in front of you can make it that much realer, plus it’s nice to have a constant reminder of what you’re working towards.

Various ways to make your financial goal visual include:

  • Create a graphic that demonstrates your financial goal. An example of this would be if you are trying to pay off your house. You could have a picture of a house and section it into 100 pieces. Then, each time you reach a small payoff goal, you can color a piece in. I did some research and found a blog post about many other creative ways to do this on A Cultivated Nest.
  • Keep a picture of your goal on hand. Whether your goal is a vacation, an item you want, or something else, having a picture can help keep you reminded of it.
  • Start a blog. Blogging greatly helped me with my financial goals. I could easily look back to see how I was doing. Plus, I felt like I had to keep myself accountable and keep improving due to the fact that everything was public. If interested, you can start a blog for cheap with my easy tutorial.

Hang out with others who share the same financial goals as you.

Learning how to stick to a budget can be a hard task but spending time with others who share the same financial mindset as you can help.

I’m not saying you should unfriend anyone who is in a different financial spot than you, but I do think spending time with someone who you aren’t trying to Keep Up With The Joneses with can go a long way.

Related article: How To Live On One Income

Read and watch financial media.

Finance is all around you and it’s really not as boring as you may think. I read something related to personal finance every day and it’s not because I have a personal finance blog – it’s because I want to!

There are different ways to stay on top of financial media. You can watch the news, listen to financial podcasts, read personal finance blogs, read financial books, and more.

Set smaller goals in between.

Setting smaller goals in between can help a person stay motivated because it will help you keep your mind on your goal. Also, smaller goals can be a nice way to challenge yourself. Making it more of a game and a competition with yourself instead of a chore can go a long way.

For example: If your overall goal is to pay off $24,000 in debt in two years, then you might want to aim for $1,000 in debt payoff each month. This seems much more attainable than the $24,000 number, and this can help you stay motivated while still challenging yourself at the same time.

Keep track of your progress.

To stay motivated with your financial goals, you should review your progress every now and then. You might want to check in daily, weekly, or monthly, depending on what type of goal you have and what personally works for you.

Keeping track of your progress is a good idea because it can tell you what you need to do in order to reach your goal, if you are behind, or if you need to make a change.

I highly recommend you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but 100 times better as it allows you to gain control of your investment and retirement accounts, whereas Mint.com does not. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more.

Think about how you will feel in the end.

It can be hard to visualize the end when you’re just starting to learn how to stick to a budget.

One great way to stay motivated is to think about how you will feel later on and/or even when you’ve reached your financial goal.

How will you feel once you pay off your debt, save a certain amount of money, or reach whatever financial goal it is that you have? You should envision what your life will be like once you reach your goal, why you are trying so hard to reach it, and so on. A little daydreaming can go a long way every now and then.

For example: If your goal is debt payoff, then you may want to dream about what a debt free life would be like!

Still have fun.

Having financial goals doesn’t mean you have to be boring. You can still enjoy life, do many of the same things you usually do, and so on.

Remember to still have fun and enjoy life!

Related post: How To Be Frugal And Fun (And Not Boring)

What tips do you have on how to stick to a budget? How do you find financial motivation and what are your financial motivators? What financial goals are you working towards?

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Apache is functioning normally

Too many people are afraid of their credit scores.

Many don’t know what their credit score is, many don’t know how to have a good credit score, and many just have an overall negative attitude about them.

This doesn’t have to be true for you, though.

I believe a credit score can be used to a person’s advantage. A good credit score can help you earn great rewards through credit cards, it can help you get certain jobs, it can help you buy your dream home, and more.

Related article: How Your Credit Score Affects Your Life + Credit Sesame Review

Plus, the great thing is that it doesn’t have to be hard to increase your credit score.

However, it can sometimes be easy to ruin your credit score if you’re not careful.

Below are four ways you may be preventing yourself from having a good credit score.

1. You spend too much on your credit cards.

If you have a credit card, you have a credit limit. However, just because you are given this limit doesn’t mean you should try to reach it.

In fact, you should always try to be below 30% of your credit limit if you want to have a good credit score. So, if your credit limit is $1,000, you do not want to spend more than $300 as this can impact your credit score.

It’s also important to note that even if you are paying your balance in full each month that going over 30% of your credit limit can still negatively impact you. This is because your balance is reported on a monthly basis to the credit bureaus. In this case, it is best to pay off your balance or at least some of it before your next credit card statement goes live so that your utilization rate stays low.

2. You cancel old credit cards.

According to FICO, 15% of your credit score is from the length of your credit history. The longer your credit history then the higher your score may be.

If you have old credit cards that carry no annual fee, you may want to think twice before you cancel them. Yes, it can be great to simplify your life, but that old credit card may be lengthening your credit history and, therefore, improving your credit score.

I have one credit card that I signed up for the day I turned 18. The credit card stinks and pretty much offers no benefits. However, it’s the card I’ve had the longest. To keep it active, I just buy one thing a year (such as gum)!

Side note: There are many reasons for why you may want to cancel your credit cards, though. If you are horrible with credit cards and can’t seem to have them without having credit card debt, then it may be your best idea to cancel them.

3. You pay your bills late.

According to FICO, 35% of your credit score is from your payment history. One or two late payments most likely won’t prevent you from having a good credit score, however, continually missing payments most likely will.

No matter what the bill is that you are paying, you should always pay it on time. Paying a bill late may lead to interest charges, late fees, and a drop in your credit score.

Yes, companies can report late payments to credit agencies. If you do happen to accidentally pay a bill late, do not panic, though. If you are quick enough you may be able to ask for some leniency from the company and ask them not to report it.

I once underpaid my monthly mortgage payment by $10. I must have clicked the wrong number because I’m still not even sure how that happened. Luckily I caught it quickly enough and my mortgage company realized that it must have been a mistake. They waived any late fees and also did not report it to anyone.

Related article: How To Live On One Income

4. You never check your credit report.

When was the last time you checked your credit report?

Sadly, many don’t ever check theirs!

You want to check your credit report at least once a year because there may be errors on it and this may be preventing you from having a good credit score. Errors can then lead to your score dropping and that’s a big reason to check!

You can receive your credit report for free each year so there is no reason for why you shouldn’t do this. You can get one free credit report from each of the credit bureaus once each year, so you may even want to time that out so that you can receive one every four months and stay as up-to-date on your credit report as you can.

How have you damaged your credit score in the past? Do you have a good credit score? Why or why not?

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Source: makingsenseofcents.com

Apache is functioning normally

We have been analyzing many of our expenses over the past several months. We experienced a little bit (okay, a lot) of lifestyle inflation as our income has increased.

There were many things we were wasting money on that we realized we didn’t need. We were being lazy, not saving as much as we should, paying for items that were a waste of money, and so on.

I don’t think I’m alone either. There are probably things you’re wasting your money on too.

Instead of wasting money, you could be putting your hard earned dollars towards your next vacation, a retirement fund, a college fund, or something else.

With this post I hope to help you analyze your expenses and see where you may be possibly wasting your money. I understand that there are plenty of reasons for why a person may spend money on some of the things below, however, the point is to see if YOU should be. Everyone is different and there is no right or wrong answer. I am a firm believer that money should be enjoyed and everyone enjoys spending their money on different things. However, that doesn’t mean you may not be wasting your money.

Below are seven things you may be spending too much money on.

1. Bottled water.

There’s a lot of waste that comes with purchasing bottled water. You are wasting money by buying water and the plastic that the water is in is a huge waste as well.

Yes, I understand there are times that come up where you may want water when you’re on the go. I also understand that some areas do not provide the cleanest water either. However, buying huge cases of small bottles of water is most likely not needed.

What you can do: You could buy refillable water containers and fill them up if the water you have access to is not the cleanest. In towns where the city water is no good, I have seen water fill up stations so that no plastic is wasted. You could also buy a water filter (this is the one we have) and clean your own water that way.

Related articles:

2. Expensive cell phones.

The average person spends a few hundred dollars on their cell phone bill each month and that adds up to a few thousand dollars each year. Is your cell phone really worth that much extra money or is it just a waste of money?

What you can do: There are many cheaper cell phone options out there such as Republic Wireless (plans start at just $5 a month), Ting, and so on. You could also not upgrade to the latest cell phone every time one comes out, downgrade your current plan, and more.

3. Food.

Okay, so food is a need, but what I’m talking about here is that you are probably spending too much money on it.

I’ve talked about our food spending a lot here on Making Sense of Cents. It’s an area where we’ve had a lot of problems. However, since traveling in the RV we have noticed a dramatic change in our food spending. We are eating in more than ever, eating even healthier, and more.

This is something we will probably have to actively work on for decades and probably even the rest of our lives.

I know there are many others who are experiencing the same food spending problems as well. It can be so easy to let your food spending get out of control, but I recommend you look at your food spending and see if you can cut down even further.

What you can do: To lower your food spending you could meal plan, shop sales, use coupons, cook from scratch, eat out less, prep your meals, and more.

I recommend you check out Personal Capital (a free service) if you are interested in gaining control of your financial situation. Personal Capital is very similar to Mint.com, but 100 times better as it allows you to gain control of your investment and retirement accounts, whereas Mint.com does not. Personal Capital allows you to aggregate your financial accounts so that you can easily see your financial situation, your cash flow, detailed graphs, and more. You can connect accounts such as your mortgage, bank accounts, credit card accounts, investment accounts, retirement accounts, and more, plus it’s FREE.

4. Cable.

Several months ago, we made the decision to eliminate our cable bill. We weren’t spending an outrageous amount on cable, but it did add up to several hundred dollars a year that we did not need to be wasting money on.

Plus, we haven’t missed cable one bit. I wish we would have eliminated it sooner! We now have Netflix and a digital antenna, however, we are thinking about eliminating Netflix and just having the digital antenna for free TV.

Sadly, the average person who has cable spends a lot more money than what we used to. I know many who spend anywhere from $100 to $300 a month on their cable bill and that is a significant expense in a person’s budget!

Related: 16 Alternatives To Cable TV That WILL Save You Money

What you can do: There are two main things you could do – either eliminate your cable or satellite bill completely or downgrade your package. You most likely do not need all of those extra channels anyways.

Related article: How To Live On One (Or 50% Of Your) Income

5. Extra warranties.

Everyone has been hit with warranties when they purchase a particular item. Sometimes they are useful, but I have come to realize that for the most part they are not and they are just a waste of money.

Personally, I have bought numerous extra warranties that were not honored because of one ridiculous excuse after another.

What you can do: Before you purchase your next warranty, you should analyze the agreement and see if it is worthwhile. In many cases, a warranty is not worth it because of strict rules, expensive deductibles, and more. Also, check to see what kind of free warranty already comes with the product. In many cases, it is enough.

6. Bank accounts with fees.

Sadly, I know a few who still pay monthly fees for their bank accounts and this is what I believe to be a huge waste of money. This is something I’ll never understand though as there are plenty of free bank accounts out there. You should never have to pay for ATM fees either.

What you can do: Shop around and see what banks and/or credit unions can offer you and your situation free banking. Trust me, they are out there!

7. Debt.

You are wasting your money if you have high-interest rate debt. This is due to interest charges you are paying that will just keep building up until you are able to pay it off.

If you have never done so, I want you to add up how much in interest you are paying each day and each month towards all of your debt. I bet you will be shocked!

What you can do: Yes, there are strategic reasons to keep debt, but if you do not have a strategic reason, then paying it off is most likely your best bet as interest charges can be a waste of money.

Do you spend money on any of the above? Why or why not? What do you think people are wasting money on?

If you are looking for other ways to save and/or make money, below are some things I recommend:

  • Start a blog. Blogging is how I make a living and just a few years ago I never thought it would be possible. I made over $150,000 last year by blogging and will make more than that in 2015. You can create your own blog here with my easy-to-use tutorial. You can start your blog for as low as $3.49 per month plus you get a free domain if you sign-up through my tutorial.
  • Sign up for a website like Ebates where you can earn CASH BACK for just spending like how you normally would online. The service is free too! Plus, when you sign up through my link, you also receive a free $10 gift card bonus to Macys, Walmart, Target, or Kohls!
  • Pay bills on time. This way you can avoid late fees.
  • Shop around for insurance. This includes health insurance, car insurance, life insurance, home insurance and so on. Insurance pricing can vary significantly from one company to the next.
  • Save money on food. I recently joined $5 Meal Plan in order to help me eat at home more and cut my food spending. It’s only $5 a month (the first four weeks are free too) and you get meal plans sent straight to you along with the exact shopping list you need in order to create the meals. This allows you to save time because you won’t have to meal plan anymore and it will save you money as well!
  • Fuel savings. Combine your car trips, drive more efficiently, get a fuel efficient car, etc.
  • Learn to have more frugal fun. We don’t spend anywhere near the same amount of money on entertainment as we used to. There are plenty of ways to have frugal fun.
  • Rent an extra room in your home. If you have extra space in your home, then you may want to rent it out. Read A Complete Guide To Renting A Room For Extra Money.
  • Answer surveys. One survey company I recommend is American Consumer Opinion. It’s free to join and free to use! You get paid to answer surveys and to test products. Pinecone Research is another company I use to complete surveys. They pay you for each survey you complete and they also occasionally send free products to review!
  • Learn how to avoid a Craigslist rental scam.
  • Use Swagbucks for your online searches. Swagbucks is something I don’t use as much, but I do occasionally earn Amazon gift cards with very little work. Swagbucks is just like using Google to do your online searches, except you get rewarded points called SB for the things you do through their website. Then, when you have enough points called SB, you can redeem them for cash, gift cards, and more. You’ll receive a free $5 bonus just for signing up today!
  • InboxDollars is an online rewards website I recommend. You can earn cash by taking surveys, playing games, shopping online, searching the web, redeeming grocery coupons, and more. Also, by signing up through my link, you will receive $5 for free!

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Source: makingsenseofcents.com

Apache is functioning normally

Last Updated: May 27, 2023 BY Michelle Schroeder-Gardner – 47 Comments

Disclosure: This post may contain affiliate links, meaning I get a commission if you decide to make a purchase through my links, at no cost to you. Please read my disclosure for more info.

If you’re anything like me, then you probably LOVE the holidays. I enjoy the decorations, the food, the people, and everything that goes along with it.

However, I know not to get ahead of myself even though I love the winter holidays an incredible amount. Holiday spending can quickly get out of hand and it’s quite easy to destroy a holiday budget.

According to the National Retail Federation, the average family in the U.S. spent $730 on the winter holidays in 2013 (it hovers around this amount most years).

Holiday spending can quickly add up when you are paying for food, gifts, decorations, and more. Plus, if you plan on traveling then your holiday spending may be much higher than this $730 amount.

This high price tag sometimes causes families to put their holiday spending on a credit card.

This is a big problem because that debt will eventually need to be paid off. Plus, interest and other finance charges may be added to this amount, which may cause the small amount you may have put on your credit card to inflate into a much bigger number. This can then impact your credit score, your credit history, your debt to income ratio, and more.

These are all things that no one wants to experience, especially since the holidays are not about the money you spend – they are about spending time with your loved ones.

While sticking to your holiday budget at times may seem impossible, I want you to know that you can enjoy the holidays and not go into holiday debt.

Continue reading below to read more about the several ways to lower your holiday spending and stick to your holiday budget.

Create and stick to a holiday budget.

Before you start your holiday spending, you should create a holiday budget. Creating a holiday budget will help you analyze your spending so that you can spend less money and not go into any holiday debt.

You should look at how much money you have set aside for the holidays, how much you estimate you will spend, and possibly even add a little buffer just in case you go over your holiday budget.

Some of the things you may need to budget for include:

  • Decorations
  • Food (such as if you are hosting or attending a holiday party)
  • Gifts and cards
  • Travel and transportation

Related: How To Live On One Income

Plan a group gift exchange.

Instead of swapping gifts with numerous people, you may want to do a gift exchange where everyone draws names and each person only has to get one person a gift. This can save a person a lot of money, plus more thought and time can go into each gift.

This is something that we do with my husband’s family. All the younger children still get gifts from everyone, but all of the adults just do an exchange. It makes it much easier and more enjoyable!

Earn extra money for your holiday spending.

You may want to look into ways to earn extra money for your holiday budget if you want to spend more money than you have saved.

There are many things you can do in order to earn extra money for your holiday spending. You could sell items from around your home, work additional hours at your job, find a part-time position (tons of places hire during the holidays!), freelance, and more.

Below are several posts that may help you find ways to make extra money for your holiday budget:

Shop early.

I know this might be a little difficult since it’s already November, but starting now is better than waiting until the last day.

I know some who start shopping almost a full year before the holiday they are celebrating. You may call them crazy, but I’m sure it saves them a lot of stress and money later.

The earlier you start shopping, the more money you are likely to save. This is because you won’t be in a rush to find what you need and you will be able to shop the sales as they come. When someone is low on time, they are more likely to buy items they may not need at a price that is higher than usual.

Find the best deals.

Prices can vary from store to store. Before you start any of your holiday spending, you may want to shop around and see what stores have the lowest pricing.

You can find the best deals by:

  • Shopping online. I like to shop online first. This way I don’t have to waste any gas driving around and I can save time by shopping at home as well. Amazon is definitely my favorite place to shop online.
  • Using a cash back website. I highly recommend using a cash back website (such as Ebates – signing up under my link will give you a free $10 gift card to a store of your choosing as well, such as Target), so that you can receive free cash back for the money you are already spending.
  • Finding coupon codes for the products you are buying. Before you buy something, type the store’s name plus coupon code into a search engine to see if any coupon codes will pop in. An example would be “Airbnb coupon codes.”
  • Buying discounted gift cards. There are many gift card companies online that sell “used” gift cards you can get for cheap. You could gift one of these or just do your shopping with them so that you are shopping on a discount.

Do you tend to stick to your holiday budget? How do you feel about holiday spending?

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Apache is functioning normally

Recently, the topic of cosigning a loan came up in a conversation I was having with a friend. Someone I know of cosigned a loan for another person, and now the original borrower isn’t paying any of the monthly payments. They are doing this on purpose – to get back at the person who cosigned a loan for them because of a recent falling out.

The above may sound crazy, but I have heard many stories where a person cosigned a loan and it went badly. Being a cosigner can have many consequences.

I did some research to see if there were any others who had shared crazy cosigning stories. I came across Learnvest’s article The Mistake That Plunged My Credit Score 200 Points. If you don’t believe me after reading today’s post that cosigning a loan, in general, is a bad idea, I recommend you read that article plus all of the comments on it.

Here’s a little snippet from that article:

It wasn’t until the fall of 2009, when I was thinking about getting satellite television, that I checked my credit report and discovered $10,000 in past due payments. My friend had missed not one, not two, but three mortgage payments!

Another interesting post is one I found on Reddit titled Co-Signing on a loan mistake.

As you can see, there are many who have an unfortunate story to share.

Here’s what you need to know about cosigning a loan.

What is a cosigner?

A cosigner is someone who agrees to be on a loan with another person so that they are more likely to be approved. For example, if your friend can only get a car with a cosigner (either due to them having a low credit score, not making enough money, etc.), then they may ask you to cosign so they can get approved.

However, a cosigner is agreeing to pay off the debt if the original borrower is unable to pay it in the future. So, even if the original borrower doesn’t pay a penny, the cosigner would have to make all of the payments or risk being sued, credit report damage, and more.

Related: Paying Off Debt And Budgeting: Tricks For Staying Motivated

Cosigning a loan may prevent you from being approved for future loans.

If you are thinking about buying a house, car, or something else soon that will need to be financed, you should think long and hard before you decide to be a cosigner on someone else’s loan.

This is for multiple reasons.

One, if the person doesn’t pay the monthly bills on time then you may be rejected for a loan in the future. Missed payments can damage your credit score and your credit report.

Two, your debt-to-income ratio will increase. So, even if your friend/family member pays every single bill on time, your debt to income ratio will increase and this may prevent a lender from approving your loan because they will think you have too much debt on your plate.

Being a cosigner isn’t something you can easily get rid of.

There’s not much you can do to remove yourself from a loan that you cosigned on. If the person isn’t making payments, you are stuck with it for the most part.

The loan would have to be refinanced to get your name off of it in most cases and there are many horror stories out there where the original borrower refused to refinance because then they wouldn’t be able to force the cosigner to continue to pay the monthly bill.

Plus, there are instances in which refinancing is impossible because of values tanking, the economy changing, and so on. So, while the original borrower may want to get you off the loan and refinance, it’s entirely up to the lender.

Cosigning a loan can ruin relationships.

Many cosigning relationships go sour. I have heard of many stories where someone cosigned a loan for someone else and then didn’t talk to them for decades because of a falling out of some sort.

I have always been a firm believer that money and relationships do not mix well. If you are going to cosign or lend money to someone then you should consider it a gift because there is a chance that you will never see that money again.

Cosigning a loan is up to you.

Everyone always feels like all of the cosigning horror stories out there would never happen to them. However, isn’t that how you think all cosigners felt at one time as well?

It’s up to each individual person to decide if they will cosign. However, I want you to remember that if you cosign then you should make sure that you can afford to make the monthly payment.

You never know – one day you may be making them. The original borrower may be a great person, but they may lose their job, have an unexpected expense come up, or something else that prevents them from paying their bills.

Cosigning a loan may not always be bad. However, I believe it’s better to realize what the consequences may be. It’s always better to be prepared!

Would you ever try cosigning a loan and being a cosigner? Why or why not?

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Source: makingsenseofcents.com

Apache is functioning normally

Wondering what to do when you can’t pay your bills can be a horrible feeling. You may feel stressed, tired, angry, along with 1,000 other emotions.

Falling behind on your bills can also impact many areas of your financial life. It may lead to:

  • Late fees
  • Interest charges
  • High interest rates when you need a loan later on
  • A damaged credit score and credit report
  • Non-stop calls from collection agencies
  • Bills piling on bills piling on bills
  • Debt

You may have fallen behind on your bills due to many different reasons. You could have recently lost your job, taken a pay cut, or had surprise expenses pop up.

Whatever your reason may be, there are steps you can take to get back on track.

Here are my tips on what to do when you can’t pay your bills.

Don’t ignore the problem.

Ignoring the problem isn’t going to help you at all. Many people get extremely stressed about being unable to pay their bills, which can lead to completely ignoring the problem in hopes that it will go away.

You have to do something.

By facing the problem, you will be able to dig yourself out of debt, get rid of late bills, and have a better grasp of your financial situation.

Try to relax when figuring out what to do when you can’t pay your bills.

You may feel very panicky if you can’t pay your bills, but remember that wasting time on worrying won’t help you at all.

Being negative, panicky, regretful, etc. leads to feeling as if you will never get out of the mess you are in. Those feelings may cause you to give up and let the bills pile up, because you can’t see a way out.

Instead, you need to take action.

Try to relax, stay positive, and focus on making changes.

Related: Why I Believe Being Positive Can Change Your Financial Situation And Your Life

Call the company.

Call the company as soon as you can. By calling them, you may be able to have late fees waived, receive a discount, and/or get more time to pay your bills.

You won’t know what they can do for you until you ask.

The worst thing that can happen is that they say no.

The best thing that can happen is they say yes and help you out!

And, yes, some companies will help you out. They aren’t all out to get you. You may want to try explaining your situation, to tell them how great of a customer you’ve been over the years, to ask what your options are, and so on.

Evaluate your income and spending.

You need to get organized so you know exactly where your money is coming from and where it is going.

This will help you spot your financial problems, and see whether working towards earning more money or cutting expenses is a better use of your time. By finding expenses to cut or areas to make more money, you will be able to put more money towards your bills and savings which can help you work through the bills you need to pay.

Related: How to Live On One Income

Cut your expenses as much as you can.

Even if it seems like there is nothing to cut from your budget, by digging deeply you can probably find a spot you can cut.

Something needs to be done so that you are no longer behind on your bills.

You may want to consider completely cutting expenses related to your:

  • Monthly car payment
  • Cable
  • Any memberships or subscriptions
  • Entertainment (there are plenty of ways to have free fun!)
  • Eating at restaurants

You may want to consider lowering or negotiating expenses related to your:

  • Car, home, or other insurance
  • Cell phone (you may even want to cut this completely)
  • Internet
  • Utility bills
  • Groceries

Related: 30 Ways To Save Money Each Month

Increase your income.

My recommendation for the best way to pay your past bills is to work on making more money. There is really no limit to the amount of money you can make. Earning more money can be a great way to get ahead a little more quickly than if you were to just cut your budget (you should still do that too, though).

To make extra money you can find a part-time job, ask for a raise or additional hours at the job you already have, start a side business, and so on.

Related: 75+ Ways To Make Extra Money

Think carefully about extreme options.

Some people put everything on their credit cards or take out payday loans when they are having a hard time paying their bills.

This can be a huge mistake. Occasionally there is a positive story about someone able to use one of these methods to their advantage, but the average person will experience a lot of money lost and increased stress.

Using a payday loan or credit cards when you fall behind on your bills can lead to digging a hole that feels nearly impossible to get out of.

I recommend analyzing the other options listed in this blog post before taking any extreme options.

Prioritize your bills.

One of the most important steps is deciding what order you should pay your bills.

You should write (or type) out all of the bills you owe, how much you owe, how late you are, and negatives that you may experience if you don’t pay a bill.

This will help you with the next action you will need to take.

Pay off your bills.

I couldn’t forget this one. Actually paying your bills is what you are working towards and what you will eventually need to do.

I recommend finding the bill that’s going to impact you the worst, then pay that one first. Then, go down the list you made prioritizing each, then pay each one off as described above. Keep paying your bills until you are done.

Prepare for the future.

You should make a plan so you don’t fall behind on your bills again.

Without a plan, there is a chance you will fall into the same habits again and again, possibly getting yourself into an even bigger financial mess.

You should:

What other tips would you give to someone who is wondering what to do when you can’t pay your bills?

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Source: makingsenseofcents.com

Apache is functioning normally

Money stress is something that impacts many.

According to a Better Money Habits Millennial Report, 41% of millennials are chronically stressed about money. 65% of millennials say that money stress impacts their well-being, 49% say it impacts relationships, 42% say it impacts their physical health, and 22% say that money impacts their work.

That’s a lot of stress!

No matter how young or old you are, I’m sure money-related stress impacts all age groups and not just millennials.

Also, don’t assume that money-related stress only impacts those who have a lower income. According to CNBC, those with a net worth of $1,000,000 or more still feel a significant amount of money stress. They fear that everything will be gone just like with a flip of a switch.

As you can see, money stress can impact all different types of people.

Money stress may:

  • Cause you to lose sleep;
  • Make you sick, nauseous, etc.;
  • Lead to high blood pressure;
  • Hurt your career;
  • Impact your family;
  • Make you angry or sad; and more.

However, you need to realize that money-related stress is something that you can have control of.

Below are several ways to fight money stress so that you can get your life back!

Figure out what’s causing your money stress.

There are many different reasons for why you may be experiencing money stress. You may be in debt, living paycheck to paycheck, spending more than you earn, and so on.

You won’t be able to eliminate your money stress unless you figure out what your problem is.

After you realize where your money stress is coming from, you can then create an action plan to fix whatever is wrong.

You may need to earn more money, pay off your debt, save more, learn how to deal with financial situations in a better way, and so on.

Related articles:

Talk about money with your loved ones.

If you are feeling money stress, there is a chance that you may be feeling like you are all alone. Instead, you should talk about money problems that you may be having with your partner so that you can find a solution together.

Regularly communicating about money is an important step for every relationship. Being open about your money situation can help prevent any surprises, it will ensure that both people in a relationship are aware of what’s going on, and so on.

You and your partner should sit down every so often such as once a week, once a month, or whatever timeframe works best for the two of you.

Realize that more money won’t always make you happier.

In 2010, a study came about money and it’s relation to happiness was published. According to the Wall Street Journal:

The magic income: $75,000 a year. As people earn more money, their day-to-day happiness rises. Until you hit $75,000. After that, it is just more stuff, with no gain in happiness.

Yes, more money may help you solve some problems, but if you don’t have a firm grasp on your finances then more money may just lead to more problems.

Source: BetterMoneyHabits.com

Understand that money and things don’t define you.

Too many equate their worth with how much money they make or what they are able to buy. In reality, though, how much money you make and spend doesn’t define who you are at all.

Remember that keeping up with the Joneses won’t help you.

Keeping up with the Joneses will make you broke and unhappy because:

  • You will never be happy no matter how much money you spend.
  • You will constantly compare yourself to EVERYONE.
  • You will go into debt because that’s the only way you feel like you can keep up.
  • You will have a loan payment for everything because that’s the only way you can “afford” everything.
  • You won’t have any money left over for retirement, an emergency fund, etc. because you’re spending it all on things you do not need.

Read more about how to avoid keeping up with the Joneses here.

Have fun.

No matter how bad your money stress may be bringing you down, you should still remember to have fun.

Having fun and enjoying life can improve your mood, help you be more healthy, clear your mind, and more.

There’s a myth out there that being frugal means you can’t have any fun. Many believe that frugal fun doesn’t even exist. There are plenty of ways to enjoy your life while staying on a realistic budget.

Related: How To Be Frugal And Fun (And Not Boring)

Stop living in the past.

When many are feeling financially stressed out, they start regretting everything they’ve done in the past that has ever cost money.

In fact, I recently overheard someone joking about how stressed out they get when they just think about their past money mistakes, such as even something as small as buying fast food.

While thinking about your past money mistakes may help you realize that you’ve made errors in the past so that you can change for the future, dwelling on them will only waste your time and ruin your mood.

This leads to my next point…

Be positive.

Yes, I realize that thinking positively can sometimes be tough when your money problems are getting you down. However, it’s important to remember that thinking negatively most likely will not help your situation at all.

Thinking positively may help you persevere, move on, and find a better solution to your problem.

Related: Why I Believe Being Positive Can Change Your Financial Situation And Your Life

Does money stress impact you?

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Source: makingsenseofcents.com