I’m going to be honest and say that I will be happy to see the end of 2016. It has been, in many ways, an epically sh$tty year. At any given time life is filled with uncertainty and I’m approaching 2017 with an extreme focus on uncertainty and how to best manage uncertainty without driving yourself crazy.
Simplify
For the past two years I’ve focused on simplifying everything in my life. In terms of my finances I’ve purposely and accidentally eliminated credit card usage from my daily habits. In fact, I’m on a completely cash budget. I should be clear-I have been in the habit of using my debit card and I’ve noticed that, yes, I do spend more even when I’m using a debit card.
Not using credit has kept me from overspending and bringing in extra stuff into my life that unnecessarily complicates my life.
I’ve also begun the process of unsubscribing to anything that tempts me to spend more through enticing offers. I’m also unsubscribing from services that I’m just not using. I also plan on contacting monthly services that I use such as HULU and see how I can pay for the service for the year. My goal is simple: eliminate as many monthly payments as possible.
Most people are making a large number of monthly payments.
They can range from:
- Mortgage/rent
- Electric
- Phone
- Car payments
- Insurance
- Day care
- Credit card payments
And the list goes on. What if instead of having 14-20 budget line items you just have 10? My theory is that by minimizing the number of people that you’re accountable to it will be easier for you to focus on paying off debt.
Have you ever looked at your budget and counted the number of people that you’re accountable to? Were you surprised?
In the next month I will pay off for the year or several months ahead on the following:
- Gym membership-Every year there is a Cyber Monday special for the Denver Recreation Center. It’s $221 for the year which is around $18 a month. Every year that I’ve purchased this membership I’ve actually used it. And, I live 5 blocks from the gym. No excuses. Done!
- Electric-I’m going to figure out what the annual cost is for my electric. I’m thinking it’s around $500-$600 a year (yep, it’s cheap) am paying that ahead.
- Mortgage-I discovered that there is a way to pay ahead on my mortgage through my mortgage company without the extra payments going to principle (which can happen). Since I’m self-employed there are just months when the cash flow is low. So, I want to get a ahead on the mortgage.
- Car Insurance-I have pretty comprehensive coverage (new driver) so it’s expensive but my goal is to pay several months ahead.
Interestingly enough, my mom used to pay ahead on everything when I was younger and she was in college. She would get her student loans and then pay rent for 9 months to a year. She would pay for as many things as possible upfront because she knew that money would be tight as the year moved forward.
Make Your Money Squeek!
Are you using all of the resources and tools out there that will save you money? Here are the tools and strategies that I used to extend my money:
- Ibotta-When I go grocery shopping I make sure to check and use my Ibotta grocery app. If you’re new to Ibotta you will receive $10 (when you sign up via my affiliate link) towards your first payment after you redeem your first savings.
- Ebates.com-I will admit that I was late to the game when it comes to using Ebates.com. Basically, you sign up and create a basic profile. Once you sign up you just need to login to your portal and then find the retailer that you would like to use…and YES-Amazon is one of those retailers. Get $10 towards your first purchase by using my affiliate link!
- Use what you have-I can’t emphasize this enough-use what you have! People are quick to replace perfectly good items way to fast.
- Do a No Shopping Challenge-I stopped shopping for a year. Yep, an entire year. I saved a ton of money and I survived the experience LOL! Is a year too much for you? I get it! Try a 30 Day No Shopping Challenge instead.
As I work hard to eliminate my remaining debt my goal is to keep it simple. By keeping things simple I am able to give my brain the space to focus on the task at hand. I used to give myself a hard time about not completing my financial journey in the amount of time that I thought I would. But, I’ve come to realize several things about financial journeys:
- Each day poses its own challenges.
- There is an emotional component to debt repayment.
- Financial lives can be rebuilt one dollar at a time.
- Disorganization will block your life and financial blessings. I’m currently making sure that all of my paperwork is organized and filed in my filing cabinet.
For the past month I’ve had the pleasure of recording a number of podcast with friends of mine who have gone from wearing the shackles to debt, to debt-freedom. I’m looking forward to sharing their thoughts with you and I hope that you will find those interviews as inspiring as I have.
What are you doing to prepare financially for 2017?
***OOPS!***
My friend Tonya brought up the very important point to be careful of becoming cash poor utilizing this type of process. I forgot to mention that savings should be focused on with the same type of intensity as getting ahead on monthly expenses. My thought is by minimizing monthly outgoing payments you can also use that freed up cash on debt-repayment. Cash poor is no bueno!
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2017 is almost upon us, and I am happy about my accomplishment this year. I am looking forward to a better year! Yay! Good thing that you have a very positive outlook for 2017, Michelle.
Well, 2016 has been a sh$t year so I am crossing my fingers that 2017 is a heck of a lot better LOL!
My only argument against paying in full up front (unless it saves you a TON of money-like the gym membership), you could be leaving yourself cash poor, especially if, like you said, you have slower months. This was good advice I had gotten as a freelancer when I wanted to put more down on my car. As much as I could have (and wanted to) because work was good at that moment, it turned out my cash flow did get pretty bad and if I had paid more for my car, I would have gone into more debt by not having the cash handy. It’s a personal choice of course, and I don’t like monthly payments either, but it’s something to think about!
Well, my goal is to also be saving at the same time. I forgot to mention that part-dang! I’m all about the cash bwahaha.
Interesting post I’m trying to save more and probably after christmas I’ll have a sort of shopping ban
Thanks Giulia!! Keep me posted on the Shopping Ban.
Hi Michelle,
Blog Lurker…question for you, why would you not want your extra mortgage payments to go to your principal? I’ve paid extra instalments on my mortgage, with payments going to the principal. My mortgage will be paid off next year, 11 years early (originally 25 yr mortgage brought down to 14 years).
Riley
I actually don’t mind it at all but if you’re trying to get several payments ahead some mortgage companies (like mine) will credit your principle vs. allowing your extra payments to be credited several months ahead. I do have the option of paying extra on principle which I do each month but for the purpose of prepping adding extra monthly payments directly to the principle is annoying. I’m looking to pay off the mortgage in the next 2 years too! Which would be a 9 year mortgage. Email me when it’s official. And HI! Welcome 🙂
Gotcha! And congrats on paying your mortgage down quickly.
Oh interesting, not something I’ve heard of before! I was going to ask about that line – was confused and thought maybe you typed ‘principal’ when you meant ‘interest’, or something.
2016 for me personally was pretty good, but not quite what I’d hoped for financially. For me I think it was a healing year ultimately and I needed that very much.
It is very common for mortgage and student loan lenders to make it difficult for their borrowers to get ahead on monthly payments. For example, I could send in 3 mortgage payments with the idea of getting 3 months ahead but my lender won’t do that. Instead, they will apply the extra payments to the principal. This is annoying because they are limiting my ability to do what I want to do with my money. In theory it’s not bad to lower your principal and I actually send in extra principal payments each month. BUT, if I want to get ahead in a different way they make it really difficult. I had a “meh” year. Personally it was ok, not bad or good (which is fine). But, I’m devastated by the election results (and I didn’t like Hillary). In fact, I’m accelerating all of my money projects/goals. I’m convinced it’s about to get real rough…in the next 16-18 months.
It’s funny that you started your post with how bad 2016 treated you because everyone I have talked to has said the same thing (including myself)! 2016 was clearly not my year and hopefully with your helpful tips on how to prepare financially for 2017 I will have a better year next year! Happy holidays from Centsai!
There have been some glimmers of light…but, I can say goodbye to 2016 and keep on moving. Yikes! Am working really hard to make 2017 an amazing year regardless of all of the external things that are going on.