Growing up, “credit card” was a forbidden word.

We were the “Let’s put these Christmas gifts on layaway,” type of household, not the “Just charge it all to my American Express” type, if you catch my drift.

Credit cards were assumed to only be used by the rich: people who could pay it off in time without falling behind on payments and falling into debt. We weren’t poor, but we were very close to living paycheck-to-paycheck. Any extra spending outside of necessities needed to be saved up over time, NOT thrown on a credit card.

Being in debt was the fear. 

Flash forward to my adulthood, after investing time to learn about healthy money management on my own, I realized that credit cards aren’t bad at all. When utilized correctly, they can actually help you save money and improve your credit score.

For those of you who don’t understand the importance of a good credit score, let’s break down the reasons why you need one:

  • Renting an apartment
  • Buying a car
  • Buying a home
  • Starting a business
  • Receiving low-interest rates or waived fees

Aside from renting a home, you’ll need a loan for the remaining listed examples. A good credit score (generally a 680 and above) shows lenders you’re a reliable lendee and able to pay them back. Even with renting an apartment, good credit scores show property owners that you’re responsible and will pay your rent in full and on time. Yes, some companies and leasing agencies work with you if you have a lower than average credit score, but that’s usually by charging you higher interest rates, extra fees, and unnecessary requirements, such as higher security deposits and needing a cosigner.

Even if you don’t have a credit card, there are other ways you’ve developed credit over time that can make or break your score. So, if you’re convinced that your credit score can use some tender, love, and care, let’s get down to the nitty-gritty.

photo of improving credit score

 

1. Pay Bills on Time

Rent or mortgage, utilities (electric, water, gas) cell phone plan, car loan…you name it. Any and every bill in your name is attached to your credit report. Payment of these, or the lack thereof, is reported to credit bureaus.

Any time you make a late payment or miss a payment, they’re notified. Several late or missed payments can result in higher interest rates on your balance, which means more money for you to pay back, as well as lowering your credit score. If the pattern continues, your credit card account can be frozen and sent to a collections agency, which is problematic. This can negatively impact your credit score for several years, which can prevent you from qualifying for loans, renting or buying a home or car, and more.

With that said, do what you need to do to make sure your bills are always paid and paid on time. Mark the dates on your calendar, set reminder alerts on your smartphone, set up auto-pay for the bills you can pay online (if available), and most importantly, set aside money each month designated to bills (I’ll talk more about how to budget in another post).

2. Keep Your Credit Card Balance Low

The ideal balance (that looks good to credit companies and loan lenders) is when your balance or spending stays below ⅓ of your total credit limit. For example, if your credit card limit is $2,000, try not to spend more than $700 and always pay it off (or at least a large portion of it) by the due date to keep from building interest and accumulating debt.

Sometimes life happens—car repairs, unexpected bills, etc. that require money than expected—and using your credit card is more convenient. I’ve been in those situations and completely understand. This is why it’s important to have an emergency savings or rainy day fund set aside (we’ll talk more about that in another post). If you don’t have any savings in this situation, try to at least pay a portion out of pocket and put the remainder of your credit card. Then, analyze and adjust your monthly budget to make sure you pay off that balance on time.

3. Check Your Credit Report Annually 

By law, you are allowed one free report of your credit history from each of the three national credit bureaus—Equifax, Experian, and TransUnion—per year (they charge a fee to request more). This helps you keep track of any account of credit you’ve opened within the past decade. Sometimes there are errors or things the credit companies overlook, such as an old utility bill that may not have been paid because the bill wasn’t mailed to your new address. Small things like that can build up over time and lower your score. Once discovered and corrected, it can make a huge impact on raising your score.

 

 

So, here’s a quick recap: a good credit score means you’re reliable, responsible, and a force to be reckoned with. Remember, a 680 score and above is considered good, so aim high! You got this!

Let’s face it: no one wants to be told how to spend their own money. After all, it belongs to you. You worked hard for it. I completely understand.

 

With that said, not everyone is gifted in healthy money management. What may be a temptation to spend for one person may not be the same for someone else. Two people may have the exact same income, but live two completely different lifestyles. The spending habits of an individual who is single with no children may not be ideal for someone married and has a toddler.

 

In order to develop a realistic budget that you can abide by, there are a few fundamentals one must first understand.

 

PRIORITIES

Here’s a secret: “need” and “want” are NOT synonyms. They’re not even close. Consider the following:

 

You need food. . .but you want to have dinner at fancy restaurant with your friends.

You need shoes. . .but you want an expensive pair of Adidas/Vans/etc.

You need a home. . .but you want to rent a deluxe, beachside, condo in Miami. 

 

The key is prioritization: understanding and giving attention to important things first. In the case of finances, necessities are important and come first; the things you need. Don’t get me wrong, a fresh pair of sneakers, a deluxe condo, and a gourmet dinner are all nice things that anyone would want for themselves. But if these aren’t things you can afford or live comfortably without financial strain, they’re not a good choice.

 

Even if your salary is high enough, there may be a certain number of necessities that your income must tend to first, which can still leave you with less money to spend on the things you want. Which brings us to the next subject.

 

INCOME VS. EXPENSES

Your salary or pay stub shows how much money you make each month, but do you know how much of it you have to spend each month? The best thing to do before spending money on extra things is to analyze the amount that must be reserved for expenses. Make a detailed list of all of your bills for the month and add them together for a total. Here’s an example:

 

  • Rent/mortgage: $800
  • Utilities
    • Electricity: $50
    • Water: $40
    • Cable/Internet: $60
  • Car loan: $280
  • Car insurance: $100
  • Gas: $150
  • Cell Phone: $70
  • Medical Insurance: $150
  • Home/renters insurance: $30
  • Groceries: $250

TOTAL:  $1,980

 

Now, subtract that total from how much you make each month. Let’s say you make $1,500 each pay period and have two pay periods per month. Your total monthly income would be $3,000.

 

Subtract your total monthly expenses from your total monthly income: $3,000-$1,980= $1,010

 

So you have an estimated $1,000 left over to spend per month, which is about $250 per week (considering four weeks in a month). If you’re buying lunch every day during the work week, which is about $10 to $20 per day, five days a week, you’re already spending nearly $100 of the $250 per week on food alone, and that’s not including weekends.   

 

This is why it’s imperative to pay attention to where your money is going, which takes us to the last principle.

 

TRACK YOUR SPENDING

This may sound obvious, but it’s easy to get caught up in the moment and forget how much money you’ve spent. We live in a consumer-driven society where everything we see, from billboards to commercials and even Instagram posts, are convincing us that are lives are miserable without their products and if we don’t buy their products we’ll remain unhappy.

Don’t fall for it.

The only thing that will make you unhappy in this scenario is your debit card getting declined at the register, or finding yourself knee-deep in debt.

 

The easiest and most effective way (in my opinion), of tracking your spending is writing it down. You can easily use a basic notebook or binder to update every evening and keep your receipts inside for reference. I’ve created a budget tracker that helps me stay organized each month. You can download it, for free, here.

 

I manually budget and track my finances bi-weekly using my Budget Journal.

 

There are also helpful apps and online tools available that do the same thing digitally, such as Mint. Whichever works best for you. Personally, I prefer writing things down so that I don’t have to depend on my phone or the internet for everything.

Keep in mind, we didn’t account for other forms of debt, such as a credit card bill or student loans, in the example expense list. Ignoring and not paying off those types of debt can do a load of damage to your credit, which is a big no-no. (You can learn more about the dangers of bad credit in another post.) For now, take advantage of budgeting apps and make a healthy habit of saving receipts. Writing down everything you spend may not be easy at first, but once you get the hang of it, you’ll see it was well worth it.

In the beginning….you had money.

You received the paycheck (or direct deposit), saw that everything added up correctly, and deemed it good.

And then you said “Let me buy this, that, and the other.” And before you knew it, there wasn’t enough left for necessities.

Stress and debt followed, and it became a pattern, then a lifestyle. And now…you’re stuck.

 

Living paycheck to paycheck is not a life you want to live. No one should have to wait for their next source of income before making a financial decision. A lack of sufficient funds has 10% to do with your income and 90% to do with your lifestyle and mentality. Being rich isn’t an immunity to bad spending habits. Many famous and wealthy people have splurged beyond their means, resulting in debt or filing for bankruptcy. Those who successfully managed their wealth wisely invested in financial advisors.

 

If you suffer from the I-don’t-know-where-my-money-went syndrome (be honest with yourself), you mostly identify with one of two reasons below:

  1. Living beyond your means (spending more money than you make)
  2. Having accumulated debt from student loans, hospital bills, car problems, or other circumstances that put you in a financial bind quicker than the average person can pay back

 

Whether you deal with #1, #2, or both, a budget will save your life. Waiting on your next paycheck to buy things you need or constantly needing to borrow money from someone is not the type of life you want to live.

 

You have to get serious about your finances. I repeat: Get SERIOUS about your money.

And the best way to do so is to change the way you think.

 

Budget savviness is a mindset. Living within your means is a discipline. It’s not a one quick fix or an overnight miracle. It takes strategy, patience (especially with yourself), trial and error, and most importantly, dedication.

definition of financial literacy

 

The secret is to do what the wise do: invest in financial advisors. And that’s exactly what we’re going to do.

 

THE MASTER PLAN

This website is your financial advisor. This is where you can come, any day of the week, any time of the day, to receive what you need to overcome debt and regain control over your money:

  • Tips and money advice
  • Budgeting tools & guidance
  • Inspiring stories from everyday people who’ve successfully reached financial freedom
  • Interviews & insight from financial experts
  • Reviews on products & price comparisons before you purchase
  • And much MORE

 

The best part is. . .it’s all FREE.

 

You shouldn’t have to spend more money to learn how to spend less money (because that’s complete nonsense).

 

No more “I’m going to show you how” posts by bloggers who say they’ll show you everything, step-by-step, but in the end give no real explanation and request that you purchase what they’re selling to receive “all the secrets.”

 

No unrealistic expectations.

No more gimmicks.

No wasting your time.  

 

I’m tackling my debt and building my savings the old fashion way: researching and reading about proper money management, cutting back on spending, and living on less than half of my income. If you’re here, it means you’re ready to do the same.

So, join me. Let’s do it together. Your debt free journey begins now. 

Get out.

No, seriously, get out: out of your house, out of your mentality, out of your comfort zone.

Go from “existing” to actually “living.”

 

There’s an entire world outside your window. Being exposed to different environments, languages, cultures, customs, and ethnicities is an unexplainable yet remarkable feeling.

Many people never visualize themselves traveling because they’re convinced traveling is too expensive. I completely understand. Trust me, I’m the most frugal, penny-pinching person you’ll meet. I swore off traveling the world until I “had a six-figure salary.” That hasn’t happened (yet). And quite frankly, I was tired of letting finances be the reason for me not to enjoy life. I discovered that you don’t have to be “rich” to experience the riches of the world. You just have to be wise in budgeting your expenses and strategic with your timing.

how to travel on a budget

Last year, I took a leap of faith and moved from my small town in Virginia to a beautiful Caribbean Island called Puerto Rico. Since then, I’ve encountered dozens of travelers from all over the world who, ironically, work average jobs and make average incomes. They convinced me to become (even more) conscious about my savings and spending and to invest in exploring. So, I planned, saved, and went on my first trip (alone!) to another country: the Dominican Republic. It’s part of another island here in the Caribbean so it wasn’t too far for me, but definitely a wonderful experience.

And here’s the cool part, I was able to pay for everything out of pocket: flight, lodge, food, shopping, etc. And I didn’t break bank. How? Well, you already know I live the frugal life and budget. But I also did the research to find even more ways to save while traveling and still have unforgettable experiences! So let’s break this thing down:
ashley amor standing in front of a cathedral in Dominican Republic
Cathedral in the Colonial Zone of Santo Domingo, Dominican Republic

Airfare Discounts

  • Credit card travel rewards (these offer mileage or cash-back rewards whenever you spend)
  • Vouchers (volunteer to cancel your current flight trip for another date and you’ll receive a complimentary voucher equivalent to a roundtrip flight, depending on the airline)

Lodging

Affordable Lodging

  • Hostels (basically low-cost, non-traditional hotels and Bed & Breakfast spots)

When planning my trip to the Dominican Republic, I found this wonderful hostel listed on the HostelWorld website. The Island Backpacker’s Life hostel had great ratings and a co-worker of mine actually stayed there a year prior while traveling. The owner, Chris, was so down-to-earth. He moved to the DR from England and renovated an old building into this beautiful gem. When I arrived, it looked exactly as the photos on the website. Amenities included WiFi, breakfast, game room, movie room, air conditioned bedrooms with comfy beds, the pool (obviously), and the coolest staff. Not too shabby for $18 per night!

Ashley Amor's photo of Island Backpacker's Life Hostel in Santo Domingo, Dominican Republic
Island Backpacker’s Life Hostel in Santo Domingo, Dominican Republic
  • Air B’n’B (People from all over the world rent out their homes, bedrooms, studios, etc. and list them on here for pretty affordable prices, depending on the location. You can search and book them on this website)

Free Lodging

  • HomeExchange
  • Nomador.com (international house-sitting)
  • Couchsurfing (similar to Air B’n’B, except it’s completely free! The “payment” is spending time with your host and building a friendship. Many people are courteous and still pay or offer to buy groceries, run errands, etc. for the host)
  • Housesitmatch.com

Budgeting & Planning

  • Find cheap Plane Tickets by checking dates that are off-season, non-weekend, and not during holidays. Also, don’t search on the airline’s website. Instead, use sites that compare prices, like CheapOair, Expedia, Travelocity, and even Google Flights
  • You have to learn how to manage your finances to help you save a little each month to put towards a trip. I explain budgeting and more here.

Whew! A lot to take in but definitely worth it. I’m currently saving up for another trip in a couple of months, this time, somewhere in South America. I’ll probably try couch-surfing the next time around!

Promise yourself no more excuses or setbacks. No money? No problem. Take it one day at a time to save, plan, and prepare.
traveling quote on wall at hostel in Dominican Republic
Wall Quote in Island Backpacker’s Life Hostel

Is it just me, or are all of these “how-to” articles sounding pretty redundant? You know, with the clickbait title, strikingly attractive yet unrelated photo, and a list of things to “possibly” do that just “may” help you “almost” come close to doing what they said you’ll do?

I don’t have time for that, and neither do you.

I’m giving it to you straight.

No bull. No paid partnership. No false advertisement.

I’m just a 26 year old woman who grew up with money being scarce, and as a result, I’m the most frugal, penny-pinching (cheap in layman’s terms) person I know. I don’t play games when it comes to saving money. And whenever I encountered some rough patches of life—college years, unemployment, hurricane aftermath, etc., I was always financially prepared.

I may not be rich, but I am wise.

And when it comes to properly managing money, especially saving thousands of dollars, you need wisdom and accountability. Period. With that said, I’m not going to drag on anything else that has nothing to do with saving money (like I said, no B.S. around here.) You came here to learn how to save at least $6,000 a year, and that’s exactly what you’ll do. Let’s dive in:

how to save thousands of dollars each year

 

 

1. Change Your Mentality

You’re not broke (No, seriously, you’re not). It doesn’t matter if you make a million dollars each year or are making below the poverty line. . .you’re still spending money, and a lot of it. For example, if you have an iPhone (or an Apple product in general), that is worth a down payment on a car. If you’re reading this article right now, chances are you’re not living on the street and, not only have access to the internet, you use it quite often. Many of us have several expensive things that we buy and consume everyday without even realizing it. If you live in America, that’s just the norm of our society. There are millionaires who are in debt, and there are people below middle-class who (aside from average home bills) don’t owe anyone a dime. So, the truth is, you’re not broke, you just have bad spending habits. Change your mindset.

 

2. Stop Dining Out

Just stop it. It’s not healthy for you, both physically and financially. Once or twice a month at a dine-in restaurant? Sure, that’s fine. But eating out twice or more each week? Especially when you already have groceries at home? (Come on, do you really want me to go there?) Let’s do some basic math:

One fast food meal, let’s say Wendy’s or Subway for example, will cost about $5. Not too bad. So most likely $10 if you just casually eat out twice a week. However, if you buy lunch everyday at work, Monday through Friday, that’s at least $25 a week. Multiply that by the 52 weeks in a year. . .

$1,300.

And that’s just fast food. It’s not factoring in weekends, or if you usually dine in one restaurant each week, like Olive Garden (if so, add at least $20 more to each week. So $45 multiplied by 52 weeks in a year. . .$2,340 a year for food that isn’t groceries.) Moral of this story? If you’re trying to save money, eat at home.

 

3. Stop Emotional Spending

I don’t know if “emotional spending” is an actual coined term, but it’s in reference to the following: spending money simply for the pleasure of satisfying your boredom, as a way of “having fun” or relieving stress, because it’s a new trend, or any other reason aside from simply needing new clothes you’ve outgrown. Remember that “accountability” word I mentioned earlier? Here’s how to put it into practice:

  • You pay Beyonce’s bills, she doesn’t pay yours. If you can’t afford an expensive concert, don’t go.
  • You’re one person. You don’t need 15 pairs of shoes.
  • Yes that [insert desired apparel] looks great on you. You know what else looks great on you? A good credit score.
  • Need some stress relief? Go for a jog. Take a hot bath. Go to a free yoga class in the park.

Don’t fall into that deceptive mentality that spending money relieves stress.

 

4. Learn How to Do/Solve/Fix Things on Your Own

So, last week I was washing clothes and the washing machine malfunctioned. It wasn’t that simple, old school version, but instead that new, high-tech Whirlpool front-wash version. The computer sensor locked the door and wouldn’t open, no matter how many times I reset it. I had two options: wait a few days and spend a couple hundred dollars for someone to come out and fix it, or be persistent and figure it out on my own. I opted for the latter. And the result? After an hour of researching dozens of home appliance repair techniques online, and frustrating trial and errors, I fixed it!

Moral of this story? Think about how much money you could save by learning how to fix a few things around the house or by learning how to make things yourself (YouTube is very resourceful). You’ll save the hundreds of dollars it would’ve cost to hire a technician or to replace them.

To my ladies out there, getting your nails and hair professionally done every month is great, but can be costly. Call me cheap, but I only go to the beautician ONCE A YEAR. And I only go to nail salons once a blue moon. I just do my own hair and nails at home. Those nail salon visits add up to about $20-$50 each, and about $30-$100 each hair appointment. Even going to both of them once a month adds up to $600-$1800 spent a year on grooming.

 

5. Learn How to Negotiate for Deals and Discounts

Time to get your hustle game on. Analyze products or services you currently pay for and research exceptions, loopholes, and cheaper options. For example, car insurance. A couple of years ago, I bought a new car and made a phone call to my current car insurance to update my account. Since the car was newer than my previous, my monthly premium lowered about $10. Then, I asked the representative how they factored in driving records. It wasn’t until after I asked that she took another look at my account and realized that I qualified for their ‘safe driver discount,’ meaning I hadn’t had an accident in the past three years. That took an additional $30 off of my premium each month (which made my insurance $220 less for the year).

Listen, you never know until you ask! You better ask about your car insurance policy, gym membership policy, credit card rewards, and anything else that offers good deals for loyal customers.

And speaking of gym membership, did you go today? Or yesterday? Or the week before? If your answer is “no,” or “once,” cancel that $80/month membership and either get a cheaper one (like Planet Fitness for $10/month), or workout for free at home (again, YouTube is very resourceful).

 

6. Perform the Process of Elimination

So most of us have discovered that you can watch just about anything on the internet, whether it’s via YouTube, Netflix, Hulu, etc. With that being said, if you have cable, you don’t need it. If you have a laptop, you really don’t need an iPad or tablet. Yes, they’re convenient. But no, you don’t need it. If you’re really trying to save some extra bucks each month, sell stuff you don’t need. You can use online platforms like Craigslist, Facebook, Ebay, Instagram, and countless others to display your items and sell them. Quick and easy.

 

7. Seek Alternatives

how to save money each yearLast, but not least, the best way I save money is by alternative shopping (another phrase I think I made up.) This means finding a cheaper alternative of what you generally buy or where you generally shop. For example, thrift stores such as Goodwill (if you have patience and know how to search well) have plenty of name-brand, gently worn clothing that some people donated simply because they couldn’t fit it or never wore and decided to give it away. Stores that are going out of business (ahem cough, Macy’s) are having tons of sales right now and plenty of items on clearance. Also, Target usually cuts their prices of clothing and store items as soon as the season changes.

You’d be surprised what you can find at a local thrift store, garage sale, or sales rack. And hey, don’t ignore all off-brand grocery items. Many major brands are literally the exact same thing (ingredients and all), as the store brand, but cost more just for the name.

 

Now, let’s do the math of everything I spoke about as an annual expense:

  • Dining out: $1,300- $2,340
  • Emotional Spending (estimate $100/month minimum): $1,200
  • Professional Services (for fixing, grooming, etc): $600-$1800
  • Extracurriculars at Average price (gym membership): $960
  • Owning Stuff you don’t need that can be sold (iPad): $600
  • Shopping name brands/expensive groceries each month: $300

 

TOTAL: $4,960-$7,200 spent annually that can be SAVED

 

As I mentioned earlier, change your mentality. You have to be serious, disciplined, and humble. I literally saved $6,000 last year when I took a leap of faith and worked full-time as a freelance writer (and I didn’t make much, the struggle was REAL, haha). My savings enabled me to pay rent each month without worry while pursuing my career.  

May this post be helpful and resourceful in your journey.

 

Peace & Love,

Ashley Amor