Tag Archives: Cash

Saving For An Emergency

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Saving For An Emergency

A great way to get out of debt is to save and pay off your debts.  Right?  Sounds simple enough.  But there is also another step that comes before paying off debts, this is a step that a lot of people do not fully understand and can result in going further into debt.

This is another common principle that a lot of financial experts advise their clients and fan base to pursue.  The principle is establishing an emergency fund prior to paying off your personal debts.  

For some of us, we went into debt in the first place because there was a form of an emergency that we were not prepared or financially equipped to handle at the moment and the way of handling the financial burden was to use a credit card or take out a no-interest loan that later became impossible to pay off in time.

An emergency fund is a great way to, well, prepare for an emergency.  A standard amount that most experts agree on saving is $1,000.  Now this is where things can get a little tricky.

We believe that you should work towards establishing this $1,000 emergency fund BEFORE you begin paying off your debts.  The logic is simple, if you begin paying off your debts and run into an emergency, you will still not be financially equipped to handle the emergency and will go further into debt.  

Despite what your expenses may be or what level your income stands, saving $1,000 into an emergency fund will be enough to handle most issues that may arise in your financial life.  Make sure your emergency fund is located in a liquid form.  You do not want to have the easiest access to your money, unless you have exceptional self-control, but you also need to insure that you have total access in the event there is an emergency.  A savings account is a great example while a CD or stuffing your $1,000 under the mattress may not be the best places to store your money.

Once you have saved the initial $1,000 you can begin paying off your debts little by little.

But the most important aspect to remember is that you are developing a healthier financial intelligence concerning your personal finances.  No matter how difficult it may seem to save the $1,000 remember you can literally do anything you put your time, energy, and thoughts to.  

Here’s to you saving money and paying off debt!

 

Let’s Talk Money Management

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Let’s talk about money management.  A lot of people have heard of a celebrity named Dave Ramsey.  Dave is a financial adviser, radios show host, and acclaimed author.  Dave’s book, “The Total Money Makeover” helps people learn the ins and outs of debt and how to get out of debt and stay out of debt.  In fact, Dave’s number one goal is for people to live debt free.

One of the principles Dave uses in his strategy is to get people to use envelopes to help manage their money.  Envelopes? you ask.  Yes, envelopes.  Dave has a strategy in which you set a monthly budget.  Let’s say your food, rent, gas, utilities, and some extra spending money.  Dave’s strategy says once you have been paid from your employer that you should immediately withdraw the cash you need for expenses.  If you’re rent is $700 a month you would get your paycheck, take out $700 in cash, and place it in an envelope you have tapped to your wall marked “rent”.  Now that the money is set aside for rent you need to do the exact same thing for your food, utilities, phone bill, etc.  The second you get your paycheck, take out the cash and place it in your envelopes and DON’T TOUCH THE MONEY!

When you need to go to the grocery store, go to your food envelope.  When you have to pay rent, go to your rent envelope.  Anything you have left over from your paycheck that didn’t go into your envelopes should go into a savings account or into paying off debt.  Don’t go out and buy the latest video game with the extra money, but PAY OFF DEBT!

This method is effective IF you stay focused.  You have to already have budget in place and have planned out your finances in order for this system to work.  If your food budget is $400 a month and you only take out $200 for your food envelope the process is pointless.

at FIRMS we believe that the first step to paying off debt is setting an honest budget and sticking to it.  Don’t do anything halfway, go all out and get focused on setting your budget and taking back control of your finances.  

As a premiere debt collection agency FIRMS is always here to help you manage your money and pay off your debts through our blogs.  Do you have any specific questions on money management or debt?  Comment below and we will be glad to respond!

 

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The Need For Cash

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There are thousands of blogs, articles, books, and workshops floating around in the world that are all circulated around the same topic; how to get out of debt.

There are differing opinions and views about how to get out of debt, stay out of debt, and better manage your personal finances.  Among the vast majority of those views is the same principle; track your spending.

We live in a world where money is electronic.  today we have credit and debit cards, papal accounts, apple pay, Samsung pay, and Bit Coins.  Money has become numbers on a screen and has lost it’s reality as total value.  Studies show it is easier to spend more money with electronically than it is when you have the cold, hard cash in your hand.

Tracking your spending starts with using cash and leaving your debit card at home.  Let’s say you’re going out to a local electronics store to buy a new television.  You have a budget in mind of $300.  You have done your research at home, you know exactly which model you want to buy and so you go out with the exact amount the television will cost in cash.  You get to the store and begin walking around looking at all of the bigger, brighter, and more defined televisions.  Suddenly the great model you found for $300 seems too small or too dim.  What are you going to do?  If you’re smart, you’ll buy your television for the $300 you planned and you’ll be happy because a $300 television is an upgrade from what you own now.  Maybe you will leave the store without a television and you’ll go home and save for a week or two until you can afford the nicer model.  Now, let’s pretend you are not that smart, which we all know you are.  But let’s say you forgot to leave your credit card at home and guess what?  You have $500 available on that card!  That means you can take your cash and your credit card and buy an $800 television!  Sadly, this is what most of us do on a daily basis.  Maybe we our budget says we have $5 to spend on lunch.  You decide to go to Panera bread for lunch and notice there’s a great lunch special for $10 and it looks delicious.  You have your debit card in hand and decide to double your budget for lunch that day.  Guess what, chances are you’re going to do the same thing 3 days out of the week, spend more money than you budgeted because you decided to leave home with your debit card.

See, this is where tracking your spending and paying with cash will benefit you.  If you track your spending you can see those patterns developing over time and see how much you actually spend over budget each week because of using your credit or debit card instead of sticking to your budget and paying with cash.

FIRMS is an odd debt collection agency.  Why is FIRMS different than most debt collections companies?  Because we don’t want you to go into debt, we want to help you get out of and stay out of debt.

We hope this helps,

 

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Positive Tips To Getting Debt-Free

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    At FIRMS we are aware that most you are probably still trying to get used to the fact that a premier debt collection agency, such as FIRMS, would actually want to help you get out of debt.  Well, trust us when we say that a major part of our pride is helping people just like you learn to better manage your finances and become financially healthy so you can avoid going into unnecessary debt.   While most debt collection companies might try to intimidate you and remain focused on simply collecting your money, FIRMS is dedicated to helping you learn to get out and stay out of debt.

One of the more serious factors in the life of someone stuck in the debt cycle is their mindset.  It is not just the mindset of finances and understanding money but the mindset of negativity that keeps us outside the place of growth and change.  One of the most important aspects to getting out of debt and making better financial decisions is staying positive in your thinking and your views about where you are going.

FIRMS has developed three changes you can make starting right now in your life to help you get out and stay out of debt.

  1. Stay Positive in your thinking.  NEVER allow your thoughts or feelings go to a negative place concerning your finances.  If you currently have some outstanding debts, don’t have negative thinking keep you in the debt cycle.  Change your thinking to be positive.  Tell yourself that yes, you do have some debt, but you are going to have everything paid off soon and you are making better financial decisions.  
  2. Set a goal and complete it.  Start with something simple like you are going to cook dinner at home more often rather than eating out.  Don’t start with your first goal being something along the lines of paying off your home.  Sure, you can pay off your home but that could take a long time.  We are looking for short term goals that you can complete soon and get some momentum going in your favor.
  3. Set a savings goal.  Set out to save $100 and then take that $100 and put it towards one of your outstanding bills or debts.  Write your goal down on a piece of paper and set it somewhere you’ll see it often.  Maybe tape it to your refrigerator or inside your car where you can see it.  Now work towards saving that $100.  Look in your house and car for spare change, maybe make your coffee at home instead of going to Starbucks. Once you have saved your $100 go and put it towards an outstanding debt.

These are three actions and changes you can make RIGHT NOW that will help you get out of debt and actions that will make you much better and managing your personal finances and having far better financial health.

    Leave your comments below and let us know some of the ways you work to become better at managing your finances.  And as always, leave any questions you have below and we will answer them in our upcoming blog posts.  FIRMS is dedicated to helping you get out of debt.

 

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