My Big, Fat Savings Goal + How I Plan to Achieve It

I had a big, fat debt payoff goal to pay off $18K in 2018. That’s not gonna happen. Instead of sending that money to FedLoan Servicing for extra payments, I’m going to build up substantial savings for myself.

Some folks may say you shouldn’t save several thousands of dollars until after you’ve paid off all of your non-mortgage debt. But I’ve realized having a large emergency fund will give me peace of mind and enough cash to cover several scenarios without having to sell something or get deeper into debt.

Check out this post to find 10 questions to ask to determine your savings goal: Emergency Funds: Why, Where and How Much to Save.

How much will I save in my emergency fund?

I’ve carefully considered real numbers from previous budgets to come up with these savings subgoals. The emergency fund could cover 5 things:
Click to read more.

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Emergency Funds: Why, Where and How Much to Save

Several conversations over the past few weeks have made me take pause and reconsider my debt payoff strategy. I dove headfirst into debt payoff at the expense of saving a full emergency fund and, frankly, my peace of mind and protection as well.

The shame! Somehow I subconsciously believed that I’d be fine. Pay off debt! Pay off debt! Go forth and conquer!

But what if I lose my job? What if I have to fly from China to the States tomorrow for a family emergency? What if I need to pay for a surgery?

As of Sept. 7, 2018, I have less than $400 in savings in the States. Soooo very un-wise! (Un-wise sounds much better than stupid, right?) I got too excited about paying off debt and didn’t replenish my starter savings a.k.a. emergency fund when I dipped into it in December 2017.

“Paid In Full” be calling me, man! It just keeps calling me. These three words give me the same giddy feeling I get when someone places an unexpected gift in my hands—pure, unadulterated joy.

Now I have to switch gears. If I overpay FedLoan Surviving before resuscitating my savings, I can’t call ‘em up and ask for it back. It’s time to put myself first.

And if you don’t have an emergency fund, then it’s time to put yourself first, too.

What is an emergency fund? 

An emergency fund is a buffer between you and unexpected things that come your way. It is usually saved in a liquid account (i.e. savings account or money market account) for relatively easy access.

Let’s not think only in terms of an emergency but in terms of an opportunity to solve a problem or take advantage of something awesome with your savings.

Years ago, my cousin in my head, Patrice C. Washington, suggested calling it an Opportunity Fund. Words matter. If you keep calling your savings an Emergency Fund or Rainy Day Fund, then that’s what you’ll attract—emergencies and rainy days. Who wants to save for that?! Opportunity Fund or Sunny Day Fund sounds so much better.

Full disclosure: I only use emergency fund for SEO purposes. I agree with Patrice.

Emergency funds 101: Why, Where and How to Save

Learn 10 questions to ask to figure out how much to save.

How to Make Extra Principal Payments on Individual Student Loans

Lately, I’ve felt so free discussing my debt-free goals with close friends in China. When I shared how I finally paid off my undergraduate student loans 9 years and 1 month after walking across the stage, my friend, Ti, told me about a former co-worker who was taking longer than that.

This single father is approaching 40. One day, he looked at his statement and grew frustrated. The balances weren’t going down. He had been paying extra for a few years.

He called the company to complain. Little did he know that his extra payments weren’t being applied to his principal.

“Oh, no!” I groaned. “You gotta tell your money where to go.”

I’m sure many of us have played the leading role in this cautionary tale. But a few years ago, I wised up (pun intended). I learned how to make sure extra payments applied to my principal—not just my interest.

Make Extra Student Loan Payments to the Principal

Find out more!

The 5 Most Important Things I Did to Organize My Finances as a Newbie

*This post contains affiliate links. That means I receive a small commission that could help me on my debt-free journey —at no extra cost to you—if you make a purchase using the links.

One of my best friends called me “the money expert” the other day and I chuckled. I thought, “Me?! Girl, bye!” Truth is: My last name is Wise, but I was anything but just a few years ago.

As a recent college graduate in North Carolina, I thought I had everything in control. I had a job in my field, which some of my friends couldn’t say, and I didn’t have to depend on my parents for anything. That’s because I was depending on Visa.

My level of financial literacy was non-existent. Neither Mom, Dad nor my teachers had ever taught me about managing money. When I decided to take responsibility for my financial life a few years ago, here are some of the most crucial steps I took to organize my finances.

1. Started seeking knowledge.

Everything starting with Call Number 332 was fair game at the local library. I think the first personal finance book I checked out was Girl, Get Your Credit Straight! That title gets to the point, doesn’t it?! I needed someone to be real with me and break things down simply. Author Glinda Bridgforth explained how credit scores were calculated and what I could do to get caught up. I even ordered my first credit reports. The more books I read, the more resentful I became for not knowing all of this already. More importantly, I grew more confident in my money management and decision-making skills.

2. Stopped using bills as coasters.

Avoiding money problems leads to more money problems, so I stopped tossing bills on my nightstand like frisbees and leaving them there to collect dust. When I opened up the Bank of America, Old Navy and CFNC statements, I finally confronted the numbers and saw how reckless I’d been. I also found out my mom had maxed out one of the credit cards in my name. The balances seemed insurmountable at the time. But I had, at least, conquered my fear of knowing the numbers so I could make a plan to clear the balances.


5 Ways I Organized My Finances Initially
Click here to read more.

10 Steps to Debt Freedom

You are taking a HUGE step in your life. Congrats! It’s so awesome that you want to get out of debt and are willing to seek knowledge on how to do it. If you want to go from confusion to clarity, then do these 10 steps. Don’t skip any.

The journey is tough but so worth it. Debt freedom is yours! Happy debt-crushing! Download the printable of this list and the debt-free pledge so you or a loved one can use it at home.

1. Get your mind right.

First, forgive yourself for having so much debt. And exhale. Perhaps your parents or guardians didn’t teach you proper money management. Forgive them, too. From now on, do not judge yourself for past mistakes. Debt does not define you. What you do with the debt does.

2. Declare your debt-free goal and create your “why.”

Say this out loud: “As of today, I am in control of my finances. I will not create new debt. I am striving to be debt-free by increasing my income, spending less than I earn and making extra debt payments. I want to be debt-free because _______________.”

Maybe your“why” is traveling or sending your kids to college loan-free. If you don’t have a strong, emotional reason for getting out of debt, then all of the budgets and checklists in the world won’t help you. When you lose motivation—and you will—remember your “why” to keep going. Repeat this declaration to yourself daily. Better yet: Write it on paper and sign it. You just made a debt-free contract with yourself!

10 Steps to Debt Freedom Checklist See the other 8 steps to get out of debt.

10 Steps To Paying Off Balance Transfer Cards Early

It seems simple, right? To pay off balance transfer cards—or any debt— you spend less than you earn and send the leftover money to the lender. That’s true, but there’s a lot more to it. You have to get your mind right and set up systems that support your debt-payoff goals.

I’ve successfully and unsuccessfully used balance transfer cards to pay off debt quicker. I don’t recommend them unless you’re disciplined and follow these tips. I nearly maxed out the latest balance transfer card and was determined to pay it off before the 0% interest rate expired in December 2018. In this post, you’ll find each step I took to pay off a balance transfer card 5 months early.

Balance Transfer Card Debt Breakdown
Here’s the timeline:
  • August 2017: I got approved for the Barclaycard Ring Mastercard, a 0% interest balance transfer card with a $0 balance transfer fee. Yep! I transferred my debts for free! I transferred two credit card balances and a grad school loan onto the balance transfer card (Bank of America Visa $2,194 + Old Navy Visa $1,943.87 + Grad School Loan $2,809.87 = Total $6,947.74).
  • December 2017:  I paid off the two credit card balances. Those interest rates were 19.40% and 25.24%, respectively.
  • July 2018: I paid off the balance transfer card in full.
  • December 2018: The date in which interest would have started accruing on the remaining balance if it were not paid in full.

10 Steps to Paying Off Balance Transfer Cards Early

Click here get the 10 steps to paying off a balance transfer card early.

Create a Goals List in Canva for Free

It’s important to keep your goals front and center to stay on track and keep a positive mindset on this journey. That’s why I love sharing my intentions on Instagram every month. Canva.com is the place I go to design everything.

Canva is an incredible tool for all of your design needs. Instagram posts, blog headers, ebooks—it can all be done in Canva. I’m not sponsored by them. I’m just saying.

You can create a goals list like this on Canva.com with a free account in a few minutes.

Goals list created by Canva's free account

The list only consists of 5 elements:

  • yellow paintbrush stroke
  • heading or title i.e. “August Goals”
  • checkboxes
  • body text i.e. individual goals
  • watermark i.e. WISE WOMAN WALLET

When you want to check off an item, you can return to Canva and add check marks.

HERE’S HOW TO CREATE A GOALS LIST IN CANVA FOR FREE


Click here get step-by-step directions with images.