Invest or Pay Off Debt First?

The short answer is do both.  Why you should do both would be the real question.  To financially get ahead and feel more secure most people should start investing now for their future.

(Have you starting investing yet or are you paying down debt first?  I would love to hear your story.)

I have been coming across this debate off and on for decades and understand the reasons for each side.   I use to believe in paying down debt first, but because of my experience with my own debt I have changed my thinking.  Let’s start by looking at each side of the argument.

Why pay off debt first?

Every month that you are paying a monthly payment on a loan you are paying extra money called interest.  This interest is your charge for getting and paying off the loan slowly.  The money you are paying in interest is not helping you pay down a loan.

Let’s say you are paying $80 on a debt.  If $40 is just in interest than each month only $40 goes toward paying down your actual debt.  This is why it is so important to find good interest rates when looking for loans or credit cards.  As you pay down your debt you will be paying less interest each month.

Having debt hang over your head and struggling from pay check to pay check is stressful.  The process of trying to get out of the ‘debt trap’ is hard.  It takes planning and tightening your belt when it comes to purchases and your lifestyle.

Paying off the debt first feels wonderful.  It reduces your stress and it gives you extra cash that you can start investing with.  This is a great reason for paying debt first.

Why invest first?

It is always a good idea to have money put aside.  You never know when you will need it.  This includes short term (savings) and long term (investing) money.  Knowing you have a safety net is very comforting and can reduce stress even if you are still paying off debt.

Advise:  You should be putting money into an emergency account that you can withdrawal easily.  This savings should be big enough to support you and pay your bills for 6 months.  Of course it will take a while to reach this amount, though putting a little away each month will help you to eventually reach this goal.

Investing long term is money you invest for the purpose of letting it grow.  That means once you invest it, you don’t touch it!  The reason long term investments in the market are a good thing is because the stock market averages a 10% growth each year.  Some years it will increase 5% and some years it will increase 15%.  Either way it has a better growth than an average savings account.

Disclaimer:  Know your risk level.  Younger investors can usually go for the higher risk stocks because if they lose money they have more time to recover it.  So, know your risk level and do not gamble with your money.

Why should you pick one option over the other?

When you decide to only focus on one option and then really work hard to achieve, it will help you get there faster and have better results.  You will be able to pay off your debt faster or you will be able to put more money into investing.  Either way working hard toward one option will make it easier.

Why tackle both together?

I do understand that trying to do both will mean you will be paying off your debt slower and not investing as much as you could if your debt was paid off.   Though it is too easy to not save money.  And that is why many will put it off and some will never do it.  When you don’t start you miss out on the gains you could have had. (I have this regret.)

In life unexpected bills always seem to come.  So, we keep turning to the credit card to get us out of trouble.  (At least that is what I have done, especially car repairs.)  If you are trying to pay it off and keep adding to it, then the debt will be around a lot longer.  Waiting to invest UNTIL your debt is gone may take too long. (Yep!)

Many of us always feel like we don’t have enough money.  By putting some money aside each month will help you not feel so strapped.  You will see that you do have money to fall back on and that you are also investing for your future.

If you invest into stocks with dividends and reinvest your dividends back into the stock, you will benefit from the compounding effect.  Make sure you pick a stable company. There are many out there.

If you wait to invest till everything is calm in your life and there is no debt, then many of you may never start.  Give yourself the gift of security and peace of mind by investing in a savings account and an investment account.  This will help you know you have a safety net if you need it.

To save money is easier than ever these days

There are several apps out there to help you with your savings and investing.

I have heard many people talking about the Acorn App.  It helps you to save in a savings account by putting little bits of money aside.  Soon it starts to grow and gives you a safety net.

Stash* is an app (I use this one) that helps you to invest with as little as $5.  If you invest $5 into a stock that is worth $20, then it will buy ¼ of the stock for you.  You will receive gains and losses based on the % of stock you own.

Remember for investing you are doing it long term so don’t pay too much attention to the market.  Unless you are playing out of your risk comfort, which you just shouldn’t do. Stash has a feature that will ask you what risk level you want and it will recommend stock bundles for you.  (Always investigate a company before you invest money.)

There are many more companies coming down the pike to help you save and invest. The ones I mentioned were the ones I was more familiar with.  Do your own research and pick what feels right for your personality and comfort zone.  Make sure to start putting money away as soon as you can

The sooner you make a habit of putting money aside and not spending it on things or having it disappear into your revolving debt the sooner you will start feeling better about your financial health.

Get a savings account with the best interest you can and let the interest compound to help the account grow faster.  Get an investment account and reinvest any dividends again to help your account grow faster.

Use time as an ally.  The sooner you start the more money you will have saved up. Whether you decide to put $5 in a month or $500, you will get a better feeling the earlier you start.

My recipe for success     (Make sure you research and do what is best for you)

1. Make sure to pay all debt payments on time.  You do not want to waste money because of late charges.

2.  Always make sure to pay over the minimum payment each month. Whether it is 50 cents or $50.

3.  Make sure to put some money aside into emergency savings.  Make sure this is not touched unless you are in real trouble.  (Goal: enough $ to last 6 months)

4. Put money into long term investments.

5. Do this EVERY month.   Make it a habit!
These 5 activities should be done at the same time.  Do a little squirreling away with your money.  As you pay down debt, then put more money into savings and investments.  Some people find that if they do this online instead of at a bank, which they can easily get to, they are less likely to dip into their savings.  Also, try to make it automatic.  Have the bank put money automatically into a savings, so you don’t have to think about it monthly.

This is for your future!  This is for your peace of mind!  This is to protect you from unseen financial problems and having a future with no money!

These things are very easy to do, though they are also very easy not to do.  Do yourself a favor and start making sure you have a safety net now and for the future.

*If you would like to try Stash.  If you sign up through this link they give you an extra $5 in stock.    https://get.stashinvest.com/dianeimv06

Have you starting investing yet or are you paying down debt first?  I would love to hear your story.

 

MY WORLD GOT SHAKEN YESTERDAY

(Did you know this?)

It started out as a normal day.  I went to work for a few hours, then came home and was going to go somewhere fun with my husband in a couple hours.  Since I had time I was just watching some YouTube videos.  I came across one from Mike Rowe who was on the show ‘Dirty Jobs’.  I really loved that show.  Anyways, in his talk he mentioned a dirty job he went on.  It was at a farm and it so happened the day he was filming it was when the farm needed to do its lamb castrations.  Mike Rowe usually didn’t study for the jobs he was going to do, but this one he looked up how lamb castrations are done.  The procedure he found, that was widely accepted, was tying a rubber band tightly around the scrotum and tail.  In a week it should fall off.  So far I was understand without any revelations.

Then Mike gets to the farm and the farmer is doing it a different way.  He cuts off the tail and pulls out the testicles with his teeth.  Yes, gross.  I was so into the story that the information still didn’t hit me.  He kept talking about it.  Then it hit me…..

SHEEP ARE BORN WITH TAILS !!!!!!!

WHAT?  I thought sheep were born with no tails, like the Corgi dog.  Which I also just found out that there is a breed of Corgi that is born with tails.

Back to sheep.  I have gone half a century believing that sheep are born without tails.  My world is different now.  I love sheep and would like to own a few.  Now, I want a sheep with a tail.

My world will never be the same.  How could I not know this.  It boggles my mind.  I go to the Puyallup Fair and I have never seen any information about sheep having tails.  I had to see if there were any pictures online.  Yep, a lot of sheep and lambs with tails.

I still can’t believe, SHEEP HAVE TAILS !!!

 

My World was Shaken- sheepjpg

Did you know that sheep are born with tails?  Why didn’t anyone tell me?  How could this be unknown to me?      SHEEP HAVE TAILS  !!!

A New Experience: New Food

Have you ever tried this or wanted to try?

This morning I didn’t want to eat my regular breakfast.  Almost every day I eat oatmeal for breakfast.  When I am not in the mood for oatmeal I will have cereal or a frozen breakfast sandwich.  Sundays my husband usually makes us a breakfast.  So, 6 days a week my breakfasts breakdown to about…  92% is oatmeal, 4% is cereal, 2% is breakfast sandwich and then 2% is whatever I can figure out making (I don’t like cooking).

This morning I was not in the mood for any of my regular breakfasts.  I was thinking about cooking eggs, but my stove was a bit cluttered and did I mention I don’t like cooking?  I had a banana that has been around for about 3 days now and I knew my breakfast was going to include a banana.  All of a sudden I got a craving.  I couldn’t believe that I was craving this meal.  I have thought about this for years, but never had the desire to try it. This morning the craving was strong.  I am following my interests more these days, so I started to look through the kitchen to see if I had everything I needed.  Luckily, it only needed 3 ingredients.

I remember growing up and hearing that Elvis loved eating this.  Well, now I want to experience what Elvis had.  I toasted 2 pieces of toast, cut my banana into slices and grabbed a jar from the pantry.

Do you know what I had for breakfast?

I had a peanut butter and banana sandwich. (I did an open faced one.)  And OH MY!  This is going to go into my rotation of breakfast choices.  This open faced sandwich was so easy to make.  Luckily, I don’t consider putting bread into a toaster cooking.  Though I do consider slicing as cooking, but I can do a banana without a cutting board, so very doable.

I enjoyed my breakfast immensely.  Only took me decades to get brave enough to try it. Where the strong craving came from is still a mystery, but I am really glad it did.

So, have you tried a peanut butter and banana sandwich or want to?

Tangent: RVing

(Have you ever taken off on a long RV trip or want to go RVing?)

I have so many things I am trying to do right now.  My main focus is that I want to be RVing.  Not just a week but weeks or a month at a time.  I want to see our great United States.  I have wanted to explore the US as long as I could remember.  There are a few places I would like to see outside the US like: Egypt (the pyramids), Mexico (The Mayan Ruins), and Australia (koala bears, my favorite animal).  I have never really wanted to visit Paris, London, or France.  I would much rather see and experience my own country.

I stumbled across videos of people that have sold their homes and are currently traveling the world in RVs.  So, now I  want an RV.  The problem, besides not being able to afford one at this moment, is that I am working at a job that is not able to be done on the road. That means I need to find a new career that will allow me to travel.

I go back to YouTube to research options on how to make money online. My top 4 choices is: opening an ecommerce affiliate store, trading stocks as a swing trader (I have been wanting to do this for about a decade), youtube videos, and blogging.  I do not know a whole lot about any of these, though I do know more than I did about 6 months ago.  I have started working on an ecommerce store and played with my phone to do videos.  I am jumping in carefully and since I don’t have much capital to back it up I am going slow and inexpensively.

The open road is calling me though.  I must push on and get these new income earners up and running.

Have you ever taken off on a long RV trip or want to go RVing?

Going on a Tangent

(What is the current tangent that you want to follow?)

At times my brain goes a million miles an hour.  It is thinking of 3-5 different things at a time.  This may explain why I have a hard time focusing and getting a task done.  Even though this may sound like a disadvantage, I love the creativeness that comes from my random thoughts.  These thoughts will lead to activities (tangents) I want to try.

I decided to look up the definition of this word. Tangent:
a completely different line of thought or action:
                    “he quickly went off on a tangent about wrestling”

My thoughts often go off on tangents.  In the post titled “Missed Opportunities and Adventures” I called following these tangents as following your passion.  Whatever you decide to call them: Tangents, passions, rabbit trails… start following them.

As of 5 months ago I have really tried to follow all the interesting tangents that I think up and I plan to start sharing the multitude of tangents with you in upcoming post.

What is the current tangent that you want to follow?

Working Toward Goals

(What would you choose for your morning affirmations?)

I will not achieve my goals if I don’t work toward them.  It is very common for me to do easy activities rather than tackle my more challenging goals.  So, I have been trying to watch videos that will help me reach the goals I know I can reach if I will just spend time moving toward them.

I wanted to share this video…

I am doing most of the things that Stefen mentions in the video.  In the morning before I get out of the bed I smile, stretch and say a few things I am grateful for.   I then get up and do my affirmations while I am doing simple exercises. This takes less than 5 mins. Before eating breakfast and getting ready for work I do my deep breathing and drink water.

Being grateful and reading my affirmations out loud is really helping me stay motivated and feeling more ready to face the day.

Here are my affirmations:  I think I took one from the video, but most were ones I made up.  I started with 5, but have added 2 more since starting 2 weeks ago.

– Failure doesn’t mean I should give up.  Keep trying!

– Nothing taste as good as being healthy and strong feels.

– I can use other activities rather than eating food when bored or upset.

(These next 4 are my favorite so far)

– I will spread happiness (not sadness or anger) today.

– I am smart and I can figure things out.

– Laziness may appear attractive but work gives satisfaction. (Anne Frank)

– I have a purpose for being on this planet, even if at times I don’t see it.

God has a purpose for me.

Starting each morning with these activities is making my mornings better.

What would you choose for your morning affirmations?

Introduction

I am currently not a church goer or have I read through the Bible yet.  I deeply believe in God.  I have been watched over and protected too often to have any doubt.

I am trying to read through the Bible, but it is very slow going.  I have a Bible app on my phone that will send me a scripture everyday.  On this page I will share the ones that makes me think, inspire me, or lifts up my spirits.  I hope you will get meaning out of the scriptures also.

Share your favorite with me and tell me how the scripture touches you.

My New Plan: The Library

(Do you have an area in your life you are struggling with?  How many plans have you implemented to solve it?  Did you finally come up with one that worked?)

Well, the School Plan as gone to the waste side.  The good side with me failing to come up with a plan that I can stick with is that all of you who are reading this will have many plans to try. Hopefully one will work for you.

One of my problems is that when I get home I get distracted and not get done what I say is important to me. I will even write me a to do list and after 3 days notice that I hardly looked at it.

My new plan is that I go to the library for a minimum of one hour Monday – Friday after my first job. I go straight there for if I stop by my house most likely I will not leave.

I have filled a backpack with paper for a to do list, journal, class planner, my story notebook, a couple of books I have been wanting to read about a topic I want to learn.  I did not have all of these from the beginning. The first two days I walked in with a book, my future to do list and my journal.

That first day I did pretty well. I did some journaling, worked on my to do list, worked on class stuff and found a book on the library shelf that will help me learn the new topic I have been trying to learn for about 3 years now.  I was very proud of myself, though the last 15 minutes went slow because I started to get tired and hungry.  I am now bringing a snack and water for me.

I started this about 6 days ago.  I forgot how much I love the library. One of my fantasies is to get locked in a library for a day or two.  I love books!

The library has so much more to offer than the last time I was regularly using it, which was about 6-10 years ago. I am so glad the library is still there and it is being used.

Since I have started going I have been reading to learn, journaling, working on class items, and have even worked on my story that I started about 2 years ago.  In addition to that story I wrote a storyline for a children’s story which I would like to make into a series of stories.

I am feeling more productive than I have for a while.  I have a friend that recently went to a coffee shop with a pile of papers that needed to be dealt with.  She said she was surprised how much she got done without distractions.  I guess it isn’t where you go, but that the distractions are minimal.

I hope this works for me.  It is just sticking to it and making myself do it!

Do you have an area in your life you are struggling with? How many plans have you implemented to solve it? Did you finally come up with one that worked?

My Newest Strategy – School?

 

(What 6 things would you like to be working on or learning?)

I have read several books on bettering myself, procrastinating, how to stop the negative thoughts in my head and how to get organized.  They all have good advice in them.  I try to follow their advice, though nothing substantial has stuck.  I have learned a little from each book and at times I think back to my favorites, but I am still looking for that magical strategy that will work for me.

I have been journaling in my notebook so I can figure out what I am going to do with the rest of my life.  Right now I am working 4 jobs and volunteering a few hours at a Senior Center.  When you put these all together I am working 7 days a week.  If that wasn’t bad enough I am not breaking the 40 hours a week mark.  That could be a good thing, though with 4 jobs you would think I would be making extra money by working over 40 hours.

So one of the several things I am trying to work out is what jobs am I going to have coming September and how I am going to accomplished what I (keep telling myself I) want.

As I write in my journal I vent and then tried to problem solve.  I started thinking about High School.  During school I was taking 6 classes and doing homework for these classes.  I liked learning new things.  What if I treat all these ‘wants’ as classes.  As long as I fit some homework in every week then eventually I would get to my goals.

I have more than 6 things I want to work on, though I decided to pick the top 6 to start with.  Here is my list:

  • PE  (I need to get exercise back into my day.)
  • Blogging about decluttering  (This way I can cover decluttering and blogging in the same class.  I do plan to do other blogging topics also.)
  • Make $ on the internet  (I want to learn how to make money from home and try to learn about passive income.)
  • Making furniture   (We are going to build a loft in one of our bedrooms… I need to figure out a plan for this, the materials we will need, and how to actually build it.)
  • Planting, gardening, yard work  (Since all of these are outside in the yard… I just grouped them together.  I am not sure I am ready to garden, but I want to grow food.  I have blackberries, a plum tree, a pot of strawberries, and I just got me a raspberry plant.  I am hoping to get blueberries next.  I want to utilize them this year… in years past many went to waste.)
  • Swing Trading  (I have looked into this some but then stalled out.  I feel like this would be a good fit for me, though I need to learn more about it.)

These are my six classes that I want to spend time doing homework for.  I hope this strategy will work for me.  If not, I am not sure how many more ideas are out there for me to try.

I look forward to completing these classes or better yet having them become a habit or future job.  Then I can go onto my next 6 classes.

What 6 things would you like to be working on or learning?

When You Think You Have It Planned

(Have you ever thought you had something all planned, then have it fall apart?)

I have been working hard making plans for my summer and when I think everything is settled, all of a sudden it isn’t.

I have been looking for a new job to go along with my others.  I have quit my morning job (they knew I was looking) after I have found a new morning job.  I had figured out my hours, how much money I will be making, and how much time I would have off to get projects done this summer.  It was all looking great.
I went on a camping vacation with my family and I was to start the new job on the Monday after returning.  The night before I got a call from a different boss telling me they are closing their business with no warning.  I am now losing about $400 a month.  Then to find out that the new job I just got may not be steady work, but come in as needed.

I am not panicking because I really wanted more time in the summer to do my projects, though I do need to make sure I can pay my bills.  Walking that fine line can be tricky.

So, I am going to go with the flow and hopefully if I start to struggle I can ask for more hours from another job that I still have.  Sometimes there is a benefit working for more than one company.  Like the saying says….  Don’t put all your eggs in one basket.

This is life?  As in the movie Matrix…  if life was all easy we would get bored.  I will definitely say I am not bored and at times I just want to laugh at this situation.  Stay tuned and see if I make it through the summer.

Have you ever thought you had something all planned, then have it fall apart?