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How a single mom paid off 77000 in debt?
Love, the creator of the renowned personal finance site The Budget Mom, noticed that budgeting for each paycheck rather than the full month made it much easier to manage her spending and debt.
“I started succeeding when I started budgeting my money by paycheck every time I was paid and dedicating every dollar for a purpose when I got paid,” Love says. “I started finding myself genuinely saving money and having more to pour down towards debt.”
As a result, she devised her own technique, which she refers to as “She used the “budget-by-paycheck method” to pay off $77,000 in three years.
The calendar approach, the cash envelope method, and the paycheck method, she claims, are all rolled into one. She claims that the technique may be tailored to your specific budget and would assist you in visualizing your objectives. This is how it goes.
What benefits are there for single mothers?
As a single mom, what else am I entitled to?
- Support for children. Child support payments can be assessed, collected, and distributed by the Department of Human Services.
How much money does a single mom need to make?
The amount of money needed to support a family varies greatly depending on where you live in the United States. For single parents, the strain is significantly greater.
In Alabama, a single parent with one child may make ends meet on just over $45,000 per year, but in California, it requires at least $62,000 per year to make ends meet. If there are two children in the family, the figures jump to $56,000 and $74,922, respectively.
How can I pay bills with no money?
It’s easy to be pressured by creditors when they phone (email, text, or send snail mail). They’ll try to persuade you that paying them is more vital than keeping the lights on most of the time.
Pay attention: The most important thing you can do is prioritize your Four Walls, which should be done in the following order:
Make sure you and your family are taken care of before you spend another dollar on debt. That means you’ll need food in the refrigerator, electricity and running water, a place to live, and a way to go to and from work every day.
How much debt is OK?
Lenders employ a uniform method to evaluate when debt becomes an issue, regardless of whether you make $1,000 per week or $1,000 per hour. It’s known as the debt-to-income ratio (DTI), and the formula is straightforward: recurring monthly debt minus gross monthly income equals debt-to-income ratio. It’s expressed as a percentage, and in general, you want it to be less than 35 percent.
Your regular monthly debt includes things like your mortgage (or rent), car payment, credit cards, student loans, and any other payments that are due on a monthly basis.
Your gross monthly income is the amount you earn before taxes, insurance, Social Security, and other deductions are deducted from your paycheck.
Assume you pay $1,000 per month on your mortgage, $500 per month on your auto loan, $1,000 per month on credit cards, and $500 per month on school loans. So your total monthly recurring debt is $3,000?
The immediate inference is that you drive a great car, but that is irrelevant to our conversation. What matters is your gross monthly revenue of $6,000 per month. Let’s get down to business.
Recurring debt ($3,000) divided by gross monthly income ($6,000) equals 0.50, or 50%, which is not a favorable ratio.
You’ll have a hard time securing a mortgage if your DTI is higher than 43%. A DTI of 36 percent is considered acceptable by most lenders, but they want to lend you money, so they’re willing to make an exception.
A DTI of more than 35 percent, according to many financial gurus, indicates that you have too much debt. Others push the limits to the 36 percent-49 percent range. The truth is that, while DTI is a useful measure, there is no single indicator that debt would lead to financial ruin.
Use our Do I Have Too Much Debt Calculator to see what percentage of your monthly income goes to credit card debt and mortgage payments, as well as how much money is left over to pay your other expenses.
How much debt is bad debt?
You want your debt to be as minimal as possible so that you may be financially flexible in the event of an emergency as well as for your long-term goals. You’ve probably reached your debt limit if you’re having trouble making monthly payments. How much debt is excessive? Keep your debt-to-income ratio below 43%, according to the Consumer Financial Protection Bureau. People with debts of more than 43% have a hard time paying their monthly payments, according to statistics.
How did the budget mom pay off her debt?
Despite eight years of experience as a financial consultant, Love didn’t know much about personal finance before establishing The Budget Mom. Love recalls her manager setting her down on her first day at her first finance job in 2011 and instructing her to construct a personal budget.
“It’s amusing. “Here I was, a finance graduate with little knowledge of personal money,” Love explains. “No one had ever asked me to do something like that in my life.”
Love now guides her readers through the process of creating personal budgets. Her hallmark method combines three budgeting techniques into one: the calendar method, the cash envelope system, and the paycheck method, which helped her pay off her own debt.
How old is the budget Mom?
Kumiko Love wasn’t always a financial wizard. However, when the 33-year-old mother decided to pursue a profession as a financial advisor, she discovered critical lessons that she has shared with her 1.5 million followers on her blog, “The Budget Mom.”
