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5 reasons you don’t need a car

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Good morning Loves.  I don’t actually have a car, I used to but I sold it and that was the best financial decision I ever made.  I bought a brand new Honda Civic in 2007 and I sold it three years later with less than 30,000 miles on it.  All that to say I didn’t use the car a lot; not only that but I didn’t need it.

Car payments are very expensive

BF and I live downtown in a big city and we bought the car for the sole reason that we didn’t have one.  We quickly learned that the benefit of the car wasn’t worth the $800 cost.  Yes you read that right.  With the car payment, and insurance costs along with the gas and parking expenses we were paying $800 a month for our car.  I admit it was nice to have when we wanted to take a weekend road trip to Boston, New York or Toronto but the overall benefits weren’t worth the monthly expense.

You can take the less convenient route

Some days I miss my car; I miss it when I have to walk home in the rain, I miss it when I need to get somewhere really quickly and walking there is going to take me more time than I’m actually going to spend at the destination and I really miss the car when I have a lot of groceries to carry.  Although the convenience of having a car is nice, I just can’t justify the costs and other headaches that come with the car.

There’s a cheaper option

I liked having the car over the last two weeks because we needed it for a specific purpose, it was super convenient to drive around town and the neighboring suburbs going to Target, Wal-Mart and grocery shopping.  The entire two week car rental only cost us $360 plus $140 in gas and $30 in parking; that’s a lot less than the $800 we were paying when we had the Honda.

Think about the environment

I’m a very impatient person and there’s nothing I hate more than wasting time.  I don’t like sitting in a traffic jam with the car running or sitting at a red light waiting for my turn to turn left.  Not only is it a waste of time but it’s also a waste of gas and it’s incredibly bad for the environment.  As I sit in a car with the engine running, not moving I can’t help but think about all the pollution I’m sending out into the air as well as all the money I’m wasting on gas.

It’s OK if you need it for a specific purpose

Don’t make the same mistake I did and buy a car just because you don’t have one and think you should.  With our move October 1st BF and I rented a car for two weeks.  Our new apartment is a lot bigger than our previous living space so we knew we’d have to run a lot of errands to run such as groceries, furniture and household supplies.  It was really nice to have a car over the last two weeks but at the same time I was happy to return it Sunday night.

Photo from Flickr

Why emotional spending is OK (sometimes)

Emotional spending

Good morning loves.  Well my 11 day vacation is officially over and I’m back at the office.  Even though I’m working away I am definitely still in vacation mode.  I spent five days of my vacation in New Orleans and before that I kicked off all the festivities with a little shopping celebration.

After scouting deals online I set my budget at $100 to spend on myself to celebrate the beginning of, not only my vacation but a new phase in my life.  Here’s a little rundown of what’s coming up in my life aka all the reasons I need o celebrate: we are moving.  That’s about it.  We are moving to a new apartment and starting a new phase in our lives: that’s definitely a reason to celebrate.

Emotional spending is not compulsive spending

Now here’s my point, it’s OK to splurge every now and then if a) you can do it without using your credit card and b) your spending is controlled.  Now let me ask you this, do you spend money when you want to celebrate something great in your life?  I used to be a compulsive spender, spending money when I was both happy or sad.  Now I only spend money on myself occasionally and never in excess.

After I paid off my debt I was afraid to spend money for a long time because I didn’t want to go back to being broke.  Now I allow myself to spend money occasionally, but within a budget and never on anything I don’t need. That’s the key to emotional spending – keep it in check.

Emotional spending can be controlled

I say that I spend  money emotionally but that’s only partially true because my expenses are always very calculated.  The intent to spend money is based on emotion, but the amount I spend and how I spend it is always based on my budget.

The season is changing so my happy emotional spending came at the perfect time.  I bought basic items I need for fall such as black tights, new black dress pants for work, a new dress for my trip to New Orleans.  In total I only spent $80 and I got absolutely everything I need.  Now that is controlled emotional spending.

How often to you spend money emotionally?

Think about the last time you bought something, anything, was it emotionally initiated?  Did you buy ice cream the last time you were having a bad day?  Did you buy a bottle of win the last time you wanted to drown your sorrows?  Or did you buy yourself a new outfit to celebrate a new job?  The truth is a lot of our spending is emotionally based.

I have to be honest I’m not sure what it is about spending money, but it can be gratifying, consoling and uplifting all at the same time.  I don’t know any other activity that has the same effect on people.  Do you?

How to spend wisely when emotions are involved

The old me would spend money on anything, and I mean absolutely anything from meals to home furnishings just so I would have something to do.  My money and my life were ruled by emotions; but not anymore.

The pain, tears and stress that come with being in debt are heartbreaking.  Now I spend money based on emotions but not as I’m feeling them.  If I have a bad day I go home and wallow, sometimes I eat cookie dough.  I think about how much money I can spend and how much I can afford to spend without feeling guilty.  That’s how I control my emotional spending and I never feel bad about it.

Photo from Flickr

A credit card without debt?

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Does that really exist? We shall see.

Have you ever been offered a VISA or MasterCard that you can reload with your own money and thought to yourself “WOW that’s a great idea because I won’t get into debt”?  That is definitely a normal reaction, I mean seriously who wouldn’t love to have a credit card without the temptation to spend and get into debt?  I know I would.  This type of credit card is prepaid and it’s often confused with a traditional VISA or MasterCard.

Do you have a prepaid credit card?

Yesterday my Dad called me and said “I got a VISA today.”  I was shocked and secretly proud because over the last few years my Dad’s financial situation has been less than stellar.  To make a long story short my parents got divorced, my Dad wanted to keep our childhood home so he got into a lot more debt (by buying out my Mom) than one person should.  When you combine this with the overwhelming need to give your daughter everything she wants in hopes that you’ll be her favorite parent it’s a recipe for financial disaster.

Fast forward to my Dad selling his house and paying off all his debt.  You would think that’s a good thing right?  Well it normally would be, if the person worked towards rebuilding their credit score.  However my Dad went in another direction.  He moved in with his now girlfriend and let everything – and I mean everything – from the phone and the car insurance to the house and the cable be in her name.  This is not helping my Dad rebuild his credit.

What is a prepaid credit card?

Yesterday when my Dad was at the bank paying his monthly bills (yes he still goes to the bank) the teller offered him a prepaid VISA card.  She explained that he can use it worldwide where VISA is accepted as a payment method and he can load as much money onto it as he wants whenever he wants.  Since my Dad has been without a credit card for over three years he thought this was a good idea.

The truth is it can be because it gives people with less than perfect credit the option of online shopping as well as booking tickets and travel.  It opens a world of doors for payment options that normal credit card less people wouldn’t have.  Since the card is funded with actual money, not credit, there is no possibility of further harm to your credit score.

Is it really the best option?

So what’s the downside?  The exact same gift of a prepaid card is also the curse.  Since the credit card is loaded with cash or money transferred from a bank account or PayPal there is no credit.  Everyone is approved for a prepaid credit card because there is no approval process, but it also doesn’t help rebuild your credit score.

If your credit is less than perfect you may want to consider a secured credit card because as you use it each month and pay it off you will rebuild your credit score.  Photo from my Flickr

Do You Consider Life Insurance an Asset or an Expense?

life insuranceA recent State Farm study found that half of Americans (50 percent) say life insurance is an asset while one-third (33 percent) say it is an expense.

While I completely agree with life insurance being an asset I’m pretty shocked that one third of those polled considered life insurance an expense.

Here are four reasons I believe life insurance is an asset that everyone should have.

Life Insurance Rounds Out a Financial Plan

I’m a firm believer that the right types of insurance round out a financial plan. For instance, you can pay off your debt, build an emergency fund, and start investing but what happens when a major emergency hits? The normal answer is that you’re back in debt or have depleted your savings trying to cover the cost.

If something happened to you or your spouse what kind of financial repercussions would there be?

For most Americans who are still paying off a mortgage and living on two incomes the answer isn’t good.

Once you get all of your ducks in a row, financially speaking, life insurance should be considered the protection layer of your financial plan.

If you need some more proof you can read all the amazing stories on Good Neighbors to see just how important having the right types of insurance is.

Life Insurance Allows You to Protect Your Family’s Future

If you have kids then I know you can understand the feeling of wanting to protect their future. As a parent all you want is the best for your children.

You want them to grow up as happy, healthy, responsible adults but you also want them to have every opportunity possible.

If you’re worried that your kids won’t be able to attend college if you’re not around then life insurance can bring you peace of mind.

You can choose what coverage amount you need and rest assured that you’ll still be taking care of your kids – even when you’re no longer here.

Life Insurance Can Cover These Types of Expenses Too

I don’t want to give off the impression that life insurance is only for couples who have children because it’s not.

Life insurance can be used to cover the cost of a funeral and can protect any co-signers you have on your debt.

If you don’t have a spouse and children to protect (yet) but want to be able to cover the cost of funeral services or cover the amount of debt you have then you probably don’t need a lot of coverage.

Find out how much you do need in these cases and get a quote. As long as you’re in good health I think you’ll be surprised at just how affordable life insurance can be.

Life Insurance Brings Peace of Mind

There’s something peaceful in knowing that even if something happens to you it’s not going to cause financial ruin to those around you.

It only takes a couple seconds to pick up the phone and call your agent but that one phone call could bring you the peace of mind you need.

Do you have life insurance?

Disclosure: This blog post was written as part of a sponsored program for State Farm to raise awareness about the importance of life insurance. All views expressed are entirely my own, and were not influenced or directed by State Farm. You can learn more about this blogger program and life insurance at GoodNeighbors.com, PlantingMoneySeeds.com, and by following #StartLiving on Twitter.