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Protect Yourself: Everything You Need to Know About Auto Insurance

Protect Yourself_Everything You Need to Know About Auto Insurance_Knowing Your Worth_Fiscal Femme

This month we are demystifying the world of insurance and will tell you all that you need  to know about the different types of insurance so that you know what they are, how they work and can decide if they make sense for you, specifically.

Lets talk auto insurance! Auto insurance protects people in the case of an accident or damage to their or others’ vehicles. The policyholder pays premiums or payments to the auto insurance company and in exchange the insurance company covers any damages so that the policyholder doesn’t have to pay out of pocket.

Premium amounts or the amount you have to pay the insurance company for coverage varies depending age, gender, driving record and many other factors. Many states require that you have a minimum amount of insurance coverage but many people opt to purchase more.

Here are a couple helpful terms:

Deductible: Just like with other types of insurance, the deductible on auto insurance is the amount you pay out of pocket before the insurance kicks in. Policies with lower deductibles typically are more expensive but before you opt for a high deductible policy to save money, make sure you can afford the deductible if something should happen.

Minimums: The minimum amount of auto insurance you are required to have by law. This will vary by state.

Another important thing to note is that auto insurance is often made up of several components, including:

Liability coverage: Protects the insured if there are claims made for medical care or damage.

Collision coverage: Covers damages to an insured vehicle in the case of a collision.

Medical payments coverage: Provides coverage for medical payments in the case of an accident or collision.

Uninsured or under insured motorist coverage: This covers losses incurred by the insured if there are injuries or damages from someone who is not insured or under insured.

Other-than-collision coverage: Covers losses that are associated with anything other than a collision such as fire, theft, falling objects, etc.)

Make sure to factor in your state’s minimum requirements, the various components of coverage, deductibles and a premium amount that you are comfortable with in order to find the auto insurance policy that makes the most sense for you.

Protect Yourself_Everything You Need to Know About Auto Insurance

And we’re off!

Justin and I took off on our honeymoon Monday night and will be traveling through Greece and Italy for the next month. Ah! I could not be more excited and promise to share lots of pictures and stories!

I’m going to be starting a new practice while we’re away where I’ll meditate on gratitude for 10 minutes each day. After, I’ll write down three things I’m grateful for and will take note of the experience. I think it’s going to feel pretty spectacular but I’ll let you know what I find. If you’re interested, feel free to join me in this new abundant practice!

On a related note, I’m also going to be posting frugal joys of ours and those we meet through out our travels. Don’t forget to join the frugal joy campaign where we’re celebrating things that are free or inexpensive that make us really happy. Just post your photos and videos with the tag #FrugalJoy to share! I can’t wait to hear your ideas!


And we're off! Knowing Your Worth_Fiscal Femme__Honeymoon

Insurance For Your Income

Guest post by Chris Walter of Policy Genius.

Protect Yourself_Everything You Need to Know About Disability Insurance_Knowing Your Worth_the Fiscal Femme

Why is long-term disability insurance still a mystery to so many people? It’s a pretty basic type of insurance that can make a huge impact on someone’s life, and yet 7 out of 10 people who work in the private sector don’t have it.

This is too bad, because for most people, long-term disability insurance runs a close second to health insurance in terms of importance. And it’s easy to shop for a good policy on your own, if you know what to look for.

That “if you know what to look for” is the tricky part, so here are some basic facts to turn you into a long-term disability insurance expert in just a few minutes.

What is it? In plain English, please.

Disability insurance is like insurance for your paycheck. It replaces your income if a health problem keeps you from working for an extended period of time. It protects the assets you’d otherwise deplete to cover your living expenses. Think of it as the paycheck side of health insurance. A more accurate name for it (and what it’s called in other countries) is income protection. Shopping for long-term disability insurance is somewhat like shopping for life insurance, because they both require a medical exam and a review of your health history. For long-term disability, an insurer will also look at your employment history and income to help determine the size of the monthly benefit.

Do I need it?

The risk and impact of disability is greater than you think. The fact is that our risk of disability is twice as high as our risk of early death. According to the Social Security Administration, 1 in 4 of today’s 20-year olds will become disabled for a period of time before reaching age 67. Also, disability isn’t necessarily permanent or catastrophic. It’s simply a health condition that renders you unable to work for an extended period of time (typically 3 months or longer). The most common causes of disability are illnesses like cancer.

If you work and support yourself, you should definitely have some sort of disability insurance. And if you have a good emergency savings fund built up, you probably still need it (although you can save money on the policy by opting for a longer waiting period). You can live off your emergency fund for 6 months (that’s the whole point of it), but it’s that scenario where you’re unable to work for two years, while also facing growing medical expenses, when your financial plans can fall apart. There’s a reason why the majority of personal bankruptcies are due to medical expenses.

Can I just rely on Social Security if I become disabled?

It may help, but don’t expect it to be enough. The average monthly benefit paid by Social Security Disability Insurance is around $1,000, and that’s assuming your claim is approved. More than half of initial benefit claims are rejected, which is one reason why it can take up to 2 years to start receiving benefits.

Is it expensive?

The short answer is, “Not if you’re young and have a pretty clean bill of health.” But like any insurance product, the amount you pay reflects how risky the insurer thinks it will be to cover you.

For long-term disability, these are the things that tend to drive up the cost.

  • You work in a high-risk job.
  • You already suffer from health issues.
  • You’re over 40.
  • You’re a woman. (Yes, really.)

About those last two bullets: The 40-year-old threshold is particularly important to keep in mind. If you’re under 40 and thinking of buying long-term disability insurance, do it sooner rather than later, because the rate will keep going up with every birthday. (Not to mention your health record will probably become more “interesting” as you age, which also drives up the cost.)

As far as women paying more, well, the official argument is that women file more disability claims than men do, which is true. Whether that fully explains the price differential is anyone’s guess.

For coverage that replaces your take-home salary, expect to pay around 2-4% of your gross annual income in premiums. And if you’re on a tight budget, you can almost always adjust a policy’s features to get good coverage at a reasonable cost.

My employer offers disability insurance. Should I get that?

Yes! You should always max out the disability coverage available through your employer, because it’s usually affordable and often guaranteed issue (meaning no medical exam). But make sure it provides enough coverage, and find out whether it’s convertible to an individual policy if you ever leave your job. For a lot of us, it makes sense to supplement any workplace coverage with an individual policy.

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What does a good long-term disability policy look like?

The ideal policy will pay 60% of your income each month until you reach retirement age, even if you start working in another profession. It will also come with a guarantee that the insurer can’t raise your premiums or cancel the policy unexpectedly.

In reality, there are a lot of factors that can affect the scope and cost of the policy (for example your profession, your health history, or your age), so it may not be possible to hit all of those ideals in one affordable policy. But a broker can help you explore your options so you know for sure.

What’s more important for me to buy first—life insurance or disability insurance?

If you’ve got dependents and you work to support them, then both types of insurance are equally important! One nice thing about shopping for them at the same time is you can use the same medical exam, even if you don’t buy both policies from the same insurer.

If you don’t have any dependents, then it’s disability all the way! Whatever the case, it’s a simple and affordable way to protect your long-term financial plans from future health complications.

Protect Yourself: Everything You Need to Know About Homeowners & Renters Insurance

Protect Yourself_Everything You Need to Know About Renters & Homeowners Insurance_Knowing Your Worth_the Fiscal Femme

This month we are demystifying the world of insurance and will tell you all that you need  to know about the different types of insurance so that you know what they are, how they work and can decide if they make sense for you, specifically.

Let’s talk about homeowners and renters insurance! Why do I lump them together? They have the same gist.

If you own your home, you probably will want some type of homeowners insurance. Homeowners insurance does three main things:

1. It protects against damage to the house itself. Depending on the level of insurance you get, certain disasters such as earthquakes and floods might not be covered.

2. It protects the possessions in your home against loss or theft. If there is a fire and many of your belongings are burned or ruined, homeowners insurance will replace them.

3. It provides liability protection against accidents that occur in your home. If someone falls in your home and sues, you’ll be glad you have homeowners insurance!

If you rent your home, you will want to consider getting some type of renters insurance. Renters insurance typically provides two of the three benefits of homeowners insurance. It does not protect against damages to the home itself. In the case of a fire for example, the landlord’s homeowners policy would cover damages to the structure of the home itself and the renters insurance policy would protect against damages to the renters belongings within the apartment. Put simply, renters insurance does two main things:

1. It protects again your possessions. In the case of theft, fire, etc. the insurance policy will replace your belongings. See why renters insurance was the best purchase I ever made!

2. It provides liability protection for injuries that occur on the premises but that are not due to structural issues with the property.

Protect Yourself_Everything You Need to Know About Renters & Homeowners Insurance_Knowing Your Worth

Already sold? Here are some of the key things you need to know to understand and compare insurance policies:

Deductible: Just like with health insurance, the deductible is how much you will have to pay out of pocket before the insurance kicks in. If your policy has a $500 deductible and you lose your iPhone that will cost $600 to replace, you will only receive $100 from the insurance company. For most policies, deductibles reset each year. Typically, the lower the deductible, the more expensive the policy.

Total Coverage: Total coverage is the total amount of protection available to you from the policy. When it comes to your belongings, total coverage should equal how much it would cost to replace  everything in your home. You’ll also find total coverage numbers for the liability and home structure which are the maximum amounts the insurance company will pay out for damages. Typically, the higher the coverage, the more expensive the policy.

Exclusions: It will be very important to note what each of the policies DOES NOT cover. Many homeowners policies don’t cover hurricane, earthquake or flood damages. You may want to purchase an add-on policy or a policy of additional coverage if certain disasters are common where you live. Many renters and homeowners policies won’t replace jewelry or art of over a certain value. In that case, you will want to consider getting policies on any jewelry or art that exceed the insured value.

Fiscal Femme Fridays – June 5th Edition

The New & Improved Fiscal Femme_04.11.15

Happy Fiscal Femme Friday! We are out to demystify the world of money and personal finance for YOU. Please share, pin, tweet, etc. whatever moves you so that we can inspire and support a new conversation and language around money together. I can’t wait to hear what you have to say.

5-MINUTE FINANCIAL BLISS TIP: It might sound really obvious but we can only use or spend each dollar we have once. Regardless of how much or how little money you have, you only get one shot. Let’s start acting that way! In order to maximize our happiness per dollar we want to start thinking about the opportunity cost of each of our expenses. To figure out your opportunity cost, think about the things that make you really happy. Maybe you love having dinner with friends, going shopping or taking fun vacations. Whatever it is, take 5 minutes to write down what makes you super happy along with how much, on average, it costs you per time. Now, whenever you are about to make a purchase, you can think of the amount in terms of this happiness producing item. Would you rather take a taxi or put that money towards something that truly makes you happy? Is it worth it to buy those shoes when it would make you much happier to put that money toward your next trip? The best part is… there is no wrong answer. Considering the opportunity cost just gives us a more realistic, conscious and honest view of our where our money best serves us. It’s time to TRULY treat ourselves!

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FRUGAL JOY: I am so blessed and grateful to be surrounded by such genuine, brilliant and spectacular people. One of my favorite frugal joys is really just hanging out with them! I take any chance I get to sit around with my friends, sharing ideas, brainstorming solutions and joking around.

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LESSON LEARNED: Ever notice how much you get done right before you head out on vacation? I’m always so productive and effective right before I leave. I have to be hyper focused on getting the most important things done because I don’t have all the time I usually do. According to the Pareto principle, also known as the 80-20 rule, about 80% of the effects come from 20% of the causes. 80% of sales come from 20% of your clients, 80% of the land is owned by 20% of the population or 80% of the results come from 20% of the work. How great would it be if we could spend all of our time on that ever so important 20%? Interestingly enough, we can! For me, that 20% is the big scary stuff that I’m not quite sure I’ll succeed at. It’s the risk-taking that gets you the real results not the comfortable easy stuff. This summer, I’m committing to focus on that key 20% just like I do right before I go on vacation. What would you be doing if you were going on vacation next week?

MONEY INSPIRATION: I’m very excited to introduce you to another incredible addition to our team this summer, Holland! Holland is going to be running our social media and will be in charge of growing our wonderful community. I’m sure you can see why I’m so excited to have her on board. She’s a fellow coffee-lover who’s all about getting out of her comfort zone!

What’s your #1 Frugal Joy?
There is nothing I love more than a silky, smooth, well frothed latte on a chilly morning.

Do You have a ‘Money Motto?
Since I am going abroad to Paris in the fall, my money motto is “Pennies for Paris” (every little bit counts!).

Best money advice you ever got?
When I was really little my parents used to give me $9 each week and I got to spend $3, save $3, and give $3 to charity. Following the ratio now is much harder but it taught me that it is important to find a balance when it comes to spending.

Where can we find you on a Saturday night?
I love to go to the farmer’s market on Saturday morning and then head to the beach and goof off during the day with my friends. Usually at night we will try to do something fun like exploring different restaurants and bars since Charleston has such a great night life!

What are you most excited about right now?
I am super excited about my internship with Knowing Your Worth. Going into college I was sure I was going to veterinary school. I was in countless biology and chemistry classes and volunteered at the aquarium almost every weekend. However, I decided a few months ago to completely change my path and major in Economics. I love challenges and cannot wait to delve into an experience a little out of my comfort zone; I am sure I will love it and I am looking forward to learning so much.

How can people connect with you?
My twitter is @hollandharvard

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DON’T MISS: Join the #FrugalJoy campaign where we’re celebrating the free or inexpensive things that make you really happy. Just post your photos and videos with the tag #FrugalJoy and check out what others are posting. Justin and I are heading off on our honeymoon so stay tuned for some frugal joys around Europe! We’re excited to share!

I love this #FrugalJoy from @millennialphilantrhopist. Free or inexpensive exhibits at galleries are such a wonderful way to spend a morning or afternoon!

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Protect Yourself: What You Need to Know About Health Insurance

Protect Yourself_Everything You Need to Know About Health Insurance_Knowing Your Worth_the Fiscal Femme

This month we are demystifying the world of insurance and will tell you all that you need  to know about the basic types of insurance so that you know what they are, how they work and can decide if they make sense for you.

First up is health insurance. Health insurance covers medical and surgical expenses. Depending on the policy, you’ll either pay out of your own pocket and get reimbursed or the insurance company will pay the health care providers directly. Health insurance is very important because it protects you from the financial risk of unforeseen medical expenses and also ensures that you will be able to pay for the care you need in any given situation.

For many, health insurance is offered through their employer which is a very valuable benefit. If that’s you, you get to choose from a couple of options and then a certain amount of money is deducted from each of your paychecks. One choice you might have is whether to select a HMO, PPO or POS plan. What are the differences?

HMO (Health Maintenance Organization): With an HMO plan, you will typically have to pick a primary care physician (PCP) within the HMO plan to be your primary health care provider. This PCP will be the gateway for you to be referred to other specialists within the plan. If you seek to be treated by an out of network physician, you will probably incur most of the cost yourself. For that reason, it’s important to check which doctors and hospitals are within the HMO network. This is typically the most inexpensive of the options and as long as you choose doctors in the HMO network, you’ll just pay a co-pay and won’t have a deductible to meet.

PPO (Preferred Provider Organization): PPO plans are typically more flexible because while they have a network of doctors within the PPO, you can also get co-insurance on doctors out of network. The insurance company will typically reimburse you for these co-insurance expenses after the fact. You also don’t need referrals to go see a specialist and don’t have to have a primary care physician.

POS (Point of Service Plan): The POS plan is a hybrid of the PPO and HMO plans. You have to designate an in network physician as your primary care provider. If you go out of network, you will incur most of the cost but if your primary care physician refers you to someone in network the insurance will pick up most of the cost.

For those who want or need to get health insurance outside of an employer, you are in for a bit more work. Luckily, Jennifer Fitzgerald of Policy Genius has boiled down the process to some tactical and easy to follow steps.

Here are some key definitions that will help you better understand your policy:

Deductible: This is the amount you pay out of pocket, per year, before your insurance kicks in. For example, if you have a $1,000 deductible and have a doctor’s appointment that ends up costing $750, you’ll be responsible for paying that $750 on your own. Once you hit the $1,000 mark, the insurance will kick in for some percentage of expenses. Typically, the higher the deductible, the lower the cost of the insurance for the insured. It’s important to note that deductibles reset each year. That means, you start back at $0 after year 1 and have to hit that deductible again before the insurance kicks in.

Co-payment: This is a fixed amount outlined by your insurance policy that you will pay for each doctor visit. Your policy might charge $20 per general doctor visit and $40 per specialist visit. That means, you’ll only have to pay that specific amount when you go to doctors within your network for things that are covered under your insurance.

Network: Insurance plans include a specific network of doctors. If you have a doctor who would be “out of network” for your insurance policy, meaning they don’t take that specific type of insurance, then it won’t be covered and you’ll have to pay for it out of pocket.

To maximize the financial benefits from your health care expenses, check out the many wonders of a flexible spending account.

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Protect Yourself – What Types of Insurance Are There?

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When it comes to insurance, we get bombarded with a zillion different products that we don’t quite understand, aren’t sure if we need and in reality can’t afford. No wonder we glaze over – it seems hopeless! This month, I’m going to demystify the world of insurance. I’m even going to be bringing in some insurance experts who will tell you everything you need to know about the types of insurance you actually need so that you can protect yourself from unnecessary risk.

While you can insure just about anything (even body parts!), here are very brief overviews of the main types of insurance:

Health Insurance: Covers medical and surgical expenses incurred by the person or insured. Depending on the type of health insurance, the insured will either pay out of pocket and get reimbursed or the insurance provider will pay the health care provider directly. Health insurance is a benefit that’s often offered by employers.

Disability Insurance: Think of disability insurance as insurance for your paycheck should you not be able to work due to illness or injury. If you are covered by disability insurance you’d receive a paycheck while you are unable to work. There are two types of disability insurance, short-term and long-term. Some employers offer one or both types of disability insurance.

Life Insurance: Life insurance protects against the loss of income that would result if the insured person passed away. The policy has named beneficiaries that receive a sum of money in the event that the insured person passes away. There are two basic types of life insurance, term and whole-life. Some employers offer life insurance benefits to their employees.

Renters or Homeowners Insurance: Renters insurance protects your belongings in an apartment or home that you are renting in the case of certain disasters and theft. Homeowners insurance protects against damage to your home as well as your belongings in the case of certain disasters or theft. Most homeowners and renters policies also offer liability protection in the case you or someone else gets injured while in your home.

Auto Insurance: Protects again the expenses associated with damage to a car. The insured pays premiums or payments to the car insurance company and then the car insurance company covers any damage to the car in the case of an accident or other damage.

Long-term Care Insurance:  Provides nursing-home care, home health care and personal care for individuals over 65 years old with a chronic disabling condition.

Stay tuned for in-depth posts on each! Any insurance we missed that you want to know more about? Let us know!

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Fiscal Femme Fridays – May 29th Edition

The New & Improved Fiscal Femme_04.11.15

Happy Fiscal Femme Friday! We are out to demystify the world of money and personal finance for YOU. Please share, pin, tweet, etc. whatever moves you so that we can inspire and support a new conversation and language around money together. I can’t wait to hear what you have to say.

5-MINUTE FINANCIAL BLISS TIP: I have a tip for you today that could earn you thousands of extra dollars for FREE per year. All you have to do is maximize your 401-K match. A 401-K match program is a benefit offered by some companies where they match your contributions to your 401-K up to a certain percentage or dollar amount. For example, if your company offers up to 3% 401-K match and you make $80,000, you would want to contribute at least 3% to your 401-K which would be $2,400. Your company would then contribute an ADDITIONAL $2,400 to your 401-K for free. If you know your company offers 401-K match, maximize it! Take 5 minutes today to set up your 401-K contribution percentage at or above your company’s match percentage. This benefit is part of your total compensation package – you don’t want leave free money on the table year after year. If you aren’t sure about the details of your company’s 401-K match program, take 5 minutes to check your employee website or to email someone in human resources or on the benefits team. They should be able to tell you exactly what your employer offers.   

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FABULOUSLY FRUGAL:  I have been lucky enough to have some amazing fabulously frugal dates with my besties over the past week and there are more to come this weekend! One bestie and I spent the afternoon walking around the park with frozen yogurt on a gorgeous day last week and stopped to sit in the sunshine on a bench to chat. For an extra bonus, I got to bring Simi along to enjoy the fabulously frugal day as well! She absolutely loved getting some playtime and hanging with the gals. This weekend I’m meeting another bestie for a workout class. Not only are these dates fabulously frugal because I get to spend quality time with my friends for very little cost, they’re also healthy and just feel really good! I’d love to hear about your fabulously frugal dates! Just comment or send me an email at ashley@knowingyourworth.com

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LESSON LEARNED: Have you heard the adage, “if you want something done well, do it yourself?” As someone who’s boot-strapped my business (and life), I’ve taken that saying to heart for a while now. Why hire someone if I can figure it out? Why spend precious resources (cash) when it’s something I can do on my own? Why trust others to do things when they might make mistakes? I’ll tell you why! 1. There are people who can do things a bajillion times better and easier than we can. Experts are ready and available to help with whatever we need who know things we don’t even know we don’t know. 2. Who has time to do everything? You can’t. Time is another very precious resource. I have to focus my time on what makes the most sense to effectively grow my business. I can only do this by knowing when not to spin my wheels figuring things out. Pretty compelling right? Two weeks ago, I decided to let this pesky saying go and brought some key players onto my team. I now have some amazing interns joining me for the summer who I’m very excited to introduce you to, a new lawyer, am joining BNI (a business networking group) and am in the process of interviewing designer / developers for our website. I’m excited for what the summer will bring with the help of this dream team!

Are there any things that you insist on doing that you don’t really need to? Do you take on any time or energy sucks just to save a buck or because you are afraid of what might happen if someone else takes the lead? Think through what you are spending your time on each day and see if there are places where you can delegate to others. You may find ways to free yourself up to do more meaningful things.

MONEY INSPIRATION: I’m excited to introduce you to one of the amazing additions to our team this summer, Alisha! Alisha is a rising sophomore at Bighamton University and is going to be helping out with marketing, specifically using her graphic design and video editing skills to help me launch some awesome stuff for you. Spoiler alert – she eats pickles everyday. Hope you enjoy our interview!

What’s your #1 Frugal Joy?
My #1 Frugal Joy would be Coca-Cola Slurpees and sunsets. I know these are two things, but I never watch the sunset without a Slurpee. And pickles. I love pickles. (I have trouble choosing just one thing). The first thing I did when I came back from school was go to 7-11, get a Slurpee, and drive to the beach with my friends. It’s my favorite thing.

Do You have a ‘Money Motto?
“Never spend your money before you have it.” – Thomas Jefferson

Best money advice you ever got?
After my first semester at college, I managed to spend most of the money I had made over the summer, leaving me as the stereotypical, broke college student. Then heard something on TV which said to save 10-20% of each paycheck. When I got a job second semester, that is what I did and is what I continue to do. It’s helping, slowly but surely.

Where can we find you on a Saturday night?
On a Saturday night, you could probably find me in my room watching Friends, or eating food. Or both. Probably both.

What are you most excited about right now?
I’m excited to start this internship, get some real experience in marketing, and be in the city, within walking distance of a Chipotle. (There are none near my house!)

How can people connect with you?
Follow me on twitter! @alishamuttreja I usually just retweet things I find funny or interesting. And anything tweeted by Oprah Winfrey.

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DON’T MISS: On Tuesday June 2nd, the Young Professionals Committee of Ellevate will be hosting ‘Money Demystified: Personal finance made clear, simple and relevant.’  I’ll be taking everyone through an interactive workshop that gets to the bottom of what you need to know to create a spending plan that works with your lifestyle, doesn’t feel restricting and puts you on track to achieve your most coveted goals. Join us at the beautiful District Cowork for this special event. Hors d’oeuvres and wine will be served.

Jars of savings

Don’t forget join the #frugaljoy campaign where we’re celebrating the things that make you really happy that are free or inexpensive. Just post your photos and videos with the tag #frugaljoy and check out what others are posting. Justin and I are heading off on our honeymoon next week so stay tuned for some frugal joys around Europe!

Frugal Joy Campaign with TM_Knowing Your Worth_Fiscal Femme

Let’s Celebrate our Frugal Joys!

All the summer fun can get pretty tough on our wallets. We travel more, go out more, celebrate more and generally spend a whole lot more. You may be trying to balance all that fun with some important savings goals, paying down loans or just be trying to live within your means. Whatever you are after, incorporating frugal joys into your life is the answer.

A frugal joy is something that is free or inexpensive that makes you really happy.

One of my favorite frugal joys in the summer is hanging in the park with friends (bonus if we bring a bottle of bubbly). It’s free quality time with friends in the sunshine! I also love exploring the city on a gorgeous day, reading a book outside, a great cup of coffee and the list goes on and on. The cool part is that our frugal joys will all be different but we can get great ideas from one another. I can test out yours and you can test out mine to see if they work for us too.

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Another bonus? You can incorporate as many of them as you want! While you might put a limit on the amount of meals you eat out or the amount of shopping you do, you don’t have to put a limit on frugal joys. You can fill your day with them without breaking the bank or interfering with your money goals.

A frugal joy is pretty powerful! This summer, through the Frugal Joy Campaign, I want to celebrate free or inexpensive things that make you really happy. Just post your photos and videos with the tag #frugaljoy to join the party! Not only will your ideas help make others happy, it will also turn your focus to all the frugal joys in your life. When you realize how many you already do and how many you can do, it will feel really abundant!

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Pay Down Debt & Student Loans in These 6 Steps: Part 6

You made it to the final step of creating a plan to pay down debt and student loans! Let’s recap all that we’ve done so far. In part 1, we mustered up some compassion for where we are in our money lives. In part 2, we took inventory of all that we owe along with other key information that we used to put together our plan. In part 3, we prioritized and decided on the order we would pay down our debt. In part 4, we put numbers to our plan and in part 5 we tested the plan and adjusted as needed. Guess what?! Now it’s time to celebrate!

I’m serious… step 6 is all about celebrating our success along the way. First, we want to figure out how long it will take us to pay off each loan completely. To do this, we’re going to use the information from our inventory in part 2 and how much we decided to contribute to our debt each month in part 4 and part 5.

Let’s say your #1 priority debt is a $10,000 student loan with a 6% interest rate. You’ve decided to put $500 toward your loan each month. Here’s how the first five months would look:

Pay Down Debt & Student Loans in 6 Steps__Part 6_ Knowing Your Worth_The Fiscal Femme

You pay 6% interest for the year or 6% / 12 for the month which comes out to $50 in interest on a $10,000 loan. In the first month, $50 of your $500 payment goes toward interest and $450 goes toward paying down the balance of the loan. Notice how the amount of interest you pay goes down each month as the balance of the loan decreases. If you continue this calculation out into the future, you’ll see that you will pay down the entire loan in 22 months.

While completely paying down the loan is one huge milestone that you’ll want to celebrate, I recommend finding other milestones along the way as well! Maybe you celebrate after you pay off each quarter of each loan. Milestones are also a great place to check in to make sure you’re on track to meet your goals. According to this chart, you’ll have paid a quarter of your loan down between months 5 and 6. When that time comes, check in to make sure that’s the case. If it is, celebrate! If it’s not, check to see what happened. Was any of your information slightly off? Did you contribute less than you planned? You might want to readjust and set new milestones.

It can be really fun to set up visual representations of your goals that also help you celebrate along the way. Maybe you have a chart with blocks of debt glued on. As you pay them down, you get to rip them off the page. Or maybe you just color in a chart as you pay them down. When each box is full, you’re debt is paid off!

The most fun part is figuring out what you will do to celebrate. Will you have a debt free party, go out to a fancy meal, or treat yourself to a day of nothing? Choose specific ways to celebrate each loan and milestone along the way. Not only is this really fun, but it fuels our progress and keeps us motivated! You might end up paying it off even faster than you planned!

Pay Down Debt & Student Loans in These 6 Steps_Part 6_Knowing Your Worth_Fiscal Femme_v2