Good Debt vs Bad Debt: The Differences Between the Two

Let’s get something straight: not all debt is created equal.  There is good debt, which gives you an opportunity to make money and there is bad debt, which you continue to dump money into with no expectation for return.  While the differences can be subtle, anybody trying to become more financially literate must know the fundamentals behind good debt vs bad debt.

good debt vs bad debtWhen talking about personal finance, particularly when the topic of budgeting comes up, all you hear about is debt, debt, debt.  Like most Americans, you begin to wonder what to do because everyone in America it seems carries debt and everything “worth having” requires you to go into debt.

This is the how the story typically goes.  You go into debt to get an education.  Then, you go into debt to get married.  Next, you buy a house and take on a huge mortgage.

Good Debt

This is when I borrow money to make more money.

For example, I borrow money and buy an investment home.  I call this home an investment because I rent it out.  Each month, my tenant pays my mortgage, taxes, and insurance in the form of rental income.  My borrowed money gets paid back without me.  Each month, I begin to gather equity in the home and, if I made a good investment, a little extra cash in my bank account.

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Saving for a Down Payment? Why You Need 20% Down

Why should I put down 20% when I can put down 5% and save more per month?  When my wife and I had our real estate business, this was a question my wife and I heard a lot while discussing how our clients were saving for a down payment. Our reply typically was, “Why should you pay PMI, or Private Mortgage Insurance?

saving for a down paymentOK, time for a quick teaching lesson. When you go to buy a house, the banks determined that a safe buyer is a person saving for a down payment that is 20% of the home’s value.  Therefore, if you put down less than 20%, you will be charged a monthly fee often referred to as PMI.

Be aware that this insurance isn’t for you. Rather, it is for the bank.  They are insuring themselves against the possibility that you will default on the payments and the bank will be required to seize the house.

If that doesn’t put things into perspective for you, let’s do a quick history lesson now and talk about the housing crisis.

The 2009 housing crisis.

As you will recall, the housing market came to a screeching halt because people bought more house than they could afford.

What happened again? Well, they used the easy lending requirements at the time to qualify for more money.  They put down less, bought nice furniture, and took lavish vacations.  Then, they lost their job or had a few rough months — and boom — they couldn’t make the mortgage payments anymore and the bank took the house.

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Apps that Save Money and Make Money: 4 Mobile Apps You Must Have

These days we’re all looking to save money.  And since most of us are attached to our phones, it only makes sense that we have apps that save money at our fingertips.

apps that save moneyIt’s hard saving money in today’s America.  It seems like every time we turn around, there is something grabbing at our wallet.  We live in a culture where spending and buying is thrown in our faces constantly.  Everywhere we turn there is an ad for this product or that service.  It can be pretty overwhelming at times if you ask me.  We’re under constant stimulation and it can be tough to not give in to the temptation.

Well look, I’m here to help. Below are apps that save money for you — and even make you some money.  No, you’re not going to get rich.  But, these apps can help you stick to your budget and even help come in below budget!  What a novel idea, wouldn’t you say?

I included my referral link for each app, but you’re under no obligation to show me some love.  Although, yes, I do appreciate it.  Regardless, sign up for them, check them out, keep the ones you like, ditch the ones you hate, and start getting on a path to saving money.

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Debt Payoff Story: How Jodi Paid Off $67,000

One of the great things about blogging is the chance to meet wonderful people and connect with them on a personal level. We have that today with Jodi.  She commented on my article about how I paid off $20,000 in student loan debt and I loved her debt payoff story.  She was kind enough to share her story in depth with me and she’s allowing me to share it with all of you.

debt payoffI truly believe her experience to be inspirational and a testament to owning your own financial situation. Jodi took charge of her finances, did the hard, but necessary work of paying them off, and she’s staring at $67,000 debt payoff that is down to its last payment as I share this.  A true inspiration.  Please read Jodi’s story below.

First, some background about Jodi.​

I am 36 years old and live in New York City, where I have lived since college graduation in 2002.

In 2008, I earned a second degree to become a certified court reporter, which has been my full-time profession since.

How did you get into debt?

​I borrowed a total of $50,000 in student loans for both degrees. While finishing up my court reporting degree, I was working part time and going to school only at night.

At a certain point, after one of my very long and exhausting days, I reasoned out that I would finish school a lot faster (and therefore, be able to get a job in my intended field much quicker) if I began going to school full time instead. So, I decided to leave my job and focus solely on expediting my degree.

Looking back, I think this was one of the best decisions for me. It enabled me to get a job just ahead of the economy crash of 2008.

But, it also meant I had to live off of my credit cards for a few months while finishing up school without an income. Scary!  And it sure did add up on the plastic.

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Best Half Marathon Playlist

Do you have a playlist of songs that just pumps you up?

best half marathon playlist run the moneyYou know what I’m talking about.  Maybe you’re having a great day and the sun is out.  You put the windows down and crank it up as you drive along.

If you’re a runner or are working your way to becoming one, I consider a great playlist a must.  When the training runs get long, you need that little something that picks you up and gives you that extra push.

Sure, you will meet people that don’t listen to music when they run.  In fact, some races don’t allow the use of earbuds to even listen to your favorite playlist.  But, I’m not here to tell you that.

I’ve used the songs below to train for five half marathons and one marathon.  All of these songs (plus about 30 more) made it to my playlist for the 2015 Philadelphia Marathon.  And if there was ever a time I needed motivation, it was running for 5 hours that day!

The playlist of songs below are rather eclectic.  It spans my love for country music and 90’s rock.  Yes, I’m a bit nostalgic.

But, these songs work.  They are great running songs.  I share them here because I used them and I believe that you can benefit from adding these songs to your playlist.  When the training runs get long, you need a pick me up.

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True Cost of Owning a House

Have you ever considered the true cost of owning a house?

I will be honest. When my wife and I bought our first house, we didn’t know.  We had no idea.

true cost of owning a houseSure, we knew all about taxes, mortgage, and insurance. And we heard about emergency funds and having a little extra set aside each month.

But, we didn’t know about everything else. You know what I mean.  The other little expenses that don’t show up on the mortgage documents at the closing table.
What am I referring to? Well, the basic costs of interior maintenance a home like paint, molding, and flooring.  Or the cost to keep it nice like mops, vacuums, or trash collection.

Then, there’s exterior maintenance with lawn mowers, trimmers, hoses, shovels, rakes, mulch, flowers, snow blowers, and pest control. And you can’t forget replacing things like the roof or garage door opener.

So, what are new, inexperienced home buyers supposed to do? Well, I have some tips for you to consider as you make your first home purchase.  Don’t do what we did.  Go in with more knowledge and preparation.

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Need Extra Money for the Family? These 5 Online Survey Sites Actually Pay!

You may recall that my wife became a stay-at-home for our son in 2016.  We were both on board with the idea, but it meant going down to one income.  She was a top real estate agent in our area at the time, so it was real shock to the budget.  It was one of the reasons we decided to ditch the expensive home in the expensive area.

online survey sites actually payWhile we could afford everything on my salary, we still wanted to have a little extra in the event of emergencies and to pad our savings.  To do this, we decided to start answering online surveys.  Now, I know what you’re thinking.  Dave, come on, those things are not legitimate.  And you would have a point.  Some online survey companies are not legitimate.  Don’t go paying somebody to take their surveys or expect to earn a full-time income filling out a couple surveys a week over your morning coffee.

No, this isn’t get rich quick.  But, it is a way for a stay-at-home mother or father looking to supplement the family’s income with a little extra income for a time.  It’s a go-to option when you’re in need of some money in a pinch.

Let’s be honest, though.  Couldn’t we all use an extra $100 or $200 a month?  Just an extra $100 that can be used for gifts for loved ones, a visit to the veterinarian, paying off debt, or padding the savings.  Well, that’s what you get with doing some surveys.  Extra money without a ton of effort that can help with life’s surprises and incidentals.  Hey, at least it offsets some costs!

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5 Key Takeaways from my first Half Marathon

Have you ever had the desire to prove something?

Maybe it was to yourself. Maybe it was to your friends or family.  Maybe it was to that coach or teacher who made you doubt your own abilities.

lessons from my first half marathonWhoever made you (or makes you) feel that way, their words stick with you. They creep in at unexpected times and you may even put yourself back in that situation where they told you that you were less than.

I am very introspective, so I find myself reevaluating past experiences a lot. Sometimes it’s healthy and sometime it’s not.

Well, in July 2014, I was in a read need to have a personal win. I was forced to go back to work after our real estate business had a tough winter.  I went from the high of leaving my job to the low of having to beg to return.

My wife suggested that I train for a half marathon as it would give me a goal to shoot for. I am the type of person that needs to look forward to things and needs to work toward something.  So, being a former runner as well, this was right up my alley.

I made the goal to run a half marathon by November, but I wanted to challenge myself to actually complete the full distance while running and walking beforehand. My wife even decided to join me.

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Frugal Fun: Taking the Entire Family to a Baseball Game for Cheap

Who doesn’t love going to a baseball game? A warm summer day.  A cold beer.  A hot dog.  Your favorite team.  Your friends and family.  Honestly, what could be better?

baseball game for cheapIt’s all great … until you see your empty wallet or your credit card bill. Major League Baseball games, along with the other major sports, are expensive and a real hit to a family’s budget.

You want to have a great (and carefree) time with the family on a Saturday afternoon. You want to give the kids some fun ballpark food – hot dog, soda, popcorn, pretzels, ice cream, and water ice.  And you want to get them a baseball, hat, shirt, and that giant foam finger that’s become a cliché.  Sure, it’s all part of the ballpark experience.

But, it comes at quite a hit to the wallet. That’s why I’ve compiled a few ideas here to help your family have that ballpark experience at a much more budget-friendly cost.

Attend a minor league baseball game instead of an MLB game.

I know it might be tough for you as an adult to sit through a minor league game. If you’re like me, you want to watch your favorite MLB team (Phillies for me) and that’s it.  However, I do appreciate baseball the game itself.  I can have any baseball game on TV and be completely happy.

For the family, go to a minor league game or an independent league game. Everything is much cheaper – from the tickets to the food and merchandise.

The caliber of play may not be the same as the MLB, but the caliber of fun will be. In the end, that is all that matters.  Plus, your budget will be happy too!

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House Poor: What it is and How to Avoid it

Have you ever felt like a complete and utter failure?  I am talking about a total breakdown, tail between your legs, wondering how life will go on from here … flat out FAILURE.  That’s how I felt on that fateful day in the stairwell at my auditing job while speaking with my wife. I had finally come to grips with the fact that we had to move because we were house poor.

That meant selling the house where we started our married life together in 2011.  Here we were, less than 5 years later, having to sell it.  We wouldn’t see the fifth year anniversary of our wedding or closing date in our home.

house poorIt was the realization of our EPIC FAILURE.

It was the house our first child (Davey Joe) came home from the hospital to. The home where my wife become a rock star real estate agent in the area and we spent countless nights scheming for her to continue her rise.  The neighborhood where we spent at least two summers planting countless miniature U.S. flags for July 4th.  The house and a community that we called home was now quickly going to become a place to visit.

The holidays around the dining room table that we got for free. We hauled the damn thing in a rented pickup truck for a half hour or so hoping that it wouldn’t tip over into traffic.

The blood, sweat and many tears that went into painting walls, laying floors, and hanging crown molding. My wife and in-laws did the majority of the work while I went to my job.

It was the home where we learned our pug had lymphoma. But, the little girl beat the odds and was cured.

We experienced ups and downs while we lived there for sure. That said, we loved that house.  We loved that neighborhood.  And we loved that town.

Unfortunately, we were the very cause of our own downfall. We created the circumstances that lead us to have to sell our first home and relocate.

Let me explain where we went wrong and how we bounced back.

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