Debt Dunk

I have written before about Dave Ramsey and the fact that I like his program. Though I am not a huge religious person, Dave’s debt plan is solid and helps people to rid themselves of debt. I have always followed the same principles and I just needed a little reminder of being a good money manager. I have been watching Dave for a while now and my wife and I have become hitting our debt with all we can.

Since I love to learn and any new knowledge can help, we signed up for Dave Ramsey’s Financial Peace University at one of the local churches. We had our first of thirteen classes last Thursday. The program cost $100-$129 for the kit and you become a lifetime member. As a member, you can take the course as much as you want for free. It also includes access to a member only website with some of Dave’s budgeting tools and forms. You also get to meet, interact and both encourage and be encouraged by others wanting to get out of debt.

The classes consist of about an hour of watching DVDs featuring Dave Ramsey. The program is centered around his seven baby steps. Once you watch the video, there is a class discussion and homework is assigned which is geared toward getting your money in order so you know where you are and where you are going financially.

Karen and i found this class interesting and it was great to interact with others from various backgrounds. Since we have applied the basic core of Dave Ramsey and starting really budgeting in September 2007, we have paid almost $11,000 towards our debt.

All of Ramsey’s program is good old fashion common sense but it is nice to have some reminders of these things. I highly recommend this course to anyone who wants to get control of their money and become debt free. I do not believe in bull when it comes to getting out of debt. I am dedicated to provided sound information to my readers and not some scheme. There are no short cuts and I believe if you owe it, you should pay it.

I will keep you updated on my course and if you have taken the class, please feel free to share your own opinion here on the blog.

I have heard in the past where if you are prudent with your money, you will attract more money. My wife and I have noticed this since we have started to really stick to a budget. Honestly, we have always had the money coming in but now we have a set budget we can put any extra coming in can go toward debt.

We seem to be getting a lot of extra income coming from new sources that we did not have before. This makes us feel wealthier now because before we would have found things to spend it on. Being on a reasonable budget makes it easier to apply any raises and extras to debt instead of extra spending.

This is a great way to live and if you decide to follow a plan like ours, you too will see life looking better. It will look like money is coming to you instead of you seeking money. You will start to be a money magnet. As you pay off your debt, things will start to look better. You may not fit in with your free spending coworkers and friends but someday, you will be free spending with honest cash. It is no longer about keeping up with the broke people who live paycheck to paycheck. This is a new way of living that will take you to a whole new level in life.

You do not have to live as a debtor your whole life to have the things you want. Yes, you may have to skip a few fancy restaurant dinners and a few extra trips to Starbucks; however, you will have a future of anything you want if you get out and stay out of debt. Can you imagine a life where you pay yourself instead paying creditors? Life would be easier with less stress.

This can be done and as you progress, you will see what we have, money will come to you. Be prudent and smart about your finances now! Sit down now and get a budget written out. Make sure every dollar you make is written down along with all expenses. Be honest with what you need and allow a little fun. If you get on a plan and stick to it, you will stop being one of those people waiting for the paycheck to save you and then run out of money way before your next pay.

Start now no matter where you are at or how old you are. When you get done reading this, sit down by yourself if single, with your wife if married, and your whole family if you have kids and write out your budget. If you have questions or need help, I will be happy to guide you with any help I can.

The economy is tough and for a while I have been trying to find a source of increasing my income. My current job is basically per Diem or when needed. I have not had any work for about a month. The good news is, my job just picked up to the point that I will have a descent salary for at least a few months. This brings me to a good point when paying off debt.

I have talked about the two equations of a budget. One is the income side and the other is is the expense side. If expense out weighs the income, you are in trouble and either have to cut expenses or increase income. In a weak economy it is harder but not impossible to increase your income.

The most simplest form of increasing your income is to get a better job with higher pay. This is easy if you have the skills and are in a an area where the job market is booming. I for one am not in that type of area. The next method is to take on an additional job. You could deliver pizza, wait tables, work fast food, or any other job that will boost your income. This is not always desired but you have to look that it is to get rid of your debt so it should only be short term. It will boost your debt paying and get you out of debt faster.

If either changing jobs or getting a better job is not an option, it is time to look at alternative ways to make extra money. With the Internet, it is easier than ever. Many people have found a lot of stuff in their basement, attic, or garage and have made a few thousand dollars selling them on eBay. You could also have a yard sale or find a resale shop that will buy the stuff or sell it on consignment. This is short term income but it could be a quick reduction in your debt.

Once you have done the above, you can look at the various at home ways of earning money. If you have good typing skills, there are doctor offices and medical companies that pay you to do medical related transcripts and billing. If you are a good writer, you could find freelance jobs on the Internet to earn extra income. Some companies people to do customer service work from home. These are just a few suggestions to up your income at home, there are many more. Just be careful not to fall for scams and never pay someone to work for them.

One way my wife and I use to earn extra money was to do mystery shops. Many of these companies reimburse you to eat at nice restaurants and also throw in a few dollars to cover your expenses. Though this is not big cash, it does give you free meals, and products with just a little bit of time. When we lived in a bigger area, we were going out once a week to steak houses and having $40 meals and we got reimbursed for filling out a survey about how the place looked and how the staff performed. It sure did help with the budget. As I advised for the home work stuff, never pay to do these types of shops. If you have pay a fee, it is scam and all you are buying is a list of sites you can find on your own.

The final way I will mention is bartering for things you need. Even though this is not cash, you will get something of value which you would buy otherwise with your income. If someone else has something you need, find something that you can do to get it for free. I have exchanged many things before to get things I need. These could be skill work or physical products. Anything you can get for free that is moral and not against any law is a good thing.

The ways I mention here are just suggestions to get your mind working. Increasing your income is a great way to speed up your debt payoff. However, be aware that it will not help if you continue to use credit cards and just increase your expenses to meet your new income. The main key is to spend less than you make and pay off your debt as soon as you can.

Have a great way that you have increased your income? Please share by leasing a comment to help or inspire others.

I think all of us know by now that the Stock market in drastically down. I personally am down 40% in my Roth IRA. I have been watching many so called financial gurus starting to advice a pull out of the market and spilt your money throughout safer investments like bonds and Cd’s.

As hard as it is to watch your investment shrinks, it is not the time to panic. Over the course of the Stock Market there has never been a loss over any ten year period. Investing in the market should be for five years or more so this should not be an issue. If you pull out now when it is down, you will fail to regain your losses and any potential profit.

Investing in the Stock Market should be for long term and should be done in Aggressive Mutual funds not individual stocks. Day trading is STUPID! If you have invested properly, you should do nothing but continue to do what you have been doing. Do you really thing all these companies are now worth 60% or less of what they once were? No, they are not. The market may sink a little further but it will recover and when it does, the profits and returns that are historic of the Market will return.

True financial wizards should not panic during times like these. If your financial person is suggesting pulling your money out of the Stock Market, I would find another financial adviser. If you are doing regular investing for long term goals, most of your losses will be flatten from cost averaging alone. Be smart and stick with your long term goals and do not panic.

This is advice free of charge! Others who are trying to convince you to pull out of the Market are trying to make a buck off your fear. Feel free to ask a question or leave a comment about this post!

Many so called finance experts recommend that you should carry a mortgage because you will have a write off for your taxes. This is bad advice! I am not saying you should never have a mortgage. Most people at some point or another have a mortgage. What I am saying is that if you can afford to pay off the home with cash, you should not continue to carry a mortgage.

If you itemize, mortgages could lower your taxes. However, that amount will be a small part of what you end up paying for interest. So you are paying $10 to save $3. This so called logic is not smart or even financially responsible. If you have to carry a mortgage, by all means take the tax write-off. However, if you can pay it off, do so as soon as possible.

The amount of people in the world who are waiting to buy a home until they can pay cash is growing. If you can do so, you will be a step ahead of the so called normal family. If you can’t save to pay cash, make sure you are otherwise debt free and that you have saved at least twenty to twenty-five percent to place a down payment and do not take a mortgage for longer than 15 years. .

Being a smart home owner will fit into the rest of your plan as being the CEO of your own personal finances. Though mortgages are acceptable debt when required, they should also be paid off as soon as possible.

How would you like to go through life with fear everyday? Waking up and going to sleep can be scary. This is not so far from reality for many people. They are burdened by their Debt. This type of fear can creep into every part of your life until all things good become bad. Many divorces are caused by debt. Families are devastated by debt. The world does not need debt.

I see a future where men, women, and children live in harmony with their money. To get to that point, we all need to look fear in the face and say you will not conquer me! I am doing it and you can too. The only things you should fear in life is those things you have no control over. Debt is not one of those things. It really is your choice to not go into debt. If you live paycheck to paycheck, debt will find you. If you take control and say enough is enough, debt will run like the coward that it is.

Have you done a budget yet? Have you stopped using your credit cards? Do you have at least a $1000 put away for an emergency? These things are important and tomorrow is not the day to do these things. Gather the whole family around you and start today by making a plan. If you are single, it is all up to you. If you are married call in the managing partner (your spouse) and together set your life on a whole new path. If you have kids, they are never too young to teach them and let them be part of the finances.

I can hear little voices of some of you reading this saying, “but Tom, you just don’t understand, we have no money to pay everything.” My answer to that is, “I have been there at one point or another.” By ignoring your personal finances, you create bigger problems in the future. It is time now to stand up and be an adult and say I can no longer live like this. Citibank is not my friend! Chase does not love me! If you say that, you will start to wonder why you are sleeping, eating, and entertaining with the enemies.

I want you to take an hour sometime the day you read this and review your finances. Then I want you to create a budget and I want you write down everything you make and everything you have in expenses. If your expenses are too high, you have two choices, increase the income or lower the expenses. You should have food, a place to call home, utilities, and a car to get you where you need to be. If you are behind on any of these things, stop everything else until you get caught up. Credit cards and unsecured debt is on the bottom of your expenses. Pay the needs first and then you can tackle the unsecured debt.

I am willing to help for free. If you think you are hopeless and need some help, I am just an email away. Just go to to the contact page and send me an email explaining what advice you need and I will do my best to help. Once you do that, come back and leave a comment to let me know you made the first step. This could be the first step in a whole new life!

There are many people who have been burned financially and still never learn from their mistakes. Credit card companies are not your friends no matter how nice they are. These people do not lend you money just because they like you. It is not an act of kindness. You will pay and pay and pay! Why then do people repeat the same money mistakes over and over? The answer is, somewhere along the line, you were taught stupid people tricks.

Society teaches us that if we want something, first we have to borrow money. If we ever want to be a success, we have to establish our credit. Even people who have gone the ultimate financial crisis, bankruptcy, start right away thinking of ways to rebuild their credit. Believe it or not, there are people who do not use credit. Take a moment and sit down, because yes, there are debt free and cash paying people in the world.

Remember the stupid tricks you have seen people teach their dog? I have seen dogs do just about anything to please their master and get a small treat. Well, I hate to be the one to break it to you but you are like a dog being trained by a society that believes you can not live without going into debt. It is the number one stupid people trick taught to most people as they grow up. If you want to get out and stay out of debt, you need to be reprogrammed. Debt is not a way of life, it is a roadblock in the road to freedom.

I know now you are thinking. I need a new car, a new house, or something else. The one and only debt I now see as ever legit is a home mortgage. That debt should only be obtained if and only if you are debt free and you have an emergency fund in place. You also must have at least 20-25% down, take a loan for no more than fifteen years, and pay it off as quickly as possible.

Yes, I want a $300,000 house with all the amenities! It would be great and I would love the feel of inviting people into my home. Now back to reality. I live in an old farm house that at times I feel like calling in the bulldozer. I am planning on someday getting a nicer house but reality is, I can not afford it until I become debt free and have a savings and a good down payment. Am I deprived? No, I live in my house and enjoy what I have. Honestly, we could go out tomorrow and get the new mortgage and worry later how to pay for it. That is what society has taught us. However, I no longer perform that stupid people trick.

Break out of your programing and take control of your own life. You are now the CEO of your personal finances! Bank of America is not your buddy and banks are used to manage your cash not to finance your fancy toys. Be smart and you could find yourself richer than you ever thought possible.

One key point I have spoken of before and I am a big proponent of is doing a budget. When you do a budget, your eyes become wide open on how much money you really have. Sometimes this is good news and other times it is not. For most though, it is like finding money you never knew you had.

There are many ways to find money that you thought you didn’t have. First, take a look at what you are spending your money on. Eating at restaurants and fast food places can be one of the biggest expenses in many budgets. I would like to say I never eat out but that would be a lie. There are ways to cheapen the bill though. Buying a soda or other beverage now can cost up from $1.25 to $3.00. This is not good for your budget or your waistline. Ask for ice water and you could save $5-$15 a week on average. That adds up to between $260 and $780 a year. Not a bad little find is it?

What about desert? Do you eat desert at most meals out? They can range from $1.25 up to $6 or more. Some deserts cost as much as the meal. Say you only have desert out three times a week. That is between $195 and $936 a year. Now that is nothing to sneeze at. try to eliminate the deserts or splitting with a partner and you could see you waist line shrink and your wallet grow. These are just a couple of examples that you can save from eating out. There are so many that you could find that will help you find money.

Alright, maybe you are more disciplined than I am. Maybe you do not eat out at all or very rarely. Let’s take a look at other ways to save. How many of you still pay your bills by mailing a check each month? If you only send out seven bills a month, you overspend by $30.24 a year plus the extra costs for buying checks. If you pay bills online, it is easier, cheaper, and you can pay instantly. Better yet, automate the ones you can and save more time and leave no chance of forgetting a bill.

So are you seeing a trend in how the small things add up? Look at your utility bills and cable bills. Can you cut out extra features you don’t need? The phone company is one who loves to add the extra charges. Make sure you are not paying for features or services you do not need. Do you have HBO or Showtime? How often do you really watch them? If you do not use, ditch them and save $100 or more a year. Does your cable or satellite company offer smaller packages? Sometimes they also offer discounts for loyal customers. It does not hurt to ask.

When trying to become debt free, you need to reevaluate everything in your life and see of it can be cut, eliminated, or reduced. Baby steps in reducing your expenses can be like finding money you never knew you had. Be a pauper now and you will live like a king later.

The holidays are winding down and the Christmas season is over. Now as the New year emerges, I have a question to my readers. Do you have financial regrets over you holiday spending? Many people spent reasonably for the holidays. Some did so because they are tired of being indebted to the credit moguls. Many more did so because they could not get any more credit or they feared the current economic situation.

Hopefully, you are one of the ones who are sick and tired of owing credit card companies your paycheck. If you over spent and now are overwhelmed, it is time to slap yourself a little, admit to your mistakes, and take the bull by the horn. Make 2009 the year you bust loose from the credit trap that you were lead to believe was the normal way of life. Wake up call! You do not have to live in debt to live. By delaying pleasure now, you can be debt free and live a whole new life where you are in control of your personal finances and not the other way around.

If you are holiday blues because of overspending, I am here to tell you that I have been there and done that. It is time to step up and work like a tornado to pay off those debts and swear off on living beyond your paycheck. Sit down and write out a budget and start paying off debts from smallest to largest. Cut everything out that is not a need and see where you stand. You should spend everything you make on paper. Starbucks is out, home cooking is in. You can do it and I am here to guide you. If you have a question, I am here to help. If you need a little guidance, ask and i will do my best to answer. I am still fighting the debt monster and together, we can send the leaches who feed on society packing.

Happy New Year and may 2009 be the year you take your money back and become the CEO of your personal finances.

Holidays can be a big strain on a budget. We all want to buy the best for are families. It is a time when money seems less important than buying gifts for everyone we know. However, it is one of the biggest times of the year to prove that you have changed your spending habits.

If you do not have the money saved up for Christmas, it is time that reality will slap you in the face. This is not the time to run to Bank of America or Capitol One. If you have to buy your kid a $20 gift instead of that $100 video game, guess what? You kid will have to learn to enjoy that $20 gift. The important thing is that you are working on getting out of debt.

My wife and I set a budget of $300 for everyone this year. This included my mother, her parents, some nieces and nephews, her two brothers, and us. We stuck pretty close to the budget except we went a little over for unexpected gifts that arose where people needed a helping hand. However, we paid cash for everything and we spent a lot of time online earning free gift cards and such to add a little extra to the mix. We also cut a little out of our regular monthly budget to cover the overage. The key factor is, we stayed with in our means and paid cash for everything.

It is not a good thing to wake up in January wondering how you are going to pay for the gifts that you bought in December. Christmas is a time for sharing, caring and giving. It is not the time to spend till you drop and sink your family’s finances. You will start to enjoy the holidays again when debt is wiped out and you will not have to struggle all year to pay for the gifts.

Unless you are a multimillionaire or the United States Government, you must live within the boundaries of what you earn. If you do not, at some point, the creditors will come knocking and you will lose sleep and the financial security you and your family needs. Once you are debt free, you can put a little more towards Christmas and holiday gifts. Until that point, spend as little as possible and stay within your budget and you will start to put the joy back in the holidays.

Merry Christmas to Your Families and may you spend your New Year cutting up credit cards and dunking your debt!