Debt Dunk

I have written in the past on how it is so important to be as debt free as possible and be prepared for those bumps in the road of life. Well since those post, I have built a beautiful new house. In the process, I took a 15 years mortgage and added extra payments when I can. If you followed my other post, you know that I lived in old farm house which was in rough shape. This being said, I lived there until my wife and I could afford a nice house without putting our financial security on the line. I live what I write and I prepared for any possibility.

Well guess what? As life happens, we moved in our nice house, both of us had good jobs and the extra payments were tacking away at the mortgage. We was living the dream and feeling the joy. That was until the rug got pulled out from under us. I worked a ten month job during the school year and on the second day of the school year, I got the dreaded call. My job was being cut and I was being laid off in one of the worse job markets ever. I worked for a non profit and we knew it could be possible at some point but not quite this quick.

This could have wiped us out of we had bought our new house before we got our financial house in order. However, we are OK. I paid off almost everything we owed prior to buying the house. I prepared a budget that would allow us to live on one salary if needed. When my wife’s car was demolished in a car wreak, we paid cash for a used mini-van. The only debt we have is my student loan and the new mortgage. I was able to sell my old farmhouse with owner finance so we have a little income from that coming in. Everything else we pay cash for. Would I like to have another good paying job? Yes, that would be great. Before the lay off, we were on track to have our house paid off in 7 years. However, we are still living good. We have a nice house, reliable (not fancy) automobiles, and food on the table. We have a little entertainment money and good family and friends. This could not have been possible without one thing!

Getting your financial house in order is the biggest key to surviving a disaster. Do you really need a brand new car with big payments? Do you need a new house or can you wait until you can afford it? Is that credit really a need or is it a stone weighing you down? How many homeless people have you personal heard about because of a sudden job loss? Are you prepared?

I have done some stupid things with money in the past. I tell everyone that if I knew then what I know now, I would be much better off. We can not turn back time, forget about the past! It is time for you to live in the now and this is where you start. If you are overwhelmed and think there is no way out, there is! You need to first sit down and do a budget. It can be very basic but you need to know where your money is going. Most people have learned that we deserve the good life and we deserve it now. You know, we do deserve it, however; we need to be able to afford it first.

Start right now by sitting down and looking at what comes in and what goes out. Food, shelter, transportation, power, and heat are first out. Then you need to see what is left and start paying down your debt. If you can’t afford that big car payment, you should not have that car. Buy a beater until you can upgrade. Cars and trucks are what of the biggest traps of buying new. They appreciate the minute you drive off the lot and lose most of the value with in two years. I drive an eleven year old SUV. It gets me from point A to point B. Is it beautiful? Nope, it has rust, a dent, A/C doesn’t work, and it squeaks like crazy. Would I like a brand new truck? Of course I would but not at the cost of the stress involved in the extra payments and the fear of financial ruin.

Look at your life, see where you have done stupid things with money and start fixing it. You are not alone, millions of people share your fate. Does that make you feel better? I hope not! I want you to be above that. I want you to take hold of your finances and rise above. Start now and start with a basic budget. I am here to answer any questions if you need help. I am still fixing one mistake; a student loan. However, the others are gone and a valuable lesson was learned. I paid all my debt, screwed no one including the credit card blood suckers and I am in a position to survive a major life downturn. My hope is that you too can get in that position.

Feel free to leave your comments. If you really want advice personally geared to your life, please use the contact form and I will get back to you to answer any of your questions. The time is now, prepare, fix, and live a more fulfilling life!

Vacations can be fun but they can also cause a lot of stress. How am I going to afford a vacation? Where should I stay? Where should I get a plane ticket? This article will address those questions and show you how to have an affordable quality vacation on a frugal budget.

When planning a vacation, first always shop around. If possible, plan as far ahead as possible. There are many good places to look for vacations. Travel agents do a good job of planning your vacation. They can plan your hotel, plane tickets, sight seeing events, and if you need one, a rental car. The downside with using a travel agent is the fact that you pay more for their services than if you done it yourself.

Another way to plan your vacation is to call airlines and hotels directly to book your vacation. This way gives you the most flexibility but also cost the most. The airlines charge more when buying direct and they increase their prices the closer you are to the travel date. Hotels charge more on weekends, holidays, and summers and they do not offer many discounts if you call them directly. Normal common sense would think you would get a better deal by cutting out the middle man but this is not the case when booking a vacation. This method is the least favorite way to use if you are frugal and looking for a bargain.

Still another way to plan you vacation is through the Internet. This is the total do it yourself method of vacation planning. You can search hotels, airlines, events, and car rentals for the area you are planning to visit. This can be fun and if you are lucky, you can find a real frugal deal. The Internet puts the world at your fingertips However, if you are not careful, you can end up paying more than you would have by just using a travel agent.

The final method I will discuss for planning your vacation is a combination of the travel agent and the Internet. This method is using an online discount vacation broker. There are many of these sites and more are being added each year. One of the oldest and my personal favorite is Priceline. This is the one my families uses for almost all of our vacation needs. Priceline offers frugal living at its finest. Priceline offers discount airplane tickets, discount hotel rooms, discount car rentals, and discount cruises. If you have some flexibility in your time schedule, you can name your own prices on hotel and plane tickets for discount at 50% or more off retail prices. Priceline also offers the convenience of full travel agents by designing vacation packages to meet your needs.

For the frugal minded people like all of us, Priceline is a one stop shopping site for all you vacation needs. If you just want to get away for a weekend drive, name your own price for the hotel room and you can save up to 60% off retail price. Want just the plane ticket? Name your own price and you can save tons of money off other discount sites. If you need a full vacation package, they allow you to pick your hotel, plane tickets, and rental car and you can add on airport pick-up and sightseeing tickets to make a well rounded well planned out complete vacation.

Frugal living is good living so be sure to use your frugal skills when planning your next vacation. Being a cheapskate can get you further when you use Priceline to plan all of your getaway needs. Have fun and enjoy your frugal vacation by taking the stress out of planning your vacation.

How many times have you looked at your wallet and your checkbook just to say I am broke? If this has never happened to you, congratulations! For almost every else, including me, it has happened. It is not a good feeling to have no money. That is the main reason you need to be prepared for everything. Preparing means knowing where the money comes from and where the money goes.

This is the first of a two part post about the in and the outs of money. Money comes from many sources. You can earn money through a job, you can get money through investment returns, government entitlements, you can win money, inherit money, or just be given money as a gift. No matter what way you get money, you have to understand that money is never unlimited; even for Bill Gates. Understanding that mere fact will start you on the road to financial freedom.

Most people are not so lucky to get money handed to them so we work for a living and earn a paycheck. You can either work for yourself by owning your own business or you can be employed by someone else. Either way, you are still working for a paycheck. It does not matter if you earn a million dollars a year or twenty thousand dollars a year, the concept is the same. We have what we earn and that is all we have. When deciding what to spend, we need to look at our earnings and compare that to what we want to see if they match up. If they do not, you can not afford what you wanted. It is so clear but many fail to see the facts.

What to do if you want something you can not afford. You must either borrow the money (bad plan) or save up for it. The other way is to increase the money coming in. This can be done by taking on more work or selling something you already own. Yard sales and Craigslist are two great ways to sell stuff to earn extra money. However, this is limited to what you have on hand. The best way to get extra money is to get a part time job. There are many simple part time jobs that can bring in extra income. Currently, working for the Unites States Census is a flexible good paying job for many people to earn extra cash. Other jobs, include newspaper delivery, Internet business, lawn care, pizza delivery, and many more. Most of these offer flexible hours that can be arranged around your full time job.

The next option is to find a better paying fulltime job. This can be done by better educating yourself, learn new skills, or moving to an area that is better paying.

The main point is that you need to know where your money is coming from and if you want a better lifestyle, you have to increase your money coming in. Credit cards is not another source of income. Because the local car dealer will give you a loan to buy a new car, it does not mean you can afford the car. Even if you can afford the car, you have to understand that the money must come from somewhere. Increasing the money going out means you need to increase the money coming in. Once you build a realization of where money comes from, you will better be able to understand the limits of your money.

Check back soon for part two “Where does the money go?”

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.

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!

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!