Debt Dunk

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!

Debt free does not mean dishonest. You made the mistakes and it is your job to fix it. If you honestly borrowed the money, you should do everything you can to pay it back. However, there are times that it may not be possible at the moment so you need to prioritize your finances.

The first key is to take care of your basic needs. These include eating, shelter, transportation, and household needs. I am talking about needs! This does not include the top brand steak, cigarettes, and other wants. You should feed you and your family on what you can afford. If you are deep in debt, you can not afford New York Strip and other more luxury items. Once you cover your basic needs, it is then time to tackle your debt.

There are many schools of thought when it comes to debt. The best plan I have found is Dave Ramsey’s Baby Steps. You save up a $1000 for emergencies and then start paying off debt from smallest to largest while paying minimum on the rest. If you do not have enough income left over to pay even minimum, you need to find ways to earn extra money or stop paying.

If your income is too low at the time, I would pay the secured debts first and stop paying the credit cards and other unsecured until you can get your income up or sell something to free up money. You can come back later and settle with the credit card companies. If you can afford, pay everyone now!

You need to have a clearly written budget laying out where all your money is going. Income and expenses should be equal. If you have more expenses than income, sell something, get a second job, or lower your expenses. You need to live with in your income or change something. Many people, including me, realize that you have more money than you think if you write it all down and stick to a budget.

The key is, nobody is going to fix you debt mess for you. You borrowed the money and you went into debt. It was partially the fault of the leeches who feed on society by pushing easy credit. However, you and I made our own debt bed. It is up to you to tackle it with all the energy you can muster in order to clear up and dunk all the debt. Cut up the credit cards, borrow nothing else, and pay off what you owe as quickly as possible. I am in the boat with you and I know it is tough but it can be done.

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This blog is here strictly for one reason. I hate DEBT! It is the biggest misconception placed on society. Did I buy into it? Of course I did. I was raised on the great concept that to get credit, you have to have credit. So at age 18 I was working for Sears and applied and got my first credit card from them.

I went out and purchased a VCR and then a new television. This was great; it was instant gratification at its finest. Buy now pay later. It was the American way right? Who cares that I was paying minimum payments at 24% interest. I had the great entertainment. It only cost me $22 a month. Well I learned that at that rate. I little $1000 I borrowed would only take 111 months. Holy cow! That was almost ten years. That great TV and VCR would be all at age 28. That was a huge wake up call. It was going to cost me $2442 for that TV and VCR. Worst part was, the VCR was refurbished because when I was 18, VCR were almost $1000 new.

I paid off that credit card as fast as I could and would love to tell you that the story of my credit cards ended there. Even with my new found knowledge at 18 of interest rates, I followed the normal society and charged and borrowed. That is what normal people do right. No that is what creditors want you to believe. I learned more and more as I grew older and made tons of stupid mistakes but all that has changed and that leads me to this point.

This blog will hopefully inspire you, kick your butt a little, and educate you in the matters of debt. My mistakes and my education will hopefully save you before you make the mistakes or help you if you are sinking in debt. Feel free to jump in and be part of my journey to wipe out all debt!