Debt Dunk

Last post I discussed the beginning of your budget. You covered your four main categories, now it is time to look at what to do with the rest of the money. First you want to start saving a little toward an emergency fund. Do this this until you save a thousand or two. This is a must so you do not have to go deeper in debt to pay off an emergency. Next, you want to look at other household expenses such as Internet, cable, phone, house repairs, and any other household bills.

Do you still have any money left? If not, take a look at the household expenses. Can you cut your phone bill with a cheaper plan? Can you live without cable and lower your Internet plan? If so, you just discovered some free cash, if you still have no more money, you need to increase income by getting a part time job, overtime, or a better job.

The next step assumes you found or have more money to pay debt. This is where life gets tricky. If the money left does not equal your debt payments, you have two options, do not pay someone or increase your income.

Again, assuming you have enough income, you pay minimum on all debts and start paying as much extra as you can on your smallest debt. Some finance experts say lowest interest or a little extra on each. I discovered neither works as well. The reason is, you believe what you see happen. If you have a small debt and pay it off in a couple months, you see it happening. It motivates you and you start to see that you can climb your way out of debt.

I know this is very basic but you will find creating your budget a little stressful. The whole family should be part of the process. Husbands, this is for you, listen to your wife! Wives, this is for you, you can’t spend more than you make. This may be reverse for some couples but you get the point. It is a partnership and you have to live with in your income.

Please share this on Facebook or other social media to help others understand. If you have any questions, feel free to leave a comment or contact me directly.

As you send your kids off to school, you hope they will learn everything they need to know to become good adults. They learn math, science, history, reading, and writing. But the problem is, this is not enough.

Most teens graduating from high school know very little about money. They may have had a small class on how to get into debt with credit cards but not real advice on how to handle money and finances. This is partly due to the normal thinking in society is to grow up get a credit card then a car loan, then a mortgage and numerous personal loans along the way. Is this how we are suppose to live?

Back 50 years or more ago, grandpa might have sit you down and gave the advice of pay cash for everything you buy. Now days, we are bombarded with easy financing, get now pay later, and much more. Parents seldom teach their kids how to manage money because they do not know how. Is that how you want your kids to grow up?

As parents, you need to first learn about money and build an honest relationship with money. No debt is good debt but house mortgage is an acceptable debt but in the shortest term possible. This means 15 years or less and pay off as quick as possible.

There are many great books and courses on the market to learn about how to manage you money. Look for the ones who focus less on getting credit and more on building wealth. You need to learn in order to pass the knowledge on to your kids.

I will be adding more posts on how to guide your kids to be better money managers. Please be sure to favorite us and subscribe to our feed. As always, if you have money questions please ask.

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!

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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