Debt Dunk

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.

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.