I’ve been struggling lately trying to find a way to cut expenses. I just keep going back through the same list of bills and there’s not much left to cut. We already have the slowest Internet, basic cable, basic phone, no long distance, etc. We have cut so many “luxury” expenses out of the budget already but just aren’t making much progress toward paying off the debt.
After a few months of frustration over cutting $10 here and $25 there in our budget, I thought I might be going about it the wrong way. I had clearly gotten to the point where there were no more expenses that could be cut easily without making serious lifestyle changes such as selling a car or house (which I do not want to do). Continue reading »
I stumbled upon this excellent post by Josh Kaufman at The Personal MBA. This is exactly how I feel about debt… with the exception of a mortgage or reasonable car payment. If it’s not going to make you money, you shouldn’t even consider financing.
After sitting down (for several hours) yesterday and hammering out a new monthly budget, we were able to allocate a whopping $1,700 a month towards credit card debt! After a few rough calculations on our credit card debt minus total payments plus interest charges, it might actually be possible for us to pay off ALL of our credit card debt by the end of 2009!
It would require getting on a “beans and rice” budget (as Dave Ramsey puts it) and would still require we find a little extra cash somewhere. We currently have $26,800 in credit card debt (which includes a business credit card). Paying $1,700 a month towards the debt would pay over $20,000 on the debt in 2009. With some additional income I expect to receive and by keeping an eye out for an opportunity here and there, I think it’s possible. Tough, but possible.
So I’ve set a goal for myself… pay off all the credit cards by December 31, 2009. I’ve always been up for a challenge, and maybe such an ambitious goal will keep us motivated throughout the year.
It’s so easy to set goals, but I’m hoping having a hard deadline and a very specific goal will help us stay the coarse and stay motivated throughout the year. I’ll be posting updates throughout the year on our progress.
The Common Craft Show is a website that makes hard to understand topics easy to understand with short, simple video explanations.
They’ve released a video about saving money that describes how compound interest and investments work, and it’s a great explanation for people who are unfamiliar with investing. Take a look:
Also checkout the other shows… while not related to finances or investing they’re very interesting and there are probably a few explanations that can be useful to you.
Credit Karma is an online service that offers a free credit score, along with interesting information about how you compare with others. You can see how your score compares with the entire nation, or just people your age. You can track your credit score over time, and get offers from partner banks.
One of my favorite features of Credit Karma is the “Simulate Your Score” tool which allows you to see how changes to your debt reported to the credit beuraus will affect your credit. Think paying off a card will help your credit? Maybe not. If it’s the oldest account you have open, it might even hurt your credit.
There are also other tools such as a home affordability calculator, which shows you how much home you can afford based on your income, down payment and other debt commitments. It also shows an estimated payment including PMI, property taxes and homeowner’s insurance.
Checkout Credit Karma… it’s completely free (supported by ads and offers from “partners”). If you’re planning on buying a house or car in the near future, it’s a great way to monitor your credit score for free.
A lot of people get Christmas bonuses at work that range from a free turkey to several thousand dollars. Unexpected income usually leads to unexpected purchases! If you know you’re going to get a bonus, plan on using that money before you get the check.
Here are some productive ideas for how to use your Christmas bonus:
Pay off debts
Build an emergency fund
Start a child’s college fund
Pay down on your mortgage
Contribute to your Roth IRA (up to the max)
Next time you get a bonus or unexpected income, have a plan for how you will use the money. You’ll avoid the “morning after” regrets and put the money to good use!
I recently watched Maxed Out, a documentary about the dark secrets of America’s banking industry. If you’re reading this blog, then you most likely already know that debt is bad… but you probably have no idea how bad it is.
Maxed Out focuses on banks and financial institutions that lend money to people who are less than credit worthy, knowing they can’t or won’t pay their bills. These credit card companies and banks make the majority of their profits off the late charges, over the limit fees and high interest they charge to people who are behind on their payments.
The documentary uncovers the shady (and possibly illegal) practices of some of the nation’s largest banks, as they prey on the young and the poor. From giving credit cards to college kids with no income, to ruthless collection agencies that use scare tactics to get people to pay on their past due debts before putting food on the table, Maxed Out is a moving film that will have you seriously questioning our casual use of debt in this country.
Maxed Out is a moving and informative documentary that will make you think about the banking industry (and government) is a completely different way.
How many times have you woken up the day after making a big purchase and regretted it? That TV, computer, furniture or car seems a little more expensive than it did yesterday. You suddenly get a funny feeling in your stomach as you realize the credit card bill’s coming in the next few weeks.
Retailers rely on impulse purchases (trust me, I own and run online stores).They use all sorts of tactics to get you to purchase today instead of waiting and really thinking about whether it’s a good decision.
One simple decision has saved me hundreds, maybe thousands of dollars…
Never spend more than $100 on a purchase without first doing these three things…Continue reading »
There are two schools of thought when it comes to paying off your debt. One says that you should start with the account with the highest interest rate, then move to the next nighest interest rate and the next until you’ve paid everything off. The other says that you should pay off the smallest balance first, moving to the next smallest, etc. Which is the best?
Dave Ramsey is a speaker, trainer and consultant on debt and financial planning. After making it big in real estate, his debt got the best of him. He went bankrupt after the bank called in some large short-term notes and he vowed never to go into debt again.
He has a popular radio show and several bestselling books and travels around the country giving speeches and seminars teaching people how to get out of debt.
We just picked up tickets to his Total Money Makeover event in Atlanta September 13. There are also events coming up in Birmingham, Tulsa, Houston, and more. If you can’t make it to a live event, check out his radio show which you can listen to live on the Internet.
Credit Karma
A lot of people get Christmas bonuses at work that range from a free turkey to several thousand dollars. Unexpected income usually leads to unexpected purchases! If you know you’re going to get a bonus, plan on using that money before you get the check.
I recently watched 