Emergency fund...

My younger brother found out how lucky he was to have an emergency fund. He had unexpected car trouble recently and the bill turned out to be $725. Since he had a $1000 emergency fund saved up, that expense didn't break the bank.

Mom and dad are on board...

Friday night I stopped by my parent's house to show them how they too can win with money. We wrote down all of their monthly expenses and bills, their non-monthly expenses and anything else and then came up with a written budget. With the success that my wife and I have had, that's as good of a way as any to get other people on board.

2006 Personal Savings Drop to 74-Yr. Low

People are spending more and more and saving less and less according to this article. I'm not saving or investing as much I would like to right now but once the debt is gone, a lot of that money will go into savings and investments. But only after all debt is paid.

2006 Personal Savings Drop to 74-Yr. Low - The Associated Press

With a few regrets, grads offer college debt advice

Here's an article about debt and college. A fella from Kansas is quoted and says do not use credit cards at all. They're a trap and if you can't pay cash for something then you don't need it. Very good advice until the end of the paragraph when he says to "keep one card, use it wisely and pay it off regularly." Don't get suckered into the notion that you need a credit card to make it in the world today because you don't.

With a few regrets, grads offer college debt advice

The car is paid for...

Well, today was a special day. We paid off our car. We bought a 2003 Mitsubishi Galant for $7000 in July and in almost 7 months time, we paid it off. Originally, I didn't want to buy that much car but I made a deal with my wife that if we got that car, we're going to pay it off as quick as we can and change the way we handle money. And we've been doing so ever since then. We averaged over $1130 paid each month on the car. And now we can use the debt snowball to take that money and pay off my student loan and then after that, pay off my wife's since her loan amount is the biggest. She's also attending class to get her Masters and Doctorate so her loan is in deferment so while we don't have to pay anything now, we will once my loan is paid for. There's no reason not to.

Giving 50% effort to get out of debt

A lot of the articles, like this one, I read about people in credit card debt, people paying off debt or advice from a "professional" only goes about halfway when it comes to figuring out how to get out of debt. And that's by simply paying off the debt by paying anything extra income on top of the minimum payment. Sounds pretty simple if you want to take the next 5 or 10 years to do it. They never address the issue of how someone got into trouble to start with and that was the use of credit cards and spending more money than what they make. One needs to change their behavior and get rid of the credit cards because there will always be that temptation to use them even if you keep telling yourself you'll use it for emergencies only and you convince yourself that big sale at the mall is one. If you want to win with money, you have to change your behavior.

The Courier News :: Business :: Debt limits credit-offer advantages

E-mailed responses to previous post story

Yesterday I posted about a story from CNN.com. Here are some e-mail responses from some readers of that article. The first response from Katherine Peal of Washington, DC shows how one can get into trouble but also how can work their way out. Others think you need credit cards for a variety of reasons.

Your e-mails: Students paying off the past - CNN.com

College can be a crash course in debt

It's only been a few years since I graduated college. There was always a table or booth set up somewhere on campus enticing students with a free t-shirt to sign up for a credit card. I was never a big enough sucker to sign up for one but I sure did apply for as much as I could receive in student loans. There really wasn't any good reason for me to do so. The thought that I needed this money outweighed common sense.

According to this article, student loans and credit cards are normal things to have to make it through college. Well that's just wrong. Someone in the article is quoted saying that you should wait until after your freshman year in college before you get a credit card. Well, sophomores, juniors and seniors have demonstrated they aren't any more responsible. So if you work hard to earn money and save a lot of it, use that to pay for school.

College can be a crash course in debt - CNN.com

2 more Real Financial Heroes

Here's a link to 2 other Real Financial Heroes:

Part 2

Part 3

Real Financial Heroes

A friend of mine sent me a link to this. Absolutely hilarious. There are 2 other Real financial heroes. All 3 are really good and really drive the point home about how a lot of people unfortunately handle money.

Discover has better "rewards"?

If you're familiar with Dave Ramsey, you always hear him talk about cutting up the credit cards, a plastectomy as he calls it. Well Discover got the bright idea of doing the same thing, only doing that to all of your other credit cards because their's is the only one you need since they have better "rewards". I used to have a Discover card as well as a Capital One and Bank of America card. I had my plastectomy a couple years ago. Now there is far less temptation to spend money I don't have. The only open account I have with a Visa logo on it is my debit card from my bank.

Debt, it's not just for the young anymore.

I've heard a lot lately about seniors and debt. While I'm far from being one, I'm already looking ahead to what I can do so that I don't end up like some of the people in this article. Priority number one for my wife and I right now is paying off debt. After that, we'll start investing more of our income. And we'll have more money to invest since we won't have any monthly payments on a car or student loans. Seeing the big picture and looking a lot further ahead than just tomorrow can make a big difference when it comes time to retire.

Rockford Register Star | Web site of the Rock River Valley

Holiday debt

Are you still paying off the credit cards you used to buy last year's Christmas gifts? If so, you're not alone according to this article. There is a way take away a lot of the stress and it worked really, really well for my wife and I. First we decide how much we're going to spend on gifts for everyone including friends and family. We then take that whole amount we came up with and divide it by 12 and save that amount of money each and every month. It's as simple as that. If you go to the store with a set amount of cash, it's a pretty safe bet you're not going to be spend more than you have in hand. It teaches self-discipline. And that's the key to winning with money - self-discipline.

Buffalo News - Holiday debt a shock? Maybe you spend too much all year long

Ridiculous article...

This article had to have been written by or paid for by a credit card company. It talks about the "hardships" of being debt-free and gives "examples" of when debt is a good thing or using credit cards for emergencies. It takes the debt-free person for an idiot. It refers to low interest rates as a reason to have debt because one would have extra money to invest. But imagine if you had no more house payments after paying it off as quick as you could. You'd be able to pay yourself that sum of money by investing the whole amount or save for any number of things.

Being Debt-Free Isn't Always All It's Cracked Up to Be (Debt Management: Personal Finance) | SmartMoney.com

Budgeting

I get paid twice a month and my wife gets paid every two weeks. So twice a month, at the beginning and then end of the month, my wife and I sit down and fill out our budget. For the most part, expenses are the same each time. For example, the bills and expenses we have on January 1 are the same as February and the same goes for January 15 and February 15. So we always have a pretty definite idea about how much money it's going to take to live. And we stick as close as we can to the amount we budget for food, gasoline and clothing. We have an envelope for each of those categories and in those envelopes goes a specific amount of cash that we use to pay for the those items so once the money in the food envelope is gone, we don't buy any more food until the next period comes. Now we make sure we have enough money in there to start but yet we make sure we're not putting in more money than what we need. Any and all extra money we have goes toward debt.

I use an Microsoft Excel spreadsheet (any spreadsheet program will suffice) for budgeting. And the guy over at I Love Debt has an awesome one you can download for free. It's helped us tremendously because with a spreadsheet you just plug in the numbers (pay, expenses, etc.) and the addition and subtraction is done automatically thanks to mathematic formulas. I started in September and have been going strong ever since. With the spreadsheet I've been able to budget out several months to see how quickly we'll pay off our debts. Now the numbers do change from month to month so you just plug those in as they happen.

Dave Ramsey

A lot of the reasoning I'll be giving on this blog on how I handle money is because of Dave Ramsey. If you don't know about Dave, I suggest you find out as quick as you can. There is a link to his site under Links on the right side. I first heard Dave on the radio a few years ago while driving. His show was like nothing I'd ever heard before. Time passed by without thinking much about it and then a guy from work started talking about him and I mentioned how I heard him a few times on the radio. So since then, we've taken his class, Financial Peace University, along with a several of our coworkers, and life has never been the same. There are a handful of us at work that stuck with Dave's program and we keep each other informed on what's working for us and how we're knocking out debt. It continues to be an amazing experience. You can listen to his weekday radio show online for free. Hopefully you live in an area that carries his show on the radio. He's on over 300 stations now across the country.

Working my way out of debt

Being in debt is normal supposedly. Well being normal sucks. My wife and I are on our way to becoming debt free and even though it's a couple years away, we have a plan, we stick to a budget, we're prepared when Murphy's Law rears its ugly head and the end is in sight. So with this blog, I'll share with you my successes as well as the struggles of becoming debt free. It's hard work but nothing that's worth doing is easy.