Bon Jovi Said it Best. Halfway There...Living on a Prayer. Killing Debt! Dave Ramsey Baby Steps are the Trick/Tip/Secret/Magic/Strategy

Oh, they're halfway there
Oh, living on a prayer
Take my hand
And we'll make it I swear
Oh, living on a prayer.

This is my July update on our debt payoff.  It has been exactly 24 months since we started our path to debt freedom and we are now HALFWAY THERE!  We started with exactly $100,332 of total debt (including the mortgage).  As of today, we have paid off $50,230.  Only $50,102 left to go.  About 24 more months from now and I will be 100% free from all worldly debts, never to go there again.  At the time we started (August 2008), I figured it would be possible to pay off everything in about six years.  I was thrilled with that calculation because we still had about 14 years left of the mortgage.  After tightening some belts and re-crunching numbers, I came up with a four year (48 month) plan to total freedom.  So far, so good.  I must stay focused to continue at this pace.  While I never want to wish time away, I can't wait for that day to come.  As I told my wife that day in August 2008, take my hand and we'll make it I swear........

My TMMO Forum Link to Keep you Motivated. Dave Ramsey Total Money Makeover Baby Steps: Best, Most Effective Debt Free Plan

Dave Ramsey's website is a great source of advice and information to keep you motivated and on track to paying off debt.  I frequently read the forums because I like to see how others are doing.
  Click HERE to check out the TMMO forum. 
Dave Ramsey Total Money Makeover Baby Steps Plan: I am making great headway on eliminating my debt and owe a ton of my success to following Dave's plan (although not exactly as written).  My next post will probably be a July update on my progress.

Keeping Up With the Joneses. Turtle Power!

Random Ramblings from a debt eliminator (me).
Am I the only one without a 46" LCD TV?
Am I the only one who doesn't have a DVR?

Am I the only one who doesn't own a riding lawn mower?
Am I the only one who doesn't have power windows & locks on my truck?

Am I the only one still with cable TV (no dish).

Am I the only one who doesn't have an iPhone/Blackberry cell phone?

Am I the only one who doesn't turn on the A/C when it hits 80 degrees?

Am I the only one who walks through the house continuously shutting off lights?

Am I the only one who washes the car in the driveway?

Am I the only one who gets coffee from the kitchen? (what's a Starbucks?)

Am I the only one who keeps the house a little bit chilly in the winter?

Am I the only one who brown bags it for lunch?

I KNOW MY NEIGHBORS DON'T!!!

Emergency Fund Wisdom from a Wise Reader.

This post is from a loyal reader (anonymous) who commented on my emergency fund post.  This one's for you (whoever you are).

Anonymous said... Good post! Have you noticed how the financial experts disagree as to how much of an EF you should have? I've seen most recommendations ranging from 3 months, to a full year.Some "experts" have even bumped up their recommendations considering the fact that, when laid off, the average American takes something like 9 months to find another job lately. ("in this economy" - are you sick & tired of hearing that phrase lately, or what?) We've got 9 months of "required expenses" in our EF. I've got ours broken down into "required expenses/bills" and "optional expenses," realizing, like you, that we can eliminate certain expenses if we need to. In the "optional" column, we have one cell phone bill, $200 of the grocery bill (family of 5), the extra mortgage payment we make each month, IRA contributions, and $400 of other items (but not church giving - that stays in the required column!). Placing the IRA funding in the optional column bugs me. I would never want to stop contributing the full amount to our IRAs, but realize that, if faced with a true emergency, we might cut back on that and revisit our retirement plans when/if emergency is over. What are your thoughts on retirement contributions? Make them "required" or keep them "optional"?

We have, however, decided to take $3,200 from the EF to pay off the car this month, since there are only 9 months left on our car payment. Why keep the car payment when we've already got the money sitting in the EF that's been designated for the car payment should we find ourselves in an emergency? ;) We've decided several times before that we were going to pay it off earlier, but each time we said "OK, pay off the car with the next car payment," we had a true "mini-emergency" come up before the next car payment (like a $1,000 plumbing bill!). So I started to think we were jinxing ourselves every time we said "hey, let's pay off the car this month!" I know, that's silly...but still.... Well, now that we are down to the 9 month mark on the car payment, we have no excuse!

Now - on to the mortgage, which is now below $58K and at least two-thirds of each payment we make is now applied to principal (not interest!) - woohoo! We get to watch that mortgage balance drop like our 401K/IRAs did in 2008! hehe - bad joke, but sometimes you have no other choice than to find the humor in the situation ;) that year sucked, eh?

I love reading your stuff - will try not to stay gone for so long again ;)

Thanks Anonymous!  I hope you have a blog of your own because you have some great stuff to say.

The Committed One.

There's No Oil Spill at the Campground. Camping 101.

My family loves to go camping.  We have a 24ft self-contained camper that is just big enough for our family of four.  Camping allows you to leave everything behind (stress, bills, daily routines) and unwind.  To me, there is nothing more relaxing and stress free than spending a weekend in nature's wonderland.  My camping days are basically broken down into three categories: coffee, food, & beer.  I always wake up early while camping and really, really enjoy that first cup of coffee.  I sit outside on my lawnchair and listen to the most peaceful sounds of singing birds.  Once my wife and other camping buddies wake up, my focus becomes all about breakfast.  I am normally a cereal guy, but while camping I turn into a Paul Bunyan breakfast kind of guy.  Massive amounts of food for breakfast.  Bring on the pancakes, eggs, bacon, sausage, hashbrowns, & toast.  One of the best things in life is the smell of breakfast cooking at a campground.  It is also kind of fun to watch the other campers next to you cooking their breakfast just to see if they're out-doing you.  Once breakfast is over, it is time to do some more relaxing.  We will sit around for a while and plan out the day.  Usually we come up with some sort of entertainment for the kids to break up the day to avoid boredom.  Sometimes we plan putt putt golf or go cart racing, but it may just be a pick-up touch football game or volley ball.  Part of camping fun is having our group start a game and then have a bunch of other campers wander over and get involved.  Once the entertainment is done, it is time for some more relaxing.  Usually we do small lunches (a sandwich) because we were so stuffed from breakfast and anticipate a kick-butt dinner.  Beer time while camping is anytime after noon (Bloody Mary's start at breakfast for some people).  The girls usually mix up some sort of fruity cocktails but I pretty much stick with beer.  Dinner may include any of the following: steak, chops, burgers, dogs, brats, chicken, kabobs, etc.  While camping, dinner is an event.  It can't just be a quickie thing, everyone gets involved with some sort of cooking task.  From start cooking time to clean up time, it is a couple hour process.  I love fires.  I love building it, starting it, and watching it.  Fire puts me in a totally relaxed trance (or maybe it is all the beer).  Sitting around the camp fire with family and friends is really what camping is all about.  No worries.  Of course, everything I have written so far is the ideal camping day for me, but what would camping be without RAIN!  Yea, it usually rains quite a bit when we camp.  We drained Lake Delton (Wisconsin Dells) a few years ago.  I am notorious for being the rain god of camping.  Campgrounds should pay me to stay away.  Rain at first glance really stinks while camping, but in reality it creates the most memories.  Nobody remembers the perfect weather days, but we will talk about walking in ankle high water around our camper for years to come.  Wicked storms while camping turn into fun times (several years later, of course).  Attitude is everything while camping.  Enjoy whatever is thrown your way.  You'll be dirty, wet, & smelly, but so is everyone else....embrace it.

Where's My Holiday State Tax Bailout Refund?

Holidays are my weakness.  The Memorial Day holiday came and went leaving me with a little less spending money.  It is WAY to easy to spend money on these long weekends.  I just get so far away from my normal day-to-day process that I seem
to spend money everywhere.  Between the graduation gifts, alcoholic drinks, camping fees, and kick butt food for the grill, the cash disappears pretty quickly.  I guess I need to budget in a "holiday fund".  As I came out of the three day weekend, I felt  fat, hungover, and broke.  I did have a lot of fun, however!  When it all comes down to it, holidays are meant to get together with family & good friends -have fun & create some memories.  I guess you can't put a price on memories.  Lets see, if I save two dollars a day until the Fourth of July, my holiday fund will have $64............

Kill-A-Watt Device Helps You Save Money on Electricity.

I bought a Kill-a-watt electricity monitoring device about a year ago so that I could really see where I was wasting money.  This cool device will tell you just how much electricity each appliance or device is using.  Is that old refrigerator costing you a ton?  All those chargers plugged into the wall will surprise you on how much electricity they are using EVEN when you are not charging anything.  Check to see how much juice those Christmas lights are using.  I soon became a Kill-a-watt junkie and was checking everything in my house & garage.  After making a few adjustments to what I kept plugged in, I figure this little device paid for itself in about 2 months.  The big payday came when I adjusted my pool pump to run about 1 hour less each day.  The savings really add up when you calculate it over time (months/years).  I highly recommend everyone getting one of these to open your eyes on electricity usage.  When you are done using it (not that you will ever be totally done), let a neighbor or friend borrow it to help them save some money. 

The Best Vaccuum Cleaner I Ever Rated! This Hoover is #1 Value and Performance Leader.

Our old Hoover vacuum cleaner had seen better days and we were tired of using vacuum bags so the other day I did some research to find the best vacuum cleaner I could at a good price (around $100).  After reading many reviews, I settled upon the Hoover Elite Rewind Bagless.  This would be our first ever bagless model.  I found the best price for a new (non-refurbished) unit on Amazon.com.  It was $92.51 with free shipping.  I ordered it and it was promptly shipped and received in about 3 days.  My wife had just finished vacuuming with the old one when FedEx delivered the new Hoover.  She assembled it (just putting the handle on) and tried it out.  She immediately called me at work and said "Oh, my goodness, I can't believe how much stuff it picked up AFTER I had just vacuumed with the old one".  She was very happy with how well it performed and really liked the cord rewind feature.  When I got home, I had to try it out.  I re-vacuumed the room that she already had done only I went much slower than she did.  It again picked up a ton of dust even though this was already vacuumed several times already.  Wow, vacuuming is almost fun when you can see how much you're actually picking up (I'm sure that feeling will wear off quickly).  Overall, we really like this new vacuum cleaner and hope it is durable enough to last for several years.

Recycling Aluminum Cans for Money AND Love.

I have fond memories of when I was a kid out collecting aluminum cans.  I used to walk the ditches behind my grandparent's house because they lived on a busy road.  Back then (late 70's/early 80's) it seemed like everyone littered...it was no big deal.  I would find pretty much anything you could imagine tossed in those ditches.  Lots & lots of empty beer cans as drinking and driving was pretty much the norm.  I started a beer can collection and probably had about 50 different cans that were pretty cool.  Some cans were made out of tin and some from this new fangled aluminum can.  The aluminum ones would be tossed into my giant Hefty bag after crushing them with a good stomp.  I would keep gathering cans all summer and toss them into an old giant metal drum that my dad had behind our shed.  I don't remember how much money I used to get when we eventually took the cans in for recycling but I do remember how excited I would be when we we driving to the recycling place.  MONEY, MONEY, MONEY.  I couldn't wait.  I probably recycled cans until I was about 13yrs old, then it just didn't seem cool anymore.

Time lapse to 2009.  During a beer drinking session with my neighbor, I commented on how ridiculous it was that we threw all our cans in the recycling bin to be picked up every week AND we paid for this privilege.  The recycling company made money from the monthly fee and they also made money off of those aluminum cans.  Hello, Bueller...Bueller.  The next day I grabbed a big old Hefty bag and started tossing in our empty beer cans (and soda).  I then went out and bought one of those nifty (and fun) wall mounted can crushers.  The kids couldn't wait for the next empty can, they loved to crush.  I saved cans for about a year until I just got tired of looking at the eye-sore of big black bags sitting by my wood pile.  I took the cans to the local recycling plant and they kindly gave my $30.  I went right over to the grocery store and picked my "free" (minus my $30) two cases of beer.  What a country!  Free beer.....well not really, but it felt like it.  So now when my wife asks if I've been drinking, I just reply:  No, I was out recycling.

How Much Emergency Fund Do I Need? Transform Debt to Wealth.

The rough economy the last few years has really brought many Americans back to the basics.  Back in the day, people used to actually have money sitting in the checking account (or under the mattress) "saved for a rainy day".  That whole emergency fund idea kind of went by the way-side when the spending/investing era took off (mid 80's).  Sometime around the collapse of the Berlin Wall, people decided that it was foolish to save money in a liquid account for emergencies.  It was so popular to just spend it and enjoy yourself (after all, money was so plentiful), or go for the "big gains" in the stock market.  Wake up call---jobs are scarce, debt is huge, housing market tanks, oh no!  When a real financial emergency does happen, you may need several month's worth of expenses to be available.  Most financial experts agree that at least three to six months of expenses are necessary but how much that means for you is the question.  First, you need to know how much you really spend each month.  You'll need to track each expense daily for several months to get a good idea of just how much you spend.  Keep a running log and don't forget the little spends (magazines, coffee, vending machine snacks, etc.).  Once you have a good idea of how much you spend each month, figure out how much of that you would actually HAVE to spend if a real emergency took place.  For example, even though you might have spent $800 a month on groceries, if a financial emergency took place you could definitely cut way back if needed and maybe only spend $500 or less.  Add up all the "needs" and get the cut-throat total.  Multiply this by whatever makes you more comfortable (3-6 months) and you will have a good idea on just how much money you need to save in the emergency fund.  Keep saving until your fund is fully funded...making sure to keep it liquid.  DO NOT TOUCH this money for anything except a full blown emergency!  No, Christmas is not an emergency.
I was once a non-believer in accumulating an emergency fund.  I figured that if the worst happened and I was really strapped for cash, I would just have to pull out the old credit card (dust it off) and live off it temporarily.  But now that I have drank enough debt-free kool-aid, I am a believer in having a fully-funded emergency fund available as MY BAIL-OUT.  I've seen the light at the other end of the tunnel and no, it's not from the locomotive coming towards me.

Where is my Alabama State Tax Refund Delay.......2010 Just Like 2009!

Still waiting on your state tax refund? I'm not, but many in Alabama still are. I don't live there but I do have relatives who do. They are getting quite used to the fact that their state tax refunds never seem to show up. How frustrating that must be.
There are several states that would be on the brink of collapse if they were actually corporations. California, Illinois, New Jersey...the deep in debt list goes on. Fiscal responsibility needs to be at the top of the "must have" list when deciding who should be the governor running the state. Some of the governors have never even been in financial control of their own households let alone multi-billion dollar industries/state. If they have never had any real experience running a successful organization (budgeting), do they really need to be running the state? I promise to stay away from the political aspect on this blog, but come on people....WAKE UP! I vote Dave Ramsey for Governor of common sense.

Saturday Night Live Deals With Debt. How to Retire Early.

This video from an old Saturday Night Live skit is pretty much all you need to know about personal finance.  Too funny, truth is always funnier than fiction.  Click on the top left arrow to start.

The Simple Life to Stop All Creditors.

If I were going to sum up the whole "live debt free and prosper" theory, I would do it by simply saying "SPEND LESS THAN YOU EARN.  That's it, simple huh?  Too bad so few actually do it.  You've all heard the saying "it's not how much you make, it's how much you keep", so why hasn't it sunk in yet?  Figuring out all the logistics involved with spending less than you make is the difficult part.  Keep your life simple by not getting involved in all the shell games (credit cards, zero percent interest, etc..) that make it seem like you really can afford that new something or other.  If you want or need something, pay cash and move on.  What's that, you don't have enough cash to pay for it right now?  THEN DON'T BUY IT, you can't afford it.  Credit cards are designed to allow you to spend money that you don't yet have.  It is a trap, steer clear.  Don't try to out smart the credit industry, it's like playing with snakes...eventually you'll get bit.  I bet everyone knows someone (or is someone) who is flat broke but has a 46" LCD TV, a $100 cell phone plan, expensive rims on the car, etc..  Notice anything wrong with the situation.  Pay yourself first, then you can spend the rest of your cash on your needs/wants.  So simple, yet so difficult.

Why Dave Ramsey? Is John Cummuta a Scam? Where's Suze Orman?

I often talk about Dave Ramsey's plan to become debt free, but I also think that another guy's program is really pretty good.  John Cummuta has a plan that has gone by several different names over the past 15 years (currently it is called "Transforming Debt into Wealth")Update: Now calling it the Debt Free Bible.
 
I actually enjoy listening to Cummuta's audio book more than I do Ramsey's.  I guess I follow a hybrid of both of their programs and have changed a few things that fit my situation a little better.  Both Ramsey & Cummuta have VERY similar backgrounds, stories, and books.  Below are some highlights of each and some differences:

Dave Ramsey's Baby Steps:
1) $1000 in Savings - Mini Emergency Fund

2) Pay Off All Debt (except the mortgage) using the debt snowball

3) Save for Fully Funded Emergency Fund (3-6 months of expenses)

4) invest 15% into 401k or Roth IRA

5) College Savings (529 accounts)

6) Pay off home early

7) Build Wealth & Give
 
John Cummuta's Transform Debt into Wealth:

Stage 1: Stop Using Credit - Operate 100% on cash
Debt is not a useful tool in building a successful life, credit makes things cost more, so why would you want to use it?

Stage 2: Pay off ALL your debts, including Mortgages.
Simultaneously with a cash-based lifestyle, we'll begin eliminating your debts. The first step in that process is the creation of what Cummuta calls your Accelerator Margin (TM). This is an amount of money that will help you accelerate your debt-elimination.

Stage 3: Focus All available cash on wealth-building
After your debt is paid off, it's time to start the first step of the wealth building phase. That first step is create an emergency savings fund.


Some differences are that Dave Ramsey says to create an emergency fund first where Cummuta says to pay off all debt before saving an emergency fund. . Another difference is that Ramsey separates the mortgage from the rest of the debts and says to pay that off at a later time, while Cummuta says it's all debt so it all needs to be eliminated.


I enjoy listening to Dave Ramsey's podcasts from his daily radio show.  He is much more accessible than Cummuta and seems to be more on the up and up.  Cummuta has a good program but has very questionable marketing tactics and many people think he is a borderline scam artist.  I have never purchased anything from him (the program was a gift) so I really can't confirm or deny his practices.  I would highly recommend  starting either one of these programs asap.  Both will get you the desired results...DEBT FREE...but only if you stick with it and persevere. Is John Cummuda a scam? No, Commuta is legit, but the plan is not much different that Ramsey's. Can you pay off house in 2 years? Not likely. Who is better, Dave Ramsey or "John Cummuta"? Both have value. What is best way to eliminate debt? Don't acquire any more, pay off the existing. Is the Debt Free Bible a scam? "Debt Free Bible" is Cummuta's newest name for his program. Oh yea, what about Suze Orman....I don't know-sorry. Is she a lesbian? Who cares.

Debt Elimination Secret Update. Getting Out of Debt: See Dave Ramsey/Cummuta/Suze Orman

My debt elimination update is a secret only because about 6 people will view this (my hit rate is not too good, huh).  Here is my update for May: 
Drum roll please.........

 Total debt as of May 9th is $53,616.


  On August 1, 2008 we owed $100,332.  We have payed off $46,716 in 22 months!  My new DEBT FREE date is August 1, 2012.  Only 27 more months until the house is paid off and we are totally debt free (how weird is that?).  The Dave Ramsey plan does work. 
It is like every other thing worth doing...it takes time and consistency.  You need to be committed to stay on it for the long haul.  I keep thinking about how I will feel once all debt is gone and everything I earn goes to my future and not the bank/creditors/drug dealers.  Just kidding on the drug dealers (although credit is consumer cocaine).  Dave Ramsey is right when he says that following the program is not complicated, but it is difficult.  It's difficult because it takes dedication, commitment, perseverance, and a bunch of other long words.  Stay the course and to the victor goes the spoils. Don't ever try and keep up with the Joneses, they're BROKE!

Free Money!!! Ebates is Cool as Swag.

I finally used ebates last week for the first time. I have bought things online for many years, but I never have used ebates to get money back. Ebates is a really easy way to get a little money back when you buy on their approved sites (many, many sites). I used it for Travelocity and ebay and will get back about 1% on each purchase. I recommend using it for all qualified purchases because...why not!  I meant to use it several times in the past few months but kept forgetting to go to ebates site first.  I wonder just how much money I lost out on over the last few years by not participating in this.  It is really about the easiest thing you can do.  Give it a look, you will love it too.  Click to check it out!   Some purchases at certain sites will get you 15%-20% back.  Hey, I like free money......

Retire Early One Cup at a Time.

Oh how I love my morning cup of coffee. From the second I stumble out of bed, coffee is the first thing on my mind. I look forward to it. So simple yet so satisfying. Coffee is an automatic for me every morning. If for some reason I were to skip it, my whole day would be a bit off kilter. You need to make investing the same way, it needs to be automatic! Don't just do it when you get the urge, make it an automatic process via your paycheck or bank account. It needs to happen at the least monthly if not weekly. If you are not taking full advantage of your employer's 401K and employee stock purchase plan then you are squandering a huge opportunity. Do it today! Take 20 minutes (about the same time it takes to drink that coffee) and figure out how to sign up. Do it for you! You can't afford NOT to! Time flies...don't delay. Twenty years of consistent investing will put you in position for a comfortable retirement. Think long term about building your nest egg and short term about getting your coffee, bacon, & eggs.

The Riches of Babylon Can Be Yours for the Low, Low Price of ........

The Richest Man In Babylon by George S. Clason.  Read this book!!!  Actually, don't read it, listen to it.  I highly recommend that anyone who is searching their way through a financial mess or just without a plan should listen to the audio-book "The Richest Man in Babylon".  This is one of the greatest books I have ever read/heard.  I have probably listened to it in entirety at least 5 times.  It gets better every time I listen to it.  It is set in ancient Babylon and tells the story (several stories) of how people went on to become wealthy by following simple rules.  It was written over 50 years ago but it's advice is timeless.  I would say that it is very similar to "The wealthy Barber" in the way that it gets the point across.  Very cool book.

Get Rich Slowly...Just Like the Yankees. Spend Time, Not Money.

Baseball is very much like investing.  The most successful teams usually play the game very methodically & slowly.  This week, an umpire criticized the Yankees & Red Sox for playing their games so slowly.  In fact, the three slowest teams from last year (Yankees, Red Sox, & Dodgers) are probably three of the most successful teams.  Coincidence?  Probably not.  Getting rich slowly is the only proven way to actually get rich.  You need to be very methodical and disciplined in order to invest to get rich in a time span covering 25+ years.   If you try to do it quickly, you are much more prone to making mistakes that will set you back.  I would much rather be slow and successful than quick and mediocre.  Take the time to analyze your investment decisions and take the slow, proven approach.  Index funds are slow and boring but they are consistent and successful.  Automatic investing is boring but successful.  Be a bore!  Be a Winner!  Go Cubs!

Disney World Tips, Tricks, Secrets,...Touring Plans!

The magic of Disney was a great Spring Break!  We just got back from a week in the sun at Disney World.  The family all had a great time and everything about the trip worked out great, start to finish.  We drove the 1200 miles to Orlando and it was smooth sailing all the way.  No traffic, no construction, no problems!  We stayed at the Port Orleans-French Quarters resort in Disney.  It is an absolutely beautiful resort.  We went to all four Disney parks and had a blast in each of them.  Epcot was my favorite as I really loved strolling through the World Showcase.  Hollywood Studios has the best rides, The Magic Kingdom is an absolute classic, and Animal Kingdom is a beautiful, scenic park.  We NEVER waited in line more than 15 minutes for ANY ride at any of the parks!  We rode all the "A" rides at least twice before noon and then again in the evening.  The key is to get to the park early and get your fastpasses as soon as you can.  Then keep getting a fastpass as soon as the time allows you to.  Don't worry about the expiration time on the fastpass, they let you ride it ANY time after the start time.  At one time at Hollywood Studios I had four sets of fastpasses saved up.  There were lines for the "A" rides that were 80-100 minutes long but we walked right in with our fastpasses doing the happy dance.  You need to get to the park at least 40 minutes before it opens and immediately go to an "A" ride, get a fastpass first, then ride it.  Then go to the next "A" ride and there will be no wait, ride it, then it will be time to get another fast pass for an "A" ride.  Have a plan (called touring plans) and you will have a great time at any of the parks.  We (family of four) stayed at the Port Orleans resort for 6 nights, got 6 day tickets to the parks, and got a $500 Disney cash card for a grand total of $2370.  The cash card lasted us until the last day (used it mainly for food).  We spent about $350 for gas and hotels on our way to and from Florida (from Illinois).  Now it is time to get back to nailing the debt.

I Need Some Feedback, Please.

This post is for you, the reader, to help me.  Please, let me know what you think about my blog.  How's my writing?  I need feedback in order to get better.  If this is your first time on this blog, please read all my posts (or at least as many as you can while still staying awake).  Let me know what is good, what stinks, and what you suggest I do to improve my writing skills.  I hope everyone who reads this will at least leave some constructive feedback.  Thanks!

Debt Elimination Secrets are for Losers! Need a Little Black Book?

Here's an update on my debt freedom path.  I have paid off $41,526 dollars of debt in 20 months.  We are on target to pay off all our debt on Dec 2012.  To be free of the $100,332 of debt will be a pretty unbelievable feeling!  It CAN be done!  To anyone who is just starting out trying to become debt free, I just say to you-BELIEVE.  Stick to it.  Don't get side tracked or discouraged.  In these 20 months, we also bought a $6000 camper (paid for) and will be going to Disney World in a few weeks ($3000+ paid for).  We are still living relatively well, just watching where we spend, cut back on several things, and keep a tight budget.  In a little less than three years from now, we will be doing the Snoopy dance and living in our paid for home.

The Recession is Officially Over! (Or People Living Beyond Their Means).

We went to the mid-west mecca Wisconsin Dells over the weekend and there were a gazillion people at the waterpark.  WALL TO WALL people!  Trust me, the Dells is not cheap.  I guess there is not too much to do at the end of February in these parts so everyone heads to the Dells.  Consumer confidence looks to be heading up so people are loosening up the purse strings.  The stock market has stabilized and retail sales are heading north.  Oh what a difference a year makes.  This time last year the stock market was at a decade low and nobody was spending money.  We will be at Disney World during spring break so that will be another recession busting indicator.  Yea, I know, I'm supposed to be paying OFF debt.

Don't Take Wooden Nickels!

Tipping the wait staff in a restaurant has always been a much debated topic.  How much of a tip is appropriate is the most often argued part, however, some people seem to feel that they should not have to tip at all as it should be the restaurant's responsibility to pay their staff an appropriate wage.  I have never worked in a restaurant before but I do understand the importance of giving good tips.  These people are SERVING you.  They are doing this in exchange for money.  If you don't want to have someone SERVE you, go to a fast food place.  I always tip 20% unless I feel the waiter/waitress was either rude or they seemingly disappeared.  If the meal was bad, it probably was not the waiter's fault.  Be polite to the waiter and ask to speak to the manager to voice your concerns.  Just because someone is SERVING you for money doesn't mean you have the right to be demanding, rude, or demeaning.  They are human beings just trying to make a living and pay their bills.  Respect them!  There have been many times that I have seen the people at the table next to me be real jerks to a waitress because she didn't bring them the extra butter as fast as they wanted or some stupid reason like that.  If you get impatient easily then you probably need to stay home and cook for yourself.  If you are too cheap to pay someone 15-20% for SERVING you then stay home and keep that table open for someone who will pay them.  Respect your fellow human beings in every thing you do. 

Frugal Living Is Your Real Debt Consolidation.

On August 1st, 2008, I had finally had enough of playing the debtor's game.  It was time for a change, a radical change.  We were in debt a little over $100,000 which included the house.  I realize that 100k is not really that much because about 80k of it was the house, but I was just tired of playing a game that felt like tug-o-war against myself.  I am a natural saver.  I have been saving/investing 10%-15% or more of my income for most of my life so I only feel "right" when I am saving.  So I was trying to save over 15% of my income AND pay all the bills (credit cards did the yo-yo from $0 to $2500 to $0...etc) and continued to use credit cards.  My total investments kept going up but my debts kept going up little by little as well.  I was about to turn 40 and didn't see how I would ever really win this game unless I changed the direction we were going in.  Credit cards had to go.  They are not evil, just too convenient.  Since August 2008, We have paid off $39,000 and only have $61,000 left to go (only the house).  I am committed to be debt free by 12/01/12.
The crazy thing about paying all this money off is that our day to day lives really have not changed much, just our thought process.  We are not the overly frugal (in my opinion) people you read about on some blogs.  I do a lot of searching other blogs to get ideas on personal finance and I come across some really different frugal/cheap/wacked-out people.  Some people go way overboard in their frugality almost to the point of insanity.  Come on people, live a little!  It is very rare that you and your spouse are both equally on the debt freedom path.  One will usually be 100% committed to it while the other is probably just along for the ride.  If you are the 100% committed one, you will burn-out your spouse really fast if you change their life too drastically.  It is a give and take situation.  Come up with ways to make your lifestyle change look a lot less dramatic than it is.  If you enjoy going out to eat, still go out (less frequently) but only when a restaurant has special nights (example is $5 pizza night).  Still go on vacation, but have a budget and save cash for it.  Take the family on a long bike ride.  Go hiking at the state park (free) with the family. You will soon realize that you do not have to spend much money to have just as much fun as you did when you were building your debt.  Don't use the "trying to be debt free" thing as a reason to be a stick in the mud.  You might need to be a little more creative in order to have fun and spend less but in the end it will be worth it.

How To Get Out of Debt and Live Debt Free! Pay/Paying Off the Mortgage Early..Yes I Should!

I find that most people really don't care if they are debt free or not.  If they can "afford" their current lifestyle, they are fine with debt.  What they really are not factoring in is RISK. Something bad might happen.  More than likely, their lives will not continue to be exactly as they are now.  They fail to ask themselves "What if".  What if they lose their job?  What if someone in their family has a major illness?  Those "what if's" are scary enough to me to make me want to eliminate (or at least significantly reduce) the risk.  Follow these steps to start your path to debt freedom. 

Step 1.   COMMIT TO IT!   Decide that you are 100% DONE WITH DEBT!  No if, and's, or but's.  Credit cards are not an option, CASH ONLY.  Done.

Step 2.   BUDGET TIME.  Figure out exactly where you are and how you will get to your goal.

A written budget giving each dollar a name is important.  Track every expense. Know exactly when you will reach your debt free date.  Have little celebrations for each debt that you pay off. 

Step 3.  NEW LIFESTYLE.  Your old lifestyle was fun but expensive.  It got you into this mess, time to say goodbye to the old and into the new.  You will be more frugal in many ways.  Eating out will be a real special treat.  Figure out how to reduce every expense (cable, cell phone, energy bills, vacations, etc.) while still enjoying your life.  Don't be a miser, just live much more financially responsible.  Read/listen to Dave Ramsey for motivation & advice.

Step 4.  SELL MORE, WORK MORE.  How much "stuff" do you have that you no longer want or need? Put it on ebay or craigslist today.  Another stream of income is huge.  Find a part-time job that brings in the very valuable extra income to increase your debt payoff.

Following these steps will make you debt free (except the house) in probably about 2-3 years.  Kill the mortgage and you will be part of the really weird 2% of Americans.  Live debt free for the rest of your life.

Integrity for $100, Alex! Get a Clue.

What is integrity?  Do we know it when we see it?  How do you get it?  These questions ran through my mind this morning as I lay in bed.  I have no idea why I was wondering about integrity, but it got me thinking.  Does integrity run hand in hand with morals?  I know a guy at work who is a devote christian but I often question his integrity and ethics.  He seems to skate on the borderline of being ethical (he's in sales).  Is integrity only the results of actions or are your thoughts included in it?  For example, lets say that you book a vacation with a company that gives you a large discount with the requirement that you go on a time-share tour.  If you absolutely have no intention of even considering buying a time-share, does this show poor integrity?  To me, integrity is sort of a label.  If humans walked around with a sticker on their foreheads (based on their actions/thoughts) that had words such as "cheapskate", "unethical", "immoral", or "no integrity"-would it change how they behaved?  As I go through my path to debt freedom, I really don't want to be labeled as being cheap.  I feel like I am right on the border of being "frugal with some cheapskate thoughts".  I am always looking for ways to save money.  I use CFL light bulbs because they save me money, not because they save energy (is this wrong?).  Should I feel guilty when I recycle products only when it is convenient?  If at work I leave the lights on all day long even when I leave the room but at home I always shut them off (because it costs me money), should I feel guilty?  I would probably say I am a bit selfish in a lot of ways.  If it affects me, I care...otherwise-maybe not so much.  If I am not really emotionally upset about the Haiti disaster and didn't donate anything, does that make me a bad, uncaring person?  I'm not sure why I am having all these thoughts this morning, but I guess it never hurts to get a little philosophical. Too bad life is not more like Jeopardy, we would already have all the answers and just need to come up with the questions.

Vasectomy 101, The Real Truth. Is it Painful?

In 2009, I had an experience that I won't soon forget.  After delaying it for several years, I finally manned up and got my junk snipped.  That means I got a vasectomy.  Just the thought of getting the procedure done made me grimace.  Once I hit 40, however, I knew it was time to give in as I didn't want to be 60 years old when my "oops" was in high school.  I went to the initial consultation with the doctor and was a little surprised when he asked me to stand up and drop my pants.  He then proceeded to feel me up.  I thought that only happened when I went to the dentist.  He felt around my sack area and said "this will be a piece of cake".  He convinced me that it would be virtually pain free and that I would be able to work after a day of rest.  I should have known something was up when a friend of mine who had it done a few days earlier would only say "call me when your done".  He wouldn't tell me anything more and quite frankly I didn't want to know anything else.  As I got to the doctor's office to do the surgery, I started to feel really uncomfortable as the nurse who greeted me was smokin hot.  Noooo!  Why couldn't she be beastly, that's just wrong!  She escorted me back to the room and handed me a robe/sheet kind of thing and asked me to undress and put it on.  She said she would be right back in to shave me.  So I put on this backwards kind of robe and layed down on the crinkly paper covered bench.  She came back in and proceeded to lift up the sheet and flip my man-thing around a few times.  Think baseball, baseball...dead cats..anything but what she was doing.  Luckily I had already shaved myself so she didn't have to.  She said it looked good (huh?) and the doctor would be right in.  The doctor came in and the fun really began.  He started to grab and squeeze my junk like it was some sort of play-doh creation.  He took my left nut and pulled it to the far corner of the room and put a clamp on it. He did the same to the right one.  He then stuck a giant needle in each side of my sack and shot in some boiling novocain.  Now the real uncomfortable part was about to begin.  As he sliced open the left side of my sack, both my legs about kicked him in the jaw.  Ughh!!  He asked if I felt it.  "YES", I murmured.  So then he gave me another shot of novocain in each side.  Then he said that I would feel a "slight tug".... ZING-ZANG-POW!!  He pulled out my vas tube and sliced and diced.  I felt everything and it was not cool.  He then used some sort of sci-fi looking contraption that was plugged in and humming.  He put it up to the tube that he just cut in half and sent 4,000 volts of electricity through my scrotum.  I smelled my manhood burning.  Inside, I was doing the silent scream.  He then told me that I was halfway done.  I was thinking that there was no way the other side (my right) could possibly be as bad.  I was hoping the novocain would have fully kicked in and I wouldn't feel a thing.  FAT CHANCE!  It was worse that the first side.  Enough said about that.  When it was finally over, I stood up (looked at my red, black, and blue mauled sack) and tried to put on the jock strap that I had brought for after the surgery.  Here's some advice for you guys, if you are a waist size 34, do not buy a jock strap that says size 32-36.  It won't fit.  I looked at the package to make sure I didn't buy a youth size.  Nope, adult size 32-36.  My junk was being squeezed out of both sides and it wasn't pretty.  After dressing (gingerly), I walk out into the waiting room to meet my wife and I just shook my head and mumbled something at her.  The receptionist handed me a specimen cup that I was supposed to put a sample in and bring back in about 6 weeks.  This "cup" was more like the size of something King Kong would put a sample in.  More about that later.  That was the most unpleasant experience of my life.   The old bag of frozen peas joke is real, it was my best friend.  Luckily for me I was on vacation for the whole week following my surgery.  Eventually, when I needed to bring back my sample, I kept looking at the huge cup with the embarrassing low level of stuff in it.  To make matters worse, the cup tipped over in my truck as I was driving to the office and half the stuff leaked out (yea, gross).  I handed the receptionist my sample, mumbled something, put my head down and walked out of the office.  Good news, officially I'm sterile.

Where Does Disney World Fit Into Dave Ramsey's Baby Steps?

I completed my tax return and was thinking about what I should do with the refund I will get.  I find it kind of funny how my first thoughts with money are always "where should I send it" (as in IRA, mortgage, etc), while most of my friends & relatives are saying "what kind of should we go on".  Am I that big of a nerd? 
Why do I always think practically and most others think fun?  My refund is going to be about $6K (yes, I know about the tax free loan thing) so I can do several things with the money.  I also get a nice bonus from work about the same time as my tax refund.  I am thinking I will send $2K to my Roth IRA, $3K extra to the mortgage, $3K to an emergency fund, and finally a nice family trip to.  OK, so I too am kinda thinking about the vacation, but that is my LAST thoughts about where to send the money.  I pay myself first.  I have some in-laws who are well in debt that are getting a really large tax refund.  They are going to run out and immediately buy a trip to Mexico and another to Disney before they spend all the money on something else (like debt).  They both make good money, but they spend every bit of it (and more).  I am sure to them that I am the "cheap one" who needs to loosen up and have some fun, but I guess I will have more fun later on.  When our house is paid for (12/01/2012) and we are 100% debt free, I guess I will have to loosen up a bit and maybe show everyone how great it is to owe nobody nuthin.  How great will it be to be known as the "smart one" instead of the "cheap one"?

Are You Upside Down on You Mortgage? How To Become Debt Free

If you are up to your eyeballs in debt, it is time to get weird.  Time to shake-up your life & your lifestyle.  Whatever you are doing now is definitely not working so give something else a try.  Get some advice from some people who have been there, done that.   Dave Ramsey has literally written the book on becoming weird in his best seller The Total Money Makeover.  He recommends that you sell your vehicle if you can't pay it off within 18 months.  Buy a beater.  That would be step one (stop using credit cards-step 1a).  Can you really afford the house?  If mortgage payments are more than about 35% of your combined income then you probably can't afford it.  Sell it and scale down to a house at about 25% of income.  OK, so now you sold your nice cars and big house--that's different and weird (good).  Do you have an income problem?  If you are working at Taco Bell and trying to support a family then it is time to step it up and reach your potential.  You may have to work crappy hours (graveyard shift), but there are many jobs that pay well if you are not afraid of a little physical work.  If you are broke and only are working 40 hours a week then it is time to find a part-time job.  I see too many broke people who work Monday-Friday 9-5.  Would an extra $600 a month help your situation?  If so, you could make $600 a month in just about any part-time job working only 15 hours a week.  Too many people want to get out of debt but are not willing to make any sacrifices in order to do it.  Shut up, stop whining & get a life.  If you want to continue living exactly like you are now AND get out of debt, you are living in a fantasy world.  You are doing something wrong, so try the opposite.  If it feels weird, it is probably right.  Shake up your life and get radical.  Make a lot of sacrifices the next 5 years so that your remaining 40+ years will be debt free and weird.

A Wake Up Call From Someone Other Than Your Creditors

While unemployment rates are around 10%, I can't help but have an extra appreciation for my job. Too often people get in a rut with their job and just kind of go into cruise control. I look at my local area and see many of my friends who are laid-off with no real hope of going back to work for another 3-6 months. It makes me realize that I am very fortunate to have a stable job in an industry that rarely has lay-offs. I know that I have "stepped it up" at work by re-focusing and doing anything extra that I can to show my appreciation for my job. Don't be "the complainer" or the "five o-clock Charlie" unless you want to be the first on on the lay-off list. Imagine just how much worse off you would be if your job were eliminated. Scary thought. Times like this can be a much needed wake up call for those who are just going through a routine (rut). A new attitude is a great start and combine that with increased performance and you will help build your financial stability. Wake up now before it's too late.

Do You Want to Be Wealthy? Three Very Simple Rules/Tips to Make You Rich with No Debt Consolidation Per Ramsey & Commuta/Orman

1. Spend less than you earn. This is The most important rule..

-don't waste money, spend on "  value"

2. Invest your savings AUTOMATICALLY.  

Make it an automatic process scheduled regularly.

3. Repeat steps 1 & 2 for 25-30 years.

That's it. These are the "secrets". Very simple yet so hard. Most people fail in step one. Credit cards are DESIGNED to allow you to spend more money than you make. Using credit cards has no place in becoming wealthy. It's not how much income you make, it's how much you keep. I recommend keeping 20% of your earnings. Do this via direct deposit into 401k, employee stock, index funds, & IRAs. Can't afford to? You can't afford Not to! Make it a priority to save. Sounds weird, huh? Don't be normal, normal is broke. Anyone who truly desires to be wealthy will. They have no choice. Big difference between someone who wants to be wealthy & someone who truly desires to be. Napoleon Hill's book "Think and Grow Rich" is a must read. The law of attraction is more powerful than 99% of people can comprehend. Most people will laugh it off and make a joke how they wish they had a million dollars-oops didn't work. Once you understand the principle of this law, you are on the right path to financial success. While your at it, you might as well read "The Power of Positive Thinking" by Dr. Norman Vincent Peale. I have seen my financial success grow by leaps and bounds ever since I understood the power of these laws and principles. The day I truly desired (and thus did something about it) to become wealthy is the day my finances started to turn around. Three Rules (and one law) to live by.

Debt is Like Milk, 2% is Really the Best. The Best Home Equity Loan is Ziltch

Debt is dumb. You can not convince me otherwise unless you are borrowing to run a business. A business is an investment that is intended to make a profit. If you have a great business model and the one thing keeping you from starting up and making money is capital, then debt may be needed. Otherwise, debt is dumb. Personal debt is acquired for many reasons but most often it is because of a lack of discipline. People want things NOW. They will not wait a few months or years until they can really afford the stuff so they do the irrational act of borrowing money. You may say a home is a good reason to go into debt. I went into debt for a home as most others do, but to say it is GOOD is wrong. I truly believe that a home that you plan on living in will not make you money. Once you factor in the interest paid for the loan, the real estate taxes, upkeep & maintenance, improvements, insurance, etc..you will be lucky to break even when selling. In the long run it is cheaper than renting, but don't be fooled into thinking that home ownership is a good investment.  Live within your means (actually live a bit below your means) and save/invest the difference and your future will be better than 98% of Americans. Yes, only 2% of Americans have no debt.  No house payment, no car payment, no loans of any kind.  Those 2% are living like no one else.  What would you do if all your money was actually your money? Start to think like this and then the whole debt is dumb idea makes a whole lot of sense.

My Huffy Needs a Breathalyzer. Homebrewing Beer Hobby

Beer. That wonderful, wonderful word! I started drinking beer when I was pretty young. I have fond memories of my buddy and I riding our bikes to steal some brews out of his grandpa's basement fridge. We would each put a couple of beers in our pockets and ride out to the edge of town and drink them under the bridge. Let me tell ya, two beers at age 11 or 12 would make for an interesting bike ride home. Fast forward to now. I enjoy beer so much that now I make my own. Homebrewing is a great hobby. It is kinda like making a cake. You get all the ingredients and follow the recipe. I'm not talking about a Mr. Beer kit, this is the real deal. There are lots of great websites that you can buy the ingredients & supplies needed to make your own sweet nectar. The whole process from start to finish takes about 5 weeks. The best kick I get out of it is when I give a friend one of my homebrews and he is like "damn, you made this--pretty good". You just can't beat good beer, good friends, and a good bridge to drink under.

A Book a Day Keeps Ignorance at Bay. Top Audio Books to Become Wealthy

>The Power of Positive Thinking...Think & Grow Rich...The Richest Man in Babylon...The Strangest Secret...these are a few of my favorite audio books. Yes, I said audio books (me a lazy reader). I have a 30-minute commute each way for work and if I listen to an audio book it makes my drive seem like its about a half-hour (huh?).
> I guess one day I got tired of listening to the usual sports talk radio so I downloaded an audio book & have been hooked ever since. Why not learn a little something on your way to work? The morning starts out with a good cup of coffee, a good book (umm..audio book) and me paying attention to the road for at least half the time. Set the old cruise at 67mph (yea, I'm a rebel) and fill the brain with wisdom. Now I just need to figure out how I can do my taxes as I drive to work...