November 2009

The Joneses are broke. Yes it is true they owe on the house, the cars, the furniture the clothes on their back and probably the food in their pantry.

If you could look into their heart you would not find peace and contentment. What you would find is worry and frustration. Not a pretty sight.

It happens seemingly over night. Just a little spent here and there. One more thing to make our life picture complete and before we know it we are in such a habit of over spending that it seems impossible to stop. Our debt to income ratio has been passed so long ago we don’t hardly know what it means.

Think about it. How did you get to this point? What are you going to do now that you have awakened and know where you are?

Get out last months journal where I listed the names of the books that will help and buy one. Look on e bay or on Amazon.com for a bargain.

Ignore your peers ignore family and friends you are doing this for your immediate family to build love and peace. Those things that God speaks about that bring a family together. No you don’t have to live forever without the nicer things of life but get these old problems and debts taken care of first then decide one at a time what things are worth. What they require to have and add them to your household if you have the cash to afford them.

Many ads on tv are trying to teach us to use plastic for purchases because it is faster. Don’t fall into this trap. Take your time when deciding on a purchase and don’t be afraid to pay cash or write a check to pay. I tell my students if the person behind you is getting upset just look at them sweetly and say, “My accountant will kill me if I don’t write this down now.” How can they get mad when it’s a matter of life or death?

You are your accountant and it is your responsibility to make your client uphold his end of the bargain by writing down every purchase atm or check.

Be bold be assured that this is your life. You are taking into your hands and you are responsible to make it work and make it better. Your quality of life depends on it.

They call it “ Getting rid of the fat”. That means finding a less expensive house to live in; yes there are some out there. Selling the car with the high payments and buying an older one in good shape that will do the job. Get your clothes at Walmart or target. They have cute stuff that isn’t as expensive as specialty shops.

Even shop around for your food. Walmart and Smiths are almost always cheaper than some of the other stores. And why not look at the places like canned food outlets they have good buys too. Don’t be afraid to look for sales. Smith’s for instances has case sales about every six months. You save a lot by taking advantage of them. Search it out and remember if you put all those pennies that you save in savings your savings would build pretty fast.

October 2009

In these hard economic times it is getting more important that we keep on track. Saying that you have no problem in your financial world when you struggle at every paycheck is lying to yourself.

I know that I have said this before but it is so important that I want to say it again. If you haven’t already done it and if you have but really need to do it again ( I try to do it at least every three months.) Look at your money spending for the last two weeks. The total should match your income. If it doesn’t, then try to figure where that money went. Then look at your expenditures that should give you an idea where your problem is.

No one is born with the knowledge of how to handle money. We must learn how. But it is hard to find someone to teach us.

Admit that you are having a problem. Research to find out about how to control finances. Some good books are:

• Debt Free Living by: Larry Burkett
• Living well on one income (in a two income world) by: Cynthia Yates
• The Total Money Makeover by: Dave Ramsey
• The financially challenged by: Wilson J Humber
  
  
  Go on a quest to learn more about money. You don’t have to enroll in school or watch all the tv programs you can find. Just read something about money at least once a year to keep you on track
  
  Learning about money shows that you care about yourself and those around you.
  
  Wealth doesn’t just happen. You need to spend some time and effort on learning how to manage and use money to your best advantage.
  
  The need for approval and respect drives us to do some really dumb things. One of those things is buying things that we don’t need in order to look wealthy to those around us or to just have something to do. We must get to the place that others opinions are not important. What is important is that we learn to manage our money so that we have adequate food clothing and shelter and a peace of mind that only comes from being out of debt, having a little money in savings for emergency and knowing that our family is together and taken care of.
  

September 2009

Changing habits is the only thing that will save you financially. Just as you must change your habits to lose weight. You must treat the problems not the symptoms. And if you are still reading this blog after all of these months you are serious enough to do something about your problems. Most likely you have started already. Have you made your lists? Have you analyzed your spending habits? Have you taken a good look and discovered some places where you need to change? If you have then you need to know that it isn’t easy and you have made good headway. Keep it up.

Using cash is the best way to go. If you use cash you will spend less and spend more carefully. It eliminates spur of the moment purchases and causes us to think carefully about what we put in our basket.

I have heard of many people who, and have done this myself; will go through their basket and do a final evaluation of the things in it to see if they do indeed want or need the item in it.

Impulse buying is curtailed by the fact that you do not have the cash in your pocket to indulge in unneeded items. But it also saves the, “Why did I buy that” statements to yourself when you get home.

Knowing that you have a credit card in your wallet that you could use gives a sense of security but the real test is to promise yourself that you won’t use it and then honor that promise by leaving it securely in its slot.

By doing a budget you will know how much cash you have to spend.

More and more people are just using their debit cards not realizing that they are adding fees to their purchase by doing so. Some gas stations charge you if you use your atm. Some atm’s will charge you if it is not your primary card source. Some automatically take out more than your purchase amount until your purchase has cleared leaving you with less money in the bank than you think is there and then you get added fees for overdraft.

Cash has no added fees, no hidden charges, no over drafts. It is what it is. You have $x's to spend and that’s all. No surprises at the end of the month.

Cash allows you to say no to yourself.” David Ramsey. Saying no to our self isn’t always easy but it is often necessary. The more you practice it the better you will get at it. At first you probably will run out of money but for a few months as you are getting used to using cash keep close records of what you spend. Check those receipts and make it a mystery hunt to figure out how you can do better. Just because we must change doesn’t mean it can’t be fun

August 2009

I don’t understand a lot about insurances but I know that there are some that do not give you the value that you think they will. Be sure that you check it out thoroughly. Do the math for now and for the future. Will it really do what it is supposed to do?

Lotteries, slot machines, gambling of any kind are not created to make you rich. They are made to make the casino owners rich or to increase some government program.Gambling represents false hope and denial. Diligence and thrift are how wealth is built not by chance.

Prepaying for things like college and funerals is not a good idea. The same money unvisited will bring a better return. Again do the homework. Add the numbers. What is the rate of increase that I would be saving. What percent of increase would I earn if this money were invested instead? See which is the greater advantage to you and choose that way.

Most people concentrate on the urgent instead of the important.Estate planning is never urgent until someone dies.If you want to win with money you must think about today as well as the future. IRA’s, 401 K’s, Estate planning, retirement. Remember these things are important for everyone. You are not excluded.

Debt management companies sound good. They take your money every month and distribute it to your bills. That sounds good but what they don’t tell you is, going this way will ruin your credit. They negotiate lower payments and sometimes lower balances and the equivalence of a chaper 13 on your record. So the best thing to do is stay away from these companies.The only thing that can be changed on your credit history is mistakes. Otherwise it takes seven years for a bad record to be taken off of your credit history..(except with chapter 7 bankruptcy) your credit report is your financial reputation.People who say they can repair your bad credit are lying and probably asking you to do the same. You could get into serious trouble by going this way so avoid it.

In a divorce if your name is still on the debt the company can still come after you for payment no matter who the judge says should pay it. This leaves you very vulnerable.The answer is to refinance all debts . Her half in her name. His half in his name. Or sell as much as possible but don’t share the debt by keeping your name on the contract.

Any deal, special plan or settlement that you make with a collector must be in writing before you send them money. Never allow collectors electronic access to your checking account, and never send post dated checks. Collectors are not your friend. They will abuse you if given the chance because you owe them money they can get away with it.

Filing bankruptcy is not the answer. It will leave you scared for life. Emotionally as well as financially. A chapter seven bankruptcy stays on your record for ten years . A Chapter thirteen bankruptcy stays for seven years. But for the rest of your life on loan papers and job applications you are asked if you have filed for one of these. If you lie technically you have committed a criminal fraud.These things I have mentioned in this article are things to avoid. They look good for the moment but leave scars that are hard to get rid of and some are permanent.Next month we talk about using cash.

July 2009

Get Rich Quick…….”When something sounds too good to be true, it is.”

Keeping that in mind when you are thinking of using one of your credit cards because they offer “rewards” is a case in point. Do they offer frequent flier miles? Consider do you ever fly anywhere? How often? Comparing the interest that you pay to get enough flier miles to go where you want, wouldn’t it just be cheaper to buy a ticket? On one credit card that I saw recently it said, “Cash in your rewards or you will lose them.” So I looked at the catalogue to see what rewards they were talking about. They had listed about five things that could be bought with reward points. Nothing was exchanged straight across. You also had to pay for the item. The prices were not cheep. A neighborhood store would have these same items at a lesser price. Check out the offer from your credit card company. Are these the kind of people that you want to support?

Every one wants something for nothing. Quick fixes. Easy money. Looking for that “get rich quick” secret that will make all of their worries go away.

I’m sorry to tell you this but there is no magic wand waving secret that will suddenly give you all of the money that you want.

There is no rich relative, for the majority of us, that is going to leave enough wealth to sustain us past our golden years. It is entirely up to each individual to take care of themselves. You won’t be able to do that if you don’t start now.

Here I want to add that if you have a few dollars and are thinking about investing. Make sure you do your homework. Don’t leave it entirely in your broker’s hands. Find out for yourself the history of the stocks or products that you are interesting in then make a wise decision getting good counsel on the matter.

The thing that will really make a difference is a lot of hard work. Live on less than you make, get out of debt and live on a plan. These are the things that will work. Not the get rich quick scams that abound.

June 2009

Using debt does not ensure the economy of our nation. If every one started saving and paying cash our country would make the adjustment and we would get more goods for the amount of money that we spend. If we as a whole were debt free we would prosper and so would our country.

Our economy would be more stable. Giving would increase and many social problems would be privatized with the government out of the welfare business. Taxes could come down and our spending capital would increase.

To sum it all up debt is not the way to wealth. Paying cash and saving is..

May 2009

Many financial advisors agree that debt is not the problem. It is only the symptom. Debt is the symptom of over spending and under saving.

I have read that 78% of the time after someone consolidates his credit card debts, the debt grows back.

The problem is that we don’t realize we must have the habit of paying cash or not buying at all and that we need to save for unexpected expenses.

Debt consolidation seems like a good way to go but when examined we find we are often paying more in the long run. They are, after all, in the business of making money. Be sure to read the small print. Is this a longer loan? Is it a reasonable amount of returnable money? You have checked the interest but does it go up at any time during the life of the loan and what about fees. You must read the small print.

Make a list of all of your bills and list them in the order of highest interest to lowest interest… also list the amounts of the bills. Start this pay period putting all of the extra dollars you can on that one with the highest interest. Even a few dollars will go against the principle and will get it paid off faster.