Be content with what you have

I hope everyone had a Merry Christmas and was able to keep it about Christmas and not the commercial spending spree it has become. We were able to tone things down and everyone had a great holiday, especially the kids!

Beth Harrison wrote the following article, I thought you might be interested.

Another Christmas is under our belts and, as the New Year approaches, most of us probably have at least 10 pounds to lose, some sleep to catch up on, a house that needs un-decorating, and a pocketbook that is empty.

Economists predicted that this holiday season would be a financial nightmare for the store owners with consumers not spending as much as previous years due to the downturn in the economy.

We are in this economic crisis for so many reasons of which just one of them is purchasing things such as houses, cars, and other stuff that we really could not afford.

Credit cards have allowed us to live above our means but made us think we were living within our means. Interest-only loans have enabled us to buy houses whose costs were way over our heads.

Seventy-two-month auto loans have enabled us to buy cars that were also beyond our finances.

Soon the media will report on our Christmas spending. Maybe people didn't spend as much this year because of their dwindling finances or fear of the economy but wouldn't it be nice if the decrease in spending was because we were celebrating the real reason for the season.


Click HERE to see the enitre article

Money saving tip: Quickbooks Pro 2009 for FREE

Today I just ordered a copy of Intuit Quickbooks Pro 2009 from Staples for FREE!

Visit www.Staples.com and click the blue and green ad on the upper right side.
Shipping is free, there is a $40 instant savings and the rest is available via a rebate coupon. All you end up paying for is sales tax for this $200 software package!

This offer is also available in stores while supplies last.

Merry Christmas!

One more balance paid

I paid off my American Express - Costco card (had a $600 balance) today. I plan to keep this card for Costco and fuel purchases only and not carry a balance. This will be my only credit card.

Once I receive my severance check, I plan to use a small portion to pay off the bank line of credit and put the rest in savings until I find employment.

Seeking employment

Strange how things work out. Three days after I began reading 48 Days to the Work You Love, I was informed the corporation I have worked at for the last 17 years no longer required my services. In the name of head count reductions I am back in the job market.

I view this as a good thing as it gives me the opportunity to find work that I really enjoy and hopefully accomplishes something other than the circle that is the corporate environment. With the severance package, it comes to about a six month cushion for me to find employment, I am optimistic I will be able to replace my job well before then.

Until then, the plan is to use a portion of the severance to kill a portion of the debt and save the rest, back to making minimum payments on the other debt. It was recommended I try to call the company I have the HELOC with and offer to settle for less with them now that I have lost my job, I will call them later this week.

Still on the road to debt freedom, just need to stop on this bench and rest a little.

Starbucks RED campaign

Here is one way to give this Christmas season at Starbucks

Starting November 27, every time you buy a (STARBUCKS)RED EXCLUSIVE beverage at participating US and Canada locations, we'll give 5 cents to the Global Fund to help saves lives in Africa.

In support of Worlds AIDS Day on December 1, we'll donate 5 cents of every hand-crafted beverage we sell that day at participating US and Canada locations.

Together, our nickels can really add up.

Make your commitment at the (STARBUCKS) RED Community today!





Buy Starbucks Holiday/Seasonal Coffees

Money as debt

Interesting video on YouTube about how money is really created in society. It is long but worth watching.

Introducing reserve ratios and more terms that explain the legalized method of creating money out of thin air

Scratch Beginnings: Adam W. Shepard

Dave had the author Adam Shepard on his show Tuesday night. Inspired by the Barbara Ehrenreich book, Nickel and Dimed: On (Not) Getting By in America Adam had a plan, take only the clothes on his back, a sleeping bag and $25.00 in cash to a random city in America and try to prove that you can make it.

The goal was to have $2,500 saved, a working automobile and a furnished apartment in one years time. During the summer of 2006 he arrived in a Charleston, South Carolina homeless shelter and began his journey.

See people, the American Dream is not dead, we do not need to bail out AIG, Citigroup or any other bank out there to make it in this country. We need to simply get back to basics. live well within our means and increase our 'means' if we want to do more in life. This story is an inspiration.

I have added this to my must read list, take a look at the book Scratch Beginnings: Me, $25, and the Search for the American Dream today!

You can also visit Adam's web site: www.scratchbeginnings.com

Christmas 2008

Christmas will be light this year, the adults in the family have all agreed not to exchange gifts. We will still buy a few things for the kids (2 years and 14 months) and the grand parents will buy them a few things as well, nothing overboard.

Seems like it takes forever to pay the bills being I am paid twice a month. It is a strange feeling being anxious for payday to arrive to make a payment to the debt snowball with such enthusiasm, am I abnormal? I think I am and that seems to be the goal here isn't it?

eBay sales are doing well, seems the Camaro Christmas ornaments are the best seller, then there are the keychains. I've been able to move $300 to the bills this past month. Still have two Hannah Montana holiday dolls I bought anticipating a Christmas rush, maybe they will sell as Christmas gets closer. If not, they will just go back to Target.

What are some of you doing different this Christmas than you have in years past now that you are geared up to pay down the debt in your life? Leave a comment and let me know.

American Express customer service

Today I contacted American Express and asked them to reduce my interest rate on my Blue card. The rate is currently at 12.99%. Their reply was 'we do not have a lower rate available'. What that means to me is they do not want to lower it.

I asked if there were any other options and I was told no. I told the representative I had no choice but to transfer the balance to another card and cancel this account. They said that was correct. You would think they would put up a fight to keep my account open, but that does not appear to be the case.

I canceled the account and will pay off the balance in my debt snowball and never look back.

Educating children about money

Dave Ramsey and the Lambo Group have put together a series of childrens books to help educate them about responsible money management.

Financial Peace Jr.: Teaching Kids About Money!
The Super Red Racer
Careless At The Carnival
The Big Birthday Surprise
My Fantastic Fieldtrip
A Special Thank You
Battle of the Chores


These books give parents the guidance and tools to teach children about saving, spending and giving money and are very easy to follow. Children enjoy the stories while learning valuable life lessons at the same time.

Click the links above for more details about each book and order them directly from Amazon and have them by the weekend!

3 reasons to pay off your house

There is an interesting article on AskMen.com about why you should pay off you house.

1. Emotional Well Being
2. Risk Abatement
3. Financial Sensibility

I've often thought the risk of losing the house if you encounter financial hardship like losing your job, a family death or other form of un-preventable event was cause enough to have your house paid for. Others around me have disagreed.

The article gives an example of the common mis-conception you should have a house payment so you have something to claim on your income taxes, hardly a wise financial decision. The numbers do not lie.

The best way to pay down your mortgage early is to pay at least 10% more toward the principal amount with each payment.

Read the entire article HERE

Life without plastic

I came across a good article at Money Magazine from June 2008, Life without plastic.

This article goes through some benefits to success when you stop using credit cards as part of your financial plan. For many people, the credit card has become the emergency plan while we continue to spend on items we really don't need and have a tendency to spend more each time we are out just because using a credit card creates a disconnect between how much the item costs and what we feel like we are really spending.

"...After McDonald's began accepting credit and debit in 2004, diners who paid with plastic spent $7 a visit on average vs. $4.50 when they paid in cash. A 2003 survey of supermarket receipts found that credit-card shoppers rang up 30% bigger bills than and carted out twice as much in non essentials as cash buyers did"

They also discuss the differences in consumer protection using a debit card versus a credit card. Since 2000, both Visa and MasterCard have extended their zero-liability protection policy to debit card purchasers as well, this has helped close that gap considerably.

Impact to your FICO score? While canceling credit cards accounts can have a negative impact on your FICO score, you can store a card or two in a safe place, using it for a small purchase annually to keep it active. This will help preserve your score if you choose to do so for personal reasons.

I recommend reading the entire article when you have some time.

Dave Ramsey Live in Michigan

I received a great birthday present this week, my girlfriend bought two VIP passes to see Dave Ramsey live in Grand Rapids, Michigan February 19, 2009! I can't wait!

We are looking forward to this, it will come at a time when we are about four months into our plan to be debt free!

Have any of you ever attended one of hte TMMO events live? What did you think? Any tips or suggestions for us? Feel free to post a comment.

What is a FICO score?

FICO, we hear it all the time. We have been trained to believe this the most important number of our existence.
Insurance companies use it to factor our rates, banks and lending institutions use it to factor the interest rate we pay on loans, landlords check it as an indicator of past debt repayment patterns, employers are even using it to screen job applicants!

The FICO score was created by the Fair Isaac Corporation and the exact formula is a well kept secret.
It has become the greatest factor in determining these things for the wrong reasons. Consider what actually makes up the FICO score, it is based upon your debt, past and present and your history of making payments on that debt;

35% of the score is your payment history
30% of the score is based on the ratio of the amount you currently owe to the amount of credit (potential debt) you have available to you. The lower your ratio, the better your score.
15% of the score is based on the length of your debt history. Also based upon the average length of time your current accounts have been open and available.
10% of the score is based on new credit (potential debt) applied for
10% of the score is based on the type of debts, a mix of credit cards, store credit, installment debt, etc. More variety will increase your score.

Consider why we feel we need a great FICO score, it is to apply for more debt. The biggest reason seems to secure an affordable rate on a note to buy a house.
It is suggested to locate and work with a mortgage rep who uses a company to do actual underwriting, not underwriting based solely or mostly on your FICO score. That is the best way to secure an affordable rate based upon your excellent history of credit responsibility and keeping yourself out of debt.

Movie: Maxed Out

I just watched the DVD Maxed Out tonight based on a recommendation from a friend. I had no idea Dave Ramsey made a few appearances in this movie, quite the coincidence.

This was an eye opening documentary on the practices of the Credit Card industry and some common business models for debt collection companies that either work to collect on debts owed or buy bad debts with the plan to collect on the debt and turn a profit for their business, at ANY cost as displayed in this movie. While it does concentrate on the predatory practices of both parties mentioned above, it does not get into the other side of it, the people like you and me that use the cards and those people who use them in very irresponsible ways.

Some of the people interviewed suffered tremendous loss as the result of these practices by the lenders or collectors, while directly or indirectly, it shows how desperate people can become over money and debt.

There is also some very interesting information about Suze Orman disclosed, we have all seen her shows, her TV appearances or read her books. She has some sound advice, but preaches the importance of a FICO score over and over again. That score is based on nothing more than how much debt you are currently in or have access to and your repayment history, nothing more. You would think someone like Suze that preaches to get yourself out of debt and take control over your life and money would not preach so heavily on the FICO score when it is based on debt.
Come to find out she has business partnership with MyFICO.com, see this 2007 press release from Fair Isaac, which IS FICO. Interesting to say the least...

I recommend you rent this or buy a copy and watch it and share it with your family and friends. See the link to the right for more information or to buy a copy directly from Amazon yourself.

Cleaning up your own credit

I have been looking into the services LifeLock and Zander provide and found some interesting information online to help do that yourself at little or no cost.

LifeLock offers to setup fraud alerts on your behalf and renew that request every 90 days. You can do this yourself and even freeze your credit by contacting the three credit bureaus below.

They request that your name be removed from pre-approved credit card offers and other junk mail lists and keep up the requests as they expire. Again, you can do this yourself with a service like www.OptOutPreScreen.com

While your name will be removed from the lists that Equifax, Experian, Innovis and TransUnion provide to businesses for the purpose of making you a firm offer of credit or insurance, you may continue to receive offers from sources that do not use Consumer Credit Reporting Companies to compile their lists.

They also order free credit reports for you from the major bureaus annually using www.annualcreditreport.com

If your wallet/purse goes missing, they will assist you in contacting each card and account. They assist you because they are not able to do it for you for legal reasons.

You can do this yourself by documenting the contents of your wallet/purse and keeping that information in a safe place, along with current contact information for each account.

Yes, LifeLock offer the $1 Million dollar guarantee, but if you put for the effort above and pay close attention to when and where you use or disclose your information, you can do this yourself.

Equifax
P.O. Box 740256
Atlanta, GA 30374
(800)-685-1111
Web site: www.Equifax.com
Get Equifax Score Watch Now!


Experian
PO Box 2002
Allen, TX 75013
(888) 397-3742
Web site: www.experian.com

TransUnion LLC
P.O. Box 2000
Chester, PA 19022
(800) 888-4213
Web site: www.transunion.com

Paying off credit card debt vs. funding your 401(k)

I suspended my 401(k) deductions in the Spring when I started tackling my debt so I had more money available to pay down my debt, trouble was I did not stop using credit cards during this process (pre-Dave). I recently read the following article that discusses this very topic.

Paying off credit card debt vs. funding your 401(k)
Source: CreditCards.com -- Jeremy Simon

When we are presented with two options that both seem good, it can be tough to make a decision. This is true in the case of the choice between using extra money to pay off credit card debt or to invest in a 401(k) retirement program -- both of which are recommended by financial advisers.

In an ideal situation, it would be possible to both pay off credit card debt and contribute the maximum amount to an employer's 401(k) retirement fund. But for most of us, we have to make the most of a limited amount of money. So for Americans faced with the decision between paying off credit card debt and funding their 401(k) plan, how should we best put our money to work?

First, consider your credit card debt. The average interest rate on credit card accounts is about 15 percent. That is very costly, especially since credit card interest payments are not tax-deductible. So with most credit cards charging 15 percent interest on whatever balance is owed, paying off credit card debt is equal to earning a guaranteed 15 percent return on your money.

More...

Finally off the roller coaster

It feels good to be off the roller coaster and I have just begun the road to being debt free. I know the road ahead is rough and I will be discouraged once or twice along the way, but it already feels good to be on this path.

Just this week I felt excited to pay the credit card bill at the end of the week! Who ever thought you could feel good about something like that?
It feels great knowing I'm not buying things I really do not need while contributing to the pile of debt I have accumulated.

Just knowing the sacrifices I am already making will be well worth it down the road.

Never have another car payment

One thing I have done that was smart was I kept my truck long after I paid of the note. Not having a car payment has freed up some money for other things, but now I see there is much more to this than I realized. Watch this video from the Dave Ramsey Financial Peace University and see how you can start driving cars without ever having to make another payment to another financial institution

Become debt free with Dave Ramsey

Here is a useful video of Dave Ramsey discussing his basic fundamentals on your road to becoming debt free. It is only five minutes, but maybe the best five minutes you will spend today

eBay Listings

I have posted my current ebay listings below. Maybe there is something you are looking for, maybe you see something you want to forward to a friend?

Baby Step one is complete!

My $1,000 emergency fund is established!
I sold my snowmobile trailer this weekend, $200 into the fund and $425 going towards debt on Monday.

Now on to the debt-snowball!

I'm working on $5,000 in credit card debt. $4,800 line of credit and a $16,000 Home Equity Line of Credit.

Book: Strong Fathers, Strong Daughters

Dave Ramsey had Meg Meeker in studio during Thursday's broadcast. Meg wrote Strong Fathers, Strong Daughters: 10 Secrets Every Father Should Know.

Coincidently Dave said tonight he has been recommending this book for almost one year now and I had not heard his recommendation. I received this book as a gift shortly after my daughter was born in 2006 but did not start reading it until two weeks ago.

Being a new father, I strongly recommend this book. It will give me a great starting point on my relationship with my daughter and should serve as a guide as she grows older.

During the broadcast Meg spoke of her latest book,
Boys Should Be Boys: 7 Secrets to Raising Healthy Sons, I plan to add this to my Amazon shopping cart later this month for sure being my son is one year old.

eBay tip: Using Paypal

Paypal is the greatest thing for online sales. It allows the average person to accept payments for a nominal fee and sell anything worldwide.

Since I started accepting payments using Paypal, I have always had a cautious eye. To help prevent any shady dealings between my Paypal account and my personal savings account, I opened a new savings account at my local bank. This new bank account is a simple savings account. This is the only account on file with Paypal, it is the account I use to transfer money to and from my Paypal account.

Lets say I withdrawal funds from my Paypal account into this savings account, after the transaction completes (usually three business days), I login to my bank and simply transfer the funds from my Paypal-specific savings account to my regular savings account.

This way in the event there is a person at Paypal that tries to clean house, they will only get the minimal amount I have lingering in this 'buffer' account.

I must add, I have NEVER had any issues using Paypal, nor do I ever expect to. There is no harm in being cautious.

eBay tip: 10 tips for selling on eBay

This information was taken from an article in Top Tech News.

1. Set the starting price low (except for items you expect little interest in)

Low starting prices stimulate auction traffic and get early bidders psychologically invested in the auction, leading to more completed sales and higher final prices.

2. Use reserve prices with caution, especially for low-priced items

When using a low minimum bid, nervous sellers sometimes set secret reserve prices to make sure their item doesn't sell for less than the item's true value.

3. Use photos in your listings.

Listings with photos receive much more traffic than listings without photos.

4. Don't flood the market

If you're selling multiples of an item, space them out, rather then selling them all at once, says Ku -- that's simple supply and demand at work.

5. Spell-check

Misspellings decrease the amount of traffic an auction receives. Note for buyers, including misspellings in your search criteria can expose some auctions that are not seen by most shoppers. This can net some nice deals to the savvy buyer.

6. Hype it up

Ku and Murnighan suggest that inserting blatant puffery like "This shirt is hot!! A must-have for the summer!!" into low-starting-price auctions could stimulate interest better than more straightforward listings, and possibly even raise final sale prices.

7. Hold longer auctions

Researchers from the University of Arizona and the University of Michigan found that longer auctions tend to fetch higher prices.

8. Don't end auctions during "eBay happy hour"

Though it might seem counterintuitive, a University of Pennsylvania researcher found that auctions ending during peak hours on eBay are actually 9.6% less likely to result in a sale.

9. Charge for shipping -- but not too much

Bidders don't pay much attention to shipping costs when placing bids, say professors at UC Berkeley and Hong Kong University of Science and Technology.

10. Avoid negative feedback

A Bentley College researcher found that sellers who have even a few positive reports are more likely than sellers who have no history to receive bids and to have their auctions result in a sale.

eBay tip: Free packaging supplies from the Post Office

The US Post Office makes selling items on eBay even easier that ever. You can order USPS Priority Mail supplies like boxes, envelopes, packaging tape and labels FREE of charge. They will even deliver them to your door!

For packaging supplies, keep those old newspapers, they make excellent material for wrapping items and keeping them safe from damage during shipping. Other options include saving the foam packaging peanuts from items you buy online or even gift wrap tissue from the dollar store.

Visit shop.usps.com and browse the catalog and place an order today.

Started the emergency fund

I already paid a bit towards my first debt before I learned about the program.
Today was payday, moved $700 towards the emergency fund.

Dave Ramsey's Debt reducing Baby Steps

1. $1,000 to start an Emergency Fund
2. Pay off all debt using the Debt Snowball
3. Three to six months of expenses in savings
4. Invest 15 percent of household income into Roth IRAs and pre-tax retirement
5. College funding for children
6. Pay off home early
7. Build wealth and give!
   Invest in mutual funds and real estate

Click HERE to download the PDF version from www.DaveRamsey.com

Secondary income: eBay

Many of you probably buy or sell items on eBay from time to time. Why not get serious about selling on eBay and use it as a secondary source of income?

I read a great book by Adam Ginsberg - How to Buy, Sell, and Profit on eBay: Kick-Start Your Home-Based Business in Just Thirty Days

There are plenty of basic eBay tips and strategies that anyone selling items can benefit from. This is a great resource and I highly recommend it.

Financial Peace

I recently read Financial Peace Revisited
by Dave Ramsey. This is a very easy read and does a great job of explaining the philosophy behind the ideas Dave talks about on his radio show every day.

He has a way of taking the obvious and spelling it out so there is no way you can mistake what you should be doing to succeed on your road to paying off all of your debt. His christian influence is very apparent in the readings as well.

The book currently sells for $16.29 on Amazon.

Creating a budget

Yes, a written budget. I have a good start on the budget, but there are a few expenses that will have to be updated as I go. Mainly expenses for the two kids, food/clothing etc.

While a budget should be considered a living document, meant to change as needed, actually doing it is quite a step in itself.

Start by writing down your net take home pay (cancel any 401K or stock purchase plan contributions while you are paying down your debt).

The next obvious step is document your fixed expenses, house payment, car payment, etc. Follow those up with things like utilities and other items you pay for monthly. Then factor in your other expenses.

Step One: Setup $1,000 emergency fund

Per Dave's Baby Steps plan, step one is set aside $1,000 in an emergency fund and DO NOT TOUCH IT. To fund this I have put my snowmobile trailer up for sale (sold the snowmobile two years ago) and plan to use the proceeds from my current eBay auctions to fund this step. I have been buying and selling on eBay since 1999, it is about time I used those skills to put that income to use.

Welcome to Living Debt Free

For the Dave Ramsey listeners out there, this page is for you. I just heard about Dave Ramsey and his view on living debt free a few weeks ago. Since then I try to catch the podcast of his radio program daily and recently read his best selling book Financial Peace.

This blog will document my journey to living debt free and will share other information I come across.

Share your stories and views on this blog with me.