Debt101 Archives - Page 2 of 2

The Debt Rules

How serious are you about getting out of debt? Well if you follow the debt rules you will hopefully kick American Express to the curb and drown discover card in the fish tank. The secret to the debt rules I will share with all of you today is first a disgusting desire to be free from all of these imaginary bosses telling you where to send those fabulous green dollars.

Do you want to continuously fund the credit card companies profit margin or would you rather increase your household profit margin? I think we all know the answer to that question, but it will take a long time coupled with an intense commitment to complete your debt repayment journey. If you are willing to step up and live life far from the average person then follow the debt rules below I will lay out for all of you. I will tell you a few strategies and far from average methods, but ultimately it will all be worthwhile.

Continue reading The Debt Rules

7 Steps to Eliminate Credit Card Debt

I wanted to share with you a story of how a young financially smart person got into and out of about 14 thousand in credit card debt. I thought I was doing good with my money by saving a lot during my young days, while accumulating debt on the flip side of the coin. The year is 2007 and I had just been laid off from a great paying job, subprime mortgages. Now I can’t even recall how I got into so much debt, but I believe it had to do with unhappiness in a previous life situation plus the fact that America was in a credit card spending frenzy.

I was spending without any concern between years 2002 through 2007 just to get rewarded for credit card points. I am hoping that all of you can take this advice to heart and realize that those credit card points are not worth it. One of my overall goals with this site is to attempt to help others avoid the same mistakes I made. Why you ask? Because the younger you are, the greater the chance you will do well financially with some guidance. See Below for the tips.

7 Steps to Eliminate Credit Card Debt:
1. Never use debt to accumulate points for useless exorbitantly high rewards
2. Do not charge daily living expenses on credit cards
3. Do not save up money until after you have paid off you’re debt
4. Use all savings to help pay down debt faster (keep only 1-2K in savings for emergencies)
5. If your interest rate is high, do a balance transfer to a lower rate
6. Avoid cards with annual card fees
7. Do not pay only the minimum

This is what I did to eliminate the 14 thousand dollar debt monster. What did I charge through out the years to accumulate all that debt. Honestly I can not recall, but I would assume the bulk of it was spent on watches, sneakers, car accessories, gifts and every day life expenses. I had the mentality that the more I charged the faster I would be rewarded with those powerful credit card points. Which in turn rewarded me with useless products from their rewards shopping catalog. Always remember that credit card companies use all the tactics possible to bait you to spend more. They want you to eventually live life cash strapped by paying the minimum for life and extending the interest you pay them. If you fall for their game you will lose and possibly be in a paycheck to paycheck scenario for a long while.

Sometimes we get carried away in getting things that we do not see the damage that is being done on a daily basis. Keeping careful track of budget categories expenses will solve that problem. Another thing that really helped me improve on my spending habits, is to simply avoid the malls and superstores. By 2010 I was done with paying it all off and a big monkey was lifted off my back.

So please do your best to take the advice above and delay gratification with immediate wants. Credit card companies want you to fail at life. Being in debt for me is failing at life.

Comment if you have slashed debt from your life?

Rich Uncle EL

Debt Freedom Done Right

How do you get the monkey off your back you ask? Well it is simple and easy to explain; first and foremost you have to stop spending aka adding more debt. Second thing you have to do is really feel an urge to be free while at the same time get the mindset ready for many months of cutting back with slicing debt here and slicing debt there. I want you to think about that for a second because when all your friends are going out clubbing every other weekend you might have to go every other month for a year or two. It will be hard and your emotions will test the heck out of you. But you can do it, because if a desire is present then anything is possible. Getting out of debt is the initial feeling, but the real underlining urge is to build a great financial foundation. Where you can have surplus cash flow and invest here and there without the worries behind bill paying all bottled up inside.

If you have doubt then you are not ready as the journey will go from tough to tougher every day. I want you to be prepared with the strength of all your ancestors because this stuff is not easy. (Depending how deeply indebted one is)

Debt Freedom Done Right:

Do not add more debt

Feel and desire to be free

Cut back on anything that is not a need

Add up the daily and weekly interest fees for each loan

For the smallest balance loan, pay as much as you possibly can

For the rest of the loans pay the minimum

Pay double the weekly interest fee plus the monthly payment amount (Smallest Balance) (Per Week)

Keep the cycle going, with every loan until you can yell, BE GONE DEBT!

This simple advice can help you achieve great momentum with debt freedom. Why you ask?

You are paying more than the minimum on the smallest balance loan until it is paid off
You are paying double the interest fee weekly thus reducing the principle dramatically
You will see results monthly and will save yourself money with interest payments
You will see the debt shave off with every balance that is paid off and get one step closer to freedom

The Total Money Makeover: A Proven Plan for Financial Fitness

Comment if you agree with the, debt freedom done right revolution coming soon to a bank near you?

PS: The books above are all debt freedom books from respectable financial gurus. This post is not a review of the books but are offered here as an additional resource for you to use if more information is required.

Rich Uncle EL

Debt Free Living

I like giving my readers the tools they need to live life debt free. I feel that you can really put to use some of the tips I mentioned below as a way to get ahead with your financial goals. It all comes down to the choices you make in life. Would you be willing to pass on your goals because you just had to upgrade your PC to the new Mac Book laptop. Granted that new Mac book might only cost you $60 dollars a month with interest free financing.

But that $60 dollars could have gottten you one step closer to realizing a financial goal you keep postponing month after month and year after year. Why is that we always need or want something? Why is it that those things have to be purchased on credit? Well if you keep reading you will enjoy another great post on how you can avoid debt.

Continue reading Debt Free Living

8 Tips to Knock Down Debt

Debt is rising for the U.S. government at an alarming rate, but for the citizens of our country average debt is slowly being eliminated as reported in CNN. Back in 2008 the average per person debt was about 8 thousand, fast forward to 2011 and the average debt is unknown as some reports claim that the debt is between 6-9 thousand and others claim between 10-15 thousand dollars. In my opinon I believe that the first figure is broken down by the total house holds who have debt and those without debt in America. The second larger figure is broken down by the households that only hold debt. So why report false hope in the eyes of the average person reading the article, because the credit card industry’s main purpose is for us to keep spending and continue fueling their revenue stream.

If the average person feels that the economy is doing better overall then they will go to the mall and shop thus fueling all aspects of our economy. But why set up a system to indebt the average person for years at the sake of our government’s GDP and corporate greed. I will provide a few tips to knock down debt and release all of us from the curse of the plastic gods.

Tips:

1. Always pay more than the minimum even if its 20 dollars more per month.
2. Begin to live a cash and debit card system, leave the credit cards at home. (emergenices only)
3. Call the companies you owe and negotiate a reduced rate on your cards.
4. If you have a car loan refinance it. (Lower rate and decreased time frame)
5. Use any additional income and tax return to pay off loans. (70% of tax return for debt reduction)
6. Use Balance Transfers only if they come with No transfer FEE option. (Chase has this often)
7. Read Dave Ramsey’s Books for the proper way to roll away debt. (Debt Snowball)
8. Debt: 1.Schools loan(Pay minimum), 2. Car Loan,(Pay minimum) 3. CC Debt (Pay maximum)

Now you can see what you need to do to get rid of debt in your household. After getting rid of the CC debt, begin paying the maximum to car loans until that is paid off. The secret is to not add on new debt while paying down debt or the downward cycle will never end for you. I have put togeather a poem for your reading pleasure:

Debt eats at your thoughts,

It makes your mind have reoccurring nightmarish afterthoughts,

It puts your mind in a trance and makes you think you can dance the rich dance,

When in reality you’re walking down the poor man’s trail, with a leaky pail.

Then the platinum clients are misled, down the path on judgment’s sled.

Bankruptcy is the next step, right before your untimely death.

Sorrow here and Sorrow there, But Amex and Discover didn’t care.

To all the naysayers who think debt is fair, just ask the poor soul laying there!

RichUncle EL

7 Steps To Avoid Debt!

1. Do not carry credit cards on you, use cash or debit cards.

2. If you see something you want to buy while shopping, sleep on it and if you still want it tomorrow then pay for it with cash.

3. Save up for big expenses, after making a budget make several categories for those major expenses you eventually have to replace.

4. If you have debt, use any savings to pay it down but keep at least 1 grand in a savings account for emergencies.

5. Attempt to increase your monthly cash flow and you will avoid supplementing living expenses with debt.

6. Keeping up with the joneses. Don’t buy things because people around you are spending like there is no tomorrow. You don’t really know their situation and you don’t want to fall under this dangerous cycle.

7. Keep fun money category in your budget around 5-10% of your paycheck. Blow it on whatever you need.

These are all steps we all should take to alleviate/eliminate the debt monster. If you keep good financial habits and stick to them you shall avoid being a salve to debt. Banks were set up to make the average person indebted to the system. They take your money give you 0% interest and loan out 90% of the money to borrowers while charging 7% or more in interest. In turn credit cards are another form of a loan these banks have used to make millions of dollars a year from the average person. If you begin to live a cash system you will be free from the banks trap and eventually will prosper in the money game.

*Please comment back if you already use a cash system and share how you have made it work for your situation.*

-For further information on getting a plan in place towards implementing a cash system email me.

Avoiding debt and using cash is another way to watch your money!