- Uop past midnight. 3am feeding. 5am hurts. Back to bed? #
- Stayed up this morning and watched Terminator:Salvation. AWAKs make for bad plot advancement. #
- Last night, Inglorious Basterds was not what I was expecting. #
- @jeffrosecfp It's a fun time, huh. These few months are payment for the fun months coming, when babies become interactive. 🙂 in reply to jeffrosecfp #
- RT @BSimple: RT @bugeyedguide: When we cling to past experiences we keep giving them energy…and we do not have much energy to spare #
- RT @LivingFrugal: Jan 18, Pizza Soup (GOOOOOD Stuff) http://bit.ly/5rOTuc #budget #money #
- Free Turbotax for low income or active-duty military. http://su.pr/29y30d #
- To most ppl,you're just somebody [from casting] to play the bit part of "Other Office Worker" in the movie of their life http://su.pr/1DYMQZ #
- RT @MoneyCrashers: Money Crashers 2010 New Year Giveaway Bash – $8,300 in Cash and Amazing Prizes http://bt.io/DQHw #
- RT: @flexo: RT @wisebread: Tylenol, Motrin, Rolaids, and Benadryl RECALLED! Check your cabinets: http://bit.ly/4BVJfJ #
- New goal for Feb. 100 pushups in 1 set. Anyone care to join me? #
- RT @BSimple: Your future is created by what you do today, not tomorrow"— Robert Kiyosaki So take action now. #
- RT @hughdeburgh: "Everything you live through helps to make you the person you are now." ~ Sophia Loren #
- Chances of finding winter boots at a thrift store in January? Why do they wear our at the worst time? #
- @LenPenzo Anyone who make something completely idiot proof underestimates the ingenuity of complete idiots. in reply to LenPenzo #
- RT @zappos: "Lots of people want to ride w/ you in the limo, but what you want is someone who will take the bus w/ you…" -Oprah Winfrey #
- RT @chrisguillebeau: "The cobra will bite you whether you call it cobra or Mr. Cobra" -Indian Proverb (via @boxofcrayons) #
- RT @SuburbanDollar: I keep track of all my blogging income and expenses using http://outright.com it is free&helps with taxes #savvyblogging #
- Reading: Your Most Frequently Asked Running Questions – Answered http://bit.ly/8panmw via @zen_habits #
Credit Counseling: Swimming Out of the Mess
I once read a news story about a horse that slipped into a manure pit.
Some people–much like the unfortunate horse–are up to their necks in a mess, paddling for all they’re worth, wondering how to get out and panicking about the apparent hopelessness of their situation.
The mess I’m referring to is–of course–debt.
Fortunately, there are some life preservers out there.
The simplest option is a debt snowball. You just list all your debts in order from smallest balance to largest. Then, focus all you energy on paying off the smallest, while making minimum payments on the rest. When the smallest debt is paid off, throw that money at the next smallest balance. Eventually, all of your debts go away.
What are your other options?
There are debt consolidation loans, debt consolidation programs, horrible debt settlement plans, and even bankruptcy. There’s a whole shark-infested reef of options, some of which will make things much, much worse for you. What to do?
Take a look at credit counseling. Credit counseling is designed as a way to educate debtors on their options, and how to pursue those options. A good counselor will look at your income, your debt, and your spending habits and help you understand what went wrong and how to avoid it.
The trick is to find a good counselor.
First, search for approved and licensed counseling organizations here.
Once you have a list of candidates, you can start trimming it using these steps:
- Ask them for information. Good agencies will send you information about itself and its services at no charge. If the balk, run.
- Are they nonprofit? In many places, credit counselor must be nonprofit to operate legally. Whether or not it’s a legal requirement, consider making it your requirement.
- Ask about their fees and get it in writing. Is there a setup fee? Monthly fees?
- Will there be a signed agreement? If there is, be sure to read it, first.
- How do they train their counselors? What are their qualifications?
- How are the employees compensated? Do they get bonuses if you sign up for certain services? If they do, go elsewhere. Their first priority should be your needs, not getting a bonus.
Once you’ve found a company you’re comfortable with, schedule a counseling appointment. At the appointment, you can expect to go over your finances in detail, including your income, expenses, debt, and financial goals. You’ll review your options with the counselor and build an action plan.
From there, your job will be to stay on the plan and get yourself out of debt.
Have you ever met with a credit counselor?
What Happens When You Save
- Image via Wikipedia
I’m a debtor.
I’d like that to be otherwise, but I’m pretty close to the limit of what I can do to change that. Don’t get me wrong, it’s changing, but there is a limit to how many side projects I can take on at one time. So, I’m in debt and likely to stay that way for the next couple of years.
As part of my budget, I set up a few categories of items that are either necessities or “really wants” without being immediate expenses. For example, I’m setting aside some money each month for car repairs, even though my car isn’t currently broken. When it comes time to fix something, I hope to have the money available to fix it, without having to scramble or <spit> tap into my emergency fund.
All told, I have about a dozen of these categories set up, each as a separate INGDirect savings account. Twice a month, a few hundred dollars gets transferred over and divided among the savings goals. Most of these goals are short-term; they will be spent within the year, like the account for my property taxes. Some of them are open-ended, like my car repair fund. Some are open ended, but will eventually end, like the fund to finance my son’s braces. All of the accounts are slowly growing.
As I’ve watched the progress of my savings accounts, I’ve noticed something funny.
My confidence is up.
It may only be a few thousand dollars, but it’s more money than I have ever had saved. The vast majority of this money will be spent over the next few years, but having it there, now means that I have tomorrow covered. For the first time in my life, I’m not living paycheck to paycheck. No matter what happens, I know I can make ends meet for a couple of months. That fact alone has reduced my stress level more than I could have imagined.
Two years ago, I was sure I was going to file bankruptcy. Now, I’m looking at being just two years away from having all of my debt gone. I have faith that my future will be bright, and only getting brighter. If I can dig myself out of this hole once, I can do it again, no matter what happens.
This has brought a calm that I can’t easily explain. I don’t have to worry about where next week’s groceries are going to come from, or how we’re going to afford braces in a couple of years.
Having an emergency fund and some auxiliary funds has been entirely worth the work we’ve done for last two years. Have you noticed any changes as you pay off your debt and build savings?
6 Questions to Financially Get to Know Each Other
This topic has been blatantly stolen from Budgets are Sexy.
1) How do you spend: cash, debit or credit? I use cash almost exclusively. I live in Minnesota and have two small children, so bundling the brats up to go inside the gas station to pay is nuts. Gas stations get the debit card. Online shopping, or automatic payments set up in the payee’s system are done on a credit card that gets paid off every month.
[ad name=”inlineright”]2) Do you bank online? How about use a financial aggregator (Mint, Wesabe, Yodlee, etc.)? I bank online. I use USBank for my daily cash flow, INGDirect for savings management and Wells Fargo for business. I used Mint strictly as a net worth calculator and alerting system. I use Quicken to manage my money and a spreadsheet for my budget, but I really like the quick, hands-off way that Mint gathers my account information and emails low balance alerts.
3) What recurring bills do you have set on autopay? Absolutely everything except daycare, 2 annual payments, and 1 quarterly payment.
4) How are your finances automated? I use USBank’s billpay system, instead of setting up autopayments at every possible payee. This gives me instant total control and reminders before each payment. The exceptions are my mortgage, netflix, and Dish. My mortgage company takes the money automatically from my checking. The other two hit a credit card automatically. Our paychecks are direct-deposited and automatically transferred to the different accounts and banks, as necessary.
5) Do you write checks? If so, how often? Once per week, for daycare. Occasionally for school fundraisers.
6) Where do you stash your short-term savings? I have quite a few savings accounts with INGDirect to meet all of my savings goals. For the truly short term, I add a line item in Quicken and just leave the money in my checking account.
Who’s next?
Saturday Roundup
- Image via Wikipedia
I’ve got a birthday party today and a class to teach tomorrow. Sometimes I think I take on too much, but it’s hard to roll that back when the side-hustles are all making a bit of money. What I need to do is make the side-hustles profitable enough that my straight job is optional.
In other news, I’m 10 days away from my first blogging anniversary(here). I’ll have to come up with a way to celebrate that.
Favorite posts this week:
GOOG-411 is shutting down, but there are alternatives. My favorites are Google SMS and Bing-411.
I’m a Zimbabwean quadrillionaire due to their version of “quantitative easing”. If you’re not pushing an agenda, QE is also known as devaluing the dollar.
I’m happy to be living in the future. When I told my wife this story, she was ready to cry at the beginning, but had to see the pictures by the end. Yay, technology!
And finally, thanks to Chris, here’s a primer on the absurdities of the security theater known as TSA:
Carnivals I’ve rocked:
Experiences v Stuff was included in the Carnival of Debt Reduction.
Thank you!
If I’ve missed anyone, please let me know.
Teaching Kids about Money
Today, Mr Credit Card from www.askmrcreditcard.com is going to contribute with an article about things we can teach our kids about life and money. He asks that you check his best credit card offers page if you are looking for a new card
I honestly think teaching kids about money this is the most overlooked thing that most parents do not teach. Instead, kids learn from our behavior and how we treat money. But I really think the subject of how to manage money must be taught.
I have three kids and teaching them stuff is sure tough. But as a parent, I would like to instill good habits (including money habits). Here are some of the things I think we can do to teach them about various aspects of life that will affect their outlook about hard work and money.
Reward Hard Work hard and Not Just Results – Some kids are talented at certain things like math or baseball. Very often (in their early ages), they excel in school or sports without much effort because of talent. But very often, because of the talent, they do not develop the habit of working hard (because they do not have to). But as they grow older, they are going to face obstacles. If they do not learn the value of hard work and overcoming difficulties, they will hit the brick wall often. Teaching them the value of hard work (even if they are talented) is so important.
What has this got to do with money? Well, I think delayed gratification is one of the hardest thing to teach, so we try to praise our kids when they achieved something due to hard work. We tell them that they accomplished it because they worked at it and we explain that to be able to afford expensive things, they have to study hard, work hard and earn their own money!
Going to Shop Does Not Mean You Have to Shop! – There are various ways to go about doing it. One way is simply to explain concepts as they come along. For example, initially, my kids always wanted to buy stuff when they go to Toys R Us or anywhere else. To put a stop to this nonsense, we had to explain that just because we went to a shop does not mean we have to buy anything. We could be just looking, doing some research or simply buying a gift for someone else.
Ask Them What Happened To Stuff They Bought A While Ago – Another thing that we like to bring up to our kids when they want to buy something on impulse is to remind them of something they bought in the past and whether they are now still excited over it and playing with it. Chances are that they will say no! We found that this was a very effective way to make them realize that they should think twice before buying anything.
Teach Kids to Compare Price – Here is another technique we use: When we go grocery shopping, Mrs Credit Card asks the kids to compare prices of the cheapest cereals. We explain to them that even though they love a particular one, there are times when it is not the best time to buy it. They should only buy it if it is on sale. We also ask them to compare the price relative to the weight of the product to see which gives greater value for money. After a while, they catch on and only buy cereal that is on sale!
Make Them Work – I see lots of kids organizing lemonade stands outside their houses during summer. It could be to draw crowds for a garage sale or to raise money for a fundraiser. I think this is such a great thing as they can learn so many things just from selling lemonade. They can learn the the concept of selling things for a profit.
Another common task kids or teens take is to work to earn some money. It could be as simple as baby sitting, walking your neighbors dog or working at the ice-cream shop. Making them realize that they need to earn before they can spend is a good lesson.
Slowly Give Them More Responsibilities – As kids grow older, I believe in giving them more responsibility. It could be making the oldest kid look after their younger siblings. Or giving them tasks like clearing the trash, doing the dishes, etc. I know of some parents who give their teens prepaid credit cards to start teaching them about using “credit” (though it is not technically credit). Maybe that is a bad idea as you want them to know to manage a student credit card when they are old enough to get one.
Selling Things For Fund Raisers – One of the things that I admire about the Boys Scouts is that they are always doing fundraisers for their scouting trips and events (no money, no outings). It teaches them “cold calling” or more likely, approaching Dad and Mom’s friends to sell things like coffee beans and Christmas wreaths!
Teach Them Not To Waste Stuff – Another thing I like to emphasize to kids is not to waste stuff. Whether it is the water when they brush their teeth or making sure they do not waste food, we are pretty particular about this. I think this is a good mindset to instill in our kids.
Performance Matters More Than How Good Your Look – I find that kids like to buy fancy stuff and beyond a certain age, they are conscious about brands. I’ve mentioned this before, but when my kids first played baseball and soccer, they keep bugging me to get them the fancy gear. I had to keep telling my kids that how you perform matters more than your gear. After a couple of years of playing, I think they have finally come to realize this and no longer bug me about things.
It’s a Never-Ending Process – Teaching your kids about money and other things that are important is a never-ending process. But you have to do it when they are young because once they grow older, they tend not to listen to their parents anymore and are more likely to be influenced by peers.
Update: This post has been included in the Carnival of Debt Reduction.
