I'm In Debt

I'm In Debt http://www.destroydebt.com/blogs/debbie.html I'm In Debt www.destroydebt.com Thu, 01 Jan 2009 07:52:24 GMT webmaster@destroydebt.com webmaster@destroydebt.com Financial New Year Resolutions http://www.destroydebt.com/blogs/debbie/362-financial-new-year-resolutions.html http://www.destroydebt.com/blogs/debbie/362-financial-new-year-resolutions.html Thu, 01 Jan 2009 07:52:24 GMT Happy New Year!  I’m writing this while sitting on a train on my way to visit my business partners in Pennsylvania.  It is my first experience using the rail for travel and I have to say it’s quite the affordable and comfortable way to go long distances!  The only issue I’ve had on my...
I absolutely the “new year”. It’s just the perfect time to reflect on what you’ve done so far and what you’re about to do with your life. It’s an opportunity to make changes and improvements in your life. If you’re in debt, as many of us are these days, when would there be a better time to resolve to get OUT of debt? As you’re making your new year’s resolutions to lose weight, get a new job, become famous or whatever you plan to do this year – why not develop your financial goals for 2009, as well?

Here are some tips to creating a financial new year resolution:

Automatic Savings Plans

The most common piece of advice people will give you regarding your finances is to pay yourself first. For years I fought against this with the excuse that I wasn’t making enough money to pay all of my bills, how in the world could I ever put any money into savings?

The trick is to save consistently, even if it’s not a lot. So if you feel like you live paycheck to paycheck and don’t make enough money, set aside $2 a week, or some other trivial amount, and I guarantee you won’t miss it. As you are able, increase the amount you save .

Debt Reduction Plan

The best way to get into debt is to have no plan regarding your finances. No budget, no goals . The best way to STAY in debt is to live without a budget and expect your money will manage itself. If you have debt and are ready to get rid of it, you need to have a plan.

-do it yourself debt reduction plan

-pyramid

-debt consolidation

-debt management companies

Money Management

The final piece of your financial new year resolution should be an ongoing money management plan. A money management plan is basically a budget, only it sounds nicer! When you’ve worked out your debt repayment plan, start thinking about what to do with the rest of your money. If you have more income than you require to pay your bills, pay more on debt and set some aside to save or invest. Have a plan in mind for what you will do when you receive any unexpected money, to prevent blowing it or letting it get absorbed into your regular money.

Good luck with your financial goals!]]> The Carnival of Family Life http://www.destroydebt.com/blogs/debbie/339-the-carnival-of-family-life.html http://www.destroydebt.com/blogs/debbie/339-the-carnival-of-family-life.html Mon, 15 Dec 2008 06:13:00 GMT We're pleased to be hosting the December 15th, 2008 edition of The Carnival of Family Life: Education Becky presents Making it Up As We Go Along posted at The Life Without School Community Blog. Erin presents The Benefits of an Inclusion Classroom posted at School Psychologist Blog Files. Sh...
Education

Becky presents Making it Up As We Go Along posted at The Life Without School Community Blog.

Erin presents The Benefits of an Inclusion Classroom posted at School Psychologist Blog Files.

Shen-Li Lee presents Tailor-Made Flash Cards for Your Child posted at Babylicious.

GrrlScientist presents The Hungry Scientist Handbook: Electric Birthday Cakes, Edible Origami, and Other DIY Projects for Techies, Tinkerers, and Foodies posted at Living the Scientific Life, a review of Patrick Buckley and Lily Binns' entertaining and informative romp through twenty "kitchen science" projects.

Donald Latumahina presents Essential Skills for Success: Learning Skills and People Skills posted at Life Optimizer.

Family Cooking & Recipes

Stephanie presents Winter Comes Too Soon posted at Stop the Ride!. Family Crafts and Activities

Amy Smith presents Nativity Crafts and Activities posted at Kids Love Learning.

Stephanie presents 5 Simple Christmas Crafts for Kids posted at Make It From Scratch.

Family Finance

Helene Zemel presents Finding a Great Home-Based Business posted at Work at Home Mom and Dad. "With the high cost of daycare and gasoline," Helene writes, "now may be a good time to start a home-based business," suggesting some businesses and offering things to look out for.

The Smarter Wallet presents Create Your Family Holiday Traditions and Save Money! posted at The Smarter Wallet.

One Family presents Best Value Notebook/Laptop and Netbook/Mini-Notebook Computers - Comparison/Review (ASUS Eee PC, Acer Aspire One, MSI Wind, HP Mini-Note, Dell Mini 9) posted at One Family's Blog, a comparison of the best value laptops and netbooks to assist frugal shoppers decide which is best for general family use.

Dana Tuetken presents How to Stop Overspending at Christmas posted at Not Made of Money.

Nicki presents Can You Afford To Work? posted at Domestic Cents.

Elizabeth presents Home Economics Ingenuity 101 - Re-purposing posted at Suburban Wife's Daily Dollar Diary. "Household frugality is about more than buying generics and clipping coupons," according to Elizabeth. She advocates buying high-quality, long-lasting products and using them to their fullest potential.

Credit Shout presents How To Use Credit Card Bonus Points For Holiday Shopping posted at CreditShout.

Raymond presents Credit Card Offers For People With Bad Credit Or Poor Credit History posted at Money Blue Book.

Silicon Valley Blogger presents Last Minute Gift Ideas and Shopping Tips For Holiday Procrastinators posted at The Digerati Life.

The Smarter Wallet presents 12 Homemade Gift Ideas To Fit A Small Budget posted at The Smarter Wallet.

Susan Gaissert presents Things We Do to Save Money posted at The Expanding Life. Family Health and Wellness

Atif Farid presents Is your child anemic? posted at dratiffarid.

Relax presents How to Become a Sleeping Winner posted at The Wise Curve. Good quality sleep is achieved with progressive muscle relaxation, and a proper matress and pillows.

Scott Lee presents 10 Reasons to See a Therapist (Even When You Don't Need Therapy) posted at ScottLee.Name.

Super Saver presents Older and Slower posted at My Wealth Builder.

Alvin Hopkinson presents How to Gain Comfort posted at Relief From Gout, explaining that there are different treatment methods, depending on severity. Relief comes from a combination of lifestyle changes, dietary modifications and exercise.

Aparna presents Fish oil for a younger looking skin posted at Beauty and Personality Grooming, Did you know that it keeps your face young?

Peter Garant presents Air Humidifiers for a Cool and Misty Environment posted at Humidifier Reviews, Peter suggests that a dearth of humidity inside the house, especially in winter, may be making breathing difficulty for your family members.

Family Humor

Stephanie presents Trying to out smart me again.... posted at Adventures in the 100 Acre Wood.

Family Pets

GrrlScientist presents Ten Tips to Keep Your Pet Birds Safe This Holiday Season posted at Living the Scientific Life. GrrlScientist presents Gift Wrapping With Bird Companions posted at Living the Scientific Life, saying, "I thought you might find this little essay amusing about wrapping gifts when there is a parrot in the house." Family Relationships and Self-Improvement

Erica Douglas presents Stepping Outside the Comfort Zone posted at LittleMummy.Com.

cate3 presents Update on "Baby Bop" posted at Why Homeschool, sharing how her family has recently grown.

Vickie Sloderbeck presents Mark(er) My Words — Sidetracked Moms posted at Sidetracked Moms. Vickie Sloderbeck presents Make Your Bedroom Your Favorite Room in the House posted at Joyful Journey Productions.

Family Spirituality/Belief/Worship

Minister Mamie L. Pack presents The Phone Booth posted at The Life I Now Live.

Family Travel

Sheila Scarborough presents Getting nautical at Nauticus in Norfolk, Virginia posted at Family Travel Guide. This interactive Virginia museum, complete with a battleship, offers seafaring and maritime history, Parenting Tips and Advice

Chief Family Officer presents Choosing a new car seat is not that easy posted at Chief Family Officer.

Condo Blues presents 10 Green Gifts That Suck posted at Condo Blues, opining that "there are a lot of good green gifts out there. None of them are on this list."

Joe presents Child Locators posted at GPS Tracking Watches. There are two main types of locators to choose from - long and short range. This article helps you select the best for your family, based upon your needs.

MoneyNing presents Let Your Children Handle Their Own Finances posted at Money Ning, suggesting that you "give your children a chance to make mistakes."

Anna Migeon presents Suzuki Gives A Lesson in More Than Piano: How to Fake It Until You Make It with “Reverse Psychology” posted at French kids don't get fat. According to Anna, "Getting kids to eat involves quitting while you're ahead."

Alvaro Fernandez presents Games for Brain Health - Novelty, Variety and Challenge posted at SharpBrains, arguing that gaming can be good for your brain.

HowToMe presents How to Find ?Free? Travel Snack ups posted at HowToMe.

Kevin presents Kids Can Make a Difference - Teaching Kids Charity posted at More4kids.

Thank you for participating in and supporting this week's Carnival! You definitely don't want to miss next week's very special, annual Merry Christmas Edition of the Carnival at Colloquium! If you would like to participate in next week's edition of the Carnival, click here to submit the link to and relevant information about your posts. If you have questions, be sure to review the Carnival guidelines before submitting your posts. Would you like the Carnival to pay a visit to your site? Check out the hosting schedule, select a date, and then drop a line advising what week you would like to host.]]> Two Carnivals Making a Stop Here at Destroy Debt.... http://www.destroydebt.com/blogs/debbie/336-two-carnivals-making-a-stop-here-at-destroy-debt.html http://www.destroydebt.com/blogs/debbie/336-two-carnivals-making-a-stop-here-at-destroy-debt.html Tue, 09 Dec 2008 01:47:58 GMT In order to bring you a good variety of personal finance, budgeting, get out of debt and family related content, I will be hosting two different carnivals in the next two weeks.  A blog carnival offers you a way to find a bunch of articles on the topics you want to read about all in one place! ...
On December 15th, check here for the Carnival of Family Life. If you are a blogger and want to submit your family related content, just submit here and I'll do my best to include your article.

On December 22nd, the Carnival of Debt Reduction will be published on this blog. This should give you your weekly fix of get out of debt strategies and success stories to motivate you to reduce debt and avoid getting into more debt through the holiday season. If you'd like to include an article you've written to the Carnival of Debt Reduction, send it in here.]]> Get Paid to Interview for Jobs http://www.destroydebt.com/blogs/debbie/332-get-paid-to-interview-for-jobs.html http://www.destroydebt.com/blogs/debbie/332-get-paid-to-interview-for-jobs.html Sat, 06 Dec 2008 11:42:18 GMT I came across a very interesting website today that I had to share.  It's a unique concept offered through NotchUp.com.  Basically - people who are found and interviewed are paid for their time at the interview.  At first glance, this sounds ridiculous, and you're probably wondering w... NotchUp.com. Basically - people who are found and interviewed are paid for their time at the interview. At first glance, this sounds ridiculous, and you're probably wondering why a company would pay someone to interview at their company... but it makes sense (to me, anyway), and here's why:

When companies hire headhunters/recruiters to fill a position, they typically spend 20% of the first year's salary of the chosen candidate. For a job that pays $65,000 per year to start, the company pays the recruiter $13,000 to help find someone who can fill that position.

Studies show that it takes about six weeks for a company to fill a position when posting the job on big job boards. You're only getting the ad in front of people who are actively looking for a new job at the moment your ad is posted on the site, right? So you are limited in the number of potential candidates you can get the job in front of. If it costs $100 per week to run your classified ad and 6 weeks to fill the position, you've paid $6,000 in ads. Not to mention, every week that a position is unfilled in a company results in lost revenues (either directly or indirectly).

So - the short of it is, it's expensive for companies to fill vacant positions through traditional means. So what NotchUp.com does is allow people to create profiles (free). If your application is approved, the profile is added into the system, either anonymously or using your real name if you aren't worried about your current employer finding you out! The site will suggest an interview rate based on your industry and experience, and then companies looking to hire may ask you to interview if they feel you are a good match. They'll pay you the interview fee you set up, as long as you show up to the interview on time, and are serious about the interview.

It's a better way to "job search" because really, you'll have to be a serious candidate for the position in order for a company to pay for the interview time, right? I can't tell you how many interviews I went on when I first graduated college that I could actually tell the interviewee's had no interest in me from the start (why did they call me in at all then?? To fill quota's probably, they most likely already had the sister of the CEO in mind for the position before anyone was called in to interview...)

Even if you love your job, it's not a bad idea to have your profile on the site. The worst that could happen is you are offered an interview and you decide not to take it because you're not ready to leave your job. The best that could happen is you're paid to interview for a position that you end up liking even more than the job you already have!]]> Starting Early and Saving Often http://www.destroydebt.com/blogs/debbie/325-starting-early-and-saving-often.html http://www.destroydebt.com/blogs/debbie/325-starting-early-and-saving-often.html Sat, 29 Nov 2008 05:24:36 GMT I have never fully understood how the financial markets work - stocks, bonds, mutual funds - they're all a bit of a mystery to me.  What I do understand is the power of compounding interest, and the fact that if you start saving money at a younger age you'll end up with more money by the time y...
Using that basic knowledge, I determined that if I started my children with some sort of savings now, and contribute to it as often as I can, they'll be better off financially when they're adults than if we waited until they were teenagers starting their first jobs.

Did you know 529 plans allow you to open them with a small amount? The 529 education plans are state-run, so the actual amounts may vary depending on the state you live in, but I opened NY 529 direct plans with $25 each at savingforcollege.com. Once I set the accounts up and chose the investment strategy, I decided to auto-deposit money each month from my checking account. This means I don't have to remember to contribute to their fund, as I set it up to occur once a month, automatically. I also connected my Upromise account, the rewards program that gives back a percentage of money I spend on groceries and other items at no additional cost to me; and set up a registry at FreshmanFund.com. FreshmanFund is a gift registry that allows friends and family to make contributions to the child's registry - and then the contributions can be transferred to their 529 accounts.

Setting up the 529 accounts for each of my children, connecting to Upromise and setting up the registry on FreshmanFund.com to connect to the 529 plans took me a total of 40 minutes and cost me $50 (I started each account with $25). If you're looking to help your children start early and save often, I highly recommend spending 40 minutes to set yourself up!

I'm torn on the value of higher education. Don't get me wrong, I'm happy I went to college for many reasons, but I think in most cases on-the-job experience is far more valuable than a piece of paper that says you graduated college. I tend to think that unless you are going to college for something extremely specific - like becoming a doctor, dentist, lawyer, etc - chances are you can learn the information you need on your own and through on-the-job training and get more practical knowledge than you get studying the courses at college.

I went to college. I have a Bachelor of Science degree in Information Systems from the College of Saint Rose in Albany, NY. I minored in Business Administration. I even took a semester of graduate school towards an MBA before I realized I was a little crazy. We didn't have college savings when I started. I started in a State school, and did 3 years at the private college combined with classes online to save some money, and then took a semester of graduate level studies online. I've been paying on student loans since I was IN SCHOOL, even though I could have deferred them all until I graduated. I still owe over $45,000 and I've been out of college for over 6 years.

I loved my college years. I loved the classes, meeting new people, and all the experiences that went with it. But I don't love the price tag and don't feel that my degree made things any easier. I entered the "real world" with almost $80,000 in college debt (and that's after receiving scholarships and financial aid that didn't have to be repaid!) I believe I would have had an easier time if I didn't have all of that debt to start out my adult life.

Even though I feel that way, I wouldn't discourage my children from going to college. What I'd like to do for them instead, is set them up with a college fund that won't prevent their ability to get need-based financial aid (if we are still in need of assistance 12 years from now); and that makes it possible for them to go to college if they choose without getting into major debt. When my children are old enough to go to school, they're looking at $210,000+ for four years tuition at a local private school like the one I attended. I'm pretty sure the average annual income isn't going to increase as fast as the cost of college, so I'm applying the "start early, save often" rule to helping them prepare for college (or whatever they choose to do with their lives as they become adults.)

That's why I started the 529 accounts now, for my son's 6th birthday and my younger son's 3rd birthday. ]]> How to Recognize Offline and Online Money Scams http://www.destroydebt.com/blogs/debbie/315-how-to-recognize-offline-and-online-money-scams.html http://www.destroydebt.com/blogs/debbie/315-how-to-recognize-offline-and-online-money-scams.html Sat, 15 Nov 2008 04:03:16 GMT How many times have you won the Nigerian lottery, without ever having entered?  Do you have a few hundred rich relatives in Africa or some other country, where you are the only living "next of kin" who could receive thousands or millions of dollars if you just send enough money for the courier ...
These are two examples of widespread, online money scams. My email inbox fills up with this sort of stuff on a daily basis. It's easy to spot online scams through emails that you get over and over again, but what about when something new comes up, that COULD be true?

I know someone who was almost the victim of a very clever offline scam. She signed up to be a mystery shopper - and we all know that there are REALLY mystery shopper jobs that exist, which makes this scam harder to spot at first. A few days later, she received a letter of congratulations - she was selected to be one of their workers. Her first task would be to try out the Western Union Service, so we can see how well the customer service is and if they deliver everything they claim to provide to their customers.

So far - everything seems normal, right? Also enclosed in this letter was instructions for her first assignment, and a check for over $3,000. The check looked real. It had watermarks and a company name and address in the left hand corner. The instructions told her that she should deposit the check into her bank account, send all but $400 to another company through the Western Union Service (to rate their service) - and keep the $400 as her pay for doing the work. It also promised many more assignments to come, averaging $400-$600 per week in pay.

The instructions specified that the money had to be sent through Western Union BEFORE a specific date, which was less than 2 weeks away from the date she received the letter and the check. This still doesn't raise too many red flags, since all assignments have deadlines and they certainly wouldn't want someone to hold on to the money for too long - what if they forgot to send it at all?

And this is where you should start thinking - hey wait a minute... My friend never signed any contracts with this company, she had never given them anything other than her name and address. Would any real company anywhere simply send you thousands of dollars without any contracts in place to protect them, should you not follow through with your end of the work?

Do you know what this type of scam is? It's becoming the most popular offline money scam - and was recently referenced in our local daily newspaper, too, with many interviews of unsuspecting people falling victim to this scam.

If you deposit the check and send out the money on or before the deadline date they give you, a day or two later the "check" you deposited will be reported as fraud. There is no real money in your account from this deposit. The reason this scam works is because banks have to make the money available to you within a certain time - even if they haven't received the funds from that check deposit yet. So while they're working on finding the funds to back the check you've deposited, you've already withdrawn the money from your "available balance" to send via Western Union or whatever service your scam letter tells you to use, and BAM! You get hit with a notice from your bank that you are $3000 overdrawn because the deposit you made was with a fraudulent check.

No matter how bad your money situation is - don't fall victim to these scams. It's easy to get caught up in the money - an extra $400 a week or even ONE TIME is enough to make people overlook some obvious clues that the entire thing is not real. If you don't recognize this as a scam - you're left with having to recover that $3000 or whatever the amount may have been, and chances are, people who are targeted for these scams simply do not have extra money to play around with. You end up in worse shape financially than before you started.

You can check for scams by searching online - I showed my friend the name of her company and the thousands and thousands of complaints made against that company (and also about 20 companies with similar names). Do your research before embarking on any journey to increase your income.]]> In Debt Until December 2011 http://www.destroydebt.com/blogs/debbie/312-in-debt-until-december-2011.html http://www.destroydebt.com/blogs/debbie/312-in-debt-until-december-2011.html Fri, 07 Nov 2008 04:17:32 GMT For months, I bugged the owner of DestroyDebt.com to create some budget and debt tracking tools with reports that I could use to really look at my financial situation.  I used the budget tracking tool first to enter in all the "stuff" I spend money on each month and compare it to my average mon... DestroyDebt.com to create some budget and debt tracking tools with reports that I could use to really look at my financial situation. I used the budget tracking tool first to enter in all the "stuff" I spend money on each month and compare it to my average monthly income. That alone is always an eye-opening experience. Most of us know whether or not we're in debt, but don't realize to what extent until we actually force ourselves to write out each and every monthly payment and living expense and view the total side-by-side with the average monthly income. If you haven't done that in awhile, I suggest you click on "budget tracker" under the Tools section here on DestroyDebt.com and see for yourself how good (or not) your financial situation is at this exact moment.

Since that didn't depress me as much as I was expecting, I decided to move forward and set up the debt tracker. I added most of my debts (individual credit cards with the total balance, minimum monthly payment required, and interest rate as well as personal loans I have). Doing this allows the system to create an approximate repayment plan, showing me how long it will take to get out of debt by making monthly payments. So once my debts were entered, I clicked on "edit your plan" from within my Debt Tracker tool, and decided to see how long it would take me to get out of debt if I paid $0 over the minimum payments each month. (We all know that paying just the minimum payments is bad and costs you hundreds or thousands of dollars in interest, but I just wanted to see).

My Snowball Payment Report told me: "You are currently $25,492.00 in debt. By using the snowball method and paying an extra $0.00 a month, you will be debt free in November of 2012 and pay a total of $27,249.57"

Then I decided to see what kind of difference I could make just by paying an extra $150 per month over the minimum payments. "You are currently $25,492.00 in debt. By using the snowball method and paying an extra $150.00 a month, you will be debt free in December of 2011 and pay a total of $26,325.36"

I shave almost a full year off my repayment schedule and save over $900 in interest. I've been debating whether I should be trying to save money each month for my future or pay off debt - a common question people have. It seems that unless I'm going to earn more than $900 in a year's time on the interest my savings would earn, I probably should be concentrating on applying as much money as possible to pay off my existing debts (and of course, avoid taking on new ones in the meantime!)

How long will you be in debt?]]> I'm in Debt - Who Should I Vote For? http://www.destroydebt.com/blogs/debbie/307-im-in-debt-who-should-i-vote-for.html http://www.destroydebt.com/blogs/debbie/307-im-in-debt-who-should-i-vote-for.html Sat, 01 Nov 2008 06:18:59 GMT Just 3 more days until Election Day, and as an American in debt, I'm most interested in how each of our presidential candidates are going to handle money situations.  Here's a look at some of the candidates' positions on issues that most likely affect your ability to repay the debt you're curre...
Immediate... Short Term Relief Efforts

Considering the financial crisis we're facing on a country-wide level, both candidates have proposed plans that are designed to jump start the economy as we head into 2009.

Senator Obama: Proposes $500 per individual/$1000 per family Emergency Energy Rebate. He also proposes penalty-free 401K withdrawals of 15%; and up to $10,000 out of IRAs. Minimum distribution requirements for retirement accounts will be temporarily suspended.

Senator McCain: Proposes an increase in the amount of stock loss that is deductible against ordinary income from the current $3,000 to $15,000. He also proposes cutting capital-gains rate on stock held more than one year to 7.5%; and would tax withdrawals made by seniors from IRAs and 401Ks at no more than 10%.

Expanding Affordable Health Care

With health care costs constantly on the rise, both candidates have plans to expand access to health care that is more affordable to families.

Senator Obama: Proposes income-related subsidies for health insurance through a newly created national exchange, expanded access to Medicate and State Children's Health Insurance Program with mandatory care for children. If employers do not contribute to the health coverage of their employees, they will be required to contribute a percentage of payroll toward the national plan (although small businesses will be exempt and eligible for tax credits on 50% of premiums). Projected decrease in the number of uninsured individuals would be approximately 20 million people.

Senator McCain: Proposes replacing the current income-tax exemption for health insurance premiums paid by employers with a refundable tax credit of $2,500 for individuals/$5000 for families. Unused credit would be placed into a Health Savings Account. If people are denied health coverage, his Guaranteed Access Plan would allow them to obtain insurance through a high-risk, state-run pool. Health insurance premiums would increase for families by about $389, but should be off set by increase in tax subsidies. This plan would also result in a reduction of uninsured people up to approximately 20 million people.

Income Taxes - Who is Gonna Pay The Bills?

Both our candidates are proposing plans that result in lower taxes overall, but the debate is over who will be paying the bills.

Senator Obama: Wants to cut taxes for middle-class families and increase taxes for individuals who make more than $200,000 a year and families who make more than $250,000. The top two marginal rates would extend to 36% and 39.6%. He would like to give seniors a break; if they earn less than $50,000 a year to stop taxing them all together. The top 1% of earners would see an average tax increase of $19,000.

Senator McCain: Proposes to raise the personal exemption for dependents from $3,500 to $7,000 gradually over a few years, and keep the top tax rate at 35%. The top 1% of earners would likely see a tax cut of more than $125,000.

]]> Stop Borrowing Against The American Dream http://www.destroydebt.com/blogs/debbie/304-stop-borrowing-against-the-american-dream.html http://www.destroydebt.com/blogs/debbie/304-stop-borrowing-against-the-american-dream.html Thu, 23 Oct 2008 03:26:34 GMT Most economists and financial experts will agree that the U.S economy will keep re-adjusting itself and eventually pull out of the latest slump we happen to be in.  The U.S economy seems to bounce back whenever it does fall, but as consumers, it's time we stop falling for quick financial "fixes...
Taking out a college loan (or two, or three...) and a home mortgage is something most people do to help realize that "American Dream". Those debts can even be considered good debts. But is it really necessary to borrow against our future to buy that big screen, fully loaded, plasma tv with the swivel wall mounts? Or swipe our plastic as we speed our way through the drive thru for lunch on the run?

Is buying what we want, when we want it part of the American Dream? Maybe for the split second as we install the new TV and watch our favorite show; or the time it takes us to eat a cheeseburger and fries - but what about when the bills start rolling in? That's when we realize that our American Dream has turned into the American Nightmare.

Want a stable financial future? Then it's become necessary to save money. We can't continue tos pend money before we make it all the time. I'm guilty of this, too. I've got tens of thousands of dollars remaining on college loans, and I've been out of college for more than five years now. I've got some credit card debt again, after finally getting out from under credit card debt a few years ago, because I had some "must-have" items that I didn't have the cash upfront to get (refrigerator, washing machine, dishwasher.. yes, all at once.) But had I had substantial savings, I wouldn't have had to charge these items!

For the last half-century or more - there didn't seem to be a huge need to save money. We could refinance our homes to take that cruise we'd been wanting to take; get guaranteed school loans to send our kids off to college.

The rules have changed. According to Stephen J. Church, an investment consultant who studies consumer finance statistics, he's concluded that:

Before the 1990's:

80% of income was used for daily living expenses and the purchase of goods (like the tv); 10% of income was used to repay debts; 10% was used for saving and investing.

By 2006:

89% of income was used for daily living expenses and the purchase of goods; and 13% of income was used to repay debts.

The entire amount of income was being used, and none was being saved. To make it worse, families were borrowing even more just to get through the average year.Families with homes "rode it out" by taking money in the form of home equity loans. When home prices skyrocketed in the 1990's to 2000's; lower and middle class families borrowed aggressively and their savings reached NEGATIVE 10%.

There is only one real way to get out of this mess - and that is to save more, spend less. And stop borrowing against the American Dream.]]> Budgeting When You Have Variable Income http://www.destroydebt.com/blogs/debbie/302-budgeting-when-you-have-variable-income.html http://www.destroydebt.com/blogs/debbie/302-budgeting-when-you-have-variable-income.html Thu, 16 Oct 2008 03:26:58 GMT If you're like most self employed people, or people who live on commission, you may find it especially difficult to create and stick to a budget.  When you don't get a regular paycheck weekly, bi-weekly or monthly that will be about the same amount each pay period - trying to figure out how to ...
Here are some budgeting tips for budgeting a variable income:

What You'll Need

*checking account (preferably a free checking with ability to pay bills for free online)

*savings account (preferably one with online access and/or connected to your checking account for ease of transfer)

*method to track income and expenses (budgeting software, spreadsheet, simple notebook, etc)

What You'll Do

It's actually not possible to budget irregular income. One way around it is to use an extra account, like a savings account, to create a buffer and make it possible for you to budget your expenses and income using a consistent amount each week (or month, however you like to budget).

1. List everything you've got to pay. Living expenses, debts that you repay, any goals or entertainment funds you feel you need, and put them in order of importance. Your list would start with the absolute necessities, and end with anything that's just nice to have (but that you COULD live without if you had to). Here's an example of what your list may look like

Food
Rent/Mortgage
Taxes
Transportation Costs (car payment, gasoline, maintenance for vehicles, car insurance)
Credit Card Payments
Loan Payments
Extra Debt Payment (if trying to "snowball" your debt away for example)
Entertainment (restaurants and take out food, movies, etc)
Vacation

budgeting categories