Enemy of Debt http://www.enemyofdebt.com Motivational Money Management Mon, 27 Apr 2015 02:00:59 +0000 en-US hourly 1 Are You Lying To Yourself About Your Finances? http://www.enemyofdebt.com/are-you-lying-to-yourself-about-your-finances/ http://www.enemyofdebt.com/are-you-lying-to-yourself-about-your-finances/#comments Mon, 27 Apr 2015 02:00:59 +0000 http://www.enemyofdebt.com/?p=16426 Enemy of Debt - Are You Lying To Yourself About Your Finances?

Today’s post is one of a network of posts throughout the personal finance blogosphere taking part in the Financial Literacy Awareness Carnival.  The Carnival is being hosted by Shannon at The Heavy Purse honoring April as Financial Literacy Month. Once you finish this post, head over there to check out other great articles linked to by the carnival. Enjoy! Are you lying to yourself about your finances? Don’t be so quick to answer that question, maybe you should think about it a little harder. You will never reach your full financial potential if you’re lying to yourself about your finances, […]

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Enemy of Debt - Are You Lying To Yourself About Your Finances?

EOD_FinanciallyREal2Today’s post is one of a network of posts throughout the personal finance blogosphere taking part in the Financial Literacy Awareness Carnival.  The Carnival is being hosted by Shannon at The Heavy Purse honoring April as Financial Literacy Month. Once you finish this post, head over there to check out other great articles linked to by the carnival. Enjoy!

Are you lying to yourself about your finances? Don’t be so quick to answer that question, maybe you should think about it a little harder. You will never reach your full financial potential if you’re lying to yourself about your finances, so you’d better be sure. How about we examine the different ways you may be lying to yourself, then we can revisit the question.

Setting Unrealistic Spending Expectations

Just because you have a budget doesn’t mean you’re being real about your spending. At one point I had $100 a week budgeted for groceries, and we exceeded it almost every week. We just weren’t being truthful about how much we could reduce our grocery spending. This resulted in having to make frequent budget adjustments to make up for the grocery overages. Eventually we raised our grocery budget to an amount that was more reasonable, and found another item we were able to cut to make our budget whole.

You can cut costs, but you also have to be real about the basic costs of things.

I Can’t Cut My Spending

You can’t, or you won’t?  When Vonnie and I enrolled in our debt management program, it was an iterative process over the course of months before we really came to grips with how much we had to change our lifestyle to fit within our means.  It also amazed us at just how little we could get  by with if we really had to.

If you’ve fallen on hard times, you have to have a very honest discussion with yourself about what spending is really necessary.

I Can’t Increase My Income

We all wish we made more money. Some people stop right there, hoping their boss calls them into their office and gives them a pay raise. Other people go find a better paying job, or a side hustle to kick their income up another notch.

You can increase your income, if you’re willing to put in the effort.

I Can Save For Retirement Later

Retirement always seems like something that is far off on the horizon. It seems like an eternity away, so what’s the harm in waiting a few years to start saving? You can certainly do so, if you want to push retirement off as well. Time is a huge factor in determining how much you will have stashed away for your golden years.

If you put off saving for retirement, you may actually be putting off retirement.

I’m Comfortable With My Credit Card Debt

You’re paying all your bills each month, including your credit card bills, and still have money left over. You’re proud of yourself, thinking you have everything under control. You know you have credit card debt, but since you’re making your payments each month you’re OK with it. Let’s do a little exercise. Add up how much you’re paying each month in credit card payments. Now think about what you could do with that money in your pocket instead.

Are you still comfortable with your credit card debt?

It’s sometimes hard for us to see things in our life how they really are because we become desensitized to them. We need to hold them up to the mirror and look at their reflection. So what do you think after reading the symptoms of lying to yourself about your finances?

Are you being real about the state of your finances?

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Five Objections to FX Trading and Why You Shouldn’t Listen to Them http://www.enemyofdebt.com/five-objections-to-fx-trading-and-why-you-shouldnt-listen-to-them/ http://www.enemyofdebt.com/five-objections-to-fx-trading-and-why-you-shouldnt-listen-to-them/#comments Sun, 26 Apr 2015 20:01:12 +0000 http://www.enemyofdebt.com/?p=16437 Enemy of Debt - Five Objections to FX Trading and Why You Shouldn’t Listen to Them

Don’t know about you but I’ve heard enough objections to last me several life-times. You want to leave work? Oh, it is so hard to get another job. You want to start your own business? Oh, but most of them fail. You want to run an ultra-marathon? Do you know how many people don’t finish? You want to make enough money to retire in four years’ time? This is impossible. And so it goes about almost anything. You see, I may be an optimist but I’m not delusional; well, not usually, anyway. I know that some things are difficult to […]

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Enemy of Debt - Five Objections to FX Trading and Why You Shouldn’t Listen to Them

fx trading

Don’t know about you but I’ve heard enough objections to last me several life-times.

You want to leave work? Oh, it is so hard to get another job.

You want to start your own business? Oh, but most of them fail.

You want to run an ultra-marathon? Do you know how many people don’t finish?

You want to make enough money to retire in four years’ time? This is impossible.

And so it goes about almost anything.

You see, I may be an optimist but I’m not delusional; well, not usually, anyway. I know that some things are difficult to achieve, others may be impossible at the time and yet another group are not worth trying to achieve.

Mastery of life and personal finance is to be able to distinguish between these.

FX trading is no exception. Don’t believe me?

Okay, just try and mention to your friends that you are going to have a go at one of its forms: spread betting or contracts for difference.

What you’d very likely hear is that you’d be better off going straight to Las Vegas and having fun in the casinos.

I won’t tell you that FX trading is safe and guaranteed investment: I told you already that I’m not delusional. But I’d very much like it of you don’t try spread betting (or CFD) to do it for the right reasons; not because of empty objections generated by inertia and lack of thoughtfulness.

What is FX trading?

FX is short for ‘foreign exchange’ or the changing of one currency into another. With the advent of Fiat currencies (these are currencies that are not underpinned by gold, other precious metal or a commodity which is actually all currencies at the moment) currencies are allowed to float and the market sets the price.

This market is estimated to be in the region of 6 trillion dollars per day. Yep, I can imagine this kind of number as well. It is $6,000,000,000,000 which is a lot of zeros.

More importantly, this market is to a degree speculative and it also very dynamic: currencies change value relative to each other all the time.

This open the two ways to make money FX trading by spread betting and CFD. In both cases you place a bet on whether a currency will go up or down relative to another currency but there are important legal differences between the two. There are also the small matters of legality and tax: in the US, for instance, spread betting is illegal and in the UK it is not taxed.

Go figure!

Still, many fortunes have been made by FX trading. Have you heard of George Soros? He is the dude who helped me get to the UK (Soros Foundation Fellowship) but he is better known for borrowing a lot of money and shorting the British pound in the 1992. His gamble paid off and he made $1 billion in the space of several weeks.

Five Objections to FX trading

Here are the five objections to FX trading and spread betting that, I believe, you shouldn’t listen to.

#1. It’s not an honest day’s work

It probably isn’t since your money makes money (or not).

While I understand some people’s obsession with hard work, I am still puzzled by the failure to recognise that it only gives you bad back and drains your life source. To get anywhere in life, you have to learn to work smart and make you money work for you.

You see, to win the game of wealth, it’s not enough to sell your labour or your reputation. You also ought to save and make your savings work for you. FX not being an honest day’s work is an inducement rather than an objection.

#2. It is gambling

Yes, FX trading (spread betting and CFD) is probably a form of gambling. Then again, gambling is really part of life. Every time you drive to work, you are taking a number of bets: you are betting that no-one will hit your car, that your house will still be standing when you get home and that nothing bad will happen to any of your relatives.

All investing is a combination of science, art and gambling. Your probability of success depends on the proportions you allow for each of those. For instance, the better grasp you have of CFD the lower role the gambling part will play.

#3. You need a lot of money to make profit

Strictly speaking, you don’t. But small capital will bring small returns – it is advised to use no more than 1% of you capital for trades at any point.

Big players play this one with very big money: professional traders working for investment banks may well stake a billion dollars on 1/100% change in price!

‘Normal’ people can dabble with small money. And they do!

#4. The middle man takes all the profit

The middle man – or woman – does take a profit from their activities but they also enable us to save money. Why should they work (for it is work) for nothing?

What you’ll have to do if you’d like to minimise the fees you pay per trade is to research the available FX platforms. There are thousands of these and the fees they charge are very different.

#5. You’ll lose all your money

This may happen. Again, you can lose all your money in any investment.

Learn to be careful. More specifically:

  • Don’t put all your investments (savings) into FX trading.
  • Don’t trade more than one percent of your FX trading account.
  • Be very strict with using the ‘stop-loss’ facility.

And remember: you’ll always have losing trades. The mastery is to win more than you lose.

Finally…

FX trading is certainly not always a plain sailing and it definitely isn’t a painless way to wealth. You may win and you may lose; the important thing is to win more than you lose.

FX trading is also not for everyone and you may well decide that it is not for you. I don’t do it, for instance. But I don’t do it not because of the objections discussed above; I don’t do it because I’m a compulsive gambler and it’s better to stay out of temptation’s way.

John, my husband, is another matter – he plays with his head not with his obsessions; and he wins more than he loses.

photo credit: Forex via photopin (license)

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13 Ways You Can Save Money On A Low Income http://www.enemyofdebt.com/13-ways-you-can-save-money-on-a-low-income/ http://www.enemyofdebt.com/13-ways-you-can-save-money-on-a-low-income/#comments Sun, 26 Apr 2015 03:01:36 +0000 http://www.enemyofdebt.com/?p=16433 Enemy of Debt - 13 Ways You Can Save Money On A Low Income

I get a lot of questions from readers wanting to know how they can save money on a low income, so I thought I would write a post about some of the suggestions I’ve been giving out that can help you put money in the bank, even when you’re living on a limited income.  I’ve also included some great resources along with the suggestions that will help you get started putting money in the bank right now!   You Can Still Save Money On A Low Income When you’re living on a small income, it can be especially hard to […]

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Enemy of Debt - 13 Ways You Can Save Money On A Low Income

I get a lot of questions from readers wanting to know how they can save money on a low income, so I thought I would write a post about some of the suggestions I’ve been giving out that can help you put money in the bank, even when you’re living on a limited income.  I’ve also included some great resources along with the suggestions that will help you get started putting money in the bank right now!

 

You Can Still Save Money On A Low Income

When you’re living on a small income, it can be especially hard to save money for things like an emergency fund, college, retirement, cars, or anything else.  We all have our lean times financially, but even in those lean times you can still find ways to save money for the future needs of you and your family, such as college and retirement. I truly believe that even if you have a low income, you can still save money if you’re diligent about the process.

 

13 Ways To Save Money On a Limited Income

So let’s get on with it!  Here are 13 ways you can save money on a low income:

 

Evaluate Housing Costs

Many times it’s difficult to save money because housing costs take a huge chunk of the family budget.  In general, it’s best to keep housing costs to 25% of your take home pay or less.  I realize that in some areas of the country this might be impossible on a small income, but there are always a few very good deals available on rent.  Just be diligent and keep looking.

If you own a home, you may be able to refinance your mortgage at a lower rate and free up some money that you can put into investments or savings. If you’re single, you can even take in a roommate or two and charge them rent to save money on housing costs.  That’s money you can put straight into investments, IRA’s, 401k’s, or an emergency fund!

 

Plan Your Shopping

Never spend money on a whim or just because you “feel like it”.  That’s where a lot of money leaks tend to happen.  The best way to spend a limited income is to plan your shopping ahead of time using a written budget every single month.  That way, you spend your money on paper before you spend it in real life.

When it comes time to buy what you need, you will already have a plan in place and you won’t overspend because you only have so much allotted for each category.  When you approach your spending in that way, you’ll feel like you got a raise because it frees up money that you were wasting when you didn’t have a plan.

 

Buy Used Stuff

Buy everything you can used.  Buy used cars, used electronics, used furniture, clothing, etc.  You’d be surprised at the great deals you can find on stuff that’s been barely used.  Sometimes you can find “open box” items that haven’t been used, but can’t be sold as new because the packaging has been damaged or opened.  I get some killer deals on EBay on this kind of merchandise all the time. I always buy used cars, and I’ve even been known to shop at Goodwill and at yard sales.  I’ve gotten $100 shirts for $4 at Goodwill and $250 shoes for $45 (worn only once!) on Ebay.

Believe it or not, my wife even picked up a beautiful set of wrought iron and glass shelves that someone had set out for the garbage collector that had absolutely nothing wrong with it.  They just didn’t want it anymore and were too lazy to give it away or sell it (price = FREE!). There are incredible deals out there for most anything you want or need, you just have to know where to look.  Never pay full price if you don’t have to!

 

Don’t Use Credit Cards

Credit cards keep you poor.  When you use a credit card, studies have shown that you spend 12% more on average because using plastic is such a smooth and frictionless way to spend money.  That doesn’t include the money you also spend on interest and fees that come with using credit cards.  Your best bet is to go cash only and use cash in an envelope system along with your monthly budget.

Find more articles on Credit Cards here

 

Sweat The Small Stuff

Take your lunch to work, plan to do your errands all at once to save gas instead of making multiple trips.  Save your change and cash it into an investment account periodically.  Heck, you can even roast your own coffee (you can also make extra money doing that, here’s how).  There are always ways to cut costs if you need to that will free up money that can go straight into savings.

You will be surprised how much you can save when you get creative.

 

Walk Or Ride Your Bike

If you can ditch the car to go to the store or to work, then do it.  You will save money on gas and have the added benefit of getting more exercise.  It’s a win-win!

Find out how Mr. Money Mustache retired at 30 by saving money riding a bike!

 

Find a Side Gig

There has never been a better time in history to find ways to make extra money.  I’ve written a whole series of articles that can get you started, and I’ll be adding more “Money Making Ideas” over time.

You can see all my Money Making Ideas articles here

 

Stay Out of Restaurants

Of course, it’s ok to eat out occasionally, but making eating out a regular habit can add up very quickly.  Restaurant food costs at least 4x more than a homemade meal would cost.  That multiple goes even higher at more expensive restaurants.  If you want to save money and still have a nice meal with friends, host a potluck at your house and have everyone bring a dish.  You’ll have just as much fun for a fraction of the cost.

 

Plan Your Meals

You can save money using meal planning apps or even a paid service like Emeals.com.  Planning your meals ahead of time allows you to better plan your grocery list, thereby spending less on food and saving much more than the service costs.

You can check out Emeals.com here.

 

Get Rid of Cable TV

This is one of the more common suggestions you’ll find, but it’s also one of the most effective.  Get rid of your cable bill and save money for your future instead.  You can still get the free broadcast channels and enjoy plenty of good programming and all the news you need.  It could also have the side benefit of freeing up some extra time to work on a side gig or increase your skills for your present job so you can get a raise or promotion.

 

Get A Programmable Thermostat

A programmable thermostat can save money on heating and cooling bills that can free up money for savings.  You can buy a basic model for around $40, or get a more sophisticated thermostat that saves a lot more energy.  Angie and I have two Nest programmable thermostats in our house that have cut our energy bills by about 10-15%.  That means we save around $30-$45 every month on our energy bills.  SWEET!

Of course, you can always change your home’s temp manually too, but a programmable smart thermostat can sense when you’re away from home, and does a much more efficient job of controlling usage while keeping you comfortable at the same time.  The cool thing is that even though these thermostats can be a little pricey, they will more than pay for themselves over time, making them a great investment.

Learn about the Nest Learning Thermostat here

Learn more about programmable thermostats here

 

Use Coupons

Using coupons to buy groceries and necessities can save you a large amount of money, especially if you know where to find the best coupons.  You can save even more by going to stores that double your coupons, as well as using that store’s discount card along with the coupons.

You can do a Google search to find coupons on your favorite products, or you can visit my coupon database to search over 10,000 coupons in one convenient place!

Visit ThisCoupon Database

Learn Couponing 101 here

Watch a “How to Coupon” Video here

 

Diligence Is The Key

Of course there are plenty of ways to save money if you put your mind to it and get creative.  But when it comes down to it, diligence is the key to save money on a low income.  When you use any of these techniques mentioned above, you have to be sure to stick with them for the long term, and when you determine how much you’re saving from each one, put that money in the bank as an emergency fund, or into investment accounts to provide for your future needs.

I realize that trying to put money into savings on a low income can be a daunting task, but it can be done.  These are just a few of the things you can do to get started. So now I want to hear from you!

Question:  What are your best suggestions for saving money?  Leave a comment and tell me about your favorites.

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I Love You Like A Blogger Roundup – 4/24 http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-424/ http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-424/#comments Fri, 24 Apr 2015 09:00:59 +0000 http://www.enemyofdebt.com/?p=16422 Enemy of Debt - I Love You Like A Blogger Roundup – 4/24

I’ve had one of those weeks where I find myself extremely thankful for my career.  I’ve been consciously taking note of the interesting and cutting edge things that I’m doing, and can’t help but want to put my heart and soul into doing the very best I can.   Enjoying my job sure makes it easy to get out of bed in the morning.  Hopefully that will translate into some sweet pay increases. That would definitely be worth a fist pump! Posts That Make Me Fist Pump How to Be a Conscious Spender from Debt Roundup Do You Need A Budget? […]

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Enemy of Debt - I Love You Like A Blogger Roundup – 4/24

fistpumpI’ve had one of those weeks where I find myself extremely thankful for my career.  I’ve been consciously taking note of the interesting and cutting edge things that I’m doing, and can’t help but want to put my heart and soul into doing the very best I can.   Enjoying my job sure makes it easy to get out of bed in the morning.  Hopefully that will translate into some sweet pay increases.

That would definitely be worth a fist pump!

Posts That Make Me Fist Pump

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The Effect Of Debt….We’ve Come A LONG Way http://www.enemyofdebt.com/the-effect-of-debt-weve-come-a-long-way/ http://www.enemyofdebt.com/the-effect-of-debt-weve-come-a-long-way/#comments Thu, 23 Apr 2015 12:10:58 +0000 http://www.enemyofdebt.com/?p=16406 Enemy of Debt - The Effect Of Debt….We’ve Come A LONG Way

I know that my life is very different now that we’ve eliminated $109,000 in credit card debt. We have breathing room in our budget, we have the freedom to decide what we do with our money, and life is just over all less stressful. But every now and then, something happens that brings me back to the days when we were struggling and reminds me just how much better off we are without the weight of debt holding us down. My smoker is in need of some maintenance. The rope gasket I had installed on the cover of my smoker […]

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Enemy of Debt - The Effect Of Debt….We’ve Come A LONG Way

EOD_LongWay

Image courtesy of pakorn at FreeDigitalPhotos.net

I know that my life is very different now that we’ve eliminated $109,000 in credit card debt. We have breathing room in our budget, we have the freedom to decide what we do with our money, and life is just over all less stressful. But every now and then, something happens that brings me back to the days when we were struggling and reminds me just how much better off we are without the weight of debt holding us down.

My smoker is in need of some maintenance. The rope gasket I had installed on the cover of my smoker had wore out and fallen off, so I made a trip over the weekend to a local fireplace store to replace it. An employee helped me get 10 feet of the gasket I needed, as well as the adhesive I would need to affix it to my smoker. The bill came to just over $35.

While the bill was exactly what I had planned for, I was suddenly reminded of the first time I bought rope gasket for my smoker. I had been told the fireplace store carried the rope gasket, but I didn’t know how much it cost. I was surprised to find out it was $2.50 per foot for the thickness I needed. There was also the matter of the $10 tube of high heat glue I needed. I hadn’t expected those two items to cost that much, and at the time $35 was a huge chunk of our weekend funds. I left the store empty handed, and headed back home to discuss with my wife whether I could make the purchase or not. I did eventually get my rope gasket, but had to wait another week or two to spread the cost out.

My most recent experience was very different. I knew exactly how much the items would cost, and during our weekend spending financial meeting I put them on the list of potential purchases. Instead of having to save a little money for three weekends to afford them without severely hindering other spending, it easily fit in our weekend allocation.

It still warranted discussion as to whether it was a good use for our money, however. I knew it wasn’t a “must have.” It’s simply something for my smoker, which is a hobby, to run more efficiently. Had there been other more pressing items that our money was needed for this weekend, it would have been the first thing to get crossed of the list.

There was a time that debt was on the brink of keeping us from paying our bills each month. With some help we were able to put ourselves in a position to be able to do that if we managed our money correctly.

Debt was also keeping us from fully enjoying life. After years of overspending, we had very little left over after meeting the basic necessities of life to do anything else. There’s certainly something to be said about being able to pay your bills, put food on the table, and clothes on your back. But life is supposed to be more than that.

The purpose of life is to enjoy it. Debt kept that from us.

I get asked frequently how paying off our credit card debt has changed our lives. I could spend an hour answering that question. I could talk about how it has improved how my wife and I communicate, and how our marriage is stronger because of our experience. I could talk about how we now have more wiggle room in our budget, and can now once again invest in our future. I could even talk about how it’s affected our children and how they view money. But if I had to sum it up in one sentence, the one that comes to mind after this weekend is:

I can buy rope gasket.

Has debt been keeping you from fully enjoying life? What are you doing about it?

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I Love You Like A Blogger Roundup 4/17 http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-417/ http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-417/#comments Fri, 17 Apr 2015 13:31:05 +0000 http://www.enemyofdebt.com/?p=16393 Enemy of Debt - I Love You Like A Blogger Roundup 4/17

Last weekend we had a birthday party for our daughter – she turned 13!!!!  Vonnie and I are now the proud parents of TWO teenagers.  We bought a huge roll of contractor’s plastic and built a “splatter paint cube” in our garage.  It was actually our daughter’s idea….but we made it come to life.  Tori and her friends each got a container with washable paint and a brush.  They went in the cube and threw paint everywhere.  They had a blast.  It turned out to be more expensive than we had anticipated, so this weekend is a “lay low” weekend. […]

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Enemy of Debt - I Love You Like A Blogger Roundup 4/17

fistpumpLast weekend we had a birthday party for our daughter – she turned 13!!!!  Vonnie and I are now the proud parents of TWO teenagers.  We bought a huge roll of contractor’s plastic and built a “splatter paint cube” in our garage.  It was actually our daughter’s idea….but we made it come to life.  Tori and her friends each got a container with washable paint and a brush.  They went in the cube and threw paint everywhere.  They had a blast.  It turned out to be more expensive than we had anticipated, so this weekend is a “lay low” weekend.

Fist pump for an awesome birthday party, her friends are still talking about it!

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Want Success? Make The Choice! http://www.enemyofdebt.com/want-success-make-the-choice/ http://www.enemyofdebt.com/want-success-make-the-choice/#comments Wed, 15 Apr 2015 13:48:24 +0000 http://www.enemyofdebt.com/?p=16386 Enemy of Debt - Want Success? Make The Choice!

There is a redemptive power that making a choice has. Rather than feeling like you are an affect to all the things that are happening Make a choice. You just decide what it’s going to be, who you’re going to be, how you going to do it. Just decide. -Will Smith (actor) This quote was stuck in my head all week, and it inspired me to view the world through a different perspective. I walked to the vending machine with every intention of buying a soda to go with my lunch. When I arrived at the bank of vending machines, […]

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Enemy of Debt - Want Success? Make The Choice!

EOD_Choice_pic

There is a redemptive power that making a choice has.

Rather than feeling like you are an affect to all the things that are happening

Make a choice.

You just decide what it’s going to be, who you’re going to be, how you going to do it.

Just decide.

-Will Smith (actor)

This quote was stuck in my head all week, and it inspired me to view the world through a different perspective.

I walked to the vending machine with every intention of buying a soda to go with my lunch. When I arrived at the bank of vending machines, I changed my mind. I said to myself, “I choose to be healthier today.” I walked back to my office, and filled up my water bottle at the water fountain instead. I smiled to myself as I leaned back in my office chair.

I felt powerful. I felt in control.

I applied the same concept to my purchasing decisions as well. Walking through Walmart, I saw they had restocked their athletic wear area with new items for Spring. I saw some shorts that I really liked, and put them in my cart. Before rolling away, I paused, removed the shorts from the cart and put them back on the rack. I already had all the gym shorts I need. I chose to not spend my money on something I don’t need.

I would have never thought of Will Smith as being a motivational kind of person. But it makes sense that someone that is successful would have some thoughts on what it takes to be successful.

We can all take something positive from the power of making a choice.

How many times have you played the victim, internally wondering why things keep happening to you? It most cases, things do not just happen to you. Your situation is the result of your own actions. $109,000 of credit card debt didn’t just show up on my doorstep, knock down my front door and sit my chest, suffocating me. I did that. To myself.

Successful people believe that they are in control of their own destiny. They make the choice to take the actions necessary to be successful.

Did you get passed over for a raise even though you thought you deserved one? Stop seething about the perceived mistreatment and choose to find a way to increase your income.

Do you need to cut your expenses? Stop whining about how the prices of things keep climbing, and choose to consume less. Investigate cheaper ways of doing things.

Tired of being overweight? Stop complaining about how your pants don’t fit anymore, or about how you don’t have the time to exercise. Make the choice to get up off the couch and be active.

Stop being an effect.  Instead, be the source of the effect. Take control.

Don’t stop there. Say it out loud. Say it every time you make a choice. Hearing your own voice adds physicality and weight to the decision. To hear it, is to believe it.

I choose to be successful!

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I Love You Like A Blogger Roundup – 4/10 http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-410/ http://www.enemyofdebt.com/i-love-you-like-a-blogger-roundup-410/#comments Fri, 10 Apr 2015 13:08:38 +0000 http://www.enemyofdebt.com/?p=16373 Enemy of Debt - I Love You Like A Blogger Roundup – 4/10

Tuesday night, my son brought home from work his very first paycheck.  It was for the 8.5 hours he was in training, and he received a paper paycheck as his direct deposit hadn’t taken effect yet.  When I asked him if he knew what to do with the check, he shook his head, “No.”  I explained to him how to endorse a check, and what he would do once he got to the bank.  I could see his eyes glaze over, so I asked him if he wanted me to go with him.  He said, “Yes.”  Looks like a financial […]

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Enemy of Debt - I Love You Like A Blogger Roundup – 4/10

fistpumpTuesday night, my son brought home from work his very first paycheck.  It was for the 8.5 hours he was in training, and he received a paper paycheck as his direct deposit hadn’t taken effect yet.  When I asked him if he knew what to do with the check, he shook his head, “No.”  I explained to him how to endorse a check, and what he would do once he got to the bank.  I could see his eyes glaze over, so I asked him if he wanted me to go with him.  He said, “Yes.”  Looks like a financial field trip is on tap for us!

Fist pump for financial field trips, AND my favorite posts of the week!

Posts That Make Me Fist Pump

Shameless Self Promotion

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Breeze Through Your Taxes Through Preparation And TaxACT http://www.enemyofdebt.com/breeze-through-your-taxes-through-preparation-and-taxact/ http://www.enemyofdebt.com/breeze-through-your-taxes-through-preparation-and-taxact/#comments Thu, 09 Apr 2015 06:00:21 +0000 http://www.enemyofdebt.com/?p=16364 Enemy of Debt - Breeze Through Your Taxes Through Preparation And TaxACT

This post is part of the TaxACT #BeatTheDeadline blog tour which shares tips on how to make tax time a smooth and easy process before the April 15 deadline. TaxACT provides the tools and guidance to help you confidently file taxes easy and fast. Do your own taxes today at TaxACT. You got this. When you think about doing your taxes, what picture immediately forms in your head? Is it one of sitting in front of the computer answering questions displayed on the screen by tax preparation software? Or maybe one of an appointment with an accountant? I’ve noticed something […]

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Enemy of Debt - Breeze Through Your Taxes Through Preparation And TaxACT

EOD_TaxActPic

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

This post is part of the TaxACT #BeatTheDeadline blog tour which shares tips on how to make tax time a smooth and easy process before the April 15 deadline. TaxACT provides the tools and guidance to help you confidently file taxes easy and fast. Do your own taxes today at TaxACT. You got this.

When you think about doing your taxes, what picture immediately forms in your head? Is it one of sitting in front of the computer answering questions displayed on the screen by tax preparation software? Or maybe one of an appointment with an accountant?

I’ve noticed something the last few years about the act of doing my taxes. There are several aspects of completing a tax return, but for me, by far the most time consuming part of the process is gathering all the information and documentation needed.

Employers are required to make your W2 available by January 31st. However there are some other very important pieces of information that you need to do your taxes that may take a bit more effort to find. Here are three of those documents:

Charitable Contributions Statements

For years, my church would prepare a charitable contributions statement and put it in our member mailbox. For some reason, they stopped doing that. The last few years I’ve had to call them or stop by their office to request one. Charitable contributions are a great tax deduction, so make sure you have all your statements or receipts before starting your return.

Personal Property Tax Information

In many states personal property tax, or vehicle license fees, are at least partially tax deductible. The proof of payment for my vehicle license fees are in my glove box, as I may need to display them if I got pulled over. I normally make a photo copy of them to have for when I do my tax preparation. However, even more important is verifying how much of my license fees can be used as a deduction. My state allows only part of the fee to be deducted, and since I can never remember the breakdown, I have to check my state’s website to remind myself of that info.

Property Tax Statement

If you own a home, you pay property taxes. My mortgage holder collects money out of each of my payments and puts it in an escrow account to make my bi-annual payments. Because I do not have to think about the payments, the statement I get from the county ends up at the bottom of a kitchen drawer. Tax time means it’s time to dig it up, and dust it off.

By being proactive and gathering everything you need before starting in on that return, you can make the act of preparing your taxes much easier.

Beating the tax deadline doesn’t have to be stressful. With TaxACT, everything you need to confidently prepare and e-file your taxes is right at your fingertips. You got this. File your simple or complex federal return FREE today with TaxACT Free Edition.

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Four Ways to Tackle Your Debt and How to Decide Which One is For You http://www.enemyofdebt.com/four-ways-to-tackle-your-debt-and-how-to-decide-which-one-is-for-you/ http://www.enemyofdebt.com/four-ways-to-tackle-your-debt-and-how-to-decide-which-one-is-for-you/#comments Tue, 07 Apr 2015 21:20:33 +0000 http://www.enemyofdebt.com/?p=16354 Enemy of Debt - Four Ways to Tackle Your Debt and How to Decide Which One is For You

Did you think that to tackle your debt is simple and straight forward? Think again! You see, when we first realised how much debt we had all I wanted was that it disappears. Oh, I know this would have taken magic I regretfully don’t possess. It may have been done by going bankrupt were we ready to take the consequences. This wasn’t our way and we did it ‘the proper way’. We reduced our spending by developing and using the ERR strategy for money management. We learned how to make more money. And we put it all against the debt. […]

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Enemy of Debt - Four Ways to Tackle Your Debt and How to Decide Which One is For You

tackle your debt

Did you think that to tackle your debt is simple and straight forward?

Think again!

You see, when we first realised how much debt we had all I wanted was that it disappears.

Oh, I know this would have taken magic I regretfully don’t possess. It may have been done by going bankrupt were we ready to take the consequences.

This wasn’t our way and we did it ‘the proper way’. We reduced our spending by developing and using the ERR strategy for money management. We learned how to make more money. And we put it all against the debt.

All that was left to do was watch the whole heap of debt crumble!

This is one way, I suppose. It is not the one way to tackle debt though.

Lately, I’ve been researching these ways. Debt is never a problem that can’t be solved. Solutions vary within and between countries. I’ve been learning about IVAs and Scotlands Trust Deed in the UK; the ‘ins’ and ‘outs’ of bankruptcy in different European countries and marvelling at the relatively debtor friendly bankruptcy rules in Israel.

In the US, there are four ways to tackle your debt.

#1. Just go for it and pay it off

This is how we did it (though we did it in the UK). Choosing this way to tackle your debt, however, means that the debt was incurred mainly and predominantly through mismanaging your finances.

Hence, the first step towards ensuring that you are not getting in further debt and that you have enough money to start paying it off, is to change the way in which your manage your finances.

This way to tackle your debt is for you is you can:

  • Generate positive cash flow to make a regular monthly payment towards your debt by eliminating the waste in your budget, by replacing what you do and how you do it and by reducing your consumption (this is known as the ERR strategy for money management).
  • Muster the discipline and determination to make regular monthly payments towards your debt.
  • Develop additional income streams and increase your income.
  • Muster the discipline to throw most of this money against your debts.
  • Access credit at lower interest (which means that your credit score is pristine like a just washed linen).

#2. Debt consolidation

Debt consolidation simply means that you’ll be taking out one loan, usually secured against an asset, instead of a number of smaller debts.

Debt consolidation is a notion in personal finance that attracts debate. It is by far not easy to decide whether to consolidate your debt. It is also by far not certain whether using this opportunity you’ll reduce or increase your debt; many people do, you know. For that matter, we did it couple of times.

Consolidating your debt has the following advantages:

  • Taking out a consolidation loan usually saves interest: Currently credit cards interest, even the most favourable one, is running at about 20%; one can still get a bank loan at less than 10% interest.
  • Taking out a consolidation loan means you are paying your debt down: loan repayments are calculated so that one always pays some of the principal rather than only interest.
  • Taking out a consolidation loan means that you are not exposed to interest rates increase: the contract that sets out the conditions of the loan also state the interest rate.
  • Debt consolidation saves energy and bother: yep, I really mean this one. It would have really drained me to have had to deal with debt across nine different places.

It is not all a bed of roses though. On the negative side:

  • Taking out a consolidation loan usually entails collateral: this means that the lender ensures you are going to pay back by asking you for security. Usually it is your home!
  • You are stuck with the interest rate: most of the time this works in your favour. However, if your credit rating is good and your borrowing to income ratio is not atrocious there may be cheaper options.
  • Loans can stretch over a long period: in fact they usually do and this can seem like a life prison sentence. Very demoralising!

In light is these points, you have to ask the following three questions to decide whether this is the option for you:

  • Can you take the collateral?
  • Do you have a strategy for overpayment of the loan and have you checked that its conditions allow this?
  • What kind of runner are you? If you are a sprinter stick with many smaller debts; if you have the mentality of a long distance runner consolidating is for you.

#3. Debt Management Plan(s)

A debt management plan (DMP) reduces the number of payments you make each month and can save you money in fees and interest.

Enrolling in a DMP is a way to gain (regain) control over your finances and develop healthy personal finance discipline. You’ll be helped with setting a realistic budget (yeah, this is going to be tight) and the negotiations with your creditors. You’ll make one, agreed monthly payment which the credit counselling organisation you enrolled with, will distribute towards your debts.

There are many positive things to say about enrolling in a DMP. I think, there are three particularly attractive points:

  • You will get and stay organised and focused;
  • You can save on fees, interest and other charges you’ll have to pay were you ‘just going for it’;
  • You won’t be worried to pick up the phone any longer (or at least not that much) because creditors and collectors will stop calling you.

There are also potential problems with it as well:

  • Your budget will be very tight;
  • It can take a long time to repay the debt (up to 60 months);
  • You’ll be in a very deep heap of trouble if you are late with your monthly payments or don’t make them. I don’t even want to tell you about it.

I believe, a DMP is for people who have a problem with finding the money to repay debt, have problem with being sufficiently disciplined to maintain the payments or both.

#4. Bankruptcy

Do you know how many people went bankrupt in the US in 2012?

I didn’t think you do. In 2012 in the US 1,221,091 people filed for bankruptcy. If you are not sufficiently impressed by the number let me tell you that this is the population of Estonia (an European country across the Baltic sea from Finland).

It is a small country but still…

The most popular type of bankruptcy is Chapter 7: about 70% of the non-business bankruptcies fall here. Under the conditions of this, your debts are discharged and you are no longer responsible for paying them.

This is the only good thing that can be said about Chapter 7 bankruptcy and the costs are:

  • The bankruptcy will stay on your credit report for 10 years;
  • It will prevent you from getting credit in the future;
  • It is likely to affect your job prospects;
  • Your assets will be sold to pay the trustee, administrative costs and, if there are some funds left, some of the creditors;
  • You can keep your house with no more than $16,500 equity;
  • You can keep your car if the equity is less than $2,500.

And it is a complex and expensive process.

I’m not going to go into detail about the other bankruptcy Chapters. Just one thing, though:

Bankruptcy is a very serious matter. Make sure that you really have no other option before you decide to go for it.

Finally…

These are the four ways to tackle your debt. Some will choose to ‘just go for it’ and good luck to them. Others will need the help of a consolidation loan or the discipline of a DMP.

Choose wisely and remember that bankruptcy is a choice of last resort. Apart from being complex, expensive and damaging to your future, you are unlikely to learn anything about money management. And this is such a loss of opportunity!

photo credit: debt via photopin (license)

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