An Unusual Day In The Life Of A Part Time Blogger
Well let me start by saying, WOW!!! Today was an extraordinary day for me. Two weeks ago I was contacted through my website by Jim Kavanagh, a writer for CNN.com. When I woke up this morning I had no idea what I was in for. Kavanagh wrote a terrific story called, Walking Away From Credit Cards, which highlighted the fact that some people have chosen to say NO to credit cards.
I was quoted as saying, “Credit card debt is our biggest hindrance in being able to take care of our families and set ourselves up for prosperity.“ He continued the quote, “If your paycheck is going toward paying all these credit card companies off, you can’t get very far.“ Now if you are a reader of this Web site then this is nothing new coming from me. The biggest argument you will see is by those claiming that they receive all these rewards which translate into free money. Free money? Really?
The Argument Dismantled
Do people really buy into this? Okay, that was a stupid question but it just seems as though people are willing to overlook a few things, all in the name of a free hat or a $200 cash back incentive. Let me point out the obviously, NOT so obvious here. Credit card companies are not stupid! They have figured out how to sucker you into using their product for many years now by marketing to you with no mercy. Let’s face it, they are great at making money!
When they are looking to promote their next big idea that will ensure that YOU are sucked right in, they are not worried about the puny amounts of chump change that you have “tricked them out of!!” They are more focused on the fact that you are more likely to spend 12%-18% more, in order to receive those “rewards”. This is because when you spend on plastic, you are more likely to spend more because the transaction does not register as pain, like cash would. You may as well say you are working for the credit card companies because to them, you are nothing more than an advertising expense. You are there best promoters! These companies do not spend millions of dollars on advertising, simply to give you FREE STUFF! You are kidding yourself!
I would be willing to bet that you spend AT LEAST $200 or more in order to receive that “wonderful” return on investment. Consider this! If you were to stop using credit cards, isn’t it logical to conclude that it is possible to get a bigger return by investing the extra money that you weren’t spending because of the lost incentive to buy more? To me it’s like listening to the people that waste their hard earned money on the lottery defend their habit by saying, “I won $200 a month ago?” As if that was worth it or something! HOW MUCH DID YOU SPEND TO GET THAT $200? Don’t be fooled!
Debt Free Suggestion
I contend that it is better to avoid the risk all together. So many people fail to weigh the risk involved. Even if you pay off your card every month, LIFE can still happen to you. When it does, your discipline will quickly turn on you once desperation and survival kick in. Avoid the risk and decide for yourself that having credit cards just isn’t worth it. Contrary to what so many people believe, you can have a life without using a credit card. Cut up those cards and experience what it feels like to not have a master looking over your shoulder, just waiting for you to slip up. It has happened to many and it can happen to you! I can tell you that my life has been so much more relaxed since swearing off the credit cards! No chains for me please, I’ll use CASH!
Wanna talk about it? Leave your thoughtful response below…
TO MY READERS NEW AND OLD
I have received an overwhelming amount of emails from this article! I want to let everyone know to keep their questions and comments coming. I will get to your specific question and may even do so with a blog entry on the subject. Please do not feel ignored if it takes a week or so to get to yours. Anyone that knows me can tell you I am more than up for the challenge! Welcome to Enemy of Debt, and thank you for stopping by to make my day for the entire month! I love my readers!!
To prove how much I love my readers I am going to have a giveaway to celebrate you! I will post a blog on Monday with details. I can tell you now though that I will be giving away TWO XL Dave Ramsey “Owe Nothing To Anyone” T-shirts!! What better way to celebrate such a good day, than by giving something away?
As it stands now this is not a political blog, and I want to keep it that way. However, with the upcoming election, coupled with recent events (bailout, mortgage crisis) and the state of our economy, I feel it is important to address this issue. It seems that so many people are putting all of their faith into electing a President that they feel will fly down from the sky with his Presidential cape and leotards to save the day. Why is that? Do people really believe that Washington is going to come to the rescue? Do you really think that is where the answers are going to be found?
If so, I’ve got news for you. It’s not true. Regardless of who gets elected in November, you are still going to have debt. If the Economy was booming you would still have debt. If the Economy is horrible, yep you guessed it, your financial situation is still the same. Your debt is the problem, not Washington. Until you get your financial situation under control nothing is going to make your life any easier when it comes to your finances. Maybe it is time you sit back and reflect upon your decisions and ask yourself a few questions.
- Do I have a budget?
- Is there anything that I can cut from my expenses each month?
- Do I have adequate savings?
- Do I rely on my Credit Cards during an Emergency?
- If I lost my job today, would I be okay?
- Are my priorities truly in order?
- If something were to happen to me (God forbid), would my family be okay?
- Is debt the center of my finances?
- CAN I DO BETTER WITH MY MONEY?
Let’s break it down shall we. If you had a budget, cut your expenses to necessities, had adequate savings, didn’t rely on your credit cards to bail you out, knew what your priorities really were, and didn’t consider debt to be your savior – the state of the economy wouldn’t put such a strain on your wallet, would it? You would not only feel safe and prepared, you would be able to use your income to make your financial situation EVEN better! Think about it! A recession is like a BIG sale and the perfect time to invest wisely.
According to a recent report on consumer debt released by the Federal Reserve, this country owes an out-of-control 2.5 Trillion dollars. This is INSANE! Here’s some context for you.
Unbelievable right? Now add another trillion and a half and recalculate. This crisis is huge, and until Americans start to realize how dumb debt really is, I am afraid we have more troubling times ahead. My point is this. Don’t wait on Washington to fix what you yourself can fix RIGHT NOW! Don’t believe for one second that any person elected into office is going to make your life complete. Step up to the plate and fix your own economy. Stop borrowing money, put yourself on a budget, spend less than you make and save as much as you can along the way. If you are not doing these things then you have no right to complain about living paycheck to paycheck.
There is NO EXCUSE as to why we in America shouldn’t be able to achieve wealth. After looking at the “Ben & Arthur Invests” example that illustrates compound interest perfectly, I am convinced that those that do not acquire wealth in this country really don’t want it unless it is given to them by those that do. Look at the chart for yourself; am I wrong? If you think so, I would absolutely love to hear from you…leave your comments below.
Murphy’s Fall?
I wanted to take this opportunity to introduce you to something that you have or will possibly go through. I have coined the term “Murphy’s Fall”. Murphy’s Fall isn’t the fall of Murphy. Instead it is something you yourself go through because of Murphy. That’s right. It’s what can happen when Murphy has moved in and just doesn’t want to leave. It could be equivalent to what marathoners call “The Wall”, which is when a marathoner reaches the 20 mile mark and starts to rationalize giving up. It’s when you start to tell yourself that you have already made more progress than most people, so quitting isn’t so bad. You may be tired, frustrated, depleted, and your hope is at an all time low. Frankly, you have fallen away from the hope and determination that you had when you first started your Total Money Makeover.
The HIGH!
I decided that it was time for me to write about this because for the past three and a half months I have experienced this symptom of not making any progress. When we first started our Total Money Makeover (TMMO), we were excited, and we made great strides because of it. We sold our car (saving us almost $500 between the car payment, high insurance costs, and property taxes), and paid off almost $5,000 in credit card debt, and old medical bills. This left us with $5,000 until we would be debt free except for our house—or so we thought. We also managed to save $2,000 for our Emergency Fund. (Savings for the first time EVER!) EXCITING STUFF!! I was PUMPED! Then Murphy decided that we were just too happy, and that it was time he paid us a visit. This would be Murphy’s first visit since we began our TMMO.
The LOW!
First we received a letter in the mail, letting us know that we owed an additional $4,000 from a student loan on top of the $5,000 in other student loans. A $4,000 jump all because we forgot about that particular loan. Next we had car trouble, some more car trouble, and yet a third round of car trouble. Throw in having to adjust to my wife having a new schedule as a Registered Nurse, and then me being forced to take time off at my job to be with Isaac until we figured something out. My wife went to nights, I went to days, and everything was taken care of. Or so we thought. After about 6 weeks, Alana was told with absolutely NO notice at all, that she would be moving to days. Now we needed to make some different arrangements. Child care was unavoidable. Still I was forced to take off some more time from work until we were able to find daycare quick and in a hurry. Wait, I’m not done! Next I get a hernia from freaking coughing, and am out of work for 3 weeks. “We have done so much more than most people!” This started to creep into my thoughts periodically until it was eventually considered rational thought.
The FALL!
In short, with all that going on, I have been really frustrated. We have made little progress since the video that I made. I am constantly thinking about how we are not paying any of our debt snowball down. We still owe $9,000 and we were supposed to be out of debt except for the house by September or October at the latest. I am coordinating a Financial Peace University class, and I am struggling with trying to remain positive and excited for the class members sake. It has been hard. The truth is, it’s not that I have lost faith in our Total Money Makeover. NOT AT ALL! I have lost faith in myself! I have let Murphy take me down, and my hope came tumbling down with it. Things seemed to reach an all time low. But has it really?
The ANSWER!
How can I truly be at an all time low? I can’t or maybe it’s better to say that I shouldn’t be. Here’s why. In less than a year we have cut up and paid off ALL of our credit cards, eliminated a car debt (saving us $8,500), managed to save $2,000 in our Emergency Fund, and with all of that doom and gloom above we have still been able to make it without borrowing any money at all. The absolute truth is that we have not even had a hard time making it through all this. Our bills have been paid extremely early compared to how we were living last year at this time. In fact, our mortgage is usually paid before the first of the month. So I must ask myself this: Why am I crying and most importantly why have I felt defeated?
I have felt this way because I have been thinking about the wrong stuff. Instead of thinking about the good, I have been analyzing the bad. Successful people are solution oriented, and they rarely think about the past. That is why it is called the past because it is gone, and you can’t do anything about it. I should have been looking at how easily we were able to find solutions that did not include borrowing money or not paying our bills. Had I been looking at it differently, I would have been getting hope and encouragement from our new found financial responsibility. I realized something all over again. WE ARE NOT LIVING PAYCHECK TO PAYCHECK ANY MORE! That is something to be celebrating, not something to be depressed about! We have a plan, and it IS working.
My Message To YOU!
Please don’t let Murphy get the best of you! You are still winning if you still have a plan. As long as you do not have to go backwards you will always be in better shape than you were before! Go FORWARD! Think POSITIVE! As long as you remind yourself of how far you have come, and avoid thinking about how things have not gone exactly like planned, you will be okay. One thing that I am sure of is that plans often take unexpected turns along the way. The key is to adjust and continue to follow the road in the direction of your goals. Don’t let “Murphy’s Fall” get the best of you! You are going to win, that I am sure of!
GOOD LUCK!
Have you experienced Murphy’s Fall? Share your story in the comments section.
STOP BORROWING MONEY!!!
Just to clear things up, the title isn’t to be taken literally. It’s just my way of grabbing your attention and telling you that if you are in debt, you need to hear this!! So LISTEN UP! This is perhaps the most important thing to learn after getting yourself on a budget. Dumping your debt will help you gain traction and in return offer you a hope you have never imagined. The reason is because all of the things most people have their money spent on before they ever get paid, steals their hope. When you accept the fact that you will always have a car payment, you have given up. You have bought into the idea that you have to do what everyone else is doing because everyone else is doing it. It’s just not true!
Think about this. You go out and you buy a brand new car right off the lot, mostly because you tell yourself that you “need” something reliable, but also because everyone else is doing it. LIE! What you need to do is satisfy your craving to impress others by “appearing” to be well off. The word reliable makes its way into the equation because it makes you feel better about a decision you know deep down to be wrong. The truth is that that brand new car is costing you an arm and a leg. So what if your payments are low!! Just because you have convinced yourself that you can afford the car payment does not mean you can afford the car.
Take into consideration that you will lose 60-70% of the cars value in about 4 years. This is why almost EVERYONE you know that has a car payment has trouble selling their car. They are all upside down. Don’t believe me? Ask around. If you avoid buying a car that will lose most of its value as soon as you stick the key in the ignition after signing the papers, you will win. (Let someone else take the hit, and buy used) But what happens is, by the time we all realize it, it’s too late. They have a few choices. Sell a car that is worth less than they owe, or trade it in to receive another car that will lose value too. To someone that is not thinking about all of the details, the second option sounds better because it means they do not have to come up with any cash out of pocket. Instead they continue the cycle. This is the cycle that car companies rely on to keep you slave to the lender. Sell the car, take the hit, and NEVER do it again!
That’s just cars. People have furniture payments, pet payments, memberships payments, mortgage payments, and let me please not forget the credit cards that they have maxed out because they were convinced that credit cards were the best form of an emergency fund. Do any of you realize just how RICH the banks and lenders are getting off of your stupidity?? Do you? You are paying extra for EVERYTHING you buy on these cards and the low monthly payments are dragging it out for as long as you remain blind. Your hope is lost, because when you wake up one day because you have had an emergency and you realize that you have reached your limit on borrowing, you give up. To you, at that moment, it feels like it will take you way too long to get out of that mess. Statistically, if you do not commit suicide, then you will probably file bankruptcy only to repeat the process. If you loaned someone money, and instead of paying you they filed bankruptcy, you would whine that it just isn’t fair. The little man just can’t get ahead.
I know the answer! STOP BORROWING MONEY!!! Stop overextending your income to the point that you can’t save a dime. Dave Ramsey has proven that you can change the outcome but you have to stop borrowing to do it. Debt is not a tool and it never will be! Stop being NORMAL. EVERYONE that is doing what appears to be normal is broke! Stop the cycle now! (To be clear, I AM YELLING!) Filing bankruptcy will not stop the cycle, it only gives you a do over and a false sense that you have won because you used someone else’s money and then got out of paying it back, so you do it all over again. Debt! Bankruptcy! DEBT!! BANKRUPTCY!! DEBT & BANKRUPTCY! Those two words go together like PERSONAL and RESPONSIBILITY! Personal responsibility!! You are personally responsible for stopping the debt cycle! It is up to you, and until you realize that, you will continue to live paycheck to paycheck and wonder where in the world all your money is going.
STOP BORROWING, do a budget, cut your expenses, save $1,000, and pay off your debt with EXTREME INTENSITY!!! Get RID of all the payments! You are killing yourself. Dave calls it death by a thousand cuts. Empower yourself to live, be free, and provide a great foundation for your family and their future. Stop relying on the Government because it is up to YOU. The Government has proven that it can’t do math. This is America! You have every opportunity to not retire broke. 80% of the wealthy in this country are first generation rich, so the argument that the little man just can’t get ahead is bogus. Dave is right when he says that if you are poor and you do poor people stuff, you will stay poor, and if you are poor and you do rich people stuff, you get rich. He also includes that if you are rich and you do poor people stuff, you get poor. The formula works the same no matter how you slice it. Go do rich people stuff and stop giving everyone else all of your income every month. DO RICH PEOPLE STUFF!
In a survey done on the Forbes 400 wealthiest people in the United States, 75% of them said that staying out of debt was the key to their success. DO WHAT RICH PEOPLE DO!!!! Those rich people didn’t have car payments. They didn’t play the lottery. They don’t have tons of credit cards, and they certainly do not use payday loans and debt consolidation. THEY DON’T BORROW MONEY, and that is why they are rich!
I can not leave you without letting you know about a sale that could change your life. You don’t need a credit card, and I am not asking you to spend money if you do not have it. I am simply saying that if you are still not convinced then you could spend just $10 plus shipping and see the most eye opening performance by Dave Ramsey in all of FPU. For just the cost of getting a pizza delivered you can experience something life changing. You can change your entire life COMPLETELY! The most inspiring 100 minutes that you could ever see is right here. Are you ready to change? Are you ready to hear why weird people all across the country and even the world are becoming debt free? You owe it to yourself to find out what that is. It’s not a $300 get rich quick unproven program, it is for real. Watch it and then PLEASE, I beg you to come back to this blog and tell me about it. If you feel like I am wrong after watching it yourself, then come back here and call me a liar. That is my challenge to you. I beg you to prove me wrong!!
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