“We simply assume that the way we see things is the way they really are or the way they should be. And our attitudes and behaviors grow out of these assumptions.”
- Stephen Covey
Secret #1 – This is by far the single most important of the 8 secrets. It is the foundational key to all success
TAKE ACTION!
If you can’t take the action necessary to achieve financial independence and success, to improve your life, you will no doubt wind up right alongside the 95 percent of the population that is dependent on debt and are ultimately financial failures.
It’s that simple. You can have the very best teachers, the very best education and training, read the best books and listen to the best tapes but without taking action, it’s all wasted.
I can’t emphasize this point too strongly or enough. You must find it in yourself to resolve to act; otherwise your thinking will amount to nothing.
Secret #2 – The level of success you achieve in your life is directly proportional to your willingness to accept full responsibility for your life.
No matter where you are now, you can only achieve greater things if you take blame and hold yourself accountable for your past. Accept your past and grasp hold of your future.
Secret #3 – Failing to execute a plan for financial independence is the same as planning to fail.
This seems fairly self evident. People just float around through their financial life hoping it will all somehow just work out. This is not only wrong but it reeks of insanity.
Secret #4 – A home based business where you can invest work and time instead of money.
You can make more money with a business of your own than a job would pay you and the tax benefits are worth the effort. It would be a good practice to start slow and small and work it steadily. Eventually, the income will exceed your job and you will need to make a decision as to whether you want to quit your job and take your business full time.
Secret #5 – Residual vs. Linear Income
Most people work at a job that pays them a linear income, which means that for every hour they work they get paid an hour’s wage. Or they sell a widget and get paid a commission on that one widget.
Residual income, on the other hand, is cumulative and continuous. Let’s say that you sell a widget, instead of getting paid a onetime commission, you get an ongoing commission for that sale month after month. Sell two widgets, get two times the residual.
Secret #6 – Multiplex Income
This is the income that you receive when you run your own business and receive your income from the work and efforts of others.
Secret #7 – Positive Mental Attitude
I used to think that keeping a positive mental attitude was the key ingredient to success and achievement, that if I maintained a PMA, success was sure to follow. I knew people that cranked up the positive attitude so much they glowed but were complete financial failures. While a PMA is extremely important, the ACTION needed in secret #1 is the true key. Couple PMA AND ACTION together and you have a solid foundation for success.
Secret #8 – Compound Interest
Compound interest refers to the fact that whenever interest is calculated, it is based not only on the original principal, but also on any unpaid interest that has been added to the principal. The more frequently interest is compounded, the faster the balance grows.
A good lesson was learned on the golf course when two friends decided to “make it fun” by placing a wager on each hole. The bet was for a dime and on each hole the bet would double. Let’s do the math. The first hole is ten cents. The second hole is twenty and the third is forty cents. Not bad, just a friendly wager, right?By the time they reached the ninth hole the bet was for $25.60. OK. Still not so bad for golf buddies. The tenth hole was $51.20, the eleventh hole was $102.40 and the twelfth hole was for $204.80! Now, if we were golfing this game, we would be getting a bit nervous. Hole 13 - $409.60. Hole 14 - $819.20. The bet continues to rise. By the 18th hole the bet will be a whopping $13,107.20!
THAT is the power of compound interest.
Tuesday
Monday
The 8 Myths of Financial Independence
“A smooth sea never made a skilled mariner”
- English Proverb
Myth #1 – You can use money the same way everyone around you uses it and still become financially independent. According to statistics compiled by the U.S. Department of Human Services state that 95% of the American population will never achieve financial independence in their lifetime. That is one of the most pitiful statistics that I ever heard of in my life.
Myth #2 – The responsible use of credit can enhance your life.
This is a very dangerous lie that is told to the American consumer by the banking industry, you know, the guys that issue you their credit cards and bury you in interest and fees. Only these parasites and retailers benefit from the use of credit cards. You only use them to have the privilege to overpay for goods and services.
Myth #3 – Pay yourself first
I consider this to be a myth for the way it is applied. You should pay your debts off first. You would be far better off if you eliminate your debt and then concentrate on paying yourself.
Myth #4 – You can get out of debt by putting a little extra on each bill each month
To effectively eliminate your debt you must use the military principle of massing the forces. This means concentrating all resources on one bill at a time. This way you will pay off the target bill more quickly and can then move on to the next. You can apply the monthly payment on the paid off bill to the second and so on.
Prioritize your bills according to the higher interest first and work your way down the list.
Myth #5 – You need to learn how to manage credit.
You need to learn how to eliminate credit. Maintain a credit to debt ration of the maximum of 15%
Myth #6 – It takes other people’s money to make money
This idea comes from the lie that you need venture capital or you have to have a huge start up cost to start a new business venture. This is simply not true. It is easier to start with a large bank backing you up on a business venture but you will also ultimately have to pay the “other people” back with interest. There are always ways to accomplish a successful business start up without using the funding of other people. Find the way.
Myth #7 – Success equals working smarter not harder.
This statement is nothing but a shortcut that seldom is effective. How about working smarter AND harder. That would be a more realistic formula for success.
Myth #8 – Education equals success
Study history and you will find that tremendous successes like Henry Ford, Thomas Edison, Albert Einstein and others who have achieved great success in life were educational failures.
The skills necessary for you to achieve true success are not taught in schools. Don’ get me wrong, education is a vital part of success but what is more important is a self directed mindset.
- English Proverb
Myth #1 – You can use money the same way everyone around you uses it and still become financially independent. According to statistics compiled by the U.S. Department of Human Services state that 95% of the American population will never achieve financial independence in their lifetime. That is one of the most pitiful statistics that I ever heard of in my life.
Myth #2 – The responsible use of credit can enhance your life.
This is a very dangerous lie that is told to the American consumer by the banking industry, you know, the guys that issue you their credit cards and bury you in interest and fees. Only these parasites and retailers benefit from the use of credit cards. You only use them to have the privilege to overpay for goods and services.
Myth #3 – Pay yourself first
I consider this to be a myth for the way it is applied. You should pay your debts off first. You would be far better off if you eliminate your debt and then concentrate on paying yourself.
Myth #4 – You can get out of debt by putting a little extra on each bill each month
To effectively eliminate your debt you must use the military principle of massing the forces. This means concentrating all resources on one bill at a time. This way you will pay off the target bill more quickly and can then move on to the next. You can apply the monthly payment on the paid off bill to the second and so on.
Prioritize your bills according to the higher interest first and work your way down the list.
Myth #5 – You need to learn how to manage credit.
You need to learn how to eliminate credit. Maintain a credit to debt ration of the maximum of 15%
Myth #6 – It takes other people’s money to make money
This idea comes from the lie that you need venture capital or you have to have a huge start up cost to start a new business venture. This is simply not true. It is easier to start with a large bank backing you up on a business venture but you will also ultimately have to pay the “other people” back with interest. There are always ways to accomplish a successful business start up without using the funding of other people. Find the way.
Myth #7 – Success equals working smarter not harder.
This statement is nothing but a shortcut that seldom is effective. How about working smarter AND harder. That would be a more realistic formula for success.
Myth #8 – Education equals success
Study history and you will find that tremendous successes like Henry Ford, Thomas Edison, Albert Einstein and others who have achieved great success in life were educational failures.
The skills necessary for you to achieve true success are not taught in schools. Don’ get me wrong, education is a vital part of success but what is more important is a self directed mindset.
Friday
The Two Things You Should Know About Those “Non Profit” Credit Counselors
“There are two ways of meeting difficulties: you alter the difficulties, or you alter yourself to meet them.”- Phyllis Bottome
The first credit counseling agencies were created in 1951 in the United States when credit grantors created The National Foundation for Credit Counseling, or NFCC. Their stated objective was to promote financial literacy and help consumers avoid bankruptcy. NFCC was really started as a collection agency for Sears and J.C. Penney, along with other major creditors, to help recover money lost to bankruptcy.
In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made credit counseling a requirement for consumer debtors filing for bankruptcy. In order to meet this requirement, during the 180-day period preceding the filing of bankruptcy, the debtor must complete a program with an approved nonprofit budget and credit counseling agency. Such a program may include, but is not limited to, one counseling session conducted by phone or over the internet. In addition, a post-filing debtor education credit counseling session is required in order to complete the bankruptcy process and to have your debts discharged.
A credit counseling agency typically receives most of its compensation from the creditors to whom the debt payments are distributed. This funding relationship has led many to believe that credit counseling agencies are merely a collections wing of the creditors. This fee income, known as “Fair Share,” are contributions from the creditors that originally earns the agency 15% of the amount recovered. The use of the term “non profit” suggests that the company is a charitable organization. This is so far from the truth that it is borderline ridiculous.
Here’s how the Consumer Credit Counseling companies actually work.
First they claim to have a special arrangement thousands of creditors, implying that they can reduce your debt. Truth be told, they will only reduce your interest rate and you will be in their program for between 5 and 7 years. You will pay back everything that you currently owe PLUS interest. If you are suffering a true financial hardship, this would not be the most ideal situation for you.
They do however have a special relationship with the creditors. Remember they are funded by the banking industry that includes your creditors. They are supplied a computer database with all of your personal information by your original creditor that promised your information would be held in confidence.
After the initial consultation, or sales pitch, where you provide them the names and account numbers of your creditors and the balances owed, a plan is formulated to tell you what you will pay and for how long. They seldom mention the effect that their program has on your credit report because now your accounts will appear as managed by xyz company. This is commonly referred to as bankruptcy’s brother because the effect that it has is as bad as bankruptcy.
Now come the fee’s. There is really no standardized procedure governing what they can charge and some agencies charge up to $5 per month per account enrolled, some charge a flat rate fee of up to $49.95 per month NOT including your debt payment. Also, you must remember that they get as much as 15% from your creditor for these same accounts.
Do you still think that they are non profit?
Doesn’t there appear to be a conflict of interest issue between these non profits dipping into your pocket and getting commissions from your creditor?
I don’t know about you but I wouldn’t trust a company that claims to be a charitable debt hero that makes their money from the people you owe money to.
The following are some questions to ask when you are looking into a debt relief company:
How much are their fees for your service?
What are the fee’s for since you are non profit?
Do you negotiate the balance of my debt to reduce my payments?
How will my credit be affected byyour program?
When will my credit be improved?
What is the total amount of fee’s that I will pay to your company over the course of our contract?
What will my total savings be?
The first credit counseling agencies were created in 1951 in the United States when credit grantors created The National Foundation for Credit Counseling, or NFCC. Their stated objective was to promote financial literacy and help consumers avoid bankruptcy. NFCC was really started as a collection agency for Sears and J.C. Penney, along with other major creditors, to help recover money lost to bankruptcy.
In 2005, the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 made credit counseling a requirement for consumer debtors filing for bankruptcy. In order to meet this requirement, during the 180-day period preceding the filing of bankruptcy, the debtor must complete a program with an approved nonprofit budget and credit counseling agency. Such a program may include, but is not limited to, one counseling session conducted by phone or over the internet. In addition, a post-filing debtor education credit counseling session is required in order to complete the bankruptcy process and to have your debts discharged.
A credit counseling agency typically receives most of its compensation from the creditors to whom the debt payments are distributed. This funding relationship has led many to believe that credit counseling agencies are merely a collections wing of the creditors. This fee income, known as “Fair Share,” are contributions from the creditors that originally earns the agency 15% of the amount recovered. The use of the term “non profit” suggests that the company is a charitable organization. This is so far from the truth that it is borderline ridiculous.
Here’s how the Consumer Credit Counseling companies actually work.
First they claim to have a special arrangement thousands of creditors, implying that they can reduce your debt. Truth be told, they will only reduce your interest rate and you will be in their program for between 5 and 7 years. You will pay back everything that you currently owe PLUS interest. If you are suffering a true financial hardship, this would not be the most ideal situation for you.
They do however have a special relationship with the creditors. Remember they are funded by the banking industry that includes your creditors. They are supplied a computer database with all of your personal information by your original creditor that promised your information would be held in confidence.
After the initial consultation, or sales pitch, where you provide them the names and account numbers of your creditors and the balances owed, a plan is formulated to tell you what you will pay and for how long. They seldom mention the effect that their program has on your credit report because now your accounts will appear as managed by xyz company. This is commonly referred to as bankruptcy’s brother because the effect that it has is as bad as bankruptcy.
Now come the fee’s. There is really no standardized procedure governing what they can charge and some agencies charge up to $5 per month per account enrolled, some charge a flat rate fee of up to $49.95 per month NOT including your debt payment. Also, you must remember that they get as much as 15% from your creditor for these same accounts.
Do you still think that they are non profit?
Doesn’t there appear to be a conflict of interest issue between these non profits dipping into your pocket and getting commissions from your creditor?
I don’t know about you but I wouldn’t trust a company that claims to be a charitable debt hero that makes their money from the people you owe money to.
The following are some questions to ask when you are looking into a debt relief company:
How much are their fees for your service?
What are the fee’s for since you are non profit?
Do you negotiate the balance of my debt to reduce my payments?
How will my credit be affected byyour program?
When will my credit be improved?
What is the total amount of fee’s that I will pay to your company over the course of our contract?
What will my total savings be?
Wednesday
Have You Had "The Talk" With Your Children Yet?
“Money is hard to earn and easy to lose. Guard yours with care.” - Brian Tracy
Have you had “the talk” with your children yet?
Not the “sex” talk but the talk that is necessary for your children’s future. The financial talk about credit and credit cards. Talking to your kids about their financial goals is key to avoiding financial conflicts in the future.
Credit cards, to have one or not to have one. That is often the question faced by thousands of families as their high school graduates have their first experience living away from home. The answer should be carefully thought out by parents and children, alike.
Undoubtedly, there can be many advantages to having and using credit cards. They’re convenient. They certainly can be useful in an emergency such as car trouble away from home or medical emergencies. And, when payments are made in a timely manner, they also can help a young person establish a favorable credit history.
But many young adults away from home for the first time have not yet mastered the financial skills required to successfully manage credit card debt. High school seniors involved in a test to measure their understanding of money scored an average of just 41.9%. Only 21% of high school and college students between the ages of 16 and 22 have taken a personal finance course.
Yet this group of American consumers is one of the most highly sought after market targeted by credit card issuers marketing campaigns. In addition to the many “pre-approved” credit card offers received by mail, college students also may be greeted on campus with a barrage of incentives offered by companies just for applying for a card, everything from free T- shirts to duffel bags.
For many of these inexperienced youth, the misuse of credit cards can spell disaster, not only financially but also academically and psychologically.
Students 18 to 21 years of age are considered adults and are legally responsible for credit card debts. Because young adults holding traditional cards receive monthly bills at their “away from home” address, they are solely responsible for managing the amount charged and making payments in full and in a timely manner to avoid interest and late fees. Parents may not be able
to monitor the amount of charges or the way in which payments are being made.
Having a parent co-sign makes credit card companies more willing to issue a card to a
young adult. However, bills still are mailed directly to the official card holder at his or her away
from home” address. While parents may not be able to monitor the card’s use, they are still legally held liable for debts if their children are unable to pay.
Similar to traditional cards, the young adult is still considered the primary cardholder and assumes responsibility for debts incurred. However, “student cards” generally have lower credit limits. On the other hand, they also may contain provisions such as above-average interest rates.
When considering this option, be sure to read the terms of the contract carefully to be sure it is truly a “student” card with lower credit limits rather than a “traditional” card which is simply being offered to students. While this option provides total independence, the lower credit limit
reduces risk as long as the young adult only holds one card and repays debts promptly.
Intended for those with little or no credit history, secured cards require a deposit equal to the
credit limit on the card. They also may carry a higher interest rate. This option allows total independence within the limits established by the deposit.
This parent owned credit card authorizes children to make charges to their parents account but since bills are mailed to the primary cardholder, parents will receive the monthly statement
of charges incurred. This option provides the security of knowing credit is available to young adults but allows parents to monitor both the types of charges being made and the total amount of indebtedness being incurred
Teen” cards are not truly “credit” cards. Rather, these are actually “smart” cards. Money deposited into an account by the parent is made available to the young adult but each time the card is used, the amount of the “purchase” is deducted from the funds available. When the funds are exhausted, the account must be replenished or the card can no longer be used.
Although more flexibility is provided for young adults over 18 years of age, some companies allow parents to place restrictions on the types of purchases that can be made and some allow online monitoring of the account by parents.
Visit with your young adult about using credit cards responsibly. Encourage your son or daughter to:
Establish a budget and live within his/her means.
Discuss the difference between wants and needs. Define what an “emergency” really is!
Resist the “free” offers made to those who apply for credit cards.
Experts recommend that students, especially, limit themselves to just one card.
Keep track of charges to credit card accounts.
Researchers have found that using a credit card log can help limit credit card debt.
Pay monthly bills in full and on time.
Over time, interest and late fees can add substantially to the total amount owed.
Have you had “the talk” with your children yet?
Not the “sex” talk but the talk that is necessary for your children’s future. The financial talk about credit and credit cards. Talking to your kids about their financial goals is key to avoiding financial conflicts in the future.
Credit cards, to have one or not to have one. That is often the question faced by thousands of families as their high school graduates have their first experience living away from home. The answer should be carefully thought out by parents and children, alike.
Undoubtedly, there can be many advantages to having and using credit cards. They’re convenient. They certainly can be useful in an emergency such as car trouble away from home or medical emergencies. And, when payments are made in a timely manner, they also can help a young person establish a favorable credit history.
But many young adults away from home for the first time have not yet mastered the financial skills required to successfully manage credit card debt. High school seniors involved in a test to measure their understanding of money scored an average of just 41.9%. Only 21% of high school and college students between the ages of 16 and 22 have taken a personal finance course.
Yet this group of American consumers is one of the most highly sought after market targeted by credit card issuers marketing campaigns. In addition to the many “pre-approved” credit card offers received by mail, college students also may be greeted on campus with a barrage of incentives offered by companies just for applying for a card, everything from free T- shirts to duffel bags.
For many of these inexperienced youth, the misuse of credit cards can spell disaster, not only financially but also academically and psychologically.
Students 18 to 21 years of age are considered adults and are legally responsible for credit card debts. Because young adults holding traditional cards receive monthly bills at their “away from home” address, they are solely responsible for managing the amount charged and making payments in full and in a timely manner to avoid interest and late fees. Parents may not be able
to monitor the amount of charges or the way in which payments are being made.
Having a parent co-sign makes credit card companies more willing to issue a card to a
young adult. However, bills still are mailed directly to the official card holder at his or her away
from home” address. While parents may not be able to monitor the card’s use, they are still legally held liable for debts if their children are unable to pay.
Similar to traditional cards, the young adult is still considered the primary cardholder and assumes responsibility for debts incurred. However, “student cards” generally have lower credit limits. On the other hand, they also may contain provisions such as above-average interest rates.
When considering this option, be sure to read the terms of the contract carefully to be sure it is truly a “student” card with lower credit limits rather than a “traditional” card which is simply being offered to students. While this option provides total independence, the lower credit limit
reduces risk as long as the young adult only holds one card and repays debts promptly.
Intended for those with little or no credit history, secured cards require a deposit equal to the
credit limit on the card. They also may carry a higher interest rate. This option allows total independence within the limits established by the deposit.
This parent owned credit card authorizes children to make charges to their parents account but since bills are mailed to the primary cardholder, parents will receive the monthly statement
of charges incurred. This option provides the security of knowing credit is available to young adults but allows parents to monitor both the types of charges being made and the total amount of indebtedness being incurred
Teen” cards are not truly “credit” cards. Rather, these are actually “smart” cards. Money deposited into an account by the parent is made available to the young adult but each time the card is used, the amount of the “purchase” is deducted from the funds available. When the funds are exhausted, the account must be replenished or the card can no longer be used.
Although more flexibility is provided for young adults over 18 years of age, some companies allow parents to place restrictions on the types of purchases that can be made and some allow online monitoring of the account by parents.
Visit with your young adult about using credit cards responsibly. Encourage your son or daughter to:
Establish a budget and live within his/her means.
Discuss the difference between wants and needs. Define what an “emergency” really is!
Resist the “free” offers made to those who apply for credit cards.
Experts recommend that students, especially, limit themselves to just one card.
Keep track of charges to credit card accounts.
Researchers have found that using a credit card log can help limit credit card debt.
Pay monthly bills in full and on time.
Over time, interest and late fees can add substantially to the total amount owed.
Friday
The Debtonator's Debt Elimination Challenge
"The better a man is, the more mistakes he will make, for the more new things he will try. I would never promote to a top-level job a man who was not making mistakes...otherwise he is sure to be mediocre." - Peter Druker
Although I believe credit to be a useful financial tool, I also believe that America, as a society, have become too dependent on credit and credit cards, using them to pay for cost of living expenses. There is currently no require courses in our school system to teach our children about the power of credit and compound interest and we, as a nation are sinking further into the abyss of runaway debt.
This is the reason I am issuing the Debt Elimination Challenge – 90 Days to Financial Freedom. In this challenge I intend to educate the consumer, young and old as to the responsible use of credit and not just managing but eliminating your debt.
But will my challenge be accepted?
That is the question. Have we become so dependent on our use of credit that we will remain slaves to our credit cards? Will we actually choose to remain indentured servants, working two jobs, just to pay our credit card bills? Will remain a nation dependent on credit cards?
These are questions that all consumers must ponder. As your monthly bills are developing into a mountain of debt, you, as consumers must decide if you will continue to accept rising interest rates and escalating fee’s or if you have had enough and desire a change.
Because it is when you truly decide, to make a commitment to yourself, that things will change.
Those that are brave enough to accept my challenge must be sick and tired of this lackluster economy and is willing to take an aggressive approach to their debt problems. The first step is to have a debt management coach that will show you the steps you need to take to eliminate your debt.
It’s time to be debt free.
But where do you start?
First of all, you need to stop charging. No matter what. Stop the bleeding. Do nothing more to increase your balances. In fact, total them up and let’s see how bad the damage is. Now, it’s decision time. Some questions to ask yourself are:
Are you behind on your payments?
Are you only making the monthly minimum payments?
Are you struggling each month meeting your monthly obligations?
Are you possibly thinking about bankruptcy, or are you looking at debt relief programs?
What are you willing to do to eliminate your debt?
Getting rid of your debt should now be your top priority. In the quickest way possible. For the least expense. Debt settlement here is the best way to do this. Your total amount of debt will be paid off for about half of what you owe in about three years. This type of program can be completed sooner, depending on the amount you owe and what you can pay each month.
Also, let’s take a look at where your current income is going. Here’s part two of my challenge, that I call my 30 day challenge. For the next 30 days, get a receipt for every dime that you spend. Every purchase, no matter how small or large. Save these receipts in an envelope for 30 days and see where your money is going. This may come as a shock to you, I know it did me when I first done it.
Can you make some adjustments in the way you spend? Can you brown bag a couple of lunches during the week? Are there any other adjustments you can make?
Develop a spending and savings plan.
A spending plan is another tool that reveals the impact goal setting could have on your personal finances. A spending plan, or budget, is your first step to building financial responsibility, and it is critical to effective decision making when developing your goals.
Financial goals will not necessarily have a dollar amount affixed to them. This will require that you either generate more income or reduce expenses or possibly, if you already have monies allocated, shift monies within your plan. In any case, your spending plan will let you know if your goal is financially possible.
For a workable savings plan, four steps are necessary:
Add up your total income, including any funds you receive in addition to your earnings.
Figure out your total fixed expenses such as rent or mortgage, insurance premiums or car payments.
Provide for a savings fund, adequate to meet emergencies and achieve special goals.
Estimate how much you need for day to day living expenses.
You may need to do some adjusting of the amount in each step until you have what you feel is a satisfactory plan. After going through each step and filling out the worksheet, you will have a better idea of where your money is going and how much you have left over to work with.
After following these steps and changing the way you think and act about finances for 90 days, you will break any of the bad habits that you have developed over the years and will be well on your way to living a debt free lifestyle.
Although I believe credit to be a useful financial tool, I also believe that America, as a society, have become too dependent on credit and credit cards, using them to pay for cost of living expenses. There is currently no require courses in our school system to teach our children about the power of credit and compound interest and we, as a nation are sinking further into the abyss of runaway debt.
This is the reason I am issuing the Debt Elimination Challenge – 90 Days to Financial Freedom. In this challenge I intend to educate the consumer, young and old as to the responsible use of credit and not just managing but eliminating your debt.
But will my challenge be accepted?
That is the question. Have we become so dependent on our use of credit that we will remain slaves to our credit cards? Will we actually choose to remain indentured servants, working two jobs, just to pay our credit card bills? Will remain a nation dependent on credit cards?
These are questions that all consumers must ponder. As your monthly bills are developing into a mountain of debt, you, as consumers must decide if you will continue to accept rising interest rates and escalating fee’s or if you have had enough and desire a change.
Because it is when you truly decide, to make a commitment to yourself, that things will change.
Those that are brave enough to accept my challenge must be sick and tired of this lackluster economy and is willing to take an aggressive approach to their debt problems. The first step is to have a debt management coach that will show you the steps you need to take to eliminate your debt.
It’s time to be debt free.
But where do you start?
First of all, you need to stop charging. No matter what. Stop the bleeding. Do nothing more to increase your balances. In fact, total them up and let’s see how bad the damage is. Now, it’s decision time. Some questions to ask yourself are:
Are you behind on your payments?
Are you only making the monthly minimum payments?
Are you struggling each month meeting your monthly obligations?
Are you possibly thinking about bankruptcy, or are you looking at debt relief programs?
What are you willing to do to eliminate your debt?
Getting rid of your debt should now be your top priority. In the quickest way possible. For the least expense. Debt settlement here is the best way to do this. Your total amount of debt will be paid off for about half of what you owe in about three years. This type of program can be completed sooner, depending on the amount you owe and what you can pay each month.
Also, let’s take a look at where your current income is going. Here’s part two of my challenge, that I call my 30 day challenge. For the next 30 days, get a receipt for every dime that you spend. Every purchase, no matter how small or large. Save these receipts in an envelope for 30 days and see where your money is going. This may come as a shock to you, I know it did me when I first done it.
Can you make some adjustments in the way you spend? Can you brown bag a couple of lunches during the week? Are there any other adjustments you can make?
Develop a spending and savings plan.
A spending plan is another tool that reveals the impact goal setting could have on your personal finances. A spending plan, or budget, is your first step to building financial responsibility, and it is critical to effective decision making when developing your goals.
Financial goals will not necessarily have a dollar amount affixed to them. This will require that you either generate more income or reduce expenses or possibly, if you already have monies allocated, shift monies within your plan. In any case, your spending plan will let you know if your goal is financially possible.
For a workable savings plan, four steps are necessary:
Add up your total income, including any funds you receive in addition to your earnings.
Figure out your total fixed expenses such as rent or mortgage, insurance premiums or car payments.
Provide for a savings fund, adequate to meet emergencies and achieve special goals.
Estimate how much you need for day to day living expenses.
You may need to do some adjusting of the amount in each step until you have what you feel is a satisfactory plan. After going through each step and filling out the worksheet, you will have a better idea of where your money is going and how much you have left over to work with.
After following these steps and changing the way you think and act about finances for 90 days, you will break any of the bad habits that you have developed over the years and will be well on your way to living a debt free lifestyle.
Thursday
A Student's Survival Guide
“To be educated, a person doesn’t need to know how much or to be informed, but needs to have been exposed as vulnerable to the transformative events of an engaging life.”
- Thomas Moore
For most students, college is the last carefree step before their life begins. Although they should have an understanding of finances, including using credit, credit cards and managing debt, they should not have worries about unnecessary monthly bills.
Tuition? Yes!
Living expenses? Yes!
Student loans? Yes!
Credit cards? A loud and resounding NO!
For the vast majority of college students, this is not the case. With aggressive marketing campaigns targeting students, the average undergraduate has at least one credit card and carries an average balance of $2,169.
The problem is that students are flooded with offers from card issuers. They often set up tables right on campus at the start of the school year to hand out applications and free goodies. More offers land in students' hands at the college bookstore, stuffed into bags with the receipts. Still more get pinned to bulletin boards.
Why and how do the credit card companies get away with this marketing barrage on college campuses? They pay the college handsomly for this. It generates a good deal of revenue for the college.
The unrestricted marketing of credit cards on college campuses is so aggressive that it now poses a greater threat than alcohol or sexually transmitted diseases.
As a result of high credit card debt, students have lower GPAs and a higher drop-out risk, because they are forced into taking a job to pay down the debt. Some ruin their credit score making it difficult to rent an apartment, afford insurance or get a job. Even relationships and mental health suffer. But with increasing education costs and no co-signing requirements, credit card issuers have found students an easy market to tap into.
A large part of the problem is that most students simply have not been taught how to handle credit cards by their family or the educational system. Only 15% of high school students take a personal finance class and that doesn’t even scratch the surface of real financial education. Even at the high school level, it is too late to be teaching students about money. This very important subject should be ingrained in our childrens brain as early as kindergarden.
Parents are sending the wrong message to their children by exhibiting the buy now pay later mentallity that our society has become. Don’t we ant our children to have what we never had? I’m not referring to material goods and services, I’m talking about education.
Education AND financial responsibility. Students are to be held accountable for the charges they make, so they just might think twice about charging that beer and pizza party or spring break vacation.
Always remember that credit is a loan. It’s real money and must be repaid. Before you aply for your first card, determine how it will be used. For emergencies? OK, but everyone that first gets a credit card say that it will only be used in emergency. You need to have the discipline that will not allow an emergency party or two.
As a parent, you might consider using a pre-paid debit card with a budgeted amount available every month. Students and parents need to talk more openly about the financial needs of the student.
This way a realistic budget can be made.
- Thomas Moore
For most students, college is the last carefree step before their life begins. Although they should have an understanding of finances, including using credit, credit cards and managing debt, they should not have worries about unnecessary monthly bills.
Tuition? Yes!
Living expenses? Yes!
Student loans? Yes!
Credit cards? A loud and resounding NO!
For the vast majority of college students, this is not the case. With aggressive marketing campaigns targeting students, the average undergraduate has at least one credit card and carries an average balance of $2,169.
The problem is that students are flooded with offers from card issuers. They often set up tables right on campus at the start of the school year to hand out applications and free goodies. More offers land in students' hands at the college bookstore, stuffed into bags with the receipts. Still more get pinned to bulletin boards.
Why and how do the credit card companies get away with this marketing barrage on college campuses? They pay the college handsomly for this. It generates a good deal of revenue for the college.
The unrestricted marketing of credit cards on college campuses is so aggressive that it now poses a greater threat than alcohol or sexually transmitted diseases.
As a result of high credit card debt, students have lower GPAs and a higher drop-out risk, because they are forced into taking a job to pay down the debt. Some ruin their credit score making it difficult to rent an apartment, afford insurance or get a job. Even relationships and mental health suffer. But with increasing education costs and no co-signing requirements, credit card issuers have found students an easy market to tap into.
A large part of the problem is that most students simply have not been taught how to handle credit cards by their family or the educational system. Only 15% of high school students take a personal finance class and that doesn’t even scratch the surface of real financial education. Even at the high school level, it is too late to be teaching students about money. This very important subject should be ingrained in our childrens brain as early as kindergarden.
Parents are sending the wrong message to their children by exhibiting the buy now pay later mentallity that our society has become. Don’t we ant our children to have what we never had? I’m not referring to material goods and services, I’m talking about education.
Education AND financial responsibility. Students are to be held accountable for the charges they make, so they just might think twice about charging that beer and pizza party or spring break vacation.
Always remember that credit is a loan. It’s real money and must be repaid. Before you aply for your first card, determine how it will be used. For emergencies? OK, but everyone that first gets a credit card say that it will only be used in emergency. You need to have the discipline that will not allow an emergency party or two.
As a parent, you might consider using a pre-paid debit card with a budgeted amount available every month. Students and parents need to talk more openly about the financial needs of the student.
This way a realistic budget can be made.
Wednesday
Your Financial To Do List
“They may say I’m a dreamer, but I’m not the only one”
- John Lennon
This is not a to do list in the traditional sense. You are not trying to think of all the things that you have to do, but rather create a list of things that you wanted to do, but never had the money or time.
When you achieve true financial independence you will have both the time and the money to accomplish anything that you want. So what we are going to do in this exercise is “act as if.” You are going to act as if money or time was no object and that you can and will do anything that you desire.
Dare to dream.
Assuming that you actually took the time to do this part of the exercise, and by reading this far I will assume that you have, you have a list of dreams – the things that you have always wanted to do.
Now pick three of these items that you want to accomplish this year. Only chose three.
Three is a good number because chosing just three things to accomplish in a year does not seem overwhelming to the avarage person. Commit to the achievement of these three things. There is no possibility for failure. It is not an option.
Write these three things that you are commited to do down on paper. There is a purpose for this which I will go over later.
What you are to do now is determine what you need to do to achieve these three things. How much money will it take? Where can you get these funds? What will you set in motion?
Remember, you have made a commitment to yourself and failure is not an option.
Write this all down on paper.
Now, in what period of time will you achieve these goals. A week? A month? 6 months? Put a time frame on each of your three things and, you guessed it, write it down.
Look at what you have written down. Don’t worry if it seems like gibberish, no one will see it, only you. Now it’s time for you to make sense of it for yourself. To give you an idea of what I’m referring to, use the following as a guide:
This year I will accomplish
A, B, C
And I will accomplish them in
A – 1 month
B – 6 months
C – 9 months
I commit myself to the achievement of these goals and I will do…..
Complete that last sentence for yourself.
Post this written commitment in a place that you will be able to see it. Make copies even and post them everywhere to keep your mind focused on your commitment. Read your written commitment aloud twice per day. Once when you wake up and when you go to sleep at night. Be sure to read it aloud. There is a psychological reason for this. The more your brain hears this commitment statement and see’s this commitment statement, the more powerful your focus will become.
Commit to this process everyday, without fail. You will certainly achieve the success you desire because people gravitate toward what they think about the most. Do this like your life depends on it.
It really just may.
- John Lennon
This is not a to do list in the traditional sense. You are not trying to think of all the things that you have to do, but rather create a list of things that you wanted to do, but never had the money or time.
When you achieve true financial independence you will have both the time and the money to accomplish anything that you want. So what we are going to do in this exercise is “act as if.” You are going to act as if money or time was no object and that you can and will do anything that you desire.
Dare to dream.
Assuming that you actually took the time to do this part of the exercise, and by reading this far I will assume that you have, you have a list of dreams – the things that you have always wanted to do.
Now pick three of these items that you want to accomplish this year. Only chose three.
Three is a good number because chosing just three things to accomplish in a year does not seem overwhelming to the avarage person. Commit to the achievement of these three things. There is no possibility for failure. It is not an option.
Write these three things that you are commited to do down on paper. There is a purpose for this which I will go over later.
What you are to do now is determine what you need to do to achieve these three things. How much money will it take? Where can you get these funds? What will you set in motion?
Remember, you have made a commitment to yourself and failure is not an option.
Write this all down on paper.
Now, in what period of time will you achieve these goals. A week? A month? 6 months? Put a time frame on each of your three things and, you guessed it, write it down.
Look at what you have written down. Don’t worry if it seems like gibberish, no one will see it, only you. Now it’s time for you to make sense of it for yourself. To give you an idea of what I’m referring to, use the following as a guide:
This year I will accomplish
A, B, C
And I will accomplish them in
A – 1 month
B – 6 months
C – 9 months
I commit myself to the achievement of these goals and I will do…..
Complete that last sentence for yourself.
Post this written commitment in a place that you will be able to see it. Make copies even and post them everywhere to keep your mind focused on your commitment. Read your written commitment aloud twice per day. Once when you wake up and when you go to sleep at night. Be sure to read it aloud. There is a psychological reason for this. The more your brain hears this commitment statement and see’s this commitment statement, the more powerful your focus will become.
Commit to this process everyday, without fail. You will certainly achieve the success you desire because people gravitate toward what they think about the most. Do this like your life depends on it.
It really just may.
Subscribe to:
Posts (Atom)
News
Posts
