Thursday, May 13, 2010

10 ways to dump your debt in 2010



A great deal has changed in the past year, and even more has changed over the decade since we ushered in 2000. I recall that the world as we knew it might have ended due to us being unprepared for the dreaded Y2K bug, lurking in our computer networks!

Well, that never materialized and neither did our more positive resolutions to cut back on our debts. Now that we are a decade into the new century, it is appropriate to offer 10 new tips for the next year that will help you get that debt devil under control.

Here are my top 10 ways to get rid of consumer debt in 2010.

Tip 1Know what you owe.

To get where you need to be, you need to know where you are starting. Gather up all your statements and determine how much you owe in total. If you don't like the answer, this negative exercise can give you the oomph to get going.

Tip 2Yes, you can, with a plan!

Having a spending plan for your income is the best way to ensure that you are spending your hard-earned money in the way you want and most importantly, in the way that assures your financial success.

Tip 3Make your own Treasury stimulus plan.

Review your income tax withholding. If you are receiving a tax refund of more than $600, you are providing an interest-free loan to the IRS. A better idea is to adjust your withholding -- have less money taken out for income taxes -- and use those funds earning zero percent interest to help pay down your high interest consumer debt.

Tip 4Save like there is a tomorrow.

Start an automatic savings plan. The simplest way to avoid unwanted debt is to have money set aside for those unexpected or large expenses that we all have. When you have money taken from your paycheck or checking account and automatically deposited into a savings account, you will hardly notice. But you will be building a very important financial tool -- liquid savings. Your savings goal should be six months to a year of living expenses.

Tip 5Half of nothing will be something.

Commit money you don't have yet to paying down your debt. Use at least 50 percent of any new raises, bonuses, tax refunds or other source of additional income to give yourself a boost in paying off expensive debt.

Tip 6Beam my payments up, Scotty.

Set up automatic electronic banking payments. A late payment can trigger a hefty late fee, and may result in an increased interest rate on future credit card purchases. Electronic payments will help avoid a payment arriving late and increasing the cost of your debt.

Thursday, March 4, 2010

How do YOU imagine your retirement


The retired couple's guide to livin' the dream

By Walter Updegrave, senior editor




(Money Magazine) -- Question: My husband and I have been happily married for 28 years. Careful spending and sound planning over time has provided us with a very comfortable financial future. Although we're compatible in many ways, our outlook differs when it comes to enjoying our money. I'm more of a saver and I hate to shop. I'm already retired, and when my husband retires in a year we'll begin drawing on our retirement savings. Can you suggest some tips on how we can communicate effectively about spending our money? How do we assure that we'll both have the independence to decide how we want to spend "our share" without judgment? --Margaret M.


Answer: The fact that at least one of you has begun to think about how you'll get along once you make the transition from the work-a-day world to retirement is a hopeful sign.
For many couples this important new phase of life is something that just happens without much real planning about how they'll handle their money in retirement or deal with the adjustments each might have to make now that their schedules and finances may be radically different than during their careers.


A 2009 Fidelity Investments survey of 502 married couples found that only 38% report making decisions together about their retirement finances and that large numbers don't agree on such basics as what type of lifestyle they expect to live after retiring.
So I applaud you for wanting to open up the lines of communication between you and your hubby now rather than waiting until you've both left your jobs.


But if you really want to improve the chances of you and your husband enjoying a retirement that's financially secure and fulfilling for both of you, I think you need to talk about more than just how you'll spend your money. You should take a comprehensive look at how you want to live in retirement and how your wishes jibe with financial reality. Call it a Retirement Dream Reality Check.
Here's how to do that in three steps:


1. Envision your retirement. You and your husband should spend some time discussing what you would like to do once you're both retired. Freed from the shackles of work, you're going to have a lot more time on your hands. Think about what you'll do with it.
I'm not talking about generalities like kicking back and taking it easy. I'm talking about specifics: Do you want to travel? If so, how often and where? Do you want to spend more time pursuing a hobby or avocation that's long been important to you, or maybe start fresh with a new one. Might you work part-time to stay engaged? Do you plan to live year-round in your current home --or maybe split your time in different parts of the country? And are there activities you think you'll participate in on your own? It would be a good idea to let your spouse or significant other in on that.
You and your husband can engage in these sorts of discussions on your own. Or you can attend a program or seminar specifically designed to help you map out the next chapter in your life, such as the Paths to Creative Retirement Workshops offered by the North Carolina Center for Creative Retirement.


The key, though, is to share ideas and brainstorm so that each of you has a sense of how your partner sees the next phase of life unfolding. The more you know of each other's hopes and dreams, the better you'll be able to plan to accommodate one another.


2. Assess your financial resources. Dreaming is nice, but you've also got to make sure your plans are tethered to reality -- that is, ascertain whether you can afford the type of lifestyle you prefer.
To do that, start by taking inventory of your finances. Tote up all you've got stashed away in 401(k)s, IRAs and other retirement accounts, investments in brokerage and mutual fund accounts, savings accounts -- and don't forget other resources such as Social Security, the cash value of any insurance policies and the equity in your home. To get a sense of how much sustainable income your savings might generate, you can check out a tool like T. Rowe Price's Retirement Income Calculator.


This is definitely an activity you and your husband want to do together, as it's important that both of you understand what sort of standard of living is realistic given your financial reserves.
You may very well find that your savings and other resources can't support all of the activities you had planned to do as a couple or separately. In that case, you can talk about cutting back or eliminating specific ventures or maybe paring back overall.
Or, you might decide that you and your husband are better off working a few more years so that you can fund a retirement that's more to your liking. But until you've actually gone through steps one and two, you can't really know whether your desired retirement lifestyle is within your reach.


3. Collaborate on (some) spending. Once you're reasonably sure you have the financial wherewithal to live the way you want in retirement, you can focus on how to manage your spending so that neither of you feels he or she is being short-changed on your retirement resources.


Given you've already got more than a quarter century of marital bliss behind you, I doubt that you and your husband are going to get into tiffs over basic expenses like the mortgage, health care, groceries, insurance costs, etc. They're pretty much necessities that will come out of a communal pot.


But it's the category of discretionary spending where things have the potential to get hairy. There are any many ways to deal with such non-essential spending, but one is to agree that you both have to agree on spending over a certain level. That level will depend on what you consider a significant amount of spending, but something on the order of $500 to $1,000 might be a reasonable starting point.
Or you might agree to cede spending decisions in a particular area to one spouse. For example, I'm a bit of a cheapskate when it comes to traveling. I figure I spend very little time in the hotel room during vacations, so as long as it's clean, a no-frills room is fine with me. Let's just say my wife feels differently. So I pretty much defer to her on travel accommodations, knowing she'll find something to her liking that won't bankrupt us.


As for smaller amounts of discretionary spending you may each want to do on your own -- clothing, lunches and dinners with friends, that sort of thing -- you might want to agree on a monthly amount you can each go through no questions asked. The size of that figure will depend on how much cash you can lay out after paying for essentials and larger items. But whether it's $100 a month, $200 or some other figure, what's most important is that you allow one another the option of spending some money without fear of judgment or recrimination.


Will following these three steps totally eliminate potential sore spots? Of course not. As someone who hates shopping, you may not understand your husband's pressing need to buy the latest electronic gizmo. (Just as he may question why you're concerned with saving at this point in your life when you've earned the right to enjoy what you've already saved.)


But if you go into retirement with the same spirit of cooperation that's kept you and your husband happy the past 28 years, you should be able work it all out. To top of page

Tuesday, March 2, 2010

Nine Things You Shouldn't Buy New

Nine Things You Shouldn't Buy New

There are a number of things I would never consider purchasing secondhand due to the creepiness factor. Sorry, but I just couldn't do it. That list, however, is quite short. Now more than ever, the vast secondary market in this country is loaded to the gills with great bargains on things that are just like new.

Timeshares. Most people I know who own a timeshare regret having purchased it new. No wonder. They are guaranteed to lose 30 to 70 percent of their value right off the bat. If you are convinced that a timeshare is for you, buy it used as a resale. According to TimeSharesUSAResales.com
, a site that deals in the secondary timeshare market, you will save an average of 67 percent off the new price.

Pets. Buy a purebred puppy from a breeder in California and you will spend at least $700, plus vet bills. Adopt a previously owned puppy from the animal shelter for about $175 including spay/neuter, vaccinations and fees. Savings? Oh, about 78 percent, according to SmartMoney.com
.

Software and console games. Games for consoles like the Xbox 360 and Sony PlayStation can often be purchased used for half-price at stores like GameStop.com
or SecondSpin.com. Ditto for popular software. Sure, you will have to wait awhile after the product's release, but by then you will know for sure which game or program is a winner, and which are considered losers.

Office furniture. Sadly, many start-up businesses fail before the second year, and many of them invested in fancy furniture. Never buy new office furniture. Check Craigslist.org
or local classifieds to find the goods.

Sports equipment. Lots of people buy all kinds of sports equipment, from basketballs to ski outfits and everything between. They plan to use all of it, and there it sits gathering dust. Find a Play It Again Sports consignment store in your area at
PlayItAgainSports.com or check out yard sales and newspaper ads for the great deals.

CDs and DVDs. Used CDs, DVDs and books are easily available. Find the latest releases in pristine condition at discounts of 30 percent or more at websites like Half.com
and Abebooks.com. Even if you think you cannot wait, take a look to see if, by chance, what you want is available used.

Cars. Want to know what happens the second you drive that new car off the dealer's lot? Edmunds.com
says it loses about 12 percent of its value. That is horrible. If you just financed it for 100 percent of its value, you are upside down before you can even show it off to your friends. Why not let someone else take that hit by buying a late-model used car?

Jewelry. These days, when people are down-sizing and liquidating in droves, you can find great bargains on previously owned fine jewelry at pawn shops for half-price or less. Just make sure you are dealing with a pawn shop that has been in business for a while and has developed a good reputation in the area.

©Copyright 2010 Mary Hunt
Everyday Cheapskate is a Registered Trademark



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Friday, February 26, 2010

Grow your own! (prosperity and food, that is)

There is no better metaphor for building wealth as growing your own food.  Gardening teaches patience, diligence and faith.  The following is an article in the Jan / Feb 2010 issue of Countryside & Small Stock Journal Magazine.  Countryside is a fabulous resource for common-sense living.  http://www.countrysidemag.com/


Gardening on a dime

By Tawra Kellam
www.LivingOnADime.com
People are often surprised to find out that even though I'm a cookbook author I went to school for horticulture. (I never wanted to be a writer. I wanted to own an herb farm.) Growing your own plants can not only save you lots of money on your grocery bill, but a nice landscape can improve the value of your home. If you're creative, you can have a great garden with very little cost. Here are some of my favorite tips to get you started:

Tools

Watch for people who are moving. Ask if they are leaving their lawn equipment and if you can have it or buy it cheap.
Use an old mailbox out in the garden to store your clippers, plastic bags and gloves. (This is my most used item in my garden!) It is especially wonderful because the kids and Hubby don't know where my tools are, so I don't have to worry about them borrowing the tools!
Use wedding tulle found at fabric stores instead of shade cloth to shade plants from the sun or to keep the birds from eating your fruit. It's much cheaper. Better yet, ask a just married bride if you can have the tulle from her wedding.

Cheap plants

If you see plants at a store that are in bad shape but not dead, talk to the manager. Ask him if he will give you a "deal" if you take them off his hands. Most of the time they will because the plants look bad and they don't want to mess with them anymore.
Last year I was able to purchase over 50 large 1/2- to one-gallon sized perennials for $50 (over $600 retail). All but about five of them lived and I was able to return those and get my money back. Most home improvement and discount stores have a guarantee that if your plant dies within one year, you can bring the dead plant and the receipt and they will give you your money back or give you a new plant.
Buy seeds on sale at the end of the season. Put them in a brown paper bag in the refrigerator for better storage. Seeds usually last many years beyond the "past due" date on the packet.

Mulch

Ask a tree trimming service to give you their wood chips for mulch if they are in the area.
Some cities also have a free mulch program where the city tree trimmers dump all the wood chips. Call your local county extension and find out if there is one in your area.
If you just need a few bags, look for torn open bags at the home improvement store. Our local store has a pile where they dump all the torn open bags of mulch and rocks. They sell the bags for $1 each, saving you up to 75% off! Most just have a few chips missing.
Use shredded paper or newspaper under mulch. This way you can use fewer wood chips.
Keep a shower curtain or tarp in your car at all times. This way if you find a good deal on mulch or plants you can take advantage of the deal right away without messing up your car.

Containers

Use deli trays with lids to start seeds. They are mini greenhouses!
Ask the cemetery if you can have the pots they throw away after Memorial Day. (You can dry the almost dead flowers for potpourri.) Look in dumpsters. Many garden centers at the discount stores throw away the dead plants, pots and all. Ask permission first.
Use Styrofoam peanuts in the bottom of pots for drainage. You can also use small six-inch plastic pots, soda cans or plastic bottles in the bottom of larger pots so you don't have to use so much soil and make the pots lighter in weight.

Miscellaneous tips

Use milk jugs as drip irrigation. Poke two or three small holes in the bottom of the jugs and place next to plants. Fill with water and they will slowly water your plants all day.
Use vinegar in a spray bottle to kill weeds. Only spray the weed. It will kill any grass or plants you want to keep if you get it on them.

For kids

Have kids water the plants after they swim in the kiddy pool. Have them take buckets of water from the pool and water the plants when the pool needs to be emptied.
Buy or ask for sandbags after heavy rains. Use the sand for paths or for the kid's sandboxes. (Only use sand from clean floodwater situations.)
Save scraps of soap when they get too small to bathe with and put them in an old nylon stocking. Knot and hang the nylon on an outdoor faucet.

Homemade Tough Hand Cleaner

  • 1/4 cup grated Fels Naphtha soap ends
  • 2 tablespoons mason's sand or pumice
  • 1 cup water
Place soap and water in a saucepan. Place over low heat; stir until soap is melted. After mixture cools, add mason's sand or pumice. Store in a cottage cheese container or margarine tub. To use, dip fingers into soap mixture and lather hands. Rinse well. This works well on greasy tools, also. Be sure to rinse and dry tools thoroughly.
Tawra Kellam and her husband paid off $20,000 debt in five years on $22,000 a year income.

There is no better metaphor for building wealth as growing your own food.  Gardening teaches patience, diligence and faith.

Monday, January 11, 2010

Six Things We Can Do to Fix This Economy

Mary Hunt is one of my favorite resources: she charged herself into roughly $100,000 worth of debt and dug herself out.  The lessons she learned became the foundation for her mission to help others who find themselves in the same situation.  The article below is from the Daily Cheapskate:



Six Things We Can Do to Fix This Economy

It's a mess out there. Unemployment is higher than it's been in 60 years, and the U.S. dollar is losing value at an alarming rate. If that's not bad enough, fears abound that taxes will be heading north for all workers, even while the United States continues to find itself in a deep, protracted recession.

On that happy note, let's turn to the subject at hand. What can we do, you and I, individually, to turn this economy around? In a word: Nothing. What you spend this week, how much you save or burn up in gasoline is not going to make one bit of difference to the U.S. economy.

But we can make a big difference for our individual economic pictures. Add that to what our friends, families, neighbors, colleagues and communities do, and we're looking at the cumulative effect, which can make a difference.

Here is a list of specific things that all of us can do, starting today, to get things back on track in our personal lives. That is how we will affect the larger picture:

Stop living on plastic. Please, just stop spending more money than you have. No matter now difficult your financial picture is right now, adding to your debt is like pouring gasoline on a fire. It is going to make things even worse.

Get out of debt. I'm talking about your unsecured consumer debt. Nothing but higher interest rates and increased fees are coming down the pike. You cannot afford to be in debt. Make a commitment today to do whatever you must to remove that financial bondage from your life.

Rein it in. Yes, you've cut your expenses. Sure you are becoming more frugal than ever. Great. Now, double your efforts. I'm serious. Whatever you are doing now, you can do better. Challenge every expense, every purchase. Is it really necessary? Can you do something else instead? Can you at least wait a few more days? Get tough on yourself. What you do not spend is money you can use to build your emergency fund or pay down debt.

"No" is the word. Place it firmly on the tip of your tongue during the new year: "No!" Use it often when you are tempted to spend foolishly. Just say "No!" to anything that you cannot buy with cash. Say "No!" to anything that will impede your efforts to save and pay off debt. Keep it handy. It will save you a lot of grief, and allow you to make economic progress this year.

Work more. Forget early retirement. Instead, figure out how you can work more, and even years longer. This is going to be a year of extra effort, not a time to ease off.

Buy American. We need to get manufacturing and production to return to the USA as soon as possible. When it fits within your budget to buy goods and services, let's do everything we can to buy American. Look for companies that are producing products for homes and families at websites like StillMadeinUSA.com and MadeinUSA.com.


Do you have ideas on how we can work together to help the economy? Join the conversation at my blog, Money Rules, Debt Stinks!

©Copyright 2010 Mary Hunt
Everyday Cheapskate is a Registered Trademark

Monday, January 4, 2010

Do not rehash the past



Set goals for your new year!


How to Set Goals

originated by:kezooki, Ben Rubenstein, Flickety,

The next time somebody tells you that setting goals is really a lot of hype, tell him this: if life is a journey, how will you get there if you don’t have an itinerary? Goals tell you where you are going, how you are going to get there and what you will do when you get there.

Steps


1    You have to decide what you want first of all. The problem with so many people is that they do not know what they really want. In other words they are not at all clear about what they want in life. Setting your goals, needs you to make a decision about that which you want, and determine when you want to have achieved that thing. In other words you must put a deadline to what you currently want. Get clear about what you want.

2    Have a good plan of attack. Ask yourself:
What do I know about this?
What information do I have?
What information do I need? Where can I get it?
What skills do I need to master?
What other resources should I use?
Is this the best way to do it, or is there some other way?

3    Start small, but keep walking. Goals don’t necessarily have to be big ones. When you set your goal too high, you might find it too overwhelming and time consuming and just give up, or make another one, just as big. It’s akin to quitting cold turkey – there are setbacks.

4    Set goals in small increments, complete with time, dates, amount, some details. If you tell yourself, “I’m going to be an opera singer” and then sit around and wait for it to suddenly happen, you could be waiting all your life. Start with singing lessons for a month, and then a year and expose yourself to opera music. You can then progress to more singing lessons year after year. By breaking down your goals in smaller, workable units, you are more likely to make them come true. Remember, even the great ones had to start somewhere.

5    Be positive when stating your goals. Instead of saying, “I am not going to miss my exercise routine today,” say “I’m really busy, so I’ll probably just make time for 20 minutes on the treadmill.” Stating your goal positively will help you view it as a good thing to do, and not as a byproduct of what you had to avoid.

6    Spread out your goals. So maybe we do have certain general goals that apply to all areas of our lives like, “I want to be successful” or “I want to be rich” but those would seem as far away as the Niagara Falls viewed from Hawaii. Instead, try making tiny goals for different aspects of your life, one or two for each, even more if you like. These areas are: family and home, career, social, physical, mental and spiritual. If you say, “I want to be a successful dad,” then try to make goals towards the development of your family life while still keeping an eye out for ways to improve your career and other areas of your life.

7    Don’t underestimate yourself. It’s tempting to sometimes just slack off, or let yourself off too easy. If you want to write the definitive American novel, then don’t try to churn out just a page or two a day when you know you are more than capable of writing five pages, even ten. The fear of failure is sometimes to blame for setting our goals too low. How often have we said, “I don’t really want to volunteer for that project ‘cause I might screw it up. And then my colleagues will make fun of me.”

8    Remember that some fears are unfounded. How do you know you’ll actually ruin it? And how do you know for sure your coworkers will laugh at your effort? If you try to reason with your fears, more often than not, you’ll realize that there really is no reason for you to be reluctant and that in fact, you can do it.

9    Write it down. Putting your goal down on paper is more than just memorizing it. You are actually confirming your willingness to make it come true. A written list of goals is an effective reminder of what you need to do and once you’re done, a good review of your accomplishment. A simple list on a piece of notebook paper is fine, or using a computer program to really jazz it up works just as well. You may want to hang it up somewhere, as a constant reminder to work toward your goals: inside your closet, the back of your medicine cabinet door, or on your bulletin board near your desk.

10  Affirm it. Affirmation is really more than writing down, “I am going to buy my $750,000 home by Christmas” twenty times. It’s actually being conscious not only of your thought processes, but also of your acts during the day.

11  If you’re trying to save money and then you pass by a shop window where a great pair of shoes seems to have your name on it, think, “If I buy those shoes, would I be making my goal of saving easier? Will I be able to meet my deadline if I splurge just this once? A few months from now if I don’t meet my deadline because I didn't save enough, would I feel good about it?”

12  Stop procrastinating. So you’ve heard this before. Big deal. Well, it is. Time wastage is one of the greatest crimes in history. If Henry Ford put off studying and tinkering with machines for another time, someone else would have improved on automobiles and he wouldn't have gone down in history as a pioneer. If you’re used to procrastination, being bullheaded about a goal can seem scary at first. Try to set a schedule and then reward yourself each time you meet it.

13  Start inculcating the habit of liking something. The most difficult thing is to LIKE something useful. For example we may like that particular model, star, lazing around with friends, to impress the opposite sex etc...but do they give us any long term returns? They just look jazzy for a small period of time and again life is as usual, that which has no achievement. .Our mind generally rejects any conscious attempt to focus on any worthwhile goal. Some really lucky souls subconsciously liked these worthwhile goals and made it big. Many of us focus subconsciously on these petty things such as entertainment, celebrities etc...and when time comes for focusing on big ones we back out because we have an already loaded negative image of that goal. It is simply a misinterpreted relativity. No reason to feel worthless before a big goal just because we have been LIKING petty goals. You need to think big, when you are setting goals, think great thoughts. You must also crystallize your thinking, make it clear to you first, then write it down.

14  Plan ahead, so you can get ahead.

Sunday, January 3, 2010

Spiritual Goal Setting Series

Start 2010 with a road map of where you wish to go with your life!  At Unity Spiritual Life Center http://www.unityspirituallifecenter.org/ in Durham, NC.  I will be presenting three Wednesday sessions starting Janual 13 from 7-9 pm in the main Sanctuary.

Week 1: We will have a spiritual goal getting exercise/session from borrowed from my Spiritual Financial Integrity class.  The purpose is for you to develop goals in the main 5 areas of life: Spiritual, Personal/Relationships, Career/Avocation, Money, Growth. 

Remember: A goal not put to paper is only a wish.........

Week 2: (Jan 20) Pictured Prayer/Treasure Mapping workshop to image their goals.  My co-instructor for this session is my friend and amazing healer, Patricia Skinner.

Week 3: (Jan 27) A 90 day prayer and action plan session that takes their time-bound, specific goals and breaks them down into doable chunks. I have some nice affirmations and exercises from Marc Allen www.marcallen.com/ that I will share with the students.