2. Get a part-time job. If at all possible, maybe it’s a good idea to search for a second job where you would only need to work for a few hours here and there. That way you can still contribute whatever money you already set with your current employer and are making up the difference/earning a little extra with the part-time job.

3. Look at your goals.  Sometimes it’s helpful to re-evaluate what you ultimately want in your future. Do you want to travel? Do you want to live comfortably? Do you want to be able to help your children out financially if you can? (not going overboard, of course) If your goals are on your mind constantly it will help you focus and stay on track in the long run.

Aaron and I are still years and years away from our retirement age, but we already have ideas of what we would like to do. We hope to live comfortably and be able to do things that we maybe missed out on earlier in life, like traveling to exotic locations. They are vague ideas now but it’s a start. They will only be more concrete the farther we move along in life. Because we have solid goals in front of us at all time it’s an encouragement to stay on track and continuing saving for the things in life that we value. Our money is tight just like everyone but we are still determine to save a considerable amount of money each month; which we do.

I encourage you to keep plugging away and to look positively at your future and the things that you want out of life. Don’t be discouraged about your current situation. Use this time to truly motivate you to move towards your goals and dreams. Once you do that, get a game plan together to do whatever you can to reach those goals and have a comfortable retirement.

1. Don’t Have a Car Payment
Did you know that a majority of American’s believe that a car payment is just a part of life? Yup, they do. And you know what, I don’t blame them. Generations have embedded this thought process into our current and most likely future generations. BUT, just because everyone else has a car payment DOES NOT mean that you need to. Buy a car WITH CASH and win. Get a beater car that you can AFFORD and drive it until it won’t anymore. You’ll save yourself thousands in the process.

2. Have a Rainy Day Fund
On a normal day, you wouldn’t take a long walk outside while it’s raining, so why should your finances be any different? I don’t know, but the average savings account today sucks. Plan and simple, folks just don’t know how to save. So you can be wiser just by saving a percentage of your income each month. Start with saving $1,000 to be used for EMERGENCIES, then move to saving 2 to 6 months of living expenses. That’s the best umbrella money can buy.

3. Get on a Written Budget
Yup, a budget. I know they aren’t fun to get started, nor are they too much fun to stick to each and every month, but they will save you boat loads of cash if you work at it. As Dave Ramsey says, spend every penny on paper before you even have it in your checking account. This way you don’t even give yourself to spend money on things you shouldn’t.

4. Cut out the Crap
Examples of crap: cable TV, eating out multiple nights every week, vacations you can’t afford, etc…Once you have a budget written out you’ll begin to see areas of it where you can probably cut to help save you some cash each month. This way you can beef up that savings account, or if you have debt to pay off, get crazy about paying off that debt. Look at your expenses each month and create two categories, NEEDS and WANTS. If you’re really good and crazy, get rid of the WANT category and roll that money into savings or debt payments.

5. Cut up that Plastic
Another painful one for folks, but a great way to get ahead in your personal finances. Cut up the credit card and if you carry a balance pay those suckers off! Start paying off the lowest balance and work up through the highest. You’ll be surprised how much extra cash you have laying around when you don’t have payments to make anymore! So get cut’n and start pay’n!
Hope these 5 tips help you avoid the ditch your neighbor is in! Any other tips? Share them in the comments!

Today I want to focus specifically on how to avoid getting into credit card debt, and if you are in credit card debt how to start getting yourself out of it. I have written a lot about this in the past, so you will see references to previous articles here on our site.

We will first start with getting out of debt and then hone in on how to stay out of credit card debt.

The Snowball Effect

I have read numerous articles, books, and heard people speak on where to start paying down on your debt. There are many “theories” out there but when you really get down to it, they are just one persons idea up against another person’s. Here is what I have filtered out to be the best way to eliminate your debt:

On a piece of paper or in an Excel spreadsheet, list all of your debts (consumer and credit) starting with the lowest BALANCE (lowest to highest). Then, next to those amounts write who it is owed to and their minimum payments. That is your game plan on paper. You are going to, in the word’s of Dave Ramsey, get “gazelle intent” on eliminating the lowest balance while making minimum payments on all the rest. Once you knock out the smallest balance you roll the cash you were throwing at that right into the next balance. Defeat that one, roll that cash right on to the next. This is why they call it the “snow ball effect”.

Why pay the lowest first? Because you will get it done quick which will accomplish two things: 1) boost your ego. You now KNOW that you can do this. If you tried to tackle the highest first you would most likely fail and not finish it. This ensures that you will stick with it and move on to the next one, because you did the lowest one!! 2) it frees up cash quicker which can be thrown into the next debt. If you tried to tackle the big one first you would not free up cash for a VERY long time, which would keep your debt around longer. You want to free up as much cash as possible (and as quick as possible) and a very good way to do this is to get rid of the ankle biters, the little balances that are a nuisances.

[source]

What to do to stay out of credit card debt

This article states that some 7.3 million consumers use credit cards to take cash advances. It also states that these interest rates can be as high as 29.97% for cash withdraws. This, my friends, is not a good way to stay out of debt and is not a good way to use a credit card. Period. I personally do not use a credit card for anything. I am a cash man and I intend to stay this way. You should too. Especially when you get out of debt. Cut up the credit cards and start to depend on cold, hard, cash. There is no better way to spend (and save!).

From the same article quoted above:

Once you have eliminated your credit card debt start SAVING your money. If you don’t have one already, get an emergency fund with no less than $1,000 in it. From there move onto getting 3-6 months of what it takes to meet your budget each month into savings. The idea here is to GET RID of debt and BUILD UP SOME CUSHION. Because here is the problem, an emergency is going to happen (I will personally guarantee this) and in order to stay out of debt, you need to have the CASH to meet the financial needs of that emergency.

Without the cash saved guess where you go…right back into debt.

I like the way that this article is titled: Unemployment affects the finances of families

And believe it or not, it’s true! If you lose your income you will have an affect on your family finances. And with the way that the economy has been for the last two years, your job and thousands of other jobs are being cut. If you are not planning for this possibility then you my friend, are living in a dream world.

Unemployment is real, and abusing government handouts is real too. Please, don’t be lazy, get a job.And if you don’t want to go back to working the 9-5 drudgery, get creative about what you can do to earn an income. The possibilities are truly endless, and working for yourself can be a nice change of pace (as long as you can manage your time…). If you lose that steady income by being laid off, your new job is finding one. And if that means creating one, then you create it!

Here are some ideas to get you started (on the work for yourself path):

Learn something new

Go beyond your bubble and learn how to do something that makes you stand out. Be it HTML, PHP, blogging, SEO, etc. Whatever that one thing, or that combination of things, is that makes you more competitive and stronger than the person next to you – learn it and do it. Hard. [source]

Cut grass

It is that time of year and cutting grass is one thing that a majority of the people who live around you will not want to do. Walk your lawn mower around town and offer to cut yards for $30 (or whatever you see is a reasonable charge for your time). Then, when you are finishing up, offer to come by next week. Do that for each house and you’ll be busy.If you have a pickup truck, drive to the next neighborhood and do the same there. Before you know it you’ll have to hire some help.

Sell on eBay

I’ve talked about using eBay to earn extra cash for the holiday season but there are thousands upon thousands of individuals who earn more than extra cash, they are using the auction giant to earn a full-time income. Start by looking around your house. What can you put up on eBay that will sell? Don’t worry so much about the value, at first. Just put something up that you know will sell and will get your feet wet. Once you have done that, dig even further in your home for items that you don’t need but would be of value to someone on eBay. List it. Once you have done that a few times, offer to sell for your family and friends. Charge them 15% of the final value fee. That’s a taste of making money to sell items on eBay (which is easy). Then, tell them to tell all of their friends and coworkers that you can sell items for them on eBay. Give them a business card and let word of mouth do the rest. Leave flyers on your neighbors doorsteps….you get my drift.

Once people start calling you will get a taste of how much crap some people have. They will think that it is priceless but you will not lie to them and agree with them. It is not worth your time, especially if you have other clients calling you. Create a fee structure like this one: if the final value is is $50-$200 you charge 25% of the final value. If $201-$500 you charge 20%. If %501-$1,000 you charge 15%. If above $1,000, you charge 10%. This is just a suggested starting point, feel free to use it and adjust it.

If you start making your own path and aren’t relying on a 9-5 income, do this one thing and I can personally guarantee that you will keep the clients coming: Treat each and every client like they are your only client. Do this and they will keep coming back.

I hope these suggestions are helpful to you and get you thinking outside of the cubical box. If you lose your job, create one.

Even after the global economy going into a recession, and even after millions of families having to foreclose on their homes, the vast majority of people will still be dependent on credit cards and other loans in order to meet the expenses that are associated with living life.

That’s right, living life. Paying the bills, putting food on the table, gas in the car, and even taking vacations. I know that you already know what my advice is but I have to give it to you anyway: do not rely on debt. Do not use debt. Do not get into debt. And if you are in debt get OUT as quickly as possible; especially if the debt is credit card debt.

If you have credit card debt, if you carry a balance on ANY of your credit cards, the best way to deal with that debt is to CUT THE CARD! Do not leave the card intact and available for use, because all that does is keep you deeper in debt and farther from getting out of debt. Cut up any and all cards that carry a balance and focus solely on paying them off! I outline the steps you can take, after cutting up your card, here.

“The borrower is servant to the lender” – Proverbs 22:7

Not only is debt a hole that some folks never get out off, but it is a hole that some folks don’t want to get out of. They get comfortable in their debt and believe that it is a part of life, a natural occurance that is inevitable. This is a lie and they are doing nothing but hurting themselves.

The verse above, Proverbs 22:7, is a verse that I absolutely love. It is a painfully true statement. I talk here about how I was indebted to my father in-law and how I wanted nothing but to get out of that debt! It had nothing to do with the fact that he was my father in-law or that he was using the debt against me. Debt chains you down, it does not give you the freedom to do as you please. In the article linked above, I mention that while indebted to my father in-law it would have been foolish of me to make any large purchases, and if I would have, I would have given my father in-law, my lender, every right to be upset with me. And while some will argue that it would not be his place, I would have made it his place because I was indebted to him, I was his servant.

When you are not indebted to someone, or some company, you have a freedom that comes only when you are free from the burden of debt. You can spend as you wish, save as you wish, and do anything you would like without having to answer to anyone. Essentially.

Please, do yourself a favor, stop spending yourself further into debt. Get serious about getting out of debt. You will not regret the decision to make sacrifices now so that you won’t have to in the future. In the word’s of Dave Ramsey: “Live like no one else [today], so later you can live like no one else.”

While banks, insurance companies, and automakers, are all failing, a company in the UK that provides debt advice and support is growing. Debt Free Direct bought consumer debt advice group Clear Start UK. While banks are failing, a debt management company is growing. I love that.

This is encouraging to me!! This provides me with a glimmer of hope that we are not all lost, that not everyone out there is giving up and settling with the MYTH that debt is a part of life.

We all know that debt has become a fact of every day life. Some people believe that debt is inevitable and there is no other way to do things. But on the flip side of this coin, there are some of us who know that there is another way and a better way to handle money  and life. For me, CASH is the name of the game. Paying with cash and having a lot of money piled up in my money market account incase of emergencies is what helps me sleep at night. It could be different for you, but as long as you know that debt is not a way to do anything, you are good.

For some, this realization may not come as easy. For most debt has not only been a part of their lives, but their parents lives as well. Some families are absolutely torn apart by debt. It is at this point, at the point where DEBT starts to control their life, that people start to think. They think about everything they have but don’t own and they think of all of the arguments they have had with their spouses or significant others over money. The thought process may take some time, but eventually they will get to the point where they know what they need to do. They need to change and they need to learn how to manage the debt they have, get rid of it, and start over.

This is where a company like Debt Free Direct comes in, and thankfully they are going to be sticking around. They offer free advice to their clients and provide them with debt solutions to help them get out of debt. With people slowly coming to the realization that living with debt does not have to be them, I see companies like this doing nothing but growing. And this makes me happy!

If you have been buried with debt and can not imagine where to start, do some research and find a debt solution company that can truly help you. Be careful, some will be nothing but a scam, but not every debt solution company is. Do your research, call a lot of people, and make an informed decision.

Asking for help is not a bad thing.

If you are fired, or laid off, or out of work, you have a new job. That’s right, a new job. You don’t get to “take the day” and mosey around your house or apartment. You have a new FULL TIME job. This job requires 8 hours of your attention every day and does not include a paid lunch. It should start promptly at 8am and end 8 hours later. Monday through Friday, this is your new job: LOOKING FOR A JOB.

I know, easy, right? Well apparently not if the unemployment rate keeps going up. But let me encourage you: you are better than that. You do not need to stay in that number. You do not need to settle for government hand outs and you do not need to NOT WORK because that is what other unemployed people are doing.

If you are laid off, your new job is finding a job. If it takes two full weeks (80 hours) to land the next job then that is what it takes. Call every person you know, or knew, and get your feelers out there! Look online. Call temp agencies. Settle for SOMETHING. Dig ditches for all I care. As long as you are being paid and are not relying on DEBT to live then I’m happy, and you should be too.

The worst thing you can do for yourself, and your family (or future family), is sit on your butt all day after being laid off. Some may look at losing a job as a terrible thing, and some make it into a terrible thing by not doing anything about it, but it can be used for good. Start your own business. Change careers. Etc. JUST DON’T SIT AROUND DOING NOTHING!! Get creative and do what it takes to stay out of using debt to live. Because, my friend, you are better than that, and you know it as well as I do.

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Show notes:

• Transferring a balance to your credit card is risky
• Understand what you are getting into when you sign up for a credit card
• Credit card companies apply payments to the balance with the lowest interest rate
• There are other ways to build credit (future podcast episode)
• In a band? Send me your music and I’ll consider it for the podcast (send to wyanradio@gmail.com)
• The French Revolution – For The Money (visit their Myspace page)

Thanks for listening! Have any comments on the show or want to suggest a topic? Send me a note at wyanradio@gmail.com.

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