Guest Post by Mariana

Issues with money or personal finance are some of the most challenging and stressful ones out there. Dealing with money problems can be particularly difficult if you little experience with financial management on your own.

 Money is a daunting thing. While it is important to understand the specifics of interest, investment, and savings, it is also essential that you know your own personal lifestyle enough to manage your personal finance habits. These three steps in your own personal development are essential steps to take in your financial development as well. Use these personal development stages to better manage and solve your money matters. 

Try Some Honesty

Honesty is paramount in most situations in life. And, while that sounds like a worthless notion, it’s true. Part of growing up and becoming a responsible adult means realizing when you are being dishonest with yourself and remedying it.

Money makes it easy to be dishonest with ourselves. There are many tricks that we will play on ourselves when it comes to personal finances and spending. However, once you are able to recognize when you are being dishonest with yourself and your needs, you will be able to better manage your money. If you really want to solve money issues, you have to be realistic with yourself about your situation. The truth is the first step in dealing with money matters.

Taking Responsibility and Making Sacrifices

For most of us, taking control of our finances means making a sacrifice or two. There are some aspects of our financial lives that we took for granted at a younger age, that we just have to own up to and change. Of course, this goes hand in hand with being honest with yourself.

If your money issues involve budgeting, then you need to accept that some things are luxuries you just shouldn’t spend your money on. If you can’t afford these luxuries, than you need to find a way to sacrifice them. Learn how to be more economical. Eat out less, use public transportation, or make your own coffee at home. Each of these little sacrifices can make a significant impact on your financial situation.

Lose the Pride, Ask for Help

For most of us, money is a very personal issue. For this reason, many people keep their financial questions and concerns to themselves. However, talking to someone about your issues or concerns can be extremely useful. Don’t be afraid to ask for help with something concerning your money situation.

Discuss things with a professional or a trusted and knowledgeable family member. If you have someone you trust in your life who has knowledge with money and numbers, solicit their help. Of course, you should be wary about who you share your financial information with. Be sure that you find someone trustworthy and capable of giving solid advice. Asking for help is one of the first signs to really maturity. Seek it, if you need it.

Author Bio:

Mariana Ashley is a freelance writer who particularly enjoys writing about
online colleges.  She loves receiving reader feedback, which can be directed to
mariana.ashley031 @gmail.com.

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Today, I want to take a look at the 7 Habits of Highly Efficient People and what makes them successful.  By now, I’m sure you’ve realized that I’ve been inspired from the readings of Steven R. Covey’s, “7 Habits of Highly Effective People“. 

 If you’ve never studied any of Covey’s earlier work, I highly endorse it as it’s possibly one of the best and highly used framework courses to help individuals and businesses to succeed and thrive.

 I’ve decided to write on what the 7 Habits of Highly Efficient People and how you can absorb what you learn here and put into immediate action in your daily life.  So, just what makes a person highly efficient and become more effective than many of their peers?  Let’s go ahead and take a look at what I’ve determined to be key factors:

Habit #1 – Positivity Radiates from the Utmost Being

Highly efficient people usually start their days on a positive note from the get-go.  This means being positive from early morning and staying positive throughout their day. 

They also know it’s all about their mindset that makes all the difference and this allows them to display confident behavior.  These traits help to make them attractive and people actually want to be around them.

Practicing Affirmations

Highly efficient people have known to start their day with daily affirmations to begin with.  By starting the day with positive affirmations, it can help set your complete day up for positivity. By positively reinforcing for at least 30 days and then beyond, you will see a huge enhancement in your mental and your own confidence will usually rise.

Habit #2 – The Mental Mindset of a Giant to Succeed

Highly efficient people also determine with their utmost being that they will do what is necessary to make it and become a success.  By taking small actionable steps, it helps to ensure that they move little by little towards their utmost goals. 

The unrelenting confidence that supports them is then just a by-product of their earlier mindset setting techniques.  It’s all about conditioning the mind for the level of achievement needed.

Habit #3: Constant Work on Continual Education

One of the biggest factors that separate those highly efficient people from their competitors are that they are determined to never stop learning.  Constantly work on their education gives them a very distinct edge over others that stay stagnant in their learning.

Think about it, if you want to learn about something, you could research it by reading a book and at a higher level course on it.  By positioning themselves as experts in certain fields, highly efficient people can quite easily become seen as a authority in their respective field or chosen profession. 

A big difference is that these personality types also help people to learn as well.  Sharing the knowledge is a key difference that reciprocates value in who they come into contact with.

Habit #4: Fosters Great Relationships

In studying highly efficient people, it’s usually imperative that their own immediate family comes first.  They place a great emphasis on family relationships and that family comes first and foremost.  Yet, they also are known to foster those outside business and other relationships with people.

Usually, they are a joy to be around resulting in more business and networking opportunities.  Not only that, but the relationships they foster aren’t all about business.  They usually make relationships with others and known as a ‘people’ person. 

Habit #5: Excellent Time and Money Managers

If you don’t value your time and money, chances are, other’s won’t value them as well.  Like I mentioned in an earlier post, “Become A Better Money Manager” ; it’s a perfect example of why you must have a healthy relationship with money. 

Usually, money is a tool to help keep the economy going and at a personal level can give you more freedom.  Highly efficient people know this fact and practice to always save more than they spend and build wealth as opposed to squandering it off without remorse.

These people are usually also very good at time management.  In fact, most of these personality types have take good time management courses and realize that time really is money and make an effective use of their time.  Time is an asset that shouldn’t be wasted and they understand that concept profusely.  They all have time management skills and make very productive use of the time they have available to them.

Habit #6: Living a Healthy and Happy Life

Being healthy and happy for no reason other than enjoying their life, usually exemplifies the way that these personality types choose to spend their lives.  Contrast this with non-exercising and miserable personality types.  There is a distinct link between keeping yourself healthy and actually living a happy life.

Great emphasis is placed on the importance of exercise and eating right.  When you exercise and stay active, ‘feel good’ types of endorphins are released into your brain resulting in better mood swings.  So, you can see why regular exercise and living and active lifestyle can help keep you happy.

Eating right has a huge effect on staying healthy.  Always monitor what you eat and your food intake.  Highly efficient people always monitor their diet and eat foods that are congruent to keeping them happy. 

Habit #7: Becoming a Real Philanthropist

Lastly, this habit is one of the most important accolades of the 7 Habits of Highly Efficient People.  By becoming a philanthropist, these types of people learn to give back to the society in which they have prospered.

By giving back, you help the generous need for charities and other non-profit organizations to be effective in your community.  Helping those less fortunate than ourselves, helps exemplify the human nature of philanthropy must exist in society in order for all of society to benefit.

Another important aspect is teaching people what you’ve learned.  To pass down those very effective leadership values can be picked up by others and they can pass them down to other generations as well.  It’s really what keeps the social fabric of society together for the common good.

Ok, so let me ask you this, what types of habits do you possess. Join the conversation by commenting below!

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It’s amazing to me how much people spend most of their discretionary income on things that don’t actually matter.  Want to see an example?  Try going to a major mall or even a designer store and just observe how people shop.  Pretend you are a reporter about to do a research article on people’s spending habits and just see how much people spend on a simple transaction.  It’s true that consumer spending is down in the current economy but it doesn’t  stop people from whipping out their credit cards and spend without thinking about the future impact of that spending decision.

Another thing to actually observe is see how many people are spending with cash rather than credit cards.  You will more than likely notice that most cash purchases will be quite small amounts vs. credit cards for bigger purchases.  I keep telling people that when you pay cash, you actually feel it more and have more skin in the game.  You feel almost nothing to pay for items worth a few hundred dollars with their credit card.  So, make the right decision and ask if you can really afford the upcoming payment if using plastic.  If you can’t pay for it in one billing statement, it’s possibly not a good idea.

Can You Afford It?

So, how can you tell if you can afford an item or items if you are paying cash or with credit cards?  Easy, simply ask yourself the basic needs vs. wants question.  Is this something that you really need or is it a luxury item that you want. 

I once heard Oprah say that how she shops is she always asks herself if she really needs the item and if it can benefit her life.  She then comes back to the same possibly purchase in 7 days to see if she feels the same way.  Imagine if everyone spent this way?  How much better ­­would most people’s quality of life and financial position be?  Also, take into consideration that someone like Oprah is worth more than a billion dollars and you start to see the picture.  How much more people are out there that really can’t afford their purchases yet do it anyway?

The whole point of this post is to make financial savvy decisions and keep yourself out of debt.  Here’s to debt reduction and wealth building.

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It’s been about three years since I’ve had my last credit card and that can make many people cringe.  How do I do it?  How am I living like this?  Am I not ruining my credit without holding them?  I’m going to give you a transparent look into what it really takes to live well without even owning a credit card. 

Many of you know me as a real Financial Freedom blogger and mindset advocate.  That’s why I always blog about getting out of damaging consumer debt and staying out of debt.  It all has to do with our personal habits and Financial Independence we want for ourselves and those around us.  Big credit card conglomerates will sugar coat credit card debt and make you believe that debt is a good financial tool.  By servicing your debt, you look like a responsible person with your finances.  In any case, nothing could actually be further from the truth.  Credit card debt can kill your true cash flow by having to pay cc bills with interest every month.  Not only that, but many people absolutely ruin their credit when they take on too much debt and can’t keep up with the payments.

My Big Why

I, like so many others, woke up one day with an epiphany. Here I was, three years ago, with a fairly small balance of about $600 on one credit card, yet the payments seemed to be going nowhere.  I was even paying more than the minimums yet the balance seemed ‘stuck’ and at the time I had other financial obligations to attend to.  It’s only when I changed my mindset from that of less consumerism that there was a real paradigm shift that took place.  I started listening to such financial experts as Suze Orman, Dave Ramsey, David Bach, Thomas Stanley and others.  Long story short, I destroyed my existing credit card balance in two lump sum payments by decreasing existing variable expenses.

In my case, by cutting down on what I was spending and cutting expenses where possible, it put me in the position where I was able to save approximately 85% of my income at the time.  Read my earlier post I, “How got rid of the plastic” for an entertaining view of cutting the plastic out of my life. 

So, How Do I Live?

Well, first of all, living without credit cards is not nearly as easy as whipping out the plastic on any whim for any unseen purchase.  However, with discipline, I’ve really learned to control those urges of needs vs. wants and I buy a lot more things I really ‘need’ out of necessity and my wants I treat as a reward.  Think about how many people that nurture and give in to wants every day.  Many people are up to their eyeballs in damaging consumer debt.  With cash in hand and a debit card, I make much better financial decisions because every purchase you can ‘feel’ and you have some skin in the game.  Credit cards give a lot of false illusions with your finances.

I’m still working on paying off my existing mortgage which because I pay on time and always some towards principal, I will eventually be totally debt free from this as well with good discipline and planning.  This also helps me build my credit score and show fiscal responsibility.

A great way to build wealth and stay debt free is to effectively budget and use a  good money management and budgeting tool , as it can make a world of difference in building your personal wealth.  

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Ok, I know, just about everyone or at least someone you know has a car.  A car is a very useful tool to get us from point A to B and many times as an enjoyable voyage.  Having said that, have you ever thought to think just about if you are driving a little too much ‘car’.  Having driven everything from old beaters to cargo vans to luxury vehicles, I have possibly ridden in almost every car ‘type’ out there.

The reason you should be looking very carefully at your automobile purchase is that it can very easily wreck your finances.  Not only that, but they are generally not good investments as well.  Good investments usually net you some sort of return and there are very few cars that do that.  In fact, a vehicles worse enemy is usually time and even worse, depreciation of the car.  I like to call these types of consumer buys – negative assets because they are devalued over time until they become almost useless.

Point in check:  Have you ever saw a vehicle from as far back as the 1980s or 90s that is still on the road today?  How much do you think they are worth?  I’d bet not every much money.  I’ve seen vehicles that were once $15K – 20K brand new that sold for $100, yes $100!  Vehicles definitely don’t age well like a fine wine. Quickly, the new car smell goes away and you realize that you are losing money every time you drive it.  It’s interesting, but every one that buys a new car goes through the same revelation, they realize that the new car is not so new anymore and even worst yet, can feel trapped with fairly high car payments.

Consumers have all right to worry about buying more of a vehicle than they can afford.  Here are some worrying stats:

• Gas Prices are at all time high – prices in the U.S. will eventually hit the $5 / Gal. mark
• Vehicles can lose serious value from the time you drive it off a dealer’s lot.
• Hybrid cars have excellent technology but usually priced 10K-15K more than their ‘normal’ models.
• A vehicle’s value can drop anywhere between 15-20% Annually and some as much as 35-40%!
• According to fool.com, a $20K dollar vehicle can very easily be worth $16K from the initial purchase.
• New Vehicle models generally get pricier every year, but the level of depreciation stays constant.

Yes, generally not the best news that consumer likes to hear.  Of course, they are some that would rather play dumb and just know that they are driving the latest car to satisfy their ego and the keeping up with the Joneses mentality.  Many others just lease, even though it wrecks their finances even more yet they own nothing at the end of the lease.

I digress though, there is still light at the end of the tunnel if you are willing to do research on what vehicle you should actually purchase.

Tips on Buying Your Next Vehicle

If you plan on buying new, make sure you can easily afford the monthly payments. Also, if buying new, you should plan on keeping the vehicle for a long time.  This makes you a lot more financially savvy, and you will save serious dough over buying new constantly every few years.

In fact, what I call ‘trading up’ or trading in your new car every two years just so you can look the part is a very unwise financial move.  A lot of people do this for the status, many do it to keep up with the Joneses, and many just like to buy new.  I know people that buy new and keep their vehicles for 10 years literally writing them off as depreciable assets.

Personally, I like to look for quality used vehicles just a few years old and look for desperate sellers.  You can quite easily find a super deal like this.  I once bought a vehicle worth around 10K for about 6K literally buying the vehicle for cash.  Real life tip: New Vehicles will be the most expensive in the first two years of ownership.  Try to find vehicles just after this threshold and you will find a sweet spot for buying.

How Much Car Can You Really Afford?

This question varies, but I tend to agree with bankrate.com that you should limit your spending on monthly car loans to be no more than about 20% of your take home income.  This is wise advice and they are so many people out there driving more car than they really need.  So much so, that they have an expensive car and can’t afford real assets such as property or a home for example.

Always factor in other additional necessities like gas, insurance for the year, maintenance and anything else.  This can be something very substantial, so make certain to use a quality Auto Loan Calculator to calculate just what you know you can afford.

My Really BIG ADVICE and Take Away

As you know, I love to blog on all sorts of Financial Freedom topics and this is one that is close to what I believe in.  To get out of debt faster, I really propose that you pay cash outright for your vehicles or put down the biggest lump sum from the get go.  Doing so, allows you to put your cash towards other debts so that you can finally be Financially Free.

Another good Tip: If you do hold a car loan, make certain to pay towards unscheduled payments or principal to shorten the life of the loan and save you much interest.

 

How do you buy your vehicles?  Have any good tips to share?  Would love to hear them, join me in the discussion by commenting on this post.

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Fresh off a fantastic and awe inspiring trip to the French Polynesian Islands, it really perpetuated me to write a post about really digging deep and finding that true intrinsic value from within.  So, just what is intrinsic value and how do we define it for ourselves?

According to one Wikipedia entry, “An intrinsic theory of value (also called theory of objective value) is any theory of value in economics which holds that the value of an object, good or service, is intrinsic or contained in the item itself. Most such theories look to the process of producing an item, and the costs involved in that process, as a measure of the item’s intrinsic value.” With that gripping intro to intrinsic value, how can we break it down even further and take almost a bird’s eye view of determining just how intrinsic value in our lives really benefits others?

By helping others, we end up with other realized benefits such as true happiness and joy as well as other rewards.  For example, if I help someone get out of debt and they find true Financial Freedom, a few things have just happened: First, I have directly benefited that person to take them out of the misery of debt and start building real wealth, not only that but possibly also permanently altered how they deal with their finances.  Second, a direct benefit to me might be gaining a positive follower that respects my methods and propels me to a more expert status on what I love to talk about.

See how that works?  Intrinsic value does not have to be measured in dollars and cents, but instead is the true value of exactly what gets delivered.  It’s a powerful concept really, especially when you start to realize your intrinsic values from being invoked from within.   The most intriguing thing about having intrinsic values is that they are so much people out there that believe that they have nothing of value to offer others.  It’s really a mindset of lack that many people tend to manifest and nurture, which in time, actually ends up harming them in some sort of way.  The real truth of the matter is everyone has something to offer of value.  I can think back to a story of a person born with no arms yet was able to learn to paint magnificent and valuable painting solely using their feet.  Now, that is what I call invoking the intrinsic value from within one’s self!

Look to powerful people such as Sir Richard Branson of Virgin fame.  This guy absolutely inspires people from all walks of life and is known to be one of the most influential billionaires today.  Not only does he talk about not being afraid of trying new things and getting out of your comfort zone constantly, but he does it with such a charisma that is worth taking notes on.  Bringing massive value to huge audiences is what this guy is about making his Fleet of Virgin products and services a household name, all at an age when most people look to living a sedentary life.  The good news is that you don’t have to emulate this type of success and value.  Being a serious influence and bring value to those you come into contact daily and those within your constant contact, this is how you build a real presence of value to others.  I’m telling you, if you help others, they will usually reciprocate the favor.  There, that’s one big secret for free.  You’re very welcome.

Why not take a 15-30 day challenge to see just how much value you can bring to others.  Here a few different suggestions you could try out:

• It could be enhancing your value to employers if you are full employed
• Building an incredible brand if you are an entrepreneur
• Helping others with your expertise where they may lack experience
• Come up with a new product or service to introduce to your market
• Work with Charities or other Non-Charitables for the greater good
• Improve on yourself with ongoing education or learn a new valuable life skill
• Be a guest speaker for a worthwhile cause
• Teach others how to see their own intrinsic values

Of course, these are just a few of the many things you could try in your own personal challenge.  Remember, they are no real rules and you can allow your conscience to be your guide.  The real point of the matter is to get in tune with yourself to see where you really shine and show where your intrinsic values actually lie.  How many people out there actually have no real idea of what they are really worth?  Answer: Much more than I or you would like to think about.  So, take this opportunity to see just what makes a better you.

I’ve really done my best to explain the intrinsic value of self as opposed to stocks and stock options and other types of intrinsic values and I hope it makes perfect sense to determine just why finding one’s intrinsic values will ultimately lead to a more interesting and fulfilling life.  It’s not just a good idea as you really want to start building relationship with others.  Remember, no man is an island and little things can make the most interesting cause and effects.  It’s a little like a ‘butterfly effect’ where one little change in one part of the world makes a little change of equal proportion elsewhere.  Our cumulative changes and contributions in the world matter.  It’s what makes the human race one of the most interesting and dynamic life forms on our planet.

P.S. as I write this post, Japan has been hit by the largest earthquake in its history (8.9 on scale of 10), now is the time for each one of us to show our cumulative intrinsic value by supporting their rebuilding effort and even saying somewhat of a prayer for that country

What intrinsic values do you believe you possess?  Will you be taking me up in the 15-30 day challenge mentioned above?  Would love to hear your feedback, join me in the discussion by commenting on this post.

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There are so many people today that really adhere to the discipline of building their financial wealth taking it one step at a time and seeing results.  However, they are many out there that believe you just save, save, save and live a frugal lifestyle and making nothing but sacrifices financially.  If you are one these people, I say to just get ready to stop the madness. 

Today, I will be revisiting why it is so important to reward yourself and why rewarding yourself actually helps you to prosper even more.   Yes, it is important to definitely live below your means, but is also paramount to have a proper reward system in place that actually helps emphasize and confirm that you are doing a good job financially and through other means.

Rewards Help Build Your Motivation Levels

It’s been proven that when people feel better about themselves in performing and accomplishing certain tasks, they will be motivated and enthusiastic to continue doing them.  Take this quote for example, “Effort only fully releases its reward after a person refuses to quit.” – Napolean Hill.  As you can see, good effort in seeing a results in doing something should definitely be rewarded. 

Reward Every Accomplishment

You should reward yourself for absolutely everything you do.  Even small accomplishments should be rewarded.  You have an internal reward system that if you don’t reward yourself externally at times, will cause you to sabotage your efforts.  When this happens, you can easily become discouraged leading to diminish or even stop the things that you have worked so hard to accomplish.  So reward yourself and do it often as you start seeing results for everything you do.

How to Reward Yourself

I consider the following principles a way of rewarding yourself while still keeping yourself in check.  In fact, there are many out there rewarding themselves all the time by abusing drugs, getting drunk and stupid, or having no regard for themselves.  This is not the party type of rewards that you need to indulge in.  Your rewards should be congruent with what you have accomplished in any way or form. 

For instance, you may have just worked hard and got a two-fold promotion at work.  A good reward system would be to take your significant other out for a night on the town, buy yourself something nice (but can afford) or even go to an amusement park or similar.  These are just a few ways of keeping yourself in check and even more importantly, start feeling good about the things you do.

My Perfect Example of a Reward System

Recently, I celebrated a birthday and for that birthday alone, could give rise to occasion for rewarding yourself. In digging further, I also found that my net worth has increased by about 11% over the same period in time from last year.  Something to definitely go ahead and plan out and reward myself for – wouldn’t you agree?  It’s the little things that matter and this was even bigger than that.

Here’s my breakdown of what I decided to do to reward myself for that day:

• Take a day out for myself and concentrate on me.  This is paramount as you can only help others when you feel good about your own life.
• Decided on a day at the beach.  Wasn’t sure on what to do yet.
• I ended up renting a jet ski for an hour and went crazy.
• An Expensive beverage of my choice.
• Dinner at a fancy Italian joint.

As you can possibly imagine from above, I ended up having a blast while at the same time reminding myself the whole reason I was doing this as a reward.   The jet ski excursion was awesome, haven’t been on one of those for years.  I then ended up at a pool with a swim up bar (if you haven’t experienced this, you must).  Ordered an $8.00 Mudslide and proceeded to talk with a patron at the swim up bar.  Yep, that just made it more concrete, life is also about rewarding yourself. 

Not only did I do the above, but I milked it even more with a great night out at dinner with a table overlooking the coast. Can you see how good a reward system can be when you plan it out and tell your subconscious mind that you are really on the right track?  It gets your whole fundamental self on board to do great things.

Important Notes for Your Reward System

It is imperative that I make one thing clear.  As you have read my own recent reward, you have got to note that in no shape or form did it lead me into further debt.  This blog is becoming Financially Free as you have already noticed.  Too have gone into debt for my little personal outing would have resulted in ‘stupid’ debt.  Many people do it every day but you don’t want to be one of these people.  So, choose your rewards carefully, there are really no right or wrong rules about doing them, but don’t go overboard either.

Why a Reward System is Critical

Have you been able to adapt and implement your own reward system yet?  If not, don’t worry, there is always time.  However, as an action measure, put this at the highest of your agenda.  Remember, this reward system does not have to relate to your personal finance and financial freedom matters, it can also be personal development, education, business, personal, family and a host of other avenues of where you can link a reward system to.  Ok, so now you have no excuses and you have the skillset to begin, plan some rewards for things you want to accomplish. Remember, those that have a reward system in place really do end up being some of the happiest people on planet earth.  Just make sure to do it in a way that is congruent and healthy to your lifestyle.

Got a reward story of your own?  Have you had good results of implementing a reward system into your own life?

 If so or if you haven’t, I’d love to hear it, so share it with me by commenting.
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Today, I want to take you on what has been my personal journey with little plastic cards of debt, mainly credit cards.  Do note that these cards represent a lot more than what most people take them at for face value.  In fact, these little cards have been responsible for putting people further and further in the hole every month, fights about finances and debt that has even led to bankruptcy in millions of cases.  There’s a lot more going on behind the scenes than what meets the eye with credit cards. 

A Personal Look at Credit Cards

For the most part, if you think about it, credit cards are marketed to be great things in your life through mediums like TV, radio, brochures and the like.  Many of them tout reward points, much better credit, lower rates and a convenient credit lifestyle.  Here’s what I actually don’t like.  Usually, on the other side of the fence, those low interest rates become teaser rates that many times get much higher after a trial period, the convenient lifestyle actually becomes a debt trap cycle and the touts of better credit can usually go out the door if your FICO score plummets when you start missing payments.

Why I Got Away from the Plastic
When I got my first credit card it was a nice, shiny American Express card with no limit and many benefits to use one (Read: a good bait and switch).  However, in checking it out, I found out almost right away that things are usually not what they are cracked up to be.  The first month, I racked  up a measly few hundred dollars on what I thought were necessary items such as gas, groceries, a few bills and what not.  At the end of the month, I also found a stipulation to owning this card; you have to pay this card off every single month in full.  Not so enticing, but I did pay it off in full every month.  Now, when an emergency came up, I racked up thousands on this card to make a nice story short.  That month, no longer could I pay the balance in full due to other financial commitments, but instead tried to opt for a payment plan.

My Debtors Became Debt Collectors

When I explained my situation to the nice folks at my card company to give me a payment plan, I was instead met with angry, ruthless debt collection type gremlins.  They wanted nothing of the sort, even though I paid a majority of the balance that month.  I was verbally harassed and called all types of times in various time zones (can you say as early as 7 AM).  This led to a very bitter taste in my mouth.  What happened to all of the dancing people skipping through fields of flowers with credit cards in hand?  Reality had set in, I was just another mindless number caught up in a vicious cycle of debt and a mindset of where it was always in the back of your mind. 

Here I was straight out of college, a decent job and already in consumer job.  Somewhere in this mess, I decided to take a stand.  I mentally prepared myself for the anguish I might go through and the sacrifices I would make to pay this card in full but knew it had to be paid.  Here’s my brief strategy that I chose to tackle this debt:

• Pay as much as I could afford towards debt and still be able to live ok.
• Ate a lot of sack lunches.  Cut eating out every day and use that towards the debt. 
• Cut entertainment and miscellaneous spending, these are wants vs. needs – so easily adapted to this one.
• Picked up overtime as I could or supplemented my income through things such as garage sales and so on.
• Determined to rid myself of further debt, I finally cut up this card and told the card company some less than livid words about how I felt and how I felt unfairly treated when I was not defaulting on payments.

These are just a few of the tactics that I put in place immediately and started seeing an improvement as more time passed by.  By month two, after applying the above tactics, the card was paid off and I rid myself of this card for good! I was debt free from stupid debt which was amazing.  Wish I had this post to read when I was ridding myself of this plastic: Shred Your Credit Cards – Win Some Cash.

Not a Bed of Roses

It’s also imperative to note that once you get rid of the credit cards, you are a recovering debt builder.  I think of this as something akin to an alcoholic that finally got clean using something like alcoholics anonymous – which turns out to be a lifelong journey.  In fact, It must be a lifetime journey to make much smarter decisions about what you know could harm you mentally as well as financially.  It’s a proactive journey of what you do and how you can help yourself from racking up unnecessary and harmful debts.  In fact, the story above wasn’t my last time that I got the debt roller coaster.  I figured it was the card that I was using instead of people out to get me for more debt. 

My second time of owning what I thought was a more robust card that gave me flexible options to actually pay it off whenever but at least meet the minimum payments.  I thought this was great, I finally had the card I thought that would give me freedom to build some credit and give me the convenience of pulling out the card for when I didn’t have the cash. 

Man, was I wrong, this was just another debt instrument that was basically a wolf in sheep’s clothing.  Not only that, but the interest rate fees were predatory!  I call anything over 21% interest on short term or long term debt predatory.  This is basically like loan sharking, except your debt bosses wear business suits.  Again, I found myself in a predicament seeing that my loan balance was growing month to month and before I knew it, I again thousands of dollars in debt from unwise choices like most credit card holders. 

Luckily, I, just like our alcoholics anonymous guy from above, also now had the skill set and experience to deal with this bad debt.  I then employed many of the same tactics from above to cut the debt like a samurai sword through Swiss cheese.  I was now a debt fighting ninja that took no prisoners!  Make sure to also read, “How to Minimize Loan Shark Tactics“ as a quick guide to separate yourself from less than unscrupulous debt masters.

I was able to finally clear up that card as well and had a reward ceremony when I was able to cut that card in many pieces.  This card represent quite a few years of built up debt, including being hog swindled into a timeshare that I couldn’t really afford and place the balance of the timeshare on this credit card.  Sheesh, talk about dumb debt decisions – that’s basically chasing debt with more debt!  I should also mention that not only have I had credit card consumer debt, but was also carrying personal debt and even a mortgage to boot.  Want to know the interesting thing, except for the mortgage; I have rid all of these other debts weighing me down like a lead anchor.  I figure I have rid myself of debts in the low-mid, five figure range which by no means is any small feat.

Stay Away from the ‘Perks’

If you haven’t been tempted by big credit card business and players yet, you more than likely will be.  I remember back in college where I would receive pre-approved credit cards with my name on it for a certain limit that just needed to be activated.  This to me, is nothing short of preying on people in order to entrap them further into debt.  Many of these card companies will try to pull you in with such crap like become a passenger on an air fighter jet for only 140,000 points and so on.  Here’s a tip, the true value of these rewards are not as great as you think.  I once saw in a cigarette catalog (no, I don’t smoke) how to get a free leather jacket with the company logo on it (more free advertising for the company) for a ridiculous amount of cigarette pack vouchers.  You could more than likely buy that jacket for a lot less than that and your Health to boot!  When you check out the perks of credit cards like airline miles and so on.  It really isn’t worth racking up huge amounts of debt just so that you can redeem them.

Practice Makes Perfect

Let me go ahead and end this post by saying that everything you do really matters.  In fact, to keep yourself debt free, you need to practice a certain amount of mind mechanics and physical techinique just like a golfer would practice his swing.  Over time, these mechanics of keeping yourself debt free would actually lead to you developing a type of ‘muscle memory’ for your brain, where your subconscious would associate going into debt as a type of pain that stifles your life freedom.  As I’ve practiced techniques like we talked about earlier, I’ve even helped my wife rid herself of her credit card as well.  She carried a balance of less than $1K for a few years and we decided enough is enough and got rid of it completely.  This is the power of applying what you already know.

Cash vs. Credit

Just a little more food for thought, did you also realize that carrying cash or a debt card tied to your bank account hurts more than using plastic? What do I mean by this?  Simply that you actually feel purchases more when you are using your own cash or debt card vs. credit cards.  Credit cards, because you are given credit for a month usually, tend to make their users spend a lot more than they normally would.  So, really take into account.  I personally use cash or debit card for normal purchases these days.  A few benefits, no bills for these at the end of the month and I’ve never been denied for any of those options like a credit card.

So, tell me, do you have a story to tell?  Have you been able to get out of credit card or bad consumer debt yourself?
 If so or if you haven’t, go ahead and share it with me by commenting.
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Well, we’ve come down to the end of another year and if you’re like me, can feel the winds of change coming with another New Year in the making.  Yes, believe it or not, 2011 is much closer than most of us think.  We’ll have time for the holidays and then after that the dawning of something new in the New Year.

Many people will be sad to know that another year has come and gone and they are getting a little older, many will welcome the change due to another year coming.  Whatever boat you are in, it really doesn’t matter too much, but it does matter that we reflect on the life we lived in 2010.  Was it a good year or a bad one?  It’s all just perspective really.  For every person that had a ‘really bad year’, there were others that absolutely had a phenomenal one.

I encourage you to take a glimpse back for what was a very eventful 2010.  What could you take from this year?  Were there lessons learned?  Maybe a new job or a new child came into the picture?  How have the hardships been?  We’re in a Recession, but was it bearable or unbearable?  Business Boomed this year or did you lose everything you had?  I advise you to come up with a very detailed list of your personal reflections of 2010 of what may have happened in your own life.  Why do this?  It’s a type of cleansing and meditative exercise.  Not only that but you can start the New Year fresh with lessons learned in 2010.  A new beginning and a simple fresh outlook of ideas and new inspiration to gather from.

Big ‘Not So Great’ Events in 2010

Like it or not, but it’s imperative that we take a look at what was significant in 2010, here is but just a small but notable list:

• President Obama helps reform Health Care in the U.S.
• Haiti is ravished by a huge Earthquake
• The BP Oil Rig explodes off the coast of Louisiana causing one of the biggest oil spills in U.S. History.
• Still in the Biggest Recession since the Great Depression
• The North vs. South Korea War rhetoric and tensions

Actual Good News of 2010

Likewise, we had some fairly good mentions in 2010 as well; these are again, just a few:

• A successful meeting of the G20 Nation Leaders as an economic boost
• Republicans made almost a clean sweep of the Elections in the U.S. (ok, I admit this isn’t good news to all and I’m neutral on the topic)
• South Africa Hosts the World Cup as the first African nation to do so.  Spain walks away with the honors and most prestige cup of the tournament.
• Recession Recovery positivity.  Yes, the Recession is not over by a long shot but there are very good indicators that the world’s economy may be on a very slow rebound.

 Ever notice how the bad news absolutely takes over anything good?  It’s one reason I can’t say I watch the news.  On the recession, you can take the sides of millions that say recession this, recession that.  I personally choose not to participate but instead work on my own micro-economy around me.  Take note, they were more millionaires as well as billionaires made during the Great Depression than you could count.  It’s all about perspective and taking advantage of opportunities. 

So, what’s your plans for the New Year?  Are you going to just set a new bunch of verbal New Year’s resolutions in your mind or will you really start to set concrete and achievable goals for yourself and your family this coming year? 

 Yeah, do the second option above and set goals, that is a better, more meaningful plan.

 By now, you should be taking a little more stock and personal reflection of 2010 and the soon to be 2011 New Year. 

Wishing you Happy Holidays for the remainder of 2010

 Hey, spread the Karma and Please share this post.  Also, I’m eager to hear what your thoughts are, so please comment below.

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I just wanted to open this post by saying that it’s getting really close to Christmas and the holidays and I know quite few people out there have much on their mind in order to satisfy others through the annual ritual of giving out gifts this season.  I’m just hoping that you’ll be very mindful of such a thing as ‘consumerism’ this season where merchants and marketers know you are coming at them full steam with purses and wallets open wide!

Good marketers are going to capitalize on this and millions to billions will be spend by top retailers on marketing this season to get you in and spending as much as they can get you to.  Some people ‘camp out’ near big retailer chain sometimes days in advance for the latest gadget to be released.  Who are these people?  Hopefully, you’re not one of these types.  Retailers have one thing on their minds, to get you into the ‘consumerism’ of the holidays and really over extending yourself.

It seems I’m not the only blogger that’s keeping an eye on consumerism this season.  Looks like Baker of Man vs. Debt blog had the same idea in his “What Christmas is NOT About” Post, Gail Vaz Oxlade’s  “Holiday Shopping” hits a nerve, A High & Noble Calling blog post “How Do you Avoid Mega Consumerism at Christmas” invokes attention and ChristianPf.com’s “How to Setup Your Christmas Budget” is good advice.  Just a few other great bloggers helping you to keep money in your pocket this season.

So many people get caught up in the giving and especially spending side of things that they don’t really take the necessary time to spend more time with their families and so on.  Isn’t that what the holidays are supposed to be about?  Every time that I visit a shopping mall certain times of the year, it reminds me of a scene from ‘Jingle all the Way’ with the fight over a turbo man doll.  See video clip below and pay special attention to timeline :45 – 1:06.  Hilarious.

So, as you can see, consumerism can drive people crazy.  First, there was road rage now it seems there is a type of shopping rage going on with people clamoring for the latest consumer goods and must have items.  

I am reminded of a couple I heard on the Dave Ramsey podcast one day.  This couple would go out of their way constantly every Christmas to buy things for every member of their family.  Not just immediate family, but relatives like aunts, uncles, cousins, nephews, nieces and the list went on.  Long story short, this couple with no children of their own had built up massive consumer debt for keeping everyone else around them happy.  They were literally adding to this consumer debt year after year until they got a proper plan to rid themselves of this ‘dumb’ debt. 

This couple went on to tell all their family that the current Christmas they would not be buying anyone any gifts because they had put themselves so far in the hole financially, it was hard to literally dig themselves out of their own mess.  Some of their family understood perfectly, some resented them but the moral of the story is that this couple finally got rid of this debt after doing some tough love and looking after themselves financially first and foremost. 

Good story and points well taken, hope it helps you to see the bigger picture about your finances.

Get a Spending Plan this Christmas

It will be tough to take your emotions out of your spending this Season, but realize that it’s imperative if you want to save your finances this season.  Have a plan and if you have a significant other, do plan out how, why and who you will be purchasing any gifts for this season.  It will take out quite a bit of the stress and bring you more relaxation this season which will help you get the most out of the season.  Intrinsic values such as times with the family, seasonal dinners, even a traditional gift opening are some of my favorite moments during the holidays.

Budget for Gifts

It’s interesting, but the majority of people when they purchase gifts for people don’t have a proper and sensible budget organized for what they can actually afford.  Make certain that you take the time to really look at your spending plan from above and budget for gift giving and even unforeseen expenses, like hosting a Christmas lunch with food items.  Want a real party; join in a potluck for your street or neighbors and friends.  You will be surprised how much you actually save by combining food from others to make up your meals.  Little things like whipping up your own egg nog rather than store pre-packaged types can go a long way.  Use your imagination on this one and limit spending on unnecessary items as it adds up quickly.

Stay Clear of the Plastic

Did you know on average, most people spend a lot more if they are making a purchase with a credit card vs. cash?  That should tell you something, because credit is something you don’t necessarily ‘feel’ when you are making purchases, can you see how it affects your purchasing overall?  Now, on the other hand, think of when you have cash and want to make a cash purchase, you will usually purchase more wisely as you are aware of how much you can actually spend without spending all your cash on you.  Not saying that you should walk around with a thousand bucks in your pocket, but making purchases with cash are usually more likely to keep your finances in check.  On the other side of the equation, if you need to make card purchases, try doing it with your debit card instead.  You will be more mindful of what you can and cannot spend.

Forget the Post Holiday Blues

So many people get caught up in the crazy shopping sprees and gift giving without thinking of what happens next.  For many, it means going into a decent amount of debt to carry you into the New Year.  What a way to start the year!  I challenge you to think different this holiday season and come out free from gift giving and spend thrift debt.  Remember debt is debt and if you have existing debts, this just adds more and more financial burdens on to you.
What are your thoughts going into the Christmas season?  Got something on your mind you want to share?

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