A debt-free vacation

Just got back from a 4-day vacation but you know what the best part is? We didn't come back home to more debt! Everything was paid for in cash. I can't tell you what a great feeling that is.

By saving up ahead of time, and choosing not to go on a shopping spree, we were able to do this relatively easily. Now if you are thinking that we could do this simply because we are rolling in the dough, well, that is just not the case, trust me.

We rented a house along with some of my other family members in a beautiful resort area. Sure it was expensive. But split three ways it was quite affordable. The other thing we did is find recreation that didn't cost extra. This included a lot of bike riding, hiking, swimming and site-seeing. Didn't cost a dime. Cheep as it gets!

My family and I relaxed and had a great time. When it was all said and done, it only cost us about $400. Because we are determined to be debt-free we saved up, set some money aside and just paid cash for everything. Not hard to do.

The reason I'm sharing this is simply to demonstrate that a debt-free vacation can be done. Anyone can do this with a little bit of planning and saving. When you come back home and know that you don't have to pay for the vacation for the next couple of years...well, that's huge.

Getting out of debt begins with not getting into more debt. Does this mean you can never go on a vacation? No way! Be creative and you will find ways to make it happen that won't mean breaking out the credit card. You can do it!

Summer finance management

Well, it's that time again to start thinking about good financial management. If you've been hanging around JumpStart for very long, you know that come summer time, that's when we start saving big on the electric bill. Yep, you guessed it; we're hanging our laundry!

Our heating bill is pretty expensive during the winter months so saving on the electric bill during summer really pays during the winter months because it means we can afford to keep the house nice and toasty warm.

The key though, is that in the budget I've made up, I don't change how much I'm allocating (setting aside) for the electric bill. This way, I'll be putting more money into the "Electricity fund" each month than is really needed to pay the bill. This way, when I get the steep electric bill come winter time, it's not a problem to pay for it.

It's a pretty simple exercise but an example of sound finance management. This principle can be applied to so many different things but is especially relevant to seasonal expenses like gas or electricity.

I'd thought about putting up a photo of us hanging laundry to prove we really do this but I'm not sure that the whole world really wants to see that, let alone my wife!

As we go through summer this year, I'll post more finance management tips in addition to those that we actually use in order to manage our money. Hopefully you'll find them just as useful as we have!

Celebrate YOUR independence from debt

While you may be out celebrating America's independence today (and that is a very good thing), I would like to encourage you to consider one day celebrating YOUR independence from debt. It may not be as dramatic as signing a Declaration of Independence, but it is significant just the same.

The founders of America certainly desired for everyone, the opportunity to pursue happiness, but I'm pretty sure that didn't include using the credit card and living paycheck to paycheck. Instead, they meant for us to be financially free of those burdens.

If you are feeling the weight of debt, then you are not living the "American Dream" as some call it. Instead, you are living the dream envisioned by your creditors: that you would be indebted to them for as long as possible.

Few things will provide a reason for shooting off fireworks a year from today than declaring yourself free from debt and living life independent of your debtors. Wouldn't that be worth celebrating?

We remember the sacrifices of so many to give us the freedoms we have today. My hope, is that a short while from now, you will be able to celebrate the sacrifices you made, in order to get out of debt once and for all.

Celebrate the fact that one of the freedoms we enjoy in America today is the freedom to be owing to no one and to enjoy the full fruit of our labor free from the stress and worry that accompany indebtedness. That celebration can be yours!

With that thought in mind, have a happy and very safe, Forth of July!

Credit Card Debt vs. The Mortgage

Everyone knows that credit card companies can be vicious at times, but even worse, they can be mightily convincing. So much so, that some people just might be inclined to pay them before they their mortgage.

"Late payments on home equity loans climbed to a 1½-year high in the opening quarter of this year, while delinquencies on credit card bills fell, painting a mixed picture of how people are managing their debt." (http://www.msnbc.msn.com/id/19580805/)

Yes, that's backwards. The bank can take your house. The credit card company cannot. Pay the bank that holds the title to your home BEFORE you pay the credit card company.

If you you are stuck with having to choose between paying the credit card or paying your mortgage, pay your mortgage first and whatever is left over, that's what the credit card company gets.

Will they complain? Yep. Might they threaten to take your possessions or garnish your wages? Yep. Can they do either? Absolutely not. Not without a court order which can only be obtained if they sue you and win a judgment against you. Without a judgment, idle threats on the phone or by mail are just that, idle threats. Well, actually, they are not idle, they are illegal.

Don't take my word for it though. Confirm it here, and especially here (paragraph 4).

Debt is easy - Jobs hard to find

I came across a news article yesterday that paints a pretty troubling picture of the job market for today's college graduates. Even with freshly stamped degrees in their hands, good jobs in their field of study are hard to find.

http://www.msnbc.msn.com/id/19358792/

While it's bad enough not being able to find work, it's also a situation ripe for producing the next generation of indebted young people. We all know just how prolific credit card companies are among today's colleges. You see the offers posted on bulletin boards all over the campus.

The problem is, many of these young kids probably got the cards so they could either survive college or enjoy some spending money, thinking they could just repay the debt once they graduated and got that great job. But here's the kicker. There may be no great job.

Sure, most can find work these days, but landing a high-paying job in a particular field of study will be pretty difficult and may take time. Meanwhile, the lack of work will only compound the already bad situation. You can see where this is going.

If you are a parent of a teen or college student, do what you can to help them understand the dire consequences of debt. The credit card companies do not care how old they are or if they are out of work.

If this describes your situation and you are struggling with finding good paying work, then there could be no better time than the present to stop using the credit cards and do what you can to get them paid off.

Either way you look at it, debt is easy and when jobs are hard to find, it's even easier. But the burden it will leave you with later on will only drive you further into a financial black hole.

Getting out of debt quickly

I got to thinking about getting out of debt quickly today and a memory of running the relay as a kid came flashing back into my mind. Funny how stuff like that happens.

Anyway, I remember being told very specifically by my coach to "pace yourself" and not blast out of the "gate" too quickly or you'll burn out and won't have any energy left to finish the race. It was good advice. It worked every time.

Everyone wants to get out of debt quickly, no doubt about it. In fact, I'd venture to say that most people would like to get debt free just as quickly as they'd like to get rich, which is why a lot of people play the lottery. Both are loosing propositions though.

Like my lessons learned in running relay, careful planning and goal setting is paramount to winning. In the relay race, I had to be very careful to stay in my lane, keep a good, steady pace, know when to kick it into high gear (during the last turn) and how to properly pass the baton so as not drop it during the hand-off to the next runner.

All of this is part of the strategy of the race. Without it, you are guaranteed to loose. Getting out of debt is no different.

If debt reduction really is your goal, then the winning this goal is going to require some goals, good planning and a good pace. Sure, there'll be some sprints. Yes, you're going to give it your all. But the last thing you want to do is just bust out of the gate without knowing where your going or how you are going to get there.

That is a recipe for disaster. Trust me, I know this from experience.

Do a little bit of homework, be patient, plan. Getting out of debt is not like winning the lottery. Sure, there are some stories of some who did it in record time. Some. Not all. Certainly not the majority.

Here's an article I wrote recently that might be a good place to start if you are getting serious about being free from debt: Debt Elimination

Budgets take too much time

"Budgeting just takes too much time. Besides, what's the point anyway. I already know I hardly have any money to spend after bills are paid."

I've heard it many times and used to say this myself! The ironic thing is, some budgets DO take too much time! It's crazy. There are some programs out there, paper and electronic that are so incredibly time consuming that it's no wonder someone would respond with a negative feeling about budgeting.

I recently published an article called, "Busting the budget myths." It's only available to Debt-Free Living members but I thought I'd give you an excerpt from that article this morning.

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Opening a budgeting workbook and staring at the pages and pages of "fill in the blanks" is enough to make an anyone whimper in fear. Can't blame them really, they can be downright scary.

Most budgets out there today are not so frightening, but what some of the complicated ones have done is instill the myth that making a budget and maintaining it will be just too much work to make it worth it.

The truth is, budgets, in and of themselves, do not take that much time at all. In fact, you could probably set one up in less time than it takes to eat a meal.

Commercially produced budgeting programs have worked hard to be all inclusive and this hasn't helped. In other words, they have worked to have every conceivable "feature" so as not exclude anyone or any possible situation. The result has been an overwhelmed consumer looking at a hundred different categories of where to put their money and not having a clue about where to begin. To make matters worse, these things are packed into a book with even more worksheets, calculators, tools and a ton of instructions to learn how to use it all.

By making the budget so complex, some really do take a long time to use. It's no wonder that it would seem like it would take forever to complete it.

There are some good products out there though that have kept the budget program within the boundaries of the essentials. While they don't have all the bells and whistles, they are exactly what you need in order to bust through the myth that budgets take too much time. I'll tell you what to look for in a budgeting program later on.

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Setting up a budget does not have to be overwhelming, nor does it need to take a lot of time. In the above article, I explore two other pervasive myths and give you some tips on what to look for in a good budgeting program.

If you'd like to read the rest of this article, just sign up for a Debt-Free Living membership, it's absolutely free! You'll get special access to the Member's section with more premium articles and additional content to help get you started on your way to a life free from debt.