Class #1) Making Your Decision

A little background.

In 2004, I was riding the wave of a management position of a small newspaper that was owned by a corporate giant.

I was underpaid, over-worked and stressed to the max. Yes, I had money, but I was also living well above my means as are most Americans today.

Credit cards, loans, car payments, not to mention a house payment, utilities, and the like, were taking up my entire check. My wife worked full-time and made a fairy decent wage, but that went towards some child care, groceries and savings.

We could keep up with Joneses as long as we were just as in debt as the Joneses.

But, in 2005 that all changed.

I made a decision to "drop out" of this system as best I could. A life-changing experience changed my way of thinking and I begin to put together a plan.

In October 2006, I executed that plan.

Now, not everyone can do what I did exactly the WAY I did it, but you can do it nevertheless.

In October 2006, I resigned my position to work on my own business (not real stable at the time), but I decided that I could supplement my income with part-time work or contract work if things go too hard.

I took out my savings and my last check and paid off my car, my three loans, and my credit card. I didn't pay my medical bills, because they can kiss my ass. I don't recommend that, but I am just sick of dealing with careless, heartless assholes.

So, here's the first thing you must do: DECIDE IF YOU WANT TO DO THIS FOR REAL. It WILL have a profound effect on your life. If you LOVE materialism too much, and think you NEED a plasma tv instead of a regular one, or a new car instead of a good used one, don't even think about this class!

If you are ... well ... you must do the first thing: GET OUT OF DEBT.

ESTABLISH A BUDGET. Make three categories :

A) CONCRETE DEBT- Debt that will probably always be.
B) TEMPORARY DEBT- Credit cards, payments, loans, etc.
C) ASSETS- Income, Savings, any money or items you have or get on a regular basis.
D) COLLATERAL THINGS- Things you own that you could sell, pawn or trade.

Such things as taxes, insurance, long-term loans (such as house payments, etc.) would fall under concrete debt. You'll probably always owe these things (or at least for a long period of time), so you can't eliminate them, but you can attempt to LOWER them.

If you own, you can refinance your home for cheaper monthly payments and cut down on your utilities (usage of water and power). Some water/power companies will average out your usage monthly and you can pay the exact same payment each month. Or you can be sure to eliminate wasteful energy (cut the lights off unless you need them, for instance). This helps SIGNIFICANTLY.

So, the key to CONCRETE DEBT is to lower your monthly burden.

For TEMPORARY DEBT, the key is to ELIMINATE it. One way to do this, is to use a tax income return to pay off these debts, or your savings, or (if possible) CONSOLIDATE them with one loan. Either of these ideas are great to help eliminate these debts as quickly as possible.

My wife and I have a credit card ONLY for emergencies (but don't even use it). We do not have a checking account anymore, but have a savings. We also hoard cash and valuables.

If you can lower concrete debt, and eliminate temporary debt, you are 75% of the way there.

NEXT CLASS : This Sunday night. Right here.

 

Thanks so much even though I am still in college i have debt. The college loans are deffered until I graduate. But the other debt I need to pay off. This category thing has helped. I also know that I need to bring up the amount of money in my savings account retrmondously so that I have some securtiy for my future.

 

my debt:
I don't own a house so I don't have any mortage bill or anything like that...my rent with utilities included is about $60/month. I sure can't complain about that.

My biggest debt is 2 court fines that I recently found out were still out there and are from way back in 2002 & 2004. But I will be paying the court $$ every payday so I can get rid of that problem in a few months hopefully. I need to pay this off before I can renew my suspended license and even think of getting a car. I haven't owned a car for 3 1/2 yrs...so no car insurance or repair bills either.

 

I have no debt so I guess I passed the first step.

 

This is very inspiring! My fiance and I have TONS of student loans it seems, but I feel positive that it will one day all pay off as long as I put money towards getting out of debt rather than putting money towards material possessions.

 

I guess I'm luckier than most...my boyfriend and I only have a combined total of $400 temporary debt, and that's from student loans. Sure beats having a couple thousand.

 

ah, I do all that
We never tried to "keep up with the johnsons". what a silly thing to do. does anyone actually do that today anymore?
We are very deep in debt, but I must say I'd sell my car before not paying medical bills (not that my beat-up car is worth anything) ruining your credit is the dumbest thing to do in my opinion

 

I'm glad I found this because it has motivated me to write down my debt and figure things out.

 

i do have quite a bit of debt, i have a bank loan that was for my car, an overdraft on my bank account & a couple of things on short term finance (less than 6months). there are things that i cant get out of paying like car insurance etc but i have decided that when my car insurance is up for renual in april i'm gona pay it in one lump sum rather than by monthy direct debit as it works out cheaper.

 

i live in a tent and i dont want a big screen teevee

 

It's pretty easy to say, "Eliminate your temporary debt." It's harder in reality. I have a serious plan to get rid of all the debt that would fall under temporary debt in your grouping. I include my student loans in that amount and my car loan. I currently have a plan to get rid of these debts as quickly as possible. Paying the most I can afford, I am looking at over six years of payments on them still. I'll keep hitting them with tax returns and everything but they're not going away for a while. Thankfully, I have no credit card debt so that helps.

Six years... for six years, I've sold myself to the system. The mortgage is high and I'll be paying that for years to come but I could always sell the house (assuming the market ever recovers) and get out from under that. If the market really turns around and I got desperate... I could attempt to sell the house for enough to pay off the other loans but that's only if I can't stand it any more. I can live with the mortgage because I like my house and accept the insane amounts of interest as the additional cost of buying the home.

Will there be a time when I'm free from this? Yeah but it's not like I can manage it in a few months. I wish... but it's going to take a long time.

 

my friends and i are hoping to buy a large tent that is semi permanent but portable so we can pick up and move and not worry about utilities. Cant wait to see how it turns out.

 

I had a similar idea to live like this, but nobody is on board to join me

 

Speaking as someone who HAS ruined her credit, it was the best thing I could have done for myself, in the long run. Without having done so, I would be in so much debt, I'd be drowning. I'm bad with money, hence, no one will lend me any! Now, I have a $900 credit card for emergencies and eff ups and am forced to live within my means. I owe very little on the credit debt I did manage to rack up and actually save if I want something. If I can't afford it, I don't buy it, what a concept! Not that I owe myself any praise, it all stemmed from many mistakes, which can be the source of our greatest gifts.

 

what if u have debt but can not find a job in this economy to pay the bills off?

 

then u apply for a job with xanterra and work in places like the Grand Canyon, AZ...where rent is super cheap & includes utilities. Only u have to get used to being out of civilization if u don't have a car.
Or apply at Death Valley,CA....where rent is FREE and 2 meals a day are also FREE.

So the money u earn, u can save it up or use it to pay off all your debts.

 

I hoard cash too! And as for no medical insurance - I have never been ill or felt the need to see a doctor since I realised i wasn't prepared to pay to see one! 8 years or so ago.There's some weird psychology there!

 

A yert might be the thing for you.

 

I pay my credit card off everymonth i only use it for what i need i shop on ebay i dont have a new car i have a used car and i dont have the latest tv i just have one that works so i am getting there i really want to live the hippie lifestyle i am new to this website but i love coming on here

 

I don't have a mortgage or have to pay rent as I'm living on inherited property.

One good way to lower the property taxes here in B.C. is to pay a small amount monthly and then the final total at the end of June is considerably lower. I've done that for 2 years now and it REALLY helps.

See if your state or province will allow this, and it can usually be done with your regular computer banking!

Vehicle Debt: None-got my last two vehicles free!

Debt: 1 loan, 1 credit card, overdraft on 2 bank accounts.

Savings: None

Collateral: Sufficient extra household goods to hold a garage sale

Ongoing Costs: Automotive fluids and repairs, Heat, Light, Phone & Cel phone--I could eliminate one phone or put the cel on pay as you go, to be used only in case of emergency.

Skills and Talents: Multi-Media Artist and Gardener

Okay Teacher, how does that sound??

Lois