I know that I have an issue, particularly being lax with a budget. I want to create a permanent lull in my financial storm. I’m just uncertain about where to start.

In my brief love affair with reality tv before I pulled the plug on cable, I really liked Gail Vaz-Oxlade (if you want more information on Gail, go here http://www.gailvazoxlade.com/.

She’s written financially directed pieces for years and is the star of her own reality show, advising couples on how to overhaul their precarious finances. I flirted with her system but never fully implemented it.

*right now I’m hitting my head against the desk in frustration. Why, oh why didn’t I follow through. Oh well, brief period of regret over.*

I’d like to revisit what she has to say and see if it’s something I can live with. I tend to approach budgets the same way I do dieting: hard-core, take no prisoners, no-pain-no-gain. In other words, too strict and unyielding to be at all manageable long term. My ass can attest to that.

I might lurk on a few financial sites like MSN money to see what the common approach seems to be in terms of debt annihilation and financial overhaul.

I’ve also checked my local job boards to look into the possibility of some extra paid work to kick start my financial emancipation. I’m still uncertain how to proceed but I think given my stellar research abilities, I might find a way. Change that- I will find a way. Maybe my waist size will decrease with my debt size?

Your debt payments should be no more than 20% of your disposable income.
Your total debt should be no more than 1/3 of your total yearly income

NLJ Solutions can help you repair your credit!

Call or email us today 201-546-5713 or Info@NLJSolutions.com

Matt Wegner presenting during Money Smart Week

What a great week teaching classes for Money Smart Week!  I’ve had a blast making a difference in the lives of all who attended the classes this week.  A special thanks to all who helped organize, plan and promote the events.  Without them this week wouldn’t be possible.  If you missed the classes this week, keep watching for updates on future offerings.

A somewhat serious post today…. about financially surviving unemployment.  With proper planning & budgeting you can hopefully prepare for even the worst circumstances.

I have learned many things over the years, that have helped me improve upon that bank account I started with my paper route money when I was 11.   And, please don’t misunderstand me.. I’m not suggesting you stop “living a happy life” or doing things you enjoy just to sock away every penny you have.

So today, I’d like to share some basic things with you. Will you be able to do all of these things, every day?  Maybe not. You may hit some financial hardships (cough, cough.. like being unemployed) but, for the most part… smart spending & planning can help save you if your own pink slip should ever arrive at your desk. 

No matter what your situation is, you should be paying closer attention to where your money goes, how you are saving for retirement and looking at every day items where you can make better money decisions.  Quite a few years ago, I read a book by David Bach called Smart Couples Finish Rich. It’s a simple & easy read that can help you get on the right path for your future.  And, if you’re not already unemployed like me, it can help you to better prepare for a future lay off or other life changing event (although, I’d never wish this on anyone!).  I have lived by many of my own principles over the years and now, sitting where I am, waiting for a government check every 2 weeks, I’m thankful that I was living by these “rules” (Hubby is thankful too… since without any savings we could never have bought him that new fridge that can fly him to the moon!) 

I’m sure my system won’t work for everyone, and some of these may need to be modified if you are already struggling but hopefully you’ll find something that will help you  (Disclaimer:  I am not a trained money professional, and all suggestions are my own personal opinion)

 1)      Do NOT buy something you cannot afford. There’s nothing worse than credit card debt. If you have c/c debt, do everything in your power to pay them off. Once they are paid off… don’t use them if you cannot pay the bill, in full, at the end of the month.  (Unless of course you are dealing with interest free credit cards ..which is a whole other conversation). 

2)      Be Frugal. Don’t always buy the “best”.. buy the “best value” until you can easily afford the “best” without going into debt. 

3)      Accept FREEBIES especially when you are just starting out. When I moved into my first place I took every free piece of furniture that was offered to me. I had mismatched rooms and stuff that I would have never picked out for myself (like a pink flowered sofa) but little by little I was able to replace pieces one at a time with stuff that I loved.   This same concept can apply long after you are “starting out”, this way you can get what you NEED now and what you WANT when you can afford it.  Use sites like Craigslist & Freecycle to find items in near perfect condition. 

4)      Do internet research before you buy stuff. You can almost always find the best price on-line.. just do a search… You’ll know which retail store has the best deal or, you’ll find an on-line store that sells it cheaper than a local retailer.  Once you’ve found your item google coupons.. you can often find a store coupon and/or a free shipping code.

5)      Save money every month.. a liveable amount that you can stick to. Set up direct deposit so that a fixed % of your paycheck goes into a savings account.. and vow to never touch that money.  Now, I realize emergencies come up but, make sure it really is an emergency (like you’ve just lost your job or rain is pouring through your roof) not an emergency like.. I saw a fantastic handbag on sale at the mall.  (Try to build up an “E-Fund” of 6 months salary)

6)      Don’t buy an expensive car. I know this is a touchy one for many people since people “love” their cars.. but there are tons of cars that work just fine that don’t cost an arm and a leg. I have owned 2 cars that I’ve driven until they died.. which gave me a few years where I had NO car payments and that’s an awesome feeling (that’s another $300-$400 a month that went into savings)

7)      Negotiate with vendors and shop around. Any time you need to have work done don’t accept the first price you are quoted.. you can almost always talk them down. Always comparison shop.. you can leverage one offer against another (and, if you’re unemployed like me.. you have plenty of free time!). Also, many times you can even negotiate with service providers (and this can be done EVERY year) 

• We called our car insurance and threatened to change insurance companies and they knocked off almost $800/yr
• Call your phone company every 6 months or so and ask them if they have any specials or if they can review your phone bill to lower your monthly cost 
• Call your cable provider and tell them you’re considering switching to another company… they will most likely find a way to lower your bill.

8)      Contribute to a retirement fund.  So many people over look this one!  Contribute the most that you can comfortably afford but, always try to max out any employer contributions…. Don’t leave money on the table! 

9)      Sell all that crap laying around your house on eBay.  Especially if you are unemployed!  You have nothing but time and.. “one man’s trash is another man’s treasure”.  It never ceases to amaze me what people will buy on eBay!

10)  If you do find yourself unemployed… call all your vendors & monthly bill companies to explain your situation to see if they can adjust your payments/interest etc.  Remember these guys want to get paid and many of them will indeed try to work with you! 

So… those are my basic tips I hope that at least some of those suggestions could help. It’s certainly not a new concept but the key is reducing your debt and finding small ways to save more. Any time you owe someone else $$ (like with credit cards) you’re just throwing money out the window… and the more money you are keeping in your own pocket, the better you’ll be when you find yourself unemployed, on your couch, in your pajamas.

Feel free to share your favorite tips below!

Frugality is much more to me than saving money or reducing debt.  It’s my quality of life.  It means spending a little extra time getting things done and just stepping back and enjoying life in simpler terms.

Yes, I do love to save money but saving is really relative person to person.  We all know the person that “saved $40″ while buying that $100 purse.  My version is can I pick up a purse from the local thrift store, Craigslist, Freecycle, WalMart, etc under $10.  There really are nice ones to be had from these avenues and who cares what brand name it is.  When people use brand names, it always bothers me.  It really does.  Who cares!   

Frugality to me means taking the time to do very simple things like line drying my clothes.  It only takes a few minutes but I find it relaxing and I just love to do this.  It is my time.

Frugality to me means accepting other people’s versions of what is frugal and deciding if that would be acceptable to me.  Some things are and some are not.  I don’t have to tell anyone that I won’t be following their example.   It is only about what would work for me  and my family.

My husband and I make a very good living but I know we could weather any storm if our circumstances changed.  We are pretty quiet about our finances but when we pay bills, we keep track of the amounts going to different utilities.  Just because we can afford to pay our electric and water bills doesn’t mean we want to spend a ridiculous amount of money on them every month.  Why work so hard to pay the utility companies?  

Forget peer pressure.  It doesn’t make you happier.  Usually miserable.  I like what I like and you can like what you like. 

Sometimes I think people’s version of the “good life” is money, fame, material items, drinking, traveling, cars, boats … you get the idea.  Is that really the good life?  I would beg to differ (for us).  The good life to me is spending time with my family, making homemade items that are good for us and more nutritious, not impairing my senses by overdrinking, enjoying local events, enjoying good reading material (romance novels just don’t cut it), waking up early every morning and enjoying birds singing and the day beginning.  I could go on and  on. 

Many moons ago, I was the type of person, rushing to work, always working late, spending money always eating out, never seeming to get ahead, never able to put money away or have time for myself.  All I can say, I will NEVER let myself become that person again.

I do my work and leave.  My personal/family time is more  important that my job.  I cook at home, bring my lunch, have no debt because I refuse to get burdened by that beast again, have a savings, live simply and really don’t care what other people think.  

It took awhile for me to get it but I am much happier and at peace with my life.  If I died today, I could honestly say … I don’t know what I would say.  I love life!  So let’s not even go there. 

Yes, it is important to me to remember those in need, locally and worldwide.  We volunteer our time every month and it just helps us to keep things in perspective and keep things real.

This truly is our frugal way of life and it is the real “good life.”

13 – Secrets to Saving and Debt Reduction – July 20, 2009 – 11:16 minutes (5.28 MB mp3)

During this podcast, we’ll discuss:

• Spending and saving plans
• Evaluating debt, and
• Sample plans for reducing debt

Most of us – even people with financial savvy – don’t handle our personal finances as well as we could. We probably all know we should spend less and save more, but it’s not so easy to actually get in the habit of doing it!

Here with us today to help us get started on ways to do just that is Michele Brander – Ent’s credit administrator.

For many of our clients our objective is to preserve assets and strip off the debt. The idea of preserving assets is to provide a future opportunity for the business owner to buy back their business and continue on after reducing or eliminating the overall debt….yes very interesting, very attractive to many business owners who are buried under crushing debt and facing foreclosure. A successful debt workout plan can work well for many.

They are filled with optimism, if only they can rid themselves of debt,  waiting for the turnaround so they can re-emerge and re-establish their business position once again, purchasing back their business and continuing on…

A great plan for many….but one hidden tragic flaw.

What if the economy continues to tank, meltdown, self destruct? What if the recession lasts for allot longer then some think…years, many, maybe five, maybe more?

Maybe the best plan is to sell the assets and move on to to the next chapter of your life.

Think about it… We are emotionally attached to making our business work. Fulfilling the dream. Reaching our pre-determined goals that we have invested so much of our heart, soul, money and time into.

So blindly, completely focused and committed we run our selves, our finances, our families, into the turmoil of working ourselves endlessly to reach that elusive goal, business success.

This may be a good thing, there is nothing wrong with hard work and commitment to a goal, but if the goal is unlikely, or even impossible to reach or highly unlikely, we frequently still run into that wall daily, determined to make it work, no matter what it takes.

The true spirit of an entrepreneur.

I respect this attitude as it is the fuel of success. But there must be a mindful analysis, a scientific consideration, a business reason to fight the battles as if it is truly impossible or extremely unlikely,  why risk it all again?

Here is the deal. The economy is very sick. Unemployment is out of control, the housing sector is in a total meltdown, the financial sector is all but out of business, and on it goes. There will be greater erosion of our economy. There will be many more failures, defaults and foreclosures, many more.

Does it make sense to re-commit ourselves to a business that has already become a victim of this economic and business meltdown? If the economy is destined to decline further and then eventually bottom out languishing on the bottom for another long while and then the slow emergence out of this huge decline.

The question being, does it make any sense at all to seek out a second chance?

Even if the debt is removed from your business can it  operate successfully without the revenue it needs to succeed? Sure eliminating deb reduces the necessity for greater gross revenues, but can any business survive, even without debt service without the revenue the business requires?

Many more businesses will fail over the next number of years. Why fail twice?

Yes we can strip off the business debt. Yes we can reduce your personal guaranty to an affordable loss. Yes you can buy back the assets or the business again and make another run at it without the bone crushing debt.

If there is no revenue remaining even eliminating the debt will not convert a losing business to a winner.

Think twice, Your best plan may be to sell your business or business assets, enter into a debt relief program such as the strategy we provide, and then …do something else. Your business may not be the best vehicle possible for your future financial success.

Consider your options, maybe it is time for a major change.

by Alexis Cala, PICurrent Assistant Producer

Courtesy of Andres Rueda

Our current economic situation has resulted in many American’s carrying around too much debt and not enough options.

Low consumer confidence, mounting layoffs, and housing problems are taking a toll on consumers when it comes to credit card debt. However, lenders are losing money too.

Credit card write-offs, or uncollected balances, are becoming a problem for you and banks as more people lose their jobs and can no longer make payments.

Credit card lenders wrote off nearly $45 billion in bad debt for 2008, and forecasters expect this number to keep growing. The recent bank stress test, a possible worst case scenario for the economy, suggests the nation’s biggest banks may see nearly $82.4 billion in credit card losses by the end of 2010. Not to mention how much each cardholder will be left with on their bill (read the full story on The New York Times).

As the possible losses grow and many cardholders fall deeper into debt, it may be a good time to start changing the rules.

President Obama and others are pushing for the approval of a credit card consumer-rights measure that would hold cardholders accountable while helping reduce debts for many. The legislation would help get rid of some of the outrageous fees, penalties, and high interest rates that credit card companies can charge. This measure could be passed as soon as Memorial Day, making your payments more affordable and rising rates a thing of the past.

There are also things you can do now to start catching up and get out of debt:

• Talk to the creditors. Figure out how much you owe and what you can afford to pay. Discuss your situation with each creditor and try to work out a payment plan. Get any agreements in writing.
• Consider debt consolidation. This can reduce your interest rates, payments, and help you get current quickly by combining your debts together into one payment.
• There are free credit card counseling agencies, like Consumer Credit Counseling Service (CCCS) that can help you get on a budget and reduce your debt.

Check out our sister site, The Beehive, for a great section on financial fixes and help getting out of debt.

For more information, please visit:

Associated Press

The Washington Post

What is this?

Let’s start with the five things you should definitely do:

1. Reduce Your Expensive Debt

Too many of us overextended ourselves during the past decade with credit cards and other debt. These bills now hang over people like the Sword of Damocles.

The first order of business is to reduce this expensive debt, even before saving for retirement or investing in the stock market. One smart strategy is to take advantage of much lower gasoline prices. One year ago, gas cost more than $4 a gallon in much of the country. Today, it’s less than half that. You should devote the money you save to eliminating your credit-card debt.

2. Get On a Budget

Thrift is the new black. That means getting on a budget, measuring exactly what you spend and looking for ways to save money. Perhaps you are eating out more than you appreciate or spending too much on a cup of coffee. Budgeting is a lost discipline for many people and one that should be rediscovered.

There are several free Web sites, such as Quicken.com and Wesabe.com, that can help you sort out your spending and give you a sense of where you can save money.

You upload password information for your credit cards and other accounts, and the sites aggregate and sort the data, so you can see how much you’re spending on, say, groceries, eating out and movies. You can then track your spending habits over time and make adjustments to save money.

What’s more, some of these sites, notably Wesabe, also have active communities discussing various budgeting issues. If you are just getting started on developing budgeting discipline, talking with others who are doing the same can help make it easier.

3. Guard Against Inflation

Currently, inflation is a relative nonissue, and most commentators — not to mention the Federal Reserve — believe that it won’t become a problem anytime soon.

Yet, many things are taking place that could raise the specter of inflation in rapid order.

For starters, the federal government is spending money like a drunken sailor. There’s the nearly $800 billion stimulus program, a proposed budget of $4 trillion (up from $3 trillion in the previous year) and hundreds of billions more in bank, real-estate and credit-rescue packages. On top of that, short-term interest rates, set by the Fed, are essentially at zero and quite low in other countries as well.

For more on this article, please visit:http://finance.yahoo.com/banking-budgeting/article/106879/What-Do-I-Do-Now?

This may surprise you, but it is now possible to call Calcutta, India for as little as 0.04 cents a minute -You can thank modern technology for reducing this cost to almost zero. Unfortunately, my Home Alarm Company has not quite kept up with the times.

Until recently it was costing me $29 a month to have my system monitored. When you think about it, that is a ridculous sum of money for a call center to answer a call from my alarm, maybe once a year, or never. For $29 I can call India for over 12 hours! I began doing some research and I discovered alarm monitoring has also become cheaper, a lot cheaper. Not surprisingly my Alarm Company had not volunteered this information when I signed up with them 6 months ago. (see here)

The cost to have a system monitored has dropped from $29 a month to services that are free, if you want to self-monitor, to around $10 a month for a decent service.

I vowed to cancel my monitoring and sign up with a cheaper provider. I called my service provider and asked to cancel my subscription. They informed me I was in a contract and would have to payout the next 30 months if I wanted to cancel. Agghh!! I thought, this is ridiculous. Then the friendly sales rep asked me why I wanted to cancel. I informed him his competition was a 1/3 of the price. “Oh,” he said, not sounding surprised.

Then a funny thing happened, I would like to think it was my shrewd negotiating skills, the sales rep offered to lower my bill – right then and there. He said if I cancel the, “Service Package” I could save $10 a month. Curious I asked, what exactly did the, “Service Package” entail. He informed me the “Package’ would assist me if my battery ceased to function. Essentially they would send a Technician to my house and replace the battery for me. – (I am not making this up)

I couldn’t believe it. Here I was paying $10 a month for someone to replace a battery, maybe once every couple years, when I could do that myself no problem.

I promptly cancelled the, ‘Service Package’ and asked when my contract was up for renewal. I then made a note in my daytimer to call the Alarm Company the day I am out of contract and replace my service with something cheaper.

Money saved:
$10 per month x 30 months = $300

Total Savings to date:

Item Monthly Savings Annual Savings

House Insurance – $50.00 $600.00
Home Alarm System – $10.00 $120.00
Total Savings $60.00 $720.00

My 10% Savings Goal $400.00 $4,800.00

SWP

Remember the old story about the poor farmer who broke into his doctors office to steal medication for his dying daughter because he couldnt afford the medication? The debate around this had to do with ethics: Is it okay to steal to save the daughters life? Is it right for the drug companies to charge extremely high prices for a prescription? Should the farmer be imprisoned? Is he justified in stealing?

A similar parallel exists today with credit card companies and us consumers. Shouldnt it be illegal for the credit card companies to charge us 18%, 20%, even 30%? How are we supposed to get out of debt if all we are able to pay is minimum payments each month? If youre a 700 credit score and you think you have a low rate, I advise you to check your statement the next time it comes in the mail. Your credit card company can raise your interest rate on a whim; and if you dont believe me read the fine print. As consumers we are expected to be in debt our entire lives.

We all want to live more than paycheck to paycheck. We all want to not work to just pay our interest on our cards every month. We all want more disposable income. We all want that nest egg. We all want the credit card companies to reduce their interest rates and play fair so we can move forward in our lives. The fact of the matter is that despite all your begging and pleading, they wont; and why would they? Their pockets are getting fatter by the day thanks to us.

So how do we get off this nightmare of a merry-go-round? What will happen if I stop paying my credit cards and tear them up?

First of all know that there is no such thing as credit card jail. However there are repercussions:

Collection and Creditor Calls: You are going to be harassed day and night with calls up to 5, even 10 times a day. Your relatives, friends, and workplace could be contacted to find out where you are. It wont be pleasant but you do have rights and they are protected by the FTC (Federal Trade Commission). For more information look up the Fair Debt Collection Practices Act.

Credit Score: You credit score will be affected. Late payments will be reflected on your credit report. If you let it go for sometime, collections and charge-offs will appear on your credit report. These can be removed once debt is paid or settled.

Legal Action: Depending on what state you are in, you could be garnished. You could have an aggressive creditor that takes you to court and imposes liens and/or judgements. Though the latter can happen, most creditors will sell your debt to a third party collection company simply because its economical for them to do so rather than seek litigation.

Side Note: If you have a moment I recommend watching (and simply type this into a search engine and youll find more than a dozen links) the PBS Special: The Secret History of the Credit Card. Youll be floored by not only how we got hooked on credit, but the methods used by credit card companies to earn enormous profits..

Though the repercussions are scary. The good news is that there are legitimate companies out there working with your best interest at heart and who can not only handle these for you, but legally wipe your debt clean and have you free of your creditors. Just like in anything else though, do your research and talk to several firms before enrolling in any program.

Ways to Cope with a College Student Loans

The financial actualities of obtaining an education amid a rising population of university students have been dealt with by countless alumnae throughout the world. Though free public education for college students was once offered by nations, states, and governments, fees are now applied to help maintain high teaching standards. Read More College Student Loan

For many people, credit card debt is way too high given the excessive interest rates charged by most card companies.

Even if you keep your outstanding balances low (under $2,000), you are still paying interest when that money could be working for you and not against you.

There is nothing wrong with using credit cards and occasionally running up a tab. It becomes a problem when you are only paying the monthly minimum. Most of your payment is going to interest charges and only a small portion is actually reducing your debt.

A strategy for reducing your credit card debt

Many people say there just isn’t any cash left at the end of the month to pay more on credit card debt. What they often mean is there is nothing I am willing to give up so there is more money to pay down credit card debt.

Here’s an idea: if you pay for your lunch every day at work, try taking a meal from home two days per week. Instead of buying lunch those two days, pay yourself what lunch normally cost.

When I say pay yourself, I mean that literally. Take the cash and put it in an envelope. At the end of the month, count what you have saved and add that to your normal payment towards a credit card.

You may be surprised to find an extra $40 or $50 per month to pay down those bills. It may not sound like much, but it begins knocking down your outstanding balance.

You will pay less interest next month and more of your payment will go to eliminating the debt.

If this example doesn’t work for you, use the same process on some other reoccurring expense. If you stick with it, you will find a way to uncover an extra $50, $100 or more a month that can pay down your high-interest debt.

Unless you are in serious credit card debt, don’t use a home-equity loan or any other borrowing to pay off your credit card debt.

Borrowing your way out of debt is usually a bad idea.

Good luck,

Ken