Charges for Physical Therapy Reduced

As I mentioned the other day, the physical therapists called and said that they needed to redo the paperwork for the charges. The reason is that they figured in a charge for a treatment the insurance wouldn't cover. So, without that charge my total bill will be $665. Plus the 5% processing fee that brings it up to $698.25. With the payments being $29.09 for 24 months.

Of course, I hope to have this paid this year as well. With my larger paycheck (even though by the hour, it's lower) I should be able to get all three of the small debts paid off this year. Then, my hope is to get both the car and the IRS (currently deferred) paid off by the end of 2009.



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April Was a Terrific Month Financially

April was a terrific month financially. I managed to pay off $1,107 in debt. An amazing amount considering my net income is only $852. Now, I know some may ask how I managed to do that. The answer is simple. I received a quarterly distribution from the Telephone company, I own a piece of. In addition I used the money from the roommate to help get this debt reduced. I am still waiting for the annual dividend check from the telephone company. That check will be $300 and I will use that to help pay off the last $400 of my home improvement loan with AmeriFirst Home Improvements.

While, I had hoped to have this debt paid off by today. it just did not happen, because the phone company has mailed the dividend checks yet. So now, I am looking to getting the debt paid off by May 31st (or June 1st, if you will). No matter, what I can't see any reason this debt won't be paid off in this time. According to AmirFirst's automated system, my next payment due date isn't until August 10th, and the payoff in late May is $404.22. Once, I get that paid off, I can turn my focus to the Fingerhut debt.

The downside, is today I entered another debt. A medical debt, for Physical Therapy. The portion that the insurance won't pay after the completion of 12 treatments will $1,315 of the $2,280 bill. The Physical Therapy center tacks on a 5% processing fee for financing the "interest free" billing, bringing my total debt to $1380.75. The cost per treatment is $109.58. My monthly payment beginning on June 23 will be $57.53. Which means 3 of my weekly payments to AmeriFirst will be going to this new debt.


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$300 Gone

I am excited. This week, the current balance on my mortgage was almost cut in half. A week ago today, my payoff balance was $725. Then I sent AmeriFirst Home Improvement a payment of $300, which was posted on their automated summary this morning. My new balance is now $423.28, based on a payoff for May 23. Of course, my goal is still to pay it off by May 1st. If only the $300 check I am still waiting on would arrive, so I can sweep that into this payoff amount. Once that happens, I would only need to come up with an additional $120 and some change to officially get it eliminated.

In fact, looking at the figures in Networth IQ, in the past month I have paid 50% of what I owed at the beginning of the month.

Realistically, at this late stage in the month, I may have to move the goal back to June 1st, but I believe in miracles and am going to stick to my May 1st goal, as long as I possibly can.

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Worshiping At The Altar of the FICO

This past weekend, the Today show on NBC, had a story entitled, "7 ways to improve your credit score." It is clear from not only the title, but also their guest that they are worshiping at the altar of the FICO score.

So what are the 7 tips?

1. Fix your credit report
   

The fastest way to raise your score is to fix errors on your credit report. Go to www.annualcreditreport.com to get a free report from each of the three credit bureaus every 12 months. It’s important to fix mistakes on all three credit reports. You have a separate credit score based on each bureau’s report, so your scores could be very different if one report contains errors.
- Kiplinger’s Personal Finance magazines, Kimberly Lankford on NBC's Today Show


I personally agree that if there is errors on your credit report, they need to (and must) be removed. I am a big proponent of checking all 3 credit reports once each year.



2. Pay your bills on time
   

   About one-third of your credit score is based on your payment history. If you’re having trouble paying the total balance, pay at least the minimum by the deadline. Making that deadline is more important to your score than the amount you pay (although the more you pay off, the less interest you’ll owe). If you do miss the deadline, pay up as soon as possible, the later you are, the more you’ll hurt your score.
   - Kiplinger’s Personal Finance magazines, Kimberly Lankford on NBC's Today Show
   

   This is a commonsense no brainer. If you are late paying your debts, utilities and other bills, it is going to negatively affect your credit. Always, let me say that again, always pay your bills on time.
   
   
   
3. Keep your balances low
   

   Another big part of your score is the share of available credit you’ve used. Lenders get worried if it looks like you’re maxing out your cards. Keep card balances below 25 percent of the credit limit, 10 percent is even better. It’s the amount you charge that counts, even if you pay the balance in full every month.
   - Kiplinger’s Personal Finance magazines, Kimberly Lankford on NBC's Today Show
   

   If we are going to be debt free, why do we need to keep low balances? This is one area, where this lady and the banks are trying to keep you in debt, by trying to tell you closing the account will negatively affect your credit. The only reason banks want you to keep any balance at all, is so they can relieve you of your hard earned money and make themselves richer.
   
   
4. Don't close old accounts
   

   Keeping old accounts with a good record can help because the age of your oldest card and the average age of your cards are key elements of your score. Closing accounts also lowers your overall credit limits, which makes it look like you’re closer to maxing out your available credit. If you do want to close some accounts, especially ones with high annual fees, close only one every few months and don’t close any accounts within six months of applying for a loan.
   - Kiplinger’s Personal Finance magazines, Kimberly Lankford on NBC's Today Show
   

   I pretty much answered this one in my last response. As Dave Ramsey has repeatedly said on his show, the only thing a good FICO score shows is that you love debt. If we are going get out of debt, we don't need a score at all. Plus, if you want to get a mortgage and don't have credit, you can still get that mortgage. Mortgages being the only debt Dave Ramsey, backs away from being critical on, can be obtained by using a mortgage broker that uses manual underwriting.
   
   
5. Pay off old debts
   

   Even a small library fine or disputed electric bill can crush your credit score if the debt goes into collection, dropping a high score by as much as 100 points. Now that more municipalities and utilities are sending small, old bills to collection agencies, I’ve been hearing from many more readers whose scores dropped significantly because of a very old bill for less than $100. Even if you pay off the bill after it’s gone to collection, the damage is already done. Negative information generally remains on your credit report for up to seven years, but the impact on your score lessens through time. Don’t lose track of small charges that can come back to haunt you, and pay the bills off quickly before your score suffers.
   - Kiplinger’s Personal Finance magazines, Kimberly Lankford on NBC's Today Show
   

   Yes, I agree. Going back and paying off debts that may have gone to collection is not only a legal obligation but us a moral one, because we are to honor our agreements.
   
   
   
6. Order your credit score
   

   You can’t get your score for free, but you can order it when you get a free copy of your credit report at www.annualcreditreport.com. Or you can go to www.myfico.com and get your score directly from Fair Isaac, which created the popular FICO score. Some credit bureaus also offer their own versions of credit scores, which can give you a general idea of how your record stacks up, but most lenders use the FICO score when setting your rates.

   
   
   I have even heard Dave Ramsey talk on his radio show about going to www.myfico.com and checking his FICO score. In his case it is 0 on all three credit bureaus. Meaning he doesn't have an "I love debt score," because he doesn't.
   
   
   
7. Don't ignore your score
   

   Buying or refinancing a house is the biggest reason to be concerned about your score. But your credit score also affects your credit-card rates and terms, car-loan rates and auto and homeowners insurance premiums. Insurers found that people who have low credit scores are more likely to have insurance claims, and your score can have a big impact on your premiums in most states. Potential employers and landlords may also check your record. Don’t worry about micromanaging your score, you’ll usually look good with anything above the high 700s. But your score can affect your personal finances at any time.

   
   OK, I have gave my thoughts on this. Unless you are going to make the banks richer and go into debt again, I strongly urge you to ignore your score. You can get a mortgage by using a manual underwriter rather then a bank that leans purely on the FICO score.
   
   With that said, I do know my scores. Last Month, the last month WaMu checked my credit from the old Providian Credit Card that i just paid off, they put me at a 688 with TransUnion.
   
   However, on April 14th of this year I logged into and got all 3 FICO's. I must say there is quite a bit of difference and I haven't been late on anything recently nor have I applied for any new debt.
   
   *** TransUnion 619 *** Equifax 550 *** Experian 624 *****
   
   Two of the three did however, have a public record on them that even though it was paid and the lien released had not been removed from my credit reports. In fact, the state actually just sent me the court papers dated some 3-years after they were to have been filed. Go figure.
   
   

Finally, Suze Orman who most recognize as a person who worships at the altar of the FICO score, has a product called, the Suze Orman FICO Kit Platinum that is available when you sign up with myFICOscore.com. The video below is from VideoCreditScore.com, and is an intereting review of the product. While I certainly to hold to the belief of fixing your "I love debt score," unless you want to put yourself into debt further (or again as the case may be), it is certainly worth viewing.






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A look at Pier 1

Regular readers of my blog have known that i owned less then 1 share of Pier 1 (PIR). An investment I made through Sharebuilder.com sometime back, when the company was trading at better then $26 a share. Now the company is trading between $3-$4/share. Something that doesn't look good. Even a great value investor, Warren Buffett has dumped part of his investments in the company. I on the other with such a small investment, am hoping to see my stock value increase. So I began watching the company more closely.

At a point when I am not putting any new money into my investments (as I dig my way out of debt), I took the $21 sitting in my Sharebuilder account and invested another $15 into Pier 1. This simple act, increased my holdings to just over 3 shares as of yesterday (Tuesday). Today (Nov. 28, 2007) the stock closed at $4.12 (up 26 cents). This is good news for me, but what about the company's financial stability.

A quick glance at their financial statement, shows that as of September 2007, they had $184 million in long-term debt. This does not include $295 million in liabilities.

As a personal finance blogger, these are two things that I see that the company must cut right away. Over all their total liabilities are $576.33 million. The good news is that they have $838.48 million in total assets. Still, when you look at their cash flow they lost $30.15 million in the second quarter of their fiscal year. This loss is worse then the 2 previous quarters, which also were money losers. In fact they have not been profitable since the quarter ending Nov. 25, 2006. That quarter they reported a profit of $22 million.

According to the Fool.com, they are 2 years from returning to profitability.

It's hard to like Pier 1 these days. The home decor specialist is roughly two years away from returning to profitability. You can pin the blame on everything from the subprime flap to chain-specific flubs, but don't throw in its towel just yet.

One thing I do like is that the new CEO has pulled television advertising. While advertising helps brings in customers, it is very costly. Cutting this expense helps them to become profitable again faster, especially when the customer base tends to be loyal to Pier 1 already. Moving advertising dollars to direct mail pieces as they have done allows their loyal base know of the sales and at a cheaper rate.

I am eagerly awaiting the 3rd quarter financials to see if their cash flow has improved since the September reports.

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my ShareBuilder Holdings

(BRK B) BERKSHIRE HATHAWAY $4,575.00/share 0.0087 shares = $39.80

(KO) COCA COLA CO $62.99/share 1.9547 shares = $123.13

(KR) KROGER CO $28.54/share 5.1353 shares = $146.56

(PIR) PIER 1 IMPORTS $4.12/share 3.1441 shares = $12.95

(WR) WESTAR ENERGY INC $26.25/share 0.7563 shares = $19.85

Credit Counseling and Consolidation?

Debt Consolidation Care is an online credit counseling service. They help people with debt consolidation, debt consolidation loans, credit card debts, debt settlement, collection agencies, payday loans, creditors and budgeting.

They do this through their Credit counseling and debt consolidation services. Their financial counselors will give professional and confidential one on one consultation to families and individuals (like you) in debt to further educate them how to find financial freedom.

Their mission statement, on their website reads:

Debt Consolidation Care mission is to get their clients out of debt quickly, and educate our clients so they stay out of debt. We want to give our clients a fresh start so that they can enjoy financial freedom for the rest of their life. We hope that you will now join our other clients on the path to financial freedom

As I looked at this site, I wondered if they could help me reach my goal on the ambitious goal that I have set for myself. I realize Dave Ramsey advises if a firm such as this is used, to use a non-profit Consumer credit Counseling Service. Still, the thought is there and unlike other privately owned counseling service, this one is not owned by the creditors.

So can they help this 39 year old single guy from Kansas? Do I have to many secured debts and not enough unsecured debt to be helped by such services? How much do they charge? Maybe I should continue on my own with gazelle intensity to get the rest of my debts paid off. Then again, lower interest rates could possibly get them paid off faster. hmmmmmmmm

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Ever since the mortgage loans have been introduced, home mortgage has been the most common of all. Whether getting a short term insurance policy like travel insurance or making a big investment like life insurance, one needs to consider all options. It involves a time-consuming process of gathering insurance quotes and making comparisons. However, much of time can be saved through online processing if you can manage to pay with credit card.

My Dream

Despite my debts, I continue to dream of owning my own business. I wrote about a trip I took to small town near the Kansas-Nebraska border last weekend. Perhaps some of you missed it. Perhaps, the post didn't interest you that day.

This is something that will not die. Most all of us fantasize about owning our own business, but then the thoughts go away and thats the end of. For me, there is no question, that I have the heart of an entrepreneur, as I can not stop thinking about owning my own business.

So heavy is this on my thoughts, I even went to the Credit Union, where my Emergency Fund/Insurance Savings is to see about getting a loan to pay off all my small debts and the IRS and allow them to automatically deduct like $30/week from the savings to repay the loan. Since I have $50 direct deposited into this account every week I would have the funds for this, plus enough to pay my insurance premiums every quarter.

They however as soon as they pulled my credit didn't want to talk to me or to see my plan. The reason? Because my FICO is now at an all time low. According to Experian it was 535 and for them to do any type of loan, it must be at 550.

Oh, well. I still believe I can get the small debts paid off by the end of the year, Then next year, I can wake up the IRS and work on getting them paid off by the end of the year.

As for my dream, it is my hope that I can accomplish the dream with venture capital rather then loans anyway.

My dream is to own a chain of grocery stores, convenience stores and maybe even liquor stores.

Struggling With IRS Debt? Talk To The IRS Yourself!

I owe, I owe, so off to work I go. We have all heard that little ditty before and for most of us it is true. For me, as many of you who have read my this blog often, know, I owe the IRS a small chunk of change. Small in the IRS' eyes that is. In my eyes it is a huge amount. So today, I thought, I would look to some of the experts and see what legal ways there are to handle IRS debt.

The first expert I looked to was the folks at Bills.com, where the first paragraph asks:

Do you owe the IRS? Are you struggling with IRS debts and cannot figure out what to do? Don’t despair, you are not alone. Many Americans owe back taxes, or cannot afford to pay their IRS debts. If you want to get IRS debt help, it’s important to understand the different IRS tax debt strategies.

I really like this website, at least on this issue, because their information is the most thorough. In fact they are the only website (I found) that even mentions the arrangement that I have with IRS. An arrangement, I tried to explain to one of my readers several months ago, but not where she understood. After my poor explanation, she told me that the IRS didn't make those arrangements, even though it was the IRS themselves who offered it to me.

In this post, we will take a look at all 5 payment arrangement methods, so if you are in the situation of owing the KGB, I mean the IRS, you will know what your options are. Which means, you will be ahead of me, when I got myself in this situation.

Compromise

1. The first and best option, is to offer a compromise. The IRS actually have a program where you can settle your tax debts for less than what you owe. Of course it's best to pay what you owe, but if you can't afford to, this is the next best alternative and will save you money over many of the others also. The concept requires the tax payer make a lump sum or short term payment plan to pay off the IRS at a reduced dollar amount.
   
   Installment
   
2. That brings me to installment agreements where the tax payer enters into an agreement to pay off the IRS with monthly payment plan. Keep in mind, the IRS will still charge you interest, during this time.
   Partial Payment
   
3. A somewhat new (according to Bills.com) debt management program is one where the taxpayer has a long term payment plan to pay off the IRS at a reduced dollar amount. To me this sounds a lot like number one.
   Not Currently Collectible
   
4. OK, this is the one the plan I am currently under, Not currently collectible is a program where the IRS voluntarily agrees not to collect on the tax debt for a year or so. With this plan, the taxpayer is still charged interest and late fees, but the IRS recognize that the taxpayers income is not one they can collect the debt.
   

   
   If a taxpayer does not qualify for an offer in compromise and cannot afford to pay an Installment Agreement, Currently not Collectible (CNC) status may be an option. If a client is placed in CNC status, the statute of limitations continues to run and the IRS will not pursue collection actions. However, if a taxpayer’s financial status improves, the IRS can remove the file from CNC status and return to active collection status.
   
   A. Taxpayer has income below allowable expenses and there is no indication that the financial situation will improve in the future;
   B. Due to high equity, the taxpayer does not qualify for an OIC and has more allowable expenses than income so an Installment Agreement is not an option; and,
   C. Taxpayer has more allowable expenses than income and the statute of limitations is getting close to expiring.
   
   

   
   Bankruptcy
   
5. Finally you can discharge your tax debts under the strict rules of a Chapter 7 or 13 bankruptcy petition. I really don't suggest this option.
   

   
   Statute of Limitations expiration, or bankruptcy relief but still seek resolution for their IRS liability. In these cases, it may be possible to negotiate long term IRS payment arrangements. The IRS allows “structuring” five primary types of payment plans, or Installment Agreements: Guaranteed Installment Agreements, Streamlined Installment Agreements, In-Business Trust Fund Agreements, Long-Term Installment Agreements, and Installment Agreements on Specified Balance Due Accounts. Currently Not Collectible
   

   
   
   

It is important to know, as I first learned on the radio program Handle on the Law, and since found on the quoted website above, that there is actually a Statute of Limitation for IRS Tax Debt. This means that the IRS has 10-years to collect any outstanding tax liabilities.

This is measured from the day a tax liability has been finalized. A tax liability can be finalized in a number of ways. It could be a balance due on a tax return, an assessment from an audit, or a proposed assessment that has become final. From that day, the IRS has ten years to collect the full amount, plus any penalties and interest. If the IRS doesn't collect the full amount in the 10-year period, then the remaining balance on the account disappears forever.

There you have it, I hope this information helps and lets all get our tax debts paid and taken care of. Remember, forget wasting your money to hire a tax lawyer, if you are proactive and don't procrastinate and try to hid from the IRS, you don't need one, as the IRS will be more then willing to work with you. You do however, have to be completely honest about everything with them.

Stay tuned on my article on Bankruptcy, to be posted in the next few days.

Getting Caught Up

I think I am finally caught up, sort of, with all my utilities. The only two utilities, I was still behind on, were brought current today. I went downtown and paid $80 to the folks at the city, to bring my water bill current and then I went to a local pay site and paid $20 on my electric bill.

According to Westar Energy, I needed to pay $15.06 to make payment arrangements so I paid $20. Now, for the next 11 months I will have to pay $14 something in addition to my monthly bill, to completely get them paid.

That now means that the only bill, that I am really behind on is my car loan. The Credit Union continues to work with me, but I did get a letter from them, informing me that I would no longer have overdraft privileges. Meaning, they will automatically return all payments as NSF, if the money is not in the account. They will continue to do this until my loan is brought current and everything has remained current (including no overdrafts) for 90-days.

Welcome! Look Around and Stay A While

It seems that I must have hit the lottery sort to speak. Yesterday, I looked at my stats and was amazed to see such a huge influx of visitors. Looking more closely at the states, it seems most of the new visitors are coming in, by way of Google searches. The search term, in one day has become the number one search term for this site. What was that term? Various versions of "84 square foot house" or home. All in all at midnight central time, I had received 310 hits on that article/page alone. Over all I had 384 unique visitors for the day. Considering I normally have 50-100 and occasionally 200 a day, to swell to almost 400 is fabulous. If this keeps up, I could be the number one personal finance blog rather then just one of the top 100.

So I would like to welcome all the new readers. If this is your first time here or if you have never commented before, I would like to welcome each of you. Everyone is encouraged to comment on any of the articles. All I ask is that if you don't have a blogger account, click on other and give yourself a name, so that your comments will be taken a little more seriously then a no name anonymous reply would be. The name you type in can be your real name, a nick name or an online pseudonym and is just to identify your comments.

This blog is (as stated above) a personal finance blog. I discuss my personal financial troubles openly here and my readers rebuke or support (with their comments) me. In addition I have talked about various frugal and thrifty tips. Discussed financial gurus like Dave Ramsey and John Cummuta. I have even discussed billionaires and business leaders such as Ron Burkle and Warren Buffett. It's all here, it's all my opinion, with your agreements, disagreements and thoughts thrown in. It to is my open book of the huge stupid mistakes I have made financially and all my struggles as I dig myself out of debt.

So with that, I would again like to say welcome and thank each and everyone of you for stopping by. Feel free to make a comment here to say hi and post how you found my blog.

Phone Back On/Changes To Be Made

Yesterday morning about 11 am CT, I was able to get my phone turned back on, but still owe $89 (by 7/24). I then called in and received the promo deal of 1000 minutes with free roaming and long distance for 39.99 (a savings of $6 over what I had been paying). I then canceled the unlimited t-zones (music downloads, Internet access, etc), saving me another $4.99. To top that off, I found I had 400 text messages at $4.99 a month, so I eliminated that also. In total I cut $16 off my monthly phone bill, plus the taxes, so that would bring the savings each month to $20-$21.

I have made the decision also, that Bank of America will be fired as soon as I can get my direct deposit changed back to my Credit Union. Part of me can understand their reasoning that, it's not really fraud, but a billing dispute, but at the same time they are suppose to be working for me, the customer, yet they act like they don't really care.

There has been several of you that helped make this possible. Each of you have been thanked on my Thank You blog. One guy in particular made a post on his blog, urging his readers to help. While, I really don't like asking for donations, I do appreciate them. I obviously, am still behind on other bills, because of all this mess, but can now see a teeny, tiny, small light at the end of the tunnel. The insulation company has threatened to turn me over to a collection agency, if I didn't make at least a 1/3 payment ($187) by July 10th. At this point, I am like who cares. They will get their money, but I am more concerned with the $75 mortgage and $400 car payments, not to mention the bills like electric, water, gas, phone, etc.

I will have them paid off by the end of the year, as I will the annoying credit card as long as I stay focused and not incurring new debt, or doing anything else stupid like I did with this home business thing. Of course, I thought I would have the credit card paid off last year to. Am I to optimistic? I believe I can get all these bills caught up and get myself debt free (except my car and taxes) by March at the latest. The trick will be to keep the bills from being disconnected, during the process.

I am open to other ways to cut expenses, even to selling my car that I am still upside down in, and getting a cheaper car.

Not counting the insulation installation, I was $845 behind, of which I still owe $770 of it, plus keeping current as the utilities as begin sending their new bills. Again, I am still optimistic, that I will successfully get these caught up and current.

On top of all this, Friday will be my birthday. I intend to have a good birthday. While, it would be awesome to become totally debt free on my birthday, I know that would change my spending habits in of itself. It will be 2009 before I am 100% debt free, including the car and the IRS taxes. Although as I already said, the credit card and small debts, I expect to have paid off by the end of this year.

Digging Out from Fraud is Slow but Happening.

I sold some aluminum today. Having gathered together 22 pounds of aluminum, they were sold today for $12.10 (55 cents/pound). I deposited the money into my bank account, bringing my balance up to a negative $4.25. The charge is still pending, so I haven't been socked with an overdraft charge yet. From what I understand, credits are taken care of first, so if I can find $5 cash and get that deposited today, before the bank closes, I should avoid the overdraft charge (I think this is possible).

I then came home and went online to pay $20 from my paypal account to T-mobile, then called them to get clarification on charges and ask about changing my plan. I can't change the plan until I bring my balance current. The past due includes parts of 2 previous bills.

My current plan is $45.99 for 1000 minutes, free roaming and long distance (new plans are 49.99 for the same thing). In addition, I have unlimited t-zones at $4.99 (new subscribers would pay $5.99 ). However, they have a promo plan, I can move to that keep me on the same plan at a charge of $39.99 (instead of $45.99), plus if I drop the t-zones, I would save a total of $11. Not a whole lot over all, but it will help and I can have phone service again.

In the meantime, I still have the free voice mail only service from Netzero, that I list on this blog to receive messages in regards to this blog.


****Update: My balance is now $5.88, in the positive thanks to my change jar.*****

Lost the Phone thanks to the fraud

Well, due to my checking account being cleared of all funds, as I discussed in earlier posts, my phone has been turned off. No partial shut off either. 100% turned off. Because, as T-mobile explained, the computer sees that returned payment and it automatically turns the phone service off. If it had just been because of a past due amount, they would have done a partial shut off, for a time.

What is a partial shut off. It means you can't make outgoing calls, but incoming calls can still reach you. So, in my case, even though I was the victim of fraud, that is in part my fault, the computer doesn't differentiate, and automatically disconnects.

So this means that I will not have phone service, until Thursday, when I next get paid, and then only if I am lucky. I will need to come up with $100 to pay past due charges or $190 to pay all charges including T-mobile returned payment fee ($20).


This problem has certainly put my budget extremely out of whack. No one is getting paid at the moment and I just went online and seen another company, tried to charge my account for their bill. Taking my balance back to a negative $17. Come Monday Bank of America, may let it stand or send it back, who knows which at this moment, but they will certainly charge my account another $35 either way for going negative.

When will this end?

It will be Thursday, before my next paycheck or my $150, from the sell of my (auto savings) mutual fund.

Bills I must come up with money for to bring current:

T-mobile $130+

Cox Internet $40+

Dish Network $90+

Car Loan $400+

Electric $75 +

Gas 75+

attic Insulation $500

The above are just past due charges not the current charges that are due on top of that. I really need to get some money made from all those ads and programs like CashCrate.

I still have some surplus of food, but I am out of milk, and it's hard to comprehend, until you are in the situation, how much you depend on having that gallon of milk in the refrigerator.

I do want to thank the friend and reader, who surprised me while I was at work yesterday. I came home from work and my yard was mowed. I could tell it wasn't done by the neighbor kid, who I usually throw $10 to do it, because his parents yard hadn't been mowed and areas of my yard that he ignores (to my dismay) had actually been mowed. Thank you guy, for getting the yard. It looks better then it has all year.

Do they really think people are that stupid?

Are they serious? Do people really respond to these things? I got this email, with a picture of a $1500 check and the message

seriously, the $1500 check could be deposited into YOUR account tomorrow!

No credit checks

Apply in 2 minutes

Nothing to Fax

Safe and secure

There are so many problems with this email. I won't even get into the evils of Payday Loans again. If you are interested, you can click on the appropriate label and read everything I have written about Payday Loans. The biggest thing I have with this email, is I have no idea who they are, and yet they want me to give them access to my bank account so that they can deposit $1500 for 14 days. Yeah right? Clean out my account is more like it. Do they really think people are that stupid?

Another email I received in the last 24 hours proclaimed

Get the things you need...
...regardless of your credit score!

Your financial worries are over. Now you can get the credit line, auto loan, cash advance, or home financing that you need...even with bad credit.

Auto loans

Cash Advance

Cell Phones

Credit Lines

Debt Reduction

Home refinancing

Again, I don't do loans, but the big question again is, who are these people? How do I know i can trust them? Sorry, but to me advertising this crap through email, makes you look less reliable. I know people are stupid about paying interest instead of saving. Hell, it's clear I have been stupid, but now am trying to reverse my stupidity. But, are people really stupid enough, to answer these email ads? Are they that desperate, that they would risk their financial health even further by giving these companies they know nothing about, all their financial information?

Reader Can't Seem To Get Ahead, No Mater How Hard She Works

Marnie recently wrote and asked me,

I work my job and I even try to make other money and volunteer for people. Yet I still do not make money to pay down debt. Help me figure this out.

The problem of being a lower wage worker, like even myself, is not easy. We make less then $20,000 a year, yet rent/mortgage and utilities still cost the same, whether we make 10,000 or 100,000. However, there are some things we all can do to cut expenses. I know that for those of us that make less, it may seem that we don't have any discretionary expenses to cut. However, I have found there is almost always things to cut. For example do we know where we spend all our money? For example, if we buy a soda pop/water and/or a candy bar is it figured into our budget? It may not seem like much, just a couple of bucks, but that couple bucks a day can add up to $60 amonth. That can be a huge part of a lower income workers budget.
What about meals out, I hate to say it, but for those of us in debt and especially those of us who are among lower income workers, we should not be eating out.
Of course, we should have the cable shut off and discontinue those newspaper and magazine subscriptions.
I know looking at my budget, I could almost live on minimum wage if I didn't have all these debts. Especially, if I didn't have the $400 a month car payment. This debt, if I followed Dave Ramsey's advice 100% could be eliminated more quickly by selling the car, buying a clunker and getting a small loan for the difference. In the mean time I would save money to buy a better car with cash.

I know it's not easy, to cut expenses and get debt free no mater how much we make. Whether you are a lower income worker, like this reader and myself seems to be or if you are a higher income worker, like I dream of being. However, it can be done.
It may seem like we are going no where, however, if we get really serious and track our spending, like I do on this blog then you will see your debt get smaller. Of course don't forget to cut up the credit cards, you can not spend your way to debt freedom.
As Dave Ramsey says, "live like no one else, so later you can live like no one else." In other words, make those sacrifices now, so later you can live without worry about (or at least as much) money.

Revisiting Practical Way to Become Debt-Free Forever!

In August of 2006 I posted Practical Ways To Become Debt Free Forever. Today, I thought I would re-post the article, with a few minor updates.

1. If you have Credit Cards with Outstanding Balances.

A. Cut up ALL Your Credit Cards, and do NOT open new lines of credit.

B. Call those cards and ask them to reduce the interest rates.

2. Save or Earn an Extra $150 - $200 Per Month.
3. Pay this Extra Money off ONE Credit Card each Month until it is Paid Off.

A. Do NOT open new lines of Credit, as the idea is to get OUT of debt, not deeper into it.

4. Continue to Pay the Minimum of ALL your other Credit Cards each Month.
5. Once One Card is paid Off Apply the TOTAL amount to a Second Card.
6. Continue until All Your Credit Cards are Paid Off.
7. Apply the Same Method to your Car and House Loans.
8. Do Not Borrow Money for Consumer Goods Ever Again.
9. Use this Monthly Amount to Build Your Assets (aka Savings).

Using this Simple Method, as John Cummuta says, most People can become Debt Free in 5 to 7 Years and Wealthy in 10 to 15 Years. Please note Dave Ramsey say, that you will be more successful if you build an emergency savings of $1,000 ($500 if you make less than $20,000/year) first, and then pay off you smallest debt first. According to Ramsey, it may be mathematically correct to pay off the highest interest rate first, but if we were think mathematically, we would never have gotten ourselves into debt in the first place.

Ambitious Credit Card Elimination Goal

I have an ambitious goal to get my one credit card eliminated, once and for all, by May 5. Over the next few weeks I want to accelerate my payments and get the credit card paid off once and for all. I am not sure how I will do it and keep my other bills current, but that is my goal. It is important to me to get rid of this 31% interest rate. I want get Washington Mutual aka Providian out of my life forever. In addition, want to pull that card out of the freezer and tax it to Kansas City with me and get a picture of Dave Ramsey cutting it up. The picture then will be posted on this blog.

My plan is to send them payments over the next few weeks, getting the debt lower and lower, culminating with a huge $400 payment from my savings account. That means, over the next 4 weeks, I will need to send an average of $134/week.

70% Attitude, 30% Hard Work

"If you think you can, or if you think you can't, you're right." - Henry Ford

Some people are often heard making the claim that they can't get out of debt. Some even claim they can't buy a car or house (or whatever) without using credit. Perhaps they have not heard the Henry Ford Quote above.
Fact is if Henry Ford thought that way, we would not have the cars that we do today and most definitely would be without Kingsford charcoal and perhaps any other kind of charcoal briquette.
But, that is beside the point. The point is, our attitudes play a big part in our financial lives. If we think that we can't live without credit and/or be debt-free, then our attitude will be our reality. Likewise, if our attitude is one of I can be debt-free. Then we will be debt be debt-free.
No, it won't happen over night, as if by magic, but thinking positive will motivate us to trudge forward towards our goal. It will motivate us to work hard and to ignore the naysayers (whether family, friends or acquaintances) and get those debts paid off, so that as Dave Ramsey says we can live like no one else. Namely Debt-free!

My goals for this year are:

• Get my Credit Card completely paid off
• Get my Home Improvement Loan completely paid off
• Get my attic insulated (more on this later)
• Get a big chunk of my car paid off
• Have my $1,000 emegency fund and start working on my 6 month savings

Ten Commandments of Debt

The following Ten Commandments of Debt were written by Jon Hanson. A debt management speaker and author. I am in the process of reading his book right now and will be posting a review of it shortly. I will then be having a series of contests to give away three copies of Jon's book graciously supplied by Mr. Hanson. Without further ado, here is
"The 10 Commandments of Debt," by Jon Hanson.

The Ten Commandments of Debt Management


1. Thou shall stretch your financial life time perspective.
If you are forty, planning for forty more years is not excessive. Don't outlive your money.

2. Thou shall not be beguiled by mass media, advertisers, or the merchants of debt.
Work your plan, not others plan for your life. "Remember the past is the past, unless you still owe for it." How many are buying things they don't need, to impress people they don't know, with money they don't have?

3. Thou shall make income run ahead of expenses.
Revenue before spending (RBS). Spend less than you make. Understand the four Debt Effects.

4. Cars are commodities.
Work to position yourself so cars are cash purchases. Buy less car, drive it longer, and set up a sinking fund for the next one. Until they do not affect your long term planning, cars are a very poor investment.

5. Thou shall not allow your Burn Rate to exceed 90 percent.
Your spending determines your ending. Burn Rate determines fate. Live on 90 percent or less of your income. After you dump the debt save at least 10 percent, if you can't, start at 1, 2 or 5 percent, just start. If you cannot save, the seeds of greatness are not within you.

6. Financial Freedom is found in submission to proven fundamentals.
Forget the fads and secrets to wealth. There are no secrets. The universe is already unlocked. Financial success is found in simple math and accumulation. Embrace and remember these three D's: Discipline, Deferral, and Discernment.

7. Thou shall not borrow for consumption.
Wealth is gained through accumulation which is the opposite of consumption. When you borrow for consumption you have nothing left and you still owe for it.

8. The way to financial freedom is delayed gratification.
Truly we should see delayed gratification as a blessing and not a curse. If you will live for ten years like most people are not willing to do, you can eventually live most any way you wish.

9. Most of your happiness will come from relationships with people, not money.
Major relationships with your children, spouse, and close friends will be large factors in your success or failure financially.

10. In general, use Good Debt for: real estate, education, and business.
Not all debt in these three areas is good debt. To be classified as good debt, the real estate, education, or business must return the capital, pay the interest and still have a profit.

DebtFree4ever TV: Generation Debt

This is the second video in DebtFree4ever TV's series on debt. Today, is a video from Geraldo At Large on Fox. It is a very interesting look at debt and why credit cards should be avoided and a perfect example of why we should alternative ways (but legal) to pay for college (instead of borrowing on student loans).