Well, hello there!  It’s been a while I know, but I’m on my way back to a regular involvement with this site.  I’m very excited because I’ve definitely missed having the opportunity to interact with you on a regular basis.  What happened, you say? I’ll explain later.  But right now, I want to talk more about the future plans for the site which I hope you’ll want to be a part of.

Ironically, as I was starting to write this post, I was watching Oprah’s Life Class when she was talking about The Plague of America: Money.  It was an awesome class and it validated the constant pull  that I’ve felt over the last few years to start a conversation to help us all  rise and realize that we can all live an abundant life.  It’s just a matter of learning how.

So, here’s what I have currently in store.  In a few weeks,  February 13, 2012, I will do an official re-launch Personal Finance Notebook.  The following week, I’ll release a free guide that I’ve written just for readers who are interested in becoming a part of this community.  The guide is called, An Escape Route to Financial Freedom: Six Pathways That Will Lead You to Live the Remarkable Life You’ve Been Called to Live.  For those of you who are already a part of the community, I’ve decided to send it to you a few days prior to the site release.  It’s something that I’ve poured my heart into.   I know that many of you have probably created those New Years Resolutions to become better managers of your money so I pray that this guide will help you along your journey to the financial abundance you seek.

SIDE NOTE!  I am in the process of merging all subscribers to one email management system.  I apologize, but for those of you that receive the site updates via Google, please look out for a confirmation email that will be coming to you within the next day or so.  I need you to re-confirm your email with the new system.  If you don’t receive the email, no worries…you are already a part of the main account. 

I have lots more to say, but I won’t bore you with the details at this point.  For now, mark your calendars for February 13, 2012.  If you’d like to participate further in the development of this project, see what you can do below:

• I’m currently very active on Facebook and Twitter.  Feel free to stop in, say hi and start interacting there.
• Leave a comment at the end of this post…all are welcome!  What are your ideas? What’s happening financially in your own life? Do you feel that you are living your life in complete abundance?  It’s o.k. if the situation is good.  It’s also o.k. if it’s a challenging time right now.  We’re here to support each other.  If you would like to share your ideas or story in a more private forum, you can email me at patrenia.spears [@] personalfinancenotebook.com (without the brackets). Information shared via e-mail will not be released, shared or exposed without your permission.
• Read more about my new vision for the site here and the community here.
• Spread the word.

That’s all for now.  Don’t forget to help me get the word out! PUSH…February 2012!!!  Thank you all so much and I look forward to a wonderful year.

Yours in Service,

Hello dear friends and readers,

Today I wanted to write a short note to all of you to just say “Thank You”.  Thank you for coming to the site, subscribing and being a faithful reader of Personal Finance Notebook.  I’ve been on this journey of sharing ideas related to personal finance officially since November of last year.  Time sure flies when you’re having fun.

I have met so many wonderful people.  Many of you have sent emails of encouragement, subscribed to receive articles as they are posted, commented on articles that have been of interest and joined the small community on Facebook.  For all of that I am truly grateful!

Now to show my appreciation for all of you, I’d like to do a little giveaway.  I have an Amazon Gift Card valued at $25 in my Amazon shopping cart.  In order to participate in the giveaway, please leave a comment stating a reason or reasons why you read Personal Finance Notebook.  On Wednesday, I’ll number each comment (in order) and use a random number generator to choose the winner.  The announcement of the winner will be made in Thursday’s post.  It’s that simple!

Ok, well that’s all for now.  Thanks again and I look forward to reading what you all have to say.  But before I go, I’ll just leave you with a statement that I’ve taken as my unofficial motto:

“Education is a social process. Education is growth. Education is, not a preparation for life; education is life itself.” ~John Dewey

Image Cred denise carbonell

A couple of weeks ago, I wrote an article about Standing Your Ground.  I discussed collectors and a few best practices when dealing with them.  At the end of the article, I made the following statement:

I encourage you though to find a way to resolve your debts so that you can build a solid financial house.  A house with holes in a few windows (the bad debts) doesn’t look too appealing. Does it?

Although I used broken windows as an analogy, it’s actually a theory first introduced by James Wilson and George Kelling.  A portion of the theory states:

Consider a building with a few broken windows.  If the windows are not repaired, the tendency is for vandals to break a few more windows.  Eventually, they may even break into the building, and if it’s occupied, perhaps become squatters or light fires inside.

Or consider a sidewalk.  Some litter accumulates.  Soon, more litter accumulates.  Eventually, people even start leaving bags of trash from take-out restaurants there or breaking into cars.

The underlying meaning is that when a window is broken in the neighborhood, it should be fixed immediately.  This more than likely will deter further damage from those that are attracted to vandalize.  Cleaning up the sidewalk every day, prevents others from seeing the need add to the pile.

Now, as I consider it here, I think about broken windows in terms of the financial house most of us are striving to build.  We all have some type of structure we reside in whether it be a single family home, condo, an apartment, etc, right?  Well, when a window is broken, you have to make one of two choices:  fix it or ignore it.

To warn you of potential danger, I’ve created a short list of “windows” to be aware of and offer some encouragement of right action along the way.

• Credit Limits

When you’re trying to get your money train back on the right track, your credit limit is something you might want to keep under your radar.  Why?  There are two reasons: one – to avoid the trap of the “over the limit fee”, two – to help your credit scores.  A high balance greater than or equal to your maximum credit limit does not have a positive affect on your credit scores.  And how does it look to potential lenders?  Not good at all.  Though you may pay your bills on time every month, you’d be considered a high risk.  

• Credit Reports

Since we’ve looked at the credit limits being a broken window, let’s look at the larger picture of the full credit report.  It must be checked.  You have the right to obtain a free copy of your credit report once every twelve months from each major reporting agency: Experian, Equifax and TransUnion by way of www.annualcreditreport.com.  A good idea is to not request them all at once.  Spread the three requests out asking for one every four months checking for accuracy.

Xenophon says, “…but accuracy is everything.”  I couldn’t agree more.  Checking everything from the personal and public information, as well as the credit history.  If anything looks strange, you have a right to request an investigation.  Don’t let the litter accumulate.

• The Mail

This broken window will probably require some time a patience, but it’s repairable nonetheless.  You know that pile of bills you’ve got stuffed over in the corner? Yeah, that one.  It’s time to pull it all out and deal with it.  Yes, the time is now.  Believe me, it’s not going away. 

It’s easy to put it to the side and say, “I don’t have time for this right now.”  But if not now, when?  Small debts become collections, collections become judgments, judgments become garnishments.  A little extreme, but some collections may even lead to jail time (click here to see a recent newspaper article about that).

***

The bottom line is this:  Being held hostage to unwanted guests is not going to be an option if you don’t repair your windows quickly.  As stated earlier, this is a short list of ideas (things we may ignore).  You could probably think of some examples from your own situation or someone you may know.  Feel free to write about it in the comments.

 Thank you so much for spending your time here with me today!

Image Cred gregoreosz

To get into your rightful place financially, you have to move past what has not only become comfortable, but what has become just a way of life.  When I say comfortable, I’m basically talking about life as usual. 

We have dreams of something bigger and better, but getting there sometimes seems too difficult.  What we normally do is keep the dream in our heads, but never move toward action.  We mostly use the One Day Theory.  You know…One Day I’m gonna have enough money to do whatever I want OR One Day I’m gonna own my own home.

You can probably rattle off a couple of your own One Day Theories – in fact, you’ve probably heard and said them many times over.  Truth is though, the One Day Theory is just another basic form of procrastination.

On a deeper level, procrastination overlaps with avoidance.  When a task initially seems too difficult to handle, we’ll put it off and put it off until it becomes a monster.  I don’t know what makes us think that the problem will go away.  It NEVER does. 

I know it seems easy to bury your head in the sand and ignore life along with your hopeful dreams.  The thing about that is, it’s suffocating.  You definitely can’t survive that way.  Survival of the fittest is taking responsibility quickly and creating the success you desire.

Do I suffer from the disease of procrastination?  Of course, I do.  All the time.  As I write this article, it is very late in the evening.  My initial thoughts were to shut the computer down and start fresh tomorrow.  But then I thought about how the delay would really throw me off schedule.  My right action was to do what’s needed now and feel good about what I accomplish later.

I remember reading a book a few years back by Brian Tracy called, Eat that Frog: 21 Great Ways to Get More Done in Less Time.  This book was key in transforming my thoughts about goal achievement and handling daily life.

My 4-Most Important Mantras from the book were:

1. Consider the consequences.  Take a moment to consider what the outcome will be if the task is put off until later.
2. Do the most difficult task first.  This statement is the entire basis of eating the frog.  Getting the difficult task out of the way first frees your mind for greater accomplishment.  It becomes a snowball of successful action.
3. Slice and dice the task.  Breaking down bigger projects into smaller manageable chunks = faster goal achievement.
4. Develop a sense of urgency.  A determination to stay focused until the project is completed.

He also says:

The key to reaching high levels of performance and productivity is for you to develop the lifelong habit of tackling your major task first thing each morning.  You must develop a routine of “eating your frog” before you do anything else and without taking too much time to think about it.

The thing is, I’m seeing many people achieve their dreams each day.  We all have our good and bad days.  The key though is to have more bad than good.  See if you constantly make two steps forward and only one step backwards, you’re doing your best to make greater strides in the right direction. 

So as you continue your day, consider something you have been avoiding – a work assignment, cleaning up your financial house, getting organized, any short or long term goal.  Be determined today to eat that frog.

How about you on the other side of the screen?  What’s stopping you? 

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I appreciate you reading today.  If you enjoyed it, don’t be selfish – share this article with a friend.   Have a wonderful and prosperous day!

Gotta Get Organized Image by Szlea

I got a call recently from a close friend who was a bit disturbed by a phone call she received.  See, over the last few years, she has been very diligent with staying debt free, paying her bills on time and keeping a close eye on her credit scores.

Life didn’t start off this way for her, but she has been able to accomplish so much by sticking to her plan.  Now, she is seeing the benefits of her hard work. 

Well, back to the story.  She received a phone call from a collection agency.  The collector started off with the preliminaries verifying name, previous addresses, etc.  Receiving these types of phone calls is out of the norm for her so she asked that he get straight to the point. 

He was trying to collect on a automatic deduction payment debt that she cancelled sometime last year.  The collection amount was about $89.00.  She politely informed him that she did not owe this debt and that there must be some miscommunication. 

At some point and time during the conversation, he even offered to settle the debt for $70.00.  Again, she declined and stated that she would call the original creditor.  The collector stated that she could do that, but to save herself some time and trouble she could just pay the debt…“That way, it won’t go on your credit.  It’s only $70.00”, he said.  Her response to him was…“I’ll just take my chances.”

She did not allow the collector to intimidate or coerce her into paying a bill she did not owe.   She immediately called the original creditor and got the matter cleared within a few minutes.   I love the fact that she showed the greater strength, as Abraham Lincoln said -

Be sure you put your feet in the right place, then stand firm.

Don’t get me wrong;  I know that talking to most collectors is like talking to a rock.  They don’t hear you.  But what’s so important about this is that she had a leg to stand on .  My friend knew she didn’t owe the bill and had the records to back up her claim. 

As I see it, there are a few things she did right:

Spoke respectfully.  There’s no sense in getting agitated over an easily solvable matter. 

Kept good records.  The best thing to do this day and age is to leave some sort of paper trail.  This can be by way of written contracts, bank statements, cancelled checks, emails, etc.  When questions about payments arise, the proof is easily accessible.

Followed up immediately with the original creditor.  I know…it’s a pain in the rear, but allowing problems to linger only makes it worse later.

Asked for proof that the debt has been cleared.  This is very important.  Having a statement from the original creditor can be useful if this debt resurfaces in the future.

If this was a debt my friend really owed, this would have been a different story.  More on that later; but for now, if you owe a debt and are being contacted by a collector, here’s my advice:  Don’t allow yourself to be bullied.  Collectors do have rules and laws that they are held accountable to.  I encourage you though to find a way to resolve your debts so that you can build a solid financial house.  A house with holes in a few windows (the bad debts) doesn’t look too appealing.  Does it?

***

As always, thank you so much for reading.  If you have a question or a tip of your own to share, feel free to do so in the comments.  Also, don’t forget to spread the word about PFN – new readers are always welcome.

Standing Tall Image by Orin Zebest

I’ll start today with a little history lesson.  See that picture to the left?  Well, that is a picture of the Philadelphia County Prison in Philadelphia, PA called…the debtor’s wing.  This wing and others like across the American colonies in the early 1800’s, held people that owed debts but were unable to pay.

It was a very simple process.  Creditors who were owed money would simply ask the sheriff to arrest those that owed and throw them in jail.  The only way the debtors could be released was to post bail or pay the debt.  Since most couldn’t do either, they remained in jail for months or even years depending on the size of the debt and their family’s ability to raise the money.  Some even died before being released because of disease that ran rampant in the close quarters of the jail.

In 1831, the United States government ended this practice with the introduction of the Act to Abolish Imprisonment for Debt.  Whew!

Now almost 180 years later, most of us spend our time creating our own debt prisons.  No, we don’t have to worry about going to jail (except for taxes or child support), but it’s a jail all the same.  As Jon Hanson said, “Working while carrying a load of debt is like a prison work-release program.  You are released each day to work, but the balance of your time is spent in a mental prison.”

Over the last several years, we have really seen the effects of debt.  The lives of normal families that were living the American Dream shattered due to the carelessness of creating debt instead of wealth.  As I see it, living in a constant state of want leads to us becoming a prisoner to our passions.

Work no longer becomes a privilege, it’s a necessity in order to survive.

Think about the feelings you had as a child…probably “free”.  Yes, the responsibility of provision was upon your parents, but there was a feeling that time was no option and your opportunities were limitless.  Becoming an adult was like being given a huge stack of blank paper that weighed about the size of an elephant.

We aim wanderously, happily spending money and using credit when we really shouldn’t.  Most of us don’t even realize what we’ve done until it’s too late.  Picture this…you sitting down on the floor “Indian style”.  Now, add up all the debts you currently owe (credit cards, personal, consumer, student loans, etc).  Imagine yourself being surrounded by this amount stacked in dollars.  If you stand, can you see the outside world easily?

See, those few moments of fun have a price tag attached.  That price tag then leads to frustration and unhappiness.  So before you make you next purchase, ask yourself… “Is this helping me to get closer to my goal?”  If not, make the decision to walk away.  Just turn and walk away.  You can do it!

If you’re in a debtor’s prison, what’s your sentence?  How long do you have before release?

Philadelphia County Prison Image by whitewall’s buick

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Thanks everyone for reading!  I really appreciate it.  Feel free to share your own experience with debt in the comments, if you’d like.  So until next time…

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“A successful man is one who can lay a firm foundation with the bricks others have thrown at him.”  – David Brinkley

Disaster is not something that many want to think about.  Over the last few years, I have been focusing more on becoming “thought” conscious and creating a positive presence in my life.  I try my best to avoid negative energy. 

Can you picture negativity as a snowball?  I can.  Negative thoughts bring negative energy.  Negative energy bring on negative emotions.  And negative emotions most times lead to some form of unhappiness. 

If you were to see me on a daily basis, you would know that I wear a purple “A Complaint Free World” bracelet at all times.  The bracelet itself does not keep me from complaining, but it is a reminder for me to be more aware of my thoughts and what I speak of daily.

But avoiding negativity financially is more than just creating positive thoughts.  It requires a verb called ACTION.  You have to DO something if you want to be successful with your finances.  Passively waiting each day for life to change or improve without action will cause you to basically run in place and /or get behind.

There are three ways I believe can be critical in avoiding financial crises:

1.  Proper Planning.  We all know that in life we have great times and then we have some not so great times.  The key though is to prepare for the times that are the hardest.  Some examples would be job loss, illness,  salary reductions, etc. 

The first step is to sit down and analyze where you are now financially and where you want to be.  This can mean creating budgets, cutting up credit cards, creating an emergency fund, and/or starting a debt payoff method.  Well, someone may say that it’s so bad, I don’t even want to look at it.  My answer is, how can you heal if you haven’t assessed your wounds?

2.  Prioritizing.  Taking a look in the financial mirror is a must.  Not just one time, but daily until it becomes habit.  Just as we dress ourselves daily for our outward appearance, we must also dress ourselves daily financially.  Reviewing spending each day reminds us of our goals and keeps us on track to achievement.

3.  Paying Attention to the Right People.  There’s one thing about advice….everyone has some form of it.  When I was in the mortgage business,  I remember many of my loans not closing due to a family member of the client advising them to seek a better deal.  After shopping around, many times the client would realize that I did the best I could for their situation.  The advising family member had no idea that they were causing more harm than good. 

There are also times when people who are not financially savvy get advice from others who are also not financially savvy.  Talk about the blind leading the blind.  When financial questions arise, it is very good to get the opinion of others, BUT you must do your own research to get the best answer for your situation.  The internet is such a powerful and useful resource and we should use it to our advantage. 

***

Our chance at disaster is 50/50, but our chance at success is also 50/50.  It depends on how you view your glass.  Half empty or half full?  AND whether you are willing to work at achieving financial success.  Do you aagree?  Let me know what you think in the comments.

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This is the first article of a three part series on “How to Create a Financially Balanced Lifestyle” based on what has worked for me AND what I’m still learning.

This is going to be a very important series if you are serious about making a better future for yourself and your family.  Let’s get started…

“All days are not same. Save for a rainy day.  When you don’t work, savings will work for you.”   – M.K. Soni

It’s been very interesting to watch how our economy has changed over the last few years.  When I first entered corporate America, there was so much excitement and opportunity.  Firstly, to make money.  Secondly, trying to choose which job to take which would provide the most income.  Beautiful homes, fancy cars, nice clothes – you name it – we had/have it ALL.  Including the debt trailing behind us, but we were/are maintaining.

Fast forward eight years, the unemployment rate is up and the morale is down (depending on who you talk to).  Ask someone “How’s it going?”, you may get one of two responses:  “Pretty good, just trying to make it” OR “Wonderful, life couldn’t be better.”

Why the different responses between people?

I think it’s based on perception AND preparation.  Could it be that the “life couldn’t be better” responder hasn’t been affected by the economy?  I don’t think that’s the answer.  But let’s dig a little deeper and look at the two different components.

Perception. Perception is defined as a way of conceiving something.  A person with a positive perception sees life through a different set of glasses.  The whole world is their oyster.  They enjoy every moment of their life, but most of the time they balance that enjoyment by way of…

Preparation. Knowing a rainy day will come and they must get ready.

So, is everybody that has a positive attitude prepared for the future?  No, not everyone, but they have conquered half the battle and with a few key concepts could be well on their way to a better financial future.

The Fundamentals Have Not Changed

As I’ve watched the recession unfold over the last year or so, I’ve noticed that the people who are least affected are those that have built their lives on a basic fundamental of money management…

• Building an asset.  And the best asset we can build is saving money for times of emergencies.  It’s not a question of “IF” an emergency will happen, it’s “WHEN?”.

Sounds really simple doesn’t it?  The real truth is that most households don’t have a savings account earmarked just for emergencies.

So What is the Right Way to Build and Asset?

The first thing you need to do is lay the framework to build your fundamental asset:  Pay yourself first.  Kind of like a forced savings plan.  This means to treat savings as the first expenditure after you receive your paycheck.  It becomes a permanent fixture within your budget.

The key point to understand is that though saving is not a glamorous event, it can and will give you a peace of mind and a sense of accomplishment.  Remember the tortoise and the hare?  Slow and steady wins the race.

While there is more to your journey for financial happiness, this is a huge start.  Just remember…perception and preparation are your keys.  The rest is a breeze.

Sometimes we get a little relaxed with our goals and plans because life does happen every single day.  You may have to take a quick step backwards every now and then, but to win the prize you have to keep taking steps forward.  No matter how big or how small.  One foot in front of the other.

Here’s the Goal:

1. Build and maintain an emergency fund sufficient enough to cover at least six months to a years worth of expenses.
2. Use high-interest savings accounts to preserve your emergency fund.  You may find the best rates locally here.
3. Keep your emergency fund in a savings account that is easy to access just in case disaster strikes.
4. If you haven’t already, create a budget (spending plan).  This will help you in achieving your goal.

***

Now, don’t be misled to think that I have thousands and thousands of dollars in the bank.  Since my husband and I have paid off our debt, we have been and are continuing to build upon our emergency fund.  This has been a process of continual growth.   An act of taking it one day and one month at a time.  But what we do know is that we are better off today than we were five years ago.  We’ve made substantial progress.  That’s something to be thankful for. 

What are your comments?  I’d love to hear them…

Click here to read on to Part 2 of the series

Stay tuned and feel free to subscribe via RSS or E-mail!

Recently, I found this video of a talk done back in 2001 at the TED Convention by John Wooden, a former coach for UCLA.  The topic of his speech is Defining True Success.  In this 17 minute video, Mr. Wooden gives wisdom that is timeless and can be applied to any facet of life including, finding success financially, in a career, as a spouse, as a parent, etc.

Since we talk about personal finance here, I’ll take a few quotes of his quotes and relate them to personal finance.  Check this out:

“My own definition of success:  peace of mind attained only through self-satisfaction in knowing you made the effort to do the best of which you are capable.  If you make the effort to the best of which you’re capable, try and improve the situation that exists for you – That’s Success. “

Succeeding at managing money is all about achievement on a personal level.  Not everyone is going to be able to attain multi-millionaire status.  Not everyone is going to have hundreds of thousands of dollars in the bank.  But with effort each person can achieve their personal best financially without being compared to others.

“I came up with a pyramid eventually …And right at the top -  “faith and patience”. Whatever you are doing, you must be patient.  You have to have patience.  We sometimes think that change is progress, but forget that there is no progress without change.  We must also believe, truly believe.  Not just give it word service, but believe that things will work out as they should, PROVIDING we do what we should.  I think our tendency is to hope that things will turn out the way we want them to, but we don’t do the things necessary to make those things become reality.”

I can definitely relate to this quote.  As my husband and I were paying off what we felt was an enormous amount of debt, what kept us going was faith and patience.  Faith that one day we would achieve our goal of debt freedom.  And patience to do the daily monthly tasks required to continue on the lengthy journey and achieve the goal.   

“Reminds me of another set of three’s that my dad tried to get across to us.  Don’t whine.  Don’t complain.  Don’t make excuses.  Just get out there, and whatever you are doing, do it to the best of your ability.  Never mention winning.  My idea is that you can lose when you outscore somebody in a game.  And you can win when you are outscored.  Just be able to hold your head up after a game.  When the game is over and you see somebody that didn’t know the outcome, I hope they couldn’t tell by your actions whether you outscored an opponent or the opponent outscored you.”

Sometimes we think that the grass is always greener on the other side so we whine, we complain and we make excuses about our present situations.  But the reality is that we should be thankful in all things.  Keep a smile at all times.  I know it hard when times are tough, but in order to get to the mountaintop, you have to go through the valley.  It’s just the cycle of life.

“Then I ran across this simple verse that said, “At God’s footstool to confess, a pour soul knelt and bowed his head.  “I failed!” he cried.  The Master said, “Thou didst thou best, that is success.”

This is my most favorite quote from the entire video.  If you do your best, that is success.  What else can I say?

There’s a lot more to be gleamed from this video, but I decided to give my most favorite parts.  In the end, the talk is meant to inspire all of us to succeed on our own personal level.  Not just going with the flow of life, but to put in some effort and try to do our own personal best. 

If you haven’t already, take a moment to watch the video.  You will definitely be inspired.  Please share your views about the video in the comments.  

If you’ve never heard of TED, it’s a small non-profit devoted to ideas worth spreading:  Technology, Entertainment and Design.  The annual conferences in Long Beach and Oxford bring together the world’s most fascinating thinkers and doers who are challenged to give the talk of their lives (in 18 minutes).  You may visit TED.com by clicking on this link.

When my husband and I decided to dump our debt, I wished that there was a button we could press that would make it all go away.   Reality was that we had to have a plan.  

We’d read a couple of books related to personal finance, but the one book that really made paying off debt simple was The Total Money Makeover by Dave Ramsey.  Most books give all the fluff and theoretical processes related to debt elimination.  The Total Money Makeover was the most simple “how to” book I’d ever read related to personal finance.

So to begin the course of action, our debt elimination involved five initial steps:

1. Accessed the problem.  We sat down together and listed our debts and the balances for each.  Those debts included two car loans, medical bills, a credit card, and a home equity line of credit.  It was a shock to realize that we owed approximately $93,000.  Yes, that’s right….$93,000.  It absolutely took our breath away.  The questions that arose were…how did we get here?  Does everyone have this much debt?  How long is it going to take us to get out of this?  O.k., after the initial shock, let’s move on.

2. Created the Snowball.  After we accumulated the damage, we listed the debts from smallest to largest balance.  Known more commonly as The Debt Snowball Method, this became the order in which we would pay the debt.  You may ask, “Why not pay off the balance that has the highest interest rate?”  Well, for us the debt snowball method allowed faster victories and the motivation to continue with the plan.  I couldn’t imagine paying on one debt for two years and it be the first successful payoff of the plan.  I know I would have given up.

3.  Stopped the bleeding.  We had to immediately stop using any form of credit.  If we couldn’t pay cash for the item, we could not purchase it.  This included any recurring payments that were being made automatically by the credit cards, i.e. subscriptions, memberships, etc.

4. Created a budget.  Yes, the dreaded “B” word.  You may want to call it a spending plan.  Either way, this I believe is the most important factor.  Instead of winging it every month, we actually became the boss of our money and told it what to do.  EVERY DOLLAR of our paycheck was accounted for.  The budget was not just for bills, it included everyday expenses such as eating out, purchases for the children, grocery, dry cleaning, etc.

5. Started an emergency fund.  Ideally, the minimum amount for the emergency fund would be $1000.  The money should be in a savings account, not easily accessible for daily use and is earmarked for “emergencies only”. 

After we started the process, we could immediately feel a sigh of relief.  Even though debt freedom was the goal we were working towards, the initial victory was that we finally had control of our money.  There was a plan, a workable plan.   We were now going to be debt free!!!!!!  Debt freedom is truly possible, not a dream, but a reality of what can be achieved.

Where do you stand currently with your debt?  Feel free to share stories, tips, or questions in the comments.

Thanks so much for reading!!!