I'm going to take a sidestep here in my financial postings to talk about something I feel very strongly about. That would be the used of credit. Let me put it right out on the table. In general, I don't believe in the use of credit. If you can't afford to pay cash for an item then you can't afford the item. (I am not talking houses and cars) Or you spend your cash on unnecessary things so when that emergency comes up you suddenly have to use the credit card because your cash is gone.

If you look to the past it seems to me people's financial stability has gone down over the generations as their reliance on credit has gone up. This can't be a coincidence. When we start buying on credit we start down the path of spending more than we have. And lets be completely clear about one thing. Credit card companies are not your friend. They are not going to look out for your best interests. In fact, most of them are designed to get you sucked in to them for life. If you didn't already know this, that minimum amount due? That nice low number that seems so simple to pay...how nice of them!.....yeah, not so much. Those minimum amounts are designed so that you'll essentially never get your card paid off and they end up making tons of money off of you in the interest you pay.
Credit card companies are notorious for their draconian policies. Read all that fine print some time. That lovely 5% interest card? See what happens if you are one day late on one payment. Suddenly you're paying 29% interest.

Buying things on credit because you can't afford to pay cash is a childish behaviour. Children demand instant gratification. Adults set goals and plan for the things they desire. Its called financial responsibility people. Its a value that has been lost over the last couple generations.

Every person, company, entity you owe money to owns you. Personally I don't want to give up that kind of control of my life. I'm told they get very nasty too if you don't tow their line. Fortunately I've never had to deal with a creditor or debt collector but I know others who have and it ain't pretty. But I'll be writing another post down the road on how to handle those kind of calls.

For now though, think about your use of credit cards. Is what you're doing responsible? And no, you don't need a credit card to reserve a hotel room, rent a car or buy airplane tickets. A debit card will do just fine.

My next financial post will be about the nitty-gritty of how to go about paying off debt.

It shouldn't be so hard to find a blog template I like. It really shouldn't. Guess I'm going to have to learn how to make them myself to get what I want. Grrrrrrr.

First let me say if you don't like my opinion that's ok. Odds are that means I don't like yours either! And that's ok too. This is something that seriously pisses me off though.

When did illegal become ok? Seriously.

I am so freaking sick of this whole illegal alien drama. I don't see what is so complicated about this whole thing. Last I checked the definition of illegal hadn't changed. Illegal means unlawful, illicit.....you are breaking the law. You are a criminal. And since you aren't a citizen of this county you really aren't entitled to all the rights afforded us by our constitution. And I really don't know who the hell you think you are to feel you deserve anything via my tax dollars.

Don't get all outraged when we say we're going to arrest you, its just what we do to criminals. And threatening to leave if we pass laws you don't like??? DUDE!! Let me help you pack!!! If you want to come back legally, be self-sufficient and obey our laws I will welcome you with open arms.

Heck if being illegal is ok then why do we have ANYONE in jail???

I'm talking about budgets.  People hate budgets.  They hate making budgets, they hate trying to live on budgets.  But that really is because people don't understand budgets.  They don't understand the real importance of one and they definitely don't understand how to create a budget you can actually live on.  I know I sure didn't before someone taught me.

First off budgets serve one very important purpose....knowing where your money is going.  Now I know a lot of people who say, "but I know where my money goes".  Really?  Do you?  Do you truly know where ALL your money is going or do you just have a vague idea of where it goes beyond the basic bills?  This is really important.  If you only know where some of your money is going then you only have control of some of your money.

To start your budget you must first list EVERYTHING you need to spend money on each month.  Mortgage/rent, electric, water, TV, internet, phone, gas and groceries are pretty standard things but there are other things that you may need to include.  Do you have meds you take on a regular basis?  Or regular doc appointments?  Maybe manicures?  These things need to be listed in your budget.  What about car repairs and clothing?  You may not spend money on these every month but you should be saving up for these expenses because you know they're going to come.  Here's what my categories are.  They're split into two sections because the top ones are the things I use cash for and the bottom ones are the ones I pay via online.  The "Blow" category is my spending money.  I can "blow" it on whatever I want.  And there is no such category as "misc".  That's a meaningless category that basically says you don't know where that money is going.


Gas
Car Repairs
House Repairs
Groceries
Meds
Blow
Doctors
Clothes


Savings
Mortgage
Insurance
Security
Electricity
Water
Phone
TV/Internet

One you know where you need to assign money to each month now you need to decide how much goes to each item.  You always take care of your "four walls" first, meaning you pay for your basic necessities: housing, food, transportation and utilities.  So fund those budget items first.  Once those are funded move on to other bills such as credit cards and loans.  For a start fund these for the minimum payment due.  Its easy enough to adjust those later if you have the money and I'll do a post soon on how to pay these things off.  Next is things like car/home repairs and medical stuff.  Finally, what you have left over you divvy out among what other things you have left.  Make sure to give yourself some blow money.  No one can stick to a budget that doesn't allow for them to have any spending money.  It may not be a lot, depending on your financial situation, but even a little is better than none.  When I was working to pay off my debt I only had $20 a month for spending and I thoroughly enjoyed spending that $20!!  

The critical part to a budget is making sure EVERY penny is accounted for somewhere.  This is known as Zero-based Budgeting.  The money out should equal the amount in each month.  It is the only way to really know where your money is going and money that goes where you tell it to is now working for you.  

Love to talk about budgeting so feel free to leave any comments or questions.

This is known as "Murphy-proofing" yourself.  Face it, something is only an emergency if you aren't prepared for it.  Murphy's Law can't happen to you financially if you already have funds in place to take care of those pesky things that pop up.  Please note, this money should be in a separate account from the one you do your day to day banking from.  You want something that you can get to in an emergency but isn't sitting right there with the rest of your money.  The temptation is too great to dip in to it then.  I highly recommend an ING savings account.

I know $1000 doesn't really seem like a lot but its more than most Americans have in savings.  And really, if you think about it, $1000 will cover most unexpected expenses....washer breaks, A/C needs fixed, new brakes for the car.....you get the picture.  The key here though is being clear about what an emergency is.  New shoes are not an emergency.  A weekend away is not an emergency.  Replacing something simply because you want the newest, shiniest model is not an emergency.  Trust me, this is a hard one for me too.  Especially when it comes to bright and shiny techno geek stuff.

A lot of people want to skip this step and go straight to the paying-off-debt phase.  Don't.  Trust me on this.  You can't imagine the peace of mind that $1000 will give you, especially if you do need it.

So I know someone is probably saying "But I don't have enough spare cash to save up $1000.  It would take me forever"!  Been there, know that feeling oh so well.  Most people can find some extra money in their budget (which will be the topic of my next financial post).  However, there are other ways to find money as well.  Look around your home.  I bet you can come up with any number of items that aren't really serving any purpose in your life.  Sell them!!  Use this as an opportunity to de-clutter and simplify your life.  About half of my original emergency fund was funded from selling things I really no longer needed and wasn't using.  For me that included a really nice 35mm camera with lenses and filters, and a motorcycle helmet.

(BTW, just as an FYI, don't ask me to come over and help you de-clutter unless you really mean it....because I will, and will take great joy in seeing things go away.  I am a minimalist at heart and purge my home at least once a year following the rule that if I haven't used it in the last year I obviously don't need it.)

Honestly, once I took a hard look at my finances and readjusted my budget then sold a few things I had my emergency fund in place in a month.  So if you don't have that $1000 set aside yet, start working on getting that taken care of.  You won't regret it.

This weekend has been largely dedicated to yard work.  Not something I particularly enjoy, at least not the mundane stuff like mowing grass, raking leaves and such.  However, I do like cutting things down!  I think its that whole instant gratification thing.  So this weekend was spent reclaiming some more of the yard.  And I use the term 'yard' loosely.  I don't think large patches of weeds around bare patches really qualifies as a yard.

The corner that I keep my garbage cans in had been overtaken by some vine encased small trees.  It seriously was a mini jungle.  I got it all cleared out which makes me very happy.  Got most of the huge piles of oak tree leaves bagged up....just in time as I'm sure the oak tree "worms" will be falling soon.

My lawn guy came over and cut down all the bushes in the front and along the side of my house....except for a small azalea bush.  Now its really obvious the outside of the house needs to be cleaned.

Next up will be spraying the yard for grubs.

I'll be doing another financial post later today probably.

I'm following 7 steps to achieve financial freedom.  This works very well for me because I'm a planner but I had no idea what I SHOULD be doing to fix my finances.  What was the fastest/best way to pay off the debt?  What about savings?  What about retirement?  How do I make sure I'll be ready to quit working when I want to?  The 7 baby steps outlined what to do in what order and how to do it.  So I think starting out with a brief description of the 7 steps is a good place to start.  I'll go into detail for each step in separate posts.

Step #1 - Save $1000 into an Emergency Fund. 
Step #2 - Pay off debt using a debt snowball. 
Step #3 - Three to six months of living expenses in savings.
Step #4 - Invest 15% of household income into Roth IRA's and pre-tax retirement.
Step #5 - Save for college for children (If this is a goal for you.)
Step #6 - Pay off house (If you have one)
Step #7 - Build your wealth!


So there you have it, my secret financial formula. Ok, so maybe its not really so secret.  Ask any questions you might have.  I truly love talking about this stuff.  And for those who like to keep tabs, I am currently on Step #3.  Because of what my future plans are I'm aiming for the 6 months of living expenses.  That's part of what I need to do now....redo my budget so I can see when I will have that in place.  Please feel free to ask me about my progress if you're interested.  It will help hold me accountable to doing what I need to do.