Archive for July 2007

Emergency Buffer Fund – Bulletproof Vests

I remember the days when Jenn and I had $4.13 in our emergency buffer fund.   Wow!  Talk about living life on the edge!

When you have $4.13 in the bank account and life throws a curveball your way, you have no room for it!

From experience, I know that $4.13 in the bank does not quite cover

  • replacing a broken dryer
  • fixing a broken car – power steering, brakes, tires, air-fuel mix thingy
  • an emergency room trip for the child

In the Financial Freedom Class that I teach, we cover the need for an emergency buffer fund in great detail.

An example I use to prove the need for an emergency fund is the fact that police officers wear bulletproof vests.

I ask the redundant question, "Why do police officers wear a bulletproof vest?"

The class will dutifully respond, "Because in their line of work, it is possible that they might get shot at!"

To which I respond, "Then why don't they just wear the bulletproof vest on the day they are going to get shot?  I mean, that vest is uncomfortable and so hot on a southern summer day!"

The class stares at me like I am completely ignorant and most deserving of the "Stupid Person of the Year" award.  "Because they never know when they will be shot at!", they say.

Hummmmm.   They never know when they will be shot at … SO they wear it EVERY SINGLE DAY – JUST IN CASE!

That, my friends, is the EXACT same reason you need to have an emergency buffer fund of cash!  You never know when life is going to happen and require that money, but the fact is that you will need it someday.  If you do not have an emergency fund when life happens, you will be highly tempted to fall into the debt trap.  That, my friends, is no fun.

By the way, a church member who is a police officer was shot today.  He had on his bulletproof vest.  The following is a line from the news story …

… an officer was shot at least four times … Officer Fikes is being treated for two gunshot wounds to his arm … two other gunshots were stopped by the officer’s vest …  (Office Fikes) was alert, oriented and in good spirits …

JUST IN CASE.  Are you ready?

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

Best strategy for paying off debt

I remember December 2002 plain as day.  It was when Jenn and I made THE DECISION to become and stay debt-free.  I thought that I would share the steps that we took to become debt free.

Joe and Jenn's steps to become debt-free

1.  Committed to each other that we would STOP signing up for more debt

2.  Attack all debt with all available money using the Debt Snowball method

3.  It is as simple as that!!!  In 14 months, we became debt-free except for the house!  We haved lived this way for the last five years, and we are NEVER going back!

Let me explain the process for using the debt snowball.

1.     List all debts from the smallest balance owed to the largest

2.     Pay the minimum payment on all debts except for the smallest one

3.     Pay as much as you can on the smallest debt!

4.     When the smallest debt is paid, take the monthly payment you were making on that debt and add it to the monthly payment you were making on the second smallest debt.

5.     Continue this process with a vengeance until you are debt free!

You can obtain the steps for putting together your own debt snowball along with an example by clicking HERE.

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

Student Loan Debt

I recently read that student loan debt is rising in America.  No big surprise since I am seeing the same thing in all of my financial counseling appointments!

There are two facts I want you to know about student loan debt.

  1. It WILL come due some day
  2. You can not bankrupt on student loan debt 

Yes, student loans will come due one day.  I financed my undergraduate degree.  I was able to pay some of it as I went along, but I still left Purdue University with nearly $20,000 in debt.  It took me 8.5 years to pay it back.  Do you want to pay payments on your education for 8.5 years or more?

You can not bankrupt on student loan debt.  There are two things that are non-bankruptable – taxes and student loans.  So if your plan was to go get a degree and then declare bankruptcy, you have a VERY BAD PLAN!

The median student loan debt of graduating bachelor degree recipients in 2004 was $19,300 according to the College Board.

Are your children going to have to finance their education as well?  If so, it will likely set back your child 5-10 years in achieving debt freedom.

I resolve to provide my daughter a paid-for college education and set her up to start out life with ZERO debt.  Life is just so much more fun when you are debt-free!

 
Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

You are now able to SUBSCRIBE to www.josephsangl.com!

Please welcome www.josephsangl.com into the early 2000's as you can now SUBSCRIBE to a feed!

If you don't know what that means, here is a short explanation.

By clicking on the SUBSCRIBE button, you can choose to have each blog post of www.josephsangl.com show up into your web-based news reader (My Yahoo!, Bloglines, My Aol, Google, etc.).  That means you won't have to check to see if the blog is updated everyday.  The latest posts will show up in your news reader – automatically!

ENJOY – Now, let's run up the subscriber base … 

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

You are now able to SUBSCRIBE TO A FEED of this blog!  Enjoy!

Laid off. Living paycheck-to-paycheck. What should you do?

With over 70% of Americans living paycheck-to-paycheck, this situation happens more often than you might imagine!

You see, when you are living paycheck-to-paycheck, bills go past due THE INSTANT that you miss ONE paycheck.

So what should you do if you encounter this situation?   I have prepared a list of things that I would do IMMEDIATELY if I were living paycheck-to-paycheck and lost my job.

  • PRAY!!!  It really does work!
  • Call every single creditor you owe and inform them of your situation.  Humbly ask them to help you.  Ask them if they would please lower the interest rate to 0%, charge no fees, and give you three months of no payments.  Most of them will work with you!!!  Communication person-to-person works so well!!!
  • File for unemployment.
  • Immediately cut out all non-essential expenses.  Get rid of the cable, internet, home telephone (keep the cell phone), gym membership, etc.
  • Go get a job that earns something to help bridge the gap between full-time positions.
  • Apply for new jobs on monster.com, hotjobs.com, and the newspapers.
  • Spend all of your money on paper BEFORE you actually receive the money.  In other words, start PLANNING your spending!  Free tools are available by clicking on "Tools" at the top of the page!

By the way, if you are living paycheck-to-paycheck, but still have a job – consider yourself warned!!!  TODAY it might happen to you.  What would your family have to do if you lost your job today?  Why not make today THE DAY that you change your family's entire financial future?

Looking for additional Personal Finance Resources?  You can obtain free tools by clicking HERE and purchase books/materials by clicking HERE.

You are now able to SUBSCRIBE TO A FEED of this blog!  Enjoy!