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Archive - February, 2009

You Can Not Borrow Your Way Out Of Debt

February 11, 2009 in Debt Freedom March, Debt Reduction with 7 Comments

I have seen so many people attempt to borrow their way out of debt. I have personally tried to borrow my way out of debt. The problem is that it does not work!

Here are some ways I see people try to borrow their way out of debt:

Debt Consolidation Loan Roll all of the credit cards into a single loan.
Home Equity Loan Roll all of the credit cards and car payments into a single loan using home equity.
Loan From The Parents Roll all of the debt into a single loan from Mom and Dad.

I have never seen it work because these "solutions" only address symptoms! You must address the root cause of what created the debt in the first place.

Iit is necessary to change spending behavior and money management behavior.

I have seen a lot of people use the crutch of "it is medical bills" and expect to receive a free pass on the debt. That is so frustrating because in nearly all cases, the reason the medical bills exist is because the individual or family opted out of carrying health insurance.

I have seen a lot of people use the crutch of "I lost my job" and expect a response of "Oh, that makes your debt OK." BUT it would have never happened if they would have made an emergency fund of three to six months of expenses their top priority instead of a house, cars, furniture, and numerous other "gotta-have-it" purchases.

You simply can not borrow your way out of debt. It requires a written plan and a ton of focus. You can start your journey by reading THIS SERIES and preparing your own written spending plan using the FREE TOOLS.

Related Resource

Joe's Book: I Was Broke. Now I'm Not.

SERIES: How Do I Build My Credit? Part 4

February 8, 2009 in How Do I Build My Credit with 0 Comments

"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part Four – Understand Why Credit Scores Are Necessary

What is the number one reason why someone would want a great credit score?

To obtain more debt!

Think about it! I am not a fan of debt at all. It robs people of peace and places tremendous strain on relationships.

What exactly is debt anyway?

Debt is nothing more than pledging tomorrow's income to someone else.

If one has zero debt, then they will have no credit score. They could have $10,000,000 in the bank, but have a zero credit score.

A credit score does have an impact on other areas of life, however. It can affect insurance premiums, deposits required for utility hook-ups, and approval to rent real estate. It can also impact one's ability to be hired! Military personnel have been denied or lost security clearances due to their credit.

So read the entire series, work on building a decent credit score, and do it all with a written spending plan!

Success Story: Saved Money On Insurance!

February 7, 2009 in Finance with 3 Comments

I love receiving success stories via e-mail!

Here is one I received this week …

From Iowa Just wanted to let you know we shopped around and got our insurance company to lower our car insurance $65 a month so that's a savings of $780.00 a year, YEAH!!!!

$780 savings is TAKE-HOME pay. To bring home $780 net pay, one would need to earn around $1,000 (because of taxes). That means you just gave yourself a $1,000/year RAISE!

That will spend just like money.

If you have not comparison-shopped your auto and homeowner's (or renter's) insurance premiums in the last two years, statistics show that you are paying too much. Geico is right when they say, "Fifteen minutes or less could save your fifteen percent or more on car insurance!"

A great product that makes insurance shopping easy is netQuote (link below). You can enter your information once, and it goes out to all of your local insurance agencies. They call and e-mail you with new quotes. Be sure to get a new quote from your current provider as well! You may be able to keep the same insurance provider for a lot less money! When companies compete, you win!

SERIES: How Do I Build My Credit? Part 3

February 6, 2009 in How Do I Build My Credit with 0 Comments

"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part Three – Pay All Bills On Time – Consider Automatic Bill-Pay

If you do not pay your bills on time, the late payments will be reported to the credit reporting agencies.

This means that you need to pay your utility, cell phone, and other monthly bills on time. This is why I am such a huge fan of a written monthly spending plan (budget). When you have a plan, the chances of paying a bill late are greatly reduced.

If you live an exceptionally busy life or are notorious for procrastination, consider automating bill payments. This will ensure that bills are paid on time, and can greatly reduce stress and the potential for your credit score to be dinged.

Read the entire series

AWESOME! Killing Cockroaches by Tony Morgan

February 5, 2009 in Finance with 1 Comment

I am FIRED UP because none other than the famous Tony Morgan just came over to my office and handed me a copy of his new book, "Killing Cockroaches"!

Here are five reasons I am PUMPED about this book:

Tony's blog [you should subscribe to it] is one of very few blogs that I read every single day.
Tony is smart. Crazy smart.
Tony likes technology and provides great reviews (with examples of practical application).
Tony is a great leader. I don't have to work for him to know it. All I have to do is observe his team and see the quality of their work and their interactions with each other. As a matter of fact, Tony's team has had a direct part in the development of every print piece produced for I Was Broke. Now I'm Not.
An cartoon intro to the book has been produced, and it made me want to obtain the book immediately! You should take a couple of minutes and watch it right now and then go purchase Killing Cockroaches.

I am off to start reading! Look for a review within the next week!

HILARIOUS!!! “I Was Broke. Now I’m Not” Theme Song!!!

February 4, 2009 in FLE with 9 Comments

The crusade is headed to Springcreek Church in Garland, Texas (Dallas suburb), and I am FIRED UP about it!

You need to stop what you are doing and watch the promo they did for this class! It is a HILARIOUS rip-off of the FreeCreditReport.com song!

AWESOME!

SERIES: How Do I Build My Credit? Part 2

February 4, 2009 in How Do I Build My Credit with 1 Comment

"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part Two – Swipe Purchase And Immediately Pay Off

A great way to boost one's credit score is to obtain a department store credit card. Here is how it works.

Ensure that a small purchase from that store (something you truly need) is included in your monthly budget.
Pull the money planned for that purchase out in cash and head to the store.
Purchase the item with the department store credit card.
Immediately after being given the receipt, tell the cashier that you want to make a payment on your credit account and give them the cash for the purchase to bring your credit account balance to EXACTLY ZERO.
Do this once each month.

Your credit score will soar as the length of the credit relationship increases and as the balance remains at zero. It might be helpful to go back to Part One to see what comprises of your credit score.

NOTE: If you do not trust yourself with a credit card and controlling your spending using a written monthly spending plan, then DO NOT use this method!

Read the entire series

SERIES: How Do I Build My Credit? Part 1

February 3, 2009 in How Do I Build My Credit with 1 Comment

"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part One – What Determines My Credit Score?

It is important to first understand how one's credit score is calculated. There are some key characteristics that are used by credit monitoring companies (Experian, Equifax, and TransUnion) to determine your credit score.

Type of Credit There are two key types of credit. Installment (car payment, house payment) or Revolving (credit card, line of credit)
Total Available Credit This is the total of all credit limits.
Total Credit Utilized This is the total of all current debt.
Length of Credit Relationship The longer the credit relationship, the better.
Payment Timeliness Obviously, payments need to be paid on time to achieve the highest scores!
Requests For Credit Made For Potential Purchases
Public Records Bankruptcies and judgments are not helpful to one's credit score!

You can check out some of the related articles/links below to learn more about credit scores.

Related Articles/Links

Skiing At Copper Mountain, Colorado

February 1, 2009 in Finance with 0 Comments

I had the outstanding opportunity to go skiing on Friday before the Financial Learning Experience in Cheyenne, Wyoming.

I went skiing at Copper Mountain in Colorado, and it was INCREDIBLE! Over a foot of fresh snow over the past week had fallen, and the slopes were in terrific shape. It was the warmest day of the week (33 degrees) and sunshine too!

Here is a picture.