| They say money talks... mine sneaks out in the middle of the night!
THOUGHTS ABOUT MONEY?
I'm learning it's more important to plan/control my current cash flow than wish I had more. Why? I've found that as my income goes up my spending goes up to match... and often more!
CONFESSIONS OF A DEBTOR
I confess I'm still in debt. Nothing new! Have been since college. My UCF logo Mastercard (BofA, formerly MBNA) has had a balance since 1999... shit for a 1/3rd of my life I've paid those jerks... plus 19% interest just to carry the UCF logo in my wallet? Yuch! Talk about depressing. Turns out most of my friends are still debtors too. It's everyone "dirty little secret." Credit cards (like cars and homes) help fool us into thinking we are doing alright when we are as broke as a joke! If someone had cancer they would tell people about it. Debt is the opposite. It's a secret, right? So why post this... A) almost everyone has debt and B) because I'm finally making slow and steady progress to kill the beast!
GETTING STARTED TOWARD BEING DEBT FREE
Where do I start? I really used to think real estate would get me out of debt! I bought books (on my credit card) and went to real estate seminars (oh, on my credit card too)! I figured if I bought a place while in debt with no money down I could use the bank's money to get out of debt... even if it had negative cash flow... the appreciate would make up for it! Wishfull thinking. The best way to get rid of debt is... drum-roll please... pay it off with cash a little at a time!
BUT WHAT ORDER... AKA I'm so deep in debt I don't know which way is up!
Like radio/pod-cast host Dave Ramsey said in The Total Money Makeover baby step #1 is to save $1,000 first! You will need this so you can live without credit cards while you attack the debts. Yes I said without credit cards - that's a concept huh? Live on cash like they did for thousands of years! This $1000 will be your mini-emergency fund. Save more if you like, but don't get carried away. You will increase this to 6-months savings AFTER the debts are paid! Press "pause" on 401K & IRA contributions too till you are out of debt (except the mortgage). If this is scary just think how much more money you will have to rebuild the 401K without debt payments! As a side note, this $1000 savings thing sounds easy... for me saving this and re-building it without the crutch of credit cards was the hardest step! Hint: I never did it until my cards were maxed and I was forced to stop using the damn credit cards.
The debt snowball is how YOU plan your attack! You know a snowball rolling down a hill gets bigger and faster thanks to inertia and increasing size! Here is how the financial snowball works. Only pay the minimum payment on all debts except one. For that one 'lucky' debt pay as much as you can extra. Cancel subscriptions, have a garage sale, bag lunch, cut, cut, cut! Once that debt is gone it will NEVER return (assuming you broke your credit card addiction by freezing those accounts).
Get EXCITED about paying off the debt. I read about a guy before computers... back when they mailed checks in envelopes to pay bills... who with each bill he included a note... It is with great pleasure that I that I pay this debt! Crazy? Not really. Track your progress every two to three months... watch the debt shrink! If it doesn't then you have a credit card addiction my friend. Cut 'em up! In my case 2013 is when all my debts die, but I'm excited today because I know the month and year my bondage will end.
 Download the Excel Snowball Calculator NOW! [file courtesy of Vertex42.com]
Plug in YOUR debt in the spreadsheet about and it will calculate the best order to pay off debts. MY favorite method is paying the SMALLEST debt first. I know I pay interest, but I'm no stranger to that! I need to see progress! I was so excited when I paid off my first $1500 debt that I posted this page!
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