Debt Clubhouse

One big waste of money is taking lunch. Of course you need to eat but do you really have to go to a restaurant during lunch. You are at work to make money not to spend money, why people go out and get a huge hero and even worse a large soda is beyond me.

You spend so much money on eating lunch at work it isn’t even funny. If you were to take leftovers or make a sandwich the night before and take it with you, you would not only save money odds are you would be eating healthier also.

A nice sandwich and maybe a piece of fruit is not that expensive at all when you think about it. Most of the time you are throwing away your leftovers anyway so why not just take them to work. You can also freeze a bottle of water and use that to replace the large soda. Lets say you save $10 a day on lunch that ends up being $50 at the end of the week or $200 a month. That adds up rather quickly lets see you do this math for a whole year and it is $2400 on lunch. Crazy isn’t it

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Save money on cable

There are many little things that you can do everyday that save you money. This one is almost as easy as placing a zipper on your pocket that won’t open. Lets do a little common sense math. First take out your cable or satelitte bill and see what you are paying a month. Odds are your bill is over $50 a month. Don’t feel bad as its normally over that and if you are a pay per view nut I am sure the bill is much higher than that.

There are 30 days in a month on average, one third of the day you are asleep. You are not watching tv when you sleep and if you are you are also paying extra on your electric bill which is another story altogether.

One third of the time you are at work. You can’t be in two places at once unless you work at home. So odds are you are not watching televison then either.

One third of the time you are home doing nothing, well except that the wife has you out shopping.Once again you are not home watching tv either. Odds are you are like me and only watch tv from 6pm to 9pm and then go to bed.

It is usually the same old channels, the news and ESPN and/or maybe a ball game. Thats it, so why Am I paying for tv that I don’t use that much. Go and check the cable/satelitte website and see if they have a similiar package that you can use and cut back on pay per view. This could save you a small fortune.

If your family hates the idea of c utting back pay per view start doing it once a week and pick a day of the week to have movie night.

Place the money you save into an online bank account that gets 4% interest and you will have enough money to take the family on a vacation at the end of the year.

I am sure once you tell the family of your plan they will get on board quickly. Mentioning the word disneyland will often help out.

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Avoiding Impulse Spending

Answer these questions truthfully:

1.) Does your spouse or partner complain that you spend too much money?

2.) Are you surprised each month when your credit card bill arrives at how much more you charged than you thought you had?

3.) Do you have more shoes and clothes in your closet than you could ever possibly wear?

4.) Do you own every new gadget before it has time to collect dust on a retailer’s shelf?

5.) Do you buy things you didn’t know you wanted until you saw them on display in a store?

If you answered “yes” to any two of the above questions, you are an impulse spender and indulge yourself in retail therapy.

This is not a good thing. It will prevent you from saving for the important things like a house, a new car, a vacation or retirement. You must set some financial goals and resist spending money on items that really don’t matter in the long run.

Impulse spending will not only put a strain on your finances but your relationships, as well. To overcome the problem, the first thing to do is learn to separate your needs from your wants.

Advertisers blitz us hawking their products at us 24/7. The trick is to give yourself a cooling-off period before you buy anything that you have not planned for.

When you go shopping, make a list and take only enough cash to pay for what you have planned to buy. Leave your credit cards at home.

If you see something you think you really need, give yourself two weeks to decide if it is really something you need or something you can easily do without. By following this simple solution, you will mend your financial fences and your relationships. 

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One of the first thing that I changed to get out of credit card debt was to stop using my credit card for everyday purchases. Now I know that this is easier said than done but stick with me for a second.
I had two or three of my bills going right to my credit card and let me tell you I didn’t realize that by paying my cell phone by credit card it was costing me a bunch of money that I could have been using to pay down my debt.

You might be thinking that this could be a good idea if your credit card was giving me points or cash back but even then it is just plain dumb to have your bills being paid this way. Lets think about this for a second, my cell phone cost me $55 a month and I had the bill automatically paid by my Visa card that had an 14% interest rate. Add the APR to that which at the time was around 5% and I am paying almost 20% interest on $55 which is about $10 a month.

This is fine if you pay your whole balance when you get the bill but most of us see that minimum payment and just send it in. Don’t feel bad I did it too until my credit card bill was at $15,000. Since I was not paying off my bill that $55 carries over. So for every month I am paying $65 instead of $55. Once I figured that out I changed the way I pay off my cell phone.

I figured this out in November and since I had been carrying a balance for about 2 years I was paying an extra $10 for all that time on each months bill. Not only is it $10 each month but once it starts steamrolling that $65 becomes more so that will become $75 and more.

The only time that it makes sense to have a recurring bill being paid by credit card is if you are not paying any interest at all and you are getting travel rewards which is a pipe dream and will never happen.

If you can have the cell phone company take out your bill from your checking account debit card and just make sure you have enough to cover it every month. Most companies will have a system set up like this because they want your money any way that they can.

Something to think about is I had my cell phone, internet, and satellite Tv being charged to my credit card every month. Once you add all this up it becomes quite expensive as you can imagine. So here is stuff that I don’t even have as a possession that I was over paying for it too. At least if I would buy a car or something of value for myself that would be a slightly different story.

If you are currently paying your recurring bills automatic by credit card stop and think if it is really worth it. Be honest with yourself. Another way to get down your credit card balance is by looking at what you are spending your paycheck on.

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I know what you are thinking “who has time to learn”. Let me tell you a trait that rich people have been using for years its called education. I am not talking about the type of education that you get in school but an education on what rich people do with their money.

Have you ever noticed that people that have money spend more time reading? It is a fact that accountants have known for years. I myself have been brushing up on my financial knowledge, actually it has become a part time job of sorts as I am making this site. I know what it feels like to be in debt and I am trying to help others stay out of debt.

When I first read “Rich Dad Poor Dad” by Robert Kiyosaki it woke me up to what I should be doing with my money. Between that great book and David Bach’s “The Automatic Millionaire” I am no longer in debt and my money is working for me. Sure it was a lot of reading but it was the best thing that I have ever did.

I asked my neighbor once how he was able to retire early and play golf a few days a week. He tells me that he keeps up with his investments. When I asked how he told me that he gets financial magazines when he buys his golf magazines. He tells me that by investing smart he makes money while he sleeps. I asked him what he gets he told me the magazines he buys are:

• Smart Money
• Money Magazine
• The Financial Times
• Kiplingers
• Golf Magazine

What surprised me is that he doesn’t go and pick them up at a newsstand. He says that would be too expensive and time consuming. He gets a package for $30 for all of them for the year and they are delivered right to his house. So he saves money and time. I asked him why he got golf magazine and he told me he needs a break from finance plus it helps him choose where he wants to take his golf vacations (at discount prices).

Not only is he smart but he even uses the golf magazine when looking to save money on vacations. Smart people use every resource when looking to save money. This is the way rich people think and when getting yourself out of debt you must train your brain to think this way.

One of the ways him and his golfing buddies got financially stable was in real estate. He went on and on about how people will always need a place to live. It sounds like a no brainer then he hit me with a stat about how if you bought a small house and lived in it for a few years instead of renting you will build up equity. With that equity you can buy a better house and rent out the smaller house and have the mortgage paid off by a renter.

As the house gets paid off it also goes up in value. I read somewhere that real estate goes up around 4% on average so if you hold on to that house for 10 years you can have a 40% profit. If you decide to sell that house you can claim the profit tax free up to $250,000 if you are single and $500,000 as of this writing.

You can take that money and use it as a down payment on a larger house. Needless to say it is better to own than to rent.   

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