Scary

Any and all of these define scary.

Debt. No emergency fund. No home maintenance fund. No car repair fund. No money set aside for Christmas, birthdays, or other known events. Adjustable rate mortgages. House payments totaling more than 25% of your take-home pay.

This is jump-off-a-cliff scary, and sadly too many are living like this. Don't be one of that crowd.
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Making the decision

Making the decision to take control and become debt-free is liberating. Now, can you imagine how it will feel when you achieve it?
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Making do with what you have

Budgeting doesn't mean making do with less. Budgeting means making do with what you have. Big difference.

In personal finance the word budget means planning. You can't plan to have money that isn't there. You can dream, you can aspire, but don't plan until the money is real.

In other words, if you make $50,000 then live a $50,000 life, not one that costs $50,000.01. It really is that simple.
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Tax Credit vs. Tax Deduction

Tax Credit: A $1 credit means you pay $1 less in taxes.

Tax Deduction: A $1 deduction reduces the amount of taxable income by $1. This reduces the amount of tax you pay by the percentage your income is taxed as a result of the deduction. If you're taxed at 20% the $1 deduction saved you $0.20.

Know the difference. Congress plays word games to make you think you're getting something you aren't.
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English 101

Blowing what took a long time to save happens way too often. Have this conversation with your kids before they head to college on your money.

English 101 is the same at a high-cost state school or a community college. If your kids don't have a plan let them be indecisive on someone else's dime. Perhaps their own.

They need to grow up. Don't throw money at them and hope for the best. Especially YOUR money.
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Deal with it

Being obsessed with money isn't good.

Being obsessed with getting and staying out of debt is good.

Income minus outgo = YOUR REALITY. Deal with it.


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Risk vs. stupidity

Never confuse risk and stupidity.

You are your own advocate. Don't do anything in your financial life, or any part of your life, without knowing the consequences of the risk you are taking.

If you give this due diligence you will guard against bringing stupidity into the equation.
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Why would anyone ever buy new?

My unofficial study shows a new car depreciates $10,000 during the first 25,000 miles. It depreciates another $10,000 during the subsequent 75,000 miles.

Why would anyone ever buy new?
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Credit card check

Use a credit card at a store and the clerks never check the signature on the back.

Use cash and they hold up the bills to the light to check their authenticity.

There's something wrong with this, don't you think?
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Paying interest on my underwear

Ever notice how store clerks look at you like you've lost your mind when you don't want another 10% off by getting a store credit card?

Of course, you look at these clerks like they've lost their minds when they act like they've never seen anyone pay cash before. Something about paying interest on my underwear just doesn't seem right.

Be polite, the clerk is just doing a job. But, say no nonetheless.


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No magic formula

Look at it, analyze it, calculate it, store it, research it and go over it again and again. The only way to save money is to stay out of debt and spend less.

No magic formula here.
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Win the lottery and then go bankrupt

You hear about people who win the lottery and then go bankrupt.

If they knew how to dictate where money goes and understood what it means to be financially responsible they wouldn't have this problem.

Knowing how to plan your finances not only gets you out of debt it prepares you to handle good fortune when it comes.
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Play a little game

Play a little game. If money were no object what would you do or buy?

I can come up with about $800,000 worth of stuff; $750,000 of it is basically ridiculous.

The moral to the story is you really don't need that much to live pretty well.
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Enough money

Only you can define what is "enough money." If you have everything YOU need, you're fine. Note "need," not "want."

Some say if you have everything you need and want you're a millionaire.

It's ok to want the finer things in life, but it's only acceptable to have them if you can pay for them in full.

Use your wallet as a guide. If you can't pay for it in full today, you can't have it. Period.
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With no recourse

If you settle with a collection agency don't send them a dime unless you get in writing the details of your settlement from the agency.

When you settle make sure the words "with no recourse" are in the documentation. If they aren't, the agency can come back to you for the difference.

And, don’t give them electronic access to your accounts . . . EVER!
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Swimming upstream

When you decided to get out of debt, and never get back into debt, you started swimming upstream.

Stay focused because your financial responsibility will scare some folks. You'll certainly get comments from family, and you may even lose friends along the way.

Smokers all want to quit. Overweight people all want to lose weight. Those in debt all want to be debt-free.

Making it happen is the hard part.
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Sets yourself apart

Want to be different? Get out of debt. That sets you apart from 70% of the people out there.

Seven of every 10 people live paycheck to paycheck. Average household credit card debt is $9K and the average household has nine credit cards.

These figures change daily. Unfortunately they're rising.

Step out of the line of people jumping off the cliff. Be different. Be with us. We have room for you.
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Opposites attract

Opposites attract. Realize this.

It's likely you both aren't savers, nor are you both spenders. But, both of you can agree to dictate where your money goes so it doesn't disappear.

If fear or shyness keeps you from asking the money questions before you get together you need to hold off getting together. You take on a person as a spouse you take on all the stuff that comes with him or her . . . including debt.
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The Total Money Makeover

"The Total Money Makeover" by Dave Ramsey.

Buy it, read it, and buy a copy for those you really care about.

Dave probably won’t care if you loan your copy out either.

www.daveramsey.com. Check it out.
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Let me talk to your supervisor

“Let me talk to your supervisor.”

Learn those words and you'll get better deals. Ask for lower prices. Be polite, give them a chance to earn your business, but make sure the salesman knows you are very aware that you have options when it comes time to make the purchase.

Don’t be timid. It’s your money, so protect it.
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Life is hard enough

There is no rational reason against being financially responsible and prepared. Enough said.

Life is hard enough. Don't let the one thing you control, your personal finances, control you.

Know your income. Know your expenses. Do the math.

C'mon folks . . . WAKE UP!
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Live on less than you make

Live on less than you make and use the extra to pay off debt.

You now owe me $3,500. That's about what the software costs that's supposed to help you pay off your bills and home early. But, you don’t need a computer to tell you if you spend less than you bring home you have some left over to play with.

Also, don't pay to set up a bi-weekly mortgage payment. You can make those extra payments yourself.
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You fell for a scam

Would you admit you fell for a scam? That's part of the reason con artists get away with it. Embarrassment keeps people from reporting the crime.

The deposed dictator scam still works today. For a con to work the mark must be desperate and/or greedy. The sane and careful don't fall for these.

If it's too good to be true . . . it's not true. Be careful. You have what the thieves want. Guard it.
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You can't borrow your way out of debt

You can't borrow your way out of debt.

Consolidation loans, HELOC's, moving from card to card to lower your interest rates are all band-aids. Fix the problem; eliminate the debt.

Those 0% credit cards come with 100% debt.

Stop moving the debt around. By the time you pay a transfer fee, move the debt, and life happens you end up gaining nothing.

Want to get out of debt? Pay the debt. It's that simple.

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Our grandparents

Our grandparents would be mystified at how much debt we have acquired.

We probably would get some sympathy from them until they heard our reasons for being in debt. Then they'd think we were just stupid and deserved what we did to ourselves.

Time honored tip. Don't spend what you don't have.

Try it and see what happens. Go ahead. All you have to lose is more debt.
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Don’t be clueless

In personal finance you can be on offense or defense but don’t be clueless.

Have a budget, have an emergency fund, have a plan for your extra money but don’t go through your financial life surprised when things happen that cost you money.

Personal finance isn't a mystery. Personal finance isn't hard. Personal finance is personal. Get involved in your own finances, you have no other choice.
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Emergency Fund

It’s impossible to think of absolutely everything that could go wrong and cost you money. But, that's no excuse not to plan for these things.

This is called an Emergency Fund and it needs to contain three to six months (minimum) of living expenses. This fund is separate from all your other funds and is not to be touched except in an emergency.

By the way, a vacation is not an emergency.
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Wealth

Making a lot of money doesn't guarantee having wealth.

There are people who make a large amount of money but who are still spending more than they make. Then there are those making a nominal amount of money who have more wealth than you would believe.

Read “The Millionaire Next Door” for a detailed study of this issue.
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Smallest to largest

List your debts smallest to largest. Pay them in that order.

Pay as much as possible on the smallest and the minimums on the others. When the smallest is paid off, add that payment to the next largest and repeat until you're completely debt-free.

Include HELOC’s or other loans where you used your home’s equity. Don't include the original home loan; that's saved for last.

This is called the Debt Snowball.
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Paying the way

If you're paying the way I assume you aren't sending little Billy or Susie off to college to learn how to have a good time. You’re having the talk with them, right?

The only person who should be living a life of leisure and being carefree on your money is you. Don't let your kids do that as they head off to college on your dime. You aren't doing them any favors and hurting your own future in the process.
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Warranty registration

Always take time to fill out warranty registration cards or do it online. It may come in handy. Whether you ever use it doesn't matter. The warranty will never work for you if you don't do your part.

Don't buy extended warranties. They're rip offs, high- cost insurance policies pushed at the counter. If the store has no more faith in the product than that you shouldn't have faith in it either.
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