Only invest if debt-free

The definition of “Speculate” is “to engage in any business transaction involving considerable risk or the chance of large gains, especially to buy and sell commodities, stocks, etc., in the expectation of a quick or very large profit.”

The richest of the rich never go "all in" when it comes to investing.

Those in debt shouldn't go in at all. Only invest if debt-free.

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The person in the mirror

Don’t tell me, tell the person in the mirror you are sick of being in debt. Look that person in the eye and say it out loud.

Some people are in debt due to circumstances beyond their control, but the majority put themselves in debt. You have to change the way you think about money, change your spending behaviors, to help that person in the mirror reach the stated goal.
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Change things forever

Do you want to maintain the status quo or do you want to suck it up for however long it takes and change things forever?

If you don’t do anything about your debt situation you'll never move forward toward true financial security.

Is the way things are today the way you want them to be in your future?
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Being debt-free is easy

Being debt-free is easy. The hard part is giving all your money to creditors every month and realizing how much you are wasting in interest and fees.

If this upsets you, it's a good indication you are ready to change your behavior, get out of debt, and never put yourself in this situation again.
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Only you can fix you

If you want a pre-packaged "system," call Jenny Craig. If you want a class, go to school. The secret to being debt-free is in your mirror.

The easiest part of my job is telling you what you already know. The hardest part of my job is getting you to listen. The reality is you really don't need me at all.

Only you can fix you.
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Student loans

Some people don’t get it. They're convinced you're depriving yourself of what debt can get for you.

You try to help them understand, but if they won't help themselves there's nothing you can do except set an example.

Remember, seven out of 10 people live paycheck to paycheck. You are the minority. Validation you're doing the right thing comes from financial peace, not from what others think.
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Anger and frustration

All the anger and frustration that comes with debt can be avoided.

You know who ran up those bills. Don't try to act like it wasn't the person in the mirror.

Now stop feeling sorry for yourself and channel that anger into positive energy and passion at work (and at the second job if necessary) to save money to pay off those debts.

Someday you will be debt-free. Believe it!
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This is not what I paid for

When a debt-free person says, “This is not what I paid for,” they mean it.

Debt-free people use their own money to buy things, not someone else's money. They expect to get exactly what they want when they use their money to make a purchase. Debt-free people do not suffer fools, liars, or shoddy workmanship.

Debt-free people have a lot more to consider than people using plastic, but also have a lot more to gain.

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1%-3% home maintenance fund

Don’t confuse being able to afford a house payment with being able to afford living in the house. Don’t let home maintenance and repair surprise you.

Keep 1% - 3% of a home's value in a Maintenance Fund to be used for projects like painting or landscaping, roof repairs or appliance upgrades.

Don't be caught by surprise.
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Family and friends

Never, ever, mix money and family or money and friends.

Lending money to someone you know changes the dynamic between the two of you. Don't let money ruin a relationship.

If you want to help someone that badly
just give them the money without any expectation of them paying it back.
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Emergency funds

Emergency funds are for emergencies, not Disney. The only thing the words have in common is both end in “Y.”

Emergency funds are three to six months of basic living expenses kept in a separate, not to be touched, account. You may never have to use these funds, but if you do you'll find having the funds set aside will turn emergencies into mere annoyances.

You also will find tremendous peace of mind.
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Prepared worriers

Be financially prepared to lose your job tomorrow. You hope it never happens, but if it does you must be ready.

You will be accused of being a worrier. However, if always being prepared for a job loss, a furnace failure, a transmission breakdown, an unexpected trip due to a family emergency, (insert your emergency here), then I guess we are just that, worriers.

At least we're prepared worriers.
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The only good debt is NO debt

The only good debt is NO debt.

If you develop this mindset you will find ways to work around ever borrowing money again. It's a behavior change that will serve you well forever.

If you don't have the cash then don't buy it. You still will live until tomorrow, and the best thing about tomorrow is that you won't have added to your debt.

It is so simple it works.
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Get involved

As a couple you have to work the $’s together. If you refuse than one is in charge of everything and the other has no vote. Now how ridiculous do you want to look? Get involved.

Have budget meetings. Those of you that enjoy the numbers do not force it on the other. Those of you that do not enjoy the numbers do not force it ALL upon the other. Budgeting and spending is a team sport. So suit up and take control!
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Paycheck to paycheck

Complain about Congress but don’t act like them.

Most Americans believe those in office are representative of us. I agree since 70% of us are living paycheck to paycheck and practicing out-of-control debt-ladened spending. We (you and me) are the 30%. We don't spend what we don't have and we think those who do are STUPID.

Do you want Congress to be the role model for your kids? You need to be the role model.
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Loans

I understand a home loan. But I will highly doubt any student loan, rant and rave about any car loan and won't even consider any other debt, especially credit card debt.

As for that home loan don't get sloppy. Home loans should be no more than a 15-year fixed mortgage where the principal, interest, tax and insurance payment is no more than 25% of your take-home pay.
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Term Life Insurance

All you need is Term Life Insurance worth 10 times your income. Avoid high-priced insurance with investment features that aren't that good anyway. You can do better on your own.

Do your own research. Don't ask the salesman. If you do it right, by the time your 20-year term policy runs out you will have enough tucked away to be self insured. You don't need a policy to last your "Whole Life."
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Quit smoking

When cigarettes were $1 a pack (yes, they once were) it was hard to make the case that quitting would save a lot of money. That argument is pretty easy to make now.

If you are able to buy cigarettes at $5 a pack you are able to pay your bills. Stop saying otherwise. You look ridiculous.

Author's note: I am a former smoker, so no sympathy here.


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Extended warranty

Don't buy the extended warranty. If you have that little faith in the product maybe you shouldn't buy it to begin with.

Having said that, homes need maintenance, cars break down, appliances wear out. These are facts of life. If you need a warranty for added comfort, instead put the money in an account and "self insure." If you never use the money it is still yours. Win/Win.
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Teaching your kids

Start teaching your kids early about the value of money. Teach them to always save part of what they earn doing chores or receive in gifts. Open a savings account for them and teach them about interest. Above all else, teach them not to spend what they don’t have!

Don't give the kids money. Make them work for it. Point out that without effort on their part there is no money. This teaches the lesson of value.
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Spinning your wheels

If you are in debt and still investing you are working against yourself. Get out of debt and then you will skyrocket financially.

To invest one minute, then pay interest the next is like spinning your wheels. You are investing in hopes of 10% plus gains but paying more than that in interest on debt. Does this make sense?

Get out of debt, then invest.
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Fully funded emergency account

When you get out of personal debt (credit cards, cars, student loans), the next step is building a fully funded emergency account that maintains three to six months of living expenses. This is a requirement for true financial peace.

Next, put a plan in place for your retirement. Then remember your kids' education. Now what? Pay off that house. All that done? Welcome to building real wealth.


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ME-conomy

Worry about the “ME-conomy” not the economy. Create a ME-conomy for yourself and place your worries there. You can’t control what others do but you can control what YOU do.

So often people judge where they should be in life based on what others have. Personal finance is not about perceptions or show but about you and your calculator. It's about not having debt. It's about owning what you have, not what others have.


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Where you need to be

If there is no work where you live, move!

You may have to sacrifice where you WANT to be for where you NEED to be. Auto Body specialists may follow hail storms to fix dented vehicles, construction workers may follow hurricanes to repair damaged homes, while others have to relocate due to corporate decisions.

Who knows, a change of scenery and people might be a good thing.
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Careful

Careful. Don’t judge people by appearances. The brand-new-car-all-the-time guy is probably up to his ears in debt while the modest-reliable-car guy is the one who wins when bank accounts are compared. Which one are you going to be?

I once heard that Wal-Mart founder Sam Walton drove around in an older model pickup truck even after he was worth millions. Do you think there's a lesson to be learned here?
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Total cost of the item

If you can’t buy it outright, you can’t afford it.

Too many people get into trouble using the amount of the monthly payment as a guide to whether or not a purchase fits into their personal budget. Use the total cost of the item as your guide and you will never be beholden to anyone again. Plus, you won't be paying ridiculous interest over and above the purchase price.
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Want to be rich?

Want to be rich? You need to be debt-free first.

Some people tout what they are worth "on paper." They add up the value of personal property and real estate in their name and what they would be worth if they sold these items. What they don't get is that most of the money made on the sale has to go to creditors to pay off debt.

Having real money that is yours and yours alone defines being rich.
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It doesn't sound right

If you aren't sure about a financial concept say it out loud to yourself or try to explain it to someone. If it doesn't sound right or you can’t explain it you probably want to avoid it.

Personal finance is about the basics. Some advisors try to convolute the basics with fancy account names or tactics, but what it really comes down to is whether you have a clue about what you are making and what are you spending.
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Income minus outgo

Income minus outgo equals a red number or green number. It’s that simple. In order to get out of debt the number MUST be green.

Many people have no real idea how much they spend. If you spend more than you bring home you are headed for financial disaster. If you are in the green, then you need to ask yourself, "What am I doing with that extra money?"
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New Year resolutions

New Year resolutions come and go but being debt-free lasts forever.

Your journey begins today. List all monthly income for your household. Next list all monthly expenses. Do the math. Are you in the red or the green? This is the first step to taking control.
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