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Ask The Experts Series: The Best Advice on Building Wealth – Part 5

December 31, 2011 By 2 Comments

Today I’m wrapping up the Ask The Experts series with a bang! The series finishes out with 5 personal finance bloggers answering this question:

What does building wealth mean to you? What advice would you give to someone on how to start building wealth? What tools do you use and recommend to accomplish this?

In case you missed it, be sure and go back to read Part 1, Part 2, Part 3 and Part 4 of this series! There is a lot of great information and a lot of knowledge packed into this series. You won’t want to miss it!

Name: Corey Maass
Website: The Birdy
Twitter: @thebirdy

Six years ago, in my second year as a freelancer, I started to really appreciate the challenge of working for yourself. It’s circular. First you have plenty of work, but it can be weeks or months before you get paid. Then the checks finally come in, but you find yourself without more work.

One month, I was at the bottom of one of these cycles, and I was nervous about paying the rent. Finally my phone rang. For a half hour, I spoke with a client who I knew would lead to too much work, too little money, and nothing but hassle. But I felt I had no choice. I needed the work.

Two months later, I found myself on the phone with the client again, being yelled at for something I wasn’t even involved in. I did the math and realized I was suffering this indignity for minimum wage. Something had to change. I fired him and vowed to never again be so desperate that I didn’t have a choice.

That was the beginning of my understanding of wealth. If I had enough money in the bank to feel stable under the worst circumstances, I would always have a choice. I would be able to say “no” next time the wrong client called, and wait for the right one.

I made it a priority. While it’s taken a great deal of hard work and a bit of luck to save up a nest egg, it has allowed me to find wonderful, solid clients, and create a stable, successful business.


Name: Doctor Stock 
Website: Doctor Stock
Twitter: @DoctorStock 

Building wealth is more than about money… it’s also about lifestyle, family, values, etc. When investors think about building wealth, I think their first inclination is to amass money… but at what cost? Building wealth is about investing your current resources in a manageable manner in order to improve your quality of life. There are a few things that are essential to building wealth: First, know your destination (i.e. why are you trying to build wealth? what is a picture of success); Second, write down what you’re not willing to sacrifice (i.e. more than a certain amount of time or measuring risk capital); and, Third, invest time (i.e. simply checking your statement once a quarter or year will not produce as much success as a more attentive approach).

For those just starting out, concentrate on protecting your capital, minimize your risk, and maximize your returns. Finding a reliable resource, without paying ridiculous fees, can really help you “pay yourself.” Investing in the stock market is not a risky, or at least does not have to be, a risky venture.

I find most tools out there take unnecessary risks… so I developed my own strategy. I use free tools such aswww.freestockcharts.com and www.reuters.com for research and then listen to people like Cramer for ideas, but not to follow blindly. I also find those with similar interests to dialogue with… and I’d be happy to talk with anyone interested in investing in the markets.


Name: David T. Domzalski
Website: Financial Bin
Twitter: @FinancialBin

Before beginning any discussion about building wealth, I think we must first point out that you can no longer rely on your house or your 401(k) as your main sources for wealth accumulation. So, get that thought out of your mind right away. Your focus must shift toward income-producing assets. This is essential if you do not want to be working when you are 70. Since the Financial Bin’s focal point is Generation Y, this advice will be geared toward those individuals.

The first income-producing asset I would advise looking into is real estate. No, this is not your home. This is rental property. My wife and I plan to invest in income-producing rentals that will generate positive cash flow for us each month. If you decide that being a landlord is not for you, you could always hire a property manager to do the dirty work for you. 

Another asset I would recommend is dividend-paying stocks. While I do not always recommend the stock market, unless you commit yourself to watching charts all day, I do like stocks that pay a dividend. The reason behind my logic is that even if they lose money, these stocks will allow you earn some money each year. Plus if you set yourself up to automatically re-invest any earnings and buy more stock, you are setting yourself up for a nice additional source of income.

A final recommendation, and the one I am going after with starting the Financial Bin, is having your own business. Sure, you could consider real estate investing a business. However, I am talking about anything other than that. It has never been easier to start your own company from scratch. If you are able to create something for yourself that can supplement or even replace your income, it is definitely worthwhile. From there, you can focus on making the business more than just another outlet that “employs” you and grow it into an entity where you can hire people. This way you get out of the self-employment realm and into the real business sector.

As for tools, I must go with You Need a Budget. The company is featured in our book, “Entrepreneur Intervention.” If you are looking to invest in stocks and real estate or looking to start a business, you must have a handle on your finances. If you’re not sure how to budget or completely lost, YNAB is a great place to start to get yourself situated.


Name: Casey Bond
Website: Go Banking Rates
Twitter:  @GoBankingRates 

A lot of people seem to equate being wealthy with being rich, but I think you can build wealth without having a whole lot of money. Building wealth is about making smart, strategic choices in order to maximize what you have, not figuring out a quick and easy way to amass more money than you’ll ever need.

There are really two tips I can offer for building wealth. The first is to start putting money away now—not when you’re a little older, not when you get a raise—now. When I got my first “real job,” I was only making $8 an hour, part-time, but I still managed to set aside $20 out of every paycheck and put it in my employer-sponsored IRA. I hardly noticed it was gone, received a quarterly match, and by the time I left that job I had a few grand set aside for my retirement. I may not have been rolling in dough at 20-something years old, but I sure got a good head start on my peers.

Secondly, you have to make your money work for you and the only way you can do that is by investing it. That doesn’t mean you need to subject your life savings to the whims of the stock market. You should be seeking a variety of ways to earn returns on your money. At the very least, open a high-yield savings account for short-term savings goals. But don’t be afraid to put long-term savings into investments with some risk—remember, unless you’re earning more than 3-4%, you’re not even keeping up with inflation and essentially losing money. It’s kind of scary at first, but remember that you don’t have to go at it alone and can always consult a professional.

Name: Ryan Bales 
Website: Budgetable
Twitter: @Budgetable

I’ve always had sort of a cynical view towards the term “building wealth”, and even more so, what it implies. Ask people why they want to build wealth and 9 out of 10 times the response will be, “security”. You don’t need wealth to have security, you just need not be poor. There is a certain sense of security that comes from knowing you have enough money in the bank (or assets) to take care of even inflated needs, but is security really why we want wealth? I don’t think so. I think most people just want to be rich, and they want people to know they are rich. Don’t think this is the case? Let’s try this: Imagine that you have $100 million in the bank, however you can’t tell anyone that you have the money. Furthermore, you can’t suggest, or buy anything that would suggest, that you have the money. In other words, from the outside, and to everyone else, you are just a regular Joe. Does having that $100 million still have the same allure? No, let’s be honest, of course it doesn’t. Financial security is only a small reason why people strive to become wealthly.

For me, what wealth really means is the sum of one’s creations. What have you brought into this world through the use of your mind, the expression of your creativity, and the result of your labor? My recommendation for anyone who wants to build wealth is to create a business. A business is one of the best ways to bring something great into the world –give the world something that wasn’t there before and the world will give back. Creating a business is also one of the only ways you will ever become rich. You aren’t going to win the lottery, and you’ll probably have a hard time investing your way into riches. Nonetheless, your potential is unlimited –it truly is, you just have to make things happen.

I want to give a HUGE THANK YOU to everyone who participated in this Ask The Experts series! It was a lot of fun and very informative. I plan to continue this series in the future!

Filed Under: Ask The Experts, Blog, Featured Bar, Saving

Ask The Experts Series: The Best Advice on Building Wealth – Part 4

December 30, 2011 By 4 Comments

Today we are switching gears in the Ask The Experts series to discuss building wealth. I posed the following question to my personal finance blogger friends:

 What does building wealth mean to you? What advice would you give to someone on how to start building wealth? What tools do you use and recommend to accomplish this?

You’ll hear from four more bloggers today and then tomorrow I’ll round out the series and close it out. In case you missed it, be sure and go back to read Part 1, Part 2 and Part 3 of the Ask The Experts series on getting out of debt & building wealth!

Name: Greg MacFarlane 
Website: Control Your Cash
Twitter: @CYCash

Building wealth is dizzyingly easy, for anyone who’s disciplined enough to commit to doing it. The whole thing can be distilled down to four words: Buy assets, sell liabilities. Do this often enough, and you can’t help but build wealth.

Sure, that’s theoretical, but what does it mean in practice? It means understanding that every financial decision you make can enrich or impoverish you, however minutely. You can spend $2000 on a vacation, or you can spend it on 100 shares of an undervalued stock. That’s not to say that you should never buy anything consumable, or defer all your gratification, but rather that you should always be conscious of where you’re putting your money. Don’t spend a couple hundred dollars clubbing every weekend, then wonder months later why you’re not getting ahead.

That being said, you have to crawl before you walk. The first thing is to get your net worth up to zero. If you’re carrying consumer debt – like a credit card balance that’s growing at 14% annually – live a spartan lifestyle in the short term until you can get out from under that debt. Spend your spare hours working a second job and eating ramen noodles. Brief, sharp pain is far better than enduring dull pain.

Then, educate yourself. Understand why a fixed-rate mortgage beats an adjustable-rate one (which in turn, beats renting.) Don’t trust your employer’s accounts payable person to handle your 401(k) for you without your input. If you can, turn your proficiency into a business and set up a limited liability company. Not to make this sound like an informercial, but we distilled everything you need to know about this into a single volume. http://amzn.to/cRd8md


Name: Todd R. Tresidder
Website: Financial Mentor
Twitter: @FinancialMentor

Budgets are like diets – they don’t work. The reason is simple: they require you to do the
opposite of what you want to do. Unless you have the discipline of a celibate monk living
in a brothel you won’t succeed for more than a short period of time.

The solution is simple… the Un-budget. Here are the rules…

•Record every penny that passes through your hands. You can use an app on your smartphone, or a small tablet in your purse (like my wife uses), or you can just get a receipt for everything and write notes on other receipts when none is available (parking meters, tips, etc.)

Now for the critically important step that makes this process really effective…

You manually enter each individual expense item into any accounting software you choose while simultaneously asking yourself the following two questions…

1. Is this taking me toward my goals or away from my goals?
2. Is this getting me the highest and best value for my money?

That’s it! That’s all you have to do.

If you follow this process for a minimum of 90 days it will permanently change your spending patterns and save you way more money than any conventional budgeting process.

The reason it works so effectively is because it takes you toward what you want. Most budgets try to enforce discipline against what  you want which is why they fail. Instead, this process helps you clarify what you want and how your spending pattern supports those goals.

After just a few weeks of regular practice you will notice you start asking the questions at the point of purchase which begins to automatically shift your spending patterns without any discipline or sacrifice. Once you have that habit ingrained you are home free and heading toward your financial goals. My retirement calculator can help you determine your desired savings goals based on your current savings and monthly deposits.


Name: PKamp3
Website: Don’t Quit Your Day Job…
Twitter: @DQYDJ_NET

To me, building wealth means making small, smart decisions over and over again.

One way to make good decisions is through automation.  Automation doesn’t necessarily mean to use computers – but it may mean that every paycheck you automatically deposit some funds in different accounts (even if you do it manually).  It all starts with your paycheck…  If you can use a tool like direct deposit to direct money into different accounts, you’re already ahead of the game.   What should you automatically be doing (not necessarily in this order!) every paycheck?

  • Saving money in an emergency fund (if you haven’t already)
  • Saving money for retirement
  • Paying down debt

If you are looking to start building wealth, know that in finances (as in life) there are no shortcuts.  If you make good decisions over a sufficiently long period of time you’ll come out on top.  A few hundred dollars a month seems like no big deal, but through compounding interest and the hands-off nature of the system, you’ll eventually be in good shape.

Of course, there are some tools that can help you out, even if they aren’t completely necessary.  As I mentioned, direct deposit is a nice paycheck feature to have – talk to your HR department (or boss, if you don’t have an HR department) if direct deposit isn’t available.  A budgeting tool also helps if you can’t get your finances in order – Mint.com offers a free tool to manage your spending.

To summarize: make good decisions for a long time and wealth will be yours!


Name: Shannyn
Website: Frugal Beautiful
Twitter: @FrugalBeautiful

Wealth building is much easier for people who have had to deal with being broke or getting out of debt.  If you’ve had to live within your means or even below your means for financial survival you’ve already mastered some of the skills needed to build wealth.  Creating room in your life for wealth means that you don’t indulge in every short term whim or impulse but instead create smart habits and prepare your life for wealth by making smart choices and not filling your life with distracting junk (also known as shopping and debt!)
If you want to build wealth don’t assume you know how.  Read up, ask questions and don’t assume that the only way to grow your net worth is through the stock market or putting money into an IRA.  Use your smarts and your skills to create assets, whether in the way you shop or what you do with your spare time.  Leverage your talents to learn new skills or monetize what you already do well.  Put your money towards true assets and towards creating income on the side to diversify your income and supplement what you already have acquired.
While in graduate school it nearly impossible to get a “good” job with an internship and a rotating class schedule, so I used my ability (Notice I didn’t say “talent!”) to write articles and develop a blog in between classes and during breaks.  It was discouraging I couldn’t get a job with regular hours, but I was able to work with my situation and make income wherever I could, however I could.  Building wealth can be done even if your situation is less than ideal and you’re flat broke!
Stay tuned – tomorrow we wrap up the series with Part 5 of Ask The Experts 
Filed Under: Ask The Experts, Blog, Featured Bar, Saving Tagged With:

Ask The Experts Series: The Best Advice on Getting out of Debt – Part 3

December 29, 2011 By 1 Comment

Continuing with the Ask The Experts Series, today 5 more bloggers answer the question:

There is a lot of information out there on personal finance as a whole, especially the topic of getting out of debt. What is your best advice on getting out of debt? What tools do you use and recommend to accomplish this?

In case you missed it, don’t forget to go back and read Part 1 and Part 2 of the series! And now on to today’s responses:

Name: Robbie Edwards
Website: One Price Taxes
Twitter: @OnePriceTaxes

Money is one of the most sensitive areas of our lives.  Personal finance, spending, and debt are all big contributing factors in relationships and often causes relationships to be torn apart.  Recently I met a single woman who gave me the most interesting requirement I’ve ever heard for a future spouse.  It wasn’t a height requirement, a weight requirement, or a hair requirement.  She told me that any man who wanted to marry her would have to have a good credit score!  I was caught by surprise by her requirement but she then explained to me that amount of effort she had put into getting out of debt herself and raising her credit score that she didn’t want to dragged down into that hole again.
The best advice I can give on getting out of debt is to start by creating a plan and then train yourself to have the discipline and the patience to stick with that plan.  Everyone wants a 5 minute (or less) way to be debt free but the truth its going to take longer to get out of debt than it did to get into it.  Here are some things my wife and I have done to pay down our debts:
1)  Take a hard look at your monthly budget.  Try and decide what monthly bills are needs (car, house, electricity) and what monthly bills are luxuries (Starbucks, eating out, etc).
2)  Find someone to hold you accountable.  No woman is an island unto herself.  Ask someone you trust to hold you accountable in the area of your budget.  Use this person as someone to bounce ideas off of as far as what you can and can’t afford.
3)  Cut up credit cards that hold the most temptation.  Using scissors is a skill most of us learn in kindergarden and it may be the most useful skill we have when it comes to getting rid of temptation.  For me, that would be the now deceased Best Buy credit card.  For my wife, it was the Target credit card.  Getting rid of these temptations will make it easier for you to get the credit card balances down.  Ask your accountability partner for help with this.
4)  Build momentum by paying off the smallest balances.  Never underestimate the power of momentum.  Getting early victories in the war against debt is VERY satisfying and will ultimately help you win this battle.

As for tools, I’d recommend Payoff.com as a good place to start in helping yourself get out of debt.  Payoff.com not only helps you get out of debt but it also rewards you with prizes for getting out debt.


Name: Jessica Streit 
Website: The Debt Princess
Twitter: @Debt_Princess

When I found myself at my lowest point in life, it was not due to an illness or the break up in my relationship, it was not due to something out of my control. Rather, the lowest point in my life was completely within my doing. I had accumulated so much debt that I could no longer pay even the minimum payments on them.

The tool that has helped me turn my life around has been in receiving an education. I have taken the time to learn as much as I possibly can about finances. I have read countless books, websites and articles about personal finance. I have taken the time to learn about myself and why I was able to get myself into a position of great debt not once, but twice in my lifetime. I have spent a great deal of time learning.

My financial education came later than I would have liked. It was not something I learned until my mid 30s. That is, in my opinion a great travesty. Our society does not typically discuss financial matters. I believe that is a great problem that should be addressed. Educating our children, our young adults and ourselves on all things money related is vital to our success. Financial literacy is something that should be taught to every child before they have left high school. Financial literacy is the greatest gift we can give a young adult before they venture out on their own into the real world.

Name: David Bakke 
Website: Money Crashers
Twitter: @MoneyCrashers

When it comes to the topic of getting out of debt, the Internet is packed with information and tools. Weaving your way through it all can be challenging and time-consuming. However, the best way to solve your personal debt issues is to take advantage of a few personal strategies while also taking advantage of some online tools and technology:

1. Fully Focus On Getting Out of Debt: Several years back, I knew that my finances were in trouble, I just didn’t know how bad. Before I finally woke up and decided to do something about it, I found myself more than $30,000 in debt. The best way to start is to fully commit and focus on getting out of debt. To do so, you need to learn exactly how to make a budget that you can stick with and follow over the long term. It literally should be something that you should think about every day, until you have some solid spending and pay-down strategies in place.

2. Slash Personal Spending: There are two things you need to do to get out of debt as fast as possible. First, cut spending. You should look at every purchase that you make on a daily basis and find a way to eliminate it or reduce it. If you buy a cup of coffee every morning at the convenience store, either quit, or buy yourself a coffee maker and make it from home. If you eat out for lunch every day, consider switching to brown bag lunches. Analyze any and all other purchases to find ways to save. You should also slash your entertainment budget. After all, if you want to get out of debt, it will involve some sacrifices in the short term. Also, note that I did not say that you need toeliminate entertainment. You still want to enjoy life, just on a smaller scale until you’re debt-free. If you’re willing to go far enough, consider making the sacrifice to cancel your cable TV to save money on your monthly bills significantly.

3. Generate Income: The next way to acquire the money you’ll need to become free of debt is income generation. Before we discuss grander topics like starting your own business, try asking for a raise or volunteering for overtime at work. You can also consider talking on a part time job. Another idea is to sell your unused items on the Internet or taking on one of many other awesome side business ideas. If you take this route and find it successful, it can easily develop into small business ownership. There is nothing like creating extra income to help complement your efforts to cut back on spending.

4. Take Advantage of Rewards: From discounts to rewards, there are numerous everyday strategies you can be implementing to save a significant amount on your purchases. For example, many of the best cash back credit cards offer an impressive 5% cash back on all of your purchases. Or if you’re a AAA member, don’t overlook many of the best AAA membership discounts that you should be taking advantage of.

5. Mint: The Mint.com personal finance application is the pioneer in online budgeting tools, and I still think their tool is one of the best. They offer budget creation help, goal-setting opportunities and ways to save money. Best of all, Mint is free. Another neat tool is Credit Sesame, which gives you all the tools you need to take control of your finances. They offer a loan search option to find the best rates for you until you can pay off all debt. They also offer credit monitoring services, and the service is free as well!


Name: Jimmy
Website: Deals Planet
Twitter: @DealsPlanet

The best advice to getting out of debt is never to get into debt. However, there are times when it is unavoidable to end up in debt. There are two possible courses of action: Increasing income and/or decrease expenses.

While each individual situation is different, there are multiple ways to increase income. Start by analyzing your current work situation. Should you consider looking for another job that pays more or should you find a second job to sumplement your current income? Are you taking advantage of advancment opportunities at your current job. Are you utilizing education and training offered by your currrent employer?

Many employers will reimburse employees for taking courses at an accredited college and university that correspond to their current job requirements. Check with your HR department if they offer such program / benefit. While this education may not immediately pay off in a promotion or a salary increase, it will help termendously down the road when you might be considered for a promotion or when you are looking for another job.

The second course for attacking debt is to decrease expenses. Start by looking at the major household expenses home and auto. Regardless if you rent or own you can look for ways to save on your housing expenses. Consider negotiating a lower rent if possibe or look around to see if you a comparable place with cheaper rent. Currently, the interest rate is at its historic low levels therefore you should look into refinancing your home to see if you can save money on mortgage.
Beside the obvious main expenses (home and auto) discretionary expenses could be reduced or even illiminated to reduce expenses. Here are few suggestions:

  • Look into reducing your cable, internet, and phone bill
  • Cut down on dining out
  • Consider shopping at discount stores. They offer the same brands at lower prices.
  • Don’t buy the latest “flashy” electronics or mobile phones. Most electronics will go down in price within 6 month-1year.
  • Pack your own lunch for work. It is usually cheaper and healthier than fast food.
  • Check with your employer if it is possible to work from home. Working from home would reduce your commute expenses.
  • Check your local newspaper for free social events. You don’t have to stop having fun just because you are cutting down on expenses.
  • Buy clothes on sale. Usually clothes go on sale toward the end of the season.

The credit card yearly summary is a great budgeting tool. It lets you see where you spent money by category; merchendise, entertainment, and auto / gas expenses. You would be surprised how those small monthly fees add up to a big year expense. There expenses that you may not be able to reduce or eliminate. However many other discretionary expense could be reduced or even eliminated.


Name: Andrea
Website: Nickel by Nickel
Twitter: @NickelbyNickel

My best advice for getting out of debt doesn’t have so much to do with the actual making-payments-on-your-debt side of things but more with the process of getting to a place where you can begin getting out of debt. I think that once you hit your breaking point and you realize that you have to do something, anything, to get out of the hole the most important part is getting informed:

How much is everything costing me? What do I actually earn? What can I really afford? I had a general idea about my bills and income before I realized I wanted to get out of debt, I had a general outline of expenses throughout the year and I sort-of planned towards them… but really when it came down to it I had no idea how much I actually spent after the fact on various items like clothing, food, fun-money. It’s like buying a train-ticket without knowing your destination, you’re going somewhere..but where? I had no idea if what I was planning was actually working and looking back I realize that what I was doing wasn’t working at all.

I started using a budgeting program (YNAB) at first just to see the cool charts at the end of the month but it really has become a valuable tool to measure how well I’m actually doing in achieving my goals. See, people are good at setting goals… but you need to reach and re-evaluate goals too and doing that can propel you do do even better the next time around.

Stay tuned to tomorrows post in the Ask The Experts Series Part 4 where we talk about Building Wealth.

Filed Under: Ask The Experts, Blog, Budgeting, Featured Bar, Personal Finance Tagged With:

Ask The Experts Series: The Best Advice on Getting out of Debt – Part 2

December 28, 2011 By 5 Comments

Today is Part 2 of the Ask The Experts Series on Getting out of Debt. In today’s post, we continue with the question:

There is a lot of information out there on personal finance as a whole, especially the topic of getting out of debt. What is your best advice on getting out of debt? What tools do you use and recommend to accomplish this?

You’ll hear from 4 personal finance bloggers today and in case you missed it, be sure and go back to yesterday’s post to see Part 1 of the Ask The Experts Series on Getting out of Debt.

 

Name: Carrie Smith
Website: Careful Cents
Twitter: @AppleCSmith

Money is a tool, not an obstacle, so treat it like one. Accumulating debt didn’t happen overnight,  and correcting the problem will take time. The biggest tool I use with my finances is be in control  of the emotions. Impulse buying, investing or saving should be balanced with smart, thoughtful and educated decisions.

How I keep myself educated is by is finding inspiration. Sometimes it’s a blog, a book, a financial show or even a podcast. It’s easy to get discouraged or lose sight of the goal, but it’s important to find things that keep you inspired and motivated. Throughout your personal finance journey, learn to be content. Whatever your situation is, whatever mistakes you’ve made, you should have joy in the journey.


Name: Ginger
Website: Girls Just Wanna Have Funds
Twitter: @Gingerlatte

This is a loaded question that can certainly be seen from many angles and viewed through varied lenses.

In order to get out of debt, I think it’s best to understand why you got into debt in the first place while honing the discipline needed to dig yourself out and stay out. The first reason stems from my background in psychology where I come from the school of thought that we first have to understand why we do something in order to change it. Learning and then unlearning old money habits can be difficult so it’s takes an appreciable amount of time to do this and do it effectively. This lends itself to cultivating the discipline is necessary to make the decision and stick with it. So getting out of debt will require much insight into spending habits while cultivating new money habits which is often underestimated.

Once you’ve achieved understanding the root of old money habits and cultivating the discipline needed to get out of debt, then you’ll need to develop a game plan.

What’s Your Debt Reduction Plan?

What system will you use? The debt snowball method is where you pay down the smallest debts to the largest thereby building momentum to the largest with the increased availability of cash from the smaller debts. Or will you start little by little and pay everything off in chunks? Your plan is important as it develops a framework through which you will operate.

Which Tools Will Help You Work The Plan?

If you’re visual and “techie” like me then you’ll want to invest some time in aggregating all of your financial accounts into a system like Mint or Yodlee. There you can list all of your financial accounts in one place and develop a plan to pay down debt, save for an emergency fund while tracking daily and monthly transactions. I find it easier to see everything in one place while watching my numbers go down (debt) while savings go up (emergency fund)

You may decide that a spreadsheet or notebook is best for you and this is fine as well. Just use something that will help you track your progress because this helps build motivation. Surprisingly, while I love using online tools, my favorite has been updating a spreadsheet with my totals. Manually changing the numbers on my accounts has given the motivation that an online tool doesn’t.

Action Items To Promote Insight and Discipline Needed to Start This Process:

  • Identify your “heart,” where you spend most of your money.
  • Decide to change your heart from reckless spending to whatever financial goal you have in mind.
  • Engage in serious introspection about why you spend the way you do. Are there other psychological needs that spending temporarily meets?
  • Divorce yourself from the emotions which enable you to rationalize and accept destructive spending habits.

The rest is history which starts with a decision-made by you!


Name: Suzanne Cramer
Website: A Straight Talk on Debt
Twitter: @ADivorcedMom

If you find yourself drowning in debt, you aren’t alone. Millions of Americans are struggling right along with you and have been in your shoes. Unfortunately, many of us are overwhelmed and don’t know where to start. Filing bankruptcy may seem like the easiest way to become debt free but the reality is it is probably the most difficult and damaging way to go. Knowing your options and researching what will work for you is the first step to debt freedom.

Consider going it alone—with a plan in place…

You have some unsecured debt; credit cards, medical bills, maybe even a few collection accounts, but you are able to keep up with the payments. You may be able to manage your situation on your own. Debt Payment Pro is a FREE tool that can help you pay down your debt. Enter simple information about your debts. Based on your debts Debt Payment Pro will calculate your possible savings. Then follow your personalized repayment schedule to pay off your debt more quickly and save on interest. It can become easy to send just the minimums and not reallocate payments to other creditors. This approach will require discipline and close attention to your payments.

Get some help—lower your interest rates and pay off debt in 3-5 years.

Maybe you are realizing your debt is becoming overwhelming and you can’t keep up with the minimums or have fallen behind. As a result your creditors have increased your interest rates and the likelihood of you continuing to manage your debt on your own has become too much for you to handle. You may want to consider entering a Debt Management Plan. Debt Management Plans, which are often called DMPs, are plans that allow debt relief providers to work directly with creditors to negotiate new terms for the repayment of your debt such as, reduced interest rates, lower monthly payments, and waived fees such as late fees and over the limit fees. With a DMP you will make one payment to a debt relief provider who will then disperse the funds to your creditors each month. A debt management plan is a great option for those who just need better term to repay 100% of their debt.

Settle your debt for less than what you owe—avoid bankruptcy.

If you find yourself scraping to just pay the essential rent, food, and utilities and have no money left to pay your creditors but want to avoid filing bankruptcy, you may want to consider a Debt Settlement Plan. Debt Settlement is an attractive alternative to bankruptcy for those who want to pay back at least a portion of their debt, but cannot afford the Debt Management Plan payment, and may have stopped paying their unsecured creditors. With Debt Settlement, you make monthly deposits to a Settlement deposit account in an amount you can afford. You do not make monthly payments to your creditors, and your provider works to negotiate with your creditors for a less-than-full repayment. When settlements are reached with creditors, settlement payments are paid from the Settlement deposit account. There are definitely pros and cons to using Debt Settlement to pay off your debt so it is important to understand what to expect.

If you decide to seek help make sure the provider is on the up and up by asking the important questions.


Name: Gary Foreman
Website: The Dollar Stretcher
Twitter: @Gary_Foreman

Getting out of debt requires a variety of skills and tools, but I’d say that 3 are the foundation for a successful attempt to get out of debt.

First, don’t expect immediate results. It will probably take you as long to dig out of debt as it took you to get into it. If you’ve been spending more than you’re making for 5 years don’t expect to get out of debt in 1. You’ll only be disappointed when a year passes and you still have a long way to go. Being realistic helps you prepare for a long haul. That’s the type of mindset that you need to see your goal accomplished.

Second, it’s essential to have a plan. “I’m going to pay down my debts” is not a plan. Knowing which debt you’ll attack first and how much you’ll be applying to that debt each month is important. Not only will that eliminate indecisiveness, but it will also allow you to track your progress against expected results.

Finally, don’t forget to reward yourself as you achieve smaller goals along the way. Treat yourself to a nice dinner when you’ve paid off the MasterCard or your auto loan. Celebrate the victories along the way. Those celebrations are an important motivator to keep you on the path to final victory over debt!


 Stay tuned to tomorrows post for Part 3 of the Ask the Experts Series on Getting out of Debt.

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