Helping You Avoid Life's Financial Mistakes

How To Get Out Of Debt With A Home Based Business

January 29, 2009 By 1 Comment

Getting out of debt is not always an easy thing to do.  Everyones situation is different.  It may be to much debt, bad credit, or even not enough money.   This is what I want to discuss in this post.  Using a home based business to get out of debt.

What Home Based Businesses Have To Do With Getting Out Of Debt

First off you may be thinking how is starting a home based business going to help me get out of debt.  Though I feel they really go hand in hand.  Don’t get me wrong starting a business takes time to grow especially a home based business. 

So making money will not be an instant thing here but once it has been established it can be a constant stream of income that will do two things for you.

  1. Get you out of debt.  It will help you with your debt payments and give the extra cash needed to get it done faster.
  2. It will diversify you income.  If you already draw two incomes in your house hold having extra income based off of your own home based business will protect you if their is that odd chance of getting laid off.

Next, start a business.  This may sound fairly simple but the real question is what business should you start.  That is all really all up to you and what you like.  Whether it be an online business, MLM, or some type of private venture you wish to start on your own.  However I will make one suggestion.  Start a business with minimal cost involved at first.  This way if you do fail you won’t lose much. 

Third, get rolling.  Don’t waist time and make up your mind that you’re going to do it.  Even if the business does go belly up you won’t lose much.  At this point this is usually were most people will fail.  Most won’t be able to make a decision and make up excuses to why they can’t start now. 

You may say I don’t have much money or this weeks just a bad time maybe next week.  Whatever you do don’t do it.  Don’t listen to that negative voice telling you can’t do it.  Keep your mind focused on starting a home base business and getting out of debt.

Fourth,  once you do have an income from your business how much are you going to use to pay down your debts.  I recommend only using 50% to 75% on debt payments.  The reason I suggest this is because, one you should save some money that you make to keep the business running and two you don’t want to become to dependant on this money.  If things don’t happen to work out you may need the income from your job to cover your debts.

Finally, you’ll want to get a business savings fund started.  As I mentioned in the last step you’ll want to save a portion of your money back for keeping your home based business running.  Getting out of debt takes time and so does building a business.  Why not spend time doing both and kill two bird with one stone.

Is This A Unique Way To Get Out Of Debt

This may sound like an odd way to get out of debt by starting your  own home based business but really this is what stumble forward is all about, showing simple and unique ways to get out of debt.

Last but not least watch for future post on which home based business ideas I like and how you can get started in them right away.

To your businesses success,

Chris

Filed Under: Financial Independence Tagged With: , , , ,

New Changes On The Credit Card Rules

January 28, 2009 By Leave a Comment

Getting Out Of Debt May Get Easier

Recently I had done a post on tips beginners should know about credit cards.  In that post I had explained how certain tactics that the credit card companies were using to keep people in debt in order to keep a profit. 

In this quick post I want to share a few changes that the federal goverment is making to limit the abuse from these companies.  Money Magazine recently reported the changes so I felt I would try and keep you updated.

  • First off credit card companies have been know to change interest rates at about any time they want to.  With the knew rules to be set in stone in 2010 these companies will only be able to raise rates if you’ve been late for 30 days.
  • Second terms are usually so hard to make out that even a lawyer can’t even figure them out.  In 2010 statements must include the full terms, fees, and all interest paid.
  • Third, terms can change with in a 15 day notice.  In 2010 credit card companies must give you a 45 day notice before they can change your interest rate and terms.
  • Last, getting ripped off by double cycle billing.  If you don’t want to pay interest twice in one month this may be the best tip of all.  In 2010 interest will only be calculated on what you owe.  However this tip only pertains to certain credit cards.  It’s nice to know these kind of money traps are getting changed.

I hope these tips help,

Chris

Filed Under: Credit Cards Tagged With: , , , , , ,

How To Setup Your File Cabinet For Tax Season

January 27, 2009 By 3 Comments

It’s that time of year again.  You guessed it, tax season is upon us and April 15th is fast approaching.  If this sent a chill down your spine you will want to read this post.  Today I’m going to talk about getting prepared.

I’m going to share a simple system with you that will save you a lot of time and make it easy for you to stay on top of your taxes and keep your file cabinet in order.  I’ve been using this system for years now and once you see how it works I’m sure you will see how this could benefit you.

But first…

A Few Things You Will Need.

First off you will need a sturdy file cabinet.  For me a simple two drawer file cabinet will do.  I like the hanging files the best but whatever suits you is fine also.

Second, file folders that hold up.  I like the hanging file folders as I talked about above.  They seem to hold out and last longer.  Although you can go with whatever you like here too.

Finally,  labels or a labeling device.  You will need to label the files in some way.  If you like the labeling device because it keeps things more organized for you or if you like writing your own labels out then do that. 

It doesn’t matter what type of each of the above items you use as long as you have those three item.  Now with that out of the way on to the system.

How Set Up Your Filing Cabinet. 

First, you will need label your fie folders in order to keep everything in order.  If your use to just throwing everything in one folder and dealing with it all later or worse shred or burn everything you have to change this.

For that reason it’s a good idea to hang onto all receipts, bills, statements, and of course your W-2 statments and all other tax filings.  At the time of writing you should keep all your statements for at least 7 years and your tax documents FOREVER!  Never shred, burn, or lose your tax documents.

Now what should you name the files?

I keep all of my files in very basic and general categories.  Here is what I label my files as.

  • Misc. Bills.  These are odd and end things I might have a receipt for.
  • Credit Cards.  All credit cards are filed here including department store card statements.
  • Phone.  This would include home phone and cell phone.
  • Pay Stubs.  Any income I earn the pay stubs will be placed here. 
  • Banking.  All bank statements and things we get from the bank will go here.
  • Mortgage Statements.  Any statement from your mortgage, HELOC, or others are placed here.
  • Insurance.  Any insurance documents you receive throughout the year including life, health and others.
  • Television.  All TV bills and also Internet bills go here.  Now if your cable is like mine I have my cable TV, home phone, and Internet all in one.
  • Electric.  All electric bills go here.
  • Health.  Anything from going to the dentist, the doctor, or filling a prescription goes here.
  • Gas.  Whether you run gas to heat your home, use electric, place those bills here.
  • Auto.  Any auto repairs, oil changes, body repairs, or even a gas receipt goes here.
  • Investments.  Any 401k info, Roth IRA, IRA, Mutual Fund info should be placed here.
  • Taxes.  Any county, state and federal tax info should go into this folder.
  • Town.  If your town provides you water and sewer place that here.
  • Giving.  Don’t forget this one.  If you have donated money to any cause or organization or place of worship you can put that here.  Anything in here is a great added tax deduction.

This how I label my files but you may have yours set up similar or may need to add a few.  Also you may need to add a few folders if you own a business.  I recommend keeping all business and personal receipts and statements separate even if your business is a sole proprietorship.  This will come in handy for adding extra deductions to your taxes.

How To File Your Old Statements?

After the first of the year you will want to empty all of your file folders for storage.  So usually after the first of the year I will generally clean out all of the file folders separately putting a rubber band around each group.  For example everything in the phone folder will be rapped in a rubber band.

Finally, placing each stack into a cardboard box.  I like this method that way if I have to look something up I don’t have to flip through a bunch of papers I can flip to the stack I need and go from their. 

Once everything is in the box I label the box to the correct tax year.  For example this years taxes are from 2008 not 2009.  Then simply place in a safe and secure place that doesn’t get wet or won’t get stolen. 

That’s it!

If this sounds to simple to you that’s because it’s meant to be.  I’ve learned in life that we tend to take the simplest route.  So start now before you burn, shred or lose another statement.  If the IRS happens to show up on your door step you will at least be prepared.

To a great tax season,

Chris

This post was recently post on The Carnival of Personal Finance #190 by Funny About Money.

Filed Under: Money Managment Tagged With: , , ,

Could This Be The Next Depression?

January 20, 2009 By 1 Comment

Hey everyone just got done reading a personal newsletter from Paul Dietrich.  If your not familiar with him he is the one of the top financial professionals in the U.S.  He is one of the top owners of Foxhall Capital and has written many articles for the Washington Post.

I’ve also had a chance to meet Paul and few of his close associates and hear what they have to say about the economy and so far he is on target.  Everything he has told me over the last year has been true thus far.  So when I get one of his personal newsletters I treat it like gold.

I must also mention that Paul is a professional investment adviser as well as at forex trading.

What we have faced so far.

  • Currently the average fund has lost 48% according to the Washington Post.
  • Trillions have been lost in 401k and IRA accounts.  This doesn’t count the trillions lost in non-pension assets.
  • The trillions lost in the real estate market, and the above average foreclosures all across the U.S.
  • The Dow having it’s worse losing streak since 1931.
  • The S&P 500 being down nearly 40% in 2008.

With all those things and a national deficit in the trillions what can we expect for 2009?

What’s up for 2009?

As far as Dietrich is concerned they expect more of the same for 2009, and that is what I am projecting as well.  We can’t expect this mess to go away overnight.  Though with some tough times still ahead we will make it through.

However don’t expect it to be another depression.  Even with things as bad as they are I am guessing 2010 will be the comeback year however this is only a guess at this point with unemployment at almost 8% it will take some time for this to work itself out.

How is this going to effect you?

If you haven’t started looking for a way to cut down your debt now is better than later.  My best suggestion is to cut down as much as you can and sock away as much as you can.  Just cause 2008 is over and we have a new president in the White House doesn’t mean things are about to get better.

Also once things do start to turn around don’t loosen your grip and get lazy with your finances again.  I learned this from the last recession we had.  This is a typical thing that happens when we get through the tough times.  We tend to let loose and forget about what just happened.

Stick with your plans even when the worst is over and get prepared for the next ression.  Even though it may be a few years or even a decade or two till the next one the point is by staying prepared you’ll be ready for the next one whenever that may be.

To getting debt free,

Chris

This post was recently featured on The Carnival of Money Hacks by Little Miss Know It All.

Filed Under: Market Updates Tagged With: , , ,

10 Rules To Staying Debt Free Forever

January 19, 2009 By 15 Comments

Recently I’ve been reviewing my current debt plan and have noticed that I’ve needed to enforce a few rules.  Not because of any one person but more for myself.  With rules in place as guidelines to keep me on the right path, achieving my goals will have better odds of success.

Here are the rules I’ve set for myself.  Yours may be different but after reading this post let me know what you would add or take away and leave a comment below.

10 Rules To Staying Debt Free

  1. Credit cards must be paid in full every month. I’ve fallen into this trap before were I say I’ll just pay it off next month and guess what it don’t happen and then another month goes by and another till finally you have so much debt on your credit cards you can’t add anymore.
  2. I must hold to a set budget every month. Budgets come in handy just letting you know where your money is going every month.  Without knowing where your money is at you can run the risk of having money begin wasted in places you don’t want. I’ve talked about this in past articles you can see here.
  3. Any purchases made outside the budget must be within are cash flow left in my budget. For example if I decide I want to buy myself a new guitar and it cost $500 then their needs to be at least $500 left in my budget.  However if there isn’t I can’t purchase the guitar.
  4. Any purchases made outside the budget must be agreed upon by both spouses. This rule is really used as a way to stop myself from making a bad mistake and getting the opinion of someone else before I buy.  If you aren’t married then make it a rule to get the opinion of a close friend or family member before you buy something out of your budget.
  5. Dining out or any other entertainment activities must be paid in cash. These types of activities have a way of stacking up on your credit card.  I’ve personally fallen into this trap of paying for meals with my credit card.  Instead use your spending cash you’ve budgeted for yourself on a weekly basis.  This will help by keeping some restraints those activities.
  6. Spending cash is set at a fixed amount and never any more. I’ve learned over time that have a fixed amount of spending cash makes you more cautious about how and where you spend your money.  If you are use to just pulling cash off your debit card or swiping your credit card this will be a habit you should break immediately.
  7. The first person I pay is myself. Getting out of debt is one thing but staying their is another.  If your not taking preventive measures to stay out of debt then their may be a good chance you will fall back into debt.  Having an emergency fund set aside were you can contribute on a regular basis will help in those times were unexpected surprises may show up.
  8. All debts and bills must be paid on time. Paying your bills on time is not only a good practice to keep up but also may have some negative results on your credit report.
  9. Once the debt plan is in place it can’t be changed. By sticking to the plan and not making changes you have a better chance to success.  I’ve also learned that by changing it whenever you want will always give you that out when you don’t want to stick to your debt plan.
  10. Always look for improvement. When your trying to get out of debt you have to look for all the breaks you can get and save money were you can.  Look over your credit card statements and other bills such as your cell phone and look for ways you can cut cost.  Staying up to date on the best ways to save is always a good habit to have.

What Are Your Rules

So now with that said, do you follow the rules or don’t you?  Feel free to share how you handle your debt situations and what rules you use to get debt free.  Also if you know of any rule that should be added feel free to leave a comment below.

To getting debt free,

Chris

This post was on The Carnival of Personal Finance #189 hosted by Taking Charge.

Filed Under: Debt Managment Tagged With: , , , ,

Beware Of This New Credit Card Scam

January 15, 2009 By Leave a Comment

Hey everyone thought I would drop a quick message today unlike my usual longer post.  I just wanted to share a quick story I heard from a family member of mine about a scam that has been going around recently concerning your credit cards.

A Credit Card Scam That Could Cost You Thousands

Just last week I was talking to a family member and they were telling me they had received a call from one of their credit card companies and they had called to inform them they were going to be receiving a special gift for being a member with their company.

The credit card company said they would be receiving a special gift certificate to several major retailer include a gift certificate to Walmart.  At this point it all sounds like a pretty good deal.

But don’t be fooled.

At this point they’ve drawn you in and got you all hyped up.  Telling you all the special offers you will be receiving.  However it’s all a scam.

Here’s the catch.

Once they have you lured in they will ask to confirm your credit card number in order to claim the gift certificates.  What ever you do don’t give it to them. 

If you give them your number they will take you for everything you have left on your credit cards.  Instead report the scam to the FTC (Federal Trade Commission)  You can also read more about how to report a scam here.

As for my family member they caught on to the scam and hung up on them.  They then called their credit card company and told them what happened.  The company informed them that they would never offer the gift cards over the phone and most all ask them for their card number.

Have You Been Hit By This Scam?

If you been hit with this scam leave a comment and tell us about it.

Chris

Filed Under: Scams Tagged With: ,

Mortgage Refinance Tips That Could Save You Thousands

January 12, 2009 By 6 Comments


Recently I just got done refinancing my mortgage to something a bit easier to handle.  My last mortgage which was an option arm mortgage and was giving me a few issues I was beginning to get a bit uncomfortable with.

Things like adjusting payments and rising interest rates started to get me thinking about the possibility of refinancing my mortgage.  So I called my current lender and decide to see what they could do for me.  Also after refinancing I talked to my title agent who closed the loan for me and she was telling me she was closing around 8 loans herself a day and refinances were becoming increasingly popular again.

So in this post I decide to go over some of the basics of refinancing that I learned from my recent refinance experience.  Also I included a few tips of things you should look for.

Why Do You Want To Refinance?

As I explained above I had certain reasons why I wanted to refinance.  It wasn’t particularly because of the rate or my payment amount.  My situation had more to do with the amount of debt I had and my payment and rate fluctuations.

First off I had a few credit card debts with interest rates that were less than desirable and a HELOC or home equity line of credit that had a high interest rate as well.  By combining these two debts into my loan I would cut down my interest and save more.

Second the mortgage wasn’t fixed and my payment and rates were jumping all around.  This became very tough to handle because I didn’t always know what to expect every month.  The payment would be more on one month and less the next.

So before you decide to refinance ask yourself why.  Is it for a better payment, better rate, no more PMI insurance, what is the reasons.  Then decide what you will gain out of refinancing and is that gain big enough for you to really refinance.

So before you do here are a few things you should know before you refinance.

12 Refinance Tips And Things You Should Know

  • Debt ratio. Your debt ratio is your debt over your income.  Lenders and banks use this to see if you have to much debt to qualify for your loan.  Typically you don’t want more than a 36% debt ratio.  The less your debt ratio the better you will qualify the less you will have to pay.
  • Credit score. Again this is something that your bank or lender will take very seriously.  Try to be above 700 or better.  This will again increase your odds of getting the loan.
  • Appraisal. With the current situation as of this post that the housing market is facing having a good home value is very important.  As in my case my value has gone up because of my location for one but also because I had done some home improvement projects that have added some great value to my home.  You should also know that certain lenders will require you to pay for the appraisal up front but may be included into the loan after you close.  However if don’t happen to close you will lose the money you paid in for the appraisal.
  • Review your good faith estimate. Shortly after you fill out the loan application the lender will send you a good faith estimate with in a few short days.  Though most of this may look Greek to you go over it and see what your total closing cost will be.  If their is something that you don’t understand call you loan officer and ask.  Don’t sign something that you don’t know what it is.
  • Know what your closing cost is. Typically closing cost will range differently from one lender to the next but after comparing the actually HUD statements I see the typical closing cost around $3000 to $3500.  Also know that if the lender said it would be only so much to close and it’s a lot high than they originally said you may want to reconsider closing on the loan.
  • Are you saving any money. Lenders like to see you saving money not just spending it all.  Proving this will gain you a lot of credibility.
  • Don’t miss a payment. This is a big NO NO.  Missing one payment is a good way to get on a lenders bad side.  This will show them that you can’t make your payments on time therefore cannot be trusted.  This is also a good way to kill your credit report as well.
  • What kind of asset do you have. Things like your 401k, IRAs, Mutual Funds, Annuities, and even the cash value in your life insurance policy can go a long way for lenders giving you a loan.
  • Last 3 months bank statements. This is a normal requirement for any lender.  They will use this information to see how you spend your money and see how much you have saved up.
  • Last two years W-2 statements. Lenders need these to know how much money you made in the previous two years at your current job.  However if you have currently just changed jobs or got laid off getting a loan my be tough to do.  If you are planning to change jobs you may want to refinance first.
  • Have at least 2 months worth of pay stubs. This is a common item asked for when you are considering refinancing.  This item and the last two will be needed for the underwriting process to be complete.  Also know that lenders will usually only count the first 40 hours of your work week and no over time unless it can be proven that you are getting a certain amount of hours every week for the last two years.
  • Compare lenders. Comparing lenders is always a good idea just to see what others are offering.  Not all lenders charge the same.  Compare at least 3 different lenders and see what you can save.

Are You Thinking About Refinancing?

Refinancing can be bit of a headache but if you don’t know what your doing but following a few of the tips above can save time and a lot of money.  If you are planning on refinancing or have some more tips to share feel free to leave a comment.

To a good refinance,

Chris

This post was recently featured on The Carnival of Personal Finance with Pecuniarities.

Filed Under: Mortgages & Loans Tagged With: , , , , ,

10 Things Beginners Should Know About Credit Cards

January 8, 2009 By 2 Comments

With all the information out there on credit cards these days and getting out of debt why is it that the average family in the U.S. has around $3,000 of credit card debt.  Is it because they are buying bigger things or is because they weren’t properly informed of all the extra things credit cards may come with.

Like most families we didn’t intend to pile up a lot of credit card debt it just happened over time gradually building payment by payment.  So in this post I decide to go over a few things beginners should know about credit cards especially beginners.

Before I start I should mention that knowing these tips could essentially save you thousands in interest payments alone so read on and leave a comment below.

  1. Universal Default Clause.  knowing just this one tip could save you a ton.  Universal default is a clause that basically states that if you miss a payment the credit card company has the right to up your interest rate to the maximum if they want.  Not only can they do that but if you have a late payment on any other bill such as a utility bill, your car loan,  or any other type of regular bill or debt you have they can increase your interest rate.
  2. Stay Away From Late Payments.  Making a late payment can ding you credit score very quickly.  It’s the quickest way for you to lose trust with other financial institutions.  But here’s the catch credit card companies have been very sneaky about sending you your statements at the last minute and in some cases a few days before they are due just so you will be late.  However the payment isn’t good from the date of your postmark.  It’s only on time once they receive the payment.  What gets me the most about this is it’s O.K. to postmark for your taxes but not for your credit card payments.
  3. Remember The 33% Rule.  If you haven’t heard of this before it basically means that as long as you stay below 33% of your credit limit your credit will stay clean.  For example if you have a $3000 credit limit and you have a $1000 balance on the card at all times you’ll be safe.  However, if you continually have a balance greater than that month after month you will start to see a few issues show up on your credit score.
  4. Stay Away From The Minimum payment Trap.  By paying the minimum payment on your cards you are in a sense prolonging the fact it will only take you more money to get debt free.  Though I do have one exception for this.  If you are running your own debt plan as I have shown in previous post then it is fine because you are doing what is called snowballing.  If you would like to learn more about this click here.
  5. Watch Out For 0% Transfers While Charging Normal Rates On Everything You Buy.  This one doesn’t apply to every card but their are the select few you may see this on.  Typically what happens here is you may get a new credit card with a 0% transfer rate so you can cut your rate down for say 6 months so you don’t get hammered with the interest.  However, if you buy anything with that card you are going to sacked with interest payments and worst of all they may then add the interest to you current balance.
  6. Be Careful About What You Buy.  This one also is just exclusive to just a few cards.  Some credit card companies are now getting picky about what you buy.  For example if you tend use your credit card at bars, nightclubs, massage parlors and a few other places some credit card companies may be reporting this against your credit.  However no credit card company has ever come forward and admitted this it has been known to happen.
  7. Be Careful Of Double Cycle Billing.  How would you like to pay interest twice on your monthly credit card bills.  Again this is only subject to certain companies but can be a big cost to you.  Double cycle billing works like this, if you have a thousand dollar balance on your card and you pay off $500 of the bill you not only pay interest on the remaining $500 but you also will pay interest on the original $1000 on your bill but here’s the catch they are charging you interest on $1500 not just $1000. 
  8. Beware Of The Overdraft Fees.  Today the average overdraft fee is around $35 not including the interest.  If you have the issue of using over the limit or think you may go over the limit beware.  This little pot hole in the road can cost you some series bucks not to mention a few dings in your credit history.
  9. Accepting Credit Without Income.  This is a big one for the younger crowd especially college students.  The average college student these days has on average $6000 on credit cards before they graduate.  But the worse part is they have now way to pay off the debt other than making the minimum payment.  This would be like going to the bank to get a loan with out showing any proof of income.  Instead look to alternatives like debit cards so you can’t over spend your limit.
  10. Be Careful Of High Credit Limits.  This can be a big trap from the beginning.  Unless you actually need the high credit for say running a business or have something that would be easier to buy with a credit card this would be fine, but if your an impulsive spender and can’t control your wallet you may want to call the credit card company and to have the credit limit lowered to something more suitable like $500. 

What’s Your Position?

Have you ever been caught in any of these situations or do you know of any other tips to pass along?  Leave a comment below and share your tips and stories.

Filed Under: Credit Cards Tagged With: , , , , , ,

Has Society Lowered Their Financial Standards

January 5, 2009 By 3 Comments

Lately the thought of how people use their money has been bothering me.  I’ve been taking time to just watch the people around me and how they use their money.  Listening to people at work, friends, family, and just about anybody that I’m around.

From this little experiment I learned a lot about people and their money.  In this post I am going to pose the question, is the way people handle their money and personal finances gotten out of control or do you believe things a pretty much unchanged?

Have The Standards Changed

With all the news on the current recession to the Wall Street scandals, to the government bailouts have the standards changed? 

So I did a little digging and found some current facts to start with. First, foreclosures are up over 55% in the last year effecting Michigan and Ohio the most.   I recently heard on my local news that there is a foreclosure every 30 seconds in the United States. 

Bankruptcy is up nearly four times higher than 2005.  There are over 2,000 bankruptcy filings per day again with Ohio and Indiana leading the pack. 

Unemployment reaching near 10% in some state such as Michigan, Rhode Island, and California.  Though it’s about to get worse with GM just recently shutting down it plant in Dayton, OH.

When you add all of that onto the massive amounts of credit card debts people have built up is it no wonder we are in this situation.  But Bankruptcy, foreclosure, and unemployment are not the only things to blame for us being in this situation. 

When you really look at the big picture and what I have learned form my little experiment is that people are buying more and saving less.  That’s right saving less.  In 1980′s the average American saved 10% of their income.  In the 1990′s it dropped to 5%  and now in the late 2000′s it’s actually gone negative.  Meaning most people are not saving anything.

To say the least we have become a see and buy economy.  Seeing what we like and buying without worrying about the consequences.  This type of lifestyle is what has lead us to are current recession with the mortgage disasters.

The normal standards that the lenders have been enforcing for so many years have gotten sloppy by giving out things such as option arm loans and even handing out loans with 125% financing. 

You heard me.  125%

Not to mention everyone in on the scandal such as the appraisers and title companies.  In fact a few month ago several appraisers in and around my area were arrested for putting out false appraisals and actually stating that properties were actually worth more than there were.

Who Is Teaching Us About Are Money?

In the end we have to look ourselves in the mirror and confront are mistakes because we are to blame for the financial challenges that we face.  Not the government, not are employers, not the lenders or the banks. 

The real question is where do we get are education about money from, school, family, friends, coworkers?  While I’m guessing it’s probably all of the above the truth is the average American does not have much of a financial education. 

To relate from my own experiences from being in financial services only 20% of the families I helped knew a lot about how money works.  Some knew a little while others knew nothing at all.  In fact I’ve been recently been running a pole on the front page of my blog to see how many people actually have a financial planner and as of this post is about 50%. 

How To Change The Situation?

While I can’t speak for every family out there I can speak for my own.  If your want to reverse the outcome that economy has given us start with yours first.  Get your families finances in order first.  Then spread the news by helping others.  Think if you could help one other family with their finances just as you have with yours.  The effects would be staggering.

This is the very essence of Stumble Forward.  To help those get on the right track by helping families make better financial decisions.  If that sounds like you subscribe to my RSS and get your family on the right track.

This post was recently featured in the carnival of money hack #47 hosted by Money Beagle.

Filed Under: Money Managment Tagged With: , , , , , ,

10 Tips To Writing Financial Goals That You Will Stick To

January 2, 2009 By 3 Comments


It’s that time of year again were we are setting goals in hopes of a better year than last.  However many goals we tend to set seem to never get accomplished.

Though their may be a lot of reasons why this happens. This post is about giving you some guidelines to follow when setting those goals especially your financial goals.

Before we dive in their is one resource that is nice to use when setting your goals, a great website called 43 Things. This site is all about setting goals and cheering people on.  I’ve also found this a great place to relate with others on similar goals and see how they are going about accomplishing them.

10 Tips To Writing Great Financial Goals

  • Write Your Goals Down. This is really the first step on goal planning.  Writing your goals down is like making a commitment to do it.  Not writing goals down is just a wish not a goal so find a pad of paper and start jotting down some ideas.
  • Have Long And Short Term Goals. Of the goals you have some may be longer term other may be easier to achieve.  The point here is not to have just long term goals or just a few short term goals you can achieve in the next year.  Start out by writing out some 20 year goals, then some 10 year goals, then some 5 year goals, then some two and a half year goals then some one year goals, then break it down to monthly goals, then your weekly goals, and finally your daily goals.
  • Link Emotion To Your Goals. When it comes to writing goals the more emotion you can add to it the more realistic it will feel.  For example, let say one of your goals is to save $10,000 into an emergency fund.  Well saving $10,000 is really a means to an end not an end.  The emergency fund is really a security blanket so you don’t have to live paycheck to paycheck like you have been.  The deeper you can relate emotions to your goals the better the chance you have of completing them.
  • Keep Your Goals In Familiar Places. Once you have your goals in place you also need to keep them in mind as well.  If you just write them and set them aside everything you have done will be for nothing.  For me I like to keep them on my night stand at night before I go to bed.
  • Review Your Goals Twice A Day. Keeping your goals in one place is a good start now you have to review them two times every day.  Reviewing your goals is half the battle.  I once new a guy who reviewed his goals some many times a day because he wanted to make $100,000 in a year with his business.  As a result of reviewing his goals some much his belief became so strong he ended up achieving his goal.
  • Build Belief Into Your Goals. When your initially writing goals down have fun and jot as many as you can think of but after sifting through them you will want to pick the goals the you have the most belief in accomplishing.  For example if you want to build a $500,000 house but you have absolutely no money saved up and no thought you think you could do it, it may be a wishy washy goal and something you don’t believe you can accomplish anyways.
  • Make Your Goals More Than About Money Or Physical Objects. Money is really a means to an end.  It’s what you want with that money not the money itself.  Also it’s not just about having physical assets like a house, or a car, it can be much more than that.  For example a few of my goals are to able to have my time to spend with my family, and also more free time for myself.  Don’t get me wrong I would like a new Mercedes S65 but it just don’t rank as high as the other two goals.
  • Make Your Goals As Detailed As Possible. Keeping your goals detailed allows you to know exactly what you want but also explaining how you will go about achieving that goal.  For example don’t just say you want a car describe the exact make model and design.  Then detail how you are going to achieve that goal.  Another example a friend of mine wanted to build a new office for his business.  He had an entire floor plan drawn up to exactly what he wanted.  He even knew right down to the detail what color he wanted the carpet to be.  The more detailed you can be about your goal the more realistic is will seem.
  • Make A Goal Book. A goal book is not just a peace of paper telling your goals but a place to get you emotionally involved with your goals.  In my goal book I do everything from describing what I want to how I will achieve it.  I also dedicate one page per goal to putting pictures of what I want to achieve.  For example if I want to spend more time with my family I will post some great photos of my family there to remind myself of all the wonderful times we have together and also remind me of all the great times we will have together.  Or if I wanted that Mercedes S65 I would find pictures of that car showing all of the different aspects of the car.
  • Know That Your Goals Will Change. From time to time things change and we lose interest in are goals.  For one reason or another we don’t want to achieve that goal anymore.  At that point it’s easy to get discouraged and stop setting goals.  Instead just know that this is the natural evolution of the goal process.  What you liked 5 years ago you may not like today.  So know that goals will come and go as thing progress.

What Goals Have You Set For The Coming Year?

The goals you set will shape your life and your destiny.  If you don’t set any goal at all it would be like trying to drive from New York to a specific point California without a map.  Without a map who knows where you will end up at.

Having goals will make it much easier for you to achieve the end result and also make a lot less mistakes on the way.  Take time now and share a few of your goals in the comments.

This was recently in The Carnival Of Personal Finance hosted by Clever Dude.

Filed Under: Financial Independence Tagged With: , , , , ,