PAY OFF YOUR DEBT AND FREE YOURSELF FROM MODERN DAY SLAVERY!

via google images

Hey, my friends! I took a break for a week, I had a lot of things going on with life and wanted to approach this next blog post with a lot of thought. (Not that I don't put lots of thought into all my posts, but anyways.)

So we've been through the need of a rainy day/emergency fund, and why credit cards have gotten more people into trouble than they have gotten people to riches.

Today I want to show you how to pay off your debt. This is something I'm still working at myself but I want to show YOU and your family how to do this as efficiently as possible.

Before I do that I want to share a quick story. I was telling a co-worker about my trip to SLC, UT and a couple other things about it, and I said, "It was more of an inconvenience, but because I had an emergency fund, life went on." He said "Do you follow Dave Ramsey?" I said, "Yes, I do!" He said, "Me too! I'm actually debt free because of following his principles." We fist bumped and started the talk. It was such an awesome feeling. He went on to tell me he has a sizable savings, bought his wife's car with cash and how his house will be paid off in just a few more years. THIS GUY IS IN HIS LATE 20's! I said, "So how does it feel?" He said, "I can't even tell you the feeling of freedom it brings, your life is so stress free, you don't have to worry about the next paycheck." That's pretty much the same thing Cowboy told me when I asked him a few weeks ago how it felt.

I found a pamphlet a few years ago and finally read it multiple times in the last year. It was  called  One For The Money: Guide To Family Finance by Elder Marvin J. Ashton (This was a talk given in the April 1975 Welfare session of General Conference of The Church of Jesus Christ of Latter-Day Saints) This is an awesome pamphlet to read through! I want to share one quote which focuses on people that live in a gotta have it now society. "We live in a self-indulgent, me-oriented, materialistic society. Advertisements entice young buyers by demonstrating how easy it is to get credit and buy on time. Interestingly, no ads focus on the glamour of paying the money back, nor do they mention how long or hard it is to do just that—especially with the unavoidable interest added on."

Ponder that, it's true isn't it? I see you nodding your heads up and down. (No, I'm not spying on you with a drone, or anything for that matter.)

In the 1998 October General Conference of The Church of Jesus Christ of Latter-Day Saints this counsel was given by President Gordon B. Hinckley : We are beguiled by seductive advertising. Television carries the enticing invitation to borrow up to 125 percent of the value of one’s home. But no mention is made of interest.

President J. Reuben Clark Jr., in the April 1938 general conference, said from this pulpit: “Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you” (in Conference Report, Apr. 1938, 103).

President J. Rueben Clark Jr. also advised us to, and I'm going to capitalize this for emphasis, "AVOID DEBT AS WE WOULD THE PLAGUE." To me that's pretty powerful.

SO HOW DO WE GET OUT OF DEBT? I'm going to show you how I do it! Remember there's more than one way to skin a cat, or so I've been told. I've never tried to skin a cat.

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Have you ever made a snowball then all the sudden decided this is awesome snow, and so you decided to start rolling that snowball on the ground? Pretty soon your pushing that huge snowball which is about waist high around the yard gathering up all the snow and you look around and there isn't anymore snow on the ground it's just dead brown grass and you are staring up at this snowball that's bigger than you are tall? I HAVE! Now relate this to your debt and bills. Dave Ramsey calls this method the Snowball Method, others refer to this as the Debt Elimination Calendar, one is included in the One For The Money: Guide To Family Finance by Elder Marvin J. Ashton. 

We have small bills with just a few hundred dollars, then we have ones with thousands of dollars, right? RIGHT! The best way that I've found to get motivated is to pay off your first couple hundred dollar bill. For Example lets say you pay $25.00 on a bill that you owe just a couple hundred dollars on, after a few month's you pay that one off, then you move that $25.00 to your next bill that you pay $45.00 on, so then you are paying $65.00 and after you pay that off you will take that $65.00 and move it to the next smallest bill, etc. etc.

I hear people ask well why wouldn't I pay off my bill with the highest interest rate? Dave Ramsey teaches the Snowball method because the whole principle behind it is, the motivation you get by paying off the smallest debt first finally making it to the biggest and final one, that your smashing with huge payments.

If you want to pay off the debt with the highest interest you certainly can, but you won't see the fruits of your labor as soon as you would by working the Snowball or Debt Elimination Calendar. Again, there's more than one way to skin a cat.

A couple weeks ago, we were able to pay off some bills and refuel the $1,000.00 emergency fund due to a work bonus. My sweet wife took the smallest bills that we have left, and called each one said (And I'm paraphrasing, because I was at work I wasn't here to witness the conversations, but I believe my wife.) I have this much money to offer you can we make a payoff final with this amount, it worked we saved money and put that on the next one. We paid off two hospital bills this way and it was a phenomenal feeling. WE CAN ALMOST TOUCH THE LIGHT!

Pretty soon I'm going to look around as Cowboy and my co-worker has and I'm just going to see dead bills laying around not calling on me to pay them and I'm going to roll that big last snowball off a fricken cliff and it'll be dead too!

Follow the ways of those who are successful, as Dave Ramsey says don't take money advice from those who are broke and live paycheck to paycheck. I certainly agree! That's why I have done a massive amount of reading on this subject in the last year and a half and spoke with Cowboy and followed Dave Ramsey and a couple of others and finding this co-worker who is debt free keeps the fire stoked and burning. You need to do the same! 

Light the fire and keep it burning by surrounding yourself with others who have the same goals or who have already done it and are living it!

I have just covered a little bit of this, but I hope you get the big picture of how to do this, it isn't rocket science, but it does take time. I'm warning you! IT TAKES TIME TO GET OUT OF DEBT, JUST AS IT TOOK TIME TO GET INTO DEBT! DO NOT GET DISCOURAGED!

COWBOY UP 

AND 

FIRE YOUR DEBT!

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BOOK RECOMMENDATION

The book I'm going to recommend on this post has become one of my favorite
called The Legend of the Monk and the Merchant, Twelve Key's to Successful Living by Terry Felber. This book takes you on a journey and tells you about a Grandfather who teaches a young boy about life personally and professionally in a fictional tale, while teaching true real life principles we can all use immediately.

This is another quick read and if you were just reading for leisure can be read in a couple hours.

Credit Cards

This week I wanted to tell you about Credit Cards (CC's) and the history behind them in the United States and the different fees the CC Companies can and, more often than not, hit you with.

I have said it before and I'm going to say it again to start off with "A CREDIT CARD COMPANY IS NOT YOUR FRIEND, THEY DO NOT GIVE YOU FREE MONEY, THEY ARE NOT A CHARITY, THEY ARE IN BUSINESS TO MAKE MONEY AND YOU ARE THEIR NEXT PAYCHECK!"

According to creditcards.com in 1946 the first Bank Card was introduced by a banker named John Biggins of Biggins Bank in Brooklyn called the "Charg-It" card. You had to be a member of Biggins Bank and the charge could only be made locally. The bill would be sent to Biggins Bank and the Bank would pay the merchant directly.

In 1951 a bank in New York introduced a charge card for use only by loan customers of Franklin National Bank in New York.

Then came the national recognition of Credit Cards by a man named Frank McNamara who introduced the Diners Club Card in 1950, this card could be used in travel and at diners, by 1951 Diners Club had 20,000 cardholders. Originally the card was made of cardboard, and then over a decade evolved into plastic, which we know it as today. (According the creditcards.com American Express and possibly other companies tried to get the public to accept the  concept of a charge card but were unsuccessful, it was the Diners Club that set the trains wheels moving.)

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When I was in college (MEAGERLY EMPLOYED) I received my first CC, I remember a friend saying you have a CC? I said yeah I do, he said your going to go into debt. I said nope, and I didn't until years later. I would buy a small something on it  and pay it off every single month. Then I got another one, via an unsolicited phone call, again paid it off every month I used it. Then the inevitable happened, I didn't have the money to make the monthly minimum payment. Then the dominoes effect started, UUGGHHH! I FELL INTO THE GREAT CC TRAP!

Via Leo Blanchette

The pains of this were pain staking, I unfortunately let them go to bill collectors and as we all know, you don't have to be a genius to work in a dingy collection call center. After deciding I was going to man up I went and paid a debt management company to handle my outstanding debts by me sending them one lump payment and a little extra to cover the cost of them doing my dirty business. (All they really did was take my payment and divvy it up and send payments to the different companies and took $50.00 of my hard earned money.) I then had a thought while driving to work, I thought why the heck am I sending these fools an extra $50.00 each month when I could apply that to another bill.(We were living in Utah at this time.) So one night I pulled my credit report, and this time I saddled up and called each one of my creditors and told them I wanted to take care of these outstanding bills in a civil manner and here's all I could pay. I remember one guy saying "We respect your call and we would much rather work with you than the other companies anyway". We were able to get everything paid off but our car before we moved back to Wyoming.

When we got back to Wyoming, the cycle started all over again. I know, I know, STUPID with 10 Zeros on the end as Dave Ramsey would say. Then I lucked out, I got a large bonus from work and the only thing we didn't pay off was the Suburban. THE NUMBER ONE MISTAKE I MADE WAS NOT CLOSING THE CARDS! (I know there are nay-sayers that will say, well if you close a credit card you will hurt your credit.) I SAY CREDIT IS HOG WASH! SO DOES DAVE! SO DOES COWBOY!

If you pull any credit report, it will tell you that credit is (I'm paraphrasing) the ability to go into debt several times and pay it back several times. Now how smart is that to go into debt so you can take on more debt? I think you'll agree with me that it's pretty dumb.

There is a movie on Netflix called Maxed Out, and it will tell you some stories and numbers that will haunt your soul. Watch it, come on go watch it, JUST WATCH IT!

I unfortunately fell for the instant gratification of gotta have it now. We all know those people you're around everyday, who go out and buy stuff and come back to work and tell you "I bought this and this, and we went on this vacation and it was wonderful......blah blah blah" and you're thinking, how are they buying all this crap, going on these crazy vacations and we're making the same amount of money roughly? (Maybe they're dealing drugs or in some illegal black market scheme. My thoughts are if it's questionable and maybe illegal it probably will come back to kick you in the butt sometime soon.) My wife had a childhood acquaintance who would always brag about all these vacations and things they would buy and it came to light they were embezzling from the government and had to face a federal judge for sentencing. (Just an example of what not to do.)

Anyways I was back into CC debt, and for some reason the CC companies kept raising my limit, and I WAS DUMB AND KEPT SPENDING! And then I had to pay the consequences, AGAIN!

So how do Credit Card companies make their money and work? I'm going to show you this awesome flow chart!

thefinancialhighway.com

Did you see how they make money? If you didn't look again! Why would you pay these "friends" money that you work hard for? Instant Gratification? Why? Because you couldn't save for it?

I wanted Cowboy to build me another hat, so what did I do? I SAVED FOR MY NEW COWBOY HAT! I know, crazy! It took me a couple months to save the money, but guess what? I paid for it in CASH! Do you want to know how I did it? OK, fine, I'll tell you. I took an envelope, I wrote NEW COWBOY HAT on the front of the envelope, I then put CASH in the envelope and saved up until I had enough money to give Cowboy at Cowboy's Classic Hat Company to build my new Dwight Yoakam replica hat. (By the way you nailed it Cowboy.)

I say you truly can't be alcohol free if you have a beer sitting next to you at dinner, same goes you can't be debt free if your using a credit card each an every month. CUT IT UP!

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Every time I get one of those dumb CC offers in the mail my kids fight over who gets to rip it up first, when my oldest daughter does it she throws it everywhere like confetti. My wife and I have actually outlawed the words Credit Card from our home. What? What's that? You ask why we did that? BECAUSE WE'VE FELT THE DEVASTATING EFFECTS IT HAS ON OUR FAMILY AND RELATIONSHIPS. 

My friends I hope you understand again THE CREDIT CARD COMPANIES ARE NOT YOUR FRIENDS THEY ARE IN BUSINESS TO MAKE MONEY AND YOUR THEIR NEXT PAYCHECK!

SO LET'S TAKE A STAND AND RID OUR LIVES OF THESE PLASTIC CARDS AND LIVE OFF OF COLD HARD CASH! (Well Mr. Mitchell what's in your wallet? A Credit Union issued Debit Card and CASH. A Debit Card works just like cash, I pay ZERO interest, I HAVE ZERO FEES!) Some merchant's will actually give you a discount if you pay with cash. My wife and I had to get a new washer about a year ago, we found the one we wanted, and I asked the lady are you going to give me a discount if I pay you cash because you won't have to pay the credit card fee of 4% and she came back after talking to her manager and he gave us 10% off. NOW THAT'S SUCCESS!

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BOOK RECOMMENDATION

This week I'm going to recommend The Total Money Makeover by Dave Ramsey. This is the book that started it all for me and my family. He will walk you through common sense advice and show you why things are the way they are and back it all up with stories and statistics. If you read this, I think you will agree you will want to do all you can to rid yourself of debt.

COWBOY UP

 AND 

FIRE YOUR DEBT!

WHAT A TRIP!

First off I need to apologize for the delay of the weekly blog post this week. My wife and I had to go to Salt Lake City, Utah to get some checkups at our Doctors down there. No worries everybody things went well for both of us.

Since Sunday is just a few days away I'm going to be brief on this post and tell you of our trip we had and the testimony I built in just a few minutes of time.

Thursday February 27th we were about 10 minutes from hitting downtown Salt Lake City (6 hours from Casper Wyoming) traveling in Parley's Canyon in the middle of a rain/snow storm when all of the sudden the wipers on our car quit working, of course you start thinking "Oh No! What's Happening?". So we pulled over on the next exit which was called the Lambs Canyon exit and my immediate thought was "The fuse blew!". So I crawled up under the dash and pulled the wiper fuse. As I was pulling the fuse I heard my wife and children saying a prayer that we would be able to fix the problem or get the help we would need. As I was struggling to get another fuse (that I robbed from another accessory in the fuse box that I knew I could live without for a few minutes) a young man who introduced himself as Cole pulled up to help. As Cole and I were trying to get the fuse back in (since the engineers put the fuse box in such a convenient spot) a tow truck pulled off the exit and drove by and backed up and asked if we needed a tow. I asked a few questions such as how much is your charge, and how far will that get me and let him know I had my wife and 4 children with us. Just as I was talking to the tow truck Cole was able to get the fuse back into the wiper spot and much to my dismay we still had no wipers.

Oh great! I'll have to get a tow, so the tow truck lowered it's flat bed and asked me to drive upon the bed, well just then the car had a loss of engine power. So we had to be winched upon the flat bed. He then asked which dealership we wanted to be towed to, I had no idea! He named a few and my wife called Jerry Seiner GM and gave the phone to me to talk to the service department. I was told that the evening service consultant would give me a call right back. When the service consultant called back I told him I was in town from Casper Wyoming for some doctor appointments and was being towed in and let him know the problems I was having, he then informed me they could look at my car at 6:30 p.m. that evening. I thought that's weird most service departments I've heard of close at 6:00 p.m.

Remember how a couple weeks ago I told about the importance of the EMERGENCY FUND? I also told how we have an auto repair fund in last week's blog post. Our auto repair fund didn't have but a couple hundred dollars in it so we knew we'd have to dip into the emergency fund and were we ever glad we had it.

So the tow truck dropped us off at the dealership and on a big sign in front of the dealership read a sign "SERVICE DEPARTMENT OPEN TIL MIDNIGHT". Wow this is another answer to a prayer. I walked in and the service consultant said "You must be Brandon from Wyoming!" I said I am, and he said first off let's get you and your family back on the road by getting you a rental car. So they loaded us up in the only thing they had at the time that would hold a family of 6, a BIG OL' 15 PASSENGER VAN! Uhhh yeah not my ideal vehicle but it had 4 wheels and the wipers worked. I'll take it! He then gave my wife and children complimentary drink coupons that they could use in the restaurant connected to the dealership. 

As we were waiting for the rental van to get to the dealership I was kind of concerned that the repairs might be more than our $1,000.00 Emergency Fund, since the car also experienced loss of engine power. So I went off in the corner and said a prayer to my Heavenly Father that he would watch over and protect us and that the repairs would be under our $1,000.00 Emergency Fund.

We got checked into the hotel and we took the kids to the swimming pool and my phone rang and it was the dealership. He said what was wrong with the car and told me that everything out the door, parts, labor and tax I would be looking at $785.33. I told him sounds good, get it fixed please! He said they had to order some parts in and so it would tomorrow afternoon before they could get it finished but they would get as much done that night as they could. No worries I had the VAN to run around in!

THE VAN AND THE FAMILY!

So my friends at the end of the day I paid:

-Tow $60.00

-Rental Car with Insurance (since they said a 15 passenger van was a specialty vehicle by most insurance standards and I didn't have time to call my insurance and double check) $88.00

-Rental Car gas $28.31

-Car Repair Bill $785.33

GRAND TOTAL $961.64

THAT MY FRIENDS IS THE IMPORTANCE OF AN EMERGENCY FUND!

Like Cowboy said it's not really an emergency anymore it's more of an inconvenience. Inconvenience it was!

There was a time in my life when I wouldn't even of had the $60.00 for the tow. GLAD THOSE DAYS ARE OVER!

I hope you have enjoyed my testimony about the importance of the EMERGENCY FUND!

I will see you again on Sunday and I hope you have your Emergency Fund and are getting used to living on a BUDGET! YEAH I SAID IT, AND I'LL SAY IT AGAIN! B U D G E T!

REMEMBER 

COWBOY UP 

AND FIRE YOUR DEBT!

(Thanks Erin, Cowboy and your Awesome Family and Dave Ramsey and his team, and Integress Solutions for your inspiration and God my eternal Heavenly Father for all of your blessings!)