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

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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.

Get Your Emergency Fund On!

It seemed like whenever I would get a little bit of extra money saved up something would happen, the kids would get sick so I would need to spend money on prescriptions, or even worse, the appliances would draw straws between each other and one would decide to quit working, or the car would need repairs.

So the cycle would start over and over and over again. NO SAVINGS AT ALL! After reading The Total Money Makeover by Dave Ramsey. The first thing I did was get what Dave calls the Emergency fund together which he recommends $500.00 if your single, if you have a family get $1,000.00 dollars as quickly as possible. Keep this money liquid, which means keeping it in a safe at home if you have one, or in a savings account at your local credit union or bank.

According to a article posted on the Blaze 33% of American's do not have an emergency fund of at least $1,000.00 to use on emergency expenses. This is frightening, I was one of these people! According to the 2012 Census Bureau Report there were 313.9 million people in America, so I was one of 103.5 million Americans who didn't have an emergency fund.

Your saying to yourself how the heck can I do this? Look around your garage, your house, for free stuff online and sell it! You'll be shocked what people will buy! When I started selling things one of the things I sold was a broke down truck that didn't run on eBay, and a guy from Oklahoma bought it and had to pay a shipping company to come get it, he probably paid as much for the shipping as he did for the truck. I had to pay eBay a small fee, but I had a national audience. When you post things for sale be completely honest, if it won't run tell them, if it has dents tell them, that way it won't come back to haunt you later down the road. As George Washington said "Honesty is the best policy." 

My wife would sell and still does through Facebook groups, clothes that are in good condition that no longer fit our kids, or shoes she hasn't worn in a long time. And I say if I haven't used it in at least 2 years, another person will probably want to give me some money for it.

On the Dave Ramsey Show people ask just what are emergency's. I'll share two thoughts, one of his and one of mine because everybody's emergency is a little different. Ordering pizza on Monday night because nobody want's to cook is not an emergency! (just saying.)

- My wife's father is a insulin dependent diabetic and lives in New Mexico, if something happens I can put her on a airplane headed for New Mexico within a hour. If something happens to my parents I have enough money to put gas in my tank and start driving to their place in Wyoming to help out. These would be considered an Emergency in my family.

- A faulty transmission would be an emergency according to Dave Ramsey.

An Emergency is anything that can't be planned for, life's unexpected events. CHRISTMAS IS NOT AN EMERGENCY! IT COMES EVERY YEAR ON THE SAME DAY! IT NEVER EVER CHANGES!

Rather than having the "OH CRAP, WHAT DO I DO NOW?" moments you won't be beat down and the emergency won't be much of an emergency. Before I had my Emergency savings if something happened I would have to pull out the credit card and hope that I would have the money to pay the payments on the credit card from month to month. (we'll talk about that evil in another week or two.) Now once your out of debt you will be able to save for at least 3-6 month's of savings. This will ensure you will be able to live for an extended period of time through either a job loss or extended sickness.

President Gordon B. Hinckley of the Church of Jesus Christ of Latter-Day Saints said this in his address to members of the church in the October 2005 General Conference, "We can set aside some water, basic food, medicine, and clothing to keep us warm. We ought to have a little money laid aside in case of a rainy day."

Since getting my emergency fund and keeping it there for only emergencies I haven't had the stress or disappointment I faced in past times when things would randomly arise, when the black cloud of life would follow me around. Around Christmas time I walked into a wholesale big box store and I was looking at all the big huge t.v.'s they always have sitting right out front when you walk in, (by the way they don't just do that by happen stance, it's a marketing ploy my friends. DON'T DO IT!) anyways I was looking at these t.v.'s and thought to myself, I have enough money in the emergency fund I could be walking out of here with just about anyone of these huge t.v.'s but I'm not doing that anymore, today in my world that would be CRAZY!!!!! A T.V. STARING AT YOU IN THE STORE IS NOT A GOOD USE FOR YOUR EMERGENCY FUND!!!!!!! DUMB DUMB DUMB IDEA!!!!!!

So friends next week I'm going to go over BUDGETS and the different systems there are to use budgets with, one is very very old and I am a huge personal fan of and use. I heard the other day while listening to the audio book Debt Free Living by Larry Burkett, that just because you balance your checkbook don't mean your living on a budget. SO NEXT WEEK we'll cover that.

So until then sell anything you think of "One man's trash is another man's treasure!" so get your emergency savings fund in place and I'll see you next week. 

REMEMBER COWBOY UP

 AND 

FIRE YOUR DEBT!

P.S. I think next week I'll recommend some books to read as well, because well, I've become quite the avid reader. Readers are leaders and leaders are readers! BOOM!