Comments on: How to Get Out of Debt http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/ Live more. Spend less. Sat, 21 Nov 2009 05:04:26 -0500 http://wordpress.org/?v=2.8.6 hourly 1 By: Link Love - Home, Family, and Money « Saving Money Ideas http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/comment-page-1/#comment-16299 Link Love - Home, Family, and Money « Saving Money Ideas Sun, 26 Apr 2009 01:55:34 +0000 http://beingfrugal.net/?p=1943#comment-16299 [...] How to Get Out of Debt at [...] [...] How to Get Out of Debt at [...]

]]> By: * Weekly Highlights: April 19, 2009 http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/comment-page-1/#comment-16173 * Weekly Highlights: April 19, 2009 Sun, 19 Apr 2009 16:14:17 +0000 http://beingfrugal.net/?p=1943#comment-16173 [...] Dollars — Enough is a very big wordAnd here are a few more articles for your reading pleasure:How To Get Out of Debt at Being Frugal — An easy to follow guide to help you get rid of your debtHow to Spend a Tax [...] [...] Dollars — Enough is a very big wordAnd here are a few more articles for your reading pleasure:How To Get Out of Debt at Being Frugal — An easy to follow guide to help you get rid of your debtHow to Spend a Tax [...]

]]> By: ABCs of Investing http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/comment-page-1/#comment-15881 ABCs of Investing Mon, 06 Apr 2009 03:10:52 +0000 http://beingfrugal.net/?p=1943#comment-15881 [...] Being Frugal wrote about how to get out of debt. [...] [...] Being Frugal wrote about how to get out of debt. [...]

]]> By: Mrs. Micah http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/comment-page-1/#comment-15879 Mrs. Micah Mon, 06 Apr 2009 01:17:31 +0000 http://beingfrugal.net/?p=1943#comment-15879 I've found it very important to be realistic about debt. As you say, we didn't get into it overnight and we're not going to get out of it overnight. It's easy to get excited, rip up credit cards, etc. It's hard to have the discipline to say "no, we can't afford that" or to send an extra $25 towards debt when the debt is so big and the $25 could buy something you want right now. Micah suggested we look at it as an opportunity to build character by developing the discipline we need. I think you've done a great job of that, and having your blog to show it helps others keep going. :) <abbr><em>Mrs. Micah’s last blog post..<a href="http://feedproxy.google.com/~r/MrsMicah/~3/8TZ1bz60LKI/" rel="nofollow">How to Understand and Overcome the Sunk Cost Fallacy</a></em></abbr> I’ve found it very important to be realistic about debt. As you say, we didn’t get into it overnight and we’re not going to get out of it overnight.

It’s easy to get excited, rip up credit cards, etc. It’s hard to have the discipline to say “no, we can’t afford that” or to send an extra $25 towards debt when the debt is so big and the $25 could buy something you want right now. Micah suggested we look at it as an opportunity to build character by developing the discipline we need.

I think you’ve done a great job of that, and having your blog to show it helps others keep going. :)

Mrs. Micah’s last blog post..How to Understand and Overcome the Sunk Cost Fallacy

]]> By: Violet Weed http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/comment-page-1/#comment-15864 Violet Weed Sat, 04 Apr 2009 13:47:10 +0000 http://beingfrugal.net/?p=1943#comment-15864 Just pay attention to Dave Ramsey (daveramsey.com) he's the guru. As for me, I've NEVER been in debt because I ALWAYS pay cash. I drive a 10-year-old truck with a dented passenger side from an encounter with black ice on a highway in Pennyslvania. I have one credit card with zero percent interest (possible, if your credit is spotless, and mine is because I don't use credit to live). I bought that truck the last day of the year, last hour the auto store was open, and I paid cash. First and last new vehicle I ever bought, in celebration of my 50th year of life. I use my credit card for all my monthly purchases and I pay it off monthly, too. If you are married, and both are working, live on ONE paycheck and bank the second. Don't eat out, you never know who is a crazy guy waiting to poison you anyway. Plan ahead for eventualities, like having an hsa. Pay your utility bills 3 months in advance, you won't lose a lot of interest on that money, and its a safeguard. Don't have cable tv, in fact, don't have tv. Stay current in the technology for your chosen career field and you'll never be without a job, or job offers. I'm 60, keep my resume posted on technology sites, and watch what skills recruiters are asking for. I work project. But unlike every other contractor I know, I'm NEVER without 'continuity of paycheck', but I haven't had to work for financial reasons since I was 42. (Not difficult if you live below your means.) If you lose a job and don't have emergency funds (I have 15K for emergencies, 1K is laughable), IMMEDIATELY rent out a room in your home, try for a woman in her, err, 60s. ;-> Life is grand when you work because you ENJOY it, and you have absolutely NO DEBT. You can pay off any 30-year mortgage in SEVEN years if you DOUBLE your payments. Think that is difficult? When I bought my first house in 1970 interest rates on loans were 'standard' (in California) at 17-18%. 4-6% you think is 'high'?? Also, don't buy more house than you need, aka no 5-6000 sq ft 'mansions', after all, you have to keep them CLEAN. Just pay attention to Dave Ramsey (daveramsey.com) he’s the guru. As for me, I’ve NEVER been in debt because I ALWAYS pay cash. I drive a 10-year-old truck with a dented passenger side from an encounter with black ice on a highway in Pennyslvania. I have one credit card with zero percent interest (possible, if your credit is spotless, and mine is because I don’t use credit to live). I bought that truck the last day of the year, last hour the auto store was open, and I paid cash. First and last new vehicle I ever bought, in celebration of my 50th year of life. I use my credit card for all my monthly purchases and I pay it off monthly, too. If you are married, and both are working, live on ONE paycheck and bank the second. Don’t eat out, you never know who is a crazy guy waiting to poison you anyway. Plan ahead for eventualities, like having an hsa. Pay your utility bills 3 months in advance, you won’t lose a lot of interest on that money, and its a safeguard. Don’t have cable tv, in fact, don’t have tv. Stay current in the technology for your chosen career field and you’ll never be without a job, or job offers. I’m 60, keep my resume posted on technology sites, and watch what skills recruiters are asking for. I work project. But unlike every other contractor I know, I’m NEVER without ‘continuity of paycheck’, but I haven’t had to work for financial reasons since I was 42. (Not difficult if you live below your means.) If you lose a job and don’t have emergency funds (I have 15K for emergencies, 1K is laughable), IMMEDIATELY rent out a room in your home, try for a woman in her, err, 60s. ;->

Life is grand when you work because you ENJOY it, and you have absolutely NO DEBT. You can pay off any 30-year mortgage in SEVEN years if you DOUBLE your payments. Think that is difficult? When I bought my first house in 1970 interest rates on loans were ’standard’ (in California) at 17-18%. 4-6% you think is ‘high’?? Also, don’t buy more house than you need, aka no 5-6000 sq ft ‘mansions’, after all, you have to keep them CLEAN.

]]> By: Lynnae http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/comment-page-1/#comment-15836 Lynnae Thu, 02 Apr 2009 19:33:16 +0000 http://beingfrugal.net/?p=1943#comment-15836 That's really an individual thing. $1000 may very well be a good starter emergency fund if you have a stable job. If not, you'll want at least a month's expenses in reserves, if not more. It depends on your risk tolerance, as well as how easy it would be to get another job, if you lost yours. That’s really an individual thing. $1000 may very well be a good starter emergency fund if you have a stable job. If not, you’ll want at least a month’s expenses in reserves, if not more. It depends on your risk tolerance, as well as how easy it would be to get another job, if you lost yours.

]]> By: Horlic http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/comment-page-1/#comment-15809 Horlic Wed, 01 Apr 2009 01:19:05 +0000 http://beingfrugal.net/?p=1943#comment-15809 Thanks for sharing. You mentioned $1000 emergency fund is not enough. In your point of view, how much should we allocate for emergency fund and any guideline that we follow to make sure the emergency fund is adequate. <abbr><em>Horlic’s last blog post..<a href="http://cash-make-money-online.com/free-online-consultants-advice-for-home-loans-property-legal-aid-interior-design-ideas-and-home-insurance/" rel="nofollow">Free Online Consultant’s Advice for Home Loans, Property Legal Aid, Interior Design Ideas and Home Insurance</a></em></abbr> Thanks for sharing. You mentioned $1000 emergency fund is not enough. In your point of view, how much should we allocate for emergency fund and any guideline that we follow to make sure the emergency fund is adequate.

Horlic’s last blog post..Free Online Consultant’s Advice for Home Loans, Property Legal Aid, Interior Design Ideas and Home Insurance

]]> By: Bandler http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/comment-page-1/#comment-15796 Bandler Tue, 31 Mar 2009 15:21:36 +0000 http://beingfrugal.net/?p=1943#comment-15796 Instead of showing the picture of cutting the creditcard you could simply write "MOTIVATION" - as TStrump said. Don't get me wrong - I really liked the picture, but it's all about motivation. Instead of showing the picture of cutting the creditcard you could simply write “MOTIVATION” – as TStrump said.

Don’t get me wrong – I really liked the picture, but it’s all about motivation.

]]> By: TStrump http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/comment-page-1/#comment-15786 TStrump Tue, 31 Mar 2009 03:51:22 +0000 http://beingfrugal.net/?p=1943#comment-15786 Motivation is the toughest, I think. We're constantly bombarded with images in advertising that say we need things. I also wonder how many people practice retail therapy to make themselves happy. <abbr><em>TStrump’s last blog post..<a href="http://feedproxy.google.com/~r/TheStrump-FinancialBlog/~3/e7nIWrxu8uM/paying-someone-to-do-your-taxes" rel="nofollow">Paying Someone to do Your Taxes</a></em></abbr> Motivation is the toughest, I think.
We’re constantly bombarded with images in advertising that say we need things.
I also wonder how many people practice retail therapy to make themselves happy.

TStrump’s last blog post..Paying Someone to do Your Taxes

]]> By: bob http://beingfrugal.net/2009/03/30/how-to-get-out-of-debt/comment-page-1/#comment-15776 bob Mon, 30 Mar 2009 15:37:49 +0000 http://beingfrugal.net/?p=1943#comment-15776 Getting out of debt and towards a model that brings long-term financial health means learning and adhering to basic sound financial guidelines. A: Retirement. Every family should put a minimum of 10% of their incomes into retirement, the more reliable being a 401k. But diversify and consider Roth IRA's, mutual funds, etc etc. Retirement comes first before anything, and when you retire, you should assume you will live from age 60-100. As such, the typical American family needs 1 million dollars worth of retirement by retirement time. Double that if you live on the coasts ( NY, CA). The older you get, the more money you will need to set aside. For example, if you're 40 and have no retirement saved up, count on putting away 20% of your paycheck. B: General savings. You should also save at least 10% of your income in the form of cash. That will assure that if you need a new car, need an emergency nest egg for hard times, or whatever is secure. C: Do not buy what you cannot afford. Much of what people buy is due to peer pressure and an antiquated belief system. For example, most couples assume that as soon as they have a baby, they MUST buy a home, and in times of a housing bubble like the one we now have, that means many people ignore the obvious and buy anyway. You should assume that your maximum mortgage on a house is 3 times annual income. So if your family makes a total of $50,000, then the house should not be more than $150,000. If you make $100,000, then $300,000, and so on. D: Make due with what you have as long as it is sufficient. Particularly cars. The typical car today will easily last 200,000 miles and make it to the 10-12 year mark. If you take care of them with simple maintenance like changing the oil when recommended and so on, they can last much longer. If it goes, has good safety features- which most cars have since the 90's- and transports your family dependably, then there's no reason to buy a new one, and in fact, buying used is still a way to save a significant amount of money. E: No credit cards except as a use to build credit. Keep one credit card and occasionally buy something and pay it off to build up good credit. Otherwise... stay away. Getting out of debt and towards a model that brings long-term financial health means learning and adhering to basic sound financial guidelines.

A: Retirement. Every family should put a minimum of 10% of their incomes into retirement, the more reliable being a 401k. But diversify and consider Roth IRA’s, mutual funds, etc etc. Retirement comes first before anything, and when you retire, you should assume you will live from age 60-100. As such, the typical American family needs 1 million dollars worth of retirement by retirement time. Double that if you live on the coasts ( NY, CA). The older you get, the more money you will need to set aside. For example, if you’re 40 and have no retirement saved up, count on putting away 20% of your paycheck.

B: General savings. You should also save at least 10% of your income in the form of cash. That will assure that if you need a new car, need an emergency nest egg for hard times, or whatever is secure.

C: Do not buy what you cannot afford. Much of what people buy is due to peer pressure and an antiquated belief system. For example, most couples assume that as soon as they have a baby, they MUST buy a home, and in times of a housing bubble like the one we now have, that means many people ignore the obvious and buy anyway. You should assume that your maximum mortgage on a house is 3 times annual income. So if your family makes a total of $50,000, then the house should not be more than $150,000. If you make $100,000, then $300,000, and so on.

D: Make due with what you have as long as it is sufficient. Particularly cars. The typical car today will easily last 200,000 miles and make it to the 10-12 year mark. If you take care of them with simple maintenance like changing the oil when recommended and so on, they can last much longer. If it goes, has good safety features- which most cars have since the 90’s- and transports your family dependably, then there’s no reason to buy a new one, and in fact, buying used is still a way to save a significant amount of money.

E: No credit cards except as a use to build credit. Keep one credit card and occasionally buy something and pay it off to build up good credit. Otherwise… stay away.

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