There’s a Cure for Debt!

Budgeting. What comes to your mind when you think of budgets? Maybe just something else you would have to find time for in your already overbooked scheduled.

What if I told you that I have found the cure for the disease that has you have been suffering from for years? Would that make you happy? Would you want to find out all you can about the cure? Well, I have news for you. There is a cure for your “disease” of debt. It’s called budgeting. But the cure will only work if taken as directed. I call debt a disease because it can literally take your health and happiness from you.  One of the symptoms of debt is overspending so the cure will address this issue.

I have found over the years that the term budget seems to be unfamiliar to many people. Simply stated, a budget is a plan for your money. A budget shows the money coming in to your household and the money going out of your household. Often, people know what money comes in but they really have no idea of how much is going out. In some situations it’s as if there are leaks somewhere and money is just disappearing.

What I would like for you to do today is to make a list of all your monthly expenses. In other words, list all monthly bills such as House payment or rent, utilities, cable, phone, insurance, groceries, savings, charitable giving, etc. Everything should be listed and I do mean everything, even that one pack of gum. If you spent $4 on a specialty cup of coffee one day, include that in your food budget. Don’t forget to include items such as Netflix, Hulu, Life Insurance, bank fees, or any recurring expense that you may not think is important. Sometimes it’s the small expenses that allow money to leak out of your budget unnoticed.

Next, I would like you to take a look at a budget form under the Budget tab entitled “Zero-based Budget Template.” The form has a tab for each month that can be found at the bottom. As you can see there are categories for Housing, Utilities, Charitable Giving, Saving, Personal, etc. All you need to do is enter your amounts in these categories. If you don’t see a category listed, you can add a new category. The template is set-up to calculate the totals for you. The object of a zero-based budget is to allocate all money so that you have a zero balance at the end of the month.

Each month you will need to complete a new budget. Some category totals do not change because they are what we call “fixed” expenses meaning they stay the same each month. Other items may change from month to month and these are called “variable expenses.” Just complete next month’s budget for now. At the end of the month, go back and see how accurate your budget was. If you over-allocated in some categories, you can make adjustments for the next month. The same goes for under-allocated categories. Remember that unexpected things can and will happen that will change your budget.


Debt-free is the way to be!

I feel safe to say that no one grows up with dreams of living a life of debt. It’s just something that most of us fall in to without really noticing until we are deeply consumed in debt. I remember the feeling when my husband and I received our first credit card. It was with a local retail store in our hometown. We thought we were something special! But this is where it all began to fall apart. At first, the payments were easy to make. Unfortunately, what was just a little debt turned into a lot of debt.

All of sudden we began receiving credit card offers in the mail. We were preapproved! But, the devil is in the details. The interest rates were unbelievably high and the minimum payments only covered the interest. The principal balance just kept increasing even though we were making payments. We just couldn’t seem to dig our way out of the hole of debt!

Then we both needed newer cars or so we thought. The new car smell was gone on the other cars so it had to be time to purchase another one. Sound familiar to you? So here we were with credit card debt, 2 car payments, and a mortgage. It was difficult just to stay afloat. Living paycheck to paycheck was a stark reality. I began to realize this was not the life I had dreamed of and I decided it was time to turn things around. I began reading all I could find on getting out of debt. I didn’t know if it would really work for us, but I felt we had to give it a shot.

Budgets weren’t familiar to me so I basically had to learn everything from the ground up. This is one of the reasons I am so passionate about helping you take control and get out of debt. There is so much information out there to help and I want to make it easy for you.

According to an article on, only 40% of families in America use a budget. In other words more than half of all American families don’t use budgets. Over the next few blogs, I intend to break the budget down into doable steps. We will walk through the process together.  A good article to read with a graphical breakdown of the average American budget can be found at:

Remember there isn’t a quick fix for getting out of debt. Commit to making the changes in your spending and saving habits that are necessary to turning your financial situation around for the good. You are in this for the long haul. Short bursts of energy may seem good at the time, but it is the finish that is important. You can and must finish this debt-free marathon! You owe it to your family to leave a strong financial legacy!

5 Reasons to Live on Less than you Make

Reason 1: Grow your wealthA great way to grow your wealth and net worth is to not outspend your budget. Always have a category for investing and wealth building. Just paying your bills and nothing more will not build wealth for your family. Many people only save and call that investing. You won’t be able to get ahead this way and will have a difficult time keeping up. I have watched too many people meander through life thinking saving alone will be enough.

Learn all you can about different types of investment vehicles. There is a multitude of free information available to you in videos, articles, books, etc. This is one area of your life in which you need to become educated. Many online discount brokerage companies have webinars to teach the basics of investing. Invest your time into this type of education. You won’t regret it.

Reason 2: Time is on your sideDon’t put off saving and investing one day longer. Live on less than you make and you can invest the difference. With more years to invest until retirement, your earnings will have longer to grow and build momentum.

I tell my students all the time to begin investing as soon as possible. If you are a parent, your children need your guidance on how to plan for their future. They want to know you have college savings set aside for them. The compounding effect is an important component to building your wealth. Don’t waste any more valuable time. Start today!

Reason 3: Unexpected events happen – We all know it’s true. The air conditioner breaks down unexpectedly during July when it’s 90 degrees in the shade. The pipes burst on the weekend and you have to pay extra just to get the plumber to come out. The engine in your car dies and you don’t have a way to get to work. These things just happen and you have to deal with them when they do. Having money set aside for these types of emergencies is a necessity.

Do you have at least 3 months worth of income set aside for emergencies? What if you were to lose your job tomorrow? Are you prepared? If you live on less than you make and you lose your job, you can survive on a lower income because you are already living that way. When you have your budget stretched to the max and you lose your job, you can’t make it financially.

Reason 4: You want to retire some day – I think we can all agree that we hope to retire some day. Most people don’t really want to work until they are 80 years old, but some people have to work well into their 70s just to make ends meet. They don’t have a choice, but you do. Make those retirement plans and set goals to get you there. By living on less than you make, you can invest more into a retirement plan so that you don’t have to work longer unless you choose to.

Reason 5: You want to leave your family financially secure – I have always wanted to leave my family much better off financially than they are now. I hope to leave a lasting legacy for generations to come because I wisely invested my money. The last thing I want to do is be a financial burden on my family. You can still have a great life by living on less than you make and you can bless future generations for years to come.

What will your financial legacy be if you continue down the financial path you are currently on? Will it be a legacy of blessings or of burdens? Only you can make the choice. Choose to leave a legacy of financial freedom!

7 Lessons from billionaire Warren Buffett!

Inc. magazine published an article describing the lessons we can learn from Warren Buffett one of America’s wealthiest businessmen ( Here are 7 of the lessons mentioned:

Lesson 1: Make wise investment decisions. Mr. Buffett chooses to invest in great companies with great ideas. He invests in companies such as Coca Cola, General Motors, Wal-Mart, Proctor & Gamble, GE, Johnson & Johnson, Kraft Foods, VISA, etc. (

Lesson 2: Don’t forget where you came from. Mr. Buffett started out as a newspaper deliver boy for The Washington Post when he was in high school. This relationship served him well over the years. His company has been one of the largest shareholders of The Washington Post.

Lesson 3: Live on less than you make. He still lives in the same house he bought in the late 1950s. It has been updated, but it is still the same home. He didn’t sell and buy a different home once his wealth grew and he could afford more. Oftentimes people live so frivolously they risk losing everything. Not Mr. Buffett. He chooses to live a frugal lifestyle and it has definitely paid off.

Lesson 4: First of all save, then you can spend. By saving first, he was able to build more wealth because he spent after he saved. Today we tend to have the mentality of spend first then if there is money left we will save. Unfortunately, this is an ineffective way to build wealth.   Set up an automatic withdrawal from your account that goes into saving and investing. You won’t have to worry about putting the money in regularly if it is automatic.

Lesson 5: Research investments before putting your money there. Make wise investment choices by doing your research. If your research reveals that a stock is strong, you will be less afraid to put your money into it. Don’t just invest on a whim. Be an educated investor.

Lesson 6: Never give up! Sometimes it may seem like things just aren’t going to work out, but don’t give up hope. Keep making strides to turn your financial situation around. Small steps in the beginning become bigger steps along the way that will lead you in the direction you need to go.

Lesson 7: Stay in good company. We all know it’s true. People often judge you by the company you keep or in other words those you hang around with. Surround yourself with people who have the same ambitions as you. You should always strive to grow and not remain stagnant. Learn from those you admire who have achieved the things you hope to achieve. Glean from their pool of knowledge. If you want to have financial freedom, spend time with those who have already achieved this status. Find a financial mentor that is willing to spend time giving you advice that worked well for them.

You can apply these 7 lessons to your own life. One thing you can start with today is to choose a few investments that you are interested and spend some time researching the companies. Several resources I recommend for researching investments are:

Another action you can take today is to consider areas in your life where you can spend less in order to save more. Even a few dollars a day will help. To save just $1,000 a year you would only have to save $2.74 per day. Is there something you can give up in order to reach this goal? Only you can make that decision. What will you do today to change your future? I challenge you to find at least $2.74 today that you can save. The first step is usually the hardest so just take it day by day. Feel free to share your savings choices by posting to the comments section. Let’s see how creative you can be!

Don’t let stress squeeze the life right out of you!    6 Tips to help.

Stress Less: According to a report by the American Psychological Association, almost 72% of adults surveyed said they felt stressed over money at least some of the time and approximately 22% said they felt extremely stressed over money ( Shocking statistics that need to change!

How can you stress less? Step back and take a deep breath. One way to help alleviate the amount of stress you feel is to take charge of your finances, not the other way around. I speak from experience. I have been so stressed before about my family’s finances that I couldn’t eat. I almost allowed stress to take my health and I am determined never to let that happen again. My hope is that you haven’t let financial issues take you to this point. If you have, you need to turn it around today!

Here are a few tips for stressing less over money:

Tip 1: Create a Budget – Contrary to popular belief, a budget is not difficult to create. List the money you have coming in and the money you have going out. Find where your money is going and put it where it works best.

Tip 2: Stick to your Budget – Needless to say, if you don’t stick with the budget it won’t work. I know what you’re thinking. I must be a rocket scientist to have figured that one out. It’s like having your personal trainer create a diet and exercise plan for your specific body type, age, gender, etc., and you don’t follow it yet you expect great results. How can it happen if you don’t put in the effort or have the willpower to do it?

I am often amazed at people when they say they just can’t stick to the budget. Here is my simple solution. Don’t spend more than you make! If your net (bring home) pay is $2,600 per month, you can only spend $2,600 per month. Live on what you make, not on borrowed money.

Tip 3: Get Out of Debt – You need to pay your basic necessities such as housing, utilities, and food first and then work on getting the emergency savings in place. I suggest you make a list of all your debts and put them in the order of the smallest balance to the largest balance. After your necessities are covered, begin paying off the smallest balance first. Pay all you can on the lowest balance debt until it is paid off. This frees up money to pay on other debt and before too long you will have paid off all your debt. Discipline is key here so don’t give up!

In this step we want to focus on paying off all the debts except your mortgage if you have one. Have you noticed that a laser can only point to a small area and not the entire room? That’s because the beam of light is focused. It has a specific purpose. It’s not trying to light up the entire house. Your home is one of if not the largest purchases you will ever make. Get those smaller debts paid for and then you can laser focus on the mortgage.

Tip 4: Save Money – One of the greatest tools for building wealth is saving your money and letting your money work for you. The compounding effect would come into play here. At first it may not seem like your money is growing much at all but given time, the compounding effect has exponential returns!

Step 5: Stay Out of Debt – Here is another ingenious statement: Once you get out of debt, stay out of debt! It would be similar to losing 50 pounds and then gaining the 50 pounds plus 10 more pounds. All the hard work and effort would have to be repeated with additional effort. Get rid of debt for good and get your mind focused on never falling prey to debt again! Learn to save and pay cash for purchases.

Tip 6: Enjoy life – Reward yourself for all the hard work and determination by enjoying your new debt-free life. There is such a peace and contentment knowing you have conquered this area of your life. Just imagine how wonderful it will be to enjoy the blessings of life by not having to worry about living paycheck to pay check again!

Take time today to make a list of all your income and expenses. Download the Monthly Income and Expenses Worksheet found on the “Forms” page to help you with this task. By completing this worksheet, you will be able to see where you may have problems in your spending. There is a Sample Tab with a completed worksheet for you to see. Once you have completed your worksheet, make a list of all your debts from the smallest to largest balance. Make a plan today to pay off the smallest balance within a short period of time. You can make this first step today toward a debt-free and more stress-free life!

Debt-Free Habits

I recently read the article “10 habits of debt-free people” by A.J. Smith at In this article, Smith lists 10 great habits people should model if they want to live without debt.

  1. Debt-free people pay attention to details – We discussed this topic a few posts earlier when we mentioned watching your bills to make sure there aren’t any unnecessary charges. You should also look at your statements to look for areas where you may be overspending. My bank’s website has a tool that tracks our spending and shows a pie chart of the month’s expenses. It can be an eye opening experience to see how much we actually spend in each category.
  2. Debt-free people know their finances – Understand how your finances and taxes work. In order to handle your finances responsibly, you need to understand how it all works. I am often surprised at the number of people who really do not understand personal finance issues. Be educated when it comes to your finances.
  3. Debt-free people pretend they make less – I’m sure you have heard this before, but learn to live on less than you make. My husband and I do not let our annual raises increase our budgeted spending. When we get a raise, we find places to put the additional money whether it’s retirement savings, charitable giving, college savings, etc.
  4. Debt-free people think long term rather than short term – I recently taught on the subjects of instant and delayed gratification. Today’s society wants things now without having to wait. This type of action is called instant gratification. Saving up and waiting to purchase something and paying cash for it would be considered delayed gratification. Debt-free people have learned the benefits of delaying gratification and avoiding debt.
  5. Debt-free people aren’t afraid to ask – What does it hurt to ask? Frequently, I have asked for discounts either when I am checking out with my items or before I make my purchasing decision on items. More often than not, there is a coupon in a drawer or a code at the register that the clerk will enter for me. I look at it this way; the worse that can happen is they just say, ”No.” I often embarrassed my children when I asked for a discount, but I have noticed they are beginning to ask for discounts and coupons, as well.
  6. Debt-free people save money – They have learned the discipline it takes to save and become debt-free. People that spend without saving will have an extremely difficult time of getting out of debt and reaching their financial goals. Always pay yourself first if at all possible. Save, save, save!
  7. Debt-free people set financial goals – SMART financial goals are key to living debt-free. Set a goal and work consistently to reach the goal. Stay the course!
  8. Debt-free people say no – Learn when to say no to expenses you have not budgeted for in your monthly budget. If you have spent all your money in the food budget for the month and you don’t have money set aside in another category for dining out, you would need to train yourself to say no if someone invited you out to an expensive dinner somewhere. These little splurges can add up quickly and could wreck your budget for the month.

**But, I will caution you to make sure you have a category in your budget for fun. What I mean is you that you shouldn’t be so strict in your budget that you fail to enjoy life even though you are trying to live debt-free. I have met people from time to time who tried to live so frugally that they were living a miserable life entirely. Budget a category of money that can be used for those things you enjoy. My family has a dining out category and a vacation category. We won’t do either of these unless we have the money set aside.

  1. Debt-free people know the value of their money – Much of my family’s budget is paid for in cash. We know how much we will have to live on for the week so we have to budget it accordingly. It is more difficult for me to spend cash than it is to swipe my debit card. I am a visual person so actually having to give someone my cash can be difficult for me at times. I like to look in my wallet and see that I have money left at the end of the week. If you are someone who always uses a debit card for transactions, try using cash for a while. Sometimes I think part of the reason we have so much debt today is because we don’t feel the pain of spending cash.
  2. Debt-free people value having experiences over having “stuff “- They see more value in spending time with friends and family than spending more time at work to make more money to buy more things. My husband and I often take fun day trips that really don’t cost much money at all. Just the other weekend we visited our local Botanical Gardens and enjoyed our time together. Admission was free but the time spent together was priceless.

Many people may say they can’t live the debt-free life for one reason or another, but I have learned it just means they won’t. I say its too costly not to live debt-free.