Sunday, August 31, 2008

See, I'm Not Nuts!

I found this little nugget about saving and building wealth that I simply have to share. Read it HERE.

Saturday, August 30, 2008

Disturbing Little Tidbit

I was reading an interesting article about consumer spending (read it HERE), and was feeling pretty good about the fact that consumer spending is remaining UP despite all the pressures from rising prices. Then I saw a little paragraph towards the bottom that saving in July dropped by more than a third from what it was in June. That made me sad. And it reinforces for me that Brittan and I share a similar struggle with most of the rest of America: Spending is a stronger force in our lives than saving. The concept of "delayed gratification" is good theory, but tough to implement.

Earlier this week, B and I sat and talked through our spending vs saving habits since we moved to Georgia. In many ways, it mirrors the results of the article. First, our expenses are considerably greater here than in Maine. But they are not outrageous. But when we took a spending audit, we discovered that we had cut way back on out saving and our "impulse" spending was three times what it was before we moved. All of the bright lights and shopping opportunities of the "big city" grabbed our attention and lured us in. We took the bait.

Secondly, because of our spending, our savings went down. We were more interested in shiny baubles than looking down the road. Shame, shame.

Fortunately, we've been through this before and were able to right the ship, before it started taking on water. We didn't do debt. We weren't even tempted to do debt. Not true, I really wanted an ATV, but my convictions about debt are stronger than "off road fever". We won't do debt.

What we decided to do, was go back to the "envelope system" for things like our dining out and grocery budget as well as our "mad money." If you don't know what the "envelope system" is you should read IOU NO MORE (shameless advertisement).

When I get paid, I go to the bank and withdraw the cash for the envelope categories, and once the money is gone, it's gone. It is a fantastic disciplinary teaching tool. It is much more difficult to part with cash than it is to pull out the debit card. Oh, yes, more difficult indeed.

Try it. But more importantly, saving for the future is just as important as spending for today. After all, you might just need to eat even after you retire.

Tuesday, August 26, 2008

Someone Sure Hasn't Heard About the Revolution

I just read the following bad advice on CNN MONEY.

Wouldn't you know it would come from a law professor? The premise of the argument is faulty. And it smells of left wing political leanings. The article says people are stupid. People won't change. Regular people can't handle or manage money. The government must step in and save the day with regulations.

I say............BALDERDASH.

People are smart, creative, industrious and created by God with great capacity for change. We see it every day. People not only can, but MUST learn to handle money. The Government represents the very worst of money management understanding. The last thing we need is Government meddling any more than they already do in our finances. Their place is to get the heck out of the way and let Free thinking, Free markets, Free people create successful futures for ourselves and our children.

The article just goes to show that having a law degree doesn't grant you good judgment. Brittan and I are classic examples of normal people who learned to manage our money. We're not rich, but we're working on it. It will take a couple of decades, but it's coming. It can for you, too.

Monday, August 25, 2008

Risk Management

I saw an article today dealing with the decisions recent college grads make on whether to pay off student loans or put their money towards a down payment for a house. Read the article HERE.

My advice would be somewhat different. First, don't do debt for college. If it's too late for that, then I would advise paying off the Student Loans first. From a common sense perspective it should be a no brainer. Just look at all the foreclosures that have resulted from people who got in over their heads. Here's how I hear the question: We have these big hairy college debts. Should we take on more debt and buy a house? Will our lives be better off if we increase our debt load?

I know its a buyers market out there. But there are always good deals to be had if you shop well. And the simple rule is, the more debt the greater the problem if something goes wrong financially.

I would not recommend buying the house until the school loans are paid off. Get radical and throw everything at the debt, get rid of it and put everything possible into saving for the Down Payment. You will sleep better at night and you'll also have money at the end of the month.

Thursday, August 21, 2008

Time to Stock Up on Chocolate

Chocolate lovers of the world, BEWARE! Prices are going up. That's right, all our favorite chocolate bars are now victims of the ever rising cost of raw materials and energy. This may be yet another sign of the apocalypse. Or it may simply be another way to keep me on my diet.
Read about it HERE.

Wednesday, August 20, 2008

Two Fun Conversations Today

Today was a good day for the Revolution.

First, I went to pick up my suits from the Men's Warehouse and the salesman (with whom Brittan and I spoke about IOU NO MORE a couple of weeks ago) said, as I was leaving the store, "Mr. Burton. I haven't read you book yet. But I want you to know, I plan to. Seriously." I thanked him profusely.

Secondly, I got my eyes tested today. Turns out, I'm still near sighted. Go figure. But during the course of the conversation, debt and money management came up. My eye doctor got very excited and said, "I think that is so cool. What is that web site again? This practice will be debt free in less than two years. We are excited. We believe we can do so much more for God if we're debt free." And.........he gave me a 10% discount. It was still a gosh awful amount of money to have people poke around your eyes, but it was a great conversation.

Nearly every day now, the subject of money management and debt comes up in conversation with people who know nothing about the Revolution. I get very excited when that happens.

Tuesday, August 19, 2008

Student Loans Harder to Find

Check out this article.

Here's the IOU NO MORE take on the subject. Don't borrow money for college. I know it's counter to everything you know about getting through school. But while college is supposed to be about education, it's been a cash cow for the lending industry. Including the Govt. Until recently, that is. Now the house this country built on a foundation of debt is beginning to crumble.

I won't even get started on some of the so called, "technical" institutes that have tuitions as high as some fine universities, but have no accreditation. We looked into one of those many years ago, when Brittan was first considering going back to college. I was appalled. We'll save that for another day.

Whenever possible, go to a State College. Go to a Community College if necessary. But make it affordable. Pay as you go. One semester or one year at a time. Don't borrow. Same goes if you MUST go to a private college. One example is for people preparing for ministry. Even there, look around, find one that fits your statement of Faith and pay as you go. Apply for grants and scholarships. Get a job. Do whatever it takes to avoid debt. Yes, it might take longer. Yes, you might have to go to a second or third choice University. But in the long run, you'll be better off.

Student loan debt haunts many families for decades after college. Just think of how that money could be invested and how much it could earn if you were paying yourself rather than Sallie Mae or some other life sucking creditor. And think for a minute about all the people who have dropped out of college and have the loan debt but no degree. That hurts doubly.

If you are parents of young children, or even those in Jr. High or High School and you plan to pay or assist paying for your child's college education, you need to start saving today. It's far cheaper to pay ahead (and gain interest along the way) than to pay afterwards when you have to pay interest.

When you talk about college with your child, explain that if Daddy and/or Mommy are going to be footing the bill, Jr will go to a State School. Maybe even a community college. It might not be popular. Well, Waah! Then Jr. can go pay for his own school and Mommy and Daddy aren't going to bail him out. This is serious.

College education is very important. But if we don't manage it correctly, it can be a financial bane instead of boon. On the other hand, if we come out of college with a debt free degree, the world is our oyster from the very beginning.

Monday, August 18, 2008

Why Banks Hate Me

Banks hate me. The feeling is growing more mutual by the day. The reasons they hate me are myriad, but they all come back to the fact that generally speaking, they don't make any money on me. The only debt Brittan and I have is our mortgage. Even that is far below what we could have borrowed. And we plan to pay it off early. We don't have car loans. We don't have credit card balances. We don't overdraw our accounts. We don't do anything to rack up fees. So they hate me. I can live with that.

The reason I'm starting to feel the same about them is due to the games banks play to try and get money out of me. First, we received a notice about a month ago that HSBC had cancelled Brittan's credit card due to "inactivity." It hasn't been used in years. I think she only had it in case we were stuck somewhere and we had to make a purchase that was above our daily limit on our debit card. Whatever. But they canceled it and offered to open a new one for her. All she had to do was call. We don't care about the credit card. We don't use them. What we care about is that by the bank closing the card, Brittan will take a hit on her credit. It won't be as bad as if it was because of debt, but "closed by issuer" dings your report. That stinks.

Second game, deceitful sales people. B and I had great relationships with our banks in Kentucky and in Maine. Brittan worked in a couple of them. We knew every employee, the managers and even the presidents. They didn't like not making money off of us, but they didn't try to stick us, either. Down here in the big cities of Georgia it's a different story. In one case, our mortgage came with a Home Equity Line of credit. Those are bad to begin with, but it was something my company arranged.........long story. Anyway, there were no fees to close it before 10 years. Or so I was told when the account was set up. And there were no maintenance fees. Yeah, right. So about 3 months ago, I decided to close it just so the temptation wouldn't be around. But, low and behold, there is a fee to close it early. So I said, "there are no fees for failing to use it, right?" "Absolutely not," was the reply. Wrong again. This week I got hit with a $25 maintenance fee for lack of use. Balderdash, I say. We will be getting that reversed tomorrow. The way things stand, I can avoid fees by using the line of credit. But then I have to make sure I pay it off before interest hits it. What a joke!

I found an interesting article related to overdraft fees. Hope you like it. Read it HERE.

Sunday, August 17, 2008

Take Control of Your Financial Future

There is a lingering notion that somehow the government will take care of us when we retire. Millions of people are still expecting to live on their Social Security after retirement. If you are one of those, please wake up and smell the coffee.

I'm 51 years old. There is no chance that SS will be able to support me in my dotage. Read this article I found today.

It is mission critical for all of us to do everything we can to build our own retirement plan. It's hard sometimes. I mean, I got started very late. I'm doing all I can to catch up. If you are in your 20s or 30s you are in a position to build some real wealth with 401k, IRA, Mutual Funds, etc. Please get started right away. Even if you're over 40 you can make a wonderful impact on your future.

Take control of your own future. No one is more interested in you than you are. We're here to help.

Friday, August 15, 2008

First Ever SimulPost

For the first time (and maybe the last), I am posting the same information on both my blogs. IOU NO MORE and OldMusher will have the same text. My loyal reader (yes, there may only be one) may be disappointed, but I couldn't decide where to post this, so I'll put it both places.

A Church in Florida has declined a gift of $600k because it was a tithe on Lottery winnings. I applaud the congregation for living by their convictions and not being tempted by a high dollar windfall. Not many people or organizations would have resisted. Kudos.

My only other comment is................ARE YOU NUTS?!

The lottery winner genuinely wanted to tithe out of gratitude to God for his good (and sizable) fortune. That was the correct thing to do.

I know that many Churches discourage playing the lottery. I don't play it. I don't encourage it. But if someone who feels differently wins and wants to share it with me or my ministry, I'm going to take it. Maybe I have no shame. Maybe I just view "ill gotten gain" differently than some others do.

I grew up in Kentucky. During my youth, tobacco was the big cash crop in the State. I worked in the fields during the summer and I took crops to the auction in the winter. One year, I had my own crop from land we leased. I sold it at auction to pay part of my Bible College tuition. When I was a missionary, a good chunk of my support came from tobacco farmers. Some people frowned on me for that and wouldn't support our mission because of it. But one old Bible College Professor put my mind at ease. He said, "Tobacco has paid the salaries and education of a whole lot of preachers around here. Think nothing of it. Or if you have to, look at it this way....the Devil's had it long enough, let's let the Lord use that money for a while." Good words.

You can read the article HERE.

Wednesday, August 13, 2008

Tru That

As it turns out, it is possible to live without credit card debt. Of course, I've been saying that for years now, but here it is via the mainstream media. Read it HERE.

Monday, August 11, 2008

Preparing for Winter Bills!

You've got to be kidding! Nope, it won't belong and the A/C will be replaced by ever rising heating bills. Suze Orman has some good advice regarding the matter. You can read it HERE.

Good News on the 401k Front

It looks like more businesses and more employees are turning to 401(k) for retirement planning. I'm glad to hear it. If your business offers such a plan, you should talk to your HR dept. about enrolling right away. It's good planning, it's good business and in most cases it's pre tax meaning the money you invest is not a part of your taxable income (plans vary, so please take the time to consult your HR person as previously recommended.)

Read the article HERE.

Sunday, August 10, 2008

I Love Spreading the Message

Yes, I believe in Life After Debt! And I love to talk about it. Brittan and I are proof that anyone can do it, so we enjoy helping others. Yesterday we went to the Men's Warehouse to buy me a new suit. Considering the last one I bought was 5 years ago, and it's the only one I own, this purchase is long overdue. As an aside, suits are a whole lot more expensive than they were 5 years ago. Jeepers, it's almost like buying a car! Suits were "on sale" for roughly $250 each. Holy Cow, that's a lot of money. But I digress.

While I was being fitted by the tailor, I overheard Brittan giving our phone number and email address to the salesman. Obviously, they want to bombard me with sales offers for all eternity. But when she gave the email address, the guy asked about it. By the time I got over to the desk, another salesman had arrived and they were both asking me questions. It almost made spending the money worthwhile. I said, Almost!

Saturday, August 9, 2008

New Slogan, New Products

We're toying with the idea of launching a line of logo wear for the Revolution. It was sparked by an accidental turn of phrase from a recent entry in this blog. We're looking at T-Shirts, buttons, mugs etc. that say something like, "Get off Debt Row." "I escaped Debt Row". That kind of thing. I know it's corny, but I love that kind of stuff. I'm such a dope sometimes. But we're looking for ways for people to take pride in their financial freedom and share it with the world. The revolution continues.

Thursday, August 7, 2008

Just When I Was Starting To Feel Better About Things

For a few weeks now, I've been excited because so many people appear to be joining the "IOU NO MORE" Revolution. But today's headlines are a sober reminder that far too many are on Debt Row. You can read all about it HERE.

Tuesday, August 5, 2008

Yep, it's that time again

Very soon, the early morning air will be filled with the sounds of happy young voices as they head back to school after another summer vacation. That means that the air is currently filled with the weeping a wailing of their parents as they try to do the "Back to School" shopping. Here's a link to some tips I found on Happy shopping, everyone. Now....... let's all sing........ "School Days, School Days. Dear old golden rule days.........."

Sunday, August 3, 2008

Trickle Down Economics Works in Reverse, Too

I read an article today that illustrates in a small way, what will happen if a certain presidential candidate is elected and fulfills his promise to raise taxes. Read the article HERE.
Already, the small and mid sized business owner is feeling the pinch of higher operating costs and a higher minimum wage. Once higher taxes are added to the equation we will see many businesses forced to close and many more scale back by laying off employees or not hiring in the first place. Many people don't understand that it is not the mega rich or the large businesses who hire the most employees in this country. The biggest load is carried by the small business owner.

Saturday, August 2, 2008

The "R" Word

Recession. Are we in one already? Is one looming? What is a "Recession" anyway? All good questions and the answers depend on who you ask.

By definition, the economy would need at least 3 consecutive quarters of negative growth to officially be recessed. We haven't had even one such quarter. We haven't even had a quarter of zero growth. In fact, the last quarter was up to 1.99%. While that is not flying, it is also not recession.

But we do have an economic slow down and we have some segments of the market that are in recession, namely the housing and automobile industries. Both are in the tank.

The combination of a weak dollar and high oil prices, have created an inflationary cyclone that are sucking in parts of the economy and millions of individuals and families. And don't forget that the weak housing and automobile sectors have affected unemployment. While not at overly high rates, the unemployment rate has risen over the last year.

Higher oil prices have raised the prices many things, not just gasoline. That makes it tougher on people to spend outside basic necessities. In our case, our gasoline budget has doubled in the last year. And we now only have one person working. Families with two people working, plus children in sports, school and church activities must be paying small fortunes in gasoline. They are also hit hard at the grocery store. It's hitting hard.

What it has really created is a credit crisis and a priority crisis. People can't borrow like they did just a couple of years ago. Industries that rely on credit are hit hardest when that happens. Who can buy a big new house when all their money is going into fueling their cars and kids? Who can afford a new car payment much less the gasoline for a big SUV or Pickup?

There's concern and there's confusion. But don't despair. Let not your hearts be troubled. There is hope. It's called "cash". When we learn to manage our money, live on less than we earn develop a lifestyle of "delayed gratification", we can prosper even in the worst of economic times.

People are starting to get it. I keep saying that, but it's true. We're receiving more requests than ever for our free Basic Spending Plan. IOU NO MORE is selling well. My email is hopping. Yes, the heart wrenching stories hurt to ready. But the hope that is growing from the grassroots makes me very happy.