Posted on 01/03/2010 7:56:09 AM PST by Diana in Wisconsin
In order to continue their quest for financial freedom — a resolution they originally set for themselves in 2007 —Douglass residents Delores and Steven Guthrie will attempt "to live like no one else" in 2010.
The concept, which the couple discovered through a step-by-step money management program they took part in at a local church, encourages individuals to become accountable for their finances and how they choose to spend their money, something local and national finance experts agree is the key to getting out of debt in the new year.
Guthrie says she and her husband began to take Financial Peace University, a video-based class series by national radio personality and finance author Dave Ramsey at Calvary Baptist Church in 2007, and in the process, they learned not be overwhelmed by their looming debt — which at that time was $420,000 — and simply work with the money they had. Guthrie says much of the bulk of their debt came from their trucking business in the form of property and equipment.
"We sometimes have a boring life, but we know it's for an ultimate goal: when we're debt free," she says. "... Honestly, Financial Peace University just really taught us not to be too overwhelmed, but just pay what we have and work with what we have,"
Guthrie says one of the most important aspects she has found in doing that is to spend money on paper first.
"Every time we get paid, say for example we get a $1,000, we take that $1,000 and write it on a piece of paper and we literally spend our money on paper first," she explains. "It takes time and it's not always fun, but by spending that money on paper first, you realize where your money is going."
The couple has also increased their cash flow, by not always going out when the opportunity arises and prioritizing where their money is needed most.
"It's not always easy. There have been times when all of our friends are out having fun and we're just sitting at home. But we've decided 'let's just sit at home' for now, because one day, because of it, we'll be able to do certain things and live like no one else. We live like no else now, so later, we can really live like no one else."
In the three years, since they became accountable for where and how their money was spent, the Guthries have reduced their debt by $317,000.
"There are so many people who have struggled this (past) year financially, but you really can overcome it if you live like no one else," Guthrie says.
Shannon Smith, a certified financial planner and registered principal with Smith and Partners Financial Services, a firm associated with Raymond James Investments, says the first step in eliminating debt is to reduce expenses.
"The reality is that a vast majority of people spend money on things they don't need. A good example is spending $5 on a latte," he says.
Smith says a reduction in spending, even by a small amount like $10 a day — assuming a person's income remains the same — can add up to a large sum of money that can be used to pay off debt, he says. "There's a way to do it, but the reality is that most people don't want to do it; they don't want to lower their lifestyle."
Smith suggests paying off debt with the smallest balance first and then utilize the former balance payment and put it toward paying a larger sum on the bigger debt balances.
For instance, if someone has three credit cards with balances of $1,000, $3,000 and $10,000, respectively, and they pay $100 every month on each balance, when the lowest balance is paid off, they can take their former payment to that card and apply it to the larger balance, along with the $100 payment they were already paying, plus any savings they were cutting from their expenses. For instance, cutting $10 out of daily spending would come to a savings of $300 per month.
"If people can find a way to cut their expenses and then take that savings and start paying off debt, in addition to what they're already paying on debt, that's how you get out of debt. There's no magic formula," he says. "The formula to getting out of debt is simple, but it's just not easy for people to execute. It just takes discipline."
Smith says another option for individuals who have good credit and some form of equity in an asset like a home is to take debt with a higher interest rate and consolidate and refinance it.
He says if someone has three credit cards at 20, 15 and 12 percent and they also have equity in a house, they may be able to refinance their home and pay off all their consumer debt (the credit cards in this case), while also locking in a lower interest rate on their house for a longer period of time. Home mortgage interest is usually at least partially tax deductible for most families, assuming they itemize deductions, he says.
"The key is that you don't go out and run those credit cards back up again because you're just going to put yourself in a bigger hole, and unfortunately, I've seen a lot of people do that." Smith says.
“Get Out of Debt in 2010”
Get out of the U.S. in 2010...posthaste.
Never once used a credit card and it was quite different! LOL
Good for you! I’m already stashing things for next year. I ‘shopped at home’ and made things myself this season, so did Husband.
It was very nice; very ‘Gift of the Magi.’ :)
Making gifts like fudge and cookies and stuff is another good things to do that people appreciate. We used those pre-sized post office boxes and did spend some on postage but it was worth it.
Slow go but working on it. I have been in credit counseling for a year and it has bought me some breathing room when things really went south for me over a year ago. Things may actually start improving soon so I can do more than just breathe. It was my own fault and I have learned my lesson.
If you are retired, Panama has special privileges for non Panamanian retirees without the need of becoming citizens.
You have asked more than just a valid question.
Other expats who live elsewhere need to come forward and help with this information.
I suggest you go to Google and lookup retirement in Panama or becoming an expat in Panama before retirement. Life is very good here.
I wish I could be more helpful, but you need to use Google and checkout their expat information.
If you decide and can, welcome to Panama.
P.S.
I forgot a very important detail: Panama has great doctors/patient care/ hospitals.
Many doctors are U.S. trained/graduates.
Panama is not a banana republic. It is very progressive.
And yes, you can have your own health insurance.
Obama will punish you if you do.
What we are seeing is a civil war of ideas and it's not the first time and won't be the last.
Interestingly enough, it seems that since post WWII, if the US sneezes, the rest of the world wipes it's nose, even Panama.
We will get through this, but it may well be painful. Pain is a good teacher. Fortunately for some, pain is not remembered which is why we need history to remind us.
These libtards we are dealing with today have been ignoring or re-writing history for decades, and they don't see the truth of it anymore or believe a distorted view like it is a religion. Their beliefs and ideas must be destroyed or severely cut out of society before we can move forward once again.
This is coming at some point, and it will be messy, but we will survive it.
If you’re not familiar with the community boards over on Dave’s site, they are a wealth of information and inspiration! Keep up the good work. We’re all pullin’ for ya!
http://www.daveramsey.com/category/community/
Dave’s Five “Must Dos” for 2010:
http://www.daveramsey.com/article/daves-five-must-dos-for-2010/lifeandmoney_goalsetting/text1/
“Well, I’m the sort of patriot who will fight to the death before thinking of leaving. I’m sorta invested in the concept of America and it’s roots.”
I agree with you.
A lot of us were in the font lines against Noriega. (Also think Honduras and Iran.) There was no carnival crap with folks laughing it up with children around to include clowns in costumes. The situation was serious and not a party.
Thus far, I have an awful feeling nobody is going to be there to cover your back.
Too many folks here on FR brag how many firearms purchased along with bullets. What a waste of money because it is all talk in the end.
The word “chicken” comes to mind which DOES NOT include you.
Thank you for your post. It was a great, honest read.
Keep safe. Keep in touch.
My best regards.
font lines = front lines
Printed and bookmarked.
If I may
Keeping 3 to 6 moths of cash might have been a good idea a few years back (we tell folks 2 months) given the loss of value of the dollar.
Getting out of debt - or better yet, never geting into the hole in the first place, is likely the best “investment’ most folks can make.
OTOH, personal finance is just that. When we busted a gut to be debt free in 1980, it was hard. We have stayed that way ever since with the exception of a home purchase. Even that was paid off in 14 years.
Now, we pay cash, save for major purchaces and use the credit card to get airline miles (we live in AK) to use on visits.
The lack of worry, of course, is priceless.
I am very fortunate to have a wife with the same mindset - we will do without rather than go into debt.
Luckily, the guy doesn’t even know I exist. ;)
Most people aren't sophisticated enough to hedge against the dollar. At this point, inflation is rather tame. If it heats up, one can always do something about then.
At this time, all the kids are grown and I'm retired. I can do nothing but lead and that's what I would bring to the table now.
Sure, there are many fair weather soldiers, but everyone has a place and a responsibility. When the time comes, they will be there, just as they were for George Washington. If you recall, George nearly lost faith because so many of his soldiers gave up and went home before the fight even started. many more deserted after but they all became war hero's and took credit after Washington turned the tide with only what was left and it was not much.
I can imagine how he felt and how he ignored those feelings to lead the country that largely had forsaken him and left him when the chips were down and all looked lost.
All things have changed with time, but remain the same as far as human nature is concerned. People don't really change, and circumstances always repeat.
That is what history teaches us and why nirvana and the promised land of liberal beliefs will never be achieved. They continue to believe in the perfect.
You can't have perfection with anything but a machine. People are far too flawed and that is not necessarily a bad thing. It's what makes life interesting.
Happy new year all of my fellow Dave Ramsey fans.
Thank you to Diana for the ping.
Dave Ramsey Fan Ping List.
If you would like to be added to the “Live like no one else, so that you can LIVE like no one else” list, feel free to Freepmail me.
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