lifestyle

Mistakes To Avoid When Trying To Get Out Of Debt

Mistakes To Avoid When Trying To Get Out Of Debt

Getting out of debt

Everyone has horror stories when it comes to debt, for me paying off debt is like losing weight. We all have great enthusiasm to get out of debt and to lose weight but most of us never follow through and succeed at either. We all make mistakes, and I have my story book full of mistakes that I made while trying to get out of debt. The one good thing about mistakes is that you learn some valuable lessons that you can share with others so they do not get into the same trap.

Mistake number one

This mistake is always number one with everyone I talk to about getting out of debt, and that is having a plan. Just like losing weight you must have a plan and you must stick to the plan. If you have a spouse both you and your spouse need to follow the plan and don’t deviate from it.

Mistake number two

Do not try to get out of debt without goals or have goals that are impossible to accomplish. Here is what you will want to do instead. First put together a plan with your spouse you both need to establish some creative goals for the family. First you need to setup small goals. These goals need to be something that you feel you can accomplish in a month or two. Then setup some medium goals that might take six to eight months to accomplish and then you need to setup some long range goals that will take one to five years to accomplish. An example of long range goals would be like paying off your mortgage early.

Mistake number three

Do not try to get out of debt without a solid documented budget in place. Most people hate budgeting, but this is a must when you’re trying to pay off debt and become debt free. Again just like losing weight, if you do not plan and setup meals correctly you will not lose the weight. Same with budgeting, if you do not have a detailed budget then you will spend money on items that don’t fit into a budget category and you will find yourself getting deeper into debt. You must have a budget no question about it.

Mistake number four

This mistake I really kick myself over, I took my bonus and raise from work and wasted the money on foolishness instead of paying down my debt. When coming into money either by work or other means you must apply this extra income toward your debt and not increase your spending lifestyle. Take the extra money and apply it towards your mortgage principle or your principle on your high interest credit cards. By doing this it will drive down your debt ratio.

Mistake number five

I kept charging on my high interest credit cards even though I knew I shouldn’t. Some families make the mistake of paying their bills with their credit cards in order to earn points from the credit card companies. This is fine if you are dedicated in paying off the credit cards when the bill comes do. I find a lot of people take the spare cash that they have in their account because they paid their bills with a credit card and they blow the cash. When the credit card bill comes in they do not have any money left to pay off the credit card then you start racking up high interest charges and getting yourself deeper into debt. Be extremely careful of falling into this trap with credit card points.

Mistake number six

I did not setup an emergency fund, this was a huge mistake that took me years to recover from. Every household needs to have an emergency fund for those unexpected home or car repairs or life changing disasters. A family should have six months’ salary set aside in a special account that you do not touch. One never know when disaster is going to hit, disaster could be illness, getting fired, your main source of transportation dies, or you have a major home repair that has to be done. Without an emergency fund you could find yourself in a world of hurt. Start today if you do not have one and keep building to it.

Mistake number seven

Do not keep the same lifestyle you are living today. I tried this and found myself not making any headway in getting out of debt. You must change your lifestyle and cut foolish spending. There are many ways to do this, here are just a few that I found I had to change. Stop going out to eat, wash your car at home instead of spending ten plus dollars taking it to a car wash, drink your coffee at home or work instead of stopping at expensive coffee shops. The list can go but I think you get the picture.

Conclusion

As you read this you will see that most of this is common sense items and mistakes. I just learnt over the years of what to do and what not to do. If someone would have shared these with me I probably would not have stayed over my head in debt as long as I did.

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Posted by Tom in Budgeting
Is Your Spouse A Happy Homesteader

Is Your Spouse A Happy Homesteader

Happy Homesteader

I remember the day that when I told my wife that I wanted to start looking and researching on how to live off the grid and become a homesteader. The look I got was a look that I had never seen her show before “The Are You Nuts Look”. I believe that when someone goes to their soul-mate and brings up the idea of homesteading they probably receive the same look.

Why is that

I believe that a lot of people have the misconception that homesteading is the same as what people see on the television show American Preppers. This is what my wife thought when I brought the idea up to her. She was under the assumption that I had lost my mind and was planning to prepare and hunker down for the zombie apocalypse. This was not my thoughts at all.

For me it was not too hard to explain to my wife what my thoughts were on homesteading since I have a sister that has been homesteading for about thirty years. I was able to show and explain to my wife that we needed to make some lifestyle changes in order to save money, be less dependent on others and the government and be more self-sufficient. This did appeal to her, from that point forward we set out a road-map to help guide us to a lifestyle of living off the grid.

Set realistic goals

Just like I stated above homesteading is a lifestyle change for the family and it needs to be approached on a gradual basis especially if your spouse is skeptical. My wife was born and raised in the Miami area so you could say she is a city slicker at heart. Where we live now is very conducive to living off the grid. But it has been a gradual adjustment in order for my wife not to get overwhelmed with a major change to her lifestyle.

Since my wife was a city girl the concept of having work done on the homestead was just a matter of making a phone call to a contractor. This was one of the first changes I had to break her of. Over the past five years she has gone from city girl to a girl that has used almost every power tool to man plus she has driven backhoes, graders, and many styles of tractors. It was a gradual metamorphous but in five years she has come a long ways.

Be open minded

One of the lessons I had to learn was to be open minded and listen when my wife said “NO”. Homesteading is a lot like a hobby along with it being a lifestyle change. Everything does not need to be done immediately and burn yourself out working from sun up to sun down seven days a week. When my wife said NO to cutting down seventy five trees in one weekend I did not take it well but I listened to her and I am sure it save my back from getting injured. When she did not allow me to cut down the huge trees up against the house but to hire it done I am sure that she saved our home from damage of a tree falling the wrong way onto the house. Listen to your spouse they may save you from getting injured or causing major property damage that will cost you more to repair than it would have if you hired the work done.

Conclusion

Homesteading can be fun, relaxing, financially rewarding and enjoyable as long as you and your partner are both on the same page. Do not try to do this alone if you are in a relationship and the other person is not on board. If you are in the beginning phases of homesteading, sit down and express your feelings to your partner and work on goals together and make sure that the both of you are on the same map of where you want this lifestyle change to go.

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Posted by Tom in Homestead