Perfectly Imperfect Family and Finances

Posted By Mr. Imperfect on June 25, 2009

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At some point in life most of us have experienced the aggravation of having to live from one paycheck to the next.  By the time the next paycheck arrives, you are already broke.  When the new payday comes, most or all of it is already spent.  There never seems to be enough money just to put food on the table and cover the normal household bills, let alone provide for any leisure or luxury.  There will come a time or an event in your life, a catalyst, that will make the change that needs to take place less painful than continuing on your current path.  When this happens, here is a good way to get started on your journey off of the payday to payday cycle.

• The first thing that you must do is get on a budget.  Do not let this “b” word scare you.  I can honestly say that one of the most important steps on our journey out of debt was creating and sticking to a budget.  Bob over at Christian Personal Finance has a great article that list 7 free printable budgeting worksheets that is very handy when you are just beginning.
• Next, look for any place in your budget that you can save money.  Do you really need a  house phone and a cell phone?  Is cable/satellite TV really a necessity?  Are you watching your “phantom” charges from appliances and other electronics that are seldom used? Are your windows and doors sealed for air leaks?  For more ways to save money each and every month click here.
• After you have pinched every penny from you current income, if you still do not have adequate capital to make progress with your debt reduction, it may be time to look for ways to increase your income.  Do you have a unique set of skills that you could market for extra income?  Are there items in your residence that are no longer in use that could be sold at a yard sale or on Ebay?  For a list of ways to make some extra money check out this post.

We can encourage you that it is a process worth undertaking.  Using the strategies that we have listed on this blog we have eliminated two of our monthly bills, we will eliminate a third within the next month, and we are on track to dispose of over 40% of our total debt this year!  Using the strategies that we listed in our Making extra money post we doubled (yes, I did say double) our income in February this year-and it has stayed the same since.  No matter how big the obstacles seem, there is hope.  Will the task be easy? Probably not.  Most things worthwhile are not.  Will people criticize and judge/discourage you? You bet.  We could not even begin to count those that have told us we were fighting a losing battle.  They have repeatedly told us that debt is just a way of life.  We even bought into that lie until we seen that there are a select few that are living debt free.  That is the life we are choosing to live.  Will you join us on this journey to financial freedom?  Please drop us a line and let us know what stage you are in, what goals you have set, and any strategies you have in place.

As always, thanks for reading and have a great day!  Have a question or topic your would like to see covered?  Leave a comment and we will respond the first chance we get!

Category: Finances, Personal Development, Saving | 1 Comment »
Tags: extra income, make money, paycheck to paycheck, save money, save on expenses

Posted By Mr. Imperfect on April 10, 2009

Just a quick reminder to all of us trying to get and stay out of debt. This time of year is the most difficult for us to remain focused on our goal of debt elimination. It is very easy to get persuaded (by yourself or others) that you deserve that $4000 vacation, or new landscaping, or a new vehicle, etc.

In order to become debt free (which will allow all of the above to be completed with cash) it is vital that we stay the course that we have set for ourselves.

“Keep you eyes on that brass ring.” We apologize for the infrequency of posting-a regular schedule will start soon.

We hope that you are all having a great week, that you may have a wonderful Easter weekend! As always thanks for reading and have a great day!

Category: Uncategorized | No Comments »
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Posted By Mr. Imperfect on February 18, 2009

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Has your financial documents and other important information ever looked like this?  Ours did not too long ago.  When we first started to get out of debt and try to take control of our finances we really had no idea where to begin.  Our bills were in the house somewhere(or so we thought).  We ended up just making guesses at what we owed to whom when we made our first budget and debt list.   Now, we can lay our hands on most any document we need in less than 2 minutes.  Here is how we got started:

1. We started a file system Originally this consisted of tan manila folders in a pile (a filing cabinet was a luxury at the time we were going to do without).  We had each bill we owed in its own little folder.  Then we placed the bills in groups: credit card debt, personal loans, car loans, and household expenses (mortgage, insurance, taxes, phone, electric, water, etc.) These eventually migrated to a box that had once held reams of copy paper, and from there into a filing cabinet.
2. We processed immediately As soon as the mail came through the door it had a place to go.  If it was a bill it was placed in the “to be paid” folder in whatever position it needed to be based on date. Once paid it was transferred to the correct account folder.  If it was a bank statement it was reconciled and filed.  The point is that most of our disarray was caused by just laying the mail down when we came in and forgetting about it.
3. We started a master list of bills This is a tip I read about over at No Credit Needed.  The list contained all of our bills, the estimated balance, the interest rate, and the date due.  At any moment we can look and see where we stand on our consumer debt.
4. We started an account and number list Another idea we gleaned from NCN.  The list has all our accounts (bills, checking, savings, etc.) with the name of the account, account number, account balance, address, and any relevant phone numbers.
5. We go over the finances once a month If you are in a relationship that you share financial responsibility in, it is imperative that you communicate and keep each other informed. It also helps that you are looking at the progress made together.  It makes it easier to say no to the $20 container of coffee and go with the $12.

That is what worked for us.  We started cutting expenese (who really needs to spend $130 a month on movie rentals?) and earning a little extra here and there.  It is paying off  in huge dividends right now.  We just paid off one of our personal loans last month, and we are on track to reduce our overall debt by 40% this year.

Thanks for reading, we hope you have a great and wonderful day.  Feel free to leave an orginization tip that has helped you in the past, or make a suggestion on a topic you would like to see on here.  Take care.

Category: Finances, Goals, debt reduction | No Comments »
Tags: debt reduction, Organization, personal finance

Posted By Mr. Imperfect on February 5, 2009

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As noted in our last post, we have paid off our first bill this year.  It was a personal loan that still had over a year left.  Now, the question we face is which bill do we pay next?  There are several schools of thought here, we are going to list them and then ask your opinion.

Pay off the debt with the lowest balance.

If we do this, we could have our next bill paid off in around six months.  The idea about this way (which is part of the Dave Ramsey plan) is that it gives you a psychological boost each time you pay a debt off.  It also helps you stay disciplined and on the right track.

Pay off the debt with the highest interest rate.

This way allows you to save more over the long run.  The difference in interest expense can be considerable over time.  By getting rid of this debt early you can save all the money that would have been spent on the interest.

Pay off the debt with the lowest interest rate.

If you are following some sort of a payment schedule (sometimes called a “snowball” by Dave Ramsey readers) you may place all of your extra money into paying off the bill with the lowest interest rate.  Here the concept is that since the payment has less interest, more of your money is going toward the principal.  Since a lot of us have our lowest interest rate in our mortgage, I think the sheer amount of time required to complete this would ne demoralizing.  This is definitely not the way we are going.

Well, we would like your thoughts on the matter.  On our site (for those of you getting this via a feed reader or email) we have a poll going for the next two weeks.  Come on over, tell us what you think, and we will display the final tally on Feb 21, 2009.

Thanks for reading and have a great day!

Category: Finances, debt reduction | 2 Comments »
Tags: Dave Ramsey, debt reduction, Finances