Managing vs. Eliminating Your Debt

Managing vs. Eliminating DebtI have a question for you. Should you be managing your debt or eliminating your debt?

This is a key question that you must answer and your response will determine your level of success with your finances.

If you are comfortable with keeping and managing your debt, you will spend your time making just the minimum payments, worried about how to increase your FICO score, and looking for options to move your debt around to the next card that offers you a “free interest balance transfer”.

You will be ok with always having a car payment and just using credit to get anything you think you need.

Debt will always be your companion.

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However, if your focus is on eliminating debt, you will put your energy on how to increase your income or cut your budget so you can apply more of money to your debt snowball.

You are not simply playing with credit cards, you are ready to break up with them for good.

You will learn to be patient and save for the things you want to buy.

Debt will no longer your companion, but your enemy. The enemy of your financial prosperity. Once you are done with it, you can move on to bigger and better things.

What will it be for you? Will you keep working on managing your debt or will you put your focus and passion on eliminating your debt?

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Posted in Debt by Jose Figueroa. No Comments

What Do You Need to Win with Money?

What Do You Need to Win with Money?Have you ever seen the movie the “Wizard of Oz”? It is considered an American classic and it debuted 75 years ago this year.

My wife has been participating in a local musical production of the “Wizard of Oz” as a pianist. I had the great opportunity of watching the performance last week.

In the story, young Dorothy gets swept out of her home in Kansas by a tornado and she lands in the magical Land of Oz All she wants to go is to get home and she is told only the Great Wizard of Oz can help her.

So Dorothy goes off to see the Wizard and along the way she meets 3 new friends: a Scarecrow who lacks a brain, a Tin Man who lacks a heart, and a Lion who lacks courage.

All 3 of them join Dorothy on her quest to see the Wizard in hopes he can help them as well. In the end, they all get what they need, but the Wizard had very little to do with it.

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When I think about our finances, I think we all have the same needs Dorothy and her friends did.

Let me explain:

  • We need our brain to be activated. We need to be involved with what happens with our money. We need to learn new information and we need to be wise with our financial decisions.
  • We also need our heart to be engaged. If we are going to change our financial situation, a lackadaisical approach is not going to cut it. We need to put some passion and emotion into it.
  • Finally, we need courage. Courage to make tough decisions. Courage to make sacrifices and changes in our habits. Courage to be honest with our spouses in terms of finances.

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And most of all, like Dorothy we all need to go home. What do I mean?

You need to make sure your home is well taken care of in terms of your finances.

Do not disengage. Do not abandon your spouse in the management of money. Do not neglect the future of your children.

Go home and take care of business.

Fortunately for you, just like with the Scarecrow, the Tin Man, and the Lion you already have what you need. You don’t need a Wizard.

You have what you need you to take care of what needs to be done with your money.

Get after it!

Question: What do you need today to begin to take control of your money?

Out of Slavery: Life After Debt

Out of Slavery - Life After DebtThe other night I was flipping through channels on TV (you know, 300 channels nothing good to watch) and I landed on the SyFy Channel and an episode of “Star Trek: The Next Generation”.

It was one of my favorites (“Redemption“) so I decided to go ahead and finish it.

Of course, since I was watching live TV, I had to endure the commercials.

Interestingly enough, several of the commercials were devoted to companies offering debt consolidation, credit counseling, and mortgage assistance services.

The promises by each of these companies were pretty enticing. Some of it went along the lines of: “Payoff all your debt quickly and easily!“, or “You have the right not to pay what you owe!“, or “We can save you thousands of dollars on interest!“, “It’s free!“.

It sounded too good to be true, and given we were watching the SyFy Channel, it made me think that these companies knew the audience would be willing to believe in claims that have very little to do with reality.

When something sounds too good to be true, it usually is. The reality is that there are still some lingering effects from the Great Recession of 2008.

Banks and lending companies are enforcing tight standards for granting credit. Even the government has tried to help by putting more controls around consumer credit card companies.

And certainly everyone had to stop and take a moment to evaluate how we handle money in view of potential down cycles of our economy.

But as you think about your particular situation, let me challenge you to consider some basic principles around debt and how to overcome it.

Regardless of where you are today: lots of debt, little debt, or no debt, these principles are true and when they are applied they will cause you to win with money.

There is life after debt.

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First, what’s God’s view on debt?

“The rich rules over the poor, and the borrower is the slave of the lender.”
Proverbs 22:7 (ESV)

Think about that statement for a moment. In essence it says that when you owe money to another person or entity, you are a slave to that person.

Think about what you owe. That person or entity chooses what interest rate you pay, when you pay, and what the minimum is. They control that portion of your income.

If you fail to pay for any reason they can take the asset or garnish wages after securing a judgment against you. They are in total control.

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Second, why do we use debt?

  • We don’t plan for expenses. When we don’t have control of our money through a budget it never seems we have enough to cover all expenses.
  • Lack of discipline for saving money leaves us relying on debt to cover emergencies.
  • We seek to take advantage of “deals” such as airline miles, hotel points, cash back, etc. We typically spend more when we use plastic. So we tend to spend more by chasing the magical free air fare or hotel stay.
  • We are influenced by the culture. We accept that paying interest is a way of life and that is the only way to get what we think we need.

There is no easy fix for getting out of debt.  There is no magical pill or perfect government program to get you out of debt.

You have to do it, you have to take control. You will get out of debt only when:

  1. You admit that using debt/credit will not bring you prosperity.
  2. You get sick to your stomach when you realize how much money you are paying in interest.
  3. You get tired of carrying the debt burden.

I know it can be stressful to carry the debt load because I have been there. I know it might seem impossible to pay it off but you can do it.

Let me tell you that I know it is possible to be debt free because my wife and I have done it. We paid off almost $50K in unsecured debt in 29 months.

We did it with God’s provision and by applying His principles. It was not easy but it was totally worth it.

Today, we are no longer slaves to debt. We are free of debt and we are walking with hope and in control of our finances.

How would life look to you if you were debt free? What could you do?

Contact me and let me show you how you can have life after debt.

It can happen!

“Debt is dumb. Most normal people are just plain broke because they are in debt up to their eyeballs with no hope of help. If you’re in debt, then you’re a slave because you do not have the freedom to use your money to help change your family tree.”
Dave Ramsey, Author and Personal Finance Expert

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Posted in Debt by Jose Figueroa. No Comments

The Budget is the Key

The Budget is the KeyIf you were to ask me what is the key ingredient for financial success, I would tell you the same thing I have told everyone since 2008 when we finished paying-off our consumer debt:

The answer is you have to learn how to live on a monthly zero-based budget.

This means that every month before the month begins, you list all of your income on one column, and on the other column you allocate every dollar available to a category.

On your budget sheet, the equation of total income – total expenses should equal zero.

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Here is what will happen when you start living on a monthly budget:

  • You will be able to tell where your money is going and you will be able to see in which areas you are overspending.
  • You will have have the information needed to prioritize your spending and put your basic necessities first (food, shelter/utilities, transportation, clothing).
  • As you learn and adjust your spending patterns, you can start to allocate money to emergency savings.
  • With your spending under control, necessities covered, and savings built, you can then allocate anything extra to paying-off your consumer debt.
  • When you pay-off your consumer debt, you can then start working on saving for retirement and college expenses.

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Without a working budget you can’t control your money.

If you can’t control your money, you can’t build savings, you can’t pay-off debt, you can’t plan for the future.

A working budget is the key that will open the door to your financial wellness.

You can start today and I can show you how.

“Economy is half the battle of life; it is not so hard to earn money as to spend it well.”
Charles H. Spurgeon

10 Things I Want for You and Your Money

10 Things I Want For Your MoneyThe blog is back!

As you probably know, I have been going through the process of changing hosting providers for the blog.

Because of that, I have not been able to add any new content over the last couple of weeks, and that has given me some time to think.

It has been just about five years since I started on this adventure of being a financial coach and blogger.

So I have been thinking about why I started doing this in the first place.

I started because I want you to win and prosper with your money.

I want you to experience the same blessings my family has received as we have learned to handle money.

With that in mind, here are 10 things I want for you and your money.

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  1. I want you to have control of your money and have the ability to decide how it is going to work for you and your household.
  2. I want you to be free once and for all from the chains of debt. Walk in your own financial strength and let your money benefit you and not the banks.
  3. I want you to experience the peace of mind of being prepared for emergencies.
  4. If you are married, I want you and your spouse to stop fighting about money so you can build your future together, as a team.
  5. I want you to leave a legacy of financial wisdom to your children.
  6. If you are single, I want you to know that you don’t have to walk alone in your financial journey. You too can win and prosper with money.
  7. I want you to have options for your future so that when the time comes you retire on your terms to do what you want to do with your time.
  8. I want you to have a complete financial plan and I want you to be in a position to take care of your family well.
  9. I want you to experience the joy of being an extravagant and generous giver.

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And last but not least, I want you to have hope with your finances. I want you to be able to dream again about your future. And, I want to help you with that.

Yes, you can win and prosper with money. Yes, you can be in control of your financial destiny.

So, let’s get started today!

Question: What’s keeping you from winning with money?