When Will I Get Out of Debt?

When Will I Get Out of Debt?That’s a great question isn’t?

Could you answer it with any kind of precision today?

I wanted to talk about how you can get out of debt.

About what it takes to end that slavery.

My assumption is that you want to be free of the chains and the burden of carrying debt.

However, that’s a big assumption because debt is normal and the numbers suggest that for the average American, that’s ok.

Just take a look.

The total household debt is $11.65T (as of Q1 2014):

  • Student Loan debt is at: $1.11T
  • Auto Loan debt is at: $875B
  • Credit Card debt is at $659B
  • Mortgage and Home Equity Debt stands at $8.7T

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As a financial coach I can teach you the process, the steps for getting out of debt.

I can also give you the reasons of why it is a good idea to live free of any debt.

What I cannot give you is the desire and the passion to get out of debt. That has to come from you.

In order to get out of debt, something has to change in your spirit, in your heart.

You will get out of debt only when you:

1 Admit that using debt will not bring you prosperity

You basically have to stop believing the lie that debt is a tool to help you win with money.

Just look at the high levels of credit card debt, car loan debt, and student loan debt.

Ask any of those people to see if they are prospering with their finances.

2. Get sick of paying interest

Do the math exercise on any of the debt items you are carrying today.

See how long is going to take to pay it off by just making the minimum payments each month.

Then, compute how much that item you bought on credit, will cost you in the long run.

Just do the math. It should scare you and/or make you mad.

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3. Get tired of carrying the debt burden

There has to be a moment when you say: “No more! I am not living this way! I have had it!!!!”

Until that happens you will be happy to go along and you will continue to rationalize your debt.

You will listen to the conventional wisdom that says debt is ok and that credit can help you.

When will you decide to become debt free? What are you waiting for? What will it take?

When you are ready to change your life and win with money, I can help.

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

The Role of Discipline in Your Financial Plan

The Role of Discipline in  Your Financial PlanAll discipline for the moment seems not to be joyful, but sorrowful; yet to those who have been trained by it, afterwards it yields the peaceful fruit of righteousness.
Hebrews 12:11 (NASB)

The Scripture verse above highlights the word discipline. So what’s discipline?

In looking at a couple of dictionary definitions, you can see that discipline can be defined as the ability to keep working at something that is difficult.

Another definition states that discipline is an activity that is done regularly as a way of training yourself to do something or to improve your behavior.

So the notion both from the Bible and from the secular definitions is that, discipline involves hard work, dealing with a difficult situation, on a regular basis, for a period of time, with the ultimate reward of improving your current situation.

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Discipline in Your Financial Plan

Discipline enables you to:

  • Prepare and work on your budget every month because you know that’s how you can control your money.
  • Keep track of your expenses so you can manage your money.
  • Stay consistent with your debt snowball and avoid falling for the traps of debt consolidation and credit repair scams. You know there is no quick fix.
  • Wait and you don’t buy a house until you are ready. You are immune to house fever.
  • Learn to save and wait to pay cash for what you really want. You don’t live just for the thrill of the moment.
  • You don’t panic with the ups and downs of the stock market. You stay on track with your investing strategy.

If you are in bad shape with your finances, realize that you did not get here overnight. But also realize that you can turn things around starting today.

Your Challenge

You can make the decision to get on different plan that gives you and your family hope for the future. But wishing for a different outcome is only part of the equation.

You need a plan and you need to act on your plan with urgency and discipline. If you need help, I can coach you through the process.

Don’t wait any longer. The time is now and the only person that can change your financial plan is you. Let’s get going!

Question: What other examples can you share about applying discipline in your financial plan?

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Is There Still Hope For My Finances?

Is there Still Hope For My Finances?A 2014 study by Fidelity indicates that 54% of Americans made New Year financial resolutions.

Of those who made resolutions, 39% indicated that these type of resolutions are easier to keep compared to other resolutions like exercising more or quit smoking.

Well, it’s almost the end of January.

If you made any New Year resolutions for your money, how are you coming along? If you are on track, congratulations!!!

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But if you are struggling with your resolutions, you might be asking yourself: is there still hope for my finances?

The short answer is yes. Regardless of where you are today, there is still hope for you.

So, what can you do to improve your financial situation?

Think Big

In order to achieve a great goal, you need to have a great reason for doing the hard work of getting there. If you are in financial trouble, what’s your motivation to get out of the hole?

Here are some examples of big picture thinking:

  • Retire w/Dignity: Do you want to be able to leave work/retire on your terms or are you resigned to having to work forever? Would you like to move into your golden years without a mortgage on your home?
  • Build Wealth: Would you like to invest more? You can’t do it if all of your money is going to debt payments.
  • Give Generously: We all want to be able to help those in need, but the weak can’t help the weak. When we are deeply in debt and we don’t have any savings, we are living to survive. But, when we have money, we can invest in others. Money: it’s not everything in this world, but it can do a lot of good.
  • Leave a Legacy: What if you learned to manage your money so you were able to save for your kids’ college expenses? What if they never go into debt because you taught them that the borrower is slave to the lender?

What’s your motivation?

Take Small Steps

When we get into any kind of trouble, it never happens overnight. It’s a series of decisions taken one day at a time.

Well, getting out of financial mess will take some time and sacrifice. But you can take small steps towards your financial victory.

Here are some free resources that can help you take a small step today.

  • Simple Budget Template. I have used this form for over 8 years now to manage my household budget every month. Just in time for your February budget.
  • Debt Snowball Template. This is the method we used to pay almost $50K in consumer debt. It took us 29.5 months, but we got it done. One debt at a time.
  • 7 Principles for Financial Success (e-book). My lessons learned in the journey to financial success. It’s free for the Kindle on January 30-31.

What small step could you take today?

Call the Coach

It might be time for you to get some assistance for your financial situation. In this day and age we are very used to the idea of a fitness or nutrition coach. Well, a financial coach might be just what you need.

I have recently updated my coaching model to provide you with more flexibility and value. I want you and your family to win with money.

I can help you to get on a budget, build an emergency fund, or break out of the slavery of consumer debt. I can share with you how to start saving for college expenses and retirement.

I can help you put a plan together to win and prosper with your money so you can be a generous giver.

I want you to have hope about your financial situation. I want you and your family to start dreaming again.

Contact me today. There is always help and hope for your finances!!!

Question: What’s keeping you from taking action to improve your finances?

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The Power of Focus in Personal Finance

Focus

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How do you get things done? I mean, how do you manage to accomplish the myriad of tasks that are in front of you every day? And in the middle of doing that, how are you ensuring you’re staying on track to meet your goals?

This post is a little different from my regular teaching on personal finance, but it does have an important application there as well so stay with me.

The Background

Over the last few months I have been dealing with the questions in the opening paragraph. As you may know, I have a full time day job as a Project/Program Manager for a large IT/Services company. I have been with that company for a little over 20 years now and I have had what I consider a successful career.

But as you also may know, I have been working on launching a personal finance coaching practice for a little over 3 years now. Since I have a full time job, the time I have left to devote to this personal finance coaching practice comes from evenings, early mornings, and the weekends.

So I recently started taking stock of where I am with the coaching practice. As a good project/program manager, I defined a set of key monthly measurements and I have been keeping track of them since January of this year.

After careful analysis of my results, I have determined that time is the limiting factor in taking the coaching practice further in the next couple of years.

Don’t get me wrong, I have learned quite a bit over the last 3 years and I have connected with some great people. I started blogging on a regular basis and I also jumped into the social media fray.

I also can tell you that I am very proud of the new things I have learned to do this year like writing 2 e-books, starting a monthly newsletter, and launching a personal finance Podcast in Spanish. So I have made some progress and I am thankful for that.

The Decision

But I also know that when you are working on something new and you want it to grow and prosper, it needs more of your attention and time. In other words, it needs the power of focus.

When I look at the amount of “free time” I have outside of my day job, it has to be enough to cover everything else in my life. This includes my spiritual and physical well-being, my marriage, my family, and my service to God.

In other words, you and I can’t do everything and I found myself having to make some tough decisions about where to spend my time at this juncture.

In his book “Start”, best-selling author Jon Acuff speaks about the concept of “dropped balls”. These are things in your life that you may have to set aside so you can focus on achieving your dream.

These are not bad things, but you can only do so much in any given day, month, year. It’s like Gandalf told Frodo: “All we have to decide is what to do with the time that is given to us.

So after much prayer, I decided to stop serving in 2 ministries that I love because I was spreading myself too thin. I was not putting enough focus on the coaching practice and I did not think I could continue at that pace and still reach my short and long term goals.

As the great Zig Ziglar said: “I’ve got to say no to the good so I can say yes to the best.

The Application to Your Personal Finances

And here is the application for your finances. Regardless of where you are with your money today, the power of focus will be your best weapon going forward.

There is nothing like laser like intensity to help you accomplish what you are trying to do with money. For example:

  • If you are just getting started, your immediate focus should be on gaining control of your money via a monthly budget.
  • If you have no savings, your immediate focus should be on saving a beginner’s emergency fund so you can avoid having to rely on debt when you have an emergency.
  • And if you are trying to get out of debt, focus on that with all your energy and attention. This is no time to worry about retirement or college savings. You will get there, trust me.
  • If you are out of debt and are thinking about buying a home, make sure you focus first on saving an emergency fund of 3-6 months of expenses and then focus on saving enough for a down payment for your home.

There are exactly 61 days left in 2013 after today. This might be a good time to take a moment and see if it is time for you to turn on the power of focus in your life.

It could be in any dimension: spiritual, professional, relationships, finances, health, etc. But spending some time deciding where your focus should be, will enable you to finish strong in 2013 and start 2014 on the right foot.

Question: Which area in your life could benefit the most from the power of focus?

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Problems with Managing Money? I Have Been There, I Can Help

Keyboard_Help-300x225Do you struggle with managing your money? Do you have too much month left at the end of your paycheck?

Are you stressed with the amount of debt you are carrying? Are you worried about saving for retirement or paying for your kids’ college tuition? Is money a source of stress in your marriage?

If your answer to any of these questions is yes, I have good news.

You are not alone and there is a way to turn things around. I have been exactly where you are.

Here is a picture of my household’s financial picture 7 years ago:

  • Had a very good, stable job, with great income. But… we were living paycheck to paycheck. Using credit cards to make up the difference every month.
  • Had almost $50K in unsecured debt (car note, credit cards, student loan, etc.).
  • Had no plan to pay for college for our son except to consider student loans.
  • Had no savings for emergencies.
  • Had very little in retirement funding and no structured plan for savings.
  • My wife and I we were not working together as a couple.
  • We realized we were not honoring God in the handling of our finances.

I realized that we needed help. In the Fall of 2005, our church offered a financial class (Dave Ramsey’s Financial Peace University, FPU) and I attended the 13-week course.

As I shared with my wife what I was learning, we started to apply biblical principles for sound financial management. We began a life transforming journey for our family.

I can thankfully share the positive impact of that decision to get help 7 years ago. Here is where we are today:

  • We are living on a budget. We have a plan for our finances. We have learned to live on less than we make.
  • We paid off all of our unsecured debt ($50K). It took us 29 months.
  • We have a 6 month emergency fund.
  • We were able to pay for our son’s college without borrowing money and without him borrowing money.
  • We have a structured approach for retirement savings.
  • We are honoring God with our handling of finances.

I firmly believe everyone is capable of being successful with their finances and sometimes it is just a matter of getting a little help.

Don’t wait and act now to start your journey towards financial wellness!

 Presione aquí para la versión de este artículo en Español.