Posts Tagged ‘debt-free’

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Sports with Debt

Saturday, January 24th, 2009

Rather than provide another list of pointers, here are a couple of sports-related situations and how to handle them to avoid getting deeper into debt.

Scenario One

Your friends all want to get tickets to a major professional sports match-up.  Tickets are expensive, what should you do?

  • Go to a popular sports bar instead, and skip the bar food.
  • Not every game for a particular team is priced the same. Go on a less-costly day.
  • Watch the game from outside the stadium. In urban and hilly areas, oftentimes residents of apartments with views into the stadium rent out their space during the game. For a large group of people, this may be a cost-effective strategy. Check on a website like Craigslist for availability. Also, some stadiums have exterior areas that fans can squat on to catch the game. Go early and stake out some space.
  • Buy tickets through alternative vendors. In particular, deals may be had right before the event starts.
  • Attend off-season training games instead. These are a lot cheaper than during the regular season, and the same stars are out in the field as at normal games.
  • Research online for value nights, buy tickets with a large group to get the group discount, or look for volunteer opportunities that include complimentary admission.
Scenario Two                                                                                                                                                          
Friends all want to go on a ski trip, enjoy a horseback adventure, SCUBA dive, sky dive, or participate in any other sports activity with a high “cost of entry”.                                                                                                                                                                                     
If equipment represents a major cost, do Internet research to find a local renter. This can be cheaper than renting at the location of the sports activity, such as at the ski lodge. Most importantly, there’s no sense in investing in equipment when your current commitment to the particular sport is minimal. If Internet research for the sport is difficult, simply walk into a supply store for that particular sport and chat with the clerk. Picking their brain can reveal many of the best strategies to saving money, as well as tips on how to have the best experience.  Finally, plan well in advance. Last-minute lift ticket, rental packages, and airfares can make the total cost explode.                                                                                                                                                  
Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

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Advice, Tips, and Techniques to Eliminate Debt: Steps Two and Onwards

Wednesday, January 14th, 2009
Steps Two – Onwards

After getting organized and creating your basic plan, follow it up with solid execution. These additional tips can help make the progress towards paying off debt go much faster. Choose and implement any of the following:

  • Automate your debt payments, making sure that you keep your total payments at least as high as the amount needed to execute your payment plan.  Automating it makes it less likely that you reduce your payments and fail to reduce your debt.
  • Avoid eating out – it costs a ton
  • Create a budget for all of your non-debt expenses. Trim out everything but the bare minimums and turn that savings into direct payments towards your debt pay down.
  • Use free or low-cost recreational and entertainment options only. They are limitless and everywhere.
  • Build up a cash reserve for emergencies equal to three months of basic expenses: housing, food, and transportation.
  • Create a short-list of arguing points why your interest rates should be lowered. Next use the list as a script and call each of your lenders, haggling with them to have your rates lowered. If you aren’t getting anywhere with the level one representative, ask to speak to a manager, and repeat the same points.
  • Transfer your balance to a new credit card with a zero percent rate, then cut up the new zero percent card and never use it, turning the credit card into a credit tool. Shop around and find a zero percent balance transfer option that has the longest zero percent period available. Note the end date of the zero percent period and make that your deadline to have that account cleared.
  • Stop adding any new funds to investment accounts, retirement or otherwise, and apply those funds instead towards debt pay down.
  • Make a checklist of everything to review during your time paying down debt, then use the list to check your progress on the first of every month. Compare your outstanding debt amount at that point to what it was on the first of the previous month. Adjust your plans to make sure that steady progress is actually a fact.
Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

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Advice, Tips, and Techniques to Eliminate Debt: Step One

Tuesday, January 13th, 2009

The idea of getting ready to reduce and eliminate debt is enough to put most of us on edge. Those nervous about the tasks involved to step out of the red often put to us the question: “What are the best tips and advice for getting out of debt?” In a two-part article, we answer it here.

Step One: Get Organized and Make a Simple Plan                                                                          
Getting organized and coming up with a simple strategy is the first and most important step. In it, you don’t just bring together all of the various bank statements, payment stubs, and notices of changes to debt terms lying around the house; you’re actually writing down concrete and straightforward things that need to get some debt control. Only with a written plan can you effectively measure your progress towards debt elimination. Still confused and not sure where to begin?                                                                                                                                                                                
Here’s the broken-down steps to “Step One”:                                                                                                                                                                     
1. Collect all documentation you can find regarding your debt. Don’t pour over it yet; just pile it all into one place.                                                                                                                                                         
2. Take the pile and organize it in groups, according to type of debt (i.e., auto, credit card, housing/mortgage, etc.)                                                                                                                                               
3. Read through it to get a basic understanding of what is owed and to whom. On a separate notepad, jot down important things such as: the principle, the current debt balances, interest rates, whether the rate is variable or fixed, mandatory timelines for payment, minimum payment amounts to avoid additional fees, and any debt prepayment penalties. Also jot down the phone number(s) of the contact(s) for the account. Don’t worry about finding all of information; do your best and don’t be afraid to call the contact phone numbers for each of your lenders to fill in the blanks.                                                                                                                                                                                                               
4. Snowball Method: Within the mandatory guidelines for repayment you can choose between one of two basic strategies: pay off the smaller balances first, or pay off the balances with the higher interest rates first. Paying off the balances with the highest interest rates makes the most financial sense to pay less interest in the interim, but motivation-wise you might feel increasingly confident as you wipe out credit cards to zero balances. In this second case, the snowball method will be optimal:  it entails paying the minimum monthly payment on each of your debts, except the one with the lowest balance, where you apply all of the remaining funds you can dedicate towards debt reduction.                                                                                                                                                                                                           
5. Check your progress every month. Tell a friend, family member, or loved one about your plan and monthly targets so that they can keep you on track, like a coach. Be explicit and clear as to what is owed. Providing your coach something in writing will add to the sense of commitment.                                                      
Tomorrow we discuss step two: various quick and simple options to speed up the debt pay down process.                                                                                                                                                                                
Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

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Wrap-up: 9 Steps for Successful New Year Debt Resolution

Friday, January 9th, 2009

This is the last post in our series of 9 steps for setting a New Year Resolution to pay off debt.

Again this year, Reducing Debt is the top New Year’s goal, with up to 56% of Americans estimated to set a goal to get out of debt in 2009.  Wow.  That speaks loads about the economy and our mindset.  So remember that you’re not alone this year if you’ve committed to working down debt.

In our series of posts on setting a New Year Resolution to reduce debt, we’ve covered basic steps you can take to get out of debt.  We’ve discussed how you can set goals, come up with a plan, and enlist the support of others in paying off debt.

Ultimately, successful debt reduction depends on a lot more than just coming up with payment schedule.  You have to put all the pieces in place to have success.  Without support of your friends, for instance, you will have a hard time changing your habits.  Without getting everyone in your family aligned behind the goal, moving the needle will feel like herding cats.  And without a good tracking system, you’ll never get the feedback to know if you’re succeeding.

Surrounding yourself with good things, brings good results almost by definition.  Here are our top 9 steps for building out a successful New Year’s Resolution to pay off debt:

  1. Stop using your cards
  2. Get organized
  3. Set family priorities
  4. Get SMART.  Set SMART goals for debt reduction
  5. Make a plan
  6. Simplify for success
  7. Tell your goal to others
  8. Ask for support
  9. Track your progress

In closing, remember that 65% of people who profess to have a goal to reduce debt never put a plan into place.  Just by creating a plan to deal with your debt and starting to track your success, you’ll be significantly more likely to achieve lasting results on your goal.  We are proud to have created DebtGoal.com which incorporates all of these elements.

Hope you have a great 2009 and have success in your goal to reduce debt.

Scott Crawford is CEO of DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

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Making Debt Reduction Your Goal for 2009

Monday, December 29th, 2008

New Year’s resolutions run the gamut from the outlandish (sky dive, climb a mountain) to the traditional (lose weight, help others more). An atypical resolution that will make a difference this year is more than a one-line “pledge to get out of debt” – it is a straightforward plan to do so.

 

Promising to end debt a boring and cliché resolution? Be stylish and realistic in your pledge and design a good plan. Here’s an idea:

 

“My 2009 resolution is to improve my personal finances and the first step is to aggressively eliminate my outstanding debt. Once I am completely free of debt, I’m going to save up for and pre-pay a tropical vacation to celebrate. Staying out of the red is going to be a cornerstone of my lifestyle moving forward. I pledge to the following plan:

 

a)      Write all of my debt down on paper, with the name of the lender, outstanding amount to be paid off, and terms of repayment.

b)      Prioritize the debts from most to least pressing to pay off. (Number them)

c)      List my monthly expenses and income. Set up a budget that trims unnecessary expenditures and comes up with a consistent amount that I can contribute towards monthly debt reduction.

d)      Start this action plan with the month of January 2009, with a modest reward for myself if I follow through with the game plan for each of the first six months of the New Year.”

 

Research shows that half the battle is proving that you can set up a plan and follow it.

 

If your debt is enormous, this is not a reason to avoid the most important resolution you can make. Simply adjust the resolution to represent a pledge to eliminate a large percentage of it (e.g., 50%) within the next year.

The best part of using a New Year’s resolution as a promise to eliminate debt is that you can let your promise be known to friends and family in a way that feels less difficult because everyone makes a resolution. It feels good because it comes off more as a declaration than a confesssion.

Raj Patel writes for DebtGoal.com, a do-it-yourself system for getting out of debt and lowering your interest costs.  DebtGoal.com incorporates all of the techniques discussed in this post and can help users understand and get visibility to and manage their debt finances.

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