Month End: December Snapshot


2018 is ending, and I’m glad this year is over with. This year has been a Year of Restoration. There’s been restoration in my finances and even more importantly restoration in my marriage. Restoration isn’t an easy process. When you think about a car being restored, there’s a lot of sweat, hard work, and physical reconstruction that can happen. Our Jack Russell Terrier, Sasha, had surgery to have two tumors removed and now she’s cancer free! There were quite a few challenges especially toward the end of the year, which increased the level of stress in our lives, but in those moments our faith increased too. When you find yourself in stressful and difficult moments, make sure to surround yourself with people who genuinely want to lift you up even if it’s emotionally. Throughout the year, and at the start of the blog, I haven’t fully disclosed all my consumer/credit card debt. I didn’t give full disclosure because I didn’t want to share how large the number was, and at the same time I didn’t want to discourage anyone from taking the steps to become debt free. Going forward I will disclose all my credit card and lines of credit debt for the purpose of being honest. I do have $25,067.91 in student loan debt, but my path to becoming debt free involves becoming debt free of credit card and lines of credit debt. My student loan is on a set income driven repayment plan and will be paid off by 2034 at a fixed rate of 3.125%. 2019 will be a year of great joy and you’ll see the remaining debt I have left to pay as I step closer to being debt free.

To encourage you, I started this year at $43,824.60 in credit card, revolving line of credit, and term debt combined. As of now, I’ve paid it down by $19,624.60 to $24,200.00. I was able to reduce my debt by this much by selling what I didn’t need to pay down portions of debt, consolidating multiple cash accounts, and using portions of my tax refund and bonus toward debt. I also completely focused on reducing a balance. Since the first blog post you’ll notice I don’t share the interest rate on the debt. The reason is because I want you to explore the two different debt reduction methods: the debt avalanche method and the debt snowball method. Personally, both methods work, and I’ve focused on debt based on how it makes me feel. I’ll also add that in addition to how I feel, I discuss with my wife my reason for switching to pay one debt with a lower interest versus a debt with a higher interest rate. In those scenarios, it’s because the balance is low enough that I can eliminate the debt within a shorter time frame. The second reason I don’t share the interest rate is because your debt reduction strategy is YOUR debt reduction strategy. You personally own it, must be responsible for it and most importantly be committed to following it day after day and month after month. My debt reduced when I finally committed to reducing it.

Your journey is different than mine, but we can take one step at a time together.

If you want to learn more about how I’m increasing my income while reducing debt, or if you want to have someone to discuss your debt reduction strategy with, or if you need a financial check-up, contact me.

Also, learn more about how I use the self-lending principle through Mustard Seed in the mustard seed section.

This month’s video is When You Are About To Give Up WATCH THIS! – Motivational Video Speeches 2019 from the Mulligan Brothers YouTube channel.

“The LORD will send rain at the proper time from his rich treasury in the heavens and will bless all the work you do. You will lend to many nations, but you will never need to borrow from them.”
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Deuteronomy
28:12 NLT‬‬
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http://bible.com/116/deu.28.12.nlt‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬‬

I believe in your journey to….

A Debt Free Me

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August 12, 2017

Items in italics are direct quotes from the articles below

http://www.investopedia.com/articles/personal-finance/080716/debt-avalanche-vs-debt-snowball-which-best-you.asp

Paying off debt is no easy task, but it will bring financial freedom. There are two distinct methods to pay off debt: the debt avalanche way and the debt snowball way. While both are useful strategies to get debt out of your life, one method might be easier for you to stick with and make a bigger impact on your debt repayment. Here’s how to find out which debt repayment method is best for you. The debt avalanche involves paying extra money towards the debt with the highest interest rate, and the debt snowball involves paying the smallest debt amount first and working your way up.

Using the debt avalanche to pay off debt will save you the most money in interest payments. For example, if you have $3,000 extra to devote to debt repayment each month, then the debt avalanche method will make your money go the furthest. Imagine that you have the following debts:

  • $10,000 credit card debt at 18.99%
  • $9,000 car loan at 3.00%
  • $15,000 student loan at 4.50%

In this scenario, the avalanche method would have you pay off your credit card debt first, then allow you to pay off your remaining debt in 11 months, paying a total of $1,011.60 in interest. The snowball method would have you tackle the car loan first, becoming debt-free in 11 months, but you would have paid $1,514.97 in interest. Just by switching the order of your debts, you can save hundreds of dollars in interest payments. For individuals with larger amounts of debt, the avalanche method can also reduce the time it takes to pay off the debt by a few months. The snowball method builds the motivation on your debt repayment. It’s important to remember that paying back debt is not exciting, and it can feel like a very long journey, so you can ask yourself which is the best method? If you are serious about tackling your debt, then pick which method is best for your own situation and personality. The best method is the one that you stick to. If you are a person that needs more motivation to pay off debt, then stick with the debt snowball method. Find or create the best method for you, but even more importantly commit to getting out of this consumer debt. When you complete this journey, you will essence give yourself a raise. Also, as you’re getting out of debt go ahead and take the extra money and grow your assets.
https://www.cnbc.com/2017/07/31/marcus-lemonis-the-2-essential-reasons-you-should-buy-a-home.html

To own or not to own? For lots of Americans, that is the question. Homeownership can be a tricky subject. Some experts argue it’s the expense that never stops taking, while others venture that not owning a home is “the single biggest mistake” young Americans are making. Serial entrepreneur and host of CNBC’s “The Profit” Marcus Lemonis comes down in favor of owning, or taking steps towards owning, the place you called home. Lemonis says that planning to own a home is beneficial even before you’re in the position to buy, because it forces individuals to think hard about saving for the future and presents a crystal clear goal. Though he notes that real estate prices in some markets make homeownership out of the question for some who might like to buy, he says there are two key reasons to consider planning to purchase property: The two key reasons are attention to budgeting and the sense of accomplishment. “In order to buy a home,” Lemonis tells CNBC Make It, “you need to have a down payment, in order to have a down payment you need to budget properly, in order to budget properly you have to buy one pair of shoes and not three pairs of shoes. It teaches you a form of moderation.” That outlook on moderation, Lemonis argues, can be applied to purchases of any size in any phase of life. To save for a down payment, you need to have a budget, and more importantly a level of self-control when it comes to your spending. I suggest having an accountability person, who you give permission to help increase your ability to save. Studies show that it takes 21 days to form a habit. Contact me and I’ll show you my process of how to accelerate your savings and at the same time budget. “I remember going into my home the first night,” he says. “It had no furniture in it, and I didn’t care. The sense of pride and accomplishment that I had about saving $23,600 was a big deal.” The financial lessons learned from homeownership, combined with the self-esteem earned through saving a down payment and the sense of security that comes from owning the place where you live, Lemonis argues, is a powerful combination. “Where we lay our heads down at night,” he says, “is important.” Owning a home will cause a lot of unexpected expenses so it’s important to properly manage your finances to both increase your income and lower your expenses for paying down or off your mortgage. Remember that real estate has value. There is only so much earth so even if the house loses value, the real estate underneath it may still hold value. As you increase your income and lower expenses, look to create income producing assets that will pay the mortgage for you. Create a system to follow and even more importantly commit to doing it.

 

If you are interested in creating a budget, then contact me for a financial checkup in the contact me section. Also, learn more about the self-lending principle in the mustard seed section.

This week, I’ve included Watch this WHEN YOU FEEL LAZY – Intense Motivation for Ending Laziness from the Video Advice YouTube channel.

“If you think you know it all, you’re a fool for sure; real survivors learn wisdom from others.”

Proverbs 28:26 MSG