These people are portrayed as poor in today’s society, and they live like kings.

Do you have a roof over your head?
Do you have a house, condo, or apartment? Can you lock your door at night and feel safe knowing that you have a place to call home? If you have a roof over your head, and a place where you can safely store your belongings, then you are not poor. Poor is someone who wanders the streets at night unsure of where they will find a place to sleep.

Do you drive a car?
Do you own a car? Do you have the ability to transport yourself and your belongings across the country and without notice? If you have the luxury and freedom to drive where you want and where you want, then you are not poor. Poor is someone who waits for hours to ride a bus that doesn’t take them close to where they want to go, or who has to walk for miles with ill fitting shoes.

Do you have a hot meal every night?
Did you have a choice in what to cook or eat for dinner each night? Chicken or beef? Soup or salad? If you can choose which vegetables to eat with dinner, then you are not poor. Poor is someone who has to go hungry so their children can eat, or who does not know where their next meal is coming.

I’m not saying that millions of American families aren’t finding themselves in terrible positions, I’m just asking that people who are wallowing in their own misery look at their own situation with some perspective. While you might need sell your house, trade your car, or cut down on your grocery bill, you are still living a better life than most other families in third world countries. Too many Americans seem to have taken their lifestyles for granted, and need to appreciate the life they still have. No matter how bad your financial situation may seem, odds are it can be much worse.

Appreciate what you have, and stop dwelling on what you don’t own or can’t afford.

HDMI cables
HDMI cables are the latest technology used to display an HD signal on your fancy new HDTV. If you recently bought an HDTV and hooked it up to a cable box or satellite dish, odds are you own an HDMI cable. HDMI sends signals digitally, meaning that there is no loss from one source to another. Salespeople will try to sell you a $120 Monster Cable brand cable if you are shopping in a Best Buy or Circuit City. But if you shop online, you can find that same cable for $5. That’s $110 saved, and you won’t notice a difference in picture quality (despite what the salesmen tells you).

Optical cables
Do you have a fancy surround sound system? If you do, odds are that it’s connected to your DVD player with  an optical cable. Optical cables transmit digital sound information optically with using a fancy technology called fiber optics. Best Buy employees will have you believe that you should spend upwards of $50 to get the best possible sound. But you can buy an optical cable for $5 online, and enjoy the same sound quality.

Line-in cables
Does you car have an auxiliary in jack so you can plug in an MP3 player? My wife and I were at Target the other day and were looking for a cable to plug her iPod into her car’s stereo. The cheapest one we could find in the store was $10. When I went home and looked online, I found it for $1.50.

The markup on most cables in brick and mortar stores can be insane. Salesmen will have you believe that the prices are justified, and that you’re paying for quality. But what you really helping pay for is the overhead of the stores expenses. By shopping online at stores such as Amazon and Monoprice, you can quite easily save yourself hundreds of dollars. To me, it’s a no-brainer.

Here are some of the blog carnivals I was featured in:

• Money Ning hosted the Carnival of Personal Finance and featured my post There are no victims in the housing market. It got quite a response!
• Credit Card Lowdown hosted the Carnival of Debt Management and featured my post Are you prepared for the recession?
• A Penny Saved hosted the Festival of Frugality and featured my post Five things you should buy used.
• The Financial Blogger hosted the Carnival of Money Stories and featured my post Going bald is a blessing in disguise.

Over the course of the past week, a number of bloggers wrote some great posts:

• Get Rich or Die Trying wondered how much is customer service worth? It turns out not a whole lot.
• Girls Just Wanna Have Funds went into the psychology of a recession. This a is a great read!
• Living Almost Large pondered whether women or men cost more. Judging from our bank statements, I’m going to lean towards women!
• Master Your Card did a great writeup on why America needs a recession.
• No Debt Plan wrote a detailed response to a reader who was nervous about buying a new home.
• Our Fourpence Worth sent me down memory lane with their post on how to make a memo board.
• Saving Savy wrote a great historical look back on her family’s finances. This is a really interesting read on how her family’s spending made her what she is today.
• The Social Marginal wrote about the housing bust from a developer’s perspective.
• Wide Open Wallet has a really cute story about teaching her daughter about spending money at the school store.

That wraps this week up! I hope everyone has a great weekend!

So how do you break the credit card debt cycle? And more importantly, how do you stop from using credit cards?

How we paid off our credit card debt
Back when we first decided to pay off our credit cards and swear them off completely, we carried a combined balance of nearly $7,000. I’m not sure what triggered our decision to wipe out our credit card debt, but when we set our minds to it, we got straight to work. We had already funded our emergency fund with three months worth of expenses, and we also had a large sum of money sitting in an Emigrant Direct savings account.

Now, most people would suggest that we take the money that was in our savings account and pay off our credit card debt with it. While that might have been the smartest choice, psychologically it was a difficult decision. It had taken us a long time to save up that money, and we didn’t want to watch it a big chunk of it disappear in one payment.

So we decided to leave our savings alone, and redirected any and all excess money at the end of each pay period toward our credit card debt. We virtually eliminated our entertainment expenses (eating out, movies, drinking at bars) and used that money to pay off our cards. While $7,000 seems like a lot of money, we managed to pay it off in three month’s time.

Now I’m not saying everyone can aggressively attack their debt like we did since everyone’s income and expenses are different. The key is that you won’t be able to eliminate your debt unless you make a serious effort of it. Make a plan and budget, and you stick to it. While at first a large debt can seem intimidating, little by little it while shrink down to a manageable amount as you hack away at it with each payment. What’s important is that you don’t give up hope, since every month when you get your credit card statement, the balance due should be slightly smaller each time.

How we stopped using our credit cards
After we paid the cards off, we swore off using them for everyday expenses. The convenience of paying with a credit card is tempting, but it’s what got us into our original situation to being with. We had already sat down and figured out a budget to curb our spending each month. As for miscellaneous “fun” expenses, we now pay for those in cash. As soon as our wallets run dry, we have to make an effort to go to an ATM to get more. Now, each time we pull money out of the wall, we ask ourselves: “Can we afford this?”

By forcing yourself to pay for items in cash, you can only spend the money you have on you. So when you run out, and you have to find an ATM to get more, you have the time to cool off and think about whatever it is you want to purchase. More often than not, I find myself not going back to the store after I think things through.

The key to living a life without a credit card is that you limit yourself to only the money you have. Most of the junk that we bought that ran up our credit card bills to begin with is never looked at. Of course, we still carry our credit cards on us in case of an emergency, since you never know what might come up that you don’t have enough cash on hand to pay for.

It’s just tough trying to explain to my wife that the red dress in the store window doesn’t count as an emergency.

The reason I may seem a little jaded to these cries for help is because these families are now turning to the government to ask for handouts because they blindly signed for a mortgage document that they either didn’t read, or fully understand. To make sure this won’t happen to you in the future, here are some quick tips when dealing with binding financial contracts.

Always read the fine print
Any contract, be it for a mortgage, credit card, or auto loan, can seem harmless when you gloss over the highlights. This is intentional. Companies that stand to profit from your financial indiscretions typically bury the less desirable parts of a contract deep within its pages.

Hire a lawyer
Think about it, if you’re buying a house, odds are you are going to sign mortgage papers that require you to pay back hundreds of thousands of dollars. Don’t you think a couple hundred dollars to hire a lawyer is worth it? While a mortgage agreement might seem like alphabet soup to you, a real estate attorney deals with these documents on a daily basis. They’ll be able to quickly weed out any potential pitfalls.

Bring a Sharpie to the closing table
Many people don’t realize that contracts are negotiable. They just blindly sign whatever paperwork gets put in front of their noses. If you see something you don’t like on a contract, strike it out and place your initials next to the strikeout. Explain to the people at the table that you don’t agree with whatever it is you don’t like, and request that a new contract be drawn up with that sentence or paragraph removed.

Be aware of what you are getting into
There are a lot of different types of mortgages out there, and each one has it’s merits (although some more than others). Just like any other major purchase, you should always perform the necessary research to become smart enough to make a sound decision. Placing your trust in people that work on commission is a recipe for a financial disaster.

By successfully budgeting your expenses, you can plan for the future and stop living day by day. Here are some tips to help your start a budget and stick to it.

Take a deep breath
Creating your budget doesn’t have to be difficult. Just remember when you’re starting out that you need to give yourself some breathing room in your plans. After all, you can’t know if one month your grocery bill is going to go $20 over, while your electric bill might be cheaper. Just keep in mind that if your expense isn’t fixed (like a mortgage, rent, or car payment) you should list a ballpark figure that leans toward the high end of that expense. That way, you give yourself some space.

Be honest with yourself
When you set out to create your budget, don’t set goals for spending that aren’t realistic. For example, your family spends about $500 a month on groceries, don’t budget for $250. Set financial goals that you know you can achieve. When you start writing down amounts that you want to limit your spending to, make sure that it’s actually possible. Nothing blows a budget faster than unrealistic goals.

Write down your actual expenses first
Before you set out to make a budget, write down your all your actual expenses. And I mean everything. From the obvious (mortgage) to the mundane (highway tolls), make sure that you create an accurate record of all your expenses as they are. It doesn’t matter if you jot them down on a napkin or if you itemize them in an Excel spreadsheet, what it is important is that you tally all your current expenses so you can create a benchmark to beat.

Trim the fat
Now that you’re staring at all your monthly expenses, let them sink in a little bit. For me, I didn’t realize we were spending over $500 on month on restaurant bills until the cold hard facts were staring me in the face. By reviewing all your actual expenses in an organized fashion, you can quickly see areas in your spending that you can naturally cut back on that won’t immediately impact your quality of living. So drop that $50 a month gym membership you don’t use, and cancel HBO. It’s time to stop spending and start saving.

Tough it out
The first month on your new budget might be difficult. After all, when you reviewed your previous lifestyle, you realized that you were spending money hand over fist on goods and services you really didn’t need. While at first it might be hard to curb your spending habits, give it a good solid six months before you reconsider spending more money. Watch each month as your savings grow, and let that be a motivator to you.

At first, I thought that perhaps we had missed a bill at some point, and that the debt was indeed legitimate. After all, why would we be contacted by a collection agency if we didn’t owe someone money? But after we made some phone calls, it turns out that this debt collection company either has false information, or is taking us for a ride.

To sum up what’s happened over the past month, we got a letter from a debt collection agency stating that we owed $48.99 for a purchase at a pharmacy. According the agency, my wife’s health insurance had expired on 11/22/07, and her insurance company was owed money for a pharmacy purchase made in December.

My wife started a new job in December, and her insurance from her previous employer was valid and paid for through 1/31/08. We have verification of this through both her previous insurance company and her old employer. Her previous insurance company also verifies that we do not, nor ever have, owed them money for unpaid debts.

Now here is where things get weird:

• The debt collection agency says my wife made a purchase at our pharmacy on 12/4/07 for $48.99. Our pharmacy has no record of us making any purchases in December.
• My wife’s previous insurance company has never heard of this collection agency. While they do use collection agencies to recover unpaid bills, they do not use this particular one.
• My wife’s previous insurance company says that they do not cancel policies at the end of the month (in our supposed case, 11/22) unless explicitly instructed to do so. Policies are paid in advance and last through to the end of the month. So if I make a payment for a policy for the month of January, I am covered to the very last day of that month.

I have spoken to the debt collection agency over the phone, and the people I have talked to have been way more polite than I thought they would be. They confirmed that they received my dispute letter, and according to them, they say the debt is valid. So when I asked what I need to provide them for proof that my wife was covered by her old insurance company at the time the supposed pharmacy purchase was made, they asked for a faxed copy of her proof of insurance.

We faxed a copy of her proof of insurance over this morning, and I called to confirm its delivery. Their response?

We receive hundreds of faxes a day, sir. Please call us back in two weeks after we’ve processed your information.

So there you have it. A company comes out of nowhere claiming that we owe them money, and we have to bend over backward to prove them otherwise. On top of that, we have to wait two weeks for them to process a two page fax.

And you wonder why debt collection agencies are so hated.

Fast forward to that morning, and I’m getting ready to leave for work. I get to my car and see nothing but balloons from the windows. After spending ten minutes rearranging balloons so I could fit in my car, I finally sat down and turned the ignition. Surprise! My battery was dead. Frantic, I ran back and grabbed my bike so I could get to work on time. As I was riding in on my bicycle that morning I realized that I should have started doing this a long time ago.

It improves your health
I have a desk job, where I spend my days sitting in my chair and slowly getting fatter. From there, I typically hop in my car to drive home, and plant my butt on the couch. By riding my bike, I’m getting the excercise my body sorely needs. The ride to work in the morning invigorates me, giving me that extra “push” to last through the day. And my ride home at night provides a great chance to unwind before I get confronted with chores and bills.

It helps save the environment
Sure, keeping my car in the driveway hardly makes a dent in terms of overall pollution, but every little bit helps. The more people that stop driving, and start riding their bike to work, not only reduce emissions, but also ease road congestion. Every little bit helps.

It saves you money
Gas is currently selling for around $3.50 a gallon. Think how much money you could save each and every week by keeping your car at home. Factor in less oil changes and routine maintenance per year as well as reduced insurance premiums, and you’re looking at thousands of dollars saved a year.

If improving your health or the environment aren’t motivation enough to park your car and ride your bike to work, then the potential savings surely will. Right now, since I have to be well dressed for my job, I only ride to work on casual Fridays. But I’ve been toying with getting a messenger bag that I can pack a change of clothes in. That way, I can change out of my sweaty clothes in the men’s room and I don’t have to worry about smelling all day.

• The Simple Dollar wrote about using Amazon for your grocery shopping. Here’s hoping my ice cream doesn’t melt!
• Clever Dude explained what you need to do to get your tax rebate.
• Girls Just Wanna Have Funds wrote how girls have to shop. I think I figured that out shortly after I married my wife.
• No Debt Plan learned the hard way that some things you just don’t want to buy on clearance.
• Our Fourpence Worth shared an awesome frugal pizza recipe.
• Get Rich or Die Trying explained when to start an emergency fund.

Finally, I’d like to thank Stock Trading to Go for hosting this week’s carnival of personal finance. I hope everyone has a great weekend!

So after I stopped crying about my misfortunes, I came upon a realization: Going bald is a blessing in disguise.

I see a lot middle aged men desperately clinging to whatever hair they have left with sloppy haircuts and comb-overs. More often than not, they also try to compensate for their hairloss by growing a mustache or beard. But none of that is for me. As soon as it becomes apparent that I’m kidding myself by trying to style what ever hair I have left on my head, I’m shaving it.

And since I’m a naturally frugal person, I realized there are plenty of ways for me to save money by shaving my head:

• Since I’ll be shaving my head, I won’t need to go to the hair dress every two weeks for $20 a pop. That’s an extra $520 in my pocket every year.
• I won’t need shampoo, or conditioner. Plus, I won’t need to buy any more product for my hair either.
• I can kiss my comb goodbye. That’ll probably save me a whopping $10 a year.
• My shower time will get cut down as well. But since my wife loves to use all the hot water first thing in the morning anyway, I keep my showers as short as possible to avoid get a cold blast of water first thing in the morning.

So at a minimum, going bald in my older years could save me around $600 a year. Of course, I’m going to enjoy my full head of hair while it lasts, but at least I won’t be depressed when I start seeing clumps of hair in the sink every morning.

Oh, who am I kidding. I’ll probably buy a toupée.