At some point in life most of us have experienced the aggravation of having to live from one paycheck to the next.  By the time the next paycheck arrives, you are already broke.  When the new payday comes, most or all of it is already spent.  There never seems to be enough money just to put food on the table and cover the normal household bills, let alone provide for any leisure or luxury.  There will come a time or an event in your life, a catalyst, that will make the change that needs to take place less painful than continuing on your current path.  When this happens, here is a good way to get started on your journey off of the payday to payday cycle.

• The first thing that you must do is get on a budget.  Do not let this “b” word scare you.  I can honestly say that one of the most important steps on our journey out of debt was creating and sticking to a budget.  Bob over at Christian Personal Finance has a great article that list 7 free printable budgeting worksheets that is very handy when you are just beginning.
• Next, look for any place in your budget that you can save money.  Do you really need a  house phone and a cell phone?  Is cable/satellite TV really a necessity?  Are you watching your “phantom” charges from appliances and other electronics that are seldom used? Are your windows and doors sealed for air leaks?  For more ways to save money each and every month click here.
• After you have pinched every penny from you current income, if you still do not have adequate capital to make progress with your debt reduction, it may be time to look for ways to increase your income.  Do you have a unique set of skills that you could market for extra income?  Are there items in your residence that are no longer in use that could be sold at a yard sale or on Ebay?  For a list of ways to make some extra money check out this post.

We can encourage you that it is a process worth undertaking.  Using the strategies that we have listed on this blog we have eliminated two of our monthly bills, we will eliminate a third within the next month, and we are on track to dispose of over 40% of our total debt this year!  Using the strategies that we listed in our Making extra money post we doubled (yes, I did say double) our income in February this year-and it has stayed the same since.  No matter how big the obstacles seem, there is hope.  Will the task be easy? Probably not.  Most things worthwhile are not.  Will people criticize and judge/discourage you? You bet.  We could not even begin to count those that have told us we were fighting a losing battle.  They have repeatedly told us that debt is just a way of life.  We even bought into that lie until we seen that there are a select few that are living debt free.  That is the life we are choosing to live.  Will you join us on this journey to financial freedom?  Please drop us a line and let us know what stage you are in, what goals you have set, and any strategies you have in place.

As always, thanks for reading and have a great day!  Have a question or topic your would like to see covered?  Leave a comment and we will respond the first chance we get!

• Eliminating Debt in 2009 Part 2 Extra Income
• Comparison Shopping
• 100 Ways in 100 Days-14: Seal Air Leaks
• 100 Ways in 100 Days-13: Fill Your Freezer
• 100 Ways in 100 Days-12: Remove Items in Groups from Refrigerator
• 100 Ways in 100 Days-11: Use Ceiling Fans
• 100 Ways in 100 Days-8-Use a Toaster Oven
• 100 Ways to Save Money in 100 Days-3: Air Dry Clothes
• 100 Ways to Save in 100 Days-1: Unused Appliances and Electronics
• Get Ready for 100 Days of Saving Money

In order to become debt free (which will allow all of the above to be completed with cash) it is vital that we stay the course that we have set for ourselves.

“Keep you eyes on that brass ring.” We apologize for the infrequency of posting-a regular schedule will start soon.

We hope that you are all having a great week, that you may have a wonderful Easter weekend! As always thanks for reading and have a great day!

• No Related Post

Has your financial documents and other important information ever looked like this?  Ours did not too long ago.  When we first started to get out of debt and try to take control of our finances we really had no idea where to begin.  Our bills were in the house somewhere(or so we thought).  We ended up just making guesses at what we owed to whom when we made our first budget and debt list.   Now, we can lay our hands on most any document we need in less than 2 minutes.  Here is how we got started:

1. We started a file system Originally this consisted of tan manila folders in a pile (a filing cabinet was a luxury at the time we were going to do without).  We had each bill we owed in its own little folder.  Then we placed the bills in groups: credit card debt, personal loans, car loans, and household expenses (mortgage, insurance, taxes, phone, electric, water, etc.) These eventually migrated to a box that had once held reams of copy paper, and from there into a filing cabinet.
2. We processed immediately As soon as the mail came through the door it had a place to go.  If it was a bill it was placed in the “to be paid” folder in whatever position it needed to be based on date. Once paid it was transferred to the correct account folder.  If it was a bank statement it was reconciled and filed.  The point is that most of our disarray was caused by just laying the mail down when we came in and forgetting about it.
3. We started a master list of bills This is a tip I read about over at No Credit Needed.  The list contained all of our bills, the estimated balance, the interest rate, and the date due.  At any moment we can look and see where we stand on our consumer debt.
4. We started an account and number list Another idea we gleaned from NCN.  The list has all our accounts (bills, checking, savings, etc.) with the name of the account, account number, account balance, address, and any relevant phone numbers.
5. We go over the finances once a month If you are in a relationship that you share financial responsibility in, it is imperative that you communicate and keep each other informed. It also helps that you are looking at the progress made together.  It makes it easier to say no to the $20 container of coffee and go with the $12.

That is what worked for us.  We started cutting expenese (who really needs to spend $130 a month on movie rentals?) and earning a little extra here and there.  It is paying off  in huge dividends right now.  We just paid off one of our personal loans last month, and we are on track to reduce our overall debt by 40% this year.

Thanks for reading, we hope you have a great and wonderful day.  Feel free to leave an orginization tip that has helped you in the past, or make a suggestion on a topic you would like to see on here.  Take care.

• What Debt Would You Pay Next?
• January Update: 1 Bill Paid Off!
• Eliminating Debt in 2009 Part 1 Saving Money
• Free Debt Reduction Ebook!
• It Pays to be Financially Organized

As noted in our last post, we have paid off our first bill this year.  It was a personal loan that still had over a year left.  Now, the question we face is which bill do we pay next?  There are several schools of thought here, we are going to list them and then ask your opinion.

Pay off the debt with the lowest balance.

If we do this, we could have our next bill paid off in around six months.  The idea about this way (which is part of the Dave Ramsey plan) is that it gives you a psychological boost each time you pay a debt off.  It also helps you stay disciplined and on the right track.

Pay off the debt with the highest interest rate.

This way allows you to save more over the long run.  The difference in interest expense can be considerable over time.  By getting rid of this debt early you can save all the money that would have been spent on the interest.

Pay off the debt with the lowest interest rate.

If you are following some sort of a payment schedule (sometimes called a “snowball” by Dave Ramsey readers) you may place all of your extra money into paying off the bill with the lowest interest rate.  Here the concept is that since the payment has less interest, more of your money is going toward the principal.  Since a lot of us have our lowest interest rate in our mortgage, I think the sheer amount of time required to complete this would ne demoralizing.  This is definitely not the way we are going.

Well, we would like your thoughts on the matter.  On our site (for those of you getting this via a feed reader or email) we have a poll going for the next two weeks.  Come on over, tell us what you think, and we will display the final tally on Feb 21, 2009.

Thanks for reading and have a great day!

• Getting Your Finances in Order
• January Update: 1 Bill Paid Off!
• Eliminating Debt in 2009 Part 1 Saving Money
• One Step at a Time: A Journey Toward Financial Independence Step 3: The “B” word (Createing a Budget)
• Free Debt Reduction Ebook!
• Improve Your Financial Situation Through Education
• Beating Depression caused by Job Loss
• One Step at a Time: A Journey Toward Financial Independence
• It Pays to be Financially Organized

photo courtesy of www.accountingunleashed.com

Well, January was a great month for us.  We have paid off our smallest personal loan.  This is our first bill that we have completely paid off since we began our Total Money Makeover.  By sticking to our budget, earning some extra money, and a little sacrifice we paid off this loan a full 13 months early-saving ourselves $427.18 in interest.  Another thing I would like to point out is that this was all aceived on a very modest income.

Now the increase in our assest was nothing to get excited about (an increase of 0.4%), but anything other than a negative number is fine with us.  The percentage of debt reduction was great (though just a little under our goal) at a whoping 3.2%.  If we continue this percentage every month that will have us at a total of 38.4% of debt gone at the end of 2009.  That is just shy of our 40% goal. This summer we are going to do some freelanceing to make up for the other 1.6%.

Thanks for reading, and have a great day!

How are you doing with your debt reduction progress?

• Getting Your Finances in Order
• What Debt Would You Pay Next?
• Eliminating Debt in 2009 Part 1 Saving Money
• Free Debt Reduction Ebook!

Welcome and thank you for reading our article. We are continuing to eliminate our debt. Our goal is 40% this year, even in this slow economy. If you are getting out of debt, or just enjoy personal finance and money saving articles, you can get our post via an RSS reader or Email.

In our last post we discussed some of the ways that we are going to save money this year.  Now, on the flip side of that coin, we are going to list a few ways that we are going to increase our income this year.  If you can save on your expenses, and increase the amount of income you are bringing in, well my friend you are fighting with a two edged sword.

Just as a disclaimer, for those of you who are looking for full time income, these ideas are for supplemental income only.  You will not get rich completing some, or even all of these activities.  I will say that depending on your level of commitment it is feasible to make an extra $200-$300 a month by working at all of these.   If you decide to work extra hours at your current job (or pick up a part-time job) those numbers will increase drastically.  So, without further delay, here are some of our nickle and dime sources:

1.  Surveys and Email Programs-Last month we made over $40 dollars by doing this when we felt like it.  Last year, when we disciplined ourselves to completing surveys everyday we averaged around $65 a month for surveys only.  Here are some of the survey providers and email advertisers we use:

• Inbox Dollars-sends you emails a few times a day, you click on the link in the email, and you get paid(only 2 cents each, but all you are doing is clicking a link and then closing the tab right?).  They also have surveys (this is one that we done everyday) that you can qualify for and make $0.50 each.  If you frequently shop online, the have several rebate programs that you earn money back for each dollar you spend. Right now they are offering a $5 sign-up bonus.
• Your2Cents-has surveys available often.  They will send you an email telling you about the survey (what it is about, how long it will take, and how much it pays).  They usually pay $1-$5 per survey, and they mail the check once you have hit $10.00.  They say that it could take up to six weeks to get your check, but every time we have requested a payout we have received our check within the first week.
• YouData-sign up for their program, fill out a couple of profiles, then get paid to view ads.  Right now they are doing text ads, but video will be coming soon.  The general pay is $0.20 per ad viewed (at least that is what we have been paid thus far), and they pay every Friday via PayPal.
• OpinionOutpost-almost the same as Your2Cents, they send you an email with the various details, and you earn so much per survey that you qualify for and complete.  Their surveys are generally short, and they have always sent out several a week to us.

2.  Ebay-this is not as lucrative as it used to be (increased number of users, higher Ebay fees, etc), but it is still a reliable source of income.  Start slow by selling items from around your house before trying to enter the wholesale arena.  Here is a post we done on selling items on Ebay.

3.  Freelance a skill or service-do you have a hobby?  A skill that others would pay for?  There are always people willing to pay you to do a service that either they do not want to do, or do not know how to do.  There are too many to mention here, but just a few that come to mind right away: Article writing for blogs or content providers, cleanig houses or cars, walking dogs in your neighborhood, window cleaning for local businesses-you get the idea.  The trick is to find something that is going to make you some extra money, but does not require a lot of overhead up front.

4.  Blogging-this one deserves a whole series of post (which it will get in the future).  You can make a  considerable amount of money by blogging, but it is a lot of work.  We make money from this blog as well as a couple of others, but the hourly wage is a very insignificant number.  When you are blogging, it really has to be about the passion and not the money.

5.  Extra work-everyone’s least favorite, this is one that we are going to implement this year as part of our Total Money Makeover. We are going to start by working extra hours that are available at our “day” jobs.  If these hours are no longer available, then getting a part-time job will be the next move.  I know that everyone thinks this economy is aweful, but those who want a job have one.  It may not be one that they prefer, or that is what they consider their “pay-grade”, but they have one none the less.

6.  Donate Plasma-we have done this for quite awhile, and it is similar to giving blood, only they give most of it back.  Without going into too much detail, blood plasma is used to make various medications.  The service we use pays $35 dollars per donation and you can donate twice a week.  For more information search for a Plasma Donation Center in your area.

Once again-you are not going to get rich by doing this, but our goal is freedom from debt; wealth will come later.  Thanks for reading, and have a great day!

What are your plans to increase income this year?  Have you tried any of the above?

• How to Break the Paycheck to Paycheck Cycle
• Selling on Ebay: One Way to Make Extra Money

It is now a great time to begin a comparison shopping campaign if you do not already have one in place.  Finding great deals is awesome, as well as commendable, but saving money on a regular basis is a far better endeavor.  Then when you combine the deals with the weekly strategies you come out way ahead.

One of the easiest items to comparison shop is groceries.  Since grocery stores abound, you can usually find the same quality of product at several locations within a few miles.  The interesting fact is that in some cases the “everyday” price of these items will vary greatly (we have seen up to 30% differences on several staple goods).  The idea is to find what products are the cheapest at which stores and purchase the items at the best price.

We have seen and read about many different ways to comparison shop, and there is not one that is superior to the others.  It is all a matter of personal taste.  Ways people comparison shop:

1. Sales Papers- there are entire communities dedicated to this way of shopping.  If you look a little online you can probably find one for your area that will let you join free of charge.  The way they shop is by looking at the sales papers for the stores in there area, and then planning the weeks menu based on what is on sale for the week.  This is not a bad idea as long as you can make yourself conform to whatever is on sale that week.
2. Price Books-we had honestly never noticed this until we read this tip.  Since then we have noticed a few people each week carrying a book with them and writing things down as they went.  While this works for some, for us (we try to get out asap to avoid impulse shopping)  it slows down the shopping process too much.  The few times we tried to shop this way, it slowed us down by an average of 20 minutes per trip-not worth it to us.
3. Spread Sheets-This is not a perfect method, but it is the one we prefer.  We save our receipts (it took us around six weeks to get the all the items we use regularly) and then enter the data in a spread sheet.  We alternated where we bought items through various stores in our area for the six weeks listed until we got the information we needed.  Every week we enter in our receipts (takes about 5 minutes) and see where we stand.  The negative ti doing it this way is that you have to frequently either watch the prices and try to remember them, or alternate shop again (which causes a loss of money).  Luckily our savings have stayed steady, even through the price increases due to the high gas prices last year.

Just as an example, the store that has the best quality and price of meat for us has canned items (corn, peas, green beans, etc. that we use a lot of) for 89 cents a can.  Our second store just 2 miles away has the same cans for 41 cents a can.  Just this one area save us approximately $6 a week.

Comparison shopping is also great for other purchases, especially large ones, as well.  We have saved on our “normal” expenses by comparison shopping for prescriptions (seems almost everywhere has a local pharmacy, Wal-Mart, Kroger, CVS, and Walgreens competing for business), insurances, car maintenance items, etc.

A few considerations about comparison shopping:

• Make sure the payout is worth it.  It is of no use to spend 12 hours comparison shopping and save 12 cents.
• Consider all aspects when you compare.  I am mainly referring to appliances here, but I am sure other situations fit.  Consider the quality of the products you are comparing, the energy consumption, and warranty length of the product in question.
• Make it a habit and you will usually get the best deal that is available to you.

Thanks for reading, and we hope that you have a great and wonderful day.

Do you comparison shop?  What method works best for you?  What is the most you have saved?

• How to Break the Paycheck to Paycheck Cycle
• 100 Ways in 100 Days-14: Seal Air Leaks
• 100 Ways in 100 Days-13: Fill Your Freezer
• 100 Ways in 100 Days-12: Remove Items in Groups from Refrigerator
• 100 Ways in 100 Days-11: Use Ceiling Fans
• 100 Ways to Save Money in 100 Days-3: Air Dry Clothes
• Saving Money While doing Your Household Shopping

First of all I would like to say that we are coupon users through and through.  Using coupons is just one of the ways that we save on groceries.  This past week was kind of slim on the savings, so we were just wondering how many of you feel that coupons are a waste of time?

Our process usually goes something like this:

1. We get our Sunday paper early Sunday morning before church (if we wait until after they are usually all gone). Time-10min.
2. We check our usual websites and company web pages for weekly sales that are going on in our area. Time-45 min.
3. Next, we check the coupons that are inside the paper to see if any match products that are currently on sale. Time-30 min.
4. Lastly, we clip the ones we are going to use this week and file the rest for later storage. Time-5 min.

That is equal to one and a half hours of work.  Lets say that in your freelance business, or personal work that you average ten dollars per hour, you have just “spent” $15.  Factor in the cost of the newspaper and now you are at $17.

The question in play here is this-Can you save $17 by using the coupons for that week, and if so, is it worth it?  If by using coupons we save around $25, then we are only at “net” gain of $8.  With that figure we could easily make the money by writing a blog post, taking a few surveys, or many of our other endeavors within an hour and a half.

As for us, it is worth it.  We get some really good deals more often than not.  Also, this is a family gathering, so while all of this is going on (including the shopping) we are enjoying time together as a family.

If I were strictly looking at it as a way to save money and get ahead of the game, I am not sure I would continue doing it.  Most coupons are for brand name items.  We have a few things that we only use brand name products, but for the most part their generic or store brand counterparts are just as good (in a few cases better) and are cheaper even if you use a coupon on the brand name.

That is just a couple of our views on coupon use-what are your thoughts?  Do you have a system that really allows you to save tremendous amounts?

Thanks for reading and have a great day!

• Combating the Rising Cost of Groceries
• Saving Money While doing Your Household Shopping

One of our main goals right now is to get out of debt as quick as possible. We lived rather recklessly and it got us into a mess. It is not an easy task to get out of debt (far easier to get into than out of), but it is an attainable goal. Right now if we paid the minimum payment or bills (student loans, personal loans, mortgage, etc.) we would be in debt for the next 24 years! That is no longer acceptable, so we have a plan in place to reduce this time drastically (we are hopeful to reduce total debt by 40% this year).   How?  Glad you asked.

First, we are going to continue to try to reduce our expenses. In the order of importance to us:

1. Meals

This is our biggest area that we struggle with. Many times money is spent on convenience meals (that only leave you hungry in an hour) that could be used for more groceries. We have literally wasted an entire months of grocery money in one week. It is our goal for 2009 to make our dining out experiences enjoyable family outings-not just a trip to the drive through window. Another way that we are going to try to improve the area of meals is through more and organized coupon use. Combing coupons with weekly sales allows us to get many items drastically reduced, free, or if we are really lucky-we get money back!

2. Reduce our fuel expense.

Our second area that has the most room for improvement is our gas expense in our vehicles. For ways that we have reduced our fuel cost, check out this article.

3. Reduce our utility bill

Lastly, we continue to try new and innovative ways to reduce our monthly utility expenses. The best ways to help reduce this expense are in our saving on expenses category.

As a note here, there are a couple blogs out there that are really worth reading while trying to reduce your expenses. First, Money Saving Mom is a great resource for sales and deals that we mentioned earlier about getting things reduce or free. Also, Lynnae at Being Frugal always has useful information on frugality and other personal finance information. GLBL Guy at Gather Little By Little is great about providing specific personal finance information and often has free software, spreadsheets, and other reviews. We have learned a lot from these three (and others), and have been inspired by both their stories of successes and failures.

We are currently on step two of the Dave Ramsey Plan. We have our $1,000 dollar emergency fund in place and we are currently working on our debt snowball. For those of you who are getting out of debt, this is one of the best plans on the market. It required a little personal tweaking in our situation (we still wanted to contribute to retirement accounts while getting out of debt), but it has worked well for us so far. The name of the book is The Total Money Makeover: A Proven Plan for Financial Fitness.  If you need a little motivation as well as a guideline debt reduction plan, this is a must read.

Tomorrow we are going to dicuss ways to increase income in 2009 to help eliminate debt. Thank you for reading, and have a great day!

Photo courtesy of www.freefoto.com.

• 100 Ways in 100 Days-7: Bake Items in “Groups”
• 100 Ways to Save Money in 100 Days-6: Use a Prgrammable Thermostat
• 100 Ways to Save Money in 100 Days-4: Wash Only Full Loads of Laundry
• 100 Ways to Save Money in 100 Days-2: Filters
• Getting Your Finances in Order
• What Debt Would You Pay Next?
• January Update: 1 Bill Paid Off!
• 100 Ways in 100 Days-12: Remove Items in Groups from Refrigerator
• 100 Ways to Save Money in 100 Days-5: Switch to CFL’s or LED’s
• 100 Ways to Save Money in 100 Days-3: Air Dry Clothes

Today we are going to talk about one of the biggest energy loss factors in any dwelling. An improperly sealed house (we will discuss insulation in another post, even though they go hand in hand) can “breathe” as much as once an hour. That means that every hour an entire cycle of new (unconditioned air) circulates through your house. This causes your heat or air source to work continuously to try to keep up.

According to The U.S. Department of Energy 46% of your homes energy loss due to air escape occurs in the floors, ceilings, and duct. These items we will focus on during the insulation post. The rest of the house we can work through an area at a time. So, lets get to it.

The first thing we need to do is to find the location of the air leaks. The best way is to burn an incense stick and let the smoke rise. For each of the following areas if the smoke travels horizontally there needs to be some work done:

1. The Fireplace. For those that have one, this site alone counts for 14% of the air loss. The best way to prevent this is to install a damper in your fireplace and make sure it is a good seal. If this is not an option, consider covering the fireplace opening with cardboard when not in use.
2. Plumbing Areas. An often overlooked area, any place where plumbing enters your house is good place for air to leak in or out. On average it accounts for 13% of air loss. Be sure to check all supply lines near sinks, showers, washers, and toilets. Also check the drains to sinks, showers, and washers. Most of these should have a plate installed to cover the hole; for added protection lift the plate and spray some foam insulation around the pipe. Replace the cover and you are finished.
3. Windows and Doors. These two account for 21% of air loss in the average house (10% and 11% respectively). Some windows are too far gone to do much with other than replace. Until you can do that, cover the window with plastic-your local hardware store will have kits available, but we have just used a good 3mill plastic and it has worked well. If your windows are not in terrible shape, a little caulk and weather stripping goes a long way. Just run an adequate bead of caulk around the areas where the glass connects to the window frame and smooth it out. For the windows, as well as the doors, place an adequate piece of weather stripping where the joints come together. It is a good idea to measure the area that needs to be sealed; too thick of a seal will not allow the window or door to close and lock properly.
4. Fans and Vents. For this area the main culprit is usually the damper and most houses loose an average of 4% here. Check all fans and vents with the incense as mentioned above. These may need to be weather stripped also. If you have a dryer vented to the outside be sure to check it often. Lint from the clothing will sneak past the filter at times and not allow the damper to close properly.
5. Electrical Outlets and Switches. This us usually the least of the worries (only around 2%) and is easily fixed. Most hardware stores will have available small foam inserts that fit directly behind the outlet or switch cover. These are relatively cheap and easy to install.

That is quite a bit to take in during one setting. Our project took us several months to completly finish. We started in one room and got it completed before moving on, but focusing on any one of these areas at a time seems to be the way most people we have talked to prefer to do it.

One great book that has helped a considerable amount of people is Consumer Guide to Home Energy Savings, 9th Edition: Save Money, Save the Earth. This book is filled with practical advice, most of which will make a huge difference. Many of the projects can be completed in a weekend.

Again we would like to ask for your comments or suggestions, and thank those of you who have replied. Thanks for reading and have a great day!

• 100 Ways in 100 Days-11: Use Ceiling Fans
• 100 Ways to Save Money in 100 Days-3: Air Dry Clothes
• Save Money on Your Utility Bill Part 3-Heat and Air
• How to Break the Paycheck to Paycheck Cycle
• Comparison Shopping
• 100 Ways in 100 Days-13: Fill Your Freezer
• 100 Ways in 100 Days-12: Remove Items in Groups from Refrigerator
• 100 Ways in 100 Days-9: Clean Refridgerator Coils
• 100 Ways in 100 Days-8-Use a Toaster Oven
• 100 Ways in 100 Days-7: Bake Items in “Groups”