Planning
Deal of the Day
OK, I have waited (purposefully) until this week to purchase a new winter coat. We do not have very many good consignment shops in this area, so when I purchase clothes, the purchases are typically made when the store is attempting to free up space for the next quarter. We purchased a coat that had been originally retailed at $69 for $11.99 
Yes, I will take that deal any day of the week, but especially now with the temps hovering in the low 20’s and a wind chill factor of zero. You can find many of the same deals, you just have to look for them + be willing to wait. Most stores are currently freeing up space for Spring clothing, the winter items are going to be marked down (which is still a profit for them, sadly enough), so now is the time to buy not only for the remainder of this winter, but for next year as well. Found any good deals lately?
Living Frugally
Frugal Living
Many people often confuse living a frugal life with not having anything. In fact, living frugally is not living without, it is living smarter (not to mention cheaper). Being frugal on purchases shows that the person has thought through the purchase. Frugality also shows that the purchaser has made every attempt to obtain an item by the lowest price possible.
I offer a living example: a movie date versus watching a DVD at home, etc. Recently, my wife and I took my 6 year old son to see “
Nearly every facet of our lives can be lived frugally. For instance, our family tries to primarily eat organic foods. They taste better and have been proven to be better for you. We used to shop for organics exclusively at Earth Fare; however, a local supermarket has recently begun increasing its organic footprint. The price difference is almost 40% for the exact same items. 40%! Same food, lower price. To boot, the supermarket is much closer to our home, so we are saving more gas money. With gas over $3 per gallon, saving fuel everywhere we can is a big help to our finances.
As you can see, we try our best to save on prices where we can, when we can. If it means going to multiple stores, so be it. If it means clipping coupons, then get the scissors out. You have to look for bargains because from my experience, bargains do not simply fall out of the sky into your lap. That is the reason they are called bargains. Do not forget to calculate the hidden costs of your bargains. The primary hidden costs are time spent and gas.
Of course, living frugally is usually frowned upon. Sure, people always like to announce the good deal they received here or there, but can it become a lifestyle? Of course living frugally can be a lifestyle. Why can it not be? Outside of personal choice, there is absolutely no reason you can not find a multitude of items at a reduced price. You have to buckle down and decide to put forth the effort. Your bank account will thank you 
Our Debt Plan
Our Personal Debt Plan
44% mortgage
23% auto loan debt
18% credit card debt
4% medical expenses debt
.6% personal loan debt
.53% department store charge cards
Our average monthly bills (minimum payments) comes to @ $1800, against a rough $4200 take home pay. Now that doesn’t seem bad, does it? Not at all. Now let’s add the actual necessities for the month:
Food $650, Daycare $200, Gas $520, Satellite TV $70, Car repairs $50, Eating out $175, Car insurance $50, Home Insurance $35, Property taxes $66, Electricity $260, Water $60, Cell and home phones $90, web hosting $15 (I have two other websites that I run), Internet access $10 (yeah, I am stuck in dial up hell), and our student loans ($28k are currently in forbearance).
OK, now our monthly bill total is more or less $4,050. Fine, we are still ahead of our take home pay of $4200. Given a normal “fudge factor”, this is close to the break even point. This is too close and approximately 50% of our pay is going straight into debt.
We created an emergency fund. Out target is a minimum of $1k. While Dave Ramsey advocates getting this fund in place and then attacking your bills, we simply can not afford to do it. We are already behind on every credit card bill, most of the department store bills, and medical expenses. A grand will not cover any major types of events, such as things that have happened to us in the past: blown transmission (my current car’s transmission is slipping) or the such. A grand will also not even come close to covering any type of major illness. Our emergency fund is in place to help us catch the smaller problems that pop up from time to time such as doctor office visits, etc. Although our emergency fund is not being created “The Dave Ramsey Way”, we are working on it.
It is important for both spouses to be on the same page. With only one spouse on board, no plan will ever work. My wife and I sat down and wrote out all of our bills and the minimums for each. In this list, we found it important to also include those bills and debts that are easily forgotten: charitable donations, land taxes, car insurance, home insurance, life insurance, and car repairs to name a few. Once we had the list written out, the wow factor was high, but this is achievable.
The snowball plan as advocated by Dave Ramsey and others is a solid principle to follow. Basically, you pay all of your bills to remain current (get current first if you are not there). If you have any money left over, apply those funds to a targeted bill. Once your targeted bill is paid off, take the money that would have gone to that bill plus the original remainder and re-target to a different bill. For example, our initial target will be our personal loan. The interest rate on this loan is 9.75%, which is not the highest interest rate that we have. The primary reason we chose the personal loan as our first target is because we only owe $675 on this bill. This bill will be paid in full this month due to our snowball effect. Once paid in full, we now have an additional $197 per month to apply to our next target. The debt snowball is a proven method for eliminating debt. This principle is the backbone of 99% of the “methods” out there.
Once the snowball has eliminated our unsecured debt, we will be going after the two auto loans and then our mortgage. At the same time, we will begin saving towards having a minimum of 6 months of expenses saved. While the emergency plan is extremely important in the beginning to prevent unexpected expenses from de-railing you, the total amount that you end up in your savings account will ultimately make or break you. For example, I have two co-workers that have been injured within the past year. One man was out of work for almost four months with no short term disability and no money coming in the entire time. The second man has been out of work for almost that amount of time and is still looking at missing a minimum of another three months. This man does not have short term disability either. If either would have had 6 months of expenses in their savings accounts, this tidal wave in life would have been reduced to a mere ripple. Getting out of debt is the primary goal; however, getting to the point of total self sufficiency is the ultimate end game objective.
Our next topic will be frugal living. I have the draft written and still need to tweak it somewhat, but be looking for it coming out soon!
Kevin Trudeau’s Debt Cures
Kevin Trudeau’s Debt Cures
Notwithstanding this book is being hawked via a 30 minute infomercial (major red flag), this is a prime example of caveat emptor. The background of the book, as told by the infomercial, is essentially yet another “get out of debt without any risk” tome.
What is the over all mission of every infomercial on television? Simply stated, the target of any infomercial is easy to discern: to separate you from your money. How do infomercials achieve this goal? Simple: by playing on your emotion of fear. Face it, everyone is scared/concerned about something. Otherwise, there would not be infomercials out there that will help you lose weight, look prettier, household gadgets (the fear of not having that “right” tool at the “right” time), and even relieving yourself of debt. The fear that Trudeau’s well written infomercial plays on is the fear of not being able to get out of debt.
Every sales pitch contains three basic, essential elements in order for the pitch to work for the huckster. These three elements exist in online, television, or even face to face sales pitches. The three elements are:
Target, front end and back end (add ons).
The target portion of the sales pitch is simply who is the product aimed at? Is there a specific demographic? Is there a specific niche market? For Trudeau’s book, the target is simply the people who can actually afford his offering the least: those that are hopelessly in debt. The beauty of infomercials is easy to understand: when you make the call, you are hooked, you want the item. Is the information helpful? In some cases, yes it is; however, in most cases it is simple separation tool (separating you from your money). I bought Kevin Trudeau’s book for two simple reasons:
1) Curiosity. While I strongly doubt the book contains any new information, the book is not available in stores or the public library.
2) I am going to see how the 30 day money back guarantee works. I want to see how easy/ hard it is to return and the total time it takes to receive a refund.
When dealing with an ‘over the phone’ purchase, the front end of the sales pitch is actually the information portion. You must realize, at this point, you have already been closed. Barring a miracle, you are going to buy this product. This is sometimes referred to as the point of no return. This is where you call the 1-800 number that is on your screen. You have to take your first step outside of your comfort zone by making contact (going to the car lot, going to Best Buy, or in this case, calling the number). What happens when you make the call to the 1-800 number? Typically, the call is recorded to make you feel trapped (because you are) and it also gives the company a legal leg to fall back on: if you later decide you do not want their product and you attempt to do a charge back to your credit card, they have your voice authorizing the sale. What is the first thing that the (commissioned) telemarketer does? They get your first and last name. Why? Well, first to put them on a first name basis with you. I mean, which sells better: “Sir, I am sure you will like our widget” or “Ted, thank you so much for calling! I understand that you are wanting to purchase our widget, is this correct?” Yep, the second one. After you answer to the affirmative to his/her question, guess what is next? “Ted, can I get your shipping information?” Wham! If you had questions regarding the product, for many people, you are now in “buying mode”. They have your information, simple as that. As a side note, when the salesperson asks for your phone number (in case there is a problem with your order), DO NOT give them your number. Why? When you you’re your phone number, you just gave that company or any entity in which
What are the two government grant websites he mentions in the infomercial and do they truly work? Thanks, Mindy 
I remember his infomercial on memory techniques. I guess he forgot about it and moved on to bigger and better ...
@ Rosy: Congratulations for turning it down! You just saved yourself more than just money, but a ton ...
I think that his appearance on "The Hot Seat" and his program is very misleading. I called after seeing ...
Thank you for sharing the information about this book. I almost make the mistake of ordering taking into consideration all ...
ALSO ...watch OUT for those "subscriptions" to his so-called "newsletters"(they are sent to your automatically when you buy these books ...
I recently came accross your blog and have been reading along. I thought I would leave my first comment. ...