Recovery tips

I was reading an article from the Debt Busters site. The one I told you about before and it says that we that are struggling to get out of a bad financial situation should do what great athletes do when they are down on their luck.

We should think about "making a comeback". Most people that follow sports can remember when a football, baseball, hockey or golf player was lagging behind and made an amazing comeback and won. Those events are talked about for years later. We should make our own comeback too.

So, the article mentions some key things to remember:

1. Let go of the past. Sure, analize what you did wrong, but don't sink yourself into it. I declare myself guilt of doing this. I can't let go of the stupid decisions I made in the past. I have to make my peace with my mistakes. I guess it's hard when my mistakes are hidden from most of the people I interact with. Good athletes are able to "shake it off" when they make a bad play, even faster than the sports commentators in the bleachers.

2. Play the next play. The past is done, now focus on moving forward. Read or become more intelligent with the use of your money. Good athletes focus on the game at hand and how to best play it, they don't wish the game was going they way they wanted it to go before it started. I guess this also refers to play the hand you are dealt, not the one you wish.

3. Follow training. In our case it means to follow your new anti-debt training. Don't try to find easy ways out of debt without first studying them carefully. For athletes in means than when they are down on their luck it is NOT the time to improvise, but rather to do things the way they have trained to do them for years. I guess for us it also means to get some smart advice about getting out of debt with long-time proven methods rather than trying those quick and easy gimmicks that are everywhere these days. Be smart with the money now.

4. Persevere. It's pretty much self explaining but in our case I guess we have to change our attitude of immediate compensation, immediate pleasure. Understand that getting out of debt will take a long time , probably much longer than it took to get into debt. There will be setbacks too but "staying the course" will be the way to go. I guess it's like going on a financial diet, so don't feel sad when you don't lose those first few debt pounds, and don't devour all your money when you your debt weight starts to go down. Stick to the plan until your attitude, your habits have changed. Only then will you be debt free for the rest of your life instead of only for a few days.

Well at least that advice and this blog is free

Not Greedy Enough

You know, I was writting the numbers on that last credit card and it was hard!

 

I felt a big weight in my heart and over my head. I got a chill down my spine and my mind was trying to answer myself how did I get into so much debt?!

 

I try to remember where did the money go. It went to several things and over and over again it did.

 

Eventually my boss called me to see some numbers on some stuff we are going to purchase for the company and I could see him going over the little details and trying to squeeze out every penny from the 3 companies quoting us.

 

Then I remember that he recently just payed about $5000 to his credit cards to clean them up for a trip he made. He gave his wife a limit to spend on the trip and he set himself a limit too.

 

He's also got some other businesses were he makes sure that every dollar gets a good return on the investment.

 

It suddenly hit me that I haven't been greedy enough. No, no, I don't mean being evil and stepping on people to get every coin. Rather in the sense of making sure that the money spent is spent well and on things or services for a purpose other than just for spending.

 

He has all this money and doesn't spend as much on some things as I do and he saves a lot. I understand that with so many incomes he has it's probably easier for him. He has houses, cars and other assets paid in full. But he must have gotten there somehow and i'm sure it wasn't spending money getting new cellphones every year or travelling to the US 3 times in a year (like I allowed my wife to do).

 

It's a really sad feeling to remember the vacations we took to the beach and that I charged on my credit cards. From the rental van to the hotel rooms to the meals.

 

I also helped a lot of people for a long time. Mostly on my wife's side. If I hadn't help I wonder what would've happened to them and I also wonder what would've happened to us and our finances. It's definitely a lot more expensive to sustain a house with 10 to 12 people in it that just 5 or 6.

 

I also remember the stupid gadgets I bought every now and then. I almost felt for the same thing just a couple of days ago. I saw this miniature remote control helicopter for $30 and I felt I had to have it.

 

Then my newly discovered greedy little man kicked me in the head. He said "Hey, let it go. You'll probably get frustated trying to fly it. And when are going to find time to fly it? What kind of an example are you going to set for your wife and kids about spending the money? and once you get it will it be something useful? No, it will be a time waster!"

 

Then I took another advice I read sometime ago. Whenever feeling to buy something, write it down and let it be for a week. If after a week you still want it then go ahead and do some research. Most things you will probably not want to buy after a week of just letting them sit in the little notepad. The "urge" to buy them will have passed and that will help you from buying stuff that you will later regret about.

 

Seems I know a lot about that, it's just that I learned about it too late. At the very least I have to consider at least 3 to 4 years of challenging every purchase we make, trying to figure the most efficient (not the cheapest) way of doing things to stretch my income the most and make those debt payments on time.

 

I figure that after a couple of years it will be an automatic reaction in my mind, unlike the active thinking that I have to do now to stop and think before giving my money away.

 

I hope to learn to be a little more greedy to keep my money for things that really do matter!

 

 

The emergency fund

I've been reading all I can about managing debt and getting rid of debt. Not the "quick, magic, rid of debt" falseness that's out there, but real, logical advice.

 

One interesting advice I read was that no matter what your financial situation is, one should create or build an "emergency fund".

I thought "How can I create an emergency fund if i'm pouring all the money i can into my credit cards?". Well, the answer was on the next paragraph. They said, "that logic is the same logic that got you in debt in the first place". It's like they were talking directly to me.

 

It says that one should build an emergency fund to tap into it when, well there is an emergency. That way you don't tap into the credit cards and get deeper in debt.

 

it says that the emergency fund should be about 3 months' worth of salary. WHAT! i can't even get one third of my salary in the emergency fund.

 

Anyway, it said i should start small and grow the fund as I could. I've asked the person who does the payroll in my office to send part of my money (a very little part) to another account that i've denonimated my "emergency fund". Whenever I get some extra money from other odd jobs and gigs I send some 10% of that money into the "emergency fund".

 

Now the hard part is establishing what is an "emergency". Lately getting the cars to not run out of fuel is an emergency. With the fuel prices rising each week here by about 5 US cents I have to get $7 or $15 out of the fund to put some gas in those tanks. Sometimes I also take out money to get take-out food on the weekends. I've cut down on the number of times that we get take-out food, and I use a prepaid food card (more on that on a future post about ways I try to save money).

 

I have to say that even this way, the "emergency fund" has helped me keep my credit cards stored and not used them.

 

I get those advice from a christian site called crosswalk. I'm not at all religious. It just that when searching for debt advice they had some. Their emails are very useful and they never push for you about religious subjects so I feel comfortable reading it.

 

IF you sign up for debt advice go here: http://www.crosswalk.com/newsletters/

 

Then look under the FAMILY section and select the one called "Debt Busters". It's a weekly email so it doesn't stuff your inbox.

 

You can also read around and see if there's more interesting for you. No pressure from me though.