The Cost of Interest

Perhaps you have been thinking about my challenge to you yesterday to come up with financial goals for 2009. Part of you may be thinking that sounds like a great idea to eliminate your debt fast. But, you may also be thinking that it's kind of nice to only be paying your minimum monthly payments. In fact, you may be getting along just fine by doing so. When you look at your monthly cashflow situation, you can eat out, buy new clothes, and you still have money left over at the end of the month.

Well, consider how much more money you would have each month if you weren't making payments to the credit card companies and toward your student loans. Don't just think about the interest you pay each month, but the entire amount of your payments. Once you pay your debts off, you will free up a lot of cash for savings, investing, college funds, etc.

If you want a clearer idea of what the interest is costing you, please check out the two links below. Input your information and it will give you some startling results.

Cost of paying minimum payments
What will it take to pay off your balance

Say you have a credit card with a $5000 balance, with an 18% interest rate. It will take you 26 years to pay off that card if you only pay the minimum amount due. You will also end up paying over $7100 in interest over that time. And this is assuming you never use the card again in your life.

After you find out how much you will pay in interest, consider what you can do with that money if you invest it. What a difference!

My intention is not to end the year with depressing information, but to motivate you for the exciting days ahead.

Happy New Year, everyone!

Are you sick and tired of being sick and tired?

If you are familiar with Dave Ramsey, you know what I’m talking about. Are you sick and tired of monthly credit card bills? A mortgage that you feel you are making no progress on? Student loans? Constantly monitoring your checking account balance so you don’t overdraw? Do you feel guilty spending $100 at the grocery store even though the food you buy is actually healthy for you? I will be honest here. I have felt all of these things at one point or another, and I’ve had enough!


My wife and I have made the decision that 2009 will be a memorable year in our lives. We are making it our goal to eliminate all of our debt (except our mortgage) this year.

Are you capable of the same?

Maybe you just got married and still have to pay off the wedding. Or, you overspent this Christmas (and the last 5 Christmas’) and the bills are going to be coming in soon. Are you looking to finally rid yourself of your student loans and begin having a positive monthly cash flow? Minimum payments are no longer the answer. It’s time to get your hands dirty and eliminate this debt. If the borrower is a slave to the lender, then 2009 will truly be a year of freedom.

As my wife and I take on this adventure, I will be sure to keep you up-to-date with not only our personal progress, but with the process as well. This isn’t something you can do without a well-devised plan. My challenge to you over these next two days is to assess your own financial situation. Talk it over with your spouse or significant other. You will only achieve your goal if everyone in the household is involved. This means the kids, too, if they are in the picture.

Get motivated, and come up with financial goals for 2009. I’m excited, and I hope you are too!

Be Smarter than the Average Bear

I have talked in the past about how incredible it is that the malls and restaurants are packed during these "hard economic times". I was struck with this realization again yesterday, but in a new way. In the past, I was wondering if the economy was really as bad as the media was making it out to be. I have since been convinced that we truly are in a recession and things are going to get a lot worse before they get better.

As I was looking for a parking spot at [the looks-like-it's-December-23rd-packed-full] Best Buy last night, I was amazed once again at all of the money being spent on so-so food and soon-to-be out of date gadgets. I understand there are some crazy steals out there, and they are very hard to pass up. But if you don't have the money, (or don't really need the item to begin with) just say "no"! A penny saved, is a penny earned, right?

My biggest concern is that people are aware of the hard times we are in, yet they choose to spend their money carelessly anyway. Where does this end? Are we, as the American people hoping to get into so much debt that we also qualify for a government bailout?

Supposedly, the average American is behind in mortgage payments and up to his eyeballs in consumer debt. Even if this is not the case, and everyone out shopping this weekend is current with their monthly payments, will this continue to be the case in the coming months? Why spend that Christmas bonus when the clouds are predicting a rainy day to come?

Now is the time to make decisions about how your money will be spent - while you are at home with a clear mind. Don't wait until you are in the middle of Macy's contemplating the 70% off sale.

My wife and I have recently made the decision to make a drastic change in our spending habits, which I am excited to share about in the days to come. I hope there are others of you out there who have already made these hard decisions or are also wanting to make this change. The only way we are going to survive these times is to make wiser decisions than those who are spending their money rampantly. It can be done! I look forward to the discussions that will take place here in 2009.

Don't Buy Stuff You Can't Afford!

I'm sure you've noticed all of the deep discounts in the stores. But take this into account.

Sometimes things can be confusing when they are put into the simplest of terms. Hopefully, we as Americans can let this one sink in...

Merry Christmas!

Merry Christmas, everyone!

This has been an exciting year for my wife and me. With the launch of our wedding planning studio and expansion of my concessions business, it has been a busy one to say the least. In this coming year, I have both some new business goals and personal goals that I am excited to share in the near future.

May you and yours enjoy this season and always remember the reason for which we celebrate.

A Visual Aide

This is worth a couple laughs. As a followup to my advice yesterday to sell things on eBay, Dwight, from The Office, has the same idea...Check it out.

Extra Holiday Cash

So I said I would give my own suggestions for making some extra cash in hard times. This was in response to the ridiculous article I read in Travel & Leisure. Running a seasonal business, my mind is trained to think outside the box on how to produce additional revenue streams. Here are a few ideas...please feel free to suggest your own in the comments section.

1. eBay, eBay, eBay. A marketplace to the world. Search your basement for things you can get rid of. I recently pulled out the Handspring Visors my wife and I had in high school. (Trust me, they were cool back then!) I can't say they will bring a lot in an auction, but the longer I wait, the less value they will have. After you sell off your extra possessions, think about other things that would sell on eBay. Last year, there were some very popular Sports Illustrated Magazines featuring Brett Favre. These were in high demand in Wisconsin at the time, and I took advantage of that. As I found them on the magazine rack, I bought them all and sold them on eBay. It sounds pretty crazy, but I made a mortgage payment in the process. What's in high demand right now, and in your specific area? Nintendo Wii or Wii Fit? The latest Barbie? Think about it.

2. Deliver pizzas. For you Dave Ramsey fans out there, you know exactly what I'm talking about. The holidays are a perfect time to pick up this short-term or maybe long-term position. If you work a 9 to 5 this will work out even better. You might argue that you won't have any time for your spouse if you take on this extra job. The two of you can do this together! While this isn't the most practical method, at least you can spend this time with each other. Play some podcasts of Dave Ramsey in the car while you're at it.

3. This falls close in line with number one, but consider how popular Craigslist is. For those bulkier items or even pieces of furniture, offer them for sale in your local community. You don't have to worry about listing fees or shipping. They can pick them up right away and you'll have cash in your pocket.

4. On the flip side of selling stuff on eBay and Craigslist, think about all the things you can purchase on these sites. I challenge you to take inventory of everything you purchase in a two-week period and then search for those items on eBay. You will be amazed at the savings. You will certainly have to think ahead on some purchases, but it won't take long to get into the habit. An example I have of this are my Gillette razor cartridges. At Target they sell for $15.50 for a 5-pack. I can get them on eBay for under $1 a piece. Considering they last me less than a week, this adds up fast.

I will leave you with these four ideas for now and add more in the future. The opportunities are out there. But it won't always be a breeze. As I like to say, if it were easy, everyone would be doing it. It's simple to talk about doing one of these things, but go ahead and take action. Your work will pay off in the end.

Christmas Bailout

With all the talk of the auto bailout and every other industry trying to get their hand in the pot, it looks like Santa Claus is in the same predicament...

Check this article out: U.S. Says It Will Bail Out Christmas