Thursday, December 8, 2011

Financial Peace My Way

I believe we should always have financial peace, it is something that scares me at 55 that I have zero, zip, nada in the bank. It wasn't always that way, while we have struggled here and there, we had major financial issues years ago and at that time, I began reading Larry Burkett in the 90's and felt empowered when I realized he went through many financial struggles on his own.

I wrote plans, worked on a budget and while I was broke, in the hole, didn't have a nickel every pay day I sat down with my paper that was color coded in black, red and green and prayed and cried over my finances. It didn't matter how much money I made, I was always in the red with a negative symbol next to it. But I kept at it.

Several years later, I purchased Dave Ramsey's Financial Peace and followed it to the letter. Eventually, I paid everything off and put money in the bank and retirement. We were able to purchase a home and I was extremely cautious as to how much home I purchased. I paid a car off and two days later it was totalled, I purchased a newer used car and paid it off.

Then, we decided to move (okay, I believed and still do believe God told us to move). Our home was sold for exactly what God told me it would. I paid another vehicle off, put money in savings, paid credit cards off. We purchased a home using money from our retirement plans while I was in Arizona and hubby was here. Looking back that is where the problem started, we used both our incomes and once I moved here, I couldn't find work at all.

So, basically we like so many are in over our heads with mortgage, however we have a lot at stake in this house, we didn't just walk into it, we put a huge down payment down on it and yet, 4 years later we still owe more than what we purchased the house for. We put a new roof on, new doors, new windows...anyway you get the point...lot of money and lots of our life in this house.

But, I still believe that diligent work and chipping at the budget will see us to financial peace. In less than six months my van will be paid off and this will cause a snowball effect because once it is paid off, the money that it free's up can be used for another bill and so it rolls on and on.

What I want everyone to know is that you can make it, the sky might look dark, the horizon may look bleak, but don't give up. Keep chipping away at those bills, you don't have to take the abuse from the collection companies and depending on the state you live in, you don't have to talk to them at all.

Pay your house payment, car payment, car insurance, utilities, groceries, daycare what you need to work and get by day by day. If there is any left make a list and pay the smallest to the mostest (yes, I know that is not a word).

I use Quickbooks for my checking and bills this shows me how I am doing financially and it isn't always pretty. Then I have a file box and they are hard copied and updated monthly in case I loose my computer and it has happened and lastly I use a spreadsheet.

On my spreadsheet I list bills smallest to highest in one column by company name, in my second column are the amounts, my third column is without the mortgage (this will make you breathe better), forth is without my school loan.

I updates these as I pay my bills and monthly I print it out and attach it to the prior month. Quarterly, I print out how much debt we have paid off in the previous quarter. It works for me, I do the happy dance and I realize I have made a difference.

Be collection agency smart:
1. If you do not believe you owe the bill, contact me for a letter you can send asking for proof, but it must be done within 30 days, sent out return receipt requested and DO NOT talk to them on the phone. Keep a file of letter copies and receipts attached to those letters.
2. Check your state attorney generals office and see if they have a list of certified collection agencies in your state. If an agency is not certified in your state, you do not have to respond to them.
3. Check your states statute of limitations on debt. Some states have 3,5 or 7 years limitations, but when you talk to a collection agency and set up any plan, it rewinds the clock.
4. Work with a budget counselor at a local CAP office, bank or credit union and show them what you have, most banks or credit unions will help you if you are serious or local housing agencies.
5. Know your rights as it applies to these agencies. They cannot harass you if you know your rights, if they step over the legal line, sit down and send a letter to the attorney general be specific with dates, times, names if you have them.

I am not saying you don't pay the bills, I am saying you set up a plan, let your creditors know your situation and send them a copy of your plan.

I hate the thought of bankruptcy, we have in our marriage had to file due to extreme hardships, I do not want to float in that boat again. However, because of that, I have taken the time to read Larry Burkett, Suze Orman, Dave Ramsey and know my rights.

Don't sell everything you own unless you feel you need to, to get out of debt. You will regret it and while Suze and Dave say sell things, they mean things of value you never use, collect dust, gifts Aunt Hilda gave you that others admire and you hate. Unless you want to, don't move into an RV on the back of your parents property to pay off your debt.

Just stop spending money you don't have to spend. It is that simple and I am not perfect. I love Starbucks, but I don't go out weekly, daily or even monthly. I go when I can afford it and have an extra dollar after paying obligations. I don't buy new clothes or shoes like I used to and forget even owning a Miche bag, not in my budget right now, so I use the one good leather purse my mom had and you know what? It works just fine!

All I am saying is lets pay off our debt and stop being indebted to the collection agencies, the creditors and the banks and put your money where it will earn the most, in a credit union.

Contact me if you have any questions, I am not an expert, but always willing to help others!

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