I thought that I would list the most �prominent� methods for getting out of debt. Each method assumes that you are paying �consumer� debt: credit cards, automobiles, home equity loans, personal loans, etc. The home mortgage is placed into a separate �debt� category, and is not paid-off until after all other debts have been paid. (If you wish, you can treat your mortgage just like any other debt, and use any of the following methods to pay it off early)

1. Debt Consolidation: The basic idea is to take all of your debt accounts, and move the balance of these accounts into one account, typically a 2^nd Mortgage on your home. Also, there are those who use a single credit card (usually offering a low interest rate), and �surf� their balances onto this single card.

Advantages: All of your debt is in �one� place. There are no worries about paying several small minimums for several accounts. The interest rate on a 2^nd Mortgage is �usually� better than the interest rate for an auto or credit card loan.

DisAdvantages: Your home becomes collateral for ALL of your debt. There is a tendency, for most, when moving all of their debt onto a second mortgage, to engage in the exact same behavior that created the debt in the first place, and to continue to use credit cards to accumulate new debt.

2. Interest Rate Quest: The idea here is to �surf� your credit card and automobile debt balances from low interest rate card to low interest rate card, thus moving the debt around and avoiding most (in some cases, all) interest payments. This usually involves 1, 2, or even more �zero� percent credit card offers.

Advantages: Little to no interest is paid. Large amounts of �money� is available, with very low minimums.

DisAdvantages: If you are late with a payment, or forget to move a balance before an �intro-rate� period is over, WATCH OUT! Customers who forget to carefully monitor their balance transfer rules and regulations can get zapped with terribly high interest rates and fees. Also, when most of your effort goes into moving balances around, and avoiding interest, very little principal is paid back, and debt can just �hang� around for long, long periods of time.

3. High-Low Rate Pay-off: The most popular method involves listing your debts, highest interest rate FIRST, down to your lowest interest rate. Pay minimums on every single debt, and pay as much as you can on the HIGHEST INTEREST RATE.

Advantage: This method makes great �mathematical� sense. Because you are paying most of you attention to the debt with the highest rate, the more you pay, the more you save.

DisAdvantages: This method can become tiresome. Why? For many people, the debt with the highest rate never seems to go away, and because they get tired of paying and paying and seeing very limited results, they give up and quit trying. While this method makes �great� mathematical sense, it can grow old quickly for anyone looking for a quick financial victory.

4. Snow-Ball or Line-Up, and Knock-Down: This method, made popular by Dave Ramsey, involves listing debts, lowest BALANCE first, highest BALANCE last. Pay minimums on every single debt, and pay as much as you can on the LOWEST BALANCE.

Advantages: Wow, this is pretty obvious. As you pay extra towards your lowest balance, you will quickly see results. Much like a diet program, those first few pounds really make a world of difference. People like to believe that they are �doing� something, and watching those first, few small balances go away provides great motivation to keep going. By the time you are ready to attack the bigger balances, you are in a motivated, progressive state of mind.

DisAdvantages: The math. Sometimes paying everything extra you have towards a 6 percent loan, while you have 22 percent loan hanging over your head seems crazy. It really comes down to desire. How are you motivated?

5. My Plan: Okay, here is what I did to get out of debt. I took ideas from all 4 plans. First, I listed all of my debts. Then, I moved all of my credit card debts onto one card, at zero percent interest. I then had two car payments, one at 5 percent, the other at 8 percent. I then listed my debts, by balance, lowest to highest. I paid minimums on all the debts, and POURED extra money towards my lowest balance. I actually paid the 5 percent car off before the 8 percent, because it had a lower balance, and I wanted the feedback of getting rid of one entire �bill�. I think that the over-all key is this. Focus, get a good rate, have a plan, pay all of your minimums, and begin to attack your debt, either highest rate or lowest balance.

(One last note: Some try to pay their minimums on all accounts, and then pay-off all of their accounts at the same time, just paying a little bit extra each month. While this will work, I have found that most people abandon this method rather quickly, for lack of �see-able� progress. It is the laser-lock focus on one particular account that creates the intensity needed to destroy debt.)

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Edit: I have been checking out the links that I have on the right side of the page, and some of the blogs I read have not up-dated their content in some time. I have decided, because of the long list of sites, to remove any blog that does not update at least once every two weeks. Also, if I have linked to your site, and you wish to be removed, please let me know. Lastly, if I have linked to you, and you’d like to be cool and link back, that would be really, really awesome.

I think it would be cool if the following were available for managing personal fiance…(and some of them may be, and I just don’t know it! If so, please let me know in the “comments” section.)

1. Instant, fluid transfers between all financial institutions. Not “bill pay” but an instant inflow and outflow among checking, savings, and credit accounts. Hit a button, and boom, your “money” is in another account. Hit another button, and it goes into another account.
2. Simple, direct, no fee stock purchases. I do not understand why I can’t purchase stock, any stock, without a fee, directly from an exchange. This should be do-able in our electronic age. Why can’t I simply “zap” money from my account to your account and buy your stock. Why the need for fees?
3. Easy to understand insurance options. I would like to purchase auto, home, and life insurance in one nice, neat package. In other words, I enter my age, my health, my number of autos, and various other information, and “boom”: out shoots my monthly premium for a “total life” policy. Why do I need three or four or more policies? Why not one policy for my entire life.
4. Simple, cashier-less checkout at the grocery store. Put a scanner-scale device in my cart, let me fill up with the items I want, scanning them as I go, and then let me swipe my debit card and hand over my coupons on my way out.
5 Per number 4: Why paper coupons? It is 2005, do we really still need paper coupons. And why coupons anyway. I love to use my coupons, but they are a hassle. There has to be an easier way to get my discount. Perhaps all coupons could reside on a “card” like my grocery discount card, and I could just swipe it. (Kroger already has this functionality, but the coupons they offer at their site are mainly junk.)
6. This one is EASILY doable. Grocery stores should stop selling items with price tags that say: 2/5.00 or 3/9.99. Please, please, please! Just put the PRICE PER ITEM, and then PUT THE PRICE PER OUNCE, FOOT, POUND, whatever. This would be so simple, and I wouldn’t have to bring my calculator with me every time I go grocery shopping.

Well, there are 6…if you have some, post below.

(You can probably tell from my last few posts that I have very little to report on the old debt-reduction front. I can’t get blood from a turnip…)

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Stuff I hate…Besides debt…

Those stupid bp ads where they talk about ways that they are saving the environment. They are a flippin oil company…it’s in their NAME…PETROLEUM. To dis your own product is just stupid. Be proud of what you are doing, or don’t do it at all.

Web sites with splashy flashy flash screens…

Skinny people with diet advice (especially that lady on Biggest Loser, the trainer… dude, she needs to gain about 15 pounds). If you have always been skinny, you know NOTHING about dieting. You might know about eating healthy, but not about DIETING. Losing and maintaining are two different things.

People who pay interest on their house and refuse to pay it off because of the tax break. Stupid. You only get a tax break on the interest, but YOU STILL HAVE TO PAY THE INTEREST!

Companies that give a discount for signing up for their store credit card… I can SEE the sign that offers the discount, please do not force me to say, “no thank you, I am going to pay with my cash,” every time I check out. Now, when asked, I just go into my whole speech about how debt is dumb, and how it ruins families and leads to bankruptcy. Companies should give me a discount for the amount of money I SAVE them by not using a credit card, so that they don’t have to pay the fee that Visa or MasterCard would charge. That would be good business.

Grocery stores with super-strict coupon policies that they don’t tell you about until you are checking out. I think that every store should have their policies clearly stated, in several locations, throughout their store.

Fat people who say, “I don’t eat nearly as much as you think I do.” Umm..I’m fat, and yes, I eat exactly how much you think I do.

Google Adsense. Sorry, but they cancelled my account for “irregular clicks”. What a joke!

Television…there is almost nothing worth watching on television. Seriously…

Bloggers who real you in with good content, frequent updates, and nice design…and then just disappear! Oh the humanity…

People who use … all the time…

People who use checks instead of cash or the debit card at the grocery/clothing/drug store. Come on, it’s 2005, not 1985. By the way…you are not “cool” just because you have your: school mascot, religious sayings, Garfield comics, or anything else on your check. Just your bank and account number will do just fine. I do not need to find my inspiration while examining your form of payment.

Christians who make themselves look foolish by telling people that God is going to “strike them down” with bad weather or natural disasters. I am a Christian. I have done some really stupid, bad things. If anyone deserved to get “struck down”, it was me. God is a God of mercy, grace, and forgiveness. People will never be converted while our so-called Christian leaders spout hate. There is a big difference between being righteous and self-righteous.

Wal-Snart. I love a bargain, and I am a capitalist, and I believe in business. My problems with Wal-Snart have nothing to do with their power, their money, or their ability to do what they want. No, I actually hate their STORES. Nasty, over-stocked, dimly-lit, security camera-infested, new-trainees on every isle, crusty yucky parking lots, broke-wheel carts…I hate everything about the Snart. I have successfully boycotted our local one since April. In fact, I would rather pay a few pennies more at Kroger or Target, than to go to our local Snart.

Fast Food/Grocery Store/Convenience Store workers who hate their jobs, their bosses and their customers, and show it. I know it stinks to work for minimum wage, on your feet for hours on end… but, toss me a “hello” or a “thank you” once in a while… I’VE had a long day, too.

Jerks who abuse people who work Fast Food/Grocery Store/Convenience Store jobs. If you cuss out a fast food worker, you are a loser, and you deserve to have your back hair removed publicly via hot wax.

Paris Hilton. Just because.

That about raps it up for tonite…

See ya soon with more pf stuff…

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I was able to make a 330 dollar payment yesterday towards the last debt, bringing my total owed to 2660, and my percent paid to slightly more than SEVENTY SIX! Yay!

Check out this week’s carnivals. Links are at the top right-hand side of the old blog.

Some blog dorkiness: I searched for “no credit needed” on both Yahoo and Google… I am the first thing that comes up on Yahoo, and the third thing on Google! This is amazing, but not for the reason that you might think. You might think that I am happy because that proves what an awesome, cool, wonderful blog I have…right? Nope. It makes me happy because there just might be a chance that while some person with bad credit is searching the net for some crap finance deal where no credit is “needed”, they just might stumble upon my site, and find the awesome world of personal finance blogs. With all of the sites that I have linked on the right hand side of this page, and with all of the wonderful info they contain, someone’s life might just be changed. Cool Huh?

As for my emergency fund…back up to 600 in ING and 500 or so in a secondary checking account. That is a wee bit less than my original goal of 2000 emergency fund, so I will be socking away my quarters and dimes, and building a slightly larger fund.

Oh yeah, retirement talk time! I met, a few months ago, with a retirement “specialist” recommended by Dave Ramsey’s site, and he was awesome. This coming year, we will be really focusing on saving for our future. Right now, I save only about 1500 dollars for my retirement, while my wife has teacher’s retirement, so 5 percent of her salary goes to that. Next year, I plan on trying to put aside a minimum of 20,000 for retirement. That’s close to 1/3 of our gross incomes! Goals, goals, goals…

Oh yeah, non pf stuff: Watch the Comedians of Comedy on Comedy Central… CLASSIC STUFF. Total funny awesomeness.

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Wow, I was super impressed by a comment left by Hazzard concerning my progress. It is great to be “validated” by someone. So, I thought I would list a few “secrets of my success.”

1. Pay off the smallest balance first, this gets things rolling.
2. Get your spouse involved. This is an absolute key.
3. (Nut-job Christian alert) Give. Before we ever budget a red penny for ourselves, we give 10 percent of our salaries, off the top, to our local church. Why? Well, we believe that the work of the local church is vital to our community, our family, and to our world. And, ummm, it takes cash to do things, even “church” things.
4. KNOW how much money you have, and KNOW where it is going, and KNOW why it is going there.
5. IF you take a breather, WATCH OUT. Like any discipline, it is VERY easy to get side-tracked. In fact, just a 3 month “breather” in the middle of our plan cost us 2 months worth of progress. Had I not “slacked” just a bit for those 3 weeks, we would be debt free already.
6. IF you miss your goal, chill for a week, regroup, and start again.
7. PICK A PLAN. If you are going to do something, keep it simple, and know what you are going to do.
8. If you don’t understand WHAT you are doing, DON’T do it. Most people don’t realize this, but you can radically simplify your financial life if you will put a laser-like focus on OBTAINING KNOWLEDGE!
9. DO NOT try to pay-off multiple debts at one time. Pay minimums on all accounts (never, never, never get behind) and put as much as possible towards your lowest balance (or highest interest, if not doing the Dave Ramsey snow-ball).
10. Understand, that the balance that you have to pay-off is money that you owe, and stop looking for a more favorable interest and start getting rid of debt. In other words, it is okay to get a good rate, but do not wait for the good rate to come along before your start paying off your debt.
11. Eating out will Kill you. Buying books, cd’s, or video games will Kill you. That extra pack of gum? That’s 25 cents plus tax that is not going toward your freedom.
12. You must learn to HATE debt. Seriously. You must see it for the evil that it is. Think I am exaggerating? Have YOU paid off 74 percent of your debt since April? No? Well, not to be arrogant, but the reason that I have been “successful” is that I HATE THE IDEA OF BEING IN DEBT FOR THE REST OF MY FLIPPIN’ LIFE!
13. Your kids are more important than your money. Love them, hug them, and teach them, and they will return your love…and they don’t care how much their junk costs! My little girl likes her 3 dollar “pocket book” as much as she likes her 50 dollar bike. For kids, it usually is the thought that counts.

Edit: About number 12 up there: The “Have You paid off… is sorta arrogant sounding, now that I re-read it… I just love the freedom of getting debt free, and I want you to be as passionate about it as I am. So, if it sounds… like I am a jerk… I acknowledge that number 12 is a bit over the top. I will not erase it, because, when I wrote it, that was how I was feeling. Now, upon reflection, I can see how it might come off as something other than what I intended for it to be. I freely admit my total and complete lack of couth. Peace out…
Dork!

Some have emailed and wondered how much salary we make each month. We bring home roughly 4400 dollars a month, give or take a few bucks.

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I am just kinda treading water these past few days. So, here is a quick update/summary of the past few weeks, and where I am at.

Credit: Total balance down to 2990, now spread across 2 credit cards, one with 990, the other with 2000. Both at zero percent. New goal of January 13, 2006… I set the goal back 1 more month, so that I will have a little extra cash for Christmas.

Savings: As you will remember, I wanted to get my savings back up, because I had totally used up my emergency fund in an effort to reach my first goal of 10-10. I now have 500 bucks in ING and 500 in our “secondary” checking account. So, the ole 1000 dollar emergency fund has been built back up.

Money Games: I love checking out the finance forum at fatwallet.com, but some of the finance “ideas” are quite silly. BUT, I have decided to get 50 bucks for signing up for a free Bank of America checking account. I should hear in a couple of days about the status of opening my account.

Weight Loss: UMMM..Well, no “gain” and no “loss”.

Cool Idea: Check out www.howtobepoor.com for a unique “twist” on the whole pixel sale idea. (Thanks Max for placing my butt-ugly pixel design on your blog page!)

Ad Removal: Okay, I hated the big blocky Amazon ads, too. So, they are gone, for now at least.

Cooking: I have a “new” hobby. I have started cooking for our family, trying to prepare 2 or 3 days worth of food at one time. I baked some “oven-fried” chicken breasts and made a pot of yellow rice. These should last for 2 or 3 days, and are great as left-overs. Also, I made some homemade applesauce for the baby boy, and HE LOVED IT. Awesome.

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