I’m in the process of upgrading the software that manages all of my websites.  If you see anything that looks a little quirky - I’m working on it.  Hopefully, I’ll have everything looking ‘just right’ in a few hours.  Thanks for your patience.

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As many of you know, I not only blog about personal finance, I also blog about health and fitness, over at No. Calories Needed.  I recently started a new eating plan and I’m down 8 pounds.  Not only has my diet affected my waistline, it’s beginning to affect my wallet.

Areas where I’m now saving money -

Lower food bills -

The eating plan calls for the slow, conscious consumption of food.  Now, instead of eating twenty bites quickly, I eat six bites slowly.  As a result, I eat less food.  The plan also allows for the consumption of foods that I actually enjoy - so I no longer feel the pressure to buy high-priced, packaged ‘diet foods’.

Lower restaurant bills -

I recently visited on of my favorite restaurants, where I would normally spend $20 to $30, and my total bill was $9.  While we rarely eat out, when we do, I like to eat what I want to eat.  But, due to the fact that I’m now eating far less food than I did in the past, I was able to order an appetizer and a baked potato, along with my beverage, and leave the restaurant satisfied.

Areas where I’m now spending more money -

Higher clothing costs -

I have begun to run, so I’ve ordered a new pair of correctly-fitted running shoes.  The shoes cost more than I would normally pay, but they are designed specifically for my feet.  Also, even though I’ve only lost 8 pounds (so far), I can tell that I’ll need a new pair of pants or two, in the next few months.  And, as anyone who has ever lost weight knows, once you shed a few pounds, there’s a desire to get rid of the ‘fat’ clothes and replace them with new, nicer items.  Of course, I have a closet full of clothes from my slightly thinner days, and I’ll begin to wear them, as I lose weight.  For now, the new clothing costs consist of the new pair of running shoes, two pairs of workout shorts, and some socks.

Areas where I will save money, in the future -

Life Insurance -

In October, my current term life policy expires.  I recently priced two new policies, one at my current weight and one at my goal weight.  The savings were rather significant, especially if you consider that I’ll be paying premiums for the next 20+ years.

Health Care Costs -

I have sleep apnea - a sleeping condition that requires that I wear a mask while I sleep.  The mask is uncomfortable and should be replaced every 6 to 12 months.  My goal is to lose a total of 80 pounds, at which point I might be able to get rid of the mask.  I’m not sure if I’ll ever be able to sleep without it, but if I could, the costs associated with the mask would disappear.  Also, due to the fact that sleep apnea can be fatal, my long-term disability insurance costs are sky high.  Getting rid of the mask - and taking a sleep test to verify that the sleep apnea is gone - would go a long ways towards reducing long-term disability insurance costs.

Areas where I will spend more money, in the future -

Running Event Fees -

As I mentioned, I’ve started running.  Inspired by my little sister, who ran in a 10k a few weeks ago, I’ve decided to sign up for a local 5k.  As I get more involved in the ’scene’, I’m sure that I’ll want to run in more events.  So, I’ll have to figure the cost to enter those events and the cost of gasoline to travel to and from those events.  Plus, I’m sure that I’ll want to buy more running gear.

I’m sure, as I lose weight, that I’ll find other areas of my budget that need to be tweaked.  If you have lost a significant amount of weight, I’d love to hear how it changed your financial life.

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I use Upromise to earn cash rewards when I use my debit card. If you’ve been thinking about signing-up with Upromise, now would be a great time. If you sign up now, and buy something, online, through the Upromise site, you will receive a $10 sign up bonus. You can link your debit cards, grocery cards, and credit cards (boo!) to your Upromise account and receive rebates from several major companies. Check their site for more details. Click this logo to sign-up.  It’s free - and we love free!

By the way, you do NOT have to transfer money from Upromise to a 529 account. For more details about how to get Upromise to send you a check for your rebates, click here.

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I’ve been thinking about the following for quite same time. When I tell people that I write about debt reduction - they inevitably tell me about their latest ‘get out of debt’ plan. Usually, those plans revolve around one of the following techniques. Unfortunately, most of these people never actually manage to reduce their debts. In fact, most of them inevitably go on to add to their debts. Why? Because, moving debt is not the same as paying it off!

1. Use home equity to “pay off” credit card and automobile debt.

Ah, the old standby. What do we do, when faced with a mountain of high-interest credit card debt? I know! We roll that debt into our home loan and we “pay if off”. You’ll note, if you read many of my articles, that I can go a little crazy using quotation marks. But, for today’s 1st point, quotation marks are quite appropriate.

When you roll your credit card debt into your mortgage - you aren’t “paying off” anything! You are simply moving debt. And, moving debt doesn’t get rid of it, any more than moving a bowl from one cabinet to another gets rid of the bowl!

2. Transfer credit card debt from multiple cards to one, low-rate card.

They come in the mail, everyday. Low-rate credit card offers are enticing - and they can be useful. But, again, moving debt is not that same as eliminating debt. While a lower rate is always preferable to a higher one, beware of balance-transfer offers. I cannot overstate the importance of understanding all of the details of the transfer. There may be hidden fees, a very short period of time during which the low-rate is actually applicable, and super-high rates associated with the account, once the low-rate period is over. Also, if you move a balance from one card to another, be sure that you don’t rack up new charges on the old card. If you do that, you’ll have a balance on two cards!

3. Borrow money from friends or family members to pay off debts.

This one might get me in a bit of trouble. But, money that is borrowed should be paid back, whether the creditor is a bank, a mortgage company, or a favorite uncle. While there isn’t anything wrong with borrowing from friends or family members - as long as the terms of the loan are understood by all parties - these types of arrangements have a strange way of turning sour. If you borrow money from mom, and it’s clear that the money isn’t a gift, pay it back.

4. Borrow money from a retirement plan to pay off debts.

I’ll be honest, I don’t know much about retirement plan loans. But, from everything I’ve ever read, they don’t sound like a good idea. While the idea of ‘paying yourself back’ sounds nice - the debt isn’t going away, it’s just being moved. And, if you couple a retirement plan loan with spending and budgeting habits that have not changed, you will be headed for even more financial pain.

5. Paying off one debt while incurring another.

If you owe $10,000 in credit card debt, and you pay it down to $9,000, that’s great! But, if at the same time, you charge $1,000 on another card, that’s lame. I can hear some of you. NCN, who does this? Lots and lots and lots of people. I’ve seen people really focus to pay off a credit card balance - only to go to the furniture store and furnish their homes with thousands of dollars worth of 90-days-same-as-cash furniture.

Instead of focusing on gimmicks for ‘paying off’ debt - may I suggest that you buckle down, create a real debt-reduction plan, and REALLY get out of debt? There are no short-cuts. Getting out of debt takes three things - money, a plan, and determination. If you have those three, you can get out of debt. If not, you’re just moving debt around.

For help in developing a debt reduction plan, you may want to read this article I wrote a few months ago - (Almost) Everything I Know About Debt Reduction.

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My daughter and my son just received two Easter cards in the mail.

As he was opening his, my son, age 4, pulls out a piece of plastic and says, “Look, Mommy, a credit card!”. My wife and I exchanged puzzled looks - and I started to chuckle. “Son, that’s a GIFT card, not a credit card.”

My son is four and we haven’t used a credit card in the last three years. I was a little shocked the he knows what a credit card is. I asked him where he had heard about credit cards. He casually mentioned that he had played with a toy cash register at someone else’s house - and that there were, “three credit cards in it, Daddy”.

I’ve been teaching my kids about money - how to make change, how to count it - but today I had an opportunity to talk to them about debit cards, gift cards, and credit cards. My daughter is eight and she grasped the concepts of ‘earning money and then paying for something’ vs. ‘getting something and paying for it later’ rather quickly. My son learned the difference between his gift card and my debit card.

I love teachable moments.

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My buddy, Nickel, from Five Cent Nickel has written a couple of articles about The Tax Stimulus Plan that you’ll want to read.  The first is about the tax rebate payment schedule and the second is about the official tax rebate calculator.  After reading the articles, it looks like our check, for $1800, should arrive in May.  This will work out great for our family, because my wife will miss a paycheck - due to the fact that she’ll be having baby #3.

Some of the rebate check money will go towards offsetting the cost of the delivery.  It looks like the total cost will be about $11,000, 90% of which will be covered by our health insurance plan.  We’ll have to pay our portion, up front, the day of the delivery.

For those of you who are new to No Credit Needed -

Let me welcome you to the site and invite you to checkout some of the other ‘NCN’ sites -

I have a weight loss blog, No. Calories Needed.  I’ve started following a new eating plan - Paul McKenna’s 4 Golden Rules - and I’ve lost 7 pounds.  I’m really excited about this plan.  I hope you’ll click over to read more.

I also have a podcast, the No Credit Needed Podcast.  I talk about debt, debt reduction, my life, saving money, and frugal living.

Finally, I manage the No Credit Needed Network.  The Network allows members to create and share a personal finance goal / chart.  You really have to see it to really appreciate it.  Two years ago, there were fewer than 10 members.  Now, there are more than 350.

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