The “Debt” Problem – and a Strong Message

I’ve been doing a lot of reading lately about the current financial situation our country faces.  The Debt Ceiling, our rising national debt, unemployment rates, and more all are very important issues right now.  As Americans today, we didn’t create these problems… they were made LONG ago by generations before us… and it seems they will remain next generation to handle as well.  This 30 minute video explains more.

So what does this mean to you?

Can you solve the nation’s debt problem?  Can I solve the nation’s debt problem?

Unfortunately the problem is much bigger that we think and you and I cannot do a thing on our own to solve the nation’s fiscal problems.

There needs to be a EXTREMELY STRONG MESSAGE that will reach all Americans:

You are a Part of the Solution

Here’s the thing… our Government, just like most American’s today, have maxed out their credit cards.  The only way the problem will be solved is by either increasing income and cut spending.  Our Government will eventually have to do BOTH.

What does this mean to you?

You will see prices rise, you will see taxes rise, you will see interest rates on loans rise.  But you will not see your income rise in the same rate.  You will feel the SQUEEZE of the Government correcting a problem it should have corrected long ago.

It’s coming folks..  if not for us… for our children.

I don’t say this to be all doom and gloom.  I’m telling you this so that you can do something about it now for you and your children.

You MUST do the following:

- Get out of ALL debt, including your mortgage.  Pay it all off and OWN it all.

- Live on CASH.  Debit cards are fine,  Credit cards are not.

- SAVE in your emergency fund to protect you from job loss.

- Invest your money to build personal wealth

 

I realize that this is a simplistic view of what needs to be done..  but I can tell you that only 4% of Americans are actually doing this.  The other 96% are spending way beyond their means with credit.

If every American got themselves out of debt.. and started saving again, the nation might have a chance.  Unfortunately that is only wishful thinking on my part.  The only thing I can do right now is to tell you how to get there yourself.  The government is going to solve it’s fiscal problem whether you were part of the solution or not.  If you don’t start getting yourself out of debt right now…you will eventually live a substandard life because you’ll be owing 75% of your income to taxes and interest.

I’m not crying wolf here.  Others have been there and done that.

 

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Overextended much?

Lately I’ve found myself a bit overextended. I’ve started too many projects and I’m finding it difficult to juggle them all and keep them all going. Each website I’ve created requires a considerable amount of time to update and maintain. I thoroughly enjoyed the process of creating them, but once created, the maintenance and upkeep on all of them are not so enjoyable.

I am thankful that these projects have not tied up a lot of money. It’s stressful enough to be overextended with my time… but it would be worse to also be financially overextended as well. If I started several websites and sunk a lot of money into each of them, then I would be under a lot of pressure to make sure each of them was successful and turn a profit at some point. Essentially, each website is its own mini “business” and I can spread my efforts amongst all of them or just one at a time.

A friend of mine told me “I’d rather be 100% done with ONE thing… then 10% done with each of TEN things.” I wish I had headed that advice long ago.

So how does all this relate to your finances? Do you find yourselves juggling too many services, memberships, and clubs. Do you spend too much time volunteering for your kids school functions, organized sports, and other enrichment?

We know some folks… We call them the “Soccer” family. That’s because all three of the children are enrolled in Soccer. Because they are all different ages, they have to attend practice at different times and their game schedules are hectic. On a typical weekend, the parents have to attend FIVE games in 2 different stadiums. Maybe that’s normal for some… but to me that’s being overextended.

Others are overextended with debt. They are juggling credit cards because they have too many. It’s a tough spot to be in and the pressure is enormous. Quite often people in this situation spend more money on things just to feel better, meanwhile they are adding to their debt level.

Solution:

Find ways to simplify your life. Take a look at how your time is being spent? Do you ENJOY all of it? If not, why do you continue to do it? Take a look at where you’re money’s going. If most of it is being spent on debt, isn’t it time to start taking steps to eliminate it so that you don’t have debt anymore?

In my case, I’ll need to discontinue building new websites until I complete the ones already in motion. Working on them one at a time until they are all completely done.

What’s got you overextended?

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The Joy of Saving for your Vacation.

My wife and I have never been on a cruise. We know many people who have been on several cruises in their lifetime and they have enjoyed them very much. I think it would be great to take a vacation and enjoy each others company and escape reality for a while. The beaches, the ocean, the resorts, it all sounds wonderful. So why haven’t we gone yet? Well…to be honest…we just haven’t saved up for it yet. But it’s on our list though!

Right now, we have “other things” we’re saving for. Just recently we saved up the money to build our kids a huge playground in the backyard. We did the saving, we did the building ourselves, and now the kids can enjoy it to the fullest. We enjoy watching them play on it with their friends and we can bask in the fact that it’s all paid for.
But before we even built the playground, we were excited about it.

You see, once you start saving…once you put that first dollar in the jar (or the savings fund), the anticipation and the excitement can begin.

We’ve done this for a while, so when we say we’re going to save up for something, we MEAN it! Right now, we’re excited about the theme park passes we’re planning to get before the summer starts. We’ve been building the excitement in our kids about the parks we’re going to. We are ACTIVELY saving up for this right now, because it was the next thing on our list. We can keep the excitement going on and on until the day comes for us to buy them. Then we are really going to enjoy ourselves. The best part of all, is that we won’t be coming home from the theme park wondering how we’re going to pay for it all…because we already did!

Contrast that with a family who doesn’t save. Using the theme park example, the parents decide to take the kids to the theme park on impulse. They say “Surprise kids, we’re going to the Disney World!”. They go the following weekend and they pay for everything on credit. When they get to the theme park the worrying begins. The kids are having a great time, but the parents are scratching their heads wondering “how much ARE we spending?”. The father says “Let’s just go with it…we’re here to have fun!” but the mother just isn’t too sure. They can try to forget about the growing cost…for a while…but in the back of their minds they know reality is coming back soon, and this realization STEALS the joy they could be having in this moment.

I don’t know about you…but I don’t want to be worrying about money WHILE I’m on vacation! I’d rather know that the trip is already paid for and that the spending money for souvenirs, pictures, food, snacks, hotels, and transportation have already been paid for in advance. That way, I can lay back, watch, and enjoy my family having the time of their lives. When I get home…I don’t have to worry about the post-trip blues. Yes, I still have to come back to reality, but the adjustment won’t include a credit card bill!

I know it’s sounds old fashioned…but saving up for your vacation allows you to have positive anticipation BEFORE it starts…FUN while you are away…and NO BILL when you get back. The alternative is to miss the anticipation stage altogether, go on a trip and worry about money while you are away, and have a bill come in your mailbox when it’s over.

So it won’t be long before we have completely saved up for our theme park passes. We are looking forward to having many great times over the next two years with them.

So what’s next?

Well…I’m anticipating walking up to my wife with sunglasses and a Hawaiian-shirt on saying “Do you know what day it is?? TODAY is the day we start saving up for a cruise!”

Is there something you are saving for right now?

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