Christian's Blog

More going out than coming in part II

Christian Clements (Indymac Bank) — Tue, 13 Nov 2007 18:48:54 -0600

I believe it was Laurence J. Peter who said, "if you don't know where you are going, you will probably end up somewhere else". I really like this quote and I think it can apply to budgeting and tracking our spending. We need a starting point to see where we can immediatley create a change.

First you need to create a budget and track your spending. I mean seriously track it for one or two months by carrying a little note pad and writing down every single penny spent. I know this sounds picky but I think even beyond the "normal bills" we would be surprised by the other dollars we spend through out the week on magazines, gum, beverages etc.

Next, if you look at the previous post, Frank and Sean were kind enough to give some excellent advice on places to cut back such as cars, food, closthing, tv etc. It definitely takes discipline and sacrfice, but cutting back on things can really clear up the cash flow. Please realize, once you are out debt and saving money you may find room to bring back certain items. The key here is to get the cash flow back in line so you are on track to grow your net worth. A couple items that I know we all love but can easily add a couple hundred dollars per month are the TV, internet, telephone and cell phone. I am not even saying these need to be completely eliminated but dial up vs high speed can be $25/mo, cable basic vs additional stations can be $25/mo. 2 or more cell phones vs one. I think you get the idea.

Lasty, realize it is a true change in habit. Don't get overwhelmed, although you may already feel overwhelmed. But like many things, start small. Perhaps after tracking your spending you may see a couple areas that can be easliy changed. I realize this is not an easy task, but hopefully anyone who feels buried in debt will find certain ideas that can make an immediate impact in their lives.

Thanks to all those who have served our country!

Christian Clements (Indymac Bank) — Mon, 12 Nov 2007 13:38:30 -0600

Like many postings today, I would just like to add my sincere thanks to those who have served and are currently serving our country to provide us with the many freedoms we enjoy. I am grateful for all the sacrifices made so my family and I can enjoy the many blessings of a free nation.

THANK YOU!

In debt with more money going out than coming in?

Christian Clements (Indymac Bank) — Fri, 09 Nov 2007 13:42:48 -0600

With Foreclosures on the rise, rates adjusting and money being tight, many people find themselves with too much month left at the end of the money. You may have heard some of this before, but I don't think a review can hurt. For some this will be new and help them immediately.

Let me first say that this is a true change of habit. You must have the desire, motivation, discipline and willingness to act to make this happen. I know, this doesn't sound easy and it most likely will not be easy. However, since it is a Friday, let me give you a couple ideas that are easy and do not require any heavy lifting. I will start with 2 softballs, so to speak. 1^st if you are paid by W-2, got a tax refund last year, and not much has changed, you should consider revising your withholdings on your paycheck. (Always consult a CPA for tax advice). Too many people let Uncle Sam use their money through out the year. The goal is to break even because you need the monthly cash flow now! If you received $3000 back last year that is an extra $250/mo you could have to save, invest or use to get out of debt. The 2^nd softball - evaluate all your credit cards. What you owe on each, the limits on each and most importantly the interest rates. You may be able to transfer some money from one card to a card with a lower rate/minimum payment and free up additional cash flow. Now I must give a small warning this could lower your credit score a little bit if you had your balances evenly distributed to be under 50% of the limit on each card. However, you need cash flow now and paying off the debt will put you in a much better situation. I hope these 2 ideas can be starting points for you.

Look at these 2 ideas as easy homework assignments for the 2-3 day weekend. Come back next week and be ready to roll up your sleeves. We will start with discussing a budget. Too many people do not have one. So have a great weekend and next week we will continue to find more money that you might not realize you even have. Have a great weekend!

If you have any questions, comments, or would like a free mortgage consultation, please feel free to call me at 702-672-8401 or email me at christian.clements@imb.com. I lend in all 50 states.