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Resolve to Be Debt Free in 2009

By
Mortgage and Lending with Mortgage Solutions Financial NMLS #150073

2008 was a tough year and 2009 poses to be just as challenging.

Many of my friends, prospects and clients have seen their debt rise, their home equity decrease, their savings/investments decrease, their credit scores worsen and their ability to earn more money decrease. Sounds like you or someone you know?

There is hope, even in these tough times. There are some simple steps that you can take to get your spending in control and make serious headway on your debt.

But first you need to be determined to see change. You need to resolve to do whatever it takes to see your debt eliminated, AND you need a plan. Here are a few steps that you can take.

1) Vision - Write a paragraph or two describing how it feels today to be in your current situation. How did you get here. Were there obvious mistakes that you made? Write a couple more paragraphs about how you would feel to have that debt eliminated, your credit restored and extra money at the end of the month.

2) Budget - Write down your known expenses and try to get a handle on the cash that slips through your fingers. Be brutally honest about the discretionary expenses, you know, food, coffee, soft drinks, smokes, magazines..... this is an area that you will be able to reduce spending in to accelerate debt reduction.

3) Debt Spreadsheet - Get some graph paper or use an excell spreadsheet and add each debt that you have. These are the fixed expenses with a start and stop date. Also include credit cards, but not utilities, or things like that. make sure that you include the balance and the payment. Use the minimum payment, not the amount that you normally send.

4) Debt Reduction - Add up your monthly minimum debt payment ( the total of all your minimum payments) and add any additional funds that you can allocate to pay your debt down. Each month pay the minimum due on all of your bills except one. On that one pay the extra amount. Keep doing that each month until you have paid of one of your bills. Next month you will have additional funds available to be applied to debt. Keep doing that until you are left with just your mortgage. Now you can start applying a good deal towards either savings or the principle on your home.

Years ago I found myself in financial difficulty and did this system. After paying a creditor off, I took that payment the next month and rewarded myself. The following month I applied the funds towards debt.

If this seems complicated, and if you are interested in an inexpensive computerized system that can help you with this let me know. I work with a company that can provide you with a customized printout every month telling you exactly how much to send to each of your creditors. You input the data, they provide the plan.

Included in this plan is EquityTRAX, Life-Lock, Tel-a-Doc and access to many other benefits. One of the perks that I'm enjoying is a $25 rebate each month for spending $100 on gas. 

Here's a link to get more information:

Your Debt Free Date - Click on the red bar to see the video, and then click on the right to get a complimentary free personal analysis.

Call me if you have any questions. Larry 503-421-0096

 

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UPDATE: 1/2/09 1:40 Pacific Time

So far, this appears to be a timely post.

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Way to go ActiveRain!!

Comments(31)

Jerel Washington
Fine Homes & Estates Team | kw - Princeton, NJ
The Key to your Real Estate Success

Beautifully written and very timely...  If okay with you, I'd like to repost this one for my clients...

Please let me know.

Jerel 

Jan 02, 2009 06:57 AM
Larry H Morris
Mortgage Solutions Financial - Portland, OR
Larry Morris, NMLS 150073

Sarah & John - Thanks for the honesty. There is still time and hope.

Kristi - You've gotten past step 1. Good luck!!

Tim & Jim - Yes, I would agree. We need to learn to get by with less AND be smarter about how we spend.

Bryan - Thanks for the comment

Karen - Thanks for the comment. Feel free to refer any of your clients to me for Debt/credit help. Of course they will remain your mortgage clients.

Bob & Bonnie - Thanks for the comment and the blessing. That is a big step!!

Margaret - Thanks for the refer to your daughters. I wish that someone had shown this to me in college. I would have developed some better habits and probably been much better off financially.

Judi - Thanks for the comment. I agree taht it is much harder to do when cash flow is variable. That's one of the things I like about the FDI system. It is easier to make adjustments and "see the big picture".

Jerel - Thanks for the comment. Feel free to re-post.

 

 

Jan 02, 2009 07:23 AM
Anonymous
Ann Grant, Keller Williams CT Realty

I loved this post! I am trying to become debt free this year (it will be a second time around for me). I seemed to have fallen off the FRUGAL WAGON for a while. I am keeping a monthly budget starting this month to see my income and out go. Being a realtor and anyone else out there in a commission based career, we need to keep track of what we spend. Let's all be debt free this year!!! Or at least debt free beside the mortgage (that is going to take a while!) Good luck everyone!

Jan 02, 2009 07:36 AM
#16
Larry H Morris
Mortgage Solutions Financial - Portland, OR
Larry Morris, NMLS 150073

Ann - Thanks for the comment and encouragement AND Best Wishes!!

Jan 02, 2009 07:37 AM
Joe Pascal
Joe Pascal - 5 Star Real Estate - Serving Wilmington, N.C. - Wilmington, NC

Larry, You went the distance on this one. Don't forget however, the paradox of thrift. That is saving and hoarding benefits the survival oriented individual, however...an economy requires the velocity effect...i.e., the more money in circulation ... the more the aggregate supply increases.
We are all in this together, and the solution is a cultural remedy called civilization.

Nice post, as usual.

Joe Pascal Owner/Broker 5 Star Real Estate   Wilmington, NC

Jan 02, 2009 08:03 AM
Larry H Morris
Mortgage Solutions Financial - Portland, OR
Larry Morris, NMLS 150073

Joe - thanks for the input. The theory is that when you have less money to spend on interest, you have more money to pay cash for bargins, invest in Real Estate, the stock Market... It's about ownership as opposed to slavery to debt. But I agree. It's not about hording money in a savings account. However, even that provides funds for the bank to lend. Most of our debt only makes the Credit Card companies rich and prevents us from taking advantage of opportunities.

In addition, many of my clients (mortgage) have at least one of the following 1) Too much debt, 2) Lousy credit, 3) Not enough Equity.

You don't know how many people I talk with who wanted a 4.5% rate 2 weeks ago and who couldn't get it due to their situation.

Jan 02, 2009 08:17 AM
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks for the tips.  While I don't believe my family can become totally debt free we are going to reduce every debt we can so - only the mortgage will remain.

That is unless my wife goes to the mall too often! :-)

Jan 02, 2009 08:21 AM
Larry H Morris
Mortgage Solutions Financial - Portland, OR
Larry Morris, NMLS 150073

Gabe - I feel your pain... But even the mortgage can be cut in half by applying money towards the principle as you also add to savings, put kids through college and have a life.

Jan 02, 2009 08:22 AM
Joe Pascal
Joe Pascal - 5 Star Real Estate - Serving Wilmington, N.C. - Wilmington, NC

Larry, I agree it's ugly and the Banks cannot be trusted to put the money in to circulation. Look at what they are doing with TARP.

Joe Pascal Owner/Broker 5 Star Real Estate   Wilmington, NC

Jan 02, 2009 08:24 AM
Diane Lynch
Realty Executives Premiere - Warrenville, IL
Real Estate Broker

Larry, this is the first year I have had to carry credit card balances to make ends meet in 27 years. We are about $500 short per month. We are doing odd jobs and anything we can to generate income, but until then we are going into debt. Luckily I am using 0% financing to avoid interest but I hate the feeling of owing money. Here's to better times.....!

Jan 02, 2009 08:33 AM
Larry H Morris
Mortgage Solutions Financial - Portland, OR
Larry Morris, NMLS 150073

Diane - I agree that sometimes you just have to do what needs to be done, especially in our industries. FDI does have an income producing component if you are interested. I'll send a link to you.

Jan 02, 2009 09:09 AM
Mike Henderson
Your complete source for buying HUD homes - Littleton, CO
HUD Home Hub - 303-949-5848

I liked the advice.  Seemed a little mlm pitch like near the end.

Jan 02, 2009 12:21 PM
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#26
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Jan 02, 2009 01:24 PM
#27
Jackie Cross
Real Living All Florida Realty - Port St Lucie, FL

With my husband out of work mostly since April being debt free seems just like a dream.  We have cut back but incoming still does not as yet meet outgoing.  Hopeing for a much better 2009 for us all.  Thanks for the advice and keep up the great work.

Jan 03, 2009 12:45 AM
Kelsey Barklow
Hurd Realty - Johnson City, TN
423/948-9154

It takes a lot, and I mean A LOT, of restraint, dedication and consistency to become debt free and I hope that someday we (husband and I) will be too. I know we spend too much money on frivolous items and that must change if we are to teach our children the value of money (and become debt free). I love your idea of rewarding yourself once after each card is paid off. Quicken is also a great inexpensive financial software program with a great budgeting and expense tracking feature. We've been using it for years. 

Jan 03, 2009 01:44 AM
Jim Allhiser
Perfection Inspection, Inc. - Salem, OR
Salem, Oregon Home Inspector

Larry,  Good stuff.  I have been a disciple of Dave Ramsey for years.  This December we are debt free except for the house, have 6 months worth of expenses in savings, 15% per month going into a roth IRA, and just set up the 529s for the kids.  With all that in place our mortgage is next.  It will take us around 8 years to pay off!!

I highly suggest the Total Money Makeover by Dave Ramsey.  It teaches you to simply live on less than you make. Sounds simple right? 

The stories in the book are inspirational and well worth around $20.

Thanks for the post.  I love to hear about people who are as weird as us!!

Jan 03, 2009 03:45 AM
Larry H Morris
Mortgage Solutions Financial - Portland, OR
Larry Morris, NMLS 150073

Genius - Thanks for the comment.

Jackie - Sorry to hear about your husband's employment.

Kelsey - Thanks for your insight.

Jim - Jim - Congrats. I've been through Dave Ramsey's Financial Peace University and found it insightful. I didn't agree with everything, but the principles are gold. When I got involved with Financial Destinations I was surprised to find that EquityTRAX is basically a computerized Debt Snowball. Good job and good luck!!

Jan 03, 2009 07:25 AM
Brian Schulman
Coldwell Banker Residential Brokerage, Lancaster PA - Lancaster, PA
Lancaster County PA RealEstate Expert 717-951-5552

Larry, a problem can't be solved without defining it first.  Your program helps identify and define an individual's financial situation.

Jan 04, 2009 11:27 PM
Larry H Morris
Mortgage Solutions Financial - Portland, OR
Larry Morris, NMLS 150073

Brian - Thanks. I agree. You can't fix something without finding the source of the problem.

Jan 05, 2009 03:38 AM