Dave Ramsey shared a story from his mentor about how we as americans are gradually acclimated to love debt. Basically it is about a frog Click here to watch video afterwards.
The Frog when placed near boiling water feels pain and discomfort so, he avoids the pot all together. Now when placed into a pot of room temperature water, the frog just swims comfortably around adjusting to the temperature of the water. Once the fire is turned on, the frog just adjusts with the increasing heat until it cannot adjust any longer…….. You get the idea.
That is how it is with debt. We are gradually adjusted into thinking credit cards are a good thing. We have a small amount 500.00 we are allowed to borrow. We get a 20.00 a month payment due. Then they increase the balance. You say oh! I can afford it. The minimum due increases. All the while you are increasing slowly your debt load. Until one day you realize you are working to pay the credit card companies and very little stays with you. You are stuck with a huge minimum due payment. For a nice chunk of your adult life. But unlike the frog, There is hope. You just need to learn a new way of doing things.
Credit cards
Store Cards
Car payments
Student loans
They are all traps. Find your way out of them people. Watch the video The water is debt. The frog is you.
You have a question? Just ask. I look forward to any and all that you may have. If I do not know the answer, I will find it.
Be Smart. Be Frugal. Be a better YOU.
Richard
Everyone is looking for the BBD. The Bigger Better Deal. But can you honestly get 18% growth on your money. I have learned one way.
Credit Cards!!!!!!
No, don’t get confused if you use them you will not gain 18% growth.
The staying away from using them will encourage you growing your money automatically by 18% on average. Because you will not be giving the banks that 18%. You automatically keep 18% therefore growing your money by……18%!!!!!
Let’s look at the marketing of these card companies…….. They promote rewards(mileage, cash back, free underwear, other items) Do your own research and that will be about 3 percent or less of the amount you charge. They use words like perks points and other similar words. But look at the math.
They give you 3 percent of your purchase back. Then you pay back 18%-25% interest back to all of these companies. SO! Looking at that in dollars for those of you who are not very good in math. I am buying a 1.00 item on credit. They will be giving me 3 cents back. Then if I don’t pay it back, I will pay the bank .18 cents to .25 cents back to the bank. I hope that explains rewards to you. They spend Billions to flash marketing into your face from every direction. What’s in your wallet? Not their cards I will say. :)
If you have a credit card balance, you need to get that sucker paid off!!!! And learn to establish savings for all of your purchases. In your lifetime if you continue to borrow money, you will throw away hundreds of thousands of dollars in interest fees. Who wants to do that? Well most of you eagerly charge it so apparently a lot of you.
Look at your downtown area. What are the names on the towers in your downtown area. They are companies that take your money. Banks and Insurance companies. I explained the banks. Now, Insurance companies!! I have too much in my head to share in one entry but I will say this.
If you are in one of those whole life policies universal life policies basically any of those policies that have a savings account setup in them. STOP IT!!!! Why are you going to pay someone to have a savings account for you? Do it yourself. They are right up there with the banks in your downtown for a REASON!!!!!!!
You can argue with me if you like, I will just smile and walk away. I am just sharing the knowledge I know and products from these two estabishments take your money. THEY DO NOT MAKE YOU MONEY!!!!!
So, start growing your money by a minimum of 18% by staying away from them. Educate yourself on insurance you should get to transfer your risk. But stay away from cash value. You are losing more money than you make.
Be Smart. Be Frugal. Be a better YOU!
Richard
The stroke of your brush…………….
The amount of paint you apply to your canvas.
The different types of brushes.
Is it not even a brush at all?
Pencil?
Charcoal?
a 5 year olds crayon?
When it comes to money, how do you handle it? Is it just a unmanaged mess like when a young child first learns how to color?
Do you take the time to add detail to your piece of art?
How many tools are you using to make your piece?
Is your piece of art the only piece you will wish to do?
The art of Money is a very delicate subject.
Some fear making it. Some fear losing it. Others make it like a piece of art. They assess every situation learn the proper stroke. Their technique. As time goes by they master that technique and move on to another medium. Maybe they were good with crayon then moved on to marker because they could now stay within the lines. I personally like being the one who makes their own lines. Not copying but actually making something your own. Learning from others yes. But in time making it your own. Maybe now it is clay pottery. I hope you get my point.
What are you doing with money?
Do you make money just to spend it……
Do you borrow money to give your money pack to another in payments…….
If you invest, are you educated in the field you are investing in……….
Start your business……did you start small and cashflow the venture…..or did you borrow there with hopes you will make enough to pay it back……..
Bottom line what does your art work(money situation) look like?
Learn the techniques. Use the tools properly. One day, you will have a piece of art worth hanging.
God bless,
Richard
Frugal-guy is just a normal guy who learned the hard way how to handle money. By losing it. If you would like to donate to his cause of teaching personal finance and his church, please click the donate button and contribute .25 cents. If all his followers go to his main page (click on pic) and donate .25 a month he will reach his goal of having a classroom to rent out to teach more. Also clicking on an advertisement you like will also aid in his cause as well. All money will go to reading material for help desk and FPU class kits to be offered to members and abroad at a discount. The more we help others the more we will be rewarded. Learn generosity. It changes you for the better. .25 cents is not a lot. God loves a cheerful giver. 2 Corinthians 9:7 If you have a question and wish to remain anonymous please send me an email to thefrugalguy@facebook.com I will answer your question in this blog and hopefully it will help a few more people. God Bless.
For all you newbies (mostly in college) you might think my life is extreme penny pinching while I think I am normal. Here is some good pointers to live your life by to get you started on the right track. Remember it is neverhow much you make, it is how you assign your money. If you assign your money to the casino or Lottery, more than likely you will live paycheck to paycheck most of your adult life. Paycheck to paycheck means you spend all your money before your next payday with no cushion. Enjoy the article. Click the title.
Richard
Frugal-guy For all you Dave Ramsey followers that want to pay off your debt faster, I found this on one of my followers web pages and is a pretty nice tool. This is a debt snowball spreadsheet. I am almost debt free so I know when we will be done. This is for you beginners just starting out. Input your debt, enter an amount you are willing to add to your debt to pay it off faster and VOILA!!! The second page gives you a layout of when each debt will be paid off. :)
Enjoy!
Richard
Just found this via the Money Makeover forums and LOVE IT. It takes into account interest and is a very simple spreadsheet. Love love love seeing the light at the end of the tunnel. I highlighted my “Paid Off” month to illustrate how every time i put extra money at it the month moves earlier and earlier.
Some things that were slightly hard to understand at first:
- Green line “recurring extra payment” is code for “anything on top of minimum payments you can afford EVERY month”
- Yellow line “One Time Bonus” (on results tab) is code for “any extra money from your budget”, i.e. couponing saved you $20, IRS Check, side job extras like waitress tips.
- On the Results tab, Hide all the “blank” debts. You CANNOT delete them or it will screw up the formulas. highlight the lines you don’t need, right-click, click hide.
- On the “Start Here” tab, you cannot “move” the debts. Just delete the sample one line at a time as you input your data and delete extras.
Just a little wakeup call. Look at the numbers. We need to WAKE UP!!!!! We spend more than we bring in. How is that smart? And they want to “RAISE” the debt ceiling.
As dave Ramsey stated, and I might not be quoting it exactly. We the people earn 50,000 a year but we are spending 78,000 a year. With over 300,000 in debt on top of that. We realize that we need to stop spending so instead of spending 78,000 we are going to cut spending down to 72,000 a year.
This is the logic our government is in right now. I will post a link from my source in the next entry.
