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Book Review: The Total Money Makeover by Dave Ramsey

book review

Dave Ramsey is a best selling author of many popular self-help books about getting your finances together. He’s inspired many with his simple, no-hassle philosophies on how to manage money. He also has a radio talk show called the Dave Ramsey Show, that you can listen to anywhere you listen to podcasts. He even started his own company built on his financial philosophies called Financial Peace University. Dave Ramsey and his colleagues have loads of resources you can find helpful in your own personal money management journey. Whether you are managing a household or a small business, Dave Ramsey has the financial advice you need to be successful and smart with your funds.

Today we’re going to take a focused look into one of Dave Ramsey’s most prolific publications, The Total Money Makeover: A Proven Plan for Financial Fitness. You’ve heard of fitness journeys and makeovers that change your style into something fresh and new, but Dave Ramsey takes all that and puts a financial spin onto it. With Dave Ramsey’s baby step plan you can exercise your financial abilities in ways you never thought possible and finally get into shape where your wallet is concerned.

What Kind of Book is The Total Money Makeover?

book cover

The Total Money Makeover is written as a self-help book. It’s even been compared to popular self-help books like, Your Best Life Now and 7 Habits of Highly Effective People because of the reader-friendly way it is written. It’s an engaging book with lots of real-world examples and stories from real people who have actually gone through Dave Ramsey’s baby steps and seen results. These short anecdotal stories throughout the book help all of Dave Ramsey’s concepts make clear common sense.

The book also includes a lot of motivational help along with the tips and advice. One of the biggest factors that holds people back from taking full control over their finances is the proper motivation and encouragement to make necessary changes to their lifestyle. Dave Ramsey helps with that too, giving you the fresh outlook you need to understand your goal and the rewards you can gain.

Dave Ramsey is also a Christian, so his books often have a religious undertone. So you may find him referencing Bible verses every so often in this book, and tackling religious views and practices with regard to money as well.

What’s in the Book?

The Total Money Makeover is essentially a step-by-step guide for how to go about your own personal money makeover journey. These steps are based on Dave Ramsey’s key money philosophies. Dave Ramsey has strict beliefs about not ever using debt, loans, or credit cards. He believes that our society today is too dependent on credit and that true financial freedom only comes when you live a completely debt free life. So the first steps in his plan are all about helping you get out of debt, and then setting you up to never get into debt again.

Simple and straightforward advice.

Dave Ramsey’s book became so popular probably because of how easy it is to follow his clearly set plan. Each step is specific enough to leave no doubts about what exactly you need to do, making his plan one that anyone can follow and find success. It also helps that he is never vague about his advice, but rather he is extremely straightforward, open, and honest.

Dave Ramsey has no get-rich-quick schemes. He’s more about using honest work, responsibility, and common sense to reach your goals. So you won’t find any crazy secrets to financial stability and success in his book, you’ll just finally learn to implement the basics in a way that really works.

A change in perspective.

Another reason people enjoy Dave Ramsey’s teachings is because he doesn’t pretend that money is what brings happiness. He’s realistic and believes that money is a tool to create stability and contentment in our lives, not the secret solution to all our problems.

He eloquently tackles many mental barriers and misconceptions many of us have about money, and works to not only change your behavior with money, but your perspective about money as well. One thing he talks about a lot is getting over the need to “keep up with the Joneses.” Often in life we compare ourselves to others in unhealthy ways, and sometimes those comparisons can lead us to make poor financial decisions for superficial reasons. So, when you read the Total Money Makeover be prepared to gain a whole new outlook on the purpose of money, and break free from comparing yourself to others.

The Money Makeover Baby Steps:

The main event of this self-help read are the baby steps the reader can take to reach financial peace and freedom. You can read a more detailed article about each of the 7 baby steps that Dave Ramsey will go through in this book, but we’ll go over a quick outline of those steps here too.

Emergency Fund

The first step in Dave Ramsey’s 7 step plan is to basically get your financial life in order. The road to stability starts by setting up your finance in a certain way. This begins with setting up an emergency fund. You can start with at least $1,000 in your emergency fund but eventually you’ll want to work your way toward having at least 6 months’ worth of expenses in your emergency fund at all times.

Debts

Once you start getting your emergency fund in place, it’s time to focus all other monetary efforts toward annihilating all your debts. He goes into more detail about this in the book. For example, he suggests you start with your smallest debts first and work your way up to your larger ones. He also recommends you save paying off your mortgage for last. But eventually the idea is to throw everything you can at your debts until they are all completely wiped out.

Build Wealth

Now it’s time to build wealth and continue saving. Since Dave Ramsey argues you should pay for everything in cash, continually building up your financial stores is an important aspect of the Dave Ramsey lifestyle. You have to have enough in savings to cover all your costs completely with cash.

In the book Dave Ramsey goes into more detail about what savings you should prioritize. He advises that you first complete your 6 months’ worth emergency fund if you haven’t gotten there already. Then he suggests you work toward saving for retirement and (if you have kids or plan on having kids) your children’s college funds.

Things You Can Do Differently:

Dave Ramsey’s primary goal in all of this is to help people get out of crippling debt and stay out of it. But there are modifications you can make to his more rigorous financial plan.

You can choose how much you want in your emergency fund.

If you’re a college student then putting aside even $1,000 may be more difficult for you. But that’s ok! Just put aside what you can. Even just adding $5 to $10 a month into an emergency fund is better than having no emergency fund at all.

Likewise, if you’re more settled in life it might be easier for you to put even more than $1,000 aside into an emergency fund. It really doesn’t matter how you do it, what matters most is that you start accumulating that safety fund in order to be more prepared for surprise expenses in the future.

You can still use credit cards and loans.

Dave Ramsey may believe in using only cash to pay for things but there are advantages to using credit cards and installment loans. When used responsibly using credit can help boost your credit score and get you the things you need to have a comfortable life. Credit cards can also provide lots of perks outside of boosting credit scores. Some credit cards come with special points that can go toward paying for things like groceries and traveling. So long as you understand your limits and include loans and credit payments in your carefully calculated budget and financial plans, you’ll be just fine.

Should I Read This Book?

You may now be wondering whether you should give this book a read or not. You should definitely read this book if . . .

  • you are in debt
  • you have trouble managing your money or realizing where your money goes
  • you have trouble making a budget

If you are looking for a book with more specific details about financial topics (like investing, or small businesses) then you should check out Dave Ramsey’s other books that go more in depth on complex financial topics. The Total Money Makeover doesn’t expound upon these topics too much since it was written more as a beginners guide to Dave Ramsey’s financial baby steps.

 

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Check out some other helpful reviews about Dave Ramsey’s book, the Total Money Makeover:

Review: The Total Money Makeover

The Total Money Makeover Review

Goodreads


The Best Books by Dave Ramsey

dave ramsey books

Table of Contents:

Dave Ramsey is a New York Times bestselling author, and a radio show host on the The Dave Ramsey Show. You can find his books wherever you buy books and you can listen to his radio show wherever you listen to podcasts or the radio. All of his books are also on Amazon, where you can find the kindle versions for your e-reader, or audiobook versions so you can learn all about finances on the go.

When getting into Dave Ramsey’s books people often wonder which book they should start with? If you want to read Dave Ramsey’s books in order there are a couple routes you can go. You can read them in the order he wrote them, or read them in order of the things you learn in each book.

Dave Ramsey’s Books in Chronological Order:

If you want to read all of Dave Ramsey’s books in order, you can follow this master list of all his books so far.

1992 – Financial Peace

1993 – Dumping Debt: Breaking the Chains of Debt

1998 – The Financial Peace Planner

1998 – More Than Enough

1999 – More Than Enough: The Ten Keys to Changing Your Financial Destiny

2000 – How to Have More Than Enough: A Step-by-Step Guide to Creating Abundance

2002 – Cash Flow Planning: The Nuts and Bolts of Budgeting

2002 – Financial Peace for the Next Generation

2003 – The Total Money Makeover

2003 – The Great Misunderstanding: Unleashing the Power of Generous Giving

2004 – The Money Answer Book

2008 – Relating with Money: Nerds and Free Spirits Unite!

2011 – Dave Ramsey’s Complete Guide to Money

2011 – Dave Ramsey’s High Performance Achievement: Accomplishing the Extraordinary

2011 – EntreLeadership: 20 Years of Practical Business Wisdom from the Trenches

2014 – Smart Money Smart Kids

2014 – The Legacy Journey: A Radical View of Biblical Wealth and Generosity

Dave Ramsey Kid Books: Life Lessons with Junior

kid books

4.38 stars on Goodreads

Life Lessons with Junior is a series of children’s books written by Dave Ramsey. In them he goes over all the most basic concepts of money management. Following Junior’s adventures can teach your kids all about monetary responsibility in clear simpler terms they’ll understand. He goes over everything from spending, debt, saving, work, giving, contentment, and integrity. Don’t miss out on gracing your household shelves with these great childhood reads with life lessons your kids will keep with them all their lives.

Smart Money Smart Kids

smart money smart kids

4.26 stars on Goodreads

Smart Money Smart Kids is a book that Dave Ramsey wrote with his daughter, Rachel Cruze. It is a book that teaches parents all about how to teach their kids about money. Part of good parenting is preparing your kids to be responsible, independent adults someday and a big part of being an adult is knowing how to manage your money. In this book Dave Ramsey and his daughter will tell you all about how to raise kids who are smart about their money.

If you’re looking for something from Dave Ramsey that can specifically help your teens, check out his article, “A Teenager’s Guide to Building Wealth.”

Dave Ramsey also has a great recommendation for a college 101 bundle that includes Debt-Free Degree by Anthony O’Neal and The Graduate Survival Guide by Anthony O’Neal and Rachel Cruze.

Financial Peace

financial peace

4.31 on Goodreads

Financial Peace is one of Dave Ramsey’s first books, but he has since revisted the book, renaming it, Financial Peace Revisited: New Chapters on Marriage, Singles, Kids, and Families. This newer edition of his first book now includes more information for married couples, singles, children, and families. This book is also where he introduces the KISS rule, which stands for “Keep It Simple, Stupid.” It’s about getting out of debt and staying out of debt and the idea that you should use contentment to make your financial decisions. It also goes over how to manage money flow and investing.

One of the primary keys to understanding your finances and being able to take control of them is to manage the flow of your money. A lot of people just let money flow as it does, not really thinking too much about where it’s coming from and where it disappears. But if you learn to take full control of where all your funds are going then the problem of disappearing funds won’t happen to you and you can find financial peace.

The Total Money Makeover: A Proven Plan for Financial Fitness

total money makeover

4.28 stars on Goodreads

A large part of what makes makeovers so fun is the joy of reaching your goals and having a different life and a different you at the end of your journey. But have you ever thought about going on a similar makeover journey with your finances? Dave Ramsey will show you how.

The Total Money Makeover may be one of Dave Ramsey’s most popular books. He talks about some of his most famous money tips all while debunking myths about money. He brings a simpler, more straight forward approach to money management that anyone can understand and utilize in their life, no matter their financial situation. Dave Ramsey says that this book can work every time, all you have to do is follow his steps.

Complete Guide to Money

complete guide to money

4.44 stars on Goodreads

In this comprehensive guide Dave Ramsey goes over all his basic financial tips and lessons—How to Budget with Dave Ramsey, how to save, how to get out of debt, how to invest, mortgages, insurance, marketing, bargain hunting, and giving. Anything you want to know when it comes to money, you can find in this master guidebook.

The Money Answer Book

money answer book

3.82 stars on Goodreads

The Money Answer Book is a quick read with questions and answers to more than 100 common money questions! It’s a fast guide that goes over budget planning, retirement planning, shopping tips, saving for college, giving to charity, and so much more. If you need something you can quickly leaf through to find the answers you’re looking for.

How to Have More than Enough: A Step-By-Step Guide to Creating Abundance

more than enough

4.11 stars on Goodreads

How to Have More than Enough is the newest version of Dave Ramsey’s earlier book, More than Enough. Once you have gotten out of debt, he has more down to earth advice about building wealth. Dave Ramsey’s perspective is unique because he doesn’t just talk about monetary wealth, he talks about having a wealth of happiness. He takes it a step further by talking about finding wealth in relationships and in your family. In this book he goes through 10 traits you need to be prosperous in life beyond your financial situations.

EntreLeardership

entreleadership

4.21 stars on Goodreads

In EntreLeadership Dave Ramsey talks about how he built his company, and how to be a strong leader. He talks about how to grow as a leader and the questions you should ask yourself in order to develop yourself. This book has doable, step-by-step guidance to follow to become a better leader and watch your business grow as you do.

He talks about inspiring and unifying your team, handling your business finances, and reaching your business goals. If you are making your own business and you need some pro tips about leadership, this book is what you want. But you can find great insights in this book no matter what you are doing with your life right now. If you are a parent you can use it with your family or at work you can use it with your coworkers! This is because leadership is really all about functioning efficiently as a team and reaching your goals together.

What Books Does Dave Ramsey Recommend?

We’ve talked all about books that were written by Dave Ramsey, but what about books that Dave Ramsey recommends? There are many other great financial reads you can find on Dave Ramsey’s website. You can also read more about Dave Ramsey’s steps to reach financial steps by reading, “Dave Ramsey’s 7 Baby Steps.” Here are just a few book suggestions from Dave Ramsey:

Dave Ramsey’s Book Club

If you’re interested in really tackling your finances with Dave Ramsey’s sage wisdom you can actually join Dave Ramsey’s official book club! All you have to do is create an account on his website and then join the book club (fees may apply). Then, at the beginning of each month you’ll receive Dave Ramsey’s book club book of the month in the mail. You’ll also get an email with details about when the live book discussion will happen on the private book club Facebook page along with a study guide to use as you read.

For more answers to any questions you may have about the Dave Ramsey book club, just visit the book club’s FAQs Page.

 
Dave Ramsey along with his many inspiring books have helped a lot of people get back on their feet financially. You can take on his financial fitness challenge too and manage your money like never before.

Another way you can get some needed financial help is to take out an Installment Loan at Check City! Installment loans can help you stay on top of your bill payments and avoid late fees, which can really hurt your long-term financial goals.


Staying Within Your Budget Successfully

When you know that you are going to be strapped down with a tight budget, it is important that you are focused on creating a budget that is actually going to work for you. Having a budget that does not accomplish your financial goals is pointless but if you are not wise about giving yourself some wiggle room in the budget it can get extremely frustrating.

While you are working on your budget, it is important that you understand where you can cut costs somewhat painlessly. When you find ways to minimize the money you are spending and you do not really notice that you are no longer spending that money, you may save a lot of money when all is said and done.

You Have to Start Somewhere

Start by figuring out where all of your money is going. Although this may sound silly, it is important that you understand where your money is going on a daily basis. Keep a record of all of all of the money that you spend to ensure that you know exactly what you are spending your money on. Keep an accurate record of what you are spending for a short period of time and then use that record to go back through and assess your spending.

Needs vs. Wants

When you are assessing your spending, you should be sure that you can take the time to figure out what is necessary and what is not necessary. Depending on your financial goal, you may find that you have a lot of money left over after the essentials or you may find that you do not have a lot of spare money. Regardless of what you find after watching your spending, you will want to look through your records and see where you can save money.

There are many different ways that you can choose to save money when you are living on a strict budget. Don’t be afraid to make some drastic changes in your lifestyle to ensure that you are able to meet the goals that you have set for your budget. You may want to start by assessing where you spend your money for food and drinks.

When you are spending money on food and drinks outside of the grocery store, you may find that you are spending a lot of extra money. Grocery shopping rather than eating out on a consistent basis will end up saving you money in the long run. When you do your grocery shopping, you should be sure that you are looking for sales and good deals. You may even want to look into a local farmers market option. When you shop at a farmer’s market you can be sure that you are getting fresh produce and often it is much less expensive than shopping at the grocery store.

Take the time that you need to find the grocery store that will provide you with the best option. You should also understand how important it is to minimize the money that you are spending on snacks. When you are out and about, you should be well aware that small charges charged on a consistent basis will start to add up quickly. Pack your own snacks or take time to purchase your drinks in bulk and bring them from home.

Plan Ahead

If you know that you are going to need to make a big purchase in the future, it is important that you take the time that you need to look through your options and secure something that fits within your budget. There are a lot of people that end up spending too much money because they do not take enough time to do research.

When you do your own research, you may be able to find a better deal on a large purchase. Don’t be afraid to take the time that you need to ensure that you are getting the best deal for your money. With the internet, you can be sure that you are able to do a lot of research without even leaving your home.

Being on a tight budget can feel restrictive. As you create your budget and stick to your plan, you may find that you have a lot more financial freedom than you did in the past. You will be able to pay off debt in a timely manner and use your money for the things that you know you are going to need.

8 Easy Ideas to Teach Yourself to Live Within Your Means

Money is such a wonderful temptation. It makes us feel powerful, like we can conquer the world. Consequently, when we have it, we want to spend it. This is especially true when the money comes in the form of a seemingly bottomless pit: a plastic card with the word “credit” attached to it.
The only problem is that when you look at your credit card bill at the end of the month, you’ve discovered that you’ve vastly overspent your budget, bringing your account balance back down to zero, where you feel powerless and frail again.

This is a common problem amongst people. It’s a difficult problem for a lot of people to solve. For that reason, we’ve compiled a list of 8 of the easiest ways to teach yourself to live within your means.

Keep Track of Each Purchase

Number eight, know how much you are allowed to spend on each type of purchase. This tip assumes you have a budget that details exactly how much money you can spend on food, gas, entertainment, etc. Review that budget periodically and remind yourself how much is in that budget.

Make a Budget, and Commit To It

Number seven, commit yourself to never go over that budget, even if you think you have a few extra dollars you didn’t use in another category. The purpose of the budget is to help you discipline your spending. Imagining that you have enough in another category to take care of extra spending is justifying the expense. Don’t allow yourself to justify spending more. Commit to the task.

Making the commitment is the hardest part. From them on out, all you have to do is say “no” and look for a creative solution to a problem you may be experiencing. Once you have a firm “no” behind you, you can focus your full attention on solving the problem, which oftentimes makes it easier to solve.

Run Your Own Race

Number six, stop comparing yourself with others. Half of the things pushing many people to buy the latest and greatest is the fear of being left behind. A huge trap is the newest technology. Rather than keep an affordable phone budget, many must have the newest iPhone or Galaxy along with 10 gigabytes of data.

The price of throwing out a perfectly good phone to purchase another one that also makes calls, texts, and accesses the internet can often put you behind a few months on your financial goals. Don’t fall into the trap of “falling behind.” Although it may not be the best and the greatest, this isn’t a race. You are no better a person for buying the newest thing.

Only Spend Cash

Number five, only use cash. You literally can’t overspend your cash. Once it’s gone, it’s gone. Not to mention the fact that you’re always very well aware of how much cash you have in your pocket. Withdraw your budget of spending money and only allow yourself to spend from that budget.

Get Excited About Saving Money

Number four, glory in saving money. Get excited about saving money. If you have enough money at the end of your budget to save more money, it brings home a sense of satisfaction. Not only are you making ends meet, but you’re also able to save for college/a rainy day. Doesn’t that mean you’re successfully living within your means? If you’re a competitive person you can think of this as a contest, you can look at each credit card balance or short term loan that you need to pay off as the next goal to focus on, as you do this you can focus on small victories and relish in the excitement that comes with winning.

Cut Down Expenses

Number three, cut down your expenses. What are you paying for that you don’t need? Are you paying for 10 gigs of data when only 2 will do? Are you paying for a landline on top of that? Do you have cable, Netflix, and Hulu accounts? What about that gym membership you never use. Cut out the expenses you would like, but don’t need. That instantly boosts your ability to stay within budget.

Find Free Alternatives

Number two, find free alternatives. Why spend money on a fancy dinner when there’s a public event that’s serving hot dogs? Why pay for a movie when you can borrow one from a friend? There’s always an alternative that will provide you more satisfaction then guiltily spending your last dimes would.

Track Your Expenses

Number one, track your expenses. The easiest way to ensure you don’t overspend your paycheck is to track what you purchase and for how much. Updating your budget sheet daily and totally all expenses to this point will help you spend under your budget every month. The process is quick and simple. It doesn’t take more than a minute. The benefit of staying out of debt is well worth the price of a half hour spent over a month.

Try these eight easy tips out. You’ll begin to notice a difference in your spending habits and bank account within the first month.

7 Proven Tools to Help You Get Out of Debt

A mountain of debt is nothing to scoff at. It’s a huge financial burden to have a 30-year mortgage, car payments, and a few short-term loans, e.g. payday loans, title loans, etc., demanding attention every month. If there was ever anything that made you feel like you never see your paycheck, it’s paying off debts.

For that reason, many are looking to dig themselves out of the mountain of debt that builds up well above their heads. The following are 7 tools that have been proven effective at helping families get out of debt.

First, if you can afford it, pay more than the minimum payment each month. Every extra penny you put towards paying off your loans brings the end of your debt a little closer. For a short-term loan, you can decrease the term of the loan by a month or two. For a mortgage, you could reduce the term by a year or two. The latter would take considerable effort, but if you worked efficiently through the following tips, you could make it happen.

Second, make more money every month. Easier said than done right? Digging out of a sticky situation is never easy though. It requires effort. The best thing about this effort is that it improves your overall financial situation for the day you finally do dig yourself out. You can make more money by seeking a raise, promotion, alternative or additional work, or starting your own business. If you don’t go for the raise/promotion, this may mean that you put in more hours at work with the other options. A nice alternative to the extra hours is when a spouse agrees to work as well (assuming that they’re not already). Sharing the load can help get you out of debt quickly.

Third, spend less in your day-to-day life. Reduce your food expenditures by cooking at home more. Reduce your grocery bills by planning meals around coupons. Cut down on your vehicle maintenance payments with carpooling, public transportation, and selling an extra car (that you could live without). Sharing gas, using public vehicles, or getting rid of an extra car each come with significant financial gains to your budget. You spend more every month on driving yourself to work every day than you’d expect. There’s something in every aspect of your life that you could label as excess. Find those points and replace them with cheaper alternatives or save all the money by cutting them completely. You’ll save a ton of money that you could put toward debt payments this way.

Fourth, avoid replacing your debt with more debt. Taking out a second loan to pay off your first one just puts you in a hole for longer.

Fifth, refinance a loan if at all possible. After a long period of good behavior, you can approach your lender for some leniency. They can take a look at your loan again to reevaluate the situation. If you meet their requirements, you can get your interest rate reduced. In terms of a mortgage, that could mean several thousand dollars less you owe the bank. Every scoop your lender can dig off for you is a win. Seek a refinance when it’s possible.

Sixth, put a little away every month into a saving’s account. Even $20 a month will go a long ways in a year. Every little bit helps. Put away money as a buffer for upcoming payments and as a safeguard for your family. If anything were to happen to your job, you would be immediately hard put to pay off your debts, otherwise your lender could walk in and take back the value of your loan. In some cases this could mean your home, leaving you penniless, homeless, and a hundred thousand dollars poorer with nothing to show for it.

Seventh, make a budget. If you have one already, reevaluate it. Once it’s built, don’t spend a penny more for anything that’s not enumerated in the budget. Make the budget a law that you live by. If you do this, you can keep your spending to predictable amount, allowing you to save more money to pay off your bills.
As you apply these seven principles, you’ll be able to chip away a bit more at your mountain of debt. Become proactive in your debt management. The sooner you do, the sooner you can declare yourself financially independent. Once you reach that point, you can finally reap the benefits of a healthy paycheck.

Spring Cleaning Your Finances

As people thankfully lose sight of winter and gratefully greet the onset of pleasant spring weather, many individuals, families, and homeowners are turning to the old tradition of spring cleaning. Spring cleaning is the time for families and homeowners to set themselves to work at giving their home a sufficient, quality and deep cleansing.

Spring cleaning is the time for families to take an inventory of their possessions, clean out the winter’s clutter, and get reorganized. While these principles are usually applied to physically cleaning out the home, this year a family may wish to consider applying the same principles of spring cleaning to their personal finances.

Save Big Money With Generic Products

And as long as the subject of spring cleaning is fresh on the minds of family members, a family might as well start their financial spring cleaning by saving money on their actual spring cleaning supplies. One of the best ways to save money on household cleaning supplies is by buying generic or off brand cleaners.

Generic brands, store brands, and off brand cleaners, as opposed to the well-known name brands, can be found at discounted prices and overall cheaper costs for the same basic cleaning ingredients that the more expensive name brands include in their cleaners. Buying generic cleaners over name brand cleaners has been shown to save consumers up to thirty eight percent on cleaning costs.

Take Advantage of Coupons and Sales

In addition to buying generic brands, a shopper can save money on spring cleaning supplies by being aware and looking out for discounts and coupons on cleaning supplies at local markets and grocers. Choosing to buy discounted cleaning supplies can be better accomplished by planning ahead for the upcoming cleaning projects.

Beyond saving money for the physical spring cleaning of the home, a family can take their spring cleaning ambition into cleaning up and revitalizing their finances. In some ways, spring cleaning the family’s finances is a very literal cleaning process, what with the various important documents and financial paperwork that will need reorganizing.

To keep better track of one’s finances, and thereby become more effective with their finances, a simple but clear organizational process is typically required. This can be either physical hard copies of important documents that will need to be organized in a clear manner or a digital organization of online or electronic documents.

It’s Time to Go Paperless

As a part of this, a family can greatly improve their organization of financial documents if they will shred those documents that can be found online. For example, if the family receives their monthly bank statement in the mail and online through an online banking system provided by their bank, then the need for the monthly mailed copy is superfluous.

In this situation, a family can contact their banking institution and ask that their monthly banking statements be sent to them through email or posted on their online account. In this way, a family can cut the clutter of monthly bank statements from their hard copy financial documents and thereby become more organized in their financial records. In addition to getting statements from your bank online, it’s also possible to sink your bank account with most of the popular budgeting apps that are on the market.

It is important for family to remember, however, that while they are going through their financial documents they should have a paper shredder on hand. Sensitive information such as birthdays, social security numbers and bank account numbers may be present on unwanted paper documentation and can be stolen, yes stolen, from the trash and used by identity thieves to wreak havoc on a family’s finances.

While some feel that hard copy financial records are more secure than online records from those who would steal their information, the truth is that with modern firewalls and protective servers in use by financial institutions a person’s records are much safer in electronic form than they are in a hard copy paper form. Because of this, as part of this year’s financial spring cleaning, a family may wish to consider talking with their banking institution about switching all that is possible into an electronic form of record.

Spruce Up The Family Budget

Lastly, a family that is undertaking the project of a financial spring cleaning will probably want/need to refurbish and revise their family budget. Budgets are vastly important tools for a family to use in order to stay financially secure and stable.

But the usefulness of a budget immediately decreases if a family chooses not to abide by the financial guidelines they have set out for themselves. Additionally, an outdated budget can lose its effectiveness quickly as fluctuations in family income or needs arise.

While performing their financial spring cleaning this year, a family might want to consider taking another look at their family budget. Revising where needed and reaffirming their commitment to living with a budget will add to the family’s financial success in the coming year. As always, when you start to focus on budgeting it’s important to stick to your budget and work towards your financial goals but also understand that things come up.

As you work on financial spring cleaning this season understand that there might be times when you come up a little short, if you find yourself in that situation Check City has several services that can help get you through until your next Payday such as cash advances or pay day loans.

Climbing Out of Credit Card Debt

Getting out of credit card debt can feel like an insurmountable challenge, but if you give yourself time to accomplish your goal and if you go about accomplishing your goal properly you may find that you are able to get rid of your credit card debt a lot faster than you would have thought. There are some simple steps that you can dedicate yourself to and these steps should help you get out of debt and be on your way to financial freedom in no time.

Evaluate Your Current Debt

First, you will want to start by evaluating the debt that you are in. Make sure that you go through all of your financial documents and take the time that you need to assess your financial situation. You should understand how much debt you are in and make sure that you know what your interest rates are for each line of credit that you are using. When you know what interest rate is the highest, you can pay down that line of credit quickly to ensure that you are only spending a minimum amount of money on interest as you are paying off your debt.

Create a Budget You Can Stick To

Second, you should be sure that you can create a budget that you will stick to. Creating a budget can be difficult if you are not used to the process, but it is important that you understand how to allocate your money. Allocating your money properly will ensure that you have leftover money to pay off the debt that you have gotten yourself into.

Creating a plan to pay off your debt will ensure that you are going to be making progress toward your goal. It is important that you set a goal for yourself and that you also map out how you are going to get to your goal. When you know how you are going to get to your goal, you can take each step, one at a time, rather than getting overwhelmed with a goal that is too large.

Debt Consolidation Can Make Budgeting Easier

You may find that it is easiest to manage your debt by consolidating the debt. As you take the time to consolidate your debt, you won’t have to keep track of a payment schedule for more than one payment. With a consolidated debt, you will be able to make one payment every month and be sure that you are staying up to date with your debt payments.

Many people do not realize that they may be able to save a lot of money by simply talking to their creditor. When you have an open dialect with your creditor you may find that you are able to get your interest rate minimized and save a lot of money in the future.

After you have gotten yourself out of debt, it is important that you know how you are going to stay out of debt. Once you are out of debt, you want to make sure that you keep the good habits that you were able to establish throughout the time that you were paying off your debt. When you have established these habits, you may want to write down what works the best for you. Whether printing out a weekly budget works the best for you or taking out cash so you do not use a debit card works best, you should understand how you are going to keep yourself within the parameters of your budget.

Staying within your budget may seem like it is restrictive, but being able to use your money as you please rather than pushing your money toward a monthly payment that you need to make is freeing. Staying within your budget allows you to allocate money toward the bills that are necessary and then the expenses that may not be necessary but that you want.

Doing all that you can to work through your budget and develop a healthy outlook on the money that you spend is a great way to ensure that you are in control of your finances.

If you feel that your finances are out of control, you may want to talk with a professional debt counselor. You can work with someone that will help you figure out the best plan of attack for your debt. With the help of a professional, your debt may begin to feel more manageable and you can be sure that you are able to use your money as you see fit.

Tip of The Week: Start Saving 10%

The tip of the week this week is for those of you that are just starting out with your savings. The task of building a “life savings” can be a daunting one. Oftentimes it’s difficult for people to think about the best way to save money for retirement when there are so many expenses at this stage in their life. As you get started with building your savings we recommend following this simple tip:

save 10 percent

While building a savings that will carry you through retirement seems insurmountable, especially if you currently find yourself living paycheck to paycheck, the thought of just not spending all of your money each month is much more manageable. Only spending 90% of your money is a pretty common budgeting recommendation, some people even refer to it as “tithing yourself.”

The word “tithe” is commonly referred to in the Bible when Christians are commanded to give a “tithe” or 10% of their income to the Lord. Whether you’re religious or not, Christian or not, you can’t deny that following some Christian financial concepts by giving a “tithe” back to yourself each paycheck is a great idea. To get started with this principle of “tithing yourself” you can follow these simple directions:

Step #1: Open a new savings account- There are several reasons we recommend opening a completely new savings account to start building your savings. First, is the fact that you want this money out of site and out of mind. If you are constantly logging in to your main account you will be tempted to start using some of that money.

Second, it’s good to take a step back from the chaos of your current bank account, each month like there can be a flood of transactions between direct deposit for paychecks and then bills going out such as cable, internet, insurance, etc.. You want to be able to tell at a glance where your savings is and having all of that chaos going on in your account can take away from that focus.

Step #2: Create a direct deposit of 10% which will be allocated to your savings account- By setting up this direct deposit and having your money swept away into your savings account each paycheck the temptation to spend that money will be less and less. While employers and payroll companies are usually set up to only deposit into one bank account you can usually set up further direct deposits or allocations within your own bank account so that the money can be forwarded of swept into your savings account. If you have any questions on the best way to accomplish this with specific bank contact a teller or online banking specialist at your local bank branch.

Step #3: Do not look at your new savings account balance for at least six months! Once things are all set up and you’ve confirmed that all of the deposits and allocations are working, STOP LOOKING AT IT. While this may sound crazy, you want that money to become unreal to you, the more you look at it, the more real it becomes and the more you start to think about how you can spend that money.

Step #4: Pretend the money is not even there- While we’ve mentioned this in several other steps it’s so important that it deserves being its own step as well. If you constantly think about that money and what you could buy with it, you’ll end up spending it. This is the same reason people should not have junk food around the house when they are dieting, because if it’s there, and around, people will be more likely to cave in. As you start building your savings, consider yourself on a financial diet and remove all potential temptations. Once you have built up a savings for six months you will begin to thrive on the fact that you are building a savings and you will begin to think of ways that you can build up that savings even faster.

Step #5: Work Towards 20%- While 10% is a great starting point it’s important to point out that it’s just a starting point. Given the condition of the economy and the rate of inflation a savings of 10% of your income won’t be enough to last you throughout your retirement even if you started saving when you first entered the work force.

In addition to the rate of inflation there are also some additional reasons that saving just 10% of your income won’t be enough. The fact of the matter is that while you work towards building your savings things are going to come up. In a perfect world you’ll be able to leave that money there and never think of it again but you’re going to find that cars will break down, kids will need braces, layoffs or job loss may come and all of those things will temporary derail your ability to set aside that additional income and sometimes even cause you to have to dip into your savings to cover such unexpected expenses.

If you currently find yourself living paycheck to paycheck the thought of building your “life savings” will be overwhelming, if you find that you just don’t have 10% to spare we recommend following the guidelines in some of our budgeting blog posts to figure out if there are some expenses that you could cut to help you get to a point where you can begin building your savings. If you follow these simple steps you’ll be able to start building your savings in no time.

Exploring Your Options to Get Out of Debt

When it comes to getting out of debt it can oftentimes seem like a insurmountable task. Depending on the cards life has dealt you, the extent of your debt will vary. Regardless of the amount of debt you may have incurred whether personal or business below is a list of options you might consider to get out of debt.

Credit Card Debt Consolidation

What is it? Credit card debt consolidation is the process of taking all of the debt you’ve accumulated on multiple credit cards consolidating it into one debt consolidation loan that you pay monthly.  It was created as an aid to help people with multiple credit cards pay off their debts rather than default on them.

It is extremely helpful to people that struggle with various interest rates. All credit card debt is added together into one bill that is given a particular interest rate. In some cases, that interest rate will be lower than that of many of the cards taken into consideration. Debtors then have a more manageable sum of money to pay back.

It is also wonderful for those that truly struggle to remember all of the deadlines associated with their credit cards. Consolidation into one monthly bill will help ensure that the credit card companies get paid. They fear one thing and one thing only: not getting the promised money back in a timely manner. Credit card debt consolidation helps that process go through more reliably.

Other Benefits

The added benefits include a sense of relief for finding a light at the end of this very long tunnel. Managing multiple accounts is extremely stressful. They take a lot of energy and worry. Bringing them together into one relieves much of that burden. The payments are more manageable in the mind this way.

The creditors and collection agencies also lay off the pressure. Your phone lines are clear and threats are diminished.

Everything happens behind closed doors. Your debt consolidation services work under discretion. They talk directly to your creditors and in essence, explain the situation. They petition for reduced interest rates and help meeting the debtor in the middle to ensure they get paid.

The main danger with credit card debt consolidation is finding someone honest to do it for you. Unfortunately, just as in every business where money is involved, there are the sharks that will ruin it for the rest of us. They will try to scam you. Their tricks will leave you in a worse position than when you began.

There are a few things you can do to make sure you are properly informed and prepared to go through this process.

First, call your creditors yourself (since this is what debt consolidation companies would do for you anyways). Explain your situation and express your desire to pay them back. Many times, they will be willing to work with you to negotiate a new payback plan. This can include lowering your payments, interest rate, late fees, etc. They will often take a lower payment to bankruptcy any day, as you may actually pay your debt back when they meet you in the middle.

Second, seek out the help of a professional. This can mean you go to a reputable debt consolidation company. It can also mean you visit a credit counselor, or a bankruptcy lawyer. Any of these options can help guide you to a payment plan that actually works for you.

Third, do some research on the companies and professionals you talk to. One of the best reporting sites on the web right now is the Better Business Bureau. If people are having trouble with a business, it’s reported to the Better Business Bureau. More and more rating sites are showing up on the web. Yelp and Google are just a few examples of places looking to give you honest ratings. See what you can find to validate that these guys know what they’re talking about on the web.

Credit Card Debt Consolidation might not be the best thing for you either though. If you would rather just grit your teeth and punch your way through this thing, there are a couple of other options to consider.

Work another job

If you can, add another job to your list. Working two jobs can be an uncomfortable experience, but it can sometimes give you just the money you’re looking for. You’re not the only one that could take the extra job though. A wife or older child could help out as well, if you asked.

Find an investor (if you’re starting a business)

Find someone who believes in your work enough to invest in your company. Investors can help you out of tight spots occasionally.

Bankruptcy

What is bankruptcy? Bankruptcy is a way to stave off the creditors when things get really bad. When you file for bankruptcy, you are alerting the public that you are unable to pay off your debts. There are a number of different “chapters” under which you can file for bankruptcy. Each means something different to the law (and your creditors) and each absolves you of certain responsibilities (if your filing is approved). The following are the 3 most common.

Chapter 7

Chapter 7 is the most popular type of bankruptcy. Under Chapter 7, you liquidate all valuable property to pay off a debt. You essentially sell everything worth something; put the proceeds in the debtor’s hands, and whatever’s left of the debt is no longer your problem. This type is extremely difficult to qualify for and various parts of the law vary from state to state. The main effect is that you get to start over with a fresh slate as a Chapter 7 will clean up the loose ends.

Chapter 13

Chapter 13 is essentially a re-evaluation of the current payback plans. Whatever the reason you cannot pay back your debt according to the current payback plan. As you can imagine, most collectors aren’t very lenient on this matter. You want to pay it off, but can’t seem to find a way. That’s what Chapter 13 bankruptcy is for. Debtors come to the court system waving a white flag and asking for a more lenient pay back schedule.

To qualify, you must have less than a million dollars in secured debts and less than $360,000 in unsecured debts. The exact numbers adjust according to the current consumer price index, so be sure to check what the true limit is before you try filing. Any more than these amounts will disqualify you on the spot.

They come forward with more than just a white flag though. The law requires you give a full disclosure of your assets, income, debts, and other financial information pertinent to your current situation. You must also have a steady source of income and present a proposal of a payment plan you can afford to pay off over the next 3-5 years. The benefits are amazing. You get to keep your current assets and get a more manageable plan to work with, a plan that your creditors can’t demand more from over the course of the bankruptcy.

When you receive the green flag to go through with the new payment plan, you must keep to it.

Chapter 11

Chapter 11 bankruptcy is most popular with people in the business sector. It is the next resort for people that have secured, or unsecured debts that exceed the limitations of Chapter 13. Very few individuals have opportunities to be in that much debt (hence the reason businesses tend to take advantage of it more often).

Chapter 11 offers companies some time to continue operations as normal until their case is completely reviewed, even though they are in considerable debt. In filing for chapter 11, the debtor agrees to only purchase things needed for day-to-day operation; not sell any major piece of equipment, a part of the company; and not expand in any way. This can sometimes lead to closing locations, laying off employees or renegotiating existing contracts with unions.

If it doesn’t look like the company is going to operate profitably while making payments, their filing may be converted into a chapter 7 case.

What are the consequences of filing for bankruptcy? Filing for bankruptcy is detrimental to your credit. It is the ultimate breach of trust in a person. Consequently, it may be almost impossible to get good credit again for years to come, chapter 7 cases taking longer than 13. Your credit history sticks with you for a very long time too. Bankruptcy may be a good way out of your current predicament, but it sticks to you like a black eye for years to come.

You also become ineligible to apply for bankruptcy again for a further 8 years, meaning that you need to get responsible with your credit again if you want to make it through the coming decade.

Filing for bankruptcy can also hurt your future career opportunities. If you drove your personal finances into the ground, what are the odds that you’re going to do well by the company, especially if you were a director or spender of money? Your career can plateau pretty quickly when you can’t be trusted with the expenses of the company.

Going for bankruptcy isn’t always your best option when it comes to getting out of debt. It is a great way to legally extend your time to pay back your debts, but you will be hurting over it for a long time to come.

There is a way out of nearly every situation. Regardless of which option you choose to get out of debt Check City is here to help you out. Whether it’s a cash advance to by you a little time until you decide which option is best for you, or a deb consolidation loan to get all of your payments into one convenient payment we can help. Take your time deciding which route is best for you, it’s important to know your options and choose one that will work for you.

 

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