Hi, I am Matt Kelly and this is the story of how I got into and out of debt.  Check out my class Creating True Financial Independence

After graduating from Thunderbird School of Global Management with a Master of International Management in 1991 I began a sixteen-year cycle of accumulating credit card debt and paying it off by rolling it into my mortgage and declaring, “Never again will this happen!”  Without any skills or tools to change his behavior, it happened again and again.

In February 2007 my wife, Cheri, and I began attending the thirteen-week Financial Peace University.  Over the following fifteen months we paid off $165,000 in debt and saved $20,000.  No, we didn’t have huge incomes.  We had received a $40,000 inheritance when my parents passed away – which we didn’t use to go to Hawaii.  Instead, we paid off debt.  In addition to using the $40,000 to payoff debt we harnessed our $80,000 annual income to payoff an additional $25,000 in debt and save $20,000

Since before we were married we had talked about taking a year off from work to travel the world.  At times, when our debts had been rolled into our mortgage, the dream seemed more likely to happen.  Of course, moving debt from one place to another did not really ever pay it off; it just hid the reality of their situation.  Then, thanks to getting all of our debt paid off, except for our mortgage, the dream became a vision.

The remaining $100,000 debt payoff came from this shared dream.  Realizing that paying off our home would be a key component to being able to freely travel around the world, we decided to downsize our condo.  We sold their $300,000 condo that had a $200,000 mortgage and bought a $200,000 condo using a $100,000 down payment.  We like the new smaller condo better and can foresee the day when we will embark on our journey around the world.

After having gone through the process of getting out of debt, our marriage is better, there is more ease in our life, and we are happier.  And the best thing is that I found a passion and a gift for helping others get out of debt too.  I have developed the class Creating True Financial Independence after taking this class most people can be debt-free, except for their mortgage, in 12 to 18 months.

In addition to teaching Creating True Financial Independence I do private coaching.

Check out this very helpful article:

3 ways to sell your old electronics that are collecting dust

From Bob over at christianpf.com

Great questions inspired by Your Money or Your Life.  Answer them thoughtfully and honestly and they will give you some great insight into what money means to you.

Who or what has influenced your major financial decisions?

If you aren’t doing what you want in life, whose dreams are you fulfilling?

When you think about your financial past, do you see any patterns?

What financial advice from the past sticks in your mind today?

What messages about money did you get as a child?  How are these reflected in your actions?

What does money mean to you? Power? Security? Sex Appeal?

Have any life crises altered your thinking about money?  How and Why?

Have you ever felt poor or wealthy?  How would you define poor or wealthy?

How much time do you spend with popular media such as television, newspapers, magazines?  How do these contribute to your view of financial situations?  Your wants and needs?

Who is your financial role model?  Is there someone that you compare yourself to when it comes to money?

What makes you feel “real” – that you really matter?

Here are 18 ways to raise $300 or more
1. Start Living on a Budget
2. Get a 2nd job or work overtime
3. Sell Stuff on EBay or Craig’s List  – may I suggest:

• Extra Bike(s)
• Extra Outdoor Gear
• Kitchen Gadgets
• Jewelry
• Books
• Collectibles e.g. baseball cards and comic books
• Musical Instruments
• Furniture
• Tools
• Cars

4. Stop Going Out to Lunch
5.     Bring Your Own Java
6. Stop Drinking Soda and Energy Drinks
7.     Quit Smoking
8.     Eat Dinner at Home
9.     Drop Cable/Satellite TV
10. Pay With Cash
11. Rediscover the Library for Book and Movies
12. Get Rid of Your Storage Unit
13. Eat Less Meat and Cheese
14. Stop Buying Convenience Foods
15. Stop Incurring Overdraft Fees – Balance Your Checkbook
16. Raise Your Auto Insurance Deductible
17. Cancel Your Land Line
18 . Stop Buying Junk Food

Learn how to take your career, team, business, marriage, relationship, family, and life to a new level by passionately and purposefully pursuing your dreams and helping others to do the same!

I attended the first Living the Dream workshop and highly recommend it.  Check it out http://thedreammanager.com/living-dream-event-sign

Living The Dream

Since the release of Matthew Kelly’s best-selling and award-winning book, The Dream Manager, there has been enormous interest from people about how to go deeper with the remarkable concept and principles outlined in the book. Companies are contacting Floyd wanting to learn how they can begin a Dream Manager Program… Managers are asking how they can use ideas in the book with their direct reports… Teams are wondering how they can create the dynamic teamwork depicted in the story… Many more are curious about how the idea can transform their family, relationships, career, and life… And not surprisingly, hundreds have decided that they want to become Dream Managers themselves.

This overwhelming response confirms what Matthew suggests in the book — it’s a wonderful thing to achieve our own dreams, but it’s an incredible feeling to help others accomplish theirs!

If you are interested in learning more about…

• How to define and pursue your dreams
• How to help others achieve their dreams
• How to introduce The Dream Manager concept to your workplace
• What skills make a good Dream Manager
• How to become a Dream Manager
• What the coming HR Revolution means to you and your company

…we would like to invite you to a special, one day training that will take your knowledge and understanding of The Dream Manager concept to a new level. Spend a day with Matthew Kelly and the Floyd team…it will change your life forever!

What?

Living the Dream: Mastering The Dream Manager Principles!

When and Where?

Monday, October 26, 2009 — 8:30am – 5pm
UBS Tower
1 North Wacker Drive
Chicago, IL 60606

Why?

To learn how to take your career, team, business, marriage, relationship, family, and life to a new level by passionately and purposefully pursuing your dreams and helping others to do the same!

Investment?

$595 per participant. Special rates are available for groups of five or more. Please contact Becky Freking at bfreking@floydconsulting.com for more information.

Matt Jabs at debtfreeadventure.com wrote and interesting post about spending journals.

I love that he is trying to reign in discretionary spending, however I believe that the cash envelope system is a far better way to do that.

A spending journal is reactive. Cash envelopes are proactive.

With cash envelopes I don’t have to record every purchase and I get to allocate my money when I am doing my budget each month. It’s the difference between making a grocery list and eating before you go to the grocery store Vs going to the grocery store when you are hungry without a list.

Since I know the purpose of each envelope I don’t care where I spent the money so long as I don’t spend the grocery money on beer. However, beer can be bought from the miscellaneous, restaurant or entertainment envelopes.

Credit Cards to start charging for not being in debt .

In an effort to increase fee income Bank of America announced, “Starting next year they will charge a small number of customers an annual fee, ranging from $29 to $99. The bank has characterized the fee as experimental. But card holders who have never carried a balance or paid late fees could be among those affected.”

Stop the credit card addiction!; use cash or a debit card. This is crazy.  The milage points and the cash back promises are just not worth it.  A free debit card from you local bank can do all the good of a credit card and none of the bad.

Isn’t it time to give up the idea that credit cards are necessary?

If you think you are getting rich by getting 3% back on your credit card purchases think again.

This is directly from an article called “Why Get A Merchant Account” by a merchant processor named Approved Payments. See what those who sell credit card processing are saying about you.

• Consumers tend to spend more when using a credit card than when using cash. There is no imposed spending limit like there is with cash, so it’s easier to keep spending.
• Accepting credit cards help customers make faster buying decisions. Impulse buys are more likely with credit cards than with cash or checks.

It is common knowledge that consumers spend between 12% – 30% more when they use a credit cards Vs cash.  The exact percentage cited varies depending on the purchase type, but the fact that you will spend more remains the same.

If you were getting $400 a year back on your cash back credit card, based upon 3% back on all purchases, that would mean you are charging roughly $13,333 dollars per year on your credit card.  An overspend of even just 12% is $1600.

I don’t know about you, but I have no desire to unconsciously spend $1600 to get $400 of my own money back at the end of the year.

I consider myself to be a marketer.  I love the study of marketing, I have a Masters Degree in International Marketing and I see everyday how marketing causes us to want what is not necessarily best for us.

My advice is to anchor yourself by finding a dream that means more to you than anything else you want.  Then you can measure each want a marketer creates against the dream.  Now you know what the want will cost you if you choose to buy it; the want costs you your dream.

Yes, I am a marketer and I am marketing financial independence and dreams.  To have financial independence and attain your dreams means you’ll have to say no to other things like instant gratification, debt, interest payments, unconscious spending and buying stuff that does not bring you great joy.

I believe that your dreams are more important than the things you’ll have to give up.  You get to decide; will it be what marketers want to sell you or  your dreams?

This post was inspired by another simple and brilliant post by Seth Godin http://sethgodin.typepad.com/.

Suffering from Affluenza?

Answer the following questions to see how you are doing with your personal finances

1. Do you have a written budget where you consciously and specifically allocate each dollar of income to spending, saving and investing before the month begins?
2. Do you save money for irregular, annual, bi-annual or quarterly expenses like car repairs, gifts or insurance?
3. Do you have medical insurance, short-term disability and long-term disability insurance and life insurance?
4. Do you have an emergency fund equal to three to six months of your living expenses?
5. Are you spending less than 35 percent of your take home pay on housing (rent, mortgage, property taxes, HOA fees)?
6. Do you only pay for purchases with cash or debit cards?
7. Are you investing 15 percent of your take home pay for the purpose of achieving financial independence?
8. Are you saving for your children’s college fund at a rate that will allow them to attend a four-year institution without taking on student loans?
9. Are you paying on your mortgage at a rate that will allow you to pay it off in 15 or fewer years?
10. Do you work at your job because it is your passion?
11. Has it been more than three months since have you worried about money?
12. Do you have a dream toward which you are moving consciously and deliberately?  If you have a partner, is it a shared dream?

If you answered “no” to one or more of these questions, you would benefit from some effective personal finance planning or coaching.