Plan for College: Go to college debt free!

You need a plan for college! If you don’t plan for college, you’ll end up in a very sorry state. Having a plan for college before you apply will save you time, debt, and stress. Watch this video for 10 quick and easy ways to go to college DEBT FREE. Watching this video, and learning how to get a debt free college education, will be the best eight minutes you’ve ever spent.

***Note, becoming a policeman or fireman requires you to attend job-specific courses. Visit this link for more information.

Tuition assistance program information:

http://www.forbes.com/sites/troyonink/2012/02/27/why-college-co-op-programs-totally-rock/

http://www.huffingtonpost.com/2012/05/10/tuition-reimbursement-10-companies-that-pay_n_1507188.html#slide=more225607

Dave Ramsey’s college guide:

http://www.daveramsey.com/tools/college-guide/?ectid=ccg.t4595

Is Having Debt Sinful?

That’s a good question! There is no doubt that debt is still the American way. The total U.S. Consumer debt is $2.8T (U.S. Federal Reserve, 2013). In spite of some improvements on the levels of debt since the recession of 2008, for the most part Americans still rely heavily on debt on a regular basis.

As a personal finance coach and blogger, I seek to teach on the best way to handle your money. Usually most people agree with me on the issues of doing a budget and saving money for emergencies and for the future. Where I find myself swimming against the current is in the area of debt. The current common wisdom is that debt is a tool and when used wisely can lead you to prosperity. Conversely, I believe that debt represents risk and that it should be avoided or eliminated as quickly as possible

I am also an Evangelical Christian and I advise and teach people from a biblical perspective. So, how do I answer the question that titles this post? The short answer is that no, having debt is not sinful. There is no prohibition in Scripture against having debt.

However, Scripture does have plenty to say about debt and none of it is good. So I want to share 3 principles that will hopefully motivate you to get out of debt and to stay out of debt: Having debt is not wise, is risky, and it is a hindrance to prosperity.

1. Having Debt is Not Wise

Probably the best known Bible verse regarding debt is Proverbs 22:7: “The rich rules over the poor, And the borrower becomes the lender’s slave.” When you are in debt, you have surrendered control of your money to someone else. Let’s forgo for the moment the argument of “good” vs. “bad” debt. The point is that you are serving your lender whether you have borrowed for a car, on a credit card, a student loan, or a mortgage.

You enter into this agreement voluntarily as no one forces you to go into debt. The lender sets the repayment terms: how much interest, length of the loan, payment date. You are not in control because the lender is in control. The lender is the master and commander of the debt.

As a Christian I have to remember that Christ died to make me free, so I should be careful not be enslaved to anything. There is no wisdom in relying on debt as a tool to achieve prosperity.

“You were bought with a price; do not become slaves of men.”
I Corinthians 7:23 (NASB)

2. Having Debt is Risky

When we assume debt, it is usually based on the idea that “we can afford the payments”. That affordability statement is based on our current situation. But what happens if the situation changes? If you suffer a loss of employment or health, what then

?Your level of risk increases with your level of debt. When we carry balances on our credit cards, student loans, etc. we are increasing the chance of not being able to repay if our income situation changes. Do you know what else increases when our debt increases? Stress levels.

In full disclosure I have eliminated all of my consumer debt, although I still have a mortgage which I am working to pay off as soon as possible. Even though I have a reasonable mortgage loan and good equity on my home, I am still in the slave position to the mortgage company: they own the home, I don’t. I will only eliminate that risk completely when I pay off the mortgage.

“Do not be one of those who shakes hands in a pledge, one of those who is surety for debts; if you have nothing with which to pay, why should he take away your bed from under you?”
Proverbs 22:26-27 (NASB)

3. Having Debt is a Hindrance to Prosperity

Do you know the other problem with debt? It gives you a false sense of security. Years ago I bought into the idea of “building up my credit” as a good financial move. At one point, I had several credit cards and lines of credit. I had the possibility of borrowing up to $53K with those credit vehicles. I never got that far but I was very proud of my financial prowess.

In reality, I was counting on credit to bail me out in case of an emergency. Those same lines of credit prevented me from learning a basic but essential lesson; it is better to wait and save for what I really want to buy instead of borrowing money every time I “needed” something.

Debt can become a crutch that will keep you and me from walking on our own financial strength. When our income goes to payments instead of savings we lose. We should be gaining interest not paying interest. When we pay interest, the banks prosper but we remain stagnant.

So no, debt is not a sin. But I believe God has bigger and better things for us. So learn to live on less than you make, save for emergencies and for the future and get out of debt as fast as you can. Then you can use your money to invest for the future and more importantly to give and help others. The longer you stay in debt, the longer it will be before you can dictate your financial destiny.

“Do not withhold good from those to whom it is due, when it is in your power to do it.  Do not say to your neighbor, “Go, and come back, and tomorrow I will give it, when you have it with you.”
Proverbs 3:27-28 (NASB)

Bio for José R. Figueroa

Personal Finance Coach/Blogger @ Figueroa Financial: Help and Hope for Your Finances. He is also the author of the e-book 7 Principles for Financial Success now available @ Amazon. www.figueroafinancial.com

How much do you need to retire?

How much do you need to retire?

People ask me, “What is the magic number a person needs to be able to retire?” “How much do I need to retire?” There are so many variables depending on your individual situation. You have one financial expert say you need 8 times your salary and others saying you need 25 times your yearly expenses. Many financial advisors expect you to have your annual salary saved by age 35. Whoops – Robin and I missed that one. Well – what if you don’t have that by age 55? Are we going to have to eat rice and beans and never take another vacation? Maybe – but most likely not. My Dad passed away at age 57 and because of Social Security and a Life Insurance policy my Mom was able to have a good retirement for almost 25 years. When she remarried our step dad they were basically living on two social security checks and a small military pension. They went on several vacations each year and lived in Orange County, California. How could they do this? They were Debt Free. If you are only paying for living expenses and have good health insurance you can make it work. 25% of retirees are depending solely on Social Security checks according to bankrate.com. http://www.bankrate.com/finance/financial-literacy/americans-plan-to-work-through-retirement-1.aspx

I am one to believe it will be around a long time – though you might have to wait longer to reach full retirement age or take a reduced benefit. Remember the Social Security Act was enacted in August of 1935 by Franklin D. Roosevelt and the first monthly payments were first paid in January of 1940. That means Social Security has been around almost 80 years. Medicare was not enacted until July of 1965 which covers much of the health expenses of those 65 years and up. Most are paying for supplemental insurance to cover some expenses that Medicare will not.

Game Changers for what I need to retire

1. Get in the 10-10-10-70 club as soon as possible. The younger the better. 10% of your net income going to giving others, 10% of your net income to investing in either a company match, traditional IRA or Roth IRA. (I feel a company match should be #1 and auto deducted from your paycheck), 10% of your net income in a savings account for “You know about it” Expenses like Christmas, vacations and those yearly expenses like property taxes, homeowners insurance, etc. and then 70% for living expenses. Robin and I were not in this club until after age 55. My point – It is not too late to get started.
2. You need to time it so before you get that gold watch you are completely debt free to include your mortgage. Change your 30 year loan to a 15 year loan if you want to make this happen.
3. You need to be on a “Spend every Penny” budget each and every month. What is nice about this is you know what you need to retire.
4. You need to know what the different streams of income will be and the amounts.

Possible Streams of Income for your retirement

How much income do you need to retire? A person could potentially have 12 streams of income to get them through the retirement years. If married that increases almost two-fold.

1. A pension or pensions from your years of employment. You could have been in the military 20 years and then worked for the Department of Defense for another 20 years and qualify for two pensions. I realize many companies are taking away the pension programs but in 2013 government workers take full advantage of this. Teachers and firefighters in California that put in 40 years of service are retiring on close to 100% of their income for life. We have close friends that are retired and they both taught high school for 40 years and are receiving close to $200,000 for life. Maybe this is why California is in financial straits – but I will say that CalStrs is very healthy financially. My brother, Mike retired after 32 years of serving his country as an Air Force pilot on 75% of his income and is still working full time for a company in the defense contracting field.
2. Your own retirement plan to include: Traditional IRA’s, Roth IRA’s, and the TSP (Thrift Savings plan) for government employees. Many come with company matches and goes in with pre-tax dollars.
3. Social Security – I will do a video just to cover ways to optimize your benefits. So many different combinations. Are you aware of the spousal benefit even if you do not qualify?
4. Inheritance or windfall – Many times parents or grandparents will give a windfall or gift to you when they are still alive. If both of your parents pass you may be in their will. This is not something any of us want to happen but needs to come in to the equation. Remember if you are retirement age then your parents are closing in on 90 years of age. On the other hand you may be helping them if they do not have Long Term Care Insurance.
5. Life Insurance policies – In many cases the reason a remaining spouse can keep up her standard of living is life insurance even though again we don’t want to think about this outcome.
6. Side hustles – After you reach full retirement age you may work and earn unlimited income without losing any of your social security benefits. I have friends that officiate water polo (one is 80) and can make up to $500 in a single weekend. Not bad spending money. Many others can work as consultants or in part-time positions in their passion and not have to make a lot. Even $500 a month can make a big difference – not a bad vacation fund.
7. Rental Properties – Our daughter and her husband have paid off the mortgage on their rental home and are now receiving $1350 per month for rent. This will be a great stream of income when they retire. Rent could be 5 times that amount in 30 years when they are ready to retire. We have friends that have 30 rental properties that each have a positive cash flow. Not a bad income stream.
8. Reverse Mortgage – A homeowner can borrow money against the value of the home. No repayment on the mortgage (principal or interest) is required until the borrower dies or the home is sold. Consult your financial planner or tax accountant before doing this as many have large origination fees.
9. Royalties from books, songs, inventions, etc.
10. Annuities – These provide guaranteed income for a defined time period which can include your lifetime and/or your spouse’s lifetime. There are many types of annuities so consult a financial planner or insurance agent. These are becoming more popular because it will ensure you will not outlive your assets.
11. Passive income from an established website with thousands of readers on a daily basis.
12. Weekly or Monthly allowance from your kids… (You’re dreaming!!) Shouldn’t they pay us back some of the $300,000 we spent on them from birth to age 21 and in some cases age 26 or older?

Debt Free Squad Challenge for How much do you need to retire?

This week sit down with your spouse or financial fitness partner and figure out if you are in the 10-10-10-70 club and if not, how much do you need to retire?. If you are within 5 years of retirement sit down with a financial planner or insurance agent and see if you are on target to retire when you want. 75% of those surveyed by bankrate.com said they plan to continue to work and most because they choose to. If you are healthy and love what you do then keep going. You can always ask for time off with no pay to vacation more if you want. Most people having worked in a job over 5 years have 2-3 weeks paid time off and weekends and holidays. That is approximately 130 days off. On a closing note make sure you continue to exercise and watch what you eat so your chances of enjoying a healthy retirement increase.

Debt and Health

Debt and Health: Is debt bad for your Health and Wealth?

Debt and health go hand in hand. The ole’ saying goes something like this, “In our younger years we are willing to spend our health gaining wealth and in our older years we end up spending our wealth on gaining better health. “ Well, here is the million dollar question and you can’t choose both answers. What is more important to you, health or wealth? When I ask those up there in years (55+) I always get a quick answer, “health without question.” When I ask the youth I get a pause then usually an answer of wealth. Many teenagers and twenty something’s take their health for granted. They say, “I’m in great physical shape and am certainly not going to have any health issues in the immediate future.” When I tell them about the young cadet in my water survival class at the Air Force Academy who was recently diagnosed with a tumor on his brain and a young tennis coach who recently had two strokes and is learning to walk all over again the answer quickly changes to, “well, maybe health.”

We would all love to answer both and many folks do have the health and wealth but the sad truth in looking at the statistics is most don’t. Living a healthy lifestyle balanced against living within your means is clearly something we should all be striving to achieve but as we all know, it is easier said than done. We can do everything right and in an instant you can lose your health and/or your wealth …. a real catch 22.

Consider the statistics on finances from blog.richhabit.net

• 46.2 Million Americans live below the poverty line
• 50% of American households make less than $34,000 a year
• Average student loan debt now exceeds $25,000
• 309 million people live in America
• 138 million people make enough money to warrant filing an income tax return
• 6.9 million, or 5% make $155,000 or more

Consider these statistics on health from the United Health Foundation for our state of Colorado.

• 1 in 6 adults (16.5%) are physically inactive compared to 26.2% nationally
• 1 in 15 have diabetes compared to 1 in 11 nationally
• 77.6% of high school students graduate in 4 years
• 18.3% smoke compared to 21.2% nationally
• 20.7% of adults are obese compared to 27.8% nationally

Here are some reasons why DEBT and Health don’t mix

If your stress level is high because of debt this will lead to health problems like heart disease and diabetes.

1. According to an AP-AOL survey stress has been linked to a variety of ailments.
2. Anxiety – those in debt were 7 times more likely to suffer from anxiety.
3. Depression – those in debt were 5 times more likely to be depressed.
4. Hair loss
5. Obesity
6. Obsessive-compulsive disorder
7. Ulcers
8. Unhealthy ways of dealing with stress

According to Stepfanie Romine, SparkSavings editor statistics show that the lower your income, the more likely you are to turn to such unhealthy coping mechanisms.

1. Caffeine fuels the stress
2. Smoking is a stress reliever to many but not good for your health
3. Drinking away your stress
4. Turning to food for comfort

Less money for yourself (when living paycheck to paycheck or trying to get out from under debt most of your money has to go to the basics of living – leaving very little for self care.
Stepfanie says, “When things get tough, you can always start small. Those tiny steps add up to big savings. By making small changes, you can make big differences in your health.”

In an article written by Kim Painter for USA Today she talks about a PBS documentary called, Unnatural Causes: Is inequality making us sick? In this documentary psychologist, Sheldon Cohen along with many other scientists and public health experts, concluded contrary to popular belief, your health is not just the sum of your genes, your health habits and the quality of your health insurance plan. Your income, education and race matter; so does your address, your job title and the status your parents had when you were small.

The point of this documentary is not that we are powerless to improve our health: Whether you are rich or poor, it’s a bad idea to smoke and a good idea to eat fruits and vegetables. It’s also good to have health insurance. But all those things are harder to sustain and may do less good if you live in a dangerous, unwalkable neighborhood with lots of fast food and no supermarkets; if you have little control in your work life; if you are constantly worried about money, housing and safety.

At a time of widespread economic pain, when the “poor are getting poorer and the middle class is being squeezed,” in the words of one sociologist quoted in this film, there’s plenty of reason to worry about the literal health of the nation.

Don’t exchange debt and health for a wealthy way of living. At the end of the day, getting control of your finances can indeed reduce stress which can improve one’s health as well as lead them down the path of achieving financial freedom and independence.

How to be a savvy-saver in the supermarket

Supermarkets employ clever tactics in order to get us spending more than we need.  They are full of tempting delights, which sometimes are hard to resist.  Supermarkets are cathedrals of consumerism – their aim is to get us spending more than we intend to.  The way products are displayed and advertised has a huge impact on how we spend our money.

There has never been a better time than now to start saving money and being more careful with our funds.  Whether you are hoping to invest one day in gold through sites like Bullion Vault Italy or you want to save some money to put towards a house, a wedding or a vacation, you are sure to find the money saving tips below helpful.

Stay away from items by the checkout

When you enter a supermarket, just remember that everything has been laid out with precision in order to tempt us with pricey luxuries.  Don’t be tempted by items near the checkout.  They encourage impulse buys which soon add up.

 Stick to your list – No additions

Are you the type of person who goes in for one or two things and comes out with a bagful?  This is due to product placement.  All the regularly bought items are dotted around the store; this is the stores way of getting us to walk through all the aisles and picking up tempting goodies along the way.

Look High and Low

If you want to save money, it is certainly worth opting for the stores own brands.  Their products are often much cheaper than the name brand items.  The higher priced products are normally placed at eye level, making them easy to spot.  However, the value prices are often found on the very top or bottom shelves, making them difficult to spot.  The saying, “Look high and low for something” really does apply in the situation.

Eat before you do your grocery shopping

Believe it or not, when we’re feeling a little peckish we often pick up indulgent sweet treats.  So before you take that grocery trip, make sure you have a full stomach.

 Good ol’ Envelope method

In closing if you want to stay within your Food budget you should try paying cash for your groceries.  This way you are guaranteed to not go over budget.  When the envelope is empty that is it until payday.  At the very least use a debit card and deduct that grocery bill from your food budget.  Groceries are the biggest variable expense in any budget and you can really save if you are a savvy-saver in the supermarket.

BullionVault Italy

Free Product! 30-day Monthly Food Budget Challenge

Need a monthly food budget? Food budget for 3? Monthly food budgets help you save money and get out of debt. We are excited to introduce to you the 30-day Food Budget Challenge featuring Jonni McCoy, author of Miserly Moms. Jonni is one of the leading experts on frugal living and monthly food budgeting. Her first book, Miserly Moms, was a best-seller upon release, offering fresh, fun tips on how to save money and cut your monthly food budget in half. View the videos below to learn how to best approach your monthly food budget.

Below we have a 3-part video series to start you on your way to cutting those food costs.  Take the next month and go over one video per week with your spouse or financial fitness partner.

Video #1:  “Eleven Miserly Guidelines to reducing your grocery expenses.”

Video #2:  “Do coupons actually save money?” 

Video #3:  “Is it cheaper to work or stay at home?”

Are you excited to cut your food bill in half? Help the Debt Free Squad reach 1 million families with the 30-day Food budget Challenge.  Share this with your friends on Facebook and encourage them to do the same. Let’s start the journey together to become DEBT FREE!!!