One of the goals my husband and I have is to pay down the majority of our debt this year, which is a mix between student loan debt (approximately 65% of our debt) and credit card debt (approximately 35% of our debt) that was acquired while my husband finished his Ph.D.  We are in gazelle intensity mode, paying down as much as we can as quickly as possible.  Thus far, we have paid down approximately $5,000 in 11 weeks.  However, this intensity is not sustainable over the long haul.

While Dave Ramsey speaks endlessly about gazelle intensity, when you have debt that is tens of thousands of dollars, you may not be able to be gazelle intense for the entire time you are paying down debt or you will face burn out.  If you are aggressively paying down debt, take the time to recoup occasionally.  Here are some tips to remember for avoiding gazelle intensity burnout:

-Taking a break is better than burning out.  Gazelle intensity can be stressful on a family.  There may be little family time because so much time is spent making extra money to pay down debt.  Sleep may also be in short supply, leading to grouchiness and petty arguments.  It is much better to take a break for a few weeks or a month, continue to make your regular payments, and then pick up gazelle intensity when you feel refreshed.  If you don’t take a break, you run the risk of burning out and not making any progress or incurring new debt.

-Slowing down is okay.  Maybe you are working hard enough to pay an extra $1,000 a month on your debt.  If you find that your life or family life is suffering, perhaps cut down on the extra hours of work and only pay an additional $500 a month on your debt.  True, the debt won’t go down lightning fast, but you are still paying extra and making better progress than you would be if you just paid the minimums.

-Remember that the debt will eventually go away if you aren’t incurring new debt.  If you stop taking on any more debt and make your monthly payments, the debt will go away eventually, even if you are not gazelle intense.

-Take advantage of snowflaking.  If you have to slow down on your gazelle intensity, you may still be able to pay down your debt more quickly in a less time intensive way than working an extra job by snowflaking any extra money you get.  If you are going to get a big tax refund this year, why not put the entire balance on your debt?  Save change throughout the month and snowflake it as well as any money you save by using coupons, for instance.  By doing this, you are still making a positive impact on your debt.

Gazelle intensity is something Dave Ramsey endorses and millions of people try to do as they get out of debt.  For a few months, pure gazelle intensity is possible.  However, if you have so much debt that even with gazelle intensity you may face 18 to 24 months or more to get out of debt, gazelle intensity for the entire time may not be possible.  Be willing to take breaks occasionally or lighten your workload when necessary. Getting out of debt is not worth sacrificing your health or your personal relationships.

This post was written by staff writer Melissa.

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If you are like many family’s these days, you may be living paycheck to paycheck – that is if you are employed. While you are probably making ends meet, you may be one bad break away from bankruptcy. If you don’t have a sizable emergency fund saved up, then you could be at risk for losing everything when that bad break happens.

Instead of waiting until something bad happens, why not be proactive and protect you and your family from possible bankruptcy? Follow some of the tips mentioned below as a place start.

4 Tips for Avoiding Bankruptcy

Here are a few tips that you can start right now to help avoid possible bankruptcy in the future.

1. Stay Healthy – One of the most common causes of filing for bankruptcy are medical bills. You and your family’s physical health has a impact on our personal finances. Make a habit of eating healthier and starting an exercise program. Both you and your finances will be in better shape.
2. Consolidate Your Debt – How many credit cards are you trying to payoff? If you are trying to payoff several high interest accounts, consider consolidating them if you can. You could also try the debt snowball method to payoff your credit.
3. Build Your Emergency Fund – Do you have an emergency fund? If you don’t – you need one. A well built emergency fund can help avoid unforeseen circumstances when you really need cash like paying your mortgage payment. Emergency funds can be used if you are out of work and looking for a new job, to pay unexpected medical bills, etc.
4. Build Extra Income Streams – This probably sounds easier than it actually is, but it is a good idea to build extra income streams into your finances. Most financial experts will tell you to diversify your assets and investments. I think it is just as important to diversify your income sources as well. That way you don’t have to depend solely on your job for your financial well-being.

The best way to avoid future bankruptcy is to be financial prepared. While it is difficult to predict what will happen in the future, you can take the steps to protect you and your family’s well being. Creating new income streams, building an emergency fund, and taking care of your body are all simple things you can start today!

What other tips can you provide? Have you been close to bankruptcy but pulled yourself out of it?

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If you are trying to pay off debt or get ahead financially, you may find the best way is to do everything yourself to save money. Mowing your lawn, cleaning your house, cooking your meals, doing your own oil changes, cutting your family’s hair, walking your own dog, starch and ironing your own shirt, among other tasks are all things you can do on your own.  Yes, you will definitely save money by doing all of these tasks yourself, but is doing so always a wise use of your time, and, therefore, your money?

While frugality certainly has its place when trying to dig your way out of debt, don’t be penny wise and pound foolish.  People sometimes get so motivated to find ways to save money that they don’t consider the time they are investing and how much their own time is worth.

Getting Out of Debt Involves More than Frugality

To get ahead financially, don’t focus solely on ways to save money.  People often forget there are two ways to get out of debt — cut costs AND make more money.  Doing either/or can help your financial situation, but doing both can improve your finances dramatically.

Because every person has a finite number of hours each week, yes, you may be gazelle intense when trying to pay down debt, and you may have picked up a side job or two in addition to your day job, but once you add in sleep, a little family time, and all of the frugal activities you are now doing to cut corners, your time is quickly spent.  You may even be robbing yourself of precious sleep to get everything done.  You may find that you can’t do it all.

To maximize your ability to find extra money to pay down debt, it is imperative to look at the bottom line.  Perhaps in addition to your day job, you have a side job you can do from home and make $40 an hour. Maybe you are working 10 hours at your side job making an extra $400 a week.  In addition, you spend 3 hours a week cleaning your own house.  Hiring someone to clean your house may cost $20 an hour.  Because you do it yourself, you rationalize that you have saved yourself $60 a week.

Doing Your Own Chores May Be Costing You Money

What you don’t realize is that you have cost yourself $60 a week by cleaning your own house.  How is that possible?  The three hours you spend cleaning robbed you of three hours a week you could be doing your side job earning an additional $120 a week.  In a situation like this, it is actually more frugal to outsource your chores and spend more time working your side job than cleaning your own house.

Outsourcing Can Even Make You Money

This thinking goes against what many of us have been taught.  However, everyone should do the math to determine if outsourcing household chores can actually result in more money coming into the monthly budget by allowing you to pursue other ventures that have a higher per hour pay.  This won’t be the case for everyone, but it will be for many.

This post was written by staff writer Melissa.

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The average American will spend $715 in holiday gifts, according to a recent Gallup poll.  In today’s economy, that may be more than most of us can afford to spend.  However, there are ways to cut that cost significantly.  With Christmas less than seven weeks away, the ideal time to start shopping is now to take advantage of some of these unique gift buying venues that can offer you significant savings.

Saving Money on Holiday Gifts

Here are a few money saving techniques you can try on this years holiday gifts.

1. Prune Your Gift Giving List – Make a list of everyone you are planning to buy for.  Are there some people you can cut from the list and instead simply send a card?  If you can’t cut acquaintances, can you downsize how much you will spend on them?  (Try some of the tips below.)
2. Buy Gift Cards with Bonuses – Many restaurants are still recovering from the recession and want to offer incentives to purchase their gift cards.  For example, Stir Crazy just launched a promotion where you will get a $25 free gift card when you buy $100 in gift cards.  These may make the perfect present for school teachers, dance teachers, and other individuals in your life that you may want to buy gifts for.  Or, you could keep the bonus gift card for yourself and enjoy a night out for free, just for buying gifts for others.  (Note that the bonus gift card usually has a much shorter expiration date than the other gift cards you purchase.)
3. Use Swagbucks – Swagbucks is a search engine where you can do your internet searches as normal, but you are occasionally rewarded with Swagbucks.  In addition, you can earn more Swagbucks by referring friends to the site, buying daily deals through the site, and taking polls.  You can redeem Swagbucks for a variety of gift cards and items including a $5 Amazon gift card for 450 points and a $5 Starbuck’s gift card for 599 points.  Occasionally the gift cards go on sale too.  It is quite possible to earn enough points for a $5 Amazon gift card within a month just by doing your regular internet searching.  While you will only see a bit of the benefit this year, if you use Swagbucks all next year, you should be able to save quite a bit off your holiday gift giving.
4. Take Advantage of Daily Deal Sites - Sites ranging from Groupon to Mamasource to Living Social and many others offer daily deal sites.  In addition to the typical restaurant and spa deals, many of these sites offer “experience” deals such as cooking classes, zipline classes, wine tasting, etc.  These would make unique, fun gifts that you can give at a significant discount.  In addition, like Swagbucks, if your friends sign up and buy a deal through many of these sites, you can earn a referral credit.  Get a few referral credits, and you can buy some of your deals for free.

Saving Money this Holiday Season

This holiday season, instead of fighting the crowds at the mall, consider taking advantage of some unusual ways to save money and give people gifts at 50% or less of the retail cost.  Your wallet will thank you, and your recipients should notice no difference in the quality of your gifts.

This post was written by staff writer Melissa.

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Many people have consumer debt, student loan debt, car loan debt or consolidation loan debt (or an array of all of them).  A lot of people just don’t add up the debt and pretend that somehow it is not as large of a problem as it is, or they believe that they will always have a car payment or credit card bills because that is just the way it is in this economy and this society.  But, some know it doesn’t have to be this way.  These people have taken the time to add up exactly how much they owe and to make a plan to get out of debt.

If you are in the latter group and are just starting your debt repayment journey, there are several things you can do in the beginning to accelerate your debt repayment progress.

1. Call your credit card issuers and ask to have your interest rates reduced.  Many people don’t take this simple step, but they should.  Simply call and tell them you are aggressively trying to get out of debt, and you would like your interest rate reduced.  You could also add that you have been a loyal customer for however many years you have, and that you pay on time (if this is true).  If the person says they can’t lower your rate, mention that you have been offered a lower rate to switch to a different card, but you really don’t want to do that because you have been with this company for so long.  If she still can’t work with you, ask to speak to a manager.  This strategy will work about 50% of the time, but it is well worth the call.  I myself recently did this, and I got a slight interest rate reduction (2%), but I also got 3500 points added to my rewards, which is enough to cover the cost of my annual fee (which I will call back to ask to have waived in a few months).
2. Ask your credit card issuers to remove any late fee penalties.  I always pay on time, but two months ago, I got to my computer later than I had planned, and I ended up making my electronic payment at 8 p.m. rather than the 7 p.m. cut off, and I was smacked with a $25 late fee.  I called and explained that I don’t pay late, this was a one-time exception, and it was only an hour late.  I was stunned that the woman on the other end, said, “Okay, I’ll remove that right now.”  This one phone call took less than 5 minutes to get an extra $25 off of my credit card balance.  (That equates to making $300 per hour, so it is well worth your time to call!)
3. Sell stuff around the house.  I don’t care who you are, you have some clutter around your house that could make you money.  List it on Craigslist or eBay or the classifieds, and sell it.  I recently sold 36 pieces of my son’s outgrown clothes and 35 storage containers for $135.  That is money that went straight onto my debt snowball.  Best of all, I got some more space in my apartment.

There is no doubt that paying off debt requires hard work and dedication.  When you are first starting out and the mountain of debt seems insurmountable, try some of these tactics to make quick progress and get some immediate gratification.  That can help build your confidence to continue on your journey to be debt free.

This post was written by staff writer Melissa.

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