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Baby Steps!

Author: Kim Staudenraus

Getting out of debt is no different than overcomming any other struggle or obstical in life. To be successful it helps to take one small step at a time.

Create small goals that lead to the big goal of becoming and living debt free.

I encourage my clients, as Dave Ramsey does, to follow seven baby steps to assist you in becoming debt free.

The baby steps are a good overall map to follow along with:

The Pressure of Money Problems and Debt

Author: Kim Staudenraus

This week a tragedy occurred just eye shot from my the building where I work. I was at lunch when I noticed the sky filled with three news helicopters.

A man in his forties, married to his high school sweet heart with two beautiful children ages 10 & 12 shot and killed his wife and kids and then committed suicide. They lived in a beautiful home, in a very up scale community. Had fairly new SUV vehicles parked in the driveway as well as a maid, who unfortunately is the one who found the bodies.

It is something that, sadly occurs all too often somewhere in the country and all indications are that this was a direct result of money problems and overwhelming debt. By all exterior appearances this family was successful and well off. The neighbors said they were very friendly and active in the neighborhood but yet private about their lives.

Is bankruptcy the answer?

Author: Kim Staudenraus

So you have too much month left at the end of your money right?

Many times my clients will ask me if bankruptcy is the answer. They say:

I am in debt, I have tried everything to get out of debt but I still don't have enough money to meet my bills and living expenses.

When I ask, what have you done to get out of debt? I receive a reply similar to this.

I have gotten a consolidation loan to pay off my credit cards and that lowered my monthly payments so I had more money. I still didn't have enough so I started using the credit cards again. When the payments from the credit cards and the consolidation loan were too high, I got took out a second mortgage to pay off the cards and the consolidation loan. That was good for a while, but I had an emergency that I had to charge on a credit card. From there I had more credit card charges and now here I am again, I can't meet the payments on the credit cards and the home equity loan and still pay my bills. So am I bankrupt?

I'm Broke...

Author: Kim Staudenraus

"But my kids are happy."

This is what the lady ahead of me at the check out line in Kmart said the other day. She was unloading a cart full of toys and went on to say she had two kids and their birthday's were coming up. Her posture confirmed her words, she seemed defeated....broke. She seemed guilty knowing she couldn't afford all that she was buying by the way she was "justifying" her actions and telling complete strangers "but my kids are happy."

The toys were for kids in the age range of three to five, and I have to admit I felt sad for her as she paid with a credit card. It was as if she was using her last bit of credit limit to portray to her kids "all is ok" and here is more stuff to prove it.

So much ran through my mind. As I watched her, I wanted to reach out and offer advice on how to not be broke, how to stop the cycle of paying with money she didn't have. I wanted so bad to show her the was a way out from under all that stress, but of course the situation and timing was just not right...she was through the line and on her way.

Get Out Of Debt Using The Snowball Method

Author: Kim Staudenraus

There are various methods of getting out of debt, the one I like best is the Debt Snowball. It is simple, and provides a quicker sense of accomplishment. Dave Ramsey is the primary advocate of the debt snowball.

So what is it? Well, before I get into the details, I first want to encourage you to make sure you have at least $1000 in the back before you start paying down your debt. This should be used as your emergency fund. Always keep that $1000 in the back so if you have an emergency, you won't create more debt in taking care of the emergency.

Basically, it is paying the lowest balance first.

If you are seriously trying to get out of debt, you've already heard of Dave Ramsey, and especially if you are reading this blog.

Dave is a straight forward, no-holds-barred, tell you like it is kinda person when it comes to helping people get out of debt. He was once in debt so he speaks from experience. He has decades of experience mentoring people to get out of debt and live debt free. His background is not just from experience but is also Bible based by stating "The borrower is slave to the lender" Proverbs 22:7 .

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