1. Keep all sales receipts and create notes to record payments made without receipts. Drop them into a coffee can or plastic jar or a space designated for receipts. Each time you get a paycheck (or once/month) add up your spending. Sort receipts and notes by expense category. Then regularly total amounts of what has been spent in a category to determine how much is needed in that category each week, or whether spending could or should be reduced.

2. Keep an account book by expense categories.

3. Use envelopes or folders for each category of expenses with an amount of money allocated for expenses for a set period of time, like a month. Record dollar amounts on the outside of the envelope or folder.

4. Pay all bills by check and keep running tallies of how much is left in the allocation for each category. This makes a record system in the checkbook. If it often seems that only particular categories of expenses are the problem, you could monitor only the categories that cause the problems.

5. “Sticky notes” can be posted on credit cards with a notation of the maximum amounts that can be charged on that card. Subtract amounts of expenditures added to the card as you make purchases.

6. An informal method used by some people is the checkbook balance, as a guide to patterns of expenses. If the balance drops below a particular amount, it is an alert to potential problems.

7. Use a budget partner for problems that seem to be spending addictions. Establish a household rule that the expense has to be verbally justified to the budget partner before any expenditure on those items can be made. The budget partner’s role is to ask questions to bring greater understanding of consequences of any expenditure rather than telling the person what to do.

8. Keep Log of “financial emergencies” to determine what they are, what triggers them, and then think of ways to avoid them.

9. Purchase inexpensive computer software designed for electronic record keeping. Be sure to back up your records frequently.

10. Carry a small notepad in your purse, car or pocket to jot down spending.

HOW TO LIVE WITHIN A BUDGET…

Controlling spending is one of the most important habits that a person must exercise in order to ensure not only future, but any kind of financial success. Sadly, today most people are convinced that they need much more to live on than they truly do.  The idea that we need more, in our never ending quest for happiness, drives us to make unplanned expenditures, and debt is the result.

The first thing that could be done to avoid overspending is to develop a budget. This budget should be put in writing, and strictly adhered to. It should be checked several times a week, in order to make sure that you are on track. There is something about having a written plan that makes it easier to consult as an authority than holding it in your head.  It also helps to work with a spouse, partner, or third party consultant that can serve as your “conscience”.

Most uncontrolled spending is the result of impulse buying and lack of planning. One must understand that retailers, restaurant owners, and other service providers are all aware of this. These companies actually count on emotional spending to keep their business profitable. Just because an item is on sale does not mean that it is a bargain, like the lady who started smoking while on holiday in Asia because the cigarettes were so much cheaper than in the US.  A bargain you don’t need is not a bargain at all.

Ask yourself, if what you already have will do the job properly or even well enough. If the answer is yes, then apart from the media induced lust for the newer, better shiny version, there is really no reason that you need to spend more on a new one. Often times people will buy the future, only to find than an item has become obsolete no sooner than it is bought, this is an unfortunate and unnecessary waste of money. As much as we all enjoy it, eating out is an added, unnecessary expense. Of course it is fine to treat yourself once in a while, but not every day. Bring a bagged lunch. Remember, this does not mean you have to eat a peanut butter and jelly sandwich for lunch every day. On the contrary, use last night’s left over dinner to create a spectacular and delicious lunch for the next day, which will so often be better for your health. Eat lunch at the office and then go for a walk. Your waist line and your check book will both thank you for it.

Turn off the lights, turn down the heat, and only purchase what you need today. Ask yourself “if I don’t pick up this item today, will I have to come back and get it tomorrow?” These are a few of the habits worth developing which help to control spending habits. Plus, if you have been previously undisciplined in using a credit card and chalked up plenty of debt, it may be time to locate the scissors and apply for a Pre-Paid Credit Card instead of the traditional “spend what you don’t have” type.

HAPPY CLIENT TESTIMONIALS…

Before I got married to my husband I was in a lot of debt. I had been on my own since I was 19 and had purchased things on my credit cards just to get by. When I got married my husband and I decided that we would both claim zero dependents on our W-4’s so that we could get a refund at the end of the year. When we get the refund each year we put it in an account that pays off something we may own on, like my new car payment (I had my old car for 10 years). This year we may put our tax refund toward helping to pay off our student loans. The best advice I can give is to live below your means, track every dime that goes out the door, and work together as a team.  It is too hard to do it alone.
_______________

My husband and I did not have much money saved up before the birth of our son 2 years ago. So, therefore, when I went on maternity leave, we racked up a lot of debt on our credit cards. Soon after, we refinanced our mortgage and used some of the equity to pay off the credit cards. However, not long after we refinanced, our credit cards were maxed out again and we both bought new vehicles both with $500 monthly payments. We were in a bind again, but I kinda had a wake up call in July 08.

I made a budget on an Excel spreadsheet and I decided to get our act together. We stopped our impulse buying and eating out. We started picking up side jobs and we sold unused and unneeded items on ebay and yardsales. I took up using coupons and watching sale ads for bargains. We tracked all of our spending and put all of our efforts into “fixing holes” and focused all our energy on one debt at a time. We had two of our credit cards paid off by the following December and we were able to pay for Christmas without using credit!! This year we have started a few savings accounts and we were able to remodel our bathroom and kitchen (on a tight budget & doing all the work ourselves, of course) with the money we have saved. I plan to have our two vehicles paid off in a year and a half by paying extra on them every month.
_________________

We are getting so close to being debt free (excluding our mortgage). We used our tax refund this year to pay of our line of credit and haven’t used it since! We just this month paid our credit card balance off in full. I’m so excited to get my bill next month and to see it say, “amount owed….$0”.  Whoo hoo! I haven’t had a zero balance on my credit card since I was 16 years old. Just to imagine the interest that I have paid makes me ill. I will never charge more than I can pay off at the end of the month again!  Big lesson learned. Now all the money that I was paying on those two bills are going toward finishing off our car payments. They should be gone by spring. So next years tax money won’t have to be earmarked toward paying off our bills. I can’t even imagine what that will feel like.

How did we do it?  We stopped looking at ads because we realized they were making us spend.  We worked together as a team.  We stopped eating out.  We tried to spend a month “on paper” before it actually started.  If our spending came in under our estimate, we rewarded ourselves with a treat (and we even budgeted for that).

I’m really excited (you probably couldn’t tell….lol).
______________

Before we were introduced to the principles you’re teaching, we didn’t think that our financial situation was that bad.  We had a little bit of credit card debt (from lack of an emergency fund), a car loan, and student loans.  No big deal right?  Until you add it up and realize that you have $23,000 of debt on a $39,000 yearly salary.  So we went crazy and paid it off… in 26 months.  Yes, that’s nearly $1000/month that totally went to extra principal.  How did we do it?

We decided that this was going to be our mission, and that we would not rest until it was done.  We estimated it would take us 3 years, but we did it in less.  It got to be a total passion of ours.  We figured there was no better way for us to invest than in becoming debt-free, so we even stopped retirement contributions to focus everything we had on the debt.

I can say that there is more than an economic benefit to being done with debt.  It just plan feels so good!

We got on a budget, and then my husband took on (a lot of) extra work while I kept things going on the home front. I am amazed and shocked that we could do it so fast!  It took a lot of sacrifice and doing without, but we rewarded ourselves when the credit card was paid, when the car was paid, and when the each of the 3 student loans came off.  I want to encourage others to keep it up and kick debt out for good! Now on to the emergency fund!

- – - – -

Hope you enjoyed the 2011 January No More Mortgage Newsletter.

Related posts:

1. November 2010 NO MORE Mortgage Newsletter
2. NO MORE Mortgage: Budgeting Tips for New Budgeters
3. Customer Reviews

Your credit score is an important number…

1. Paying late: Thirty-five percent of your credit score is your payment history. Consistently being late on your credit card payments will hurt your credit score. Pay your credit card bills on time to preserve your credit score.

2. Having a balance charged off: When creditors think you’re not going to pay your credit card bills at all, they charge off your account. This account status is one of the worst things for your credit score.

3. Having an account sent to collections: Creditors often use third-party debt collectors to try to collect payment from you. Creditors might send your account to collections before or after charging it off. A collection status shows that the creditor gave up trying to get payment from you and hired someone else to do it.

4. Defaulting on a loan: Loan defaults are similar to credit card charge-offs.  Defaults show you have not fulfilled your end of the contract.

5. Having your home foreclosed: Getting behind on your mortgage payments will lead your lender to foreclose on your home. In turn, the late payments will hurt your credit score and make it harder to get approved for future mortgage loans.  Late mortgage payments are worse than late credit card payments.

6. Getting a judgment: A judgment shows you not only avoided your bills, the court had to get involved to make you pay the debt. While they both hurt your credit score, a paid judgment is better than an unpaid one.

7. High credit card balances: The second most important part of your credit score is level of debt, measured by credit utilization.  Having high credit card balances (relative to your credit limit) increases credit utilization and decreases credit score.  A maxed out card is the worst.

8.  Closing credit cards that still have balances: When you close a credit card that still has a balance, your available credit drops to $0 but your balance remains. This makes it look like you’ve maxed out your credit card, causing your score to drop.

9. Closing old credit cards, especially those with available credit: Another component of your credit score, 15%, is length of credit history – longer credit histories are better. Closing old credit cards, especially old cards, makes your credit history seem shorter. Also if you have several credit cards some with balances and some without, closing those credit cards without balances increases credit utilization.

10.  Applying for several credit cards or loans: Credit inquiries account for 10% of your credit score. Making several credit or loan applications within a short period of time will cause your credit score to drop. Keep applications to a minimum.

11. Having only credit cards or only loans: Mix of credit is 10% of your score. When you have only one type of credit account, either loans or credit cards, your credit score could be affected. This factor mostly comes into play when you don’t have much other credit information in your credit history.

NO MORE Mortgage Tax Update

IRS STOPS MAILING OUT FORMS…

The Internal Revenue Service says it will no longer mail out tax packages with forms and instructions for filing a paper return. The change comes as an increasing number of taxpayers are filing their returns electronically. In early October, taxpayers who filed paper returns last year should have gotten a postcard from the IRS with instructions on where and how to get the forms needed for filing 2010 returns. In short, the forms will be available in January from the IRS website or at select libraries and post offices.

The IRS says people who file electronically can get refunds deposited directly into their bank accounts in as little as 10 days. Otherwise it can take up to six weeks to get a refund check in the mail.

The IRS says the move will reduce mailing costs. But the change also reflects changing habits; the majority of individual filers now file electronically. Just 8 percent of individual taxpayers got paper forms and instructions in the mail last year. The rest either filed electronically or used a paid tax preparer or software. Taxpayers can file returns electronically for free on the IRS website, www.irs.gov . The agency also gives free electronic filing help to those who earn $58,000 or less through a program that walks taxpayers through their returns by asking a series of questions about income, expenses and other financial transactions.

Signs You’re Headed Toward Accumulating Credit Card Debt…

How do you know if you’re using your cards unwisely? NO MORE Mortgage presents some ways to tell you’re on the path that will create more and more credit card debt. Here are 10 signs that you are headed toward accumulating credit card debt from NO MORE Mortgage.

1. You use credit to meet basic needs: Your income should be used to buy everyday items like food, clothing, and gas. Having to use credit cards to cover these types of purchases is a big sign of financial trouble.
2. You transfer balances to avoid credit card payments: There are times when a credit card balance transfer makes sense, like to consolidate credit card balances or to get a lower interest rate. However, frequently transferring balances instead of making credit card payments is a red flag.  The fees to make these transfers are often higher than the monthly payment you might be trying to avoid.
3. You skip one credit card bill to pay another: Prioritizing credit card payments is wise. But skipping payments is always unwise. If you consistently find yourself too strapped for cash to make your credit card payments, you are already in credit card trouble.
4. You avoid or ignore credit card statements: If only wishing away credit cards actually made them go away. Pretending your credit card debt doesn’t exist only gives it time to grow. Facing credit card debt sooner gives you the opportunity to tackle debt before it gets out of control.
5. You charge more than you pay: Imagine trying to fill a hole while someone shoveled out more dirt than you put in. Your hole would never get filled would it? It’s the same with debt. If you’re charging more than you’re paying, your credit card debt will always continue to increase.
6. You don’t have an emergency fund: If you don’t have an emergency fund, you’ll feel forced to use your credit card for every little item that is out of the ordinary. Credit card debt created because of  unexpected expenses can be hard to pay off, especially if your budget is already stretched.
7. You don’t have a plan to pay off your credit card debt: You know what they say, “Failing to plan is planning to fail.” If you’re not actively working to pay off your credit card balances, you could end up unnecessarily paying on the cards for years to come. Whether you have excessive credit card debt or not, you should always have a plan to pay off your balances.
8. You use credit to “afford” expensive items: The allure of credit is that it tricks us into thinking we can afford to buy more than we really can. Truth is, only extra income or lower expenses (or both) enables you to afford more expensive items. Incurring credit card debt to maintain a lifestyle you really can’t afford isn’t a losers game.
9. You have past due accounts: If you have credit cards that are currently past due, you’ve probably run into unfortunate financial trouble that’s keeping your from making payments. Remember, the more in arrears your accounts become, the harder it will be to bring them current again. Take a look at your monthly budget for money you could find to get your credit accounts back on track.
10. You have maxed out credit cards: If your credit cards are all maxed out, you’re not headed for credit card debt, you’re already in deep. What now?  Make a decision to pay off your credit card debt or take more severe steps to get rid of them, even if it hurts your credit.  You must learn to make wiser choices about credit card use in the future.

STRETCHING YOUR BUDGET PAST AGE 55…

Of the 14.9 million unemployed, more than 2.2 million are 55 or older, according to the U.S. Labor Department. And almost half of those have been unemployed six months or longer. The unemployment rate in that age group is a record high 7.3%.  NO MORE Mortgage shares how you can make every dollar count.

1. Retirement Accounts: If you have no choice but to dig into your retirement account, there are ways to minimize the tax hit and penalties.  Most people know that if you withdraw money from an individual retirement account or 401(k) before age 59 ½, you’ll pay federal income taxes on the withdrawals AND you will get hit with a 10% penalty. But the tax code has a provision, 72(t), that allows someone younger than 59 1/2 to withdraw a set amount of money at least five times until age 59 1/2 or for five years, whichever is longer. You won’t pay a penalty, but the money is still taxed. The caveat: Once you start taking out the money, you’re locked into making withdrawals, says Jerod Wurm, a certified financial planner in Sacramento. Jonathan Pond, a financial adviser for AARP, says that if you were laid off this year, you might want to delay tapping your retirement money until next year, when you might be in a lower tax bracket. If you need a chunk of money for a short period of time, consider the 60-day rollover requirement. This rule allows you to take money out of a qualifying retirement account, tax- and penalty-free, once a year, regardless of your age — but the full amount must be deposited back into the account within 60 days.
2. Health Insurance: Most states have programs that offer low-cost coverage, typically if one earns less than $30,000 a year. The MassHealth program in Massachusetts, for example, covers adults and children under age 19 if they live with the parents. Short-term insurance policies, which typically cover unexpected illnesses and accidents, can run as low as $30 per person for a month. Catastrophic insurance typically starts as low as $30 a month depending on a person’s age and health. Have you been denied coverage or been quoted an exorbitant rate because of a pre-existing condition? You can enroll in the federal Pre-existing Condition Insurance Plan, a part of the new health-care law. Premiums range from $320 to $570 a month per person depending on the state.
3. Real Estate: The typical advice is to downsize to a cheaper home in a cheaper locale. But today’s real-estate market is anything but typical. And for people who are hunting for work or have a spouse with a much-needed job, moving to a state with a lower cost of living may not be feasible. So use your home to make some extra cash. If you live near a college or university, for instance, rent an extra room to a student or recent graduate. You can easily get a few hundred dollars a month. Contact a school’s student-housing department or put up fliers on campus. For homeowners who are 62 and over and still have equity, another option is a reverse mortgage, which allows older homeowners to tap their home’s equity while they remain in the house. The loan typically doesn’t come due until the homeowner sells the house or dies. And upfront fees have come down some recently.
4. College Expenses: Still on the hook for college tuition for your kids or yourself? Try renegotiating loan and aid terms. Jerome Chester, a 51-year-old from Bethesda, Md., who has been unemployed since June, went to student-loan provider Sallie Mae to renegotiate his tuition loan. He was able to defer payments, about $1,000 a month, for six months. And a school’s aid package isn’t always set in stone. Go back to the school and ask for more aid given your financial troubles. Results will vary by school and a family’s financial status.

NO MORE Mortgage helps with homeowners insurance

EXPERIENCED AN INCREASE IN YOUR MORTGAGE PAYMENT?…

Homeowner’s insurance rates have been increasing in almost every state, which has caused many NO MORE Mortgage clients to see an increase in their mortgage payment because their escrow amount increases.  This overall increase in homeowner insurance rates is caused by a variety of factors, but it appears that this trend is not going to reverse in the near future. We have asked Heritage Insurance, Inc. to work with NO MORE Mortgage customers that would like to reduce their homeowner’s insurance premium.  They will not be able to save every customer on their homeowner’s policy, but it appears that the vast majority will be able to realize some savings, and some could see very significant savings.

For those of you that are interested, Heritage will review your current policy and then offer quotes from other insurance companies.  This is a free service.  They are a national broker that sells for 127 different insurance companies.  Some of these companies are large nationwide companies (Traveler’s, Safeco, The Hartford, Progressive, etc.) and some are smaller, regional companies.  This review will allow you to see a variety of prices and determine if you can reduce your insurance premium by switching to another carrier.

For those of you that are interested in trying this service using the resources of Heritage, we have pasted a link to The Better Business Bureau’s report on their company at http://www.bbb.org/louisville/business-reviews/insurance-services/heritage-insurance-service-inc-in-louisville-ky-3067. They have been an accredited BBB business since 1979.

Call now to receive your policy review at 888-782-1391, or you may send an email to chris.oneill@nomoremortgage.com.  There is no cost or obligation.  The analysis can be sent to you via email, and no salesman will call.  NO MORE Mortgage has a strict privacy policy that prevents us from giving our client information to any third party.  This is a free service available only to NO MORE Mortgage customers.

Related posts:

1. October 2010 NO MORE Mortgage Newsletter
2. Right Way to Break Up With Your Credit Card
3. How Credit Cards are Stealing from the Poor to Feed the Rich

~Phillip D. Rushton
NO MORE Mortgage

“I like working for NO MORE Mortgage helping families build equity in their homes, with a goal of paying off their mortgage so that they own their own homes. This places families in a much more secure financial position than has been the case of the past couple decades where families were often encouraged to live off the equity in their homes. Then, when home prices fell, the equity disappeared, and many families lost their homes to foreclosure.”

~Ron Hammond
NO MORE Mortgage

“I love NO MORE Mortgage. I have worked here for years and I will continue to work here for years to come. There is nothing better than working at a job that truly helps people. It’s one thing to have an inviting and friendly work environment, but it is a whole lot more when you combine that with a superb product. Every person I have talked to I have been able to walk away knowing that they are going to be in a better situation because of working with us. Everything from peace of mind and stability all the way up to saving marriages comes to mind as I think about past clients I have worked with. If we could make this product a national policy then we would not be in the financial mess we are now in. Nothing can beat sound financial principles and structured financial planning. NO MORE Mortgage accomplishes all of these things and combines them in a way where it is virtually impossible to achieve the same outcome without the program. I will continue to be excited and get other people excited about this because it does work! It will work for you as long as your current financial situation allows you to qualify. Thanks for reading and I would love to talk to you more.”

~Landon Glenn
NO MORE Mortgage

“No More Mortgage has the right program at the right time. There is no better way to become debt free in so little time. It is gratifying to provide the kind of help that so many people need right now.”

~Kent Payne
NO MORE Mortgage

“It is so gratifying to come to work at a job I truly love, for a company that I believe in. Every day I get to establish and continue relationships with people that are life altering. Whether someone is financially free or financially burdened, it affects all areas of their life. With financial education and automation, NO MORE Mortgage provides peace of mind.”

~Sheri Winn
NO MORE Mortgage

“I love my job as a Personal Finance Analyst at NO MORE Mortgage. It’s the most satisfying sales job because we are not just selling a product, we’re helping people to make a major improvement in their lives.”

~Landon Fowler
NO MORE Mortgage

“Working with NO MORE Mortgage has proven to be a rewarding job because of the excitement I see in the people I work with. I see people who are struggling to find a stress free life and being able to promise them the help that they need feels very good. It amazes me to see the holes that people are in, and knowing that NO MORE Mortgage employee’s are genuinely interested in helping those people get out of debt lets me leave the office each day knowing that we have made a difference in some way.”

~Courtney Fowler
NO MORE Mortgage

“In the past few weeks I have had the privilege of helping people from all walks of life.
Included is a Circuit Judge from the Deep South, a Gynecologist from the Western United States, and a Serviceman from the Mid-Eastern United States among many others. None of them are in DEEP TROUBLE… that is not typically our clients… like most of our clients they simply wanted to have an automated program that will work in approximately 9-10 years!!”

I have the best job in the world… helping people. What more could a person hope for?”

~Phillip Ostler
NO MORE Mortgage

“I have been employed with NO MORE Mortgage for over 3 and a half years. I enjoy working here because I like helping people. We have fantastic clients, and I like to hear about their progress. I also enjoy the drug-free work environment here. I like the fact that my coworkers also care about our clients and always try to do what’s best for them.”

~Jonathan Wetzel
NO MORE Mortgage

“Working at NO MORE Mortgage, It is very rewarding to help families put a specific plan in place to get them debt free, and ready for financial freedom!”

~Anthony A. Zabala
NO MORE Mortgage

Related posts:

1. NO MORE Mortgage
2. Homeowner’s Debt Elimination Program (Overview)
3. Financial Salvation for Senior Homeowners

“We were wanting to consolidate our two mortgages into one payment when we saw your NO MORE Mortgage ad. We had already contacted several lenders, but the rates were so high and the payments were more than we could handle. Alex was able to work out quite the plan for us to eliminate all of our debt, with a lower payment than we were making! It’s great for us. Now, we are saving money two ways-each month with a lower payment, and in the long run because our house will be paid off 19 years sooner than it would have. Now, our home will be paid off a just a couple of years after retirement. I am glad that we can always talk to a live person and have our questions answered. Needless to say, we are very satisfied”

Linda Smith of Cumberland, MD

Related posts:

1. Customer Reviews

No related posts.

Linda Smith of Cumberland, MD

“With NO MORE Mortgage we’ll be saving $60,000 to $80,000!”

James & April Cox
Claxton, Georgia
5m:32s

“Before we found NO MORE Mortgage, my debt ratio was high, but we still had good credit and I wanted to keep it that way. I work for a bankruptcy attorney and I see what happens when things get out of control everyday. Bankruptcy was not an option for me and I knew there must be an intelligent way to take care of it. Writing it all off didn’t seem right. Credit card companies make it so easy to get over your head in debt and make it so hard to get out.

When I heard that we could be debt free including the mortgage in just 8 years and save more than $220,000 in interest, it almost sounded too good to be true, but when they explained the way it worked, it made sense to me we were excited. I didn’t want to carry a mortgage into retirement and neither did my husband.

Now I get on every month and look at the progress we’ve made and it makes me feel good. We’ve even found ways to accelerate out plan even further and are one year ahead of schedule!

Now, getting the credit card statements in the mail isn’t stressful for me because I know that everything is getting paid down as quickly as possible and one by one these bills will be gone forever. The NO MORE Mortgage debt plan has simplified our lives in a big way. I am glad that we did it.”

Barbara and Kelly Smith of Green River, Wyoming

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