• We are expecting our first child in just over a month now. Surprisingly there is a thing or two we need to do to get ready.
• I am currently taking a very time-consuming MBA class. This course requires much more work than my most recent ones and the subject matter is incredibly boring. There is no word that describes it better than “painful.”
• We just completed a mortgage refinance and I found myself less inspired to write about paying down debt when we were unable to do so. More on that in a subsequent post.
• Many of my previous posts seemed too generic, uninspiring and lacked ingenuity. I am looking to change that going forward.

The first three items on this list are just excuses, plain and simple. I have an amazingly great disdain for the phrase “I don’t have enough time” even though I find myself using it all too frequently. Rather than not enough time, the real truth is that I haven’t made it a priority. Sometimes playing a mind numbing game of Angry Birds is more rewarding, at least in the short-term.

While I doubt I will suddenly find a renewed commitment to posting more regularly on this blog, I do have a couple of changes that I am looking forward to.

• Personality. When I first started this blog, I was trying to be too much like the other bloggers that I had been reading. While many of the blogs contain useful information, they are incredibly bland and don’t grab your attention. Get ready for a little more flair. Please note that the two most commonly cited characteristics of my personality are sarcastic and unsympathetic.
• Short and sweet. Who wants to read a 10,000 word blog post? There are plenty of academic journals for those who have trouble sleeping.
• Less preachy. No more don’t do this and don’t do that. Since I am not getting paid to write any of this, I am not in the business of giving out advice. I can promise a good standing-on-a-soapbox-rant every now and then.

And in the spirit of the second item above, that’s it and stay tuned for more!

In years past I would think of a daunting task like stopping my consumption of junk food or exercising at least three times a week. It was very cliche, boring, and never anything I was really committed to or excited about. By the end of January it was always a complete failure.

Resolutions are typically done to improve ourselves. I already know what I would like to change in my life, and the flip of the calendar does not make it more likely to occur. It needs to take a commitment from me and a true desire to make the change.

The difference I have noticed so far is that I don’t feel this pressure that the resolution can cause. I don’t have this formidable goal lurking over me that I feel compelled to work towards even when I don’t want to. It is freedom. It is less stress. It feels great.

Welcome 2012. So far you seem much like 2011, but perhaps with a little less to worry about.

It was at the beginning of the year 2007 that my husband decided to take out a loan to start a business. As soon as he set off with his new business, he was met with a serious accident in the middle of that year. His health insurance policy was not competent enough to reimburse the cost of such major mishap. Even I didn’t have sufficient funds to bear his medical expenses. Hence, I had to take out another loan. I was confident enough to handle the situation as I was employed in a reputable company with a good pay package. But suddenly, at the onset of 2008, when the recession hit the global market, not only was his business shattered but my company also suffered a huge loss and we had to accept a decrement of 50% of our salary. In the mean time, I found that I’ve swiped both of my credit cards excessively and I’m still left to repay the two big loans. Immediately we checked our savings account and found that we are left with only $20,000. The situation became too tough for me to handle and we had to spend sleepless nights. Suddenly one friend of mine advised me that it is with the help of a balance transfer method we get relief from the stress.

When we approached a financial institution to take out a loan, they at first assessed my financial situation and found that we had taken out:

1. One loan of $30,000 at 15% interest with a minimum of $1500
2. A second loan of $10,000 at 10% interest with a minimum of $400
3. A credit card with an outstanding balance of $14,000 at 8% interest with a minimum of $420
4. Another credit card with an outstanding balance of $16,000 at 8% interest with a minimum of $480

Hence the total minimum monthly payment we had to make against our loans was $2,800.

However, with a credit score of 625, we finally got the approval to take out a credit card of 3% interest rate with an adequate credit limit. We transferred all the obligations into the new credit card. Here, we were required to make $1400 as minimum monthly payment. But we decided to pay more than the minimum to repay our debts soon. Hence, we started leading a frugal lifestyle. We tried to use our hobbies to earn money in the leisure time. My husband started sailing with affiliate marketing whereas I often used to write content for different websites after my work shift. Hence, we managed to gather sufficient funds to be able to make the monthly repayments of the loans.

For three long years we struggled hard and were finally able to pay off $76,300. Now, we are leading a stress free life. Recently, I got an increment in my salary. This experience has taught me a lot. Now, I frequently use my plastic cards and always repay my bills on time. Both of us try to maintain a budget so that we are able to save a ransom amount to combat any type of emergency situations.

In 2012 we are embarking on a challenge to slim down the number of unnecessary items in our house. For each day of the year we will find an item that we no longer need or want and get it out of the house. Keeping with our environmental focus, our intent is to keep as much out the landfill as possible. Most of our household items will find their way to our locally operated thrift shop or will be recycled.

Throughout the year, we’ll keep this spreadsheet updated with our progress. Feel free to check in on our progress!

We were able to retire the last student loan early by taking a few actions.  First, we temporarily diverted some attention away from paying down on our mortgage.  While it is most efficient to pay off the highest interest debt first, paying down smaller debts has its benefits as well.  For instance, it eliminated an entire loan payment, the time spent making payments and the time it took to track the loan balance.  Plus, it just feels like we have less debt by having only one loan, even if we would have been at the same position.  Sometimes the physiological benefits outweigh the financial ones.

We did dip into our savings a bit in order to pay off the loan.  With savings rates so low, it wasn’t much of a sacrifice.  In a matter of just a few months, our savings should be right back to where it was before the student loan was paid off.  It is just a temporary dip that was well worth it.

Now we are left with only the mortgage.  It will be a bit harder to celebrate the small victories since there is still a sizeable balance left on this loan.  But with a child on the way, I think we’ll have a few other things to celebrate along the way.

We all have our gazingus pins (read Your Money or Your Life) that tempt us to spend our hard earned money. Learning to control these desires and limit how many of them you actually act on is the key to reducing or eliminating buyer’s remorse.  Using advice from Elaine St. James in herbook Living the Simple Life: A Guide to Scaling Down and Enjoying More, I have found a method that works for me.

A simple wish list. Rather than making purchases on a whim, I record everything I think I would like to buy in a small list on my phone. It helps me to have this list incredibly accessible since I can update it wherever and whenever a consumerist desire strikes me (advertising is powerful, man).  I also include the date when an item is added.  Tracking the date can be a measurement of how important—or how unnecessary—an item is.

There are a few benefits I have noticed with keeping the list:

It reduces emotion.Once I removed immediate gratification from purchasing decisions, most purchases became much less attractive.

No more spending to save. I have always struggled with the retailers’ concept of spending money to save money.  Instead of jumping at a sale price, I would rather evaluate an item to see if it is really necessary.  Instead of saving $20 by spending $100, I saved $100 by avoiding the purchase all together.

Time to conduct research. Keeping the list allows me time to conduct the proper research on a product and evaluate comparable items.  I often use Amazon.com’s reviews to see what others have said and experienced.  I read the reviews of both the lovers and haters and figure my experience will usually be somewhere in between.

When I first started my wish list, it was quite extensive and fluid.  It seemed like I was constantly adding new items and removing them once they have fallen out of favor.  Gradually this practice has slowed to the point where my list is now short and changes are infrequent.  Maintaining the list has changed the way I think about making a purchase.

For most, avoiding buyer’s remorse is about saving money.  I cannot disagree that I find this attractive, but my intentions go further. It has undoubtedly helped in our journey to becoming debt free; however,the true value is in detaching the emotion from acquiring material objects.

It was but a few months later that my wife and I realized the extra $20 or so per month we were spending for a clearer picture wasn’t living up to the hype.  Don’t get me wrong, the detail was amazing and a noticeable step up from standard definition.  But was it worth it?  Were we getting any additional satisfaction because the picture was in HD?  No and no.

This is just one example of how we examined our expenses totrim out what wasn’t necessary.  Other places we looked included additional cellular phone services, blazing fast Internet speeds, excessive dining out, unread subscriptions, and nights out on the town that result in killer hangovers.

Redirecting the funds from our trimmed expenses to help pay down debt is getting us closer and closer to becoming debt free.

Gone are the days where people can work for a company for 30 years, retire, and then collect a pension and healthcare benefits for the rest of their lives.  Soon we will also see that we can rely less on our nation’s Social Security and Medicare programs.  Usher in the new era of personal financial responsibility. 

Retirement savings is no longer something that people will have the choice about.  If you want to live a comfortable, or even a very modest retirement, you will need to take charge of your retirement savings.  Participate in your employer’s 401(k) and earn the free match if there is one.  Open a Roth or traditional IRA.  If you are self-employed, look into a SEP or a solo 401(k).  There are many ways to save for retirement and any savings is better than no savings.  It is not difficult to do.

Your future can start today. 

This is the third time the SES light (repair shop shorthand, as I’ve learned) has lit up recently and I am starting to question the longevity of this vehicle.  Plus, I do not like shelling out the $100 each time just for the repair shop to read the service codes.  The car has been starting to feel like a money pit. 

But like the earlier warnings, this repair will be relatively small and the car will continue to be a reliable means of transportation.  Since this is the car’s sole purpose, it is difficult to justify replacing it — even if I have an irrational dislike of the vehicle.  As much as I would like something different, I know that the smart financial decision is to pay the $350 repair bill rather than $20,000 for a new vehicle.  Although it was a vigorous fight, my rational mind won out against my emotions.

The lesson here is understanding the purpose of the asset.  For us the car is transportation.  It gets us from A to B, hauls our groceries, and takes us to visit family and friends.  It is not a status symbol.  Spending a few hundred dollars to keep it rolling gets us a little bit closer to becoming debt free.