I Was Broke. Now I'm Not!

I announced HERE that I am in the process of writing my next book. It will be a book that is addressed to high school students, and I am sharing 12 Things I Wish I Had Learned About Money Before I Hit The Real World.

That is not necessarily the title, and it might end up being 10 things or 15 things. All I know is that I want (and need) your help in writing this book!

For the next few days, I am going to ask you to take a couple minutes of your time and share some things you wish you would have learned about specific money topics.

Part Five Financial Decision-Making

Here is the question that I want to hear your thoughts on today:

What is the best financial decision you have ever made? What led to that decision? How would you teach young people to make that type of decision?

Share stories!

Read entire series

I announced HERE that I am in the process of writing my next book. It will be a book that is addressed to high school students, and I am sharing 12 Things I Wish I Had Learned About Money Before I Hit The Real World.

That is not necessarily the title, and it might end up being 10 things or 15 things. All I know is that I want (and need) your help in writing this book!

For the next few days, I am going to ask you to take a couple minutes of your time and share some things you wish you would have learned about specific money topics.

Part Four Financial Decision-Making

Here is the question that I want to hear your thoughts on today:

What is the worst financial decision you have ever made? What led to that decision? How would you teach young people to avoid that type of decision?

Share stories!

Read entire series

I announced HERE that I am in the process of writing my next book. It will be a book that is addressed to high school students, and I am sharing 12 Things I Wish I Had Learned About Money Before I Hit The Real World.

That is not necessarily the title, and it might end up being 10 things or 15 things. All I know is that I want (and need) your help in writing this book!

For the next few days, I am going to ask you to take a couple minutes of your time and share some things you wish you would have learned about specific money topics.

Part Three Debt

Here is the question that I want to hear your thoughts on today:

What were the first debts you ever obtained, and how did they impact your financial situation?

Share stories!

Read entire series

I announced HERE that I am in the process of writing my next book. It will be a book that is addressed to high school students, and I am sharing 12 Things I Wish I Had Learned About Money Before I Hit The Real World.

That is not necessarily the title, and it might end up being 10 things or 15 things. All I know is that I want (and need) your help in writing this book!

For the next few days, I am going to ask you to take a couple minutes of your time and share some things you wish you would have learned about specific money topics.

Part Two Impulsiveness

Here is the question that I want to hear your thoughts on today:

How have impulsive financial decisions impacted your overall financial situation? Share stories!

I announced HERE that I am in the process of writing my next book. It will be a book that is addressed to high school students, and I am sharing 12 Things I Wish I Had Learned About Money Before I Hit The Real World.

That is not necessarily the title, and it might end up being 10 things or 15 things. All I know is that I want (and need) your help in writing this book!

For the next few days, I am going to ask you to take a couple minutes of your time and share some things you wish you would have learned about specific money topics.

Planning Your Spending

Here is the question that I want to hear your thoughts on today:

What do you wish you would have known about planning your spending by the time you graduated high school?

Share your stories in the comment section!

I do not know what the title will be yet, but it will be something like:

12 Things I Wish I Had Learned About Money Before I Hit The Real World

It is our passion to help others accomplish far more than they ever thought possible with their personal finances. In I Was Broke. Now I'm Not. (and its related Group Study), I told my story of walking out of financial disarray, and I teach the tools we used to become debt-free. It is mostly focused on providing a CURE for an existing negative financial situation.

In this new resource, we are focusing on PREVENTION of negative financial situations. I know that I went through twenty years of formal education (13 years of K-12, 4 years of undergrad, 3 years of grad) and I had exactly zero classes on personal finances. It is my hope that we can provide a resource that can be utilized in schools and in churches to teach high school students how to manage their financial resources well.

I need your stories! For the next five days, I will be asking a series of questions about what you think teenagers need to know about money before they hit the real world.

I have met a ton of people who are experiencing the harshness of the following two key items:

* No Plan, No Savings, Piles of Debt
* Loss/Reduction of Income

Here is what you can do when faced with this situation.

1. Cry. It is OK to be regretful for awhile!
2. Take time to prioritize who will get paid and who will not get paid. (Read the post I wrote HERE about priority order.)
3. Write out your goals. Make sure they are SMART.
4. Prepare a written spending plan (even if you know that it will not balance to Exactly Zero). This will allow you to fully understand your "Go Get This!" number.
5. Take ACTION!

There can be a tendency to just focus on #1 and hope for everything to just work itself out. Usually, this is not the case. Recovering from this type of issue is emotional and gut-wrenching, but it requires one to take action.

You CAN recover from the mess!

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I heard several times that Crocs were great shoes. I finally heard it enough that I bought a pair. They are great! So great that I wear them everywhere. Including to Iowa in January in snow. When I finally tried out a pair, I thought, "Why didn't I listen and take action earlier?"

I heard several times that iPods were incredible. I finally heard it enough that I bought one. It is incredible! So great that I wear it while running, driving, and sitting on an airplane. When I finally tried out a pair, I thought, "Why didn't I listen and take action earlier?"

"Why didn't I listen and take action earlier?" This is a question I have asked myself many times after discovering a new thing that enhanced my life greatly.

It applies to my finances. When I first prepared a written spending plan before the month and the money arrived, I asked myself this key question.

I wonder how many more things I should be listening to and taking action earlier?

I challenge you to ask yourself the same question.

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"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part Four - Understand Why Credit Scores Are Necessary

What is the number one reason why someone would want a great credit score?

To obtain more debt!

Think about it! I am not a fan of debt at all. It robs people of peace and places tremendous strain on relationships.

What exactly is debt anyway?

Debt is nothing more than pledging tomorrow's income to someone else.

If one has zero debt, then they will have no credit score. They could have $10,000,000 in the bank, but have a zero credit score.

A credit score does have an impact on other areas of life, however. It can affect insurance premiums, deposits required for utility hook-ups, and approval to rent real estate. It can also impact one's ability to be hired! Military personnel have been denied or lost security clearances due to their credit.

So read the entire series, work on building a decent credit score, and do it all with a written spending plan!

"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part Three - Pay All Bills On Time - Consider Automatic Bill-Pay

If you do not pay your bills on time, the late payments will be reported to the credit reporting agencies.

This means that you need to pay your utility, cell phone, and other monthly bills on time. This is why I am such a huge fan of a written monthly spending plan (budget). When you have a plan, the chances of paying a bill late are greatly reduced.

If you live an exceptionally busy life or are notorious for procrastination, consider automating bill payments. This will ensure that bills are paid on time, and can greatly reduce stress and the potential for your credit score to be dinged.

Read the entire series

"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part Two - Swipe Purchase And Immediately Pay Off

A great way to boost one's credit score is to obtain a department store credit card. Here is how it works.
1. Ensure that a small purchase from that store (something you truly need) is included in your monthly budget.
2. Pull the money planned for that purchase out in cash and head to the store.
3. Purchase the item with the department store credit card.
4. Immediately after being given the receipt, tell the cashier that you want to make a payment on your credit account and give them the cash for the purchase to bring your credit account balance to EXACTLY ZERO.
5. Do this once each month.

Your credit score will soar as the length of the credit relationship increases and as the balance remains at zero. It might be helpful to go back to Part One to see what comprises of your credit score.

NOTE: If you do not trust yourself with a credit card and controlling your spending using a written monthly spending plan, then DO NOT use this method!

Read the entire series

"How do I build my credit?"

This is one of the most common questions I am asked. In this series, I will be sharing various ways that one can build credit while still winning with money.

Part One - What Determines My Credit Score?

It is important to first understand how one's credit score is calculated. There are some key characteristics that are used by credit monitoring companies (Experian, Equifax, and TransUnion) to determine your credit score.
* Type of Credit There are two key types of credit. Installment (car payment, house payment) or Revolving (credit card, line of credit)
* Total Available Credit This is the total of all credit limits.
* Total Credit Utilized This is the total of all current debt.
* Length of Credit Relationship The longer the credit relationship, the better.
* Payment Timeliness Obviously, payments need to be paid on time to achieve the highest scores!
* Requests For Credit Made For Potential Purchases
* Public Records Bankruptcies and judgments are not helpful to one's credit score!

You can check out some of the related articles/links below to learn more about credit scores.

Related Articles/Links
* Experian's "What's In A Credit Score?"
* TransUnion's "Credit Scoring 101"
* Equifax's "Keeping Score On Your Credit Score"

I had the outstanding opportunity to go skiing on Friday before the Financial Learning Experience in Cheyenne, Wyoming.

I went skiing at Copper Mountain in Colorado, and it was INCREDIBLE! Over a foot of fresh snow over the past week had fallen, and the slopes were in terrific shape. It was the warmest day of the week (33 degrees) and sunshine too!

Here is a picture.


It was incredible, and I want to go back RIGHT NOW!

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I recently spoke in Ottumwa, Iowa.

I was there to teach the Financial Learning Experience at thebridge church (pastor is Marty Schmidt).

I learned a lot about Ottumwa, Iowa.
* It is the hometown of Radar from M.A.S.H. and Tom Arnold
* It is about 1.5 hours south and east of Des Moines
* There is a huge need for financial training (just like all other areas of America!)
* I like Ottumwa
* It is home to a cool new church called "thebridge"

I also have realized that I have been living in the South for awhile. I showed up in Des Moines (8 degrees F and snow) wearing a light jacket, running socks, and Crocs.

Guess what? I was cold. Snow came in direct contact with my legs just above the ankles, and snow went right through the holes in the Crocs and soaked my socks.

So for those of you who were wondering: Crocs do not work well in snow.

It made me think about the number of times I have showed up ill-prepared to address financial issues. For example, I used to think that earning more money would solve my credit card balance and impulsive spending decisions. I was wrong. The fact was that I could earn millions of dollars a year, and I would still have an outgo problem.

I was ill-equipped. My monthly written spending plan using INCOME - OUTGO = EXACTLY ZERO was the correct tool to address my problem.

My Crocs have been replaced with nice leather waterproof shoes.

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A person who recently attended a Financial Learning Experience e-mailed me the following question:

I had the privilege of hearing you speak both during the message and the class that followed. My wife and I are committed to eliminating our debt. With that in mind, I have a question. I have three credit cards one for 6,000.00, one for 1956.00 and one for 5775.00 I am paying high interest rates 27.98, 24.00 and 20.4% respectively.

I tried to reduce my rates, but they were unwilling and the reality is that I don't get [0%] offers in the mail anymore.

I responded with the following question: Have you applied for one of the cards on my "Next Steps" site [HERE]?

His response FIRED ME UP!

Here is his response.
I just applied for the discover card and I put two of the cards to be transferred totaling 11,500.00 and I was accepted! After talking to Bank of America earlier today I felt as if I were a heathen slug that had delinquent deadbeat written on my forehead and the reality was that I had always paid them!

Thank you. You will get my phone call with a loud yahoo! You have an awesome ministry keep up the good work.

So let's look at the math. $6,000 was moved from 27.98% and $5,500 was moved from 20.4%. That one move saved $205/month in INTEREST!!! That is over $2,400 per year in INTEREST that was eliminated.

If you are paying interest on a credit card, why?

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I was able to achieve my goal of completing the marathon in under four hours!

I am PUMPED! More to follow in the next week on the similarities between finances and marathons.

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Welcome to the latest series - "Helpful Real Estate Sites".

It is my hope that this series will equip you with new information that helps you make excellent real estate decisions!
It is my hope that this series will equip you with new information that helps you make excellent real estate decisions!

Part Three - CNNMoney.com's Real Estate Section

CNN has partnered with Money Magazine to provide helpful and very timely information about real estate - both on the macro level and the personal level.

Some specific reasons I like this site are:
* Timely Articles - Helps me keep up with national trends in real estate
* Calculators - I love all of CNNMoney's calculators - not just the real estate section. In the real estate section, you can find calculators for renovations, refinancing, cost of living comparisons, and shop for a mortgage. You can check out their calculators HERE.
* Real Estate Tips - Whenever you learn something new regarding real estate, it has the potential to save you thousands of dollars! I like saving money!

Those are some of the reasons that I love CNNMoney's Real Estate Section. Have you used this resource before?

Visit CNNMoney's Real Estate Section

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Welcome to the latest series - "Helpful Real Estate Sites".

It is my hope that this series will equip you with new information that helps you make excellent real estate decisions!

Part Two - Zillow.com

This is another way to research homes that are for sale in your area.

I like the clean feel of Zillow.com, and its of use. Here are some additional reasons I like Zillow.com:

* Market Dynamics Just below the search bar, Zillow provides an up-to-date number of homes that are on the market in the entire US. I like seeing the macroeconomic view of the housing market.
* Days on Zillow A key measure in real estate is "Days on Market" or DOM. Zillow has created a similar measurement called "Days on Zillow". This information can be utilized to construct a better offer.
* Make Me Move Feature Zillow has a feature where you can list your house without actually listing it. Basically, you provide a price that you would be willing to sell your house for and if someone decides to purchase your home, the "make me move" happens. Interesting concept!
* Recently Sold Feature This feature allows you to see the houses in your search area that have sold most recently and the price at which they sold.
* Home Values Index You can see what homes are selling for you in your area by a number of measures - including $/SF, Selling Price, and flips.

Those are some of the reasons that I love Realtor.com. Have you used this resource before?

Visit Zillow.com

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Welcome to the latest series - "Helpful Real Estate Sites".

It is my hope that this series will equip you with new information that helps you make excellent real estate decisions!

Part One - Realtor.com

I have used Realtor.com to find each of the four houses that I have purchased.

This web site is an excellent way to understand market prices and to understand market availability.

Here are some specific reasons I love Realtor.com:

* Easy to search You are able to select the specific items you are interested in. For example, if you are interested in a three bedroom, two bathroom house with a garage, you can search for that. If you want to search for listings that include land, then you can select that also. Another key search criteria is square footage.
* Price range specific You can search for specific price ranges of houses within your set criteria. This really helps one understand what is available within that price range.
* Listings are mapped You can see all of the listings on a map. This is a great feature that allows you to understand the inventory available within the location you have selected.
* Pictures Many of the listings have photos of the exterior and interior. Instead of setting up a walkthrough, you can do so from your computer!
* Seamlessness Once you find some homes that you are interested in, you can select "Request a showing" from the actual listing. Awesome!

Those are some of the reasons that I love Realtor.com. Have you used this resource before?

Visit Realtor.com

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The Federal Reserve Board has implemented some substantial rule changes that govern how credit card companies interact with cardholders.

I am PUMPED about some of the rules changes, but I am disappointed that most of these will not be implemented until July 2010.

Here are some rule changes that I am excited about:
* Double cycle billing is eliminated. This eliminates double-billing on interest (robbery).
* Can't raise rates unless payments are more than 30 days behind. Provides some margin for error before default rates go into effect.
* Payments will be applied to highest interest balances first. YAY!

And here is my personal favorite - No more universal default rules! This means that credit card companies can not raise your rate on a card that has been paid on time simply because you have paid late on another credit card!

You can read a complete article about the credit card lending rules at CNNMoney - HERE.

As a reminder, there is a way to prevent credit card companies from controlling your life - PAY THEM OFF!!! If you are carrying a balance on your credit card and are paying interest, it can be very worthwhile to transfer the debt to 0% balance transfer credit cards so that ALL of your payment is applied to principal. PAY THEM OFF, and apply the first rule of holes - stop digging! No more debt.

Introduction
Couple #1 is THROUGH with debt! They have been married for many years and have two children. They are now over a year into their Debt Freedom March.

Couple #1's Thoughts This Month
The current economic environment is flipping crazy. I can only think that God had his hand in my wife and I deciding to get out of debt long before this downturn.
* We paid half the balance of car 2 and owe just $500.
* We increased the payment on the HELOC to $700.
* The property taxes are already paid when in years past I would have to wait until my tax check came back.
* Christmas is bought and paid for and under the tree. Instead of buying useless presents for friends this year, I made gifts out in my shop.

We have a lot to be thankful for. We have our jobs, we have our health, and we have each other. May God bless you all as I have been blessed. Merry Christmas!

Updated Debt Freedom Date


Month By Month Progress


Sangl says
Another excellent month! Couple #1 has a fully-functioning Known, Upcoming Expenses account that has enabled them to stay the course even in difficult economic times. If your budget is constantly smashed by things like property taxes, quarterly insurance premiums, vacation, or Christmas, I highly recommend clicking HERE to learn how to set up a Known, Upcoming Expenses account.

Read Previous Monthly Updates For Couple #1 HERE

I love giving. Love it!

I have seen the the simple act of giving completely transform lives. My education is a direct result of GIFTS.

Purdue University
* My beloved university where I received my bachelor's degree in Mechanical Engineering (BSME) was founded through gifts.
* In 1862, President Lincoln signed the Morrill Land Grant Act that would give public owned land to any state that would use the land or proceeds from the sale of that land to found a college teaching agriculture and engineering.
* In 1869, Indiana signed on and accepted GIFT from John Purdue ($150,000 - in 1869! At 4% annual inflation, that equates to a gift of $38,614,733!). They also accepted a GIFT of $50,000 from Tippecanoe County (where Purdue is located) and 100 acres from local residents.

Clemson University
* The university where I received my masters degree in Business Administration (MBA) was founded through the same Morrill Land Grant Act!
* In Thomas Green Clemson's will, he bequeathed the Fort Hill plantation and a considerable sum from his personal assets for the establishment of an educational institution of the kind he envisioned.

Giving made my education a possibility. John Purdue, the residents of Tippecanoe County, and the local residents who donated land all made Purdue a possibility. Thomas Green Clemson made Clemson a possibility. Although the residents of Tippecanoe County who donated tax dollars and land are not mentioned, they are just as much a part of it as John Purdue and Thomas Clemson.

Key Lesson: GIVING allows me to make a difference in future generations.

Sources
* Purdue University web site
* Clemson University web site

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I love filling in the squares on the Sangl Family Home Pay-Off Spectacular every month. It is so satisfying to visibly watch the debt leave.

Over the past year, we have developed an entire set of Debt Pay-Off and Saving Spectaculars. In fact, they have been downloaded thousands of times! That floors me.

I would love to hear your ideas on additional Spectaculars we can provide.

So … ask yourself the following questions:

What are you paying off? and What are you saving money for?

Put your suggestions in the comments below, and the team will work to provide spectaculars for them over the next several weeks!

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Marathon training is like planning.

I am currently training for a full marathon that I will run on January 18 in Houston, TX. I am neck deep in to the training plan right now, and there have been several times that I have asked myself, "WHY am I doing this? AGAIN?!!"

Since this is my second marathon, I am much more aware of the importance of good planning.

In my first marathon, I had a great training plan that I obtained from HalHigdon.com. He has training plans for all lengths and types of runs, but I pulled up the novice marathon training plan.

It was a great plan. It started out with moderate runs and slowly but surely it stretched out to longer runs. I remember specifically a day that the plan called for a twenty mile run. A twenty mile run. I was training in Indiana for the race, and it was horribly cold outside so I ran on a treadmill.

Shortly after I got on the treadmill, a young mother showed up and placed her baby in a car seat attachment next to her. She then proceeded to change the TV to "Bob The Builder". She ran for twenty minutes and then left me stranded there watching "Bob The Builder" - SIX STRAIGHT EPISODES!

After running for seventeen miles, I could not take "Bob The Builder" anymore so I got off the treadmill to go change the TV channel. I never got back on the treadmill. I never ran the other three assigned miles.

I ended up shortchanging one more twenty mile run that was on the plan.

Guess what happened? During the marathon, I ran great until mile 17. By mile 19, I was hurting so bad that I stopped and walked for awhile. I ran-walked the final 7.2 miles. I finished, but I really paid dearly for not following the plan.

Have you ever planned your spending and then failed to follow it? I know I have in the past. I made it through the month, but I paid dearly for not following the plan.

That is how marathon training is like … plannning.

Will Rogers said that "even if you are on the right track, you will get run over if you just sit there."

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I believe that the greatest economic stimulus package that could have ever been implemented is LOWER GAS PRICES.

Seriously. I believe that super-high gas prices forced people to trim their spending to essentials and to restructure their spending - including eliminating gas hogs. Now that gas prices have eased there is extra money each month.

I do not know about you, but I saw a ton of people at Wal-Mart on Black Friday shopping with cash.

The average American family is getting an extra $50 to $200/month simply because of lower gas prices. That equates to an extra $600 to $2,400/year.

What do you think?

I am PUMPED about 2009! This crusade takes tons of people to make it work, and I am so honored that so many of you have participated in or volunteered to serve at one our events.

Here are the cities that the crusade will be visiting in the first three months of 2009.

* January 17 & 18 Houston, TX
* January 24 & 25 Royersford, PA (Philly area)
* January 28 Ottumwa, IA (Des Moines area)
* January 31 & February 1 Cheyenne, WY
* February 7 & 8 Dallas, TX
* February 22 Canton, GA (Atlanta area)
* March 7 & 8 Acworth, GA (Atlanta area)
* March 12 & 15 Anderson, SC
* March 22 Lakeland, FL (Tampa area)

I am also stoked to see that the crusade will be traveling in ways that do not require me to travel! The I Was Broke. Now I'm Not. Group Study is being implemented into small groups and medium size groups in dozens of churches.

That PUMPS ME UP! I am so honored that I get to serve so many people, churches, and businesses and be a part of life changing work.

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The IWBNIN Team is pumped to offer the following Christmas 2008 Special to those of you who are on this crusade to help others accomplish far more than they ever thought possible with their personal finances.

Through December 18th, you can purchase 10 copies of I Was Broke. Now I’m Not. for $100 and shipping is FREE! To purchase these materials, click HERE.

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One of the most common questions I am asked is:

"Should I get a home equity loan to pay off all of my non-house debt?"

Here is my response.

I am not a big fan of consolidating one's non-house debt into a home equity loan. This is for several reasons, and I have outlined those reasons below.

* This is addressing a symptom, not the root cause. This question is usually motivated by our need for immediate action. It is the same motivation that causes us to purchase a car and finance it for five years.
* Borrowing from home equity makes it more difficult to sell the house. This is especially true in today's house market. There are a ton of people who now owe more on their house than it can be sold for. Consequently, they become trapped in the house.
* Changing spending behavior is a process. If one runs out and consolidates their debts, it might remove the urgency from the need to change spending behavior. Changing one's spending behavior takes time. I am convinced that if I had obtained a home equity debt consolidation loan in December 2002, I would not have changed my spending behavior. However, because it took fourteen months to address our debt, our spending behavior was completely changed. We have never looked back!

Having spoken with thousands of people and working one-on-one with nearly one thousand people in the past two years, I am convinced that obtaining a home equity loan is not the best way to eliminate debt. The most common result from obtaining a home equity loan is less equity in the house and the consumer debt shows back up because the spending behavior was not changed.

This is, in fact, my own story. I obtained a debt consolidation loan to move a pile of credit card and consumer debt to one payment. After paying $315.60 a month for an eternity, I wanted to celebrate, but I could not. Why? Because while I had finally paid off the debt consolidation loan, I had not changed my spending behavior and my credit card debt had grown back to more than I had consolidated in the first place!

What do you think?

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Related Tools/Articles
* Debt Elimination Tools
* SERIES: "How To Pay Off Debt"

This is a series written for those who are struggling mightily with their finances and tough decisions are being made about who will be paid and who will not be paid. It is my hope that this series will provide practical steps that can be taken to walk out of this situation and into financial freedom.

Part 4 Take Action!
I have found that whenever I am overwhelmed, I move toward doing nothing. I just want to shut down and ignore everything. Running away feels like the right thing to do.

Yet, the FACT is that running away will just make the situation worse. Will it be extremely difficult to work through this situation? AB-SO-LUTE-LY! But the cost of NOT doing something is even more difficult! You CAN do this.

Below are some practical tips that have worked for me when I have wrestled with overwhelming situations.

* Action List I prepare a list of items and prioritize them
* Establish accountability Someone who I trust who will hold me accountable to my actions
* Seek Help Here at NewSpring Church, we provide FREE one-on-one financial counseling for over 500 people each year. We provide this service on-site at all of our campuses. You can request this free counseling HERE. We will not try to sell you anything. Our counselors are winning with their money and are passionate about helping folks do the same!

Read the entire series

This is a series written for those who are struggling mightily with their finances and tough decisions are being made about who will be paid and who will not be paid. It is my hope that this series will provide practical steps that can be taken to walk out of this situation and into financial freedom.

Part 3 Prioritize
When the financial sky is falling down and the walls are closing in on you, it is imperative that spending is prioritized. Here is my suggested order of priority for spending when there just is not enough to pay everything.

1. Housing Must take care of the mortgage and utilities first. Now if the mortgage payment has run out of control and it is 60% of one's take home pay, then it is high time that the house be sold or income be tripled within a couple of months.
2. Food I am going to eat before one single bill is paid! We must be able to eat. I am not talking about Olive Garden or fast food. I am talking about groceries bought with coupons and much attention to frugality.
3. Transportation If transportation is required to produce income, then it is imperative that the vehicle payments, insurance, taxes, gasoline, and maintenance be funded.
4. Back Taxes Owing the government back taxes is a terrible thing, and it must be addressed. I would rather owe anyone besides owing Uncle Sam!
5. Secured Debts If there is additional money remaining after Housing, Food, and Transportation are taken care of, it is time to pay the secured debt payments. This is debt where the lender can come take something - like a car, boat, motorcycle, tractor, etc. If the lender repossesses the item, they will sell it at a wholesale auction and come after you for the difference.
6. Family & Friends Debts If you owe family and friends and you still have some money left, it is essential to pay on debts owed to family and friends. Unpaid debts to family and friends has been the cause of untold relationship issues since time began. Avoid this!
7. Unsecured Debts It is time to address the unsecured debts. Credit cards, student loans, signature loans, etc. One thing to note is that unsecured debt holders will be screaming and hollering the loudest because there is nothing they can come take from you. As a result, they will try to play upon your emotions to get you to pay them before you pay anyone else. And it works! I have met with a lot of people who have kept their credit cards current while letting the house payments fall behind. Not good!

Go back to the spending plan you have prepared and ensure that your priorities are in order.