Easy Ways to Pay Off Your Mortgage Early

Photo from bridgememphis.com

If you're like most homeowners, you pay a mortgage payment every month.  Wouldn't it be great to pay it off early?  Dave Ramsey shares some easy and painless ideas which can save you interest and end your mortgage payment sooner than you ever thought was possible.  Check out this link:

http://www.daveramsey.com/blog/3-money-hacks-for-paying-off-your-home/?ectid=elp.facebook.post.9-24-2014

Source:  daveramsey.com

Creating a Budget

Are you wondering where your money goes every month?  Creating a budget may not sound like the most exciting thing in the world to do, but it is vital in keeping your financial house in order. Before you begin to create your budget it is important to realize that in order to be successful you have to provide as much detailed information as possible. Ultimately, the end result will be able to show where your money is coming from, how much is there and where it is all going.

• Gather every financial statement you can. This includes bank statements, investment accounts, recent utility bills and any information regarding a source of income or expense. The key for this process is to create a monthly average so the more information you can dig up the better.
• Record all of your sources of income. If you are self-employed or have any outside sources of income be sure to record these as well. If your income is in the form of a regular paycheck where taxes are automatically deducted then using the net income, or take home pay, amount is fine. Record this total income as a monthly amount.
• Create a list of monthly expenses. Write down a list of all the expected expenses you plan on incurring over the course of a month. This includes a mortgage payment, car payments, auto insurance, groceries, utilities, entertainment, dry cleaning, auto insurance, retirement or college savings and essentially everything you spend money on.
• Break expenses into two categories: fixed and variable. Fixed expenses are those that stay relatively the same each month and are required parts of your way of living. They included expenses such as your mortgage or rent, car payments, cable and/or internet service, trash pickup, credit card payments and so on. These expenses for the most part are essential yet not likely to change in the budget. Variable expenses are the type that will change from month to month and include items such as groceries, gasoline, entertainment, eating out and gifts to name a few. This category will be important when making adjustments.
• Total your monthly income and monthly expenses. If your end result shows more income than expenses you are off to a good start. This means you can prioritize this excess to areas of your budget such as retirement savings or paying more on credit cards to eliminate that debt faster. If you are showing a higher expense column than income it means some changes will have to be made.
• Make adjustments to expenses. If you have accurately identified and listed all of your expenses the ultimate goal would be to have your income and expense columns to be equal. This means all of your income is accounted for and budgeted for a specific expense. If you are in a situation where expenses are higher than income you should look at your variable expenses to find areas to cut. Since these expenses are typically essential it should be easy to shave a few dollars in a few areas to bring you closer to your income.
• Review your budget monthly. It is important to review your budget on a regular basis to make sure you are staying on track. After the first month take a minute to sit down and compare the actual expenses versus what you had created in the budget. This will show you where you did well and where you may need to improve.

Source:  Directly quoted from about.com, Jeremy Vohwinkle.  Article found here:  http://financialplan.about.com/od/budgetingyourmoney/ht/createbudget.htm

Here are some free budgeting tools I found for you online.  Now you have no excuse!  Decide which one fits your needs best and get to work managing your money!

http://www.kiplinger.com/tools/budget/ (electronic budget form)
http://financialplan.about.com/library/n_budget.htm (printable budget form)
http://www.betterbudgeting.com/budgetformsfree-basicbudgeting.htm (another printable budget form)
http://momsbudget.com/printables/householdbudgetprint.html (another printable budget form)
http://www.daveramsey.com/tools/budget-lite/ (quick 60 second online budget form)

Getting out of Debt: A How-to Guide

Is debt weighing you down?  There is hope!  It takes time, hard work, effort and persistence but you CAN get out of debt.  Here is a helpful step-by-step guide to help you pay down debt and move toward a debt-free future.  Make up your mind to put a plan into place and don't give up until you are debt-free. 

In order to get out of debt you must do the following:

1. Create a budget and track how you spend your money.  A good household budget starts with an honest assessment of your monthly expenses. Use this budget worksheet to jot down all of your regularly occurring expenses, including any money that you spend on eating out, hobbies or other forms of entertainment. Fill in all of the fields that pertain to you, and ignore the ones that don't. Have expenses that aren't included on the form? There's room to add those in under the "Other" category.

2.  Set budget goals and find ways to lower your monthly expenses.  For example, do you need your car?  Can you ride the bus?  Do you need cable/satellite/netflix when you can find free tv and movies on the internet?  Try brownbagging your lunches at work and cooking from scratch! Little changes can make a big difference in your budget.  For money saving ideas, see these links: 

http://thrivingandthrifty.blogspot.com/2010/10/ways-to-lower-your-monthly-expenses.html

http://thrivingandthrifty.blogspot.com/2010/10/practice-thrift-and-frugality.html

3.  If cutting expenses still does not allow you to put money toward eliminating debt, look for other ways to make money.  Can someone else in the family contribute financially?  Can you take on a part-time or second job?  A paper route? 

4.  Create a debt elimination plan.  The following commitments are vital to this plan:

• You must commit to stick to your budget.
• You must commit to not use credit to purchase anything until your debt is eliminated.
• You must commit to using at least 50% of increases in income to pay down your debt.

A Debt Elimination Calendar will help you eliminate debt.  Mark off several columns on a piece of paper.  In the first column, write the name of the month.  At the top of the next column, write the name of the creditor you want to pay off first.  It may be the debt with the highest interest rate, or the earliest pay-off date.  List the monthly payment for that creditor until the loan is repaid as shown below.  At the top of the next column, record the name of the second creditor you want to repay and list the minimum payment due each month.  After you have repaid your first creditor, add the amount of that monthly payment to your next payment to the second creditor.  In the example below, notice that the family finished making monthly payments on their credit card.  They then added $110 to the department store's $70 payment, creating a new payment of $180.  Continue this process until all debts are repaid.  

Sample Debt Elimination Calendar

Month	Credit Card	Depart. Store	Dentist	Auto Loan	Education Loan
January	110	70	50	235	75
February	110	70	50	235	75
March	110	70	50	235	75
April	110	70	50	235	75
May	PAID	180	50	235	75
June		180	50	235	75
July		180	50	235	75
August		PAID	230	235	75
September			230	235	75
October			PAID	465	75
November				465	75
December				PAID	540

Sources:  http://frugalliving.about.com/od/moneymanagement/a/Budget_Form.htm, http://www.managingmymoney.com/, http://providentliving.org/pfw/multimedia/files/pfw/pdf/72726_DebtEliminationCalendar_pdf.pdf