Chasing the Bull

Does Christmas sneak up on you every year? Once it is over, do you wonder where your money went and why you spent so much? If you are working on becoming debt free, the holiday season can seriously set you back a few months. It is extremely easy to ruin months of hard work in a single afternoon. Here is a a few things we plan on doing this year so that next year our budget will not be hit as hard.

1. Determine how much we plan on spending - This year I am tracking all of our gifts in a simple spreadsheet. I am documenting such items as who the gift is for, what the gift is, and how much it cost. In late December, my wife and I are going to sit down and determine how much we are going to spend next year. By reviewing my spreadsheet, we should be able to determine where we spent too much, or too little, and make changes accordingly.

2. Add gifts to our budget - Over the past year, we have done pretty well in sticking to our budget. Since this was our first year using one, we left off a number of important things. The most obvious being Christmas gifts (I cannot believe I forgot that). Since we will have determined how much we want to spend in step one, we now must simply add it to the budget. If we plan on spending $500 on gifts, our monthly budget should include $19.25 per paycheck. I honestly have no idea what the real number is going to be this year. I am hoping that it is not much more than this!

3. Start saving now - Now for the hard part! After completing steps 1 - 2, I will now know how much I need to save each paycheck. I use online banking so it should be a simple thing to transfer $20 from my checking account to my savings account. I should be able to do this every two weeks without fail. This is where I will need to focus on my goal to become debt free.

4. Stay Focused - If I have learned anything about myself over the past six months, I have learned that I need to constantly revisit my goals and objectives. If not, it is extremely easy to get into the mindset that $20 is not that much money and that I can start saving next week. We all know how that will turn out.

5. Stay on Target - Whenever I get distracted, I think back to a epic scene in Star Wars - A New Hope. In case you haven’t seen this movie (and shame on you if you haven’t) Luke Skywalker and his fellow X-Wing pilots are mounting an attack on the Death Star. There are lasers and enemy ships flying everywhere, trying to distract the good guys from attacking. One of the Rebel Commander keeps repeating “Stay on target! Stay on Target”. This is what I need to do! I need to ignore the noise and confusion around me, and focus on successfully completing my mission to become debt free.

Following these steps will, hopefully, ensure that next year’s budget will be more realistic. If I plan a bit better during the year, I will be one step closer to realizing my debt free goal.

What steps do you take to ensure you stick to your budget during Christmas? Do you budget money all year, or simply wing it?

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Do you hate seeing the amount of interest you pay the credit card companies each week? Do wish there was an easier way to lower credit card debt without getting a second, or even a third, job? When I began my quest to become debt free, I started sending multiple payments to my creditors each month.

Credit card companies like to charge you on your average daily balance.  If you send in payments more often, you can effectively reduce the interest that accrues on your daily balance. Additionally, if you will commit to making payments every 14 days, you will end up making an additional payment every year. This will truly help you lower credit card debt.

Before you start sending your credit card companies extra checks, ensure that they allow you to remit amounts that are less than the minimum amount due. Not all credit card companies will honor multiple monthly payments that are smaller than the stated minimums.  If you are going to commit to such an effort, you will want to be sure it is worth it.

Once you have established that making multiple payments is allowable, decide  how you are going to actually make the payments. My preferred method is to use online banking. I have used it for well over two years now, with absolutely no issues. You are, in fact, safer making payments online than you are when you send in a check. Additionally, when you pay online, your payment is already coded to your account. You do not have to worry about the credit card company incorrectly applying your payment to someone else.

Next you need to decide how much you are going to send every 14 days. Since my goal is to lower credit card debt, I actually send in the minimum amount every 14 days. If your income does not allow this, send in half of your minimum every 14 days. This is another benefit of using online banking (your payment will get there faster). In order for this method to work, you must be organized. Otherwise, you can get into trouble.

Since you will be making less than the minimum amount due every 14 days, it is imperative that you do not fall behind in any payments. Even though you are making more than one payment, you are still required to make at least the minimum payment. You can, and will be, assessed late fees and penalties if the second payment arrives late. Again, I cannot stress how much having an online account will help you in this regard. I enter my payments to automatically be made on a certain day. This way if I forget, my payment will still be sent off as planned.

What do you think? Has anyone tried this method to lower credit card debt?

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I am absolutely loving eHow right now. For those of you who do not know, eHow is a website in which members can publish “How to” articles. The interface is really easy to use and you can create a new article in about five minutes. Once you submit your article, eHow shares the revenue generated from your article.

Many people question why I would publish an article on someone else’s website, where I have NO control over how my article is used and I only receive part of the revenue that is generated from my work. If I could generate the kind of traffic that eHow does, I would agree with you completely. eHow, however, has a page rank of 6 and receives millions of visitors each month. I think I receive around 100 visitors a day here. The basic math simplifies the equation a bit.

As my goal is to become debt free, I plan on implementing a three-headed attack; eHow, Bukisa, and this personal finance blog.

I have been writing for eHow for almost 3 months. During the first month I earned $4.50. In October I earned $18. So far in November I am on pace to make $25. To be honest with you, I have not published as many articles as I could have because I wanted to make sure that I would actually get paid. I am now comfortable that eHow will pay me. As such, I am going to step up my article writing efforts. The goal is to write one article a day for the rest of November and December.

Bukisa is a new site, similar to eHow, that I joined a few days ago. I have only published one article so far but plan on publishing at least 3 articles a week. This site is unique in that you can earn money from the revenue generated from your articles AND a portion of the revenue generated from your network’s articles. If I want to become debt free, I feel that this kind of writing will be well worth the effort.

Finally, I plan on creating a meaning personal finance post on this blog at least 5 times per week. I have so many good ideas, but unfortunately, I have been extremely busy at work over the past 6 months. I am going to make my debt free journey a priority. So expect a more active posting schedule.

What do you think? Do you know of any other places where I can earn some passive income from writing articles? Have you tried eHow or Bukisa? How much are you making each month?

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