It's the Economy, Stupid!

I was watching the Today Show this morning, and I noticed a recurring theme from the sound bytes from our illustrious presidential candidates. They kept talking about the poor souls who “live paycheck to paycheck” and those where are victims of “predatory lenders.” It made my think to myself, what about responsibility?

I mean, these candidates are telling us that they will take care of us. But why do we need taken care of? Because we have been stupid.

Why would somebody be living paycheck to paycheck? Sure, there are legitimate folks who have had a string of bad luck who need assistance. But for the majority of folks, they simply spent more than they make. It seems to be how our society is groomed.

What if the majority of people had 3-6 months of living expenses tucked away in an Emergency Fund? And what if people avoided debt and actually paid for things.

If they have a crisis like a lay-off, instead of repossessions and foreclosures, we’d be discussing strategies for a new job or career. And, we wouldn't be asking Hillary or Barack for help.

Which brings me to Ron Paul.

Let me just say first, that I am not endorsing one candidate over another, and I do not yet know who I will vote for in this upcoming election.

But after hearing this talk about all of these “victims” (true, victims of their on irresponsibility), I happened to hear an interview with Ron Paul on the radio during my commute.

Amazingly, he said what I had been thinking. The problem doesn’t require spending more money to help people (for instance, an $800 tax “refund”), but rather a change in behavior. The Fed needs to stop cutting interest rates. That is only a temporary band-aid that, in the long run, weakens the dollar and encourages more borrowing and consumption.

Instead, the government should be encouraging saving and spending less that you make.

I’m not smart enough to completely understand all that Mr. Paul was saying, and I’m certainly not smart enough to repeat everything here. But, let me just say that he is the first candidate who made sense when it comes to the economy.

The government spends too much money, and so do its citizens. Let’s learn to save for a rainy day, and stop charging our coffees. Let’s take responsibility for our own stupid actions, including agreeing to take out risky loans.

Seems like we could use a good dose of grandma’s common sense right now.

My HOF Ballot

I am a lucky voter in Joe Posnanski's "Pozcar Awards." Here is my ballot for baseball's hall of fame:

Bert "Be Home" Blyleven
Andre Dawson
Goose Gossage
Don Mattingly
Jack Morris
Jim Rice
Pete Rose
Alan Trammell

Some comments:

Blyleven: I've always loved Bert. He's not given nearly the credit he deserves.
Dawson: I grew up at a time when cable TV was just coming into homes, and our family quickly became Cubs fans. I will always have Dawson's menacing batting stance burned in my memory.
Pete Rose: Yeah, he bet on baseball. But you just can't deny his place in baseball history. The guy could flat out hit better than anybody in the game.
Alan Trammell: I wish he had never taken that manager job in Detroit. His reputation is forever stained after losing all those games. Great player, though.

Take a Note

My wife thinks I’m a little bit nuts over this issue.

I’ve been an Outlook user all of my life. (By “all of my life,” I mean “since I’ve been a serious email user.” That was probably around 1997 or so. I used other email programs before that, but that was about the time that serious work-related email use really kicked in.)

I’ve always thought of email and calendar as sort of a ubiquitous activity. It was there, and we really didn’t have to put too much thought into it.

Over the years, Outlook has evolved into a very powerful and easy to use interface for email and calendar. When I left my previous job, I was using Outlook 2007 which was coupled with the latest version of Exchange Server. (I’m not much on the Exchange product, so I’m not sure what they call the latest version).

I accepted an offer with another company about 2 months ago. I came to the company knowing that it was a Lotus Notes shop, but I didn’t think too much about it. My wife has been Notes user at her job for years and years. She’s never really complained about it. I mean, seriously… how difficult is it to create a decent email and calendar program?
Apparently, it’s so difficult that the largest computer company in the world can’t do it. IBM’s Lotus Notes is, in a word, awful.

There are obvious issues, of course. It completely ignores the interface design standards that have been established over the last 20 years of Windows computing. For example, look at the scroll bar on the right of your screen. The length of that bar gives you an indication of how long the document you are looking at is. In Notes, the scroll bar is always the same size.

And of course, it’s ugly. Notes is the worst looking mainstream application I’ve ever seen. It uses its icons that are right out of the early days of Windows. Can’t IBM afford some decent designers?

But all of that is probably tolerable, if it weren’t so damned difficult to use. This is where the conversation gets a bit fuzzy. I don’t know if it’s because I’ve always used Outlook, or if there is something to this, but I find Notes difficult to use.

It’s hard for me to find emails that I know I’ve saved in my Inbox. It’s hard for me to figure out if I’ve accepted or declined a meeting. It’s hard for me to schedule meetings.

I’ve been using Notes for 2 months, and it’s not getting any easier.

At my old company, we used to sell a service for interface design. We bragged about the staff we had who graduated with degrees that specialize in human/computer interaction. I personally thought it was a bunch of hogwash. But I’m starting to believe that there really is a science to this. I think Microsoft built all of this subtle usability knowledge into Outlook.

Outlook is just plain easy to use. It capitalizes words for me. It corrects spelling for me. It shows me a small preview of my new mail down by my clock, so I can instantly decide to read or ignore it, or even delete it right there without ever leaving my work. I can send email by hitting Alt+S. The calendar is easy to read. There’s no extra effort required to figure out who is available for a meeting. It’s great!

Obviously, I can’t just give up on Notes. My company uses it, right or wrong. I will continue to try to learn its ways and perhaps one day, it will be as easy to me as Outlook. But as of today, it sure doesn’t seem like that will ever happen.

New Gig

Yesterday I started my new job at Perceptive Software. Perceptive makes a product called ImageNow, which is a document imaging, management and workflow tool. So far, the company seems to be a great place to work and while I'm just starting to learn the product, it is very impressive.

www.imagenow.com

Financial Peace University – Fall Class

Our next Financial Peace University class is scheduled to begin September 17, 2007. We will have class on Monday evenings from 7-9. If you would like to join us, please email me.

Our summer class is winding down. We have just one class left. It has been a good class, and I hope everybody has gotten some good information from it.

Personally, our debt snowball remains on hold while we save up some money to get our house painted. We had to start over after we had some extra expenses in July. We hope to have the money saved to paint the house in just a few months, and then we will be back on the snowball with a vengeance!

The 100% Down Plan

Can you pay cash for your home? Think about that for a moment… How much do you pay in monthly mortgage payments? Now, imagine your life if you didn't have to make those payments? What could you do with that money? Save for retirement? Give to a charity?

So many people have the mortgage idea ingrained in their thinking. They can't even imagine having a paid for house.

Is it easy? Heck no! If it was easy, everybody would have a paid for house! (No, my house isn't paid for, but we're working on it).

But it is possible. There is a young man in my current Financial Peace University class who may be able to do just that. He is working hard, earning as much money as he can. He is renting a small house, and splitting the rent with a roommate. He is currently paying off all of his debt, and then will start socking away as much savings as he can. He hopes to save enough to pay for some land with cash, and then will build a house on the land.

If he is able to succeed on his plan (and since he has a plan, he's well on his way), he will end up with a paid for house in a few years. Yes, it will take hard work, and it will take time. But by putting it off, he will be in a great position for the rest of his life.

If you already have a mortgage, you can still experience this freedom. You need to pay off your mortgage as fast as you can. Don't stick with that 30 year plan. Figure how much you are able to send each month, and re-amortize your current mortgage. You can find amortization calculators on the Internet. You don't need to refinance (unless you have an adjustable rate mortgage. In that case, refinance NOW!)

Just use the amortization calculator to figure out how soon you can have your house paid off. You can either set a time goal (7 years, for example) and calculate the payment and start paying that, or use the calculator to see when your house will be paid for based on the payment you are able to make.

MAKE IT AUTOMATIC! We all know that telling yourself to write a bigger check each month won't work. It just won't! So, set up the payment using your bank's online bill payment service. That way you never have to think about it. Sit back and watch that balance shrink!

Once your house is paid off, you are in the catbird seat. You can either take your old house payment and start funding mutual funds and become wealthy very quickly, or you can put that money away in savings to build up some cash for your next house.

Let's say you pay off your $120,000 house, and then start putting away your $1,000 payment into savings. In three years, your house may have increased in value to $150,000 and you will have $36,000 in savings. You can then go buy a $180,000 or $190,000 house for cash! It's amazing the power your home has once the debt is released.

Most people believe mortgages are a way of life. But the paid off home is the way to riches!

Retirement and College

I am coordinating a Financial Peace University class at my church. (If you are interested in taking FPU, please let me know. I'm planning our next class now).

Last night's lesson was on retirement and college saving. There were a couple of very important points from that class that I would like to reiterate here.

Save for yourself first

You probably feel a tinge of guilt thinking about putting off your children's college fund for your own savings. Believe it or not, your first priority should be your retirement savings. It is much more important that you have your nest egg built up for retirement.

There are too many ways to fund college other than college savings. Yes, if you are funding your retirement accounts and are debt free, then by all means throw some money in an Education Savings Account. But if you are still paying off your debt or are saving for college instead of saving for retirement, do not save for college.

First, there is no guarantee that your child will go to college. Some kids are natural mechanics and welders and can make a great living without college. Second, college can be paid for in other ways. Your child can work through college, you can apply for scholarships, and your child can go to a community college for their first two years. In Missouri, there is a program that pays for the first 2 years of college for eligible students. Look into programs like these to help with the cost of college. But, by all means, DO NOT TAKE STUDENT LOANS!

Too many students are starting life under a mountain of debt. Worse, they never learn the power of being debt free, and fall into a lifestyle of payments. How can you get your life started, or save for a house with that debt hanging over your head? Here's an idea: start life debt free, and work hard to keep it that way.

Take your employer's FREE MONEY

Does your employer offer a 401(k) plan? Do they offer a match? If so, TAKE THE MATCH. Your employer is offering to give you FREE MONEY for your retirement. That's great! Take it!

If you still have debt, you might want to either suspend or hold off on starting your retirement saving. Dave Ramsey's advice is to not save for retirement at all while you are paying down debt. That way, you will have more money available to work your debt snowball.

But if your company offers a match, you might consider saving just enough to take advantage of the match. For example, if you company matches the first 4%, then save 4%. Take that free money and sock it away into your 401(k) account. It's just too good a deal to ignore.

We love the name ROTH

If your company does not offer a match on their 401(k), then perhaps a better plan is to fund a Roth IRA instead. With a Roth, you invest after-tax dollars in your choice of investments (please choose growth stock mutual funds with a good track record). That money then grows TAX FREE. That's right, when you pull the money out at retirement, you pay no taxes! There are some restrictions on the Roth, so please check with your financial advisor, but if you can, invest in a Roth.

There are lots of different things to think about when planning for college or retirement. The most important thing is this: START EARLY. The power of compound interest will easily make you a millionaire by just investing a little each month. If you haven't started yet, get yourself out of debt and get your emergency fund built up quickly. Then start putting as much as you can (15% is recommended) away for your retirement.

The earlier you start, the wealthier you will be.

For more information on how you can retire wealthy, please see Dave Ramsey's web site.

Debit Cards Are Evil

You are probably thinking I mistyped the title. It should read:

Credit Cards Are Evil

Well, that is true too! Credit cards are bad news.

But in this post, we'll talk about how using a debit card can wreck a budget.

Last summer, my wife and I were shopping for our son's birthday. Just a couple of weeks earlier, we decided to get serious about our money and stop the crazy spending. Using Dave Ramsey's advice, we started using cash for our purchases.

Previously, we thought that if we were using our debit card we were doing well because we were not charging our purchases. We were paying with money we had and not going into debt.

But what we didn't realize is that we were overspending by using that debit card. When you swipe, you don't register the pain of money leaving your hands. And you don't have a hard limit on what you can spend.

Back to our birthday shopping. We were struggling. We'd never been on a pure cash basis before. We always caught our slack with the credit card. But here we were, wandering around Target with $100 cash in our pocket. We were suddenly very aware of what we were buying. We wanted to make sure the items we purchased were good buys, and something that our son would really appreciate.

I can remember holiday shopping trips in the past. We just picked up any old thing and tossed it into the cart without much thought. It's amazing how your thinking changes when you are using folding money.

We finally had a cart full of items and headed to the register. This was the big "Ah ha!" moment for us. The cashier rang up our purchases and the total was over $100. How would we handle this in the past? Shrug and swipe.

This time though, we only had $100 to spend. We asked the cashier to put back 2 items to get the total under $100. We felt so empowered!!!

The $20 or $30 we didn't spend on his birthday went toward groceries or gas for the car. Suddenly, this whole budgeting thing made sense.

Dave Ramsey says that studies show that people who pay with plastic (debit or credit) tend to spend 12% to 18% more than if they use cash. And in a fast food environment, it's more like 20% to 30% more (no wonder McDonalds installed all those debit card machines!)

So now, we pay cash for everything. Real, green, folding cash. Gas, groceries, gifts, clothes, everything is cash. We budget our expenses, withdraw the cash and put the budgeted amounts in envelopes. For groceries, we'll take the cash and put it in an envelope with "groceries" written across the front. When we go to the grocery store, we never spend more than what's in the envelope (because we can't - that's all that's in the envelope!)

We now feel terribly guilty when we have to use the debit card. We know that using the debit card means we're spending money that wasn't budgeted for.

This system is the key to paying off debt. We want to make sure we have an extra amount of money each month to send off to pay down debt. By sticking to the envelope system, we can be assured to always have that money available for debt.

Some financial experts say to throw out the budget. (I'm currently reading "The Automatic Millionaire" by David Bach. He says budgets don't work. I respectfully disagree.) There's a saying: "If you aim at nothing, you will hit it every time." A budget gives you a target, something to aim at.

The budget and envelope system is the key to freeing up the money you need to get out of debt.

And getting out of debt is the key to freeing up the money you need to reach financial freedom.

More on Cars…

One more thought about cars…

I think that when most people hear someone say "save up and buy your car with cash," the immediate reaction is, "no way! That's too much money!"

But, remember, you have an asset to add to your cash. The trick here is getting your current car paid off. I was thinking about this as I drove to work today. My car will (hopefully) be paid off in about 6 months. I'm going to keep driving it after that while we work on our other debts, but once that car is debt-free, it now becomes a powerful asset for buying my next car.

If you think about buying a $10,000 car with saved up cash, you might feel overwhelmed. But it doesn't have to be that bad.

As an example, let's pretend my car is 5 years old and I'm ready for a new car. According to kbb.com, a 5 year old Taurus like mine is worth $6,195 in a private sale. In this example, let's also say I'm debt free except my home, and so I've been putting away $400 a month into a "new car" savings account. After just 10 months, I have $4,000 plus whatever interest I've earned in there.

I run an ad for my car and find someone to buy it from me for $6,000. I add that $6,000 to the $4,000 I've saved, and I have $10,000 to buy a car. Remember, I only buy good, reliable used cars, so finding one for about $10,000 shouldn't be too hard.

If I continue saving $400 per month, in just 10 more months, I could upgrade to a $14,000 car with cash (sell my $10,000 and add my savings). If I continue this trend, I could be driving a very nice car in just a couple of years, WITH NO CAR PAYMENTS!!!

Of course, I wouldn't do this. Once I get my new (used) car, I will drive it longer than 10 months so I can put that $400 into something other than a new car cookie jar. For example, maybe I'll put that $400 into a good growth stock mutual fund. If it grows at 10% (which it easily should) that $400 a month will turn into about $80,000 in just 10 years. In another 5 years, it would be about $160,000!!!

Wow! I'd much rather have $160,000 than that new car smell any day!!!

Cars and Money

Cars.

From my experience, cars are one of the biggest reasons people run into money problems. I am guilty of this. I've made some VERY stupid mistakes with cars in the past. But, I've learned my lessons. Here are some thoughts on what I've learned.

New Cars Suck

That is, they suck the money out of your wallet. I love driving a new car. They smell great, they shine, and they don't rattle. New cars are awesome! But they are a terrible place to put your money.

Everybody knows that new cars lose their value very quickly. But for some reason, we don't care. We still buy them knowing we are losing money on the deal. But the positive feelings that come from driving a new car buffer all of that pain.

But studies show that new cars lose about 40% of their value in the first four years. You might as well throw your hundreds out the window.

Millionaires Buy Used

Buying used makes good financial sense. If you buy a good, reliable, two-year-old car, you're letting somebody else take the hit on the depreciation. That's what most millionaires do. How do you think they became millionaires?

Roll Me Over

This is the one that killed us. Let's say you bought a new car a couple of years ago. And, like me, you wanted the best so you bought the top of the line model and financed it out 5 or 6 years so you could make the payment. Now, you're tired of that car. You work hard, so you deserve to drive a nice car. Besides, the car you have will need repairs soon anyway, so why not just buy a new one and get the new car warranty that goes along with it?

Believe me from experience: DUMB!!! You trade in your car, and you learn that the dealer will give you less than what you owe for it. That's okay. Just roll it into the new loan. Now, you are even more upside down on the new car!!! It's an endless cycle.

Soon, you're stuck in a car with a bloated payment and a huge debt.

Pay Cash!

I used to say it. How many times have you said it?

"You'll always have a car payment. There's no way to avoid them."

You have to be an adult about this. Don't let that new car fever get the best of you. Take your time, save up and pay cash for your cars. Avoid the dreaded car payment.

Snowball Your Car

If you currently have a car with a car payment, you need to decide whether to keep it or sell it. Here is a rule of thumb to help you decide:

• If it will take longer than 1-2 years to pay off your car, sell it
  
• If all of your cars together are worth more than half your take home pay, sell a car
  

If you love the car and you think you can get it paid off in a year or two, keep it and snowball the loan to get it paid off.

But, what if you decide to sell it but owe more than it's worth? Here's an example. You owe $22,000 on a car that is worth $18,000 (be sure to check kbb.com for your car's worth. Look at "Private Sale," not "Trade In Value.")

If you sold it for $18,000, you would have to come up with $4,000 to settle the note. So, you could either save up that money, or you could borrow it. What??? Borrow??? I thought we were getting out of debt!!!

We are. But a $4,000 debt is better than a $22,000 debt, isn't it?

But then what do you drive? Well, you have to be serious about getting out of debt. If you need to replace this car, then instead of borrowing $4,000, borrow $6,000 or $7,000 and buy a little $2,000 or $3,000 car.

Of course, you don't want to drive this little clunker forever, so GET MOTIVATED! Get your debt paid off, then save up some money! Put your old car payment in a cookie jar. In 10 months, you'd have around $4,000 (assuming you're saving $400 a month). If you then sold your clunker for $2,000, you'd have $6,000 to upgrade. In another 10 months, you'd have another $4,000. Sell your new clunker for $5,000 and you could buy a $9,000 car. Pretty soon, you're driving a decent car with no debt!

This is an extreme case. You have to be VERY MOTIVATED to work this plan. In our case, we couldn't quite muster the strength to do it this way.

I drive a lot for work, and so I wanted something that was comfortable and reliable. I traded my BMW ($20,000 debt) in on a Ford Taurus ($10,000 debt). That cut $10K out of our debt and reduced my car payment by about $200.

My wife's car is a different story. We are VERY upside down in it. We'd like to sell it, but we the deficit is so large, we can't make it work. So we are going to try to pay it off (or pay it down). It will take a while, but that albatross will either be out of our lives or paid for.

Either way, I'm drawing a line in the sand… No car payments!!!

Don’t Save For Retirement?

The biggest key to getting out of debt is unbridled focus and intensity. If you focus on that and that alone, and attack it, it can be done.

Dave Ramsey calls it "Gazelle Intensity," based on a show he saw on the Discovery channel. (He tells the story in his book, "The Total Money Makeover.")

If you are spreading yourself across several goals, you will not get to where you want to be quickly. For the debt snowball to really gain some traction, you must scrape up every last penny you can, which brings us to a very difficult decision – should I stop putting away for my retirement?

This is a sticky point. If you work for a company that provides a match for its 401(k) plan, you should be thankful. How can you turn away that "free" money? It's tough, I know.

But if you are trying to pay off a bunch of debt, and you are also sending some money to a retirement plan, some to a college savings plan, a little to this credit card, and a little to that savings account, nothing gets done! You are spread too thin!

Dave's advice is to stop all other saving and attack the debt. In most cases, you will be able to make up for lost time after you are debt free by saving much more than you are today. You will finish the second Baby Step faster, and get on with your plan for financial freedom sooner. You will knock that retirement savings into the stratosphere after your debt is gone.

But, in the real world, this is difficult to actually do. My wife and I struggle with this. We have not stopped investing in our retirement accounts. Both of our companies have match programs, so we are contributing as much as the match allows, but no more.

Remember, there are recommended ways of traveling down this path. But in the end, you and your spouse much be in agreement and do it together. If one of you is not comfortable with stopping retirement savings, then adjust your plan accordingly.

Connecting MDA to Vista’s Mobile Device Center

I started using Windows Vista last October. Since then, I've tried off and on (unsuccessfully) to connect my MDA phone to Vista's new Mobile Device Center.

I've used the ActiveSync for years without any problem, but the Mobile Device Center just wouldn't connect at all. It's not a big deal for me because I sync directly to my company's Exchange server over the air, so I can get anything to my phone that way.

Still, it was frustrating that I couldn't get this connection to work.

I've Googled for the problem (and I've also Live'd for the Microsoft folks reading this), and there were some others with similar problems, but those were all solved with firewall tweaks. None of that helped me.

Well, yesterday I finally got a successful connection. Here's what I did:

On the MDA, click Start, then Settings. Go to the Connections tab and click USB to PC. Uncheck the "Enable advanced network functionality" check box. (does anybody know what that's for?)

Connect the MDA to your USB port and you should get a connection. However, if you try something like copying files to the MDA, you'll notice that the connection keeps getting lost. Go back into the USB to PC setting screen and recheck the "Enable advanced network functionality" check box. That should cure the connection problems. It seems that one connection needs to be made with the box unchecked, and then it can be checked thereafter.

Hope this helps… Now if they would only release that WM6 update for MDA…

The Debt Snowball

Since August, 2006, my wife and I have been able to pay off over $45,000 in debt. That's a lot! There are several things we did to make this progress.

Stop Borrowing Money

We cut up our credit cards and agreed that we would never borrow again. We've gone a year now without using credit cards, except for work expenses that were reimbursed. By refusing to borrow more money, all our steps are going forward; none backward.

The Snowball

Anybody who's remotely familiar with Dave Ramsey knows about the debt snowball. You take all of your debts, order them from smallest to largest, and start paying them off one at a time. You pay the minimums on all but the smallest one. For the smallest one, you find as much extra money as you can each month to add to its payment. Once the smallest one is paid off, you celebrate briefly then roll that payment into the next debt. Each time you pay one off, the snowball rolls over and you attack the next.

The reason you go smallest to largest (and ignoring interest rates) is so you can experience some victories. Going through this process is largely behavioral. If you have that satisfying feeling of paying one off, it motivates you to keep going.

Our extra snowball amount at the start was a few hundred dollars. We started with Care Credit which was zero percent, but the smallest amount.

Whole to Term

For many years, we had been paying into whole life insurance policies. At the time, it was sold to us as a way to take care of our need for life insurance as well as an investment for college for our kids. We paid $250.00 a month into this, and our balance last year was a total of about $15,000. That's not much of a return. We applied for term life policies and when they were approved, we canceled the whole life policies and took our $15,000 out. That money was applied to our debts, smallest to largest. By the time we did that, we had knocked out the first four debts and part of the fifth.

Sell Stuff!

Another tactic is to sell stuff. I had a 1966 Mustang Convertible sitting in my garage for years. I LOVE old Mustangs, but at this point getting out of debt is more important than having an old car in the garage. We sold it, netting us another $9,000.

The Dreaded Car Payments

I was driving a BMW that I owed about $20,000 on. A lot of times, Dave will say "sell the car!" I didn't have enough extra cash around to buy another car that I could use for my job, so instead of just selling it, I traded it in on a 2004 Ford Taurus. The car dealer thought I was nuts, but there was a method to my madness. I went from a $20,000 debt and a $515 payment to an $11,000 debt with a $250 payment. That freed up almost $300 a month to apply to the snowball, and reduced our total debt by almost $10,000. I love the Taurus and can't wait to pay it off (4 years ahead of schedule, by the way!)

FOCUS!

I love that my wife has been equally focused on this process as I have. We've both been very motivated to become debt free. There have been times when we've had extra money that we could have spent, but we've supported each other and have applied the money to the snowball.

IT'S NOT EASY!!!

We are now putting our snowball on hold. We have some things around the house that need to be taken care of, and we are not borrowing money to do them. We will save the cash to take care of these things and then resume the snowball. We know it will take a while – about three more years – but we know it will be worth it.

FOR MORE INFORMATION: Please see Dave's web site (www.daveramsey.com) for more information about the Financial Peace program. If you want to learn more, buy a copy of "The Total Money Makeover." That book gives you all the information you need to get started.

Our Journey to Financial Peace

A year ago, I became fed up. My wife and I both have great jobs and make good salaries. But, when I sat down to pay the bills, I found that we had no money left to buy groceries. We had too much debt; too many payments.

It was last July when I discovered Dave Ramsey. His radio program motivated me to get serious about our money.

I have been resisting blogging about this because it is somewhat personal, but I've now decided to blog about our debt-free journey.

I have a formulated a lot of opinions on money and debt over the past 11 months. I'll be sharing those along the way as I share our journey with you.

Here is a rundown of our debt (except our house payments) when we started our journey on the first of August, 2006:

Orthodontist: $1,800
Best Buy Credit Card: $1,847
VISA 1: $4,468
VISA 2: $8,158
VISA 3: $12,357
BMW: $20,000
Care Credit: $1,600
2^nd Mortgage: $12,109
2^nd Mortgage: $32,029
Volvo: $36,500
TOTAL: $130,868

Just 11 months later, here is the rundown:

Taurus: $10,625
2^nd Mortgage: $11,995
2^nd Mortgage: $31,665
Volvo: $31,500
TOTAL: $85,745

You might be wondering why we have so many mortgage payments. We have two houses. In 2005, we purchased a home for my wife's parents. I think it's safe to say that we really couldn't afford it, but it was important to us to help them out. To rearrange our debt, we got a second mortgage on our primary home. Then we got a mortgage and a second mortgage on the house we purchased.

Our immediate goal is to pay off all our debt except for our 2 main house payments. So we have $85,745 to go.

We've made great progress in our first year. We've paid off over $45,000 in debt in just one year.

In a future post, I'll explain how we were able to do that.

Remember: "Debt is Dumb, Cash is King!"

Microsoft's New Mobile Phone

My good friend Jon Box blogs about Microsoft's newest innovation... the Windows Mobile OFone.

Check out the video here.

Watch out Apple!

A World Record

Over the weekend, I broke a world record. Well, not just me... Me and 1,682 of my closest friends.

The record was for most guitars playing a song. We all took the field at Community America Ballpark and played "Smoke on the Water."

I wasn't sure about the event leading up to it, but it turned out to be a great time. The best part was that I got to hang out with my old buddies Kris and Mike, and play a little guitar with my son Joey. Kris, Mike and I were in a band years ago, so playing with those guys again was a blast.

Seeing Pink

I've been wanting to get a Pink Zune for my wife. When I saw Circuit City's sales flyer this week, I knew it was time to buy. The Pink Zune is a limited edition, only 100,000 of them are begin sold, and they are selling better than any other color of Zune. The retailers have started charging different prices for the different colors (see amazon.com), so at $199, I jumped on it.

We got the Pink Zune yesterday, and we let it charge and sync overnight. I'm excited to play with it tonight - specifically, to try the wireless sharing feature (this is the first time I've had two Zunes together to try it!).

My wife loves it, and I must say, the Pink looks very cool. It's much better in person than in the photos I've seen. I do find it curious that the Pink Zune does not have the Zune logo on the back like my black Zune has.

Zune Download of the Week: Fourth Edition

"Breakfast in America" was a huge album. I remember when it was released back in 1979. "The Logical Song" was a big hit, and I remember a story about how the saxaphone solo was recorded in a bathroom because they liked the sound of the echo in there.

There were some huge hits on that album, and not surprisingly, four of the tracks on "The Very Best of Supertramp" come from that album. Also included are some other Supertramp greats like "Give a Little Bit," "School," and "Bloody Well Right."

The Zune subscription is a great way to reaquaint yourself with old favorites.

Microsoft Surface

Check out Microsoft Surface. At first you may wonder what the purpose is. A table top computer? Why?

But think about the possiblities. For example, a demo at the end of this video shows an interesting example of this technology in a retail setting.

Another cool idea: You and a friend have lunch, and wish to split the bill. You each lay your credit card on the table, and it automatically recognizes who you are and then displays pictures of each item you ordered. You and your friend can each drag your food items to your credit card, making splitting the bill easy. You then drag a slider over for the tip and touch the "pay" button.

How about this: You lay your Zune on the table. You then scroll through your music library using your finger, and you drag the songs you like over to the Zune and the music is synced to the Zune.

Then, you lay your digital camera on the table, and the table shows you the photos on the camera. You drag a few of them over to your Zune so you can show them to your friends.

It's all done with your finger and with no cables to attach. Very cool.

Zune Download of the Week: Third Edition

Okay, okay… so I missed a couple of weeks. So sue me!

To make up for it, I'll give you two downloads this week.

First up, an example of what makes the Zune Subscription so cool – rediscovering old favorites. I grew up listening to the FM Album Rock station, which included a healthy dose of David Bowie. I never considered myself a Bowie fan, but after years and years of hearing those songs, they just sort of stick with you. To feed my urge, I downloaded "Best of Bowie."

Isn't it funny how there are some songs that you never really thought you liked, but then at some point a switch if flipped and that old familiar song becomes a favorite. Bowie's songs are like that for me. Songs like "Changes," "Suffragette City," "The Jean Genie," "Rebel Rebel," and especially "Young Americans" are just great tunes. These are songs that I've heard over and over but never really paid any attention to, but now are some of my favorites. This CD also includes one of my favorite all times songs, "Under Pressure" which Bowie did with Queen.

Speaking of Queen (and rediscovering old favorites)… I don't remember how old I was, but I remember getting Queen's "Jazz" album out of a discount bin. It had a little cut in the corner to remind me that I paid less than retail for it. I pretty sure I bought the album for the music, but a side benefit of course was the poster that was included in the album. The album included some great songs like "Bicycle Race," "Fat Bottomed Girls," and the lesser known "Don't Stop Me Now." I also very much enjoy the swingy "Dreamer's Ball."

Bowie Downloads

• Changes
  


• Suffragette City
  


• Young Americans
  


• Under Pressure
  

Queen Downloads

• Bicycle Race
  


• Fat Bottomed Girls
  


• Let Me Entertain You
  


• Dreamer's Ball
  


• Don't Stop Me Now