It’s always enlightening to see how our brains work – especially when the instinctive nature of the mind can be detrimental to the way we handle money. One such thought process is our propensity draw comparisons.

Many people blame credit cards, loans, and mortgages, which is (again) another form of human behavior – the tendency to find fault in others but not ourselves. Credit card companies may provide us with the tools to fall deep into consumer debt but credit cards are tools nevertheless – wielded by us, the consumers, to bring about our own financial demise.

Because we compare the prices of things we buy, we are actually inclined to spend.

This or That?
When we compare two things, we will find one that we prefer over the other. And when we are shopping, we will compare prices (among many other things like appearance and functionality).

I recently bought a DSLR camera. This sweet piece of technology costs a fortune – and it gets worse. For those who are not tech-savvy, they fall in the category of cameras that professionals use, which consist of a camera, lenses, and a bunch of accessories.

So, I was in the market for a new lens. After much research, I found a few that fit the bill for what I was looking for. One would cost in the range of $1,100 and the other would be around $350.

For a poor guy like me, there is nothing more to think about – the cheaper one it is.

If two items look the same, perform the same, there is nothing left but to look at the price tag. Naturally, the one with the lower price is the one we take to the cashier. Never did a third option come to mind – to not buy anything at all.

When “Opportunity” Strikes
More often than not, shoppers see a great deal and they won’t let go of that opportunity to pay less for something of value (or what they assume to be of value). Much like how people don’t like to miss out on getting rich, we must take advantage of a good price.

Some examples of must-spend shopping opportunities:

• Weekly supermarket specials
• Calvin Klein sample sales
• Black Friday

Even for myself, I’ve done my share of research (as I’ve always done before making a big purchase) and it is actually worse for a person trying not to spend. With more devotion into any aspect of life, we become drawn to it. Knowledge may be a bad thing. Once I found out what I wanted, I was compulsively scouting for a good price on the lens I wanted. As soon as I found a “great” price, I didn’t let that opportunity go to waste and spent my money.

Cannot Be Avoided
Since it is human nature, it isn’t surprising that most of us fall so deep into consumer debt. Even a self-proclaim frugalite such as myself will succumb to necessary-but-really-not-necessary purchases from time to time. I’d assume that the savviest savers with long-term goals are much more capable to resist this type of innate behavior but we must enjoy some of our money now. Right?

We judge. We compare. Live with it (but try to hold yourself back once in a while).

(Photo credit: TheBusyBrain)

Related posts:

1. Weekend Links: A New DSLR Camera But Not Yet a Photographer A brewing
2. Coupons, Discounts, and Sales Do Not Mean You Are Saving We all fla
3. How Much Debt Do I Have After 4 Years Of College? Credit car

The PineCone Research panel has just opened up again and they are looking for new members! I’ve been with them for over two years already and they are by far the best paid survey group out there.

From the referring links that I check through SiteMeter, I see that many of them arrive at my blog in search of this highly rare chance to be a part of such a great research panel. PineCone Research typically has ads on certain websites and clicking these ads are the only way one can apply to become a member. It is a highly selective and exclusive panel with swift payouts of $3 USD per completed survey. I know many people are looking to be accepted into this panel. PineCone Research is certainly at the top of my list of online money making opportunities.

They sent me an email asking me to reach to other would be interested in joining.

So, if you’d like to join, click this link.

They do pick individuals of certain demographics. If you are selected to join, you should receive an email within a few days that you’ve been chosen.

Note: Only one member per household.

Sign up before it expires and good luck!

Related posts:

1. Pinecone Research Signup Link – February 2010 The PineCo
2. PineCone Research Signup Link – October 2008 The PineCo
3. Pinecone Research Signup Link – September 2009 The PineCo

“The Automatic Millionaire” bestseller by author David Bach was quite an inspiration. Although it came out in 2004, I’ve recently found it hanging out in the library and I’ve finally gotten around to reading a personal finance book that actually provided sound money management principles.

David Bach writes with a convincing voice but it all came about through the story of the McIntyres. In fact, the financial advice in this whole book was drawn from the financial success of the McIntyre’s – but they sure revved up an internal flame to replicate their methods of handling money. If there was one thing I wanted to do after reading this book, it was to live like Jim and Sue McIntyre.

Here are a few highlights of the book:

- The Story of the McIntyres
By far, the story of this happy couple free of financial worries is one that surely invokes envy – and it is also the foundation for rest of “The Automatic Millionaire”. They represent the lives that the majority of Americans strive for:

• a solid nest egg
• substantial savings
• post-retirement income
• children they don’t need to support
• homes without a mortgage

- Pay Yourself First
The lack of willpower to save before spending is identified to be a core reason for the corresponding lack of financial success while using the popular expense tracking tool called a budget. The basic principle of Pay Yourself First is to save a small portion of your paycheck before you even see it. Whether it is in a savings account or retirement account, Bach tells us to put what we earn into ourselves and the future.

I have seen firsthand how an increase in income has also led to an increase in spending – I got the iPhone with my first paycheck after getting a job. If I had seen a smaller amount in my checking account after getting paid, I might have held off on picking up the latest gadget.

- Financial Automation
The perfect compliment to Pay Yourself First would be to automate it. First into your 401K, then your savings, and whatever you can into your IRA – all of which can be funded automatically. Set your bill payments to be paid automatically as well. By setting your savings priorities first automatically, anything you have left would be spendable to your discretion. With online banking and many financial institutions conducting their business through the Internet, automating your finances is psychologically beneficial and much more doable.

“The Latte Factor”
My non-existent relationship with coffee doesn’t rule out the fact that everyone has a blind weakness when it comes to spending. A$4 latter per day among many other little things that we buy over the course of the day can add up to huge amounts over the course of a year. My “Latte Factor” is actually small snacks like cookies and chips.

How dedicated can one be towards dealing with their “Latte Factor”? David Bach may help you identify the things in your life that is costing you a better financial future but I don’t think that telling someone to stop buying their cup of coffee is going to work. Quitting cold turkey is difficult but I do suggest reducing your consumption. Get a smaller size drink or a smaller bag of chips. Sure, it may not be “worth” it but I do believe cutting small expenses can lead to a big difference.

Overview
For anyone who is considered a blank slate for personal finance advice, “The Automatic Millionaire” is a great way to start. In about 5 hours time, it can certainly provide motivation to begin taking control of personal finances.

One thing I suggest is to not get too hung up on the numbers that David Bach uses. Don’t place too much emphasis on the different tax implications of a 401K, Roth IRA, and taxable investment account. Stick to the principles – even if you are already familiar with them. It is easy to be critical while scrutinizing every dollar amount that Bach uses as an example.

The second I finished the book, I was on my laptop logging into my various financial accounts and researching how I can automatically pay my student loans, credit card bills, and deposit funds in my Roth IRA. If these simple things were the effect of reading “The Automatic Millionaire”, then I’d say that it was worth reading!

Related posts:

1. The Psychological Effects Of An Automatic Savings Plan Last month
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A brewing desire to enter the world of photography has finally been fulfilled as I bought a new DSLR camera (the Canon Rebel XS). The first thing that hit me was – photography is an expensive hobby. An all-out photographer could have a camera hanging on his neck that is costs as much as a nice used car – with his gear bag worth even more.

I’ve got to admit that I’ve got the upgrade bug, where I’m constantly looking for new lenses and accessories. It is something is would devastate my bank account and I know it! So, knowing how dangerous it is, I’ve decided to get better at taking good photos and learn before jumping into something I’m not ready for – not like I’m looking to become a professional photographer (though I wouldn’t mind it as another source of income).

Maybe now, I’ll be using some of my own images for blog posts instead of having to rely on the great community of Flickr users.

Enough about photography, let’s check out some interesting posts from this past week:

• Can You Be Content While In Debt at Delivery Away Debt. Most of us got into debt because of the joy of shopping and the new stuff that we get – often at the swipe of a credit card. Now, many suffer the consequences. What’s done is done. But, have you realized that removing debt can make you happy too?
• Automation: Why You Don’t Have to Feel Bad About Spending Ever Again at Personal Finance Ninja. Automation of your finances has be a long renowned method towards financial freedom. When all the right things are done automatically, the extraneous (aka. the spending) should not become a part of a guilty conscience.
• Simple Investing Advice From Warren Buffett at All Financial Matters. Warren Buffett is the one person whose footsteps many aspiring investors want to follow. If you’d follow the advice that millionaires gives, why wouldn’t you take the advice from one of the world’s wealthiest?

Related posts:

1. Weekend Links: Controlling My Parents Roth IRAs Both my pa
2. Weekend Links and Designing My Roth IRA Portfolio As I am ac
3. Weekend Links and Changing Checking Accounts Well, now

This is a guest post from Mr Credit Card from www.askmrcreditcard.com. Mr Credit Card was a student a “long” while ago, but today, he is going to be writing about some mistakes to avoid when you graduate and enter the working world. If you are looking for a credit card, please check out his best credit card deals and offers section.

So you’ve finished your work, you’ve passed your classes and earned a degree that’ll make you rich, right? For a lot of students who’ve recently graduated, this might be the time to really start the party, because after all, you deserve it. Here are some very common money mistakes that recent grads make that usually just end up putting them in an even larger financial burden than they already had.

1. Overspending on the wardrobe. The first thing that many folks who graduate do is to go on a shopping binge on a new wardrobe. After all, you’ve just finished living in pajama pants and hoodies for 4 years, now it’s time to step it up and dress like an adult. Being well dressed and wearing nice clothes does not mean spending all of your money on designer fashion. Shop the sales and clearance and look for deals and great buys instead. If you really do need some fancy clothes for your work, save up for it.

2. Partying and drinking more while out of school. Maybe you only partied a little during school, or maybe not at all and now that you’ve graduated you feel like you should. Just because you’re done with school, it doesn’t mean you’re suddenly able or should be partying and drinking with friends a year afterwards. Also playing Mr. Big and picking up the tab doesn’t always reflect your success to your friends and family, but that you’re wasting money. Look for other ways to celebrate that may be cheaper and save the money for something that won’t give you a hangover the next day. This is almost like the Starbucks effect, but I guess we’ll just call it the Happy Hour effect.

3. Eating out too much. A lot of students are sacrificing great meals during school by eating Ramen noodles and frozen pizza until they graduate, so of course when it’s all said and done they can’t wait to indulge a little in something that doesn’t go in the microwave or come with its own packets of seasonings. Unfortunately, eating out is a bad habit that can end up becoming extremely expensive. The best thing would be to improve your cooking skills from Ramen Noodles to something more conventional!

4. Buying swanky gadgets. Everyone loves gadgets and college graduates are no different. Once you make it to graduation though, this is no time to splurge on brand new cell phones and laptops, nor new plasma TVs and home entertainment systems. Believe it or not, the gadgets that brought you through your 2, 4 or 8 years of education, are still good enough until you can actually afford the newest and swankiest of gadgets. And, if you didn’t have it before, you probably don’t need it now.

5. Abusing the credit cards. This is an easy one to fall into, and not just by college graduates. Upon graduation, the world is yours and all you can think of is jumping on the high paying job that you were trained for and letting the cash roll in. If it takes a little while that’s okay, because you have credit cards and you can pay them later, right? Unfortunately, the high paying job doesn’t always land at your feet as soon as you take your gown off and you certainly don’t want your entire salary going to paying credit cards – something that the recent CARD act hopes to assure.

Don’t abuse your credit cards with the intention of worrying about it later. Never be tempted to carry a balance on your credit card. Do not fall for low interest rate offers. Instead, pay your bills in full every month. Use either a cashback rewards credit card or a gas credit card if you drive and travel a lot and save some money in the process. Once again, remember to pay your bills in full.

6. Not being savvy when grocery shopping. This is similar to eating out a lot. College graduates are probably the last to use grocery store coupons or shop the cheapest prices on bologna especially when they’ve most likely been choking down Ramen for a while. It is still a good habit to get into right away to prevent spending unnecessary gobs of money on groceries. If you have the time, learn to use coupons. There are lots of Mommy sites that will teach you a thing or two on the subject.

7. Celebrating with an expensive trip. Woohoo you’re free from school forever, now you should take a 2 month backpacking vacation across Europe, right? Actually, this is probably not a great idea since a) vacations cost money you probably don’t really have in your pocket yet and b) it’s best to start looking for a career in your field as soon as possible. Rather than enjoy the good life, learn the right to enjoy it. You simply have not earned that right just by graduating. Remember, money talks in this world.

8. Purchasing a new set of wheels. As a college student, you may have spent the majority of your time while getting educated, either carpooling with friends, driving a clunker that has since been silly stringed and covered with class of 2010 graffiti or just plain old walking. Many graduates feel very strongly about purchasing a brand spanking new vehicle upon graduation and end up with a car payment as much as most home mortgages. Take the silly string of your clunker and get as many miles out of it as you can. Get a used car if you really have to.

9. Renting a new crib by yourself. Who’s sick of dorm rooms and roommates? A college grad is sick of it, that’s who, but living by yourself and renting a fancy new apartment is actually a waste of money. At the very least, keep one of your buddies around to share the rent so you can save some money for the house that will be an even better investment in the long run.

10. Forgetting to save for retirement. When you are young and feel like you can conquer the world, the last thing you will bother about is retirement savings. After all, it seems so far away. But always sign up for your company’s 401k plan or whatever retirement plans they offer (especially if they match). If your company does not have a retirement plan, you can set up your own Roth IRA and start investing with less than $1000.

Look Further Down the Road
Sure you deserve to treat yourself, but decide upon a treat that is minimal and won’t put you in debt in the long run. After all, you don’t want to spend the rest of your life in your new career paying off everything you splurged on as soon as you graduate. Make wise decisions now and you’ll reap the rewards later.

Simon’s Note: As a somewhat-recent graduate myself, I’ve made a few of these mistakes as well with a few upgrades in the closet, an iPhone, and a PS3 since graduation. But, it is important to note that many young adults make these mistakes WHILE IN COLLEGE too – which is even worse.

(Photo credit: CarbonNYC)

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We love the word “free”. To us, “free” implies something that doesn’t come at a cost. Free stuff is great. Who doesn’t like free stuff?

We are a society that thrives on capitalism: there is always something to gain in exchange for something else – which should probably hint that “free” comes with a catch because it wouldn’t exist otherwise. Someone giving stuff away could gain as little as the proud feeling of doing something good. Any less of gain would render that “stuff” as garbage.

Most of us feel great when we get something for free and don’t think twice about why that is so. We don’t stop to wonder how it can be free – since many people would prefer to charge someone for something instead of just handing it out.

I’ve recently run into plenty of situations (that most people can relate to) regarding free stuff that revealed to me the truth behind “free”:

- Good old hand-me-downs
There is this always some fashion look that teenagers will often chase at a certain stage in their young lives. I, too, became a part of this generation that bought an item that (even after 4-5 years) is still popular among teens – in this case, it was a discontinued edition of a popular backpack.

My younger cousin who has entered high school is going through this exact same stage and the backpack is still in style – in fact, he’s been haggling me about giving it to him. Now that I find no significant need for it, I let him have it.

He gets a backpack that makes him “cool”. What did I get?

Nothing tangible, of course. I did get the feeling of doing a good deed (somewhat) and for putting a smile and two seconds of joy on my cousin’s face. Making others happy makes us happy too right? Another perk is uncluttering. It has just been taking up space in my room since I graduated. Giving it away would be one less thing in my room.

- Buy one get one free
Mmm… For some reason, “free” just triggers the inner shopaholic in everyone. Maybe that is why the field of neuromarketing exists – the study of sensorimotor, cognitive, and affective response to marketing stimuli (according to Wikipedia). Despite practically saying the same thing, “buy one get one free” is more likely to induce a shopping spree than “two for the price of one”.

A clothing retailer (as have many stores) was having a sale to prepare inventory space for clothing for the coming spring. The ad stated that jeans were buy-one-get-one-free. Sure. I needed some new jeans so I’ll just pick up two pairs.

I walked out of the store with two pairs of jeans, two shirts, and a hoody. What just happened there?

The two primary goals of their use of “free” was beautifully accomplished as it was able to get me to walk into their store and spend money while my shopping trip helped get rid of out-of-season inventory. Like all other sales and discounts, the intent is to get you to shop, which would lead to spending – and “free” does this with flying colors.

- A free book
Ever gotten something free and you just couldn’t help but gloat and spread the word? And soon, everyone knows about it – such is the power of word-of-mouth. Some companies have realized the skepticism of shoppers and uses “free” to lure in one shopper, who brings in more shoppers, who bring in even more shoppers.

Like many other bloggers out there, I get free stuff so that I can act as a trusted (at least for what it’s worth) middleman with an unbiased (again, I try) voice. So occasionally, I’d get a book, service, or product for free in exchange for an honest review here on Realm of Prosperity.

To us bloggers, having our blogs recognized as a viable avenue for trustworthy opinions is flattering. But, it isn’t necessarily the best deal since a thorough review of any product or service could potentially be worth more money than the value of the free product or service. If Apple gave a few free iPads to the staff of TechCrunch, their review serves as exposure, marketing, and advertising which could drive a huge number of sales. A “free” $500 just bought a dedicated review that one would have charged thousands to write.

Take a Second
So the next time something free comes along, I’d take a second to ponder the benefits to the other party that comes from such a kind gesture. Although I wouldn’t totally disregard that there is a very rare chance that such a generous act could come from a sincere individual – but I tend to be a skeptic.

I think it is safe to say that any commercial entity that’s offering “free” stuff is using it as a marketing tactic. For other situations, it may not be so clear-cut to decipher. That’s right ladies: think twice before accepting that free drink at the bar (guys are going to lash out on me for that one).

(Photo credit: frankh)

Related posts:

1. Suspicious Terms That Ruin Great Deals In the mid
2. Why You Shouldn’t Go Shopping On Black Friday There are
3. Comparing Prices Was a Bad Idea It’s alway

The PineCone Research panel has just opened up again and they are looking for new members! I’ve been with them for over two years already and they are by far the best paid survey group out there.

From the referring links that I check through SiteMeter, I see that many of them arrive at my blog in search of this highly rare chance to be a part of such a great research panel. PineCone Research typically has ads on certain websites and clicking these ads are the only way one can apply to become a member. It is a highly selective and exclusive panel with swift payouts of $3 USD per completed survey. I know many people are looking to be accepted into this panel. PineCone Research is certainly at the top of my list of online money making opportunities.

They sent me an email asking me to reach to other would be interested in joining.

So, if you’d like to join, click this link.

They do pick individuals of certain demographics. If you are selected to join, you should receive an email within a few days that you’ve been chosen.

Note: Only one member per household.

Sign up before it expires and good luck!

Related posts:

1. Pinecone Research Signup Link – March 2010 The PineCo
2. PineCone Research Signup Link – October 2008 The PineCo
3. Pinecone Research Signup Link – September 2009 The PineCo

Deceptive businesses exist all around the world and we hear stories of fraud and scamming. The extremity of such deceitful practices is unknown until it hits close to home.

Among the common fraud schemes such as Nigerian money transfers and pyramid scams, there is the popular magazine scam – the one my friend became a victim of.

What Happened the Friend
Johnny, a close friend, was a subscriber to ESPN Magazine when he got a call from a representative of “World Wide Readers Service”. The caller went straight into offering a number of other magazines in addition to Johnny’s current subscription of ESPN Magazine for a discount price of $50 per month. Assuming it was a legit offer (since they knew of his current subscription with ESPN), Johnny gave out his billing information.

For the following four months, Johnny saw a charge on his monthly credit card statement for $49.99 without receiving a single magazine in the mail. Upon realizing that he had just became a victim of a telemarketing magazine scam, Johnny cancelled his credit card to prevent the company from charging him again.

Seeing that they weren’t getting their monthly dose of scammed money from Johnny, they gave him a call to obtain new credit card information – along with the threat to report him to a collection agency if he failed to do so. The next obvious step was to request a cancellation to stop these ludicrous charges. Their response: Sure. Just pay the cancellation fee of $1,100.

Apparently, they claimed that Johnny had a 3-day cancellation period in order to avoid the cancellation fee. But really, who get can get five different magazines to an address within three days of ordering? And, I should mention that all their contact numbers are supposedly out-of-service.

What they used to hold him accountable is a voice recording of the initial phone call in which he entered a verbal contract with them. Any affirmative response could be added into an audio editing that actually makes him sound like he agreed to their terms.

The cancellation fee is quite a steep amount but it is holding Johnny’s good credit as hostage. The company had strategically put an amount which was large enough that someone would rather pay it than hire a lawyer.

What Did Johnny Do?
Well, Johnny decided to pay the cancellation fee of $1,100. He used a voice recorder for all calls between him and the scammers. He also requested a written letter of cancellation. The entire ordeal was a reason for constant worries and many sleepless nights – he just wanted to get it over with.

Was there a better approach that Johnny could have used in handling his situation?

Surely, he probably could have pursued legal advice and action. It would have been a taxing endeavor (both mentally and financially) despite he wouldn’t yield to the scammers’ demand.

But, he’d rather have this problem out of his life as soon as possible. Despite being out $1,300, Johnny learned a valuable lesson and is glad that it is all over now. There is very little he can do now other than sharing his story in an effort to prevent others from becoming a victim.

How to Avoid Becoming a Victim
Avoiding these magazine scams is easily done by becoming a savvy shopper. Most people would think “this is too good to be true”. Aggressive sales tactics play a big part in the success of these bogus companies.

• Confirm the affiliation of the caller. Note the details of a telephone offer from the company. Call the office company number and inquire on the offer details.
• Never provide any personal or financial information to anyone over the phone (expect trusted sources). Once you provide personal and financial information, it implies that you agreed to something. This will jeopardize your privacy and credit – and it looks bad for you if you decide to take legal action.
• Perform a quick Google search with the “name of the company” and the word “scam”. Google will provide you the best and fastest way of determining the legitimacy of a company. Any signs of shady business practices means you should hang up right now.
• Do not say anything indicating your agreement to a verbal contract. Make a note to not say “yes” or “I agree” to a telemarketer. Altering a voice recording is quite simple.
• Request paperwork and info/terms. Having everything in a written document is a way to obtain proof of agreed terms and details. If you want to cancel anything, request a letter of cancellation. You’ll have proof ready when they decide to dispute your cancellation.

Johnny hopes that sharing this story and experience would help others avoid becoming victims of similar companies in the future. And, I hope that everyone who stumbles upon this article through a search for “World Wide Readers Service” will realize that they are a scam before falling prey to them.

(Photo credit: jepoirrer)

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One year ago, I was able to use TurboTax to file my own tax return since it was quite easy because I was still in school. A small, simple W-2 form. A few trades. A few dollars in savings interest. And that’s pretty much it. Done in 15 minutes.

Now out of school, I’ve got so much more going on. In addition to just regular employment, there is freelancing, blog income, and student loan interest. This year introduced a big part of taxes that I had been mystified by – deductions and credits. With Realm of Prosperity picking up steam, I might have to seriously start considering this blog a business.

Even if you don’t plan on filing on your own I think it is a great educational experience to use tax preparation software to compare your results with those of a professional accountant.

On to some interesting articles from around the personal finance blogosphere:

• Is Paying Kids for Good Grades Wrong? at Darwin’s Finance. While any incentive to get good grades would have been great, I never got a penny for doing good in school. In fact, I studied so I wouldn’t get punished – not to make some money. Stereotypical of Asian families to beat their kids if they don’t meet the expectations.
• Take Your Competitive Resume and Tweak the He#$ Out Of It! at MyLifeROI. Unemployment rates haven’t seen any good signs lately and the world is becoming more dynamic, which means our resumes require more of a sparkle than usual. I’ve revised my resume a few times and you should too.
• In China, It’s Sexy To Save!! at Weakonomics. What a lovely article covering the harsh truth of how things work in China through the study of economics, relationships, and biology. I don’t know if it was a good or bad thing that I was born in the U.S because I’d be super sexy in China (since I like to save).

Check out this guest post I contributed to Free Money Finance:

• What War Strategy Games Teach About Building Our Own Financial Empires

Realm of Prosperity participated in a carnival:

• Carnival of Personal Finance #242 – Fun Tax Facts at Cash Money Life

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3. Links to Carnivals 8/28/08 This week

After calculating his interest costs for the month of January, @MattJabs exclaimed in a recent tweet of how he was paying $40.13 per day towards interest on debt that he currently owes. Talk about a hole in your wallet!

His post made me grab the calculator to do the same thing he did. Although I only have to pay interest on my school loans (credit card is at 0% introductory rate), I wanted to see how much money I was leaking thanks to interest.

Since my parents bought out one of my student loans, I used the figures from my January student loan statement. On about $8,800 of college debt, I paid only $39.18 per month towards interest – which equates to $1.26 of interest per day. I am fortunate to be looking at such small numbers but I’d still like to keep that money instead of giving it away. With about $40, it could go towards a nice automated savings plans (or a treat such as a Netflix subscription or more text messages for my iPhone).

The Frightening Cost of Debt
Interest is an unnecessary expense and it creates deadly spiral – it buys time and smaller debt payments but it is time and small payments that actually puts us deeper into debt. The more money one can put towards the principal, the less one will be paying in interest.

Take out your own calculator and find out how much money you lose on interest per day. You don’t have to be a stickler and count for every penny. Just add up the interest that you are paying for all your debts and divide it by 30. This will give you a rough idea of how interest is killing you.

Even if it is just a few bucks per day, it is quite scary to see that you are losing money on a daily basis because of your debt.

A Great Way to Motivate
Now just think this to yourself:

I work hard every day to put food on the table for me and my family. But, every afternoon on the way home, a thief robs me of $40 cash from my wallet.

Matt watches $40 vanish every day because of his debt. Watching money disappear like that serves as fuel for his anger and hatred towards debt – which ends up being a great reason to rid of that debt even faster.

Wouldn’t you be mad if you became a victim of a magazine scam or fitness club scam that takes $40 from your checking account every month for no reason? Is $40 per month in interest any different?

(Photo credit: Thirteen Of Clubs)

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