Impulsive Spending

I have come to the conclusion that for the next 8 months this blog will revolve much around me finishing up getting out of debt. Last week I thought ok I need something fresh and new every day but I realized that my journey can sometimes be enough food for thought for some of you people out there. Again I always want to share new info and I will, but I created this blog to journal what happens to me while becoming debt free, so if I start to seem self absorbent thats because I am at this point in my journey and hopefully my thoughts, ideas or mistakes can inspire another.

With that said, I will blog more and more about each day verse trying to find something new and fresh, I mean my life really isn't THAT boring lol.

So yesterday my computer crashed for the 100th time since God knows when. I brought this dell inspirion back in 2003 I do believe ( actually let me go check my credit report "pause") found it "date opened 2004". Wow that was 6 years ago! seems like longer but 6 is enough years to be having the same computer even better the same LAPTOP because they just don't hold that much info. At any rate me and this laptop have gone through it. I feel like I did when I got my first cabbage patch doll (her name was Wendy). I took her everywhere and I traveled a lot when I was a kid to visit my dads side of the family in Arizona. There was this one time Wendys arm ripped, and I almost lost it. I remember yelling to my auntie "What are we gonna do!" I couldn't be without my doll for a moment because she was my best friend. My aunt as talented as she was sewed the arm back on and it was like she was a brand new doll again. Bad analogy I know. Yesterday when it crashed however I was fed up, I had just gotten the rent check from my tenant and I was ready to head to walmart and spend a minimum of $300 on a new computer and I really didn't care what it was. All I knew was I WAS SICK of the thing breaking down on me randomly.

So while im trying to see if the thing is really crashed (real blue screen or fluke) I realized it was almost time for my fpu class. Walmart will have to wait. So I head to class and by the time it was over I had realized there was no need to buy a new computer. The lesson Tuesday night wasn't even about spending, it was about creditors and totally unrelated to my dilemma, however the 2 hours gave me time to think about a few things.

1. I had a recovery cd, plus the driver cd to reinstall everything without a hitch at work I just need to wait to get it.

2. The same computer repair people I have been going to have been fixing my problems for FREE and I have been there at least 3 or 4 times not only getting free help but additional help above and beyond what I came there for that could easily amount to $500 bucks or more.

3. Had I rushed to walmart I probably would have gotten something I wasn't completely happy with and would have been mad I wasted money and didn't get what I wanted because of my lack of patience.

4. I realized there wasn't REALLY anything of major importance I needed to do on the computer other than blog and play on facebook which I can do with my iphone turned itouch.

Lastly I remembered debt freedom is only 8 months away and when this is all done I can take time to get something I really want after all whats another 8 months if its already been this long right. I have learned over the last two years that the things we tend to dramatize most of the time really isn't that dramatic as they appear to be. Even more so we feed into drama by sharing our "Crisis" with others so they can feed into OUR dramatics even more making it seem once again more valid than it really is. The more I work the program the more I have learned to think first before acting which hey if you don't it can cost you more than you anticipate. Its kinda like my co-worker who said she needed a new car the other day because her windshield wiper motor when out..... um that can be fix lol

Today my computer is back up and running with no cost to me other than about 10 minutes of my time. What do you think about being impulsive ?

Be Our Guest!

The weather here in Michigan has finally broke and I am eager to get into some new clothing however I haven't the slightest clue about bargains! So with that said if anyone wants to do a guest blog here at Divine and Debt Free PLEASE let us know, im open to all Ideas!

Thanks!

Gratitude Friday Living out your passion

I am grateful mostly this week for having a job. Yesterday was my first time being written up for tardiness in 5 years that I have worked there. It was a bit of a wake up call and it make me realize just how much I have to be thankful for. 1 they don't fire people on the spot, and 2 my boss even though she did was she did still was kind to me yet firm which is hard to come by especially when I give people my puppy dog eyes they just can't help but resist the love lol.

If you have a dream you should follow it but also be responsible. Hard work always pays off in the end and let no one tell you otherwise.

So is anybody grateful today?

Work From Home Ultimate List

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Blog Throwback (Are You Broke?) Don't fake the funk

I started a blog in 2007 which shall remain nameless unless you already know the name of it lol. That chronicled just about everything going on in my life. I started to read some of those old entries and all I can say is I have GROWN! Anywhoot, here is an entry I did (April 4, 2008) on debt and I thought it was pretty interested to know 2 years later everything I wrote on the subject still remains true. Check it out!

Ok as you all know I have been on this huge financial kick for the past 4 months. Had a large amount of set backs and finally able to get the ball back rolling. As I was enjoying my friday evening I was reading blogs one to be exact called stuff educated black people like (yall know bout it). Anyways I started to wonder about us folk and what it is that actually makes us successful people.

Most Educated folk after they get their college degrees move outta state and make there first home purchase, get their first car, and take that first trip to another country. At first I used to be close minded thinkin yea this was really how to show people you made it. After I hit rock bottom from losing just about all my stuff (and mind) I started to realize that all that stuff didn’t really make sense and the friends I thought I was keeping up with had less than I did. So now I have a new list of what it means (to start) to be financially successful along with your college education. Just because you have an education does not give you permission to be stupid about money.

1. Don’t buy a house unless its more than just you living in it and if you do pay it off in 15 years or less

Yea I know we look good and we can show off but truth is now days unless you are purchasing a home for 50 cents on the dollar its not a wise choice. Most of us if we travel and work them 75k and up jobs dont even have time to enjoy that lavish home so it just sits there looking cute and going down in value. Also paying a home in 15 years will cost you more on the front end but will save 10’s of thousands in the long run. Most folk say they don’t plan to own a home more than 5 or 10 years but truth told if you pay it off you can have this as an asset in addition to the new home you purchase, instead of dumping all the interest. Also the so called tax deduction you think you get from owning a home (per the irs) is not really helping you (ask me for more info on this)

2. Pay off your student loans

We all think its the American way to live in debt and have student loans but truth is the longer you keep them the longer you will be broke. I looked at my student loan balance it said it would be an extra 7,000 if i drag my payments on for life instead of paying off the original 11,000 I actually owe, the rest is interest. It is a wise choice to pay off all your loans regardless of what they tell u in college. also stop going to school trying to avoid paying back loans and get a job!!!!

3. Pay for cars with cash Thats just smart and its what rich folk do they don’t typically drive BMW’S

4. Actually contribute 15% of your income to retirement some kinda way

Please don’t believe ssi will be there when you turn 65.

5. Stop borrowing money

Buying everything on credit is not cute anymore even if it is a 0% interest card.

6. Have a net worth

The definition of net worth is what you own – (MINUS) what you owe = what you are worth. meaning if you had to get rid of everything what would you be left with. If all your money is tied up in house payments credit cards, car payments, bikes, boats, and time shares and when you add it all up hello?? your broke. You have to actually have something you own to be wealthy and also not have debt if you owe 500,000 on stuff and none of it is paid for unless you got 1 million in the bank your broke

7. Stop Using credit cards

Who wants to argue with me about this really?

8. Learn how to really invest in real estate

This does not mean borrowing the equity against your principal residence to go buy rental properties and fix and flip its (this is not property ladder on TLC). Those people who do that don’t have money and neither do you. If you wanna be a tv look a like, the least you can do is pay cash for your investments and us cash to fix them up. If all those rental properties you never sell go belly up or u lose your job God forbid, your house will be foreclosed on first!!! this isn’t cute when you have mouths to feed.

9. Save Money for stuff you want to buy

So I know we live in a get it now pay for it later society but honestly if we saved for it for a couple months you might not feel such stress later on when your not using it.

10. Don’t get a loan to start up a business

Most new businesses cost under 5,000 to start so you do not need the SBA to get off the ground!! Stop being lazy, if you want to advertise print some flyers and drive around town and post them, make a website, tell friends, work your butt off. You don’t need hundreds and thousands of dollars in capital to start a company and make it work.

I am learning these things now. It took me losing most of all I had to figure out I really had nothing. I don’t want to live the life of my broke friends who look like they got it going on. I want to be the one who actually has money to lend and not need it back, actually take real vacations and actually own nice cars and houses. Most importantly I want to give back to my community we can’t do that financially or spiritually if we work 100 hours a week trying to pay a house note.

I am currently working on getting out of debt, its not cute to be in it. Its not fun getting out. I have to live on nothing and work my butt off for a number of years (hopefully less that two) but it will be a great feeling when I say I truly have a net worth.

Mikki

High-Performance Achievement 8 steps of action

When I was at the Dave Ramsey live event we picked up this audio cd of Dave at a meeting for his employees. The tape was so great I decided to share the 8 Steps outlines on the tape in my opinion on how they work.

1. Establish a big, hairy, audacious goal - In the tape the goal was running a 26k marathon. In my case its becoming debt free by October.

2. Plan out in the incremental steps that will lead you to accomplish your BHAG. To become debt free I have taken on what is called the baby steps: baby emergency fund, debt snowball. Both have worked great in the last two years and I believe working the baby steps is by far the best plan out there but it only works when you get intense!

3. Fine people who have accomplished the same or similar goals and find out how they did it - At first I didn't have a support group or anyone I knew that was on the same path now I have Brad over at enemy of debt (he is debt free and awesome) and a host of other people that are in the PF blogging world. Talk about motivation!

4. Heed the warning from the experts, but don't dwell on the negatives - Some warnings I have found about becoming debt free were: have a blow fund which I didn't listen too and still have problems with it sometimes. As far as the negatives I can think of any but in Daves case they told him to pace and sometimes he wouldn't and also that he would quit at the 2o mile mark, which he didn't!

5. Decide what you are willing to sacrifice to hit high-performance achievement - This was a big one for me, over the last few weeks I figured out getting out of debt was most important to me. Working at the salon is secondary, even dating is not so high on the list (scary right) but I made the choice to put debt first, when this is over I can move on to another BHAG!

6. Keep away from negative people and get around positive influences - Trust me this has been so detrimental to my success. The better things get the more I realize how much I need positivity in my life. Its important to have your own personal cheer team because right when you are ready to quit the cheer team is yelling YOU CAN DO IT!

7. Visualize your plan in your mind repeatedly - I see myself being debt free all the time and its so cool to feel a taste of what it will be like when I become debt free I just can't wait!

8. When you win, enjoy it! Celebrate - I plan too!!

Buying Your First Home

I am excited to have my first reader response question here at Divine and Debt Free! This question comes from Tabitha and I am so delighted to talk about this topic!

I am wondering if you have your house buying process blogged? I am kinda buying a house ( I say kinda because even though I've gone thru underwriting, I still haven't found a home that I'm satisfied with buying--going on a yr now) and am reading everything I can from others who have already bought. From the bits and pieces I've gathered I've sensed a negative vibe from your experience.

First let me say in spite of some negative things I have said about home ownership on this blog, I still do believe its good. Its one of the best investments you can make especially in today's market. However some of my views have changed slightly as I have gained more incite on the topic which we will explore more so let get started....

We have embarked on one of the biggest housing slumps in recent years. I believe a lot of the downturn had to do with people not being able to afford what they purchased (including me). Yes The economy played a roll as well as banks but over all it was due to people wanting it now and fast.

So my first advice is to only buy what you can afford. "But Mikki how do you know how much you can afford?" Let me tell ya for one don't listen to the bank!! They can approve a mortgage up to 4 times of your gross income based on a credit score. Just because they said you are approved doesn't mean you have to take a loan for the amount they approve you for. A good rule of thumb is 25% of your take home pay. This will ensure you don't become what we call "house poor"

Also you should aim to put down 20% to avoid private mortgage insurance, be debt free with an emergency fund of 3-6 months and get a 15 year fixed mortgage (yes I said it). If you don't have this in place then my friend you are NOT ready. Take it from a person who brought a house while broke (me). Don't be mad if you don't fit the bill, its just my advice on how to have a win win situation. I CAN guarantee you if you do it this way you will keep Murphy and his cousins broke, desperate and stupid away from your door step!

So you say "Mikki I have all that im ready!" Ok good now we can move on to the fun part so here we go!!


Step 2 - Get Pre approve and shop rates: This will insure you are getting the best bang for your buck and also explain the cost of your new home, ie taxes, fee's and interest which we call a good faith estimate based on your loan amount. A few things you will need to be pre approved are : bank statements, proof of income and other investment accounts 401k ect... most recent w-2, pay stubs, taxes, and drivers license.

Step 3- Make a list of features you want: Do you want to live in the city or suburb, ranch home or two story, a garage, walk in closets, lots of storage, big back yard, and the list goes on. This will help a good realtor sift out certain homes for you and trust me it can get as detailed as you like it to be!

Step 4- Find the right realtor: Buyers agents don't cost you a penny!! so shop around! in most cases the home owner pays the commission for your agent which means you pay nothing for expert help so why not take advantage of this! Most realtors require you sign a agent agreement form to insure you aren't wasting their time, so before you sign on the dotted line be sure you are happy with your agent they are working for you!

Step 5- Get a home inspector: Just like realtors not all of them are the same so here are a few tips to help you. Interview a few and ask a lot of questions, ask for references from people they have worked with in the past, do a background check, and make sure they have broad knowledge of home systems and structures. Ask how long they have been in the business and make sure they can provide you with a complete report.

Step 6 - Consider the location: You know the saying location is everything so you want to think about how far of a commute from you job it is, do they have a good school district (good even if you don't have children) are you near shopping, churches, freeways ect.... is it a low crime area.

Step 7 - Do a walk through before you sign those papers: Don't expect every seller to own up to every physical detail that will need to be fixed.

Both you and the seller are out to maximize your investment. Conduct a thorough inspection of the home early in the process, looking for signs of damage or poor construction. Consider hiring an independent inspector to objectively view the home inside and out, and make the final contract contingent upon this inspector's report. This inspector should be able to give you a report of any item that needs to be fixed with associated, approximate cost.

Step 8 - Get an inspection: An inspection should review all cosmetic features, mechanical systems and the structural integrity of the home, such as:

• Roof and gutter
• House foundation, basement and crawl space
• Heating and air conditioning systems
• Electrical systems
• Plumbing
• Kitchen counters, cabinets, faucets, etc.
• Bathrooms

Step 9 - Make an offer : Your realtor has access to all sorts of information that will keep you from offering too much or too little on a home. Making the right offer on a home is difficult.When negotiating, always use your realtor to communicate with the seller. Your realtor is your go-to person. He or she will advise you appropriately and make sure you don't get in over your head.

Step 10 - check check check: Again, make sure the mortgage is a 15-year, fixed rate mortgage and your down payment is 10-20% of the home's value. Also make sure that your house payment isn't more than 25% of your monthly, take-home pay. Now is not the time to throw caution to the wind just to get the house you want. Slow down and realistically think through everything before you jump head-first into making this major purchase.

I love the idea of home ownership and all that it means, but I do want this time around to be the right way and I am sure you feel the same way. Thanks again to Tabitha for the question and the Dave Ramsey website for all the tips on buying a home. If I missed something please feel free to send me a message.

Oh yes and those of you who are in a position to buy now, don't forget the first time home buyers tax credit ends In April so get to gettin!!