Blogging Away Debt Blogging Away Debt follows real people on their journey to debt freedom — with tips on the debt snowball, budgeting, cutting expenses, and staying motivated.

by Tricia

Today I have a guest post from Debbie Dragon. She’s a writer for DestroyDebt.com, a website dedicated to helping people find their way out of debt and into a more rewarding, financially secure future. The website also runs one of the forums that I mentioned in the list of debt forums that I have found.

Most people make New Year’s resolutions, and the majority of people probably include “lose weight” as one of their top resolution goals. But what about your finances? Isn’t the New Year a good time to resolve to make yourself more financially-fit, as well?

If you’ve got credit cards, loans, and other sources of debt, it can often leave you feeling discouraged and wondering how you could ever pay it all off. Becoming debt-free is a possibility, and there is no time like the present to make it happen. Here’s what you can do to get started to a financially-fit you in 2008:

Know What You Earn

I’m not talking about what you earn on paper for your annual salary; I’m talking about the amount you actually see in your paycheck after your deductions are taken out. How much do you make each month after you’ve paid your health insurance, work loans, taxes and whatever else is taken from your pay before you even see it?

Know What You Owe

Take an hour or two and make yourself a detailed list. Write down everything you pay each month, the minimum payment due, the date it’s due, how much you owe to be free and clear of that debt, and what the interest rate is. For expenses you don’t pay monthly, estimate the amount you do pay (quarterly or annually) and then break it down into a monthly amount. For example, if you average about $1200 a year on car maintenance and repairs, include $100 per month for this expense.

Once you have your list of everything you owe, look at it again. Did you forget to include your gasoline? Did you include your daily coffee at Starbucks or the newspaper you grab on your way to work? If these are things you pay for more often than not, you must include them as your living expenses (unless you are going to change your habits and stop buying these non-essentials immediately- which is a good idea if you’re looking to get out of debt!)

Create Your Debt Repayment Plan

Going someplace you’ve never been is difficult without a map or directions of some sort; getting to a debt-free status is just as difficult without a real plan. Your debt repayment plan is your roadmap out of debt and into a financially-fit lifestyle.

Determine what areas of your “what you owe” list can be eliminated or reduced. Do you really need to pay $102 a month for cable tv, just so you can have high definition or 234 channels? Can you make coffee at home and skip the daily stop at your local coffee shop, and bring your lunch from home instead of getting fast food? These are all areas that seem like such an insignificant amount when you’re buying it; but over a year’s time the amounts add up and could go a long way to getting you out of debt if you eliminated and reduced these non-essentials.

Once you’ve narrowed your list down to the essential expenses, decide how much you can comfortably afford to pay off on each account, each month. The Snowball Method is highly recommended, as each time you pay off an account you will have that much more money to apply to the next account on the list, and as your payments snowball bigger, the amount of debt you owe is decreasing. Another method many financial advisors will recommend is paying off accounts with higher interest first.

Regardless of your method of choice, it’s important that you create a plan on PAPER, and hold yourself accountable. Just as a weight loss resolution requires determination, motivation, and discipline- the resolution to become more financially-fit requires the same.

Thanks, Debbie for the guest article! 🙂

by Tricia

We are always on the lookout for ways to save money. Lately, we have been trying to buy things that we use a lot in larger quantities. For the most part, the bigger the package, the lower the price (although there are exceptions – always check!).

One thing that is heavily used in our household is ketchup. I personally don’t use it a lot (maybe only on fries), but my husband puts it on everything fried or fake-fried in the oven – steak, chicken, pork, fish, french fries. My son takes after his father. With two ketchup-loving people in our house, we go through a lot of it.

When you look at ketchup on a per bottle basis, it can get a little expensive. Since we go through so much, we decided to buy a large Heinz container of ketchup as well as a $2.00 pump to go with it. Instead of buying bottle after bottle of ketchup, we would buy large containers of ketchup (any brand) to refill the Heinz container.

During our last trip to Walmart, my husband grabbed a can of Hunt’s ketchup. He was excited at how much ketchup you could get for a low cost. As he placed it in our cart, I took a look and gave him a smile that showed my approval. When the both of us are on board with saving money – it’s a very happy feeling.

Tonight, my husband fried some chicken wings we bought on special and some french fries. Our Heinz ketchup container was empty, so my husband grabbed the new can of Hunts and opened it. He noted that it was a bit runny, and we both at first shrugged it off since we haven’t had Hunt’s brand in a while. I grabbed a spoon to dish out some ketchup for my son. As my spoon swirled around the can, I started getting that feeling in my stomach that something was terribly wrong.

“Look!” I told my husband.

“What?”

“Look at the can!”

“What?”

“Look!”

My husband smiled as he finally realized that in bigger wording in the middle of the can it stated, “Tomato Sauce.”

Now we have 6 lbs, 9 ounces of tomato sauce. I’ve already placed it in containers and put it in the fridge. It’s not a complete waste because we do use tomato sauce to make our own pizza sauce. Although…I’m not sure we could get through the whole can before it goes bad. I have a feeling we’ll be searching the net for other things we can make with the sauce before it goes bad.

Lesson learned – if you think you are getting a great deal by purchasing a can of ketchup, make sure it is a can of ketchup! 🙂