How to Avoid Debt for Christmas

avoid debt for christmas

All I want for Christmas is You

Ahh Christmas is almost here.  Christmas season is the best time of the year for many, but it could also be one of the most stressful times for people who are in debt and can’t afford to buy gifts.

There is just so much pressure put on us to buy everybody and their mother a little something something for Christmas.  If you don’t, then you are just like Ebenezer Scrooge.

The pressure comes from everywhere.  There are countless Christmas commercials telling you what you should buy, there’s Christmas music everywhere (doesn’t tell you to buy stuff, but it reminds you two months in advance that it is Christmas season and that you should start getting ready), and there are also those who keep asking, “What are you getting [INSERT NAME] for Christmas?”  It is not even November yet!

Don’t get me wrong.  I love Christmas.  It is a time to get together with your family and loved ones.  Everybody seems to be happy – maybe tired of the Christmas songs, but happy – some of us gets a little break from work, and we get gifts.

Yes, I like gifts too.  The problem I have is when people get into debt just to buy somebody else a gift.

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How To Avoid Credit Card Annual Fees

avoid credit card annual fees

No more annual fees!

Being an avid reader of personal finance blogs/websites for the last year or two, I’v noticed that there are two schools of thought when it comes to credit cards. Those who say credit cards are pure evil and avoid them at all cost, and those who embrace credit cards and use them to play the rewards game.

I’m in neither of these camps.

I definitely don’t avoid using credit cards.  Not because I don’t think they are dangerous – they certainly could be in the wrong hands – but because they are very convenient.  I use credit cards more that I use cash.  However, I only use credit cards when I know I have the cash to pay for whatever I buy.

For example.  I budget $150 for groceries per month, but instead of paying cash when I go food shopping, I pay with my credit card.  I know I can’t spend more than $150 because then I’ll go over budget.  At the end of the month, I take the $150 that are in my bank and pay off the credit card.

This allows me to not have to carry cash all the time and also earn some rewards.

Now, I like earning rewards, but I don’t play the rewards game.  The game where you sign up for 10 or 20 credit cards and spend X amount of dollars a month to get X number of points.  I’m impressed by the people who are able to do this, but I’m just not one of these people.

I spend what’s in my budget and if I get rewards then cool, and if I don’t get rewards then also cool.  I don’t try to manufacture spending to claim rewards… or maybe not yet.

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The Best Way to Pay Off Debt

best way to pay off debt

Photo Credit: StockMonkeys.com

Getting into debt is very easy.  Just start buying stuff with your credit card and don’t pay it off each month.  But getting out of debt is very difficult.

The average American family with at least one credit card has around $16,000 in credit card debt (2012 data).  Many of these families are trying to erase that debt but are having a hard time accomplishing that.  There might be many different reasons why this is so, but one of those reasons might be that they’re not approaching it the right way.

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Philadelphia Restaurant Doing The Right Thing

Philadelphia Restaurant

You could still tip, though.

I’ve never worked at a restaurant, but I know some people that have worked at one… I’ve also eaten at a lot of restaurants.  What can I say?  I like food.  And this experience gives me the right to ask, “why don’t restaurants pay its employees a decent wage?”

The federal minimum wage for tipped workers, such as servers, is $2.13 per hour, and has been so since 1991.  This is pure insanity.  How can somebody make ends meet making $2.13 an hour?

I understand that tips could make up for the low wages, but not every server makes money from tips.  If you are a server and are scheduled to work during the slow hours, you are out of luck.

Because of this, servers experience almost three times the poverty rate of the workforce as a whole.  Servers also rely on food stamps at nearly double the rate as the general population.

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4 Ways to Replace Cable and Save Money

replace cable

Cut the cord, man.

Okay let’s admit it.  We’re TV addicts.

The average American watches 5 hours of TV per day, according to a report from Nielsen.  Five hours a day!  That’s a lot of TV watching.  But that’s understandable, I mean how else are you going to keep up with the entire Kardashian family?

But just because we are addicted to TV doesn’t mean we have to pay over $100 a month to watch our favorite shows.  And $100 is a low number.  It is estimated that the average price of cable TV will hit $123 a month next year.  That’s $1,476 a year!

I’m not suggesting you stop watching TV – I watch more TV than I’d like to admit – all I’m saying is that you should consider paying less for your services.

I haven’t had cable for over a year and I don’t miss it at all.  True, I have to wait a day to watch my favorite shows, but as long as nobody ruins it by telling me what happens, one day is not that long of a wait.  I’ve noticed that people nowadays are pretty good at not telling me what happened.  They usually ask, “Oh man, did you see it last night?”  No, and don’t say anything or I’ll karate chop you in your throat.

Anyways, below are a few ways you can replace cable and save money in the long run.

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The Friday Five – Halfway Done!

Writing challenge

I believe I can fly!

Oct 10th – Oct 16th

Welcome to another edition of The Friday Five. This is where I share what I consider the week’s top-five money related articles from around the web.  There are a lot of great personal finance websites publishing amazing content daily and I feel that I must share them with you.  I hope you enjoy my five favorite articles of the week.

If you haven’t, please read this week’s posts on How To Track Your Spending and on Living On Campus Cost More than Off Campus (Infographic).  Please don’t forget to follow me on Twitter, Google+, and like Million Dollar Ninja on Facebook.

In no particular order here are The Friday Five

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Living On Campus Costs More than Off Campus (Infographic)

living on campus

NJCU in ‘da house!

With the cost of higher education in the U.S. rising tremendously each year – over 500% since 1985 – it is no wonder students and parents get into so much student loan debt.  I mentioned that there are proposals being written to try and change that, but until those proposals are put in place, we have to deal with this price gouging if we want to get a college degree.

There are a few things we can do to avoid student loans, like 529 plans and working through college, but the fact remains that we still have to pay for tuition – unless we get a scholarship.

A college education is becoming more and more of a necessity.  Study after study has shown that people with a bachelor’s degree earn on average 66% more than people with only a high school diploma.

That being said, there are definitely ways to lower the cost of a college education. You could go to a in-state public school for example.  But even if you go to an out-of-state school, you could potentially save a lot of money by living off campus.

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How To Track Your Spending

track your spending

Write it down!

The number one rule of wealth management is “Know where your money is going.”  Don’t look it up, it’s an unwritten rule.

Everybody knows how much money is coming in every month.  They just have to look at their paychecks.  But not everybody knows where all of that money is going.  Sure, they know about the big bills: rent/mortgage, student loan, car payment, utilities, phone, etc., but many don’t remember at the end of the month what they spent at the beginning of the month.

This causes them to always ask, “Where the hell did my money go?”

I certainly was one of these people.  Every month I used to ask myself the same two questions.  The question above and “What did I buy this month?”

I was really fed up with that routine so I decided to write down every single expense I made… I mean EVERYTHING.  After a month I looked back at my spending and was able to figure out where my money was really going.

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The Friday Five – Why Isn’t College Free in The U.S.?

why isn't college free

Education Should be Free

Oct 3rd – Oct 9th

Welcome to another edition of The Friday Five. This is where I share what I consider the week’s top-five money related articles from around the web.  There are a lot of great personal finance websites publishing amazing content daily and I feel that I must share them with you.  I hope you enjoy my five favorite articles of the week.

I didn’t have a Friday Five last week because there was just so much to say about our Trip to Philly.  But we’re back!

If you haven’t, please read this week’s posts on Fitness and Writing Challenge and on Good Debt Vs Bad Debt.  Also don’t forget to read last week’s post on Our Trip To Philly – Part One, Our Trip To Philly – Part Two, and on You Can’t Go To Philly and Not Run The Rocky Steps!  Please don’t forget to follow me on Twitter, Google+, and like Million Dollar Ninja on Facebook.

In no particular order here are The Friday Five

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Good Debt Vs. Bad Debt

Good Debt vs Bad Debt

All debt is bad… or is it?

Debt is such an integral part of our daily lives that most people think it is the only way to live.  I can’t even count the amount of times I’ve heard people say, “I will always have debt.”  This makes me sad because it doesn’t have to be so.  Debt is not necessary.

That being said, I’m not opposed to certain type of debt.  I would even go as far as saying that some debt is actually good debt.  Okay I take that back, no debt is good debt, but you could argue that some types of debt are not “as bad” as others.

Good Debt – a.k.a. A little better debt.

Good debt is debt that helps you build assets, helps you make more money, and/or increases your net worth.  Some examples of good debt include:

Home Loan – Okay, I personally don’t think that buying a house is a must, but I also don’t think that getting a loan to buy one is a bad idea either… as long as you can afford it.  The value of a house usually increases over time so a house is more of an investment than an expense.

You have to understand though, that the value of a house doesn’t always increase and there’s definitely the potential of losing money, so I wouldn’t advice you to purchase a house unless you are ready.  Meaning, you have a 20% down payment and an emergency fund of 6 months to 1 year worth of expenses in case something goes wrong.

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