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March 23, 2011, at 6:00 am If you're new to BFS, please subscribe to my RSS feed. It shows me a vote of support and keeps me motivated to keep your attention. If you have any questions or comments for me, please contact me and I'll get back to you asap. Thanks for visiting! As some of you may know, I don’t read many personal finance books. My tastes trend towards mysteries and suspense. BUT, out of all of the personal finance books I have read, The Automatic Millionaire by David Bach has always been my favorite. I love common sense advice that is simple to use and can make huge positive impacts on someone’s life.
Now I have the honor of reviewing a chapter of David Bach’s new book, Debt Free for Life. Here is my personal take on Chapter 9, Mortgage Debt: How to Protect Your Home and Pay Off Your Mortgage Early.
My Personal Take on Mortgage Debt
I will be honest, I asked to review this chapter specifically. I truly believe that paying off a mortgage early is one of the keys to financial security. Sure, there are worst debts. There are higher interest debts. There may even be higher interest investments. BUT, there is no security blanket in the world better for me than finally being able to live payment free in my own home.
That is why Mr. BFS and I found an affordable home ($114,000), put 20% down, and overpay the mortgage every month. If we just keep on the same track, our house will be paid off in 10 years total or less. We’ll be completely debt free at around age 32 and 33. That will make our early retirement dreams even easier to attain.
Bach’s Breakdown of Mortgage Debt
David Bach has once again impressed me with a straight-forward look at debt and EASY ways to get rid of it quickly! His mortgage debt chapter highlights the benefits of fixed-term mortgages and ways to use them to your advantage. He also gives advice on refinancing or handling a bad mortgage situation.
In my opinion, the highlights of the Chapter 9 – Mortgage Debt include:
—> His wonderfully quick explanation and visual of the tens of thousands of dollars anyone can save if they can afford a 15 year mortgage instead of a 30 year term.
My husband and I would have been looking at a $530 payment for 30 years instead of the $740 payment we have with our 15 year loan, so the decision was pretty easy. It was pretty cheap either way, so why not go with a 15 year term, right?
—> His biweekly payment suggestion and visual for 30 year fixed-rate terms. It shows that anyone who pays half of their mortgage payment every two weeks can shave 5-7 years off their 30 year term and save tens of thousands of dollars overall. Biweekly payments on a $300,000 mortgage at 6% will shave off 6 years and $72,000!
—> Bach also suggests how to switch over to a fixed-rate mortgage if you plan on living in your home for more than 5 years and are in a variable-rate mortgage currently. He follows this with points to pay attention to during a refinance.
—> The last part of the chapter is for anyone in a mortgage crisis right now. He gives great advice to anyone who is currently struggling to keep their home including places to contact and options you may have.
—> As with all of his chapters, there is a small checklist at the end for anyone trying to go after debt freedom for life.
My Summary
Overall, I couldn’t agree more with David Bach. Mortgage debt freedom is an important step to financial security and his suggestions are common sense ways to get there faster. It may not be a brand new idea, but it surely is worth mentioning by anyone as much as possible. Plus Bach has a great way of simplifying ideas without being condescending. I personally enjoy his very straight-forward writing style and appreciate the examples he selects to use. Bach seems like a guy that personal finance geeks like us could have a good conversation with. I give Debt Free for Life my personal thumbs up!
This was an UNPAID, UNSPONSORED review by me, Crystal at Budgeting in the Fun Stuff. I did receive a free copy of David Bach’s “Debt Free for Life” in order to be able to do the review, but I volunteered for it in advance since I did very much enjoy “The Automatic Millionaire” before I ever even knew what a personal finance blog was, lol.
Here are some other chapter reviews from the blogosphere:
March 22, 2011, at 6:00 am
The following is a guest post from fellow blogger Denise from The Single Saver about using freebies to save money. You can find her info after the post, thanks!
Do you utilize free items (aka “freebies”) in your efforts to save money? If not, maybe you should reconsider.
My Recent Freebies
I hunt for freebies on a very part-time basis, but I still manage to save a pretty nice chunk of change through the process. For instance, some of my bigger finds in the last couple months include:
- two 3.5 lbs bags of dog food
- three snack-size bags of Cheeze-Its
- one box of Wheatables
- three bottles of Excedrin
- three Atkins bars
- one container of Yoplait yogurt
- coupons, which resulted in 30 boxes of free Special K cereal
- one bottle of Blink Tears
- many boxes of free tampons
How Freebies Help Save Money
How do freebies help singles and small families (and big families, too!) save money? The obvious answer is they give you a product for free. But they also save you money by letting you try out a product that you may be unfamiliar with – and if you don’t care for it, you have not spent any money in the process. Also, most (but not all) freebies come in single serving sizes, which is just the right size if you are single.
Sure it is nice to get something for nothing, but is it really worth the time to look for them? Yes it is worth the time, mainly because it takes almost no time at all! I am a busy person, and I can assure you that if finding freebies was time consuming, I would not do it!
Strategy to Save Money with Freebies
So what is my strategy? It is pretty simple. I initially chose two freebie-finding websites and I followed them on Facebook (I follow ‘Frugal Freebies’ and ‘The Frugal Girls’, but there are many others you can use). A few times a day, as I scan my Facebook account I look to see if either of these two groups have posted anything new. If I see a freebie that interests me, I take action. If not, I ignore it. This takes just seconds to do. If you aren’t a Facebook user, most freebie-finding websites also broadcast via Twitter.
Tips to Save Money with Freebies
1.) Often you will need to fill in a form to request your freebie. This will usually include your name, address, and email address. If the form requests any personal information like a social security number or credit card number, it is likely a scam. Do not ever give your social security number or a credit card number in order to get a freebie!
2.) Utilize your friends and family. If there is a hot freebie, see if your friends and family wish to receive it, too. If not, see if they will get it for you. For instance, my parents, who do not have a dog, requested a coupon for a free bag of dog food and passed it on to me.
3.) Only sign up for freebies that interest you. Your time is too valuable to spend it requesting things that you will never use (for instance, I don’t even look at the free diaper offers). Also, as most manufacturers put a limit on how much of a product they will give out for free, it is good etiquette to leave it for someone who may have a legitimate need or use for it.
4.) Check the packaging that the free items come in. Most manufacturers will include coupons for the item. If you find the product is one you want to keep using, you can save some money on your next purchase.
5.) Set up a separate email address to use when requesting freebies (through a free service like Google or Yahoo). That way, your personal email box will not get filled up with spam and other offers. Periodically check that email account as manufacturers will sometimes email you coupons and special offers.
Getting freebies is an easy way to save a little money, try out new products, and have fun in the process. For other ways to save money, don’t forget to check out The Single Saver for our “Tip of the Day”!
About:
The Single Saver offers practical, money saving tips in a fun and interactive format. It is written by Denise, a single woman herself who grew up in a small family. A reformed spend-a-holic, she now enjoys the challenge of finding new ways to live a frugal yet very comfortable lifestyle. When not saving money, she is usually spending it on food for her two greyhounds and two cats.
Crystal’s Comments: I actually haven’t really looked into freebies before unless they end up in my actual mailbox. I’m signing up to follow a few freebie websites via Twitter now and will let you know if I come across any stellar deals that make me giddy!
March 21, 2011, at 6:00 am
April 18th is just around the corner and if you are like my husband and me, you may have been putting off the inevitable. But just because you have to file a return does not mean that you will necessarily need to pay Uncle Sam big money. There are several tax tips to make sure that you are doing everything possible to lower your tax bill.
Tax Tips #1: Deductions
Take a second look at your tax return. You may just be able to deduct more from your taxes than you realized to start with. Remember that you can deduct items like uniforms you bought for a job and mileage that you used for any business endeavors. Even the space in your home that you designated solely for a business use can lead to a big deduction. For example, I was able to deduct the office space I use for blogging and my new laptop as a business expense since I only use that space and my laptop for blogging.
Tax Tips #2: Remember Your Losses
No one likes to admit defeat but at tax time, your losses can save you some serious money. Be sure to claim any losses that you took during the year on your investment portfolio including all stock and mutual fund investments. Remember to also write off any real estate losses or losses from theft.
Tax Tips #3: Use Your Tax Credits
There are a bunch of tax credits that you may not realize that you are eligible for. For example, someone that bought their first home between January 1, 2009 and April 30, 2010 for less than $800,000 may qualify for a tax credit worth 10% of the new home’s value up to $8,000 if they will live in the new house for more than 3 years.
Also, repeat home buyers who bought a new home valued at less than $800,000 between November 6, 2009 and April 30, 2010 after living in their previous house for at least 5 consecutive years may qualify for a tax credit worth 10% of their new home’s value up to $6,500.
Tax Tips #4: You Can Still Contribute to your 2010 IRA
Even though we are well into 2011, it’s still not too late to make a contribution to your IRA for 2010. You have until April 18th to max out you’re your contributions for 2010. Why should you miss out on a potential tax deduction that can help you trim your tax bill? Take advantage of the tax savings and save for your future at the same time.
Mr. BFS and I are taking advantage of this extra 4 months to fully fund a second Roth IRA for 2010, but since that involves post-tax contributions, we won’t be seeing in tax benefits right now. I still love that extra 4 months though…
I hope this little reminder helps. Mr. BFS actually did our taxes last weekend and we personally did save a ton by following our own advice. The hardest part was choosing between the Tuition and Fees Deduction and the Lifetime Learning Credit to see which one would benefit us the most thanks to his graduate school expenses last year. It was a nice problem to have and led to a $200 refund despite my blogging income. Yay!
What great tips have I missed? What deductions and credits would you suggest paying the most attention too?
March 20, 2011, at 6:00 am
Since I do plan on blogging full time by 2012, this is the year for a HUGE push. These are the new goals to keep us on the right track!
Here are my Goals for July 4th, 2011:
Here is what we are shooting for by July 4th, 2011:
Alexa – Maintain a Ranking at or around 37,500
Visits – 60,000 total visits (I started BFS on February 20th, 2010)
Feedburner Subscribers – 500
Twitter Followers – 500
MozRank – 5.5
Today’s Update
Alexa – 32,454 (As always, THANK YOU!)
Visits – 45,942 (14,058 to go…that is totally ahead of schedule!)
Feedburner Subscribers – 442 (58 to go)
Twitter Followers – 416 (84 to go)
MozRank – 4.99 (0.51 to go still)
As always, thank you so much for being my supporters! I could not do any of this without you and I really never forget that!!!
The Saved Quarter Challenge Update
I joined The Saved Quarter Challenge this year and am aiming to save at least $21,000 by the end of 2011! That would be a tiny bit more than 25% of our GROSS pay from our two full time jobs.
Here’s how I’ve done this week for the Saved Quarter Challenge ($21,000 Goal):
I have better updates after the 13th of every month since that is when our billing periods end, but here is where we funnelled away money this past week:
- 401(k) – $80
- Emergency Fund / Savings – $150
- Extra Cash for Investments – $210
We also saved $120 for vacations and $60 each for our fun money accounts, but I won’t count that unless we have leftovers at the end of the year.
Total This Week: $440
We can save what we do because we live off of a little more than my husband’s salary as a school librarian ($38,000 take home pay), which means we save most of what I make ($26,000 take home pay) and all of our hobby job incomes (reffing for Mr. BFS and blogging for me). Reffing usually brings in $2000-$3000 a year and blogging is bringing in $10,000 or more a year (we’ve already hit more than $5000 for January-March 2011).
Total to date: $8670 guaranteed, $12,330 to go.
Additonal Info
I will continue posting monthly and yearly blog statistics and income updates from here on out, so stay tuned at the beginning of every month!
In case you didn’t know, Alexa traffic rankings are determined by the numbers of hits a site gets by people with the Alexa toolbar. If you want to be part of this ranking community, you can download the Alexa toolbar here. 
If you don’t already, you can follow me via RSS or Twitter by following those links.
To learn more about the Yakezie, the blogging group that has helped me in SO many ways, check out my Yakezie page! Feel free to email me if you are a Yakezie member or challenger and don’t see yourself on the list!
If you are interested in seeing how I went from an 8 million plus Alexa rank to about 50,000 in less than 8 months, you can see My Blogging Schedule, which breaks down everything I do related to blogging. If you want to see how I brought in $6000 in less than 10 months, you can check out How I Make Money Blogging.
THANK YOU ALL FOR BEING THE BEST READERS EVER!!!
March 19, 2011, at 6:00 am
Also, check out my other blog, Crystal Clear Thoughts,
for my Weight Watchers Updates! I’m already down 19 pounds!!!
And please use About Life Insurance as a resource for everything life insurance!!!
Let me know if you do help out and I will be sure to return the favor!
My Favorite Posts this Week
Guest Post from BFS
Thank you so much to JD for having me over for the day!
Guest Posts at BFS
Thank you for a day off!
If you would like to guest post on BFS, please contact me with your idea or post and I’d love to have you over for the day! If you are a business, please contact me here for more details. Thanks!
Giveaways and Other Info
Blog Carnivals
My carnival – Totally Money Blog Carnival – was all Daylight Savings Time
at Canadian Finance Blog!
Please check out the last edition and submit here every week!
If you are hosting a carnival that includes Budgeting in the Fun Stuff, please email me so I can include it in my roundup. Also, please email me if you’d like to host Totally Money. Thanks!
Top 5 Referring Sites to BFS within the Last Week:
I Post the top 25 on the first Saturday of every month.
- Get Rich Slowly
- Free Money Finance
- Yakezie
- Grumpy Rumblings of the Untenured
- Punch Debt in the Face
Feel free to contact me if you have any suggestions. I’d love to add a few more blogs to my regular reading list or at least give a shout-out for great posts or contests.
As always, thanks to all the bloggers that teach me something new every day. Thanks to all my commenters for making this blog the community I want it to be. Thanks to all my “lurkers” too.  I hope everybody is enjoying this as much as me!
March 18, 2011, at 6:00 am
I have a reader question for you today from Mr. BFS and me. When I hit a blogging income of $30,000 a year or more and start blogging full time, is our pension, a stagnant 401(k), 2 Roth IRA’s, and stocks going to be enough for early retirement?
As of right now, we have Mr. BFS’s pension, my 401(K), a Roth IRA, and Scottrade investments. We’re also ready to fully fund another 2010 Roth IRA, which we will do within the next 2 weeks.
As of our last net worth update, this is where those accounts stand:
- Pension – On target for a 70% pension at age 52. That would be $33,250 a year if it happened right now.
- 401(k) – $24,500. I contribute 6% which is matched 100% up to 6%, so it has been getting $4260 a year.
- Roth IRA – $23,500. We’ve been contributing $5000 a year since 2008 and started with $2400 in 2007.
- Scottrade – $19,500. We’ve contributed $18,000 to our stock portfolio since 2008 (we learned about investing the hard way early on, so our average rate of return is much higher now than it looks, lol).
We will be losing the ability to contribute to my 401(k) if/when I quit my day job, but we will definitely fully fund a 2nd Roth IRA. Will we still be on track for early retirement at age 52?
I personally think we will be fine since our annual expenses (without savings) are around $40,000 and that’s with a mortgage according to our budget and the actual results. Without the mortgage, which is on track to be paid off no later than 2017, we would need $29,000 a year to keep the lifestyle we have right now in early retirement.
Even if we take into account higher medical insurance during retirement, I still bet we’d stay around $40,000 in today’s money. The pension and the Scottrade account would be able to cover that by themselves. The 2 Roth IRA’s and whatever is left in my 401(k) should just be uber icing on the cake.
Since it may help, here are some quick projections I came up with using a retirement calculator (I am 28):
- The pension would be paying out $35,000 a year in today’s money (70% of my husband’s 5 greatest years of pay).
- The Roth IRA we have already would be around $500,000 with 8% returns at age 52 and $850,000 at age 60 if we stop contributing at age 52 but leave it alone.
- Our stock account would be at about $300,000 at age 52 with 8% returns and low contributions ($2500 a year).
- My 401(k) may have $150,000 if we stop contributing 6% at age 30 and simply leave it alone for another 30 years at 8% interest.
- The 2nd Roth IRA may be around $400,000 if we contribute $5000 from now until age 52 and then leave it alone for another 8 years all assuming 8% returns.
- Our cash savings will be around $400,000 if I factor in a 2% return overall from now until age 52.
What do you think? Are 2 Roth IRA’s, a pension, an old 401(k) account, and stocks enough for an early retirement? If not, what else would you suggest?
March 17, 2011, at 6:00 am
The following is a guest post from Kevin McKee at Thousandaire - where you will be entertained with funny blog posts and informative videos as you are learning about personal finance, taxes, politics, and whatever else Kevin wants to talk about. He even posted a message on his site for you readers today!
Happy St. Patrick’s Day
Today is St. Patrick’s Day; the annual holiday where we drink green beer, kiss random people because of their heritage, and execute random acts of violence upon people who aren’t wearing the right clothes. Being an Irish Catholic, this holiday has a special place in my heart.
One of my favorite parts about St. Patrick’s Day is the idea of “luck”. Kissing the Blarney Stone will give you good luck and the gift of gab (something I was born with). A four leaf clover is filled with good luck if you happen to find one. Leprechauns are so lucky that if you find and capture one, he must grant you three wishes.
While I love the idea of the “Luck of the Irish”, I don’t believe in it. The only luck I believe in is the kind you make on your own. As a “lucky” Irish Catholic, here are my St. Patrick’s Day tips on how to increase your luck, and how it can improve your personal finances, as well as your life in general.
Diversify Your Income
Imagine if a friend of yours lost his primary job and had no working spouse and other source of income. You would probably lament how unlucky that guy was and how sad you are for him.
Now imagine another friend who loses his primary job but has a side job, a nice portfolio of dividend paying stocks and a working spouse. You would probably think he is lucky that he wasn’t devastated by the loss of his job, but that isn’t luck at all. It’s smart planning.
Very few people would even consider letting their investments ride on a single stock or mutual fund, yet many of us stake our livelihood on a single source of income. Diversification of income is the only way to truly protect yourself from a disaster and make sure you are one of the lucky ones if you lose your job.
Don’t Take No For An Answer
When I was in college applying for jobs, I found one I really wanted. It was exactly what I wanted to do, paid really well, and had a very nice benefits package; a personal finance nerd’s dream!
I made it through the initial interviews and they flew me out to Florida for the final round. The more I learned about this job, the more I knew it was perfect for me. Then I got home and a few days later I got a phone call from the company telling me that I wasn’t the right fit for the position.
Except they were wrong. I knew that was the perfect job for me. I contacted the recruiter and told him again why I was the right person for the position. It took some persuading, but I ended up getting another follow-up interview, and eventually landed the position. I’ve been working there ever since and have loved it. My friends all tell me I’m so lucky to have such a great job.
Except I wasn’t lucky at all. There were countless “unlucky” people who got the same phone call I did and had to find a different job. The difference between them and me is that I knew what I wanted and I didn’t take no for an answer.
Read Books
Think about the most financially successful people you know, and then ask yourself if those people read books. I’m willing to bet the answer is “yes”. I have a multi-millionaire uncle, and he once quoted Charlie “Tremendous” Jones saying, “You will be the same person tomorrow, next week, next month, next year and in 5, 10, 20 years except for two things – the people you meet and the books you read.”
I got a promotion and raise at work last year worth over $10,000 a year, and I can credit any of my successes at work to the book “How to Win Friends and Influence People”. That book has created more luck in my career (and subsequently my personal finances) than anything I ever learned in school. That is just one example of how I am a better, richer person because I read books.
You Can Be Lucky
Anyone can be lucky if they choose to be. Lou Gehrig told the world that he was “the luckiest man alive” after he had been diagnosed with a lethal disease so rare, they named it after him. That doesn’t sound very lucky to me, but he had a positive outlook on life saw himself as lucky. And in the end, that’s the only person who really matters.
Start Making Your Luck Today
St. Patrick’s Day is the luckiest day of the year. You can try to kiss the Blarney Stone or look for a four leaf clover, but you’re probably better off making your own luck.
Crystal’s Comments: I agree 100%. Almost everyone in my “real” life who hears that I make money blogging will then say how lucky I am to be bringing in that extra $1000 a month. It’s not luck! I put in 30-40 hours a week blogging – I love it and want to do it forever, but it is not luck that writes the posts, comments on other blogs, and answers emails every single day. Go out there and create some of your own luck this St. Patrick’s Day!!! Good luck!
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DISCLAIMER I am not a professional or a financial advisor. BFS posts are informational opinions only. Please make your own financial decisions based on personal research or see a financial advisor.
Also, there are paid links on this site. There is no obligation on your part to purchase any products advertised on this website.
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