Here are what I believe to be the 3 best reasons to cut up the plastic and start paying with cash again.

1. Discounts

Retailers are charged fees by various financial institutions for the ability to accept credit and debit cards. Sometimes it is a fee per transaction and other times it is a set monthly fee. You can bet that they are going to find a way to pass those fees on to you. Weather it’s a simple price increase or a 25 cent fee added at the time you swipe your card, they will charge you for the privilege of using your plastic.

Besides the fees retailers are charged there is the time it takes to collect, store, reconcile and process all those little transaction slips. Cash all but eliminates that.

You can save a lot of money by just offer to pay for the item in cash. The key to this is to offer 10% less (at least) than the retail price and pull out the cash right on the spot. You can almost always use the power cash to negotiate a better price.

2. Easier to stick to a budget

When you are on a tight budget managing your spending using debit cards may seem like a good idea but you are actually more likely to overspend and blow the budget.

There is something about handing over the cash that stings a little; it no longer becomes just a number on your monthly statement. You can physically see that you have less and that alone can be enough to spend it a little more wisely, even make you question if you really “need” that item that you can’t live without.

3. Security

Credit card numbers are stolen thousands of times everyday, and if your card numbers are stolen the thieves will withdrawal cash or make unauthorized purchases right up to the limit. Many times you are covered and not required to pay back the stolen money but you do have to have your cards replaced and many times there are forms that need to be filled out in order to prove that you are innocent.

This also happens to debit cards, and a simple everyday transaction can result in your bank account being wiped out.

So that is it and remember as long as you aren’t carrying around a briefcase full of money, cash is a much safer and cheaper way to pay for those everyday purchases.

(Click to Enlarge)

*NOTE* You will notice that there is no mortgage listed above. While it is considered a debt, for your own sanity it’s best to concentrate on your smaller consumer debt first.

Getting Organized

Sometimes your credit card statements aren’t up to date, especially if you are continuing to add to them or are making more than one payment per month.

It’s important to call the number either listed on your statement or the back of your card and get the most recent balance.

You can organize your debts however you like, by monthly payments, interest rates or total by creditor. There is really no right or wrong way.

Know Your Numbers

Many people don’t know what their total debt is. Ignorance will almost always lead you deeper into debt. By being conscious of your debt and knowing what you owe you will be in a better position to stop it before it gets out of control.

Your Debt Plan

Now that you know what your total debt is, you can start to develop a plan to get it paid off as soon as possible. After all that is the goal right?

One of the most effective ways to eliminate your debt quickly is by utilizing a debt snowball. You can read more about how to properly use the debt snowball here.

Why The Debt Snowball?

This is a very popular method for reducing your credit card debt. It’s taught by many financial experts and credit professionals, and for good reason. This method is part math and part emotion, which is also why it’s popularity is increasing.

There are 4 basic steps to follow:

Step 1: List your debts in order of outstanding balance and not by interest rate. If 2 balances are roughly the same you can put the higher interest rate card above the one with the lower interest rate. List your smallest balance first and the largest debt last. Like this:

1. $1100 – Min payment $35
2. $3250 – Min payment $98
3. $6000 – Min payment $180
Total payments: $313

Step 2: Add up the minimum payments on all the cards. From the example above the total minimum payments would be $313. Now commit to increasing your total debt payments by at least 25% to 30% more or $100 whichever is higher. For $313 as your beginning minimum payment total a 30% increase would be $94 extra, so lets round that up to $100. You would commit to paying at least $413 every month towards your credit cards.

Step 3: Start making the minimum payments on all your credit cards with that extra 25-30% or $100 going to the debt with the smallest balance. Continue to do this month after month until the first debt has been completely paid off.

1. $1100 – Min payment $35 + $100 = Monthly payment of $135
2. $3250 – Min payment $98
3. $6000 – Min payment $180
Total payments: $413

Step 4: Once your first credit card debt has been cleared, you are going to take what was it’s minimum monthly payment plus the 30%/$100 extra payment and add that to the minimum payment for the next largest debt on your list.

1. Paid
2. $3250 – Min pay $98 + $35 + $100 = Total Monthly Payment of $233
3. $6000 – Min payment $180
Total payments: $413

Continue to do this until debt#2 has been full paid and then repeat the process for the final debt. Your Monthly payments on the last debt will be the full $413 that you have committed towards reducing your total credit card debt.

Helpful Hints

1. $100 should be the minimum amount you commit to in extra debt payments. This will help you eliminate your debt much quicker. If you are on a fixed income or can only scrap together $50 or that is alright as well. Anything over and above the min payments will benefit you, but make an honest effort in trying for the $100 mark.

2. Throw your pocket change into a bowl or dish and every month add that on top of your payments, sell stuff on ebay, take a second job or just give up your morning coffee and throw all that extra income towards your debt snowball. Every little bit helps.

3. Contact your credit card companies and let them know what you are doing. Some companies might take any extra payments and apply the towards your future monthly payments. Let them know that these extra payments are to be applied directly to the principal.

4. Once a debt has been paid off take time to celebrate it, reflect on what you have accomplished and think of new ways to contribute extra money to the next debt. This can be great motivation for tackling the larger and more time consuming debts.

Name.com is constantly changing their promo codes. While old ones expire they are replaced by new ones. So here is a list of the latest name.com promo and discount codes as of March 20th 2009.

Latest Name.com Promo Codes
Renew .com .net and .org domains for only $7.69 using promo code: NPENBY – No Longer Working

New .com and .org domains for $7.99 using promo code: LORENA – No Longer Working

Renew .com .net and .org domains for only $7.69 using promo code: SAUDADE

New .com and .org domains for $7.95 using promo code: IPANEMA – No Longer Working

That’s it so far. I will keep updating these codes as I find them. I have saved a ton of money on over 20 domains using these codes.

UPDATE:
These are working as of May 12th 2009

Save .99 off a new .com or .net domain using promo code: PIRIGUETE – This is no longer valid

Save .90 on renewals of .com or .net domains using code: EATATCHANS

Get a new .com or .net domain for $8.25 using coupon code: GREENBOW – This is no longer valid

Get a new .net domain for $7.25 using promotion code: HTESROB I used this 2 days a go to register huggiesdiapercoupons.net – This is no longer valid

*Update June 3rd 2009*

Get a new .net domain for only $7 using name.com promo code – parkhill – This is no longer valid

Save .59 on a new .com or .net using promo code – washpark – This is no longer valid

$8.20 for a new .com domain registration using name.com promo code – stapleton -This is no longer valid

Update September 2009

$8.19 for a new .com domain registration using name.com promo code – diptera

Renew your .com .net or .org domains for only $8.25 using name.com promo code – chilopoda

I’ll post more as I test them.

Enjoy.

I was surprised to learn that in the US some states don’t offer lump sum payouts on lottery winnings rather opting to go with a large one time payout. I guess it comes as no surprise that this opened the door for investment companies to come up with their own programs for capitalizing on lump sum lottery winnings and taking a chunk of the cash as profit.

With in our groups discussion we had a few questions about how the lump sum payouts actually work. I thought that I’d do a little research and find the answers myself. Below are the answers to our 5 questions about lump sum lottery winnings.

1. How much of the money do we get to keep, assuming a $1,000,000 winning?

Answer: I went online to get a quote from one of these investment companies and got a response back in 5 minutes, they really wanted my money. After a few questions they came back with the quote of roughly a 20% fee. That seems a bit high but I guess it is reasonable if they are forking out $800,000 cash. This is negotiable though as the lottery winners we are in control, there are many companies that what this kind of business.

2. Do we have to sell the whole amount all at once?

Answer: No, we can split up the lottery winnings payouts however we like. So we could sell 50% of the annual payments and still receive a large sum of the lottery winnings plus get monthly payments. The payment splits are really up to you and the investment people they seem to be pretty flexible.

3. What kind of fees hidden or otherwise are we going to have to pay?

Answer: Apparently none. The lender is responsible for dealing with the court fees and paperwork nothing else out of pocket for us. Sweet.

4. Can’t we just go to the bank and sell it to them?

Answer: Nope. They don’t do structured settlement payments. At least not at my bank, and my bank rep said most other banks won’t either as it is not a simple transaction. She also recommended that we get our own lawyer to go over the paperwork before signing anything. Smart lady, that’s why my money is with you 

5. What lottery#’s are we going to play to win all this money?

Answer: Quick picks, keeping track of everyones personal picks is a pain and so many people use the same low numbers (birthdays, anniversaries etc…) that you end up with a ton of duplicate numbers. Save your birthdays for your own personal tickets and keep them out of the group numbers.

There you have if folks, the low down on lump sum lottery winnings. I seriously hope you have to reference this info once you win the lottery, just not on the same draw as me :)

Step 1

Get a student loan and ask for more than you need.

Post secondary education is a very valuable asset and a worthy pursuit; unfortunately this can come with a very large price tag. I wasn’t fortunate enough to qualify for a scholarship and had to foot the bill on my own. Lucky I managed to avoid taking out a student loan and went to a local college where I could afford the tuition (barely). Many of my friends are still paying off their student loans today.

Student loans can burden you for many years after you graduate and if your chosen career doesn’t work out it could take you a very long time to pay the loans back. If you can find a similar program at a local college or university seriously consider attending and save some big money and stress. (if you have kids set up a college fund for them now and ease the burden later)

Step 2

Get a credit card and use it for everyday purchases.

I used to buy groceries, gas and convenience store items on my credit cards with the intention of paying them back right away. While I did manage to collect some big rewards I managed to accumulate a small balance each month that seemed to grow bigger every week until I could only afford the minimum payments.

Many people will tell you to never get a credit card, and for many people that have poor spending and budgeting habits such as I did when I was younger that is sound advice. If you are not an impulsive buyer or use it for everyday purchases though a credit card may in fact be beneficial in helping you build a good credit score. A good credit score is essential if you want to buy a home in the future and not get a terrible interest rate. That is if you are planning on getting a mortgage.

Step 3

Leasing a new car

My first car I ever owned was leased, it looked great and I loved it. After about a year or so the novelty wore off and I was stuck with a 1 year old car that was worth much less than I owed on it. 4 years after that and I decided to buy it out (with borrowed money of course), for about $1000 more than it was worth and then had to pay to have it certified. It took me 8 years to pay for this new car, not to mention the thousands of dollars I paid in interest. Avoid leases and payment plans, if you need a car buy used and save up for a new car.

Step 4

Buy a house with a 25 year mortgage

Did you know that you can buy a home with $0 down? I did and I almost lost it. After a few months I was in over my head.

As a rule you should aim for no more than a 15 year mortgage and put down at least 25% of the purchase price as a down payment. You can get away with 20% in some cases, other than that you should rent and save until you have enough. When it comes to payments if your mortgage payments are more than 40% of your gross monthly income, you can not afford it. (I would go even lower and limit it to 35%

Step 5

Don’t pay a cent for a year – Furnish your new home on store credit

Those deals seem great at the time and you have every intention of paying off the furniture (couches, TVs, kitchen appliances) before the year is over but sometimes life gets in the way and at the end of it you don’t have enough to pay it all off. Then they get you for the whole amount plus interest (28 % for the whole year. ouch).

That happened to me on my first LCD TV I purchased $1400 turned into $1820 after interest and fees. Save up for these big purchases and pay for them in cash. You would be amazed at the deals you can get just by pulling out a wad of cash and making an offer to pay for the item on the spot.

That is basically how you can a mass a huge amount of debt in a relatively short amount of time. I realize I left out the wedding and the kids but those came after I got my financial act together.

The scary thing is that this is the route that millions of people are taking these days and they are in for a major shock when the debt gets so large that the “consumers” will get “consumed” by the payments until they lose it all or make some major lifestyle changes.

For that you need to ditch the free blogging sites, own your own domain name and look for some commercial web hosting.

I am a firm believer that you need to spend money to make money and nowhere is that more true than on the internet. Now I’m not talking about spending hundreds of dollars and most commercial web hosting is fairly inexpensive, roughly $5 – $12 a month. Owning your own domain is even cheaper at around $10 per year. (even cheaper if you use a name.com promo code)

The 3 Best Commercial Web Hosting Companies
Here are my top 3 picks for commercial web hosting companies. It should come as no surprise that these are also some of the most popular hosting companies on the market today.

1. Hostgator.com
For less than $8 a month you get unlimited disk space, unlimited bandwidth, and the ablility to host unlimited domains. You get a ton of software and support included in this plan and if the time comes you can also upgrade to their dedicated hosting service.

2. Powweb.com
This was that first company I dealt with when I started 3 years ago and they are great. Your first year is $60 including a free domain and 300 GB on disk space (I never even came close to using it all). Powweb also has really good 24 hour support via chat and a great forum with very knowledgeable members. You can pay by paypal too.

3. Godaddy.com
Godaddy’s deluxe plan is more than enough for what most bloggers and internet marketers need. They have all the bell’s and whistles as the other guys but have more free ad on applications. The deluxe plan starts at 6.99 a month, the price decreases the longer you sign up for.

So if you are currently blogging on a free hosted site either (wordpress or blogspot) consider switching to a commercial web host and you’ll be in a better position to start profiting from your site.