Free Debt Reduction at a Price
I had read a question a while ago that asked if anyone had tried many of the ‘debt into wealth’ programs that are sold via radio, tv and online.
I initially gave my own following response: I think you will find that most “gurus” end up advocating the following steps in some fashion:
1. Stop using credit cards
2. Write down your debt, what you owe and what you bring in
3. Live below your means
4. Sell stuff to make extra money and help pay down debt
5. Get a second job if you have run out of things to sell
6. Save money for emergencies
The thing about the ‘gurus’ is that they take information that is out there in the library (in the 332.0 section) or online for free. Not only that, to get out of debt and move into a wealthier life is mostly about common sense. To have wealth, you want to live on less than you make so that you have money for tomorrow.
One thing I don’t like about gurus is that what they sell for 80-300 dollars can be learned for free. It isn’t about some special pill, but about your own incentive to get debt paid off. Inspiration is out there, there are radio shows by Dave Ramsey, NCN podcast and Clark Howard.
I recently ordered John Cummuta’s Transforming Debt into Wealth free promo – First I was a bit disgusted that when I called to get the free promo I was grilled about how much debt I had, how soon I wanted to pay debt off and so on. All I wanted was the free promo. The reason they ask you questions is to get you to buy the system straight up because, as I learned later, the promo CD is simply a repeat of what is told in the advertising material that comes along with it. Basically, worthless.
But you can borrow his books, and probably the same information, at the library in the personal finance section (332.xx). Even the items that you buy through this promotion were available at the library.
One of the inserts gave teasers for items you will learn through his system:
How to save thousands of dollars when you buy insurance – First, not everyone is going to save thousands, but it does add up. The main way to save money on your insurance is to call around or check online sites like insurance.com. You would want to do this every 6-12 months to make sure you are getting the best deal and sometimes, you can also mention that some other insurance company is offering a lower amount and find out if they will beat it.
How to stop car dealers from picking your pocket – This is about picking out a car and getting as close to the book price as possible. The best way to stay out of debt is to buy a car after you have saved for it, one that is second-hand and preferably has one owner. I would also suggest that you get your loan approved first with a bank or credit union and then find the car. But there are many other support networks through Bankrate, American Consumer News, eHow and MSN Money.
How to calculate exactly when you will be completely out of debt – This is the art of debt snowballing, in which you take one debt and pay it off, then roll that payment into the next one. There is a handy Snowball calculator that allows you to figure this out. You can pay off either the smaller debt first or the the one with the highest interest.
Specific ways to cut daily shopping expenses without sacrificing – The many ways to cut back are out there and the information is free. Basically, plan ahead and don’t impulse buy. Reheat your left-overs. Cut down on the amount of food you eat and when possible, grow it yourself. (Living on Less ‘“ Grocery Shopping, 10 Secrets to Saving Money on Food, 7 Secrets To Staying Slim, That Save You Money)
Why mortgage interest deductibility is the ‘tax shelter’ lie – This goes along the idea that if you owe anyone (bank included) then they own you. It is about whether the tax deduction for a house payment has a value that is better than holding onto the debt of the house. There are two different viewpoints on this (Free Money Matters vs. Becoming and Staying Debt Free)
As you can see by just a few of the teasers above, there is a flood of information online (not counting the library) that is free and doesn’t require that you plunk down any money to learn. If you want more, Mint has a great list of 30 free ebooks on personal finance.
Additional reading:
Clark vs. Dave
Debt Reduction Seminars
The Character of Thrift
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Dawn C. is site owner of Frugalforlife.com and is residing in Colorado with her spouse, Teri, of 11 years. Dawn can be reached at Frugalforlife@gmail.com
Plus, your library’s 332.024 section (and derivatives like 332.02401 if they have those) should have plenty of materials from these gurus, since they’re often in high demand. Or if you don’t see what you want, try to reserve it.
I learned all about Dave Ramsey and Suze Orman via my library (ok, and blogs…but I got it from the horses’ mouths there).
I love that snowball calculator with every fiber of my being. It reminds me that the end is in sight, and I like seeing the dates move up when I come across extra money.
Dawn: I’m still learning the “check out a book at the library” trick. Why buy when you can borrow it for free and learn a thing or two about frugality.