5 Types of Financial Roller Coasters

There are many reasons people get in trouble with their finances. If any of these describe you, reach out for help. There are solutions to each of these types that anyone can implement in their lives. Take a look.

Feast or Famine

Financial Roller Coaster

Have you ever met those people who are on an extreme rollercoaster ride with it comes to their finances? The type that seems to be doing fine one day, and the next day you hear they are barely scraping by.

Maybe it’s the people who buy a new home and they are all excited so they go out and buy a whole bunch of new furniture on credit. They are euphoric until the first bill comes in and then they are in panic mode.

Or it could be the person who pays off all their debt and the next thing you know, they are bringing stuff to the pawn shop to get to the next payday. Suddenly, the sell and buy scenario is a regular thing at the pawn shop.

The Slow Death

Financial Roller Coaster Wilted Flowers

These are the people who consistently live above their means. Unfortunately, a lot of Americans live this way. They spend $1.22 for every dollar they make. It’s a slow death because they overspend just a little but over time, that extra $0.22 adds up.

Maybe it’s the couple who is living vicariously through their children and can’t say no to them. You here them say stuff like “I’ll never let my kids go without like I did when I was a kid.” Whenever they go to the grocery store, they have to buy their child a toy – because – well, that’s just what they do. Right? Their kids are in all kinds of sports through school and other after school activities. It’s exhausting!

The Train Wreck

These are the ones you feel sorry for. This is the couple who has the breadwinner that has a heart attack. The person survives but is told they must retire right now! Of course, they planned on working for another ten years but now they have to figure out how to live on $35,000 per year instead of the planned $55,000.

The divorced couple. Neither one makes out ok from this situation. They both end up broke in the process due to lawyer fees, split accounts, etc. All their accounts are frozen during the process so they have limited funds to work with while they are going through the divorce. When everything is finally done, they both struggle for years trying to make all their finances work again on an individual basis.


Here the spouse has died and there is no more income. Maybe they have been diagnosed with a disease that will take all their finances. A natural disaster takes place and they lose everything only to find out that their insurance won’t cover half of it.

Living on Prayer

This is the person who makes a decent living but never saves any money. When they turn 65 (or whatever the retirement age is for them) they talk to a financial planner only to hear that they can’t retire because the only money they have to live on is what they can sell their house for. If they sell their house, they will have a little money but that won’t last long. No planning was ever considered.

Steps to Avoid Tragedy

Financial Roller Coaster Money

Here are a few steps you can start to take now so that you don’t become one of the people described above.

  1. Live beneath your means. This means putting something from every check aside for later in life.
  2. Don’t make compulsive purchases. 50 years ago, if you didn’t have the cash, you didn’t get the item. It can still work that way today
  3. Make sure you have some type of medical insurance. Sure, the cost is out of control right now but if you don’t have it and something happens, all your plans go out the window.
  4. Have some life insurance. There’s nothing worse than seeing someone lose a loved one and not have enough to live on going forward. It’s a gift for your spouse and your family.
  5. Save. Save. In our current society, it’s all about instant gratification. Believe it or not, you can live with less stuff and still have a happy life.

If you need help with your finances, reach out to local organizations that help in this area. A good place to start is Consumer Credit Counseling. Find support groups and courses that can help turn things around.

What are some ways that you have avoided these tragic scenarios? Comment below.



Why Get More Credit?

Credit, Bad – Debt-Free, Good

Credit Cards

If you’ve read any of my previous blog posts about credit, you know that I’m not a fan of people getting all kinds of different credit. I am a firm believer that being debt-free is an amazing way to live. You never have to worry about where your money needs to go, how much you need to make to pay all those various bills, or worry about what will happen if something happens like a job loss or a medical diagnosis.

You may also know that I am now a REALTOR®. I want to help people learn about that process so they can get into a home that they can afford without stressing about the increasing costs of ownership.

My Friend Paul

Paul Nolte

As a REALTOR®, a trusting and honest relationship is established. If you are a seller, I represent you in any negotiations once a Listing Agreement is signed. If you are a buyer, I represent you in any negotiations once a Buyer’s Representation Agreement is signed. Without an agreement, you are on your own when it comes to navigating the contract paperwork and any negotiations.

Paul Nolte is one of the partners and a preferred Mortgage Loan Originator from Home Team Mortgage at our Ebby Halliday, REALTORS® office in the Plano/Willow Bend area.

We’ve had several conversations about clients who need help getting a loan. One reason a contract will fall through is an issue with credit. That’s why it is so important to start working on your credit immediately, preferably six months before you want to purchase a home.

Paul has provided an article on how to improve your credit when preparing to purchase a home.

My Take


Although I can appreciate having a variety of credit avenues open to show credit worthiness, sometimes, that is not a good thing for people.

If you have a habit of keeping a balance on your credit cards, then maybe a better way would be to keep one credit card and maintain control of your spending.

I was divorced in 2002 after an almost 15-year marriage. After six years, I managed to pay off my debts and only kept one credit card. Over time, I had several car loans for various lengths of time and maintained a zero balance on my credit card. With a credit score over 800, I had no problems qualifying for a loan for a house.

Everyone needs to decide their own path when it comes to finding a great home. If you choose wisely, your credit can help you achieve the goals you want. However, if you neglect what is happening with your credit, it may prevent you from getting that house.


Here’s a brief list of things that can trip you up when trying to purchase a home.

  1. Missed payments on loans.
  2. Late payments on credit cards
  3. Late utility payments
  4. Eviction
  5. Bankruptcy
  6. Foreclosure
  7. Too much debt-to-income ratio. If you owe more than about 36% of your income towards bills, you may not qualify for a loan.

There are also ways people can sabotage the loan process.

During the contract period, you start to purchase items for your home:

  1. Riding mower
  2. Refrigerator
  3. Washer and dryer
  4. Vacations

Once you are under a contract, do not make any changes that could affect your credit or your debt-to-income ratio. You’ll have time to purchase those items after you move into your new home.

Reach out to me so we can work together to make sure any credit issues are addressed before trying to purchase a home. Visit my business website for contact information.

Get the Pre-Underwritten Brochure!




Who Me?

Have you ever thought about giving yourself an allowance as a way to save money?

Yes you.

You know, like we give to our kids or how you got one as a child.

Budgeting, like a lot of things, takes discipline. When I was paying off debt, and even today, I gave myself an allowance just like the kids. Everything else in the budget was accounted for. I created a zero dollar budget. A zero dollar budget is simply allocating all your money in a given pay period so that there is nothing left over. Every dollar has a place.

The allowance was for me to spend on however I wanted to. If I wanted to buy lunch at work, it came from there. If I wanted to buy a movie or go to the movies for that matter, it came from my allowance.

What’s In It For Me?


I still give myself an allowance. Since I am now married, my wife gets her own allowance.

The cool thing about an allowance is it allows us the freedom to do what we want with it. Many times, I try to save my allowance so that I can do things for my sweet wife. We even have a standing joke that when I start spending my allowance, she says “So you’re spending my money?” She knows that I try to save some of my allowance to buy nice things for our anniversary, her birthday, Christmas and other occasions as I see fit.

How Much?


How much should you allocate towards an allowance?

Initially, I gave myself $10 per pay period. That was right after the divorce from my first wife. $10 was more money than I had in my pocket for more than a decade. I never had money so having $10 in my pocket was a treasure.

Maybe $10 is too much for you right now. Maybe you can afford to give yourself $300 per pay period as an allowance.

Before you decide on an allowance, you should make sure that a lot of other things are being taken care of first. Are you paying all your bills on time? If not, then maybe you need to sacrifice a little so that you can catch up on things. Are you saving anything in the event something happens where you need some quick cash? Where will the money come from if you need the air conditioner fixed at your house? If your answer is a credit card, then maybe you need to sacrifice your allowance until you have some money set back.

Live With It!

The allowance is just that – an allowance. I allow myself to spend this money however I want to. No strings attached.

However, that’s all I get. Nothing more.

When I run out – I need to wait until the next payday before I can get anymore.

You need to decide what the right amount is for you.

The bottom line is that the more you focus on getting out of debt, the more you will be able to give yourself an allowance later.

The choice is yours.



The Paperback Is Here


Long Time Coming

Well, I finally got my book, The Little Debt-Free Book, published as a paperback version. This version was submitted on January 31, 2015 for review. It took another day for the review process to be completed before I was able to order the proof copy.

Next Step

The proof copy arrived at my house this week and I was able to look over every aspect of the book in physical form. After reviewing the book, I had to go back to Createspace.com and authorize the release of the book on Amazon.com and Createspace.com. The book is now available on both of those sites.

Unexpected Outcome

A really cool thing has happened during this process. Recently, I gave a speech to a group of women at a shelter who had escaped domestic violence. Afterwards, the lady who runs the program told me that they would be interested in using my book as part of their program. Now that’s cool!

I have always hoped that the book would be able to help someone who struggles with their finances. Now it is becoming a reality.

Another unexpected thing was that Amazon immediately discounted the price of my book. After some research, I found out that if the book is available in more than one location, then Amazon reserves the right to keep the lowest price. The book is also available on Createspace.com so Amazon has discounted the price by 10%. That’s a good deal for anyone wanting the book. It saves them money.

Ending Thoughts

I know that there are a few people who have purchased the Kindle version of the book who have wanted the paperback for their kids. This affirmation is wonderful. I hope to reach more people with public speaking and this book in the future.

The Fine Print

First Things First

My apologies for being late with this blog post. I have been trying to post weekly since I began this blog and this is the latest posting that I have had. Things should be better next week.



Contracts are everywhere! When you buy a house, sign up for cable or Internet Service, purchasing a car and any number of other things. If you rent a place, it is called a lease. Contracts are there to protect the supplier. However, when something changes and you need to be out of a contract, you end up paying quite a bit to get out of them.

Buying A Home

My wife and I recently purchased a home. However, we are in a lease with the place we are renting for a couple of months to come. Cha-Ching! Breaking the lease means extra money so they can list the place earlier. Even though they are going to list it when we leave, they charge extra in the hope they can rent it before regular lease expiration. If that happens, then we don’t have to pay for all the time on the lease.


We recently made the decision to eliminate cable. We had given up TV for lent anyway so it was not a hard decision. Cable companies are a pain. When we first purchased the home, we thought we would just transfer the cable to the new location. Because we had only been with them for nine months, there was going to be an extra fee of $100.00 to move it to the new location. When we called back to cancel instead, they came up with all these offers in order for us to keep it. Free transfer, reduced billing, even a suspension of services for a mere $20 per month for up to nine months. We could reactivate it at any time within the nine months and pick up the contract where we left it off. What a bargain. For $30 per month for the remaining months in our contract, we could pay to cancel the service altogether. We opted to cancel altogether. Can you still get TV via an antenna?


If at all possible, I am going to try to avoid contracts with service providers except in the case of utilities, etc. since we will be in our new home hopefully, for a long time.

What contracts do you have and what is the cost of getting out of those contracts if you need to? Think about it the next time you get ready to sign up for another service.

Savings Challenge Update

Here is the status of our savings challenge.

Savings Challenge 3-11-2014

Our balance now is $530.68. Getting there. How about you?


If you have ever watched a soccer game where the announcers are from Mexico, then you are familiar with the reaction they give when someone scores during the game. There is an elongated GOOOAAALLL into the microphone. There is no misunderstanding about what has happened. Sometimes, they can go on for 30 seconds or more. Here is an example from YouTube.

Wouldn’t it be great if we had that kind of enthusiasm about our financial well-being?

Setting Goals

This week, we will be looking at goal setting with our finances. Written goals are so important because it gives us something tangible to look at when we are making decisions regarding finances. Being specific in the goals is also very important. Anyone can say they are going to save money this year. A statement like that could mean that you are going to save $10 for the year or $25,000.00 in a year or any point in between. How will you know if you met your goal if you give yourself a range like that?

Let’s go over what I refer to as the four tier goal setting plan. I will start by defining each tier and then offer some suggestions for each one. I include an image of a simple way to write goals down.

Goal Setting

Immediate Goals

The first tier is the immediate goals. These are goals that can be completed in six months or less. This requires that you look at all the various debts you have and make a realistic list of your options for dealing with those debts. Another area to consider is personal savings. If you read the post, Emergency!!! What Do I Do Now?, it is really important to have some cash set back to take care of things that happen in life. Above all, make your goals as specific as possible. Making the statement “I will cut back on using credit cards” is not a goal. Stating that the savings account will have some money in it is not a goal either. I would like to include a few ideas of ways that you can add items to the immediate goals list.

  • I will save $25.00 per week beginning January 1. By the end of six months, I will have $650.00 in savings plus interest.
  • I will no longer use credit cards for standard purchases. They will only be used in case of an emergency if I do not have the cash to take care of it.
  • I will pay off the lowest balance credit card within six months.
  • I will reduce grocery expenses by 10%. I will do this by making sure I have a shopping list each time I go to the store.

Short-Term Goals

Short-Term goals are goals that can be completed between six months and two years. These are a big longer and may take a bit more thought to make sure they can happen. Here are a few examples.

  • I will have $750.00 in an emergency fund by December 1, 2015.
  • I will pay off two credit cards and cancel them by September 1, 2014.
  • I will save $60.00 per month so that I can take a reasonable vacation in June 2015. That is $1080.00 for a short vacation.
  • I will start adding $100.00 per month to my mortgage payment by September 1, 2014.

Mid-Term Goals

Mid-Term goals are goals that can be completed between two years and five years. These goals are longer and require some thought. Keep in mind that things change over longer periods of time. So do priorities. Here are a few examples.

  • I will pay off my car(s) by January 1, 2018
  • I will have my emergency fund fully funded with $2000.00 by January 1, 2016
  • I will have all credit cards paid off. I will close all credit card accounts except for one.
  • I will start a part-time business selling craft products online by June 1, 2016.

Long-Term Goals

Long-Term goals are goals that take five years or more. Some things should be included in this list no matter what. Here are a few examples.

  • I will be debt-free by January 1, 2020 except for my mortgage.
  • I will pay my mortgage off by January 1, 2022.
  • I will have $500,000.00 in IRA’s, Retirement Accounts, and other assets by January 1, 2025.
  • I will have $50,000.00 set aside for my children’s education by January 1, 2023.

Living Document

Hopefully, it is obvious that this goal listing is a living document. A living document is one that changes with time due to circumstances. If savings for the immediate goals list can be accomplished in four months versus six months, then the immediate goals list should be updated to reflect that.

It is a good idea to visit the goal list weekly (at least) to check how we are doing. It is ok to change your priorities. As a personal example, my goals have changed considerably since I had brain surgery in June 2009. Things happen in this life and we need to adjust as those things happen.

The important thing is that we keep those goals in front of us so that we can make progress. Like so many things in life, the road may not be straight but if we have goals in mind that we are striving for, then even when things happen, we can keep focusing on where we want to get to.

Without writing goals down, everything we want to do becomes just a nice idea.

What are some goals that you are striving for? Let’s share those ideas here. Maybe you have something in common with someone else.

Emergency!!! What Do I Do Now?

I wanted to talk about emergencies today because of something I recently went through and some things one of my daughters went through too.

Have you ever noticed that when things seem to be going pretty good, something always happens that attacks your finances? It seems that the more we put forth an effort to be responsible with our finances, the more things happen that seem to try and derail us. I have had those experiences with my faith as well.

The other day, I was getting ready to go out of town to visit some family. I had already noticed that I needed to replace the tires on the front of the car so I took the car to the shop to get them changed out. Well, it turned out that the back tires were in just as bad a shape as the front tires. Instead of changing two tires, I ended up changing all four of them. I had not planned on spending that much money on tires that day.

I am in a good position though. I have money in several different accounts and was able to move some money around and pay for four new tires without much issue.

My youngest daughter ran into a similar situation a few months ago. I’ve talked to all of my kids about putting some money back just in case something happens that they are not ready for. She actually took my advice and had been putting money away from the job she has. She was able to have $800.00 in repairs done to her car. Even though she was not happy that she was spending that money on her car, a few days later, she shared on Facebook with her friends how good it felt to know that she had the money there to take care of it.

I’ve told all of my kids that they should have $1000.00 in a bank account just in case something comes up. I’ve heard that from many sources. If you look up “emergency fund” on the Internet, you are sure to find thousands of results that say just that. The usual response from the kids to that is “that’s easy for you to say, you make a lot of money.” Well, I don’t really make a ton of money but it is something I feel strongly about. Instead of setting a goal like that, I suggested that they put $100.00 away for something unexpected. Hopefully, while they are gathering that money, nothing comes up that they need to address right away. Once they have that done, I tell them to slowly work that amount up until they get it to $500.00 and then to $1000.00.

When I first started putting money away like this, my initial goal was to get $200.00 put aside as soon as I could. It took a while, probably 2-3 months, but I was able to do it. If you can get $1000.00 put aside, that will cover most repairs to the things you have. Even if you have a house, $1000.00 will more than likely cover most repairs, from a broken window, to an air conditioner repair.

It does not matter how you start. It could be that once a week, you pack your lunch and take that money and put it aside. However you do it, by having that money available for those “oops” moments in our lives, you can pay cash for those repairs. After all, it is not a matter of “if” something is going to happen, it is a matter of “when” something will happen. The result of that kind of savings is that you don’t have to put the repair on a credit card. Any time you can avoid using a credit card, you are better off.

Saving $5.00 per week comes out to $260.00 in one year. That does not include the interest, however small that is, from the bank. $10.00 per week adds up to $520.00 in a year. Just keep in mind what the money is set aside for. It is not there to go out to dinner or buy those clothes that are on sale. It is for things that must be repaired or it causes hardship in your life. If you use some of it, then slowly build it back up.

With credit card interest at ridiculous levels, any chance you have to avoid them and pay cash for minor repairs, the closer you will get to eliminate any debt you have on credit cards.

Today, my “emergency fund” typically has about $3000.00 in it. Short of having to buy a new car, I have just about anything covered that could break. The tires did not really bother me. Replacing tires is a necessary part of owning a vehicle. It’s done, the car is in good shape, we are safe driving it and I do not owe anyone for getting the tires replaced. You can do this too.