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Debt Free Principles is now Debt Free Guys located at www.debtfreeguys.com.  Please stay connected with us there, Twitter and Facebook.

Real Wealth

Robert Kiyosaki, Rich Dad, defines being wealthy as having your investments exceeding your expenses.  This can be done through your own business or businesses, investments in the stock market, real-estate and/or minimizing your expenses.  The day you don't have to rely on someone else for enough of a salary to cover your expenses you're wealthy.

Foreclosing or Walking Away from Your Home Has Consequences

Home owners that foreclosed, walked away or defaulted on a previous mortgage are finding it hard to get financing now that the housing market seems to be turning around.  They shouldn't be surprised.  Their activity stays on their financial records and often impacts FICO scores, which is the gauge lenders use to determine lend-ability.  That's why it's key to always live below your means and have emergency savings.

More - Mortgage Relief Program

In the Market for a Car?

Buying a used car is likely the most cost effective.  Do your homework first, however, and make sure you're getting what you're expecting.

More - You Can Afford the Car But Can You Afford to Drive It?

Retail Shoppers Have Disappeared

The government shutdown impacted retail sales.  With the next scheduled crisis just after the holidays, current spending levels authorized through 01/15/2014 and the debt cushion extended through 02/07/2014, shoppers aren't likely to loosen the purse strings this holiday season. 

More - "Do you want to save 10% on your purchase today?"  "No."

You Can Afford the Car But Can You Afford to Drive It?

Most of us typically dream about driving a nice car. It seems that Americans especially have always had an affair with their cars. We have been barraged with images of vehicles from the time we are children into adulthood in toys, cartoons, posters and every other commercial during a typical Sunday football game.

I personally dream of some day driving my own Audi S4, but there are many other models that bring a twinkle to our eyes; Corvettes, Cadillacs, a 69 Camero, Mini Coopers, Jeep Wranglers, BMWs, the new Tesla and yes even the oh so humble Toyota Camry. I need someone to explain that last one to me though.

So you know what car revs your engine and you have it picked out and have been saving or planning ahead for it. So you can afford the car, but can you afford to drive it?

Per the U.S. Bureau of Labor Statistics the average American household has 1.9 cars and spent $8,998 on transportation costs in 2012. That is almost 17.5% of all our expenditures. Yes, you read that correctly, we spend over 17% or over half of what we spend on our homes on getting to and from them. What costs so much?

The reality with almost any purchase is that there are opportunity costs associated with them. What is an opportunity cost? That would be the additional costs to ownership. For our cars this includes among other things, gas, insurance, taxes, license and maintenance.

Here are 4 ways to save on car expenses:

1.       Raise your insurance deductible- put away your deductible in an emergency account and raise your deductable from $250 or $550 to $1000. This can save you $10, 20 or even more on your monthly insurance premium. Insure yourself rather than paying the extra to an insurance company

2.       Shop around for insurance – there are many providers out there shop around and pit them against each other. There are many online tools you can use to shop for insurance

3.       Premium gas – your owner’s manual says you need the top of the line gas, but do you really? Switch between the top grade and medium grade every other time and save yourself a few dollars each fill up

4.       Refi – you do it with your home, why not try it with your car. If you are still out a few years on your loan shop around for a lower rate on your loan. Switching banks can save you a few dollars a month on your loan

Interest Rate? What Interest Rate?

The gap between 30-year fixed rates and one-month CDs or a saving's account rate is widening, making it more difficult for savers.  This especially hurts the middle class and retirees

Tips to Create a Budget

8 tips to creating a budget.  They key points are to be flexible and consider both sides of your balance sheet, if necessary.

Tips for Cutting Back Credit Card Spending

Three tips for cutting back spending on your credit card.

"Do you want to save 10% on your purchase today?" "No."

Did you ever regret agreeing to sign up for that retail credit card?  Here are four steps to correct that. 

Fix it for Free

There's nothing cheaper than free.  Learn how to get help fixing things for free.  Fixya's a pretty cool website.  They cover auto repair, cell phone  repair, even children's toys.   

NFL/Netflix Deal

The NFL is squashing rumors of a possible deal letting games to be streamed through Netflix or Google.  In businesses, rumors typically come from a shred of truth.  Cord-cutters stay tuned.  If/when this happens, it will provide much needed competition to cable TV.

More - Cutting the Cable Cord

Interview Prospective Realtors As Potential Employees

We don't think many people who are selling or buying a house consider "interviewing" prospective realtors.  It's good advice, though. 

Saving & Investing

Start early and be consistent.

The Washington Threat

Business leaders around the country are starting to see Washington DC as the biggest threat to the U.S. economy.  This affects jobs.  Because of the recent "crisis" many businesses saw consumer spending drop.  This happens crisis after crisis and Washington is nothing anymore if it's not a crisis. 

Despite Washington's Best Efforts to Ruin The Economy

Retail stores are poised to hire temporary workers this holiday season.  That's a relief for many.  Expectations are that many of these positions may lead to full-time work. 

Kicking the Can Down The Road

Yes, an 11th hour deal was made to fund the government but only temporarily.  As we said last week, we'll be having the deja vu yet again early 2014.  Yawn!  In the meantime, pay attention to see if spending is even cut back. 

Successful Financial Management

Three keys to being successful with your finances.

We Need More Austrian School of Economic Thinkers

Said Einstein, "We cannot solve our problems with the same thinking we used when we created them."  Will economic manipulation play out better this time?

Preparing Your Child for the “Real World”

We’re reading more and more about the escalating costs of college and how unprepared young adults are to manage their own money.  We’re not judging.  We were financial nightmares ourselves.  In hindsight, we feel we weren’t given sufficient tools to be prepared.  Blame that on upbringing or education or whatever.

Personal finance education isn’t coming from school anytime soon.  What’s a parent to do?  What if you treat your high school-aged child as a roommate?  Ha!?  What?  Why would you do that?

Hear us out.  Studies show that when students first get into college, they’re not financially mature.  They don’t understand the value of a dollar.  They don’t understand why they should be cautious about, spending, school sponsored credit cards and debt.  They aren’t prepared to pay bills or share expenses with their roommates.

As CNNMonday reports, the average allowance paid by the 61% of parents who pay one is $15 a week.  Most kids don’t save this money.  81% of parents say they’ve discussed money management with their kids.  What does this really mean when allowances are spent almost as soon as they’re received?  This suggests there aren’t enough real-life examples for children, only theory.  CNNMoney suggests using allowances as a “gateway to budgeting”, reserving the money for going out with friends and short-term expenses.         

What if parents took this further?  The idea is to provide a real-life example of the value of a dollar.  If, when students get into high school, they are treated as a roommate, they’ll more quickly become financially mature.  Maybe home shouldn’t be a free ride.    

What do we mean, exactly?  Have teenagers pay bills.  Maybe have them pay all or a portion of their phone bill.  Make them responsible for covering a portion of the groceries they eat, maybe provide cabinet space for their own food.  Make them pay for gas, car insurance or part of the car payment.  They could even pay “rent” and if they miss a payment, they sleep on the couch. 

This may require a bigger allowance or them getting a part-time job.  Of course, children can’t be responsible for covering all of their expenses without a full-time job.  Parents are still responsible for providing most needs, so make sure they eat and sleep well. 

Parents are also solely responsible, apparently, for providing their children with personal finance education.  We think this may be a helpful way to do so.