Well, colleges are back in session again with students going back for Fall Semester.  There are a mixture of emotions, from excitement to anxiety when a new semester starts.  There are also many expenses that must be covered in order for the college student to get settled. 

Financial aid money, grants, and student loans are often used when kicking off the semester.  However, too many times the average student spends too much up front and then struggles for the remainder of the semster.

This is just a reminder to keep your costs low up front.  I know books are crazy expensive, but maybe you know a friend who can lend you the book if they had the class before, or perhaps the Professor will allow you to share a book with someone. 

Just look for clever little ways to save money (i.e. make sure all roomates share in grocery expenses), which will ultimately allow you to stretch your dollar throughout the semester. 

And for crying out loud, do not go buy a designer purse or new set of golf clubs with your student aid.  That is just silly!

So who exactly are Debt Recovery Tradesmen?  Well, I'm not even 100 percent sure, but I will try to break it down for you.  I have recently heard this title used and wanted to just explore it further to find out who these folks are.

Dictionary dot com defines tradesman (or tradesmen - plural) to mean a worker engaged in a trade or a person skilled in a particular craft. 

Therefore, from that meaning we can derive this defintion of Debt Recovery Tradesmen to mean people skilled in recovering debt. 

However, do these people actually help you payoff your personal debt or are they actually debt collectors?  To be honest, I belive both could be defined as debt recovery tradesmen, but for the most part I believe they are service providers out to help companies recover outstanding debt. 

So in a nutshell, this is a fancy word for a debt collector.  I just thought you may want to know.

So you need to "get out of debt fast" right?  Well, actually that phrase reminds me of another common phrase which you have probably heard quite often: "get rich quick".

And to be frank, the true fact about both phrases is simply that it is not possible.  However, just because you cannot get out of debt overnight does not mean it is an entirely slow process.  Let me share with you an example:

John is 28 and has recently borrowed money from the bank to purchase a truck.  Here are the numbers:

- $7,000 borrowed
- 6.5% interest rate
- 60 months (or five years)
- $136.96 monthly payment

So, when all is said and done, John will pay a total of $8,216.60 (principal and interest) for his truck.  This will take him 5 years.  

What if John decided he wanted to get out of debt quickly.  Well, unless a rich uncle gives him the $7,000 to payoff the truck, John is going to pay more monthly for his truck.

With efficient budgeting, John could pay $300 per month on the truck and have it completely paid off in 2 years or less, instead of the original five.  With this example, John did get out of debt fast as he will be able to live for three additional years debt free! 

By the way, once John pays off his truck at age 30 he should put that $300 into a growth stock mutual fund every month until he retires at 65 and here is how much money he will have thanks to the power of a 12% compound interest rate:

$1,929,287.84

Yes that is almost $2 million, so stay tuned to more blog posts on how compound interest works or simply check out my 3 step guide below for more info!

HBOT Defined:

HBOT is a Household Bill Organizing Template.  I personally made up this term to define a spreadsheet I built to manage my personal household expenses.  The template that I created is included in my PeskyDebt 3 Step Guide, but here is the basic principle of what I created:

A list of all my household bills including:

Mortgage, Cars, Groceries, Eating Out, Medicine, Car Insurance, Life Insurance, Water, Electric, Gas, Phones, Trash pickup service, mowing service, Gasoline, Credit card(s), Student loan(s), Savings, Tithes/Gifts, Clothing, Entertainment, Debt payoff amount monthly. 

Those are just a few of the categories that I have used in the past.  However, I have since paid off lots of debt, so those are not all relevant for me, but of course you can make your own.  Beside each category, which should be listed down the page, here is what you should breakdown for an effective houshold bills tool. 

Ideal % - This is the ideal percentage you should pay for each of those categories every month.  I defined these number in my HBOT from the guide.

Payment - This is actually how much you pay each month for those categories.

Our % - This is the percentage that you actually pay out of your total income every month for each category.

Difference - this is the calculated difference of the ideal % and your % to show you how good or bad you are doing compared to where you should ideally be with your personal finances.

Date to pay - This is the general date of the month that you pay each of those bills.  For example, if you are paid every 2 weeks, then you will likely allocate funds for each category only on 2 days of each month (15th and 30th).  This is your discretion, but don't make it hard.

Beginning Amount and End Amount - This is an automatic calcualtion built into my spreadsheet which calculates the money taken out of my budget for each of my categories.  It is best to try to zero out your account, or rather, know exactly where every dollar is going on paper before you actually spend it. 

So, you need to defer your student loans.  Let's start by creating a simple definition for:

Student Loan Deferment:

A way to pay back your student loans at a later date.  In a way, you will be pushing back your payback for some specific reason.  Those reasons and a few types of student loan deferments may include:

• Education Deferments - this type of deferment usually means that the student is still in school, or returning to school for a graduate program or another degree after graduation.  As long as the student is enrolled half-time as defined by the school, he/she will usually qualify for "in school" or this education deferment.
• Hardship Deferment - this is often referred to as economic deferment and means that if someone is in a financial bind due to unemployment or a lost job (layoff), he/she may qualify for hardship deferment.  Contact your lender to learn of the qualification necessary for this deferment. 
• Disability Deferment - This deferment applies to those students with disabilities, or those unabled to work due to injury or illness.  It can even be for those that may be caring for a spouse with a disability.   

August is a big vacation month; and with the lure of beaches, mountain resorts, golf courses and the countless other vacation destinations that fill your mind, please be aware of your money.  It is so easy to be tempted to use your credit card to take that vacation.

It is one thing to have an emergency credit card (though I do not recommend it for everyone) to book vacations and tickets and all that fun stuff.  However, it is a completely different situation if you actually depend on your credit card money to pay for the vacation.  If you book a condo, for example, on your credit card, then you should have the cash to immediately pay off that reservation when the bill comes due, or even go online and pay it immediately.  

Do not use a credit card to go on vacation.  It may be fun for a week, but you will soon return home and have an extra $3,000 in debt and more monthly payments.  You could be paying for that single week of pleasure for years.  

It is better to just have cash available to go on vacation.  It will force you to budget your vacation wisely and you will not have to worry about added debt or higher monthly payments when you return from your vacation.  Vacations are supposed to release stress and tension.  Going on vacation by way of a credit card will simply increase your stress and tension.  So, if you do not have cash for vacation, just don't go.