What is your debt bill?  What do I mean by this, right?  Well, I was just sitting here thinking, and I figured something out that is quite simple.  You should sit down at your kitchen table with all your bills.  Sort through them and categorize all your debt into the same pile.

Then, total up all your debt to come up with your "debt bill".  Your debt bill will be one big bill to which you can attach a definitive dollar amount. 

For example, list your amounts owed on each of your debts like this:

1. Credit card 1 - $1,300

2. Credit card 2 - $2,800

3. Car 1 - $12,000

4. Car 2 - $8,000

5. Student Loan - $14,000

6. Home - $138,000

TOTAL DEBT BILL: $176,100.00

So, that is a large bill right.  Well, if you take away the home it cuts it down to $38,100.00

The point:  Coming up with a debt bill puts a number in your head to strive for.  If you carry around $38,100 in your head while you are agressively paying off your debt, then you always are reaching for that goal.  Then, go re-evaluate your debt bill in one year and what if the number has dropped to $24,000.  Now, even though you may not have paid off individual debts, your total debt bill is much smaller and you fell great about your accomplishment.  Good Luck and figure out your debt bill today! 

What in the world does consolidate consolidation debt loan mean?  Well, I have happened upon that exact terminology more than once recently and the only thing I can figure out is exactly what it says.  People want to consolidate their debt consolidation loans.  What?  That is just stupid!  First of all, debt consolidation loans are a bad idea simply because you are just transferring debt and spreading it out over time.  I've blogged about that before and will blog about it again soon, but that is beside the point.

So basically, here is what these jokers have done and want to continue to do:

1.  They have consolidated (a.k.a transferred) their debt (credit cards, cars, personal lines, lines of credit, etc.) all into one debt consolidation loan already, which may have resulted in lower over all payments over a much longer period of time (that is bad enough).

2.  Now, they have not learned their lesson, so they have obviously taken on additional credit card debt, just as I had predicted in an earlier blog.  Now, they want to roll that in with their existent debt consolidation loan into a new debt consolidation loan.

If you are one of these people just stop it right now!  I am not trying to be a jerk, but you need some tough love and to be frank you are absolutely wasting your life and drowning in debt.  Go ahead and download my free guide right from this site.  You can find the link above.  Take an hour and read it and get yourself out of this mess.

Absolutely do not even attempt another debt consolidation loan because your cycle will continue and you will eventually file bankruptcy.

So, is a debt consolidation loan bad?  First, let me start by quickly defining debt consolidation loan.  This is a single loan that pays off many of your existing debts, and it sometimes results in lower monthly payments over a longer period of time (longer repayment schedule).  Keep in mind, however that this loan does not eliminate your debt, it simply transfers it.

In my opinion, these loans are bad for the most part.  The loan may not be bad for everyone and may in fact benefit some folks, but for the majority of people really deep in debt, these loans are bad and this is why:

People in general do not change their financial bad habits.  Therefore, if a person gets a debt consolidation loan and does in fact lower his monthly payments, then in his mind, he has all that extra money now per month.  He will then get even more credit cards and other unsecured debt, resulting in even more bottom line debt to pay off.  The debt consolidation loan simply transferred money and drew out the payments over a long period of time, and then this guy takes on more debt, which just ends up resulting in a much worse personal financial position over time. 

For this very simple reason, debt consolidation loans are bad.

Yes, you just read that eating out can save you money and here's how. 

I generally do not promote eating out on this site as it is often not an affordable option for those in severe or minor debt.  However, I am feeling generous today, so I will share with you a very practical, yet seldomly practiced tip on how to save money by eating out.

SHARE YOUR FOOD.  That's it.  Whether you are going to lunch with a friend, spouse, work buddy, or child.  You should find someone who is willing to practice the "art" of sharing food.  And here's what you could potentially save everyday; if you eat out at least once per day.

Typical expense for a married couple going to quick set down lunch eating off the lunch menu (tax not factored):
2 Sodas - $4
2 Meals (lunch prices) - $13
Tip - $3
Total - $20

Now, the same married couple goes to the same restaurant, but shares a dinner portion of the meal and they drink water.  Here's the cost:
2 Waters - $0
1 Meal (dinner price) - $9
Tip - $1.50
Total - $10.50

YOU HAVE JUST SAVED $9.50.  Now, calculate that over the period of 1 year, and let's say you eat out once per day with your friends, spouse, or someone for 5 days per week, 50 weeks per year.  That is a grand total savings for the both of you of $9.50 per day for 250 days.

TOTAL SAVINGS:  $2,375.00

So, if you have to eat out, then do it like this and seriously save yourself thousands of dollars per year.

Well, by now you probably know that in my opinion, budgeting is a key ingredient to financial security.  But, how do you budget your money when your income is different every month?  Well, it is quite simple and here is the formula:

Look at your past year of income and write down your best month and worst month, income wise.  For example, if you are a sales person then one month you may make $10,000 and the next you may make $1,000.  So, it is obviously hard to set a budget.  But do this.  Take the averages.  Simply take your best month plus your worst month for the year and then average the two.  

So, in this example 10K plus 1K is 11K, and then averaged out (divide 11K by 2) makes it:  $5500.  So you should set your budget at $5,500 per month, and live on that.  Therefore, when you have a large month (i.e. 10K), then that money will automatically carry over for when you may have that skinny month (1K).  

Really, this is simple math, and is a great tool to use for those of you with volatile incomes, but you want to be on a consistent monthly budget. 

Keep in mind, there is a concept that stock traders use called "sell the news".  What this means is that people watch what the news is reporting and either buy or sell stocks based on those news reports.  These trades often have nothing to do with the companies performance financially.  Right now our society is experiencing a "sell the news" type mentality with personal finance.  The news often reports the really bad conditions of the markets, housing and all things financial, and it scares us to death. 

I simply caution you to be careful not to put all your faith in the news, and allow yourself to examine your own personal finances, as you have a much better idea of what is going on with you than the news.  This is just a note of caution. 

So, are you addicted to spending money?  With the economy in a bit of a slump right now, I have personally noticed a big change in society just through observation.  I enjoy an occasional lunch date with my beautiful wife, but there seems to be a different feeling in the air at the restaurants right now.  To be frank, people look miserable.  Next time you are out just look around and see.  I believe it is because they are broke or maybe they have been told they are going to go broke by the news, but yet they spend anyway. 

I could be off base here, but it seems people have a hard time giving up the spending habit, even during "hard times".  They keep going out to eat, yet they do it with a sour look on the face.  If you are going to regret that $30 lunch, then don't do it!  Easier said than done, I know.  But next time you feel bad about it, just set back and really analyze your own situation and if you really have it in your budget to spend, then enjoy your meal and relax.  If you do not, then don't make the same mistake twice.