Going Into Debt-Do Millionaire Nurses Do It????

Debt is a way of life in the good ol US of A.   We really don’t even think about borrowing money for a car, putting the kids braces on a credit card, or even that most productive of home appliances, your big screen-6o months of easy payments-no interest!

Till you are a day late with a payment on payment 59.  Then the interest on the whole 60 months becomes due.

Won’t that day feel like the day the last patient  threw up all over you, after drinking a fifth of cheap wine….

Flexo, at Consumerism Commentary has written a great post on 5 debts to avoid. These include:

1. Pay-day loans-because of high interest.
2. Loans on your expected tax refunds-again because of the high interest rate, These loans are also used to entice people to buy things that wouldn’t ordinary buy-“it won’t cost you anything but your tax refund!!!!”
3. Gambling debts-it is one thing to gamble your money away-another to gamble away money you don’t even have.
4. Rent to own debt-this one gets people, cause they don’t think of it as debt-so they pay what amounts to a high price for an item, that basically is equal to a huge interest rate.
5. Debt on  an item that is going down in value-cars, mobile homes are the two most common items here-although any appliance debt, four-wheeler, boat, …….could qualify.

Now, he goes on to say that student loan debt, and house mortgage debt, and even car debt in occasional limited circumstance is justified.  Now, because the “right” of home ownership is so deeply ingrained in our country, that the thought of putting off  home ownership – until we can pay cash-would seem crazy to most.  So, my feeling is mortgage debt is ok, as long as it meets reasonable  criteria-see this post.

The problem with student loan debt, is that it is so easy to get these days, people borrow money for living expenses, not just tuition-that might mean expensive apartments, bar tabs, car payments, etc.  You wake up the day after graduation, so excited to get that first job, at 40,000 bucks a year-whooo-hoooo.   Then you realize you borrowed 125,000 dollars for that degree, and if you are lucky you might pay if off with your first social security check-forty years down the road.  And no, most student loan debt is not bankruptable-it is yours forever.

That leaves car debt, and I have written so many times about car debt lately, that I am not even going to go there.

So, for those of you who say,”What am I going to do now.  I have borrowed money to make ends meet for years!”

Well, you are at the right place.  That’s the point of  “The Millionaire Nurse”.  To teach you how to make goals, plan your spending, and make the correct decisions that will allow you to prosper for the long haul, and not just feeling good today!

So think twice about going further into debt.  If I can  make you think twice about borrowing money, before you execute, then I have done my job.  The rest is up to you-Good Luck!

Change of Shift-Great Place for Nursing Reads!

Change of Shift, the latest compilation of blog posts from the Nursing World is up at Emergiblog.

Check it out this weekend.  Winter is a great time to curl up with your laptop and check out what is going on with nursing-all over the world.

Cars: A Love/Hate Relationship for Millionaire Nurses! Or What to do When You Can’t Make the Payments!

Cars-an American passion-but what can you do when your dream becomes a nightmare, cause you can’t make the payments?

Cars-a rite of passage for sweet 16’s-I know, in some places it is now 17 for the driving age, but not here in the South-especially in farming country.  Kids here are driving tractors by age 8, and the pick-ups in the fields by 10.

So it’s not a surprise that car debt is also almost a religion.  Paid for car-who does that????

I am reminded of an old MAD Magazine cartoon-“You remember MAD Magazine don’t you??”  For you twenty-somethings-it was a smart-alec illustrated magazine for tweens-was around a long time-“Spy vs Spy!” was my favorite.  Actually, it is still around-check it out…

Anyway-I digress while waxing nostalgic-The cartoon had a picture of an elephant in the back-yard of suburban America, with the caption-“The only reason there is not an elephant in the yard of every American, is no one has offered one for 60 interest free monthly payments!”

Well, I thought it was funny…..

In these challenging financial times, many people find they have more car than they can afford.  What can you do when your car is upside down and you are struggling to make your payment?

• Well, you can have a yard sale, put you and the kids to work in extra jobs, eBay, consignment and raise the difference to get clear title.  Then sell that ugly lump of coal (they are not as cool looking when you are behind on your payments….)
• You can go to a credit union or local bank, especially if they are holding the note-and ask them to release the title, so you can sell the car-make sure you get the full Kelley Blue Book, retail value.  You would sign a note for the difference-and pay it off as quickly as possible.
• You can let the note-holder take back the car.  They will then sell it at a small part of its value, and then will try to collect the difference from you.  (Yes, the proverbial Take-Back Man).  Your credit score will take it in the……..

What do you do for transportation?   Raise enough money to buy an old vehicle, that is in adequate mechanical shape to get you to work.  You may have heard of “Two Buck Chuck”the wine, this might be “Thousand Buck Truck”, the Whine…..

Anyway-then save like crazy, to upgrade your ride, as  your financial condition improves.  Tell your friends you are just being like Warren Buffet-who is said to drive an old pick-up around Omaha….

What if you leased your car and you can’t afford the lease payment-well then you are just screwed…..

Well, not really-you basically have the same options.  Get out of the lease by paying the lump sum pay-off, which is likely  substantial.  Try to find someone to assume the lease payments-if your lease-holder will allow.  Or, just turn it in-again, there is abig credit hit for this-plus they too, will come after you for the payoff when they sell it.  See this article on Edmunds.com for their suggestions.

So now you are saying-“If I had the money, I wouldn’t be in this shape, so what good does this info. do me???”  Well, that is a valid point-which is why I wrote this post.

If you don’t have car debt-don’t go there.  If you do, try to pay it off as quickly as possible.  Paying yourself a car payment every month for a lifetime, will make you a true “Millionaire Nurse!“-unless you are a near senior citizen like me….Every debt you have is a potential risk-no one can see the downside when your  “new car fever”  strikes, so watch out for it.

Reading this blog is like the flu vaccine-an ounce of prevention…. and all that.

So, be careful out there, as the guy in “Hill Street Blues” used to say.  Car payments are evil!

So, let us know, if you love or hate your car or car payment-let us hear your car stories.  Let us hear the name of your car……

Saving Money-While Losing Weight and Getting Fit-Win/Win/Win!

“How can you save money, get fit, and lose weight all at the same time, Dr Dean?”

“Well, I am glad you asked.”  Here are my rules, for “Millionaire Nurses”, who know the value of saving money, and  good health and fitness.

• Burn more calories:  Bike to work, walk to work, even if it is only once a week.  Same for shopping, park the car and walk to several of your destinations if possible.  If you have to drive, park as far away from your work as possible-(won’t save money, but will burn calories.)
• Stop fast food-take healthy food for lunch.
• Switch shopping time to exercise time.
• Take advantage of health insurance/workplace incentives to lose weight and exercise-Some companies drop premiums, or even give cash bonuses if you meet certain measures of losing weight, stopping smoking, or exercising.
• Cook at home-make it fun-turn the tv off, put on your apron with nothing underneath(keep it safe), turn up the music, use healthy ingredients, have your family help(with clothes underneath the apron if you have kids, please!)
• Instead of date night out at the movies, or on the weekend-make it play time out-take a walk at a park, bike, build a snowman, cross-country ski.
• Smaller food portions at meal times translates to lower grocery bills.
• Skip desserts at home and when eating out.
• Save water, and take showers together with your spouse-(if you don’t know how this can lead to burning extra calories, then we need to talk.)
• Stop buying pre-packaged, high sodium/preservative sandwich meat.  Buy a chicken breast/bake or grill/cut on the diagonal for sandwich size portions-you can do the same with pork-loin, or inexpensive roasts.   If you have too much to use in a couple of days, freeze them, labeled with date and identity, in sandwich size freezer bags.
• When buying exercise equipment, buy used on Craig’s list or E-bay.
• When joining a gym, watch for special rates, ask for friend referral coupons, and make sure you have a way to cancel your membership without penalty!
• Switch to whole grain cereals or oatmeal-buy in bulk/add low-fat milk, fruit instead of cereal bars, or skipping breakfast.

What are your favorite ways to save money while losing weight and getting fit?  Let us know your tips.

And to get you started, here is a link to a 2 bucks off for Soy milk by 8th Continental-I love the stuff! And it is healthy too.

And if you need “Emergency Money Resuscitation” then go pick up my free E-book, filled with money-saving tips-did I say free.  You will then receive my e-mail mini-course on personal finance, and newsletter- all free.

Carnival of Personal Finance is up!

Check out the latest version of the Carnival of Personal Finance-great reads/lotsa learning goin on…..at the Million Dollar Journey’s Blog.

Have a great Monday.  Spend a few minutes in quite reflection for the folks in Haiti and for the goal of equality, that this holiday stands for.

“PAD” Your Savings: It Should be “Planned, Automatic and Done!”

Saving money, is not done just for the sake of saving.  To be most successful, develop a goal and plan.

In medicine we develop a treatment plan or guide.   If the diagnosis is heart failure  then doing a chest x-ray, blood gas, give diuretics and so on…..,

As circumstances and facts change, then adjust the treatment plan.

What happens in cases where there is no plan? Here is an example:

You have three doc’s consulting on the case, they all write conflicting orders, the nurses have no idea who is in charge.  At best, the remarkable being that made the human body comes through and the patient gets well anyway.  At worst, an injury or event occurs that slows down  progress-drug- drug interaction, allergy, or infection occurs. Frugal lawyers get involved….Makes me shudder to think about it.

So how does that compare to your personal finance and savings.  Those that have a plan, and direction will always win.  Doesn’t mean bumps in the road don’t occur, but you have plans in place to deal with them.

So what do I want you to do about the Savings part of your personal finances:

1. Determine what your savings needs are-home down payment, car upgrade, new tires,  or retirement.
2. Make sure your emergency fund is in place. See this post about my recommended Super-Duper Emergency Fund.
3. Once you determine the need then decide on how fast you can meet the goal-10 bucks a week or 100 bucks a month.
4. Make your savings automatic: your 401-k is usually painless, because it comes out without your thinking about it.  So do the same with all your savings-have the amounts you choose drafted right after you get paid, to the right accounts or sub accounts.
5. Review every three months for adjustments.  If you gradually increase your savings rate, it is much easier to reach goals, without everyone in the family having a heart attack-“What do you mean, I can’t go to Old Navy this weekend?”

So go “PAD” your savings-“Planned, Automatic, and Done!”

Housekeeping:

• For these posts directly to your e-mail, sign up on the right.   I will not sell your email address.
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• To get my free E-Book on “Emergency Money Resuscitation” go here-did I mention free!

Nursing News for Millionaire Nurses!

Here is a summary of economic and world news affecting the world of nursing.

This article discusses nursing as a second career for displaced  or unsatisfied workers-something that has gone on for years.

This article discusses the more than 1800 nurses who have volunteered to go to Haiti to help with disaster relief-not a surprise, because that is what nurses do-help others in need.

This heartfelt story by a nurse who is thankful for a wife who supports him, when job stress is too much.

This post by Kathy Quon BSN discusses time management for nurses, and resources available to help, for those who struggle with managing their workload.

This post gives you ten apps for the i-phone, that are applicable for nurses/health-care workers.  As long as you NEED them, plan for them in your spending,and don’t just lust for them.

And finally, this post from the American Journal of Nursing, with their top ten stories of 2009.

Enjoy, and please share with us any stories in the Nursing world that would relate to “The Millionaire Nurse” community.

Rainy Day Reads: For Millionaire Nurses!

It is raining steadily here in the South.  Although, after 2 weeks of bitter cold (for us) a little rain and warmer temps (upper 50’s and low 60’s) is not bad.

Here are a few posts that I thought were interesting enough to share with you, so curl up and start reading.

For you young student nurses, and those  just getting started in life, read this post about inability to get a credit card in Twenty Something Finance.

For you older guys wanting more information about the benefits of giving, check this post by Free Money Finance.

And for the shoppers out there, try this clothes shopping article out by The Simple Dollar.

And finally,Daniel, at Sweating the Big Stuff, posts about banking issues, which we can all use a little help.

So, enjoy your day, while learning how to become, “The Millionaire Nurse!”

Mortgage Escrow Accounts-The What, Whys, Wherefore’s, and the Do I Havta’s?

Escrow accounts were the topic of a recent question over at Cash Commons.  This is a great money, and personal finance question and answer site, hosted by “The Mighty Bargain Hunter”.

I thought I would discuss a few of the details about escrow accounts-considering the number of houses being sold to first time home buyers, with the recent tax credits, combined with low prices.  This is a great time to buy a home, if you are READY.

I found this link  very helpful in explaining escrow accounts, and it links to pages with examples of how the monthly amounts are figured.

In summary, an escrow account is a type of savings account, required by many mortgage companies, and their guarantors, such as FHA, VA that are designed to ensure there is money available to pay  your taxes and  home owners’ insurance.  The details about the amount required monthly  is given to you when you close your loan.  (One of the 100 pieces of paper you sign or initial!)

The escrow amount, is usually built into your monthly payment- many people forget there is one until they get a notice that they need to increase the amount because taxes or your insurance went up.

The reason for a mortgage escrow account, is to protect the lender, or mortgage holder from losing their collateral-your home.  How could this happen?

• you fail to pay your homeowners insurance- a fire occurs-now your home has no value-the lender’s collateral-gone with the wind….
• you don’t pay your taxes on your home, your state or county, sells the home on the courthouse steps-your mortgage holder is screwed!

Obviously, in this day and age, they can’t afford that-so-they require escrow accounts.

Now if you pay 20% down, have no PMI (Private Mortgage Insurance) and are working with a private lender, escrow accounts are not always required-just ask your lender-I haven’t had one in years.

Now the rules for escrow are complicated, but there are protections to keep unscrupulous mortgage companies from holding on to too much of your money for too long.  The Real Estate Settlement  Procedures Act or RESPA covers the rule lenders must follow.  This includes rules that prevent them from making you deposit excess amounts-if the amount deposited  is in error, and your balance builds up above 50 bucks above that needed-they are required to send you the money within 30 days.

But the lenders also have rules that allow them to have a “cushion” to make sure there is enough to cover expenses as they come due.  They can also require you to increase your monthly deposits if the account balance drops-or send a one time amount if they feel is necessary.

Now, of course, when you have someone “looking after you” ie paying your taxes and insurance, then what happens when they screw up and don’t pay.  This is one of those areas that causes great heartburn, because insurance may get canceled, tax liens placed and other potentially bad things happen.

So Millionaire Nurses know who is in charge of looking after them-THEY ARE!  As part of your financial planning, put a tickle reminder on your calendar to email or call your insurance agent periodically to make sure everything is in order.  Get to know the insurance people in your life enough so they will be comfortable calling you if there is a problem.

If you get a notice about a tax bill being late, don’t assume the mortgage holder will handle it-check on it right away-before penalties start to pile up.

Yes, you may say you don’t owe them, it wasn’t your fault-how easy will that conversation be with the folks at the courthouse.

So deal with these problems early before they become huge problems.  Just like an IV site infection,  prevention is way better than  sepsis, gorillacillins,  and ICU-become proactive with the biggest investment in your life,  YOUR HOME!

Millionaire Nurses and Disaster Response/Giving-Now Is The Time To Step Up!

One of the most important tenets or “Millionaire Nurse Mindsets” as I call them involve giving.  This means giving on a routine basis to your church, and or other worthwhile charities.

However, there are times when you just have to go above and beyond your planned giving.  This is the reason I recommend planning your spending, so you have a margin for needs/gifts that come out of the blue.  This may be a neighborhood child selling something to raise money for school, or a loss of a home to a fire or flood in town.

This disaster in Haiti qualifies on all fronts as a huge need that we all need to respond.  I will be giving to the Salvation Army on-line, and I challenge all Millionaire Nurses and wannabe’s to do something similar.

Regardless of the political situation in Haiti, these are women, children, elderly who need the basics just to survive.

Doctors without borders is another great way to help.

For actual volunteer opportunities for nurses, check out this site at The American Nursing Association for more links to volunteer organizations.

So take a few minutes to say a  prayer for these people, and give to the organization of your choice.

That’s what “Millionaire Nurses” do!