Hello, I'm your host, Mr. Chuck, a retired accountant turn truck driver, I reduce my debt in a relatively short period of time, debt reduction to achieve financial freedom takes commitment, confidence, determination. personal finance, what is personal finance, it's more than just paying off debt or creating a budget. It is planning, managing money, as well as savings and investing. Also the protection of your assets plus protection of income. While this podcast focuses on reducing debt, personal finance is very much more than that. This is the start of my season three. I've been doing this for two years now. And for those of you who are new or only listen to a few episodes, maybe you don't know about me. Mr. Chuck, I'm a retired accountant used to be a certified public accountant, had my own business, I sold my business and I became a truck driver. Mostly because I was tired of doing the same thing after 20 plus years. I think about 25 years. And in one day, while I was driving the truck, I was thinking, What can I do when I retire? I have really no hobbies, I have gardening, which is only in the summertime. I ride my motorcycle, it's mostly in the summertime. I don't even do that too much anymore. Maybe I will once I retire. I was like, What can I do? What can I do in the months where I can't go outside or whatever, just something different to do, to stay focused to keep reading up on things, learning things and keeping my mind active. And I came up, I create a podcast. And then I thought, well, what's it gonna be about? i The only thing I know anything about is getting out of debt. Because I just did it. And I learned how to do it. And I thought, well, maybe I can share that with everybody. But I didn't know anything about podcasting. I didn't know anything about recording audio. So to start with, I just, you know, tried a few samples. And well, that didn't work out myself. And expensive microphone, I didn't want to put a lot of money into it right up front, because I didn't know how long it was going to last. And I didn't think I would last this long. I didn't even think I'd last, you know, 10 episodes. And I studied up about podcasting, how to do it, what to do, what you need it and all that kind of stuff. So I just jumped in and start doing it. What else are we gonna do on the end, just do it. Now use planning for five years and then doing it for three weeks. So I settled on doing a weekly episode. Release it on Sunday, early morning hours, because that's willing day I knew I was going to be home. So if I had to get one, something recorded, I'd be able to record it Saturday and Sunday and get it released. So that was my schedule. And I did get out of debt. And I paid off credit cards, I paid off auto loans. I paid off my line of credit against my house. I even paid off my first mortgage. And it took me three years and eight months. And it was like $130,000 I was like wow. How did I do that? And I start looking at that. I thought wow, I need to share this with everybody. So that's why I did the podcast. So let's get back to personal finance. What is it? That's my history. My short history and podcasting. I want to thank all you people that listened to a large majority of my episodes and I apologize but the first three months they weren't all that good. I even went back and re edited them a little bit to try and improve the audio quality but is this one good? I'm just getting better. At a little experience goes a long way with improvement. And that's true for everything in life. So just what is personal finance? Personal Finance is how you manage your money, how you spend it, or hold on to it. It's about what you make and how you navigate everything from the dreaded b word budgeting, to spending, savings borrowing, investing your hard earned money. So personal finance is your income. And that money you make, and money, oh, budgeting, creating a budget to know where you are, how much is coming in, and how much is going out. Your credit, credit scores, and credit reports. That's all considered personal finance, credit cards in loans. And all loans would be your mortgages, your auto loans, personal loans, payday loans, everything, any way you borrow money. It's about savings. It's about setting up the savings for an emergency fund. It's about investing, investments, and retirement, that's all part of planning. It also includes insurance, if you have a home, your lender is gonna require you to have homeowners insurance, in case the house burns down, they will be able to get their money that they lend you from the insurance company. Same with the automobile, your auto loan, your lender requires you to have auto insurance in case you wrecked the car. And they'd be able to recover what you owe them. That there's insurance for other things. There's disability insurance, if you would be in the wreck, and you become disabled and unable to work, you can have insurance to cover that. And it'll pay you X amount a month, you can have insurance. And that could be long term or short term. You have insurance not only for your home, your auto to protect your income to protect you from other people, or somebody else would get injured. So that you'd be able to provide them with some money to pay for their injuries. There's insurance for everything. You don't need it all at once. But over time, as you get a home, get a car, have higher income, maybe start a family, then different types of insurance will kick in. And you should be considering this as all personal finance, taxes. Everybody's gonna pay taxes. So you need to do some planning, tax planning doesn't hurt at all. If you want to minimize the taxes, pay the least amount of taxes that he can, then you need to do some planning. What can you buy? Or what can you do to reduce your taxes? Well, if you have a mortgage, the interest that you pay on the mortgage is tax deductible. Currently, the real estate taxes you pay are tax deductible on your income taxes, currently, so by knowing your taxes, and what's required of you, doing tax planning can help you reduce your tax liability. And for those of you who are wage earners, meaning you get a W two, and you get more than two or $3,000 in refund a year, and you don't have 20 children and you don't have a lot of tax credits that you're getting. You're just having too much money withhold from your work or from your paycheck. He got to quit doing that. He should only get 500 to$1,000 refund a year. Anything more than that is you're wasting your money. They're not paying you interest on it. And if you're struggling to get out of debt, that's money you could use to increase an emergency fund or pay off your debt. So that is everything. Personal Finance. You can't manage your personal finance less you have money and income is money. Income from a job for most of us unless you or air or artists, Rs are you're not. If you're lucky enough to make more than a medium household income, as of 2017, that was$60,366 you have responsibilities to suck away your income. And then you got that rent, or mortgage car loans, maintenance costs, insurance, groceries, utilities, credit card balances, cable TV, clothing, and other things you don't need but want anyway. So you have income coming in, and you're gonna spend it, you're gonna pay for things that you either need or want. So let's focus on no needs. You need housing, any transportation, you need food, you need clothing. Those are your needs, you should focus on only spending your money on those four categories. And don't overdo it. Buy what you can afford, don't over buy, don't buy $100,000 car, and it can only afford a $30,000 car. Because the more deeper in debt you go, the harder it is to get out of debt. And it's going to be harder for you to borrow money for other things when the need arises. I have in my show notes, two articles that I'm referring to. And this one is credit.com personal finances, and they're gone. Now they're talking about your debt to income ratio. And I've talked about that in the past, your mortgage on your home, should not exceed 36% of your income. So if your income is $1,000 a month, your rent should be no more than $360 a month, just an example. And then there you got good debt and you have bad debt. Well, good debt is debt that you have to provide you with your needs, housing, transportation, food, clothing, but mostly housing and transportation, food and clothing should come out of the money that you earn from your paycheck, either weekly, or how often you get paid. No debt can be bad. Also, if you have absolutely zero debt, and you don't have a credit rating, that could be bad, he need a little bit of debt that you manage and control. And he don't let it get out of hand. And you try to pay it off every month, if it's a credit card. So that you can get a good credit score. One of the best ways to keep a good credit score is to pay all your bills on time on or before the due date. That would be your rent, your utilities, your all your loans, everything once you start paying late. And if you're struggling by not paying one bill to cover another, that's a sure sign, you're in trouble. And you're starting down the path of having multiple money problems. And a budget is a good way to track all that. You know how much is coming in, you know how much is going out. And then a few can project that forward, knowing in advance what bills you're gonna pay, before you have the income to pay it, you're gonna know, I need to save a little money this pay period. So I have it the next pay period to pay that big bill that's coming up. That's called planning, payment history utilization credit age course, the longer you have a credit in your name, the older it becomes, the better your credit score. So that very first credit card that you open up, maybe you charged it up, you paid on it for a while you thought Oh, I hate credit cards, I'm going to pay it off and cancel it. But everything there was good except for canceling it. Because if you close off that credit account with it, whether it's a credit card or whatever, if you close it, you lose that score. It may be five years old, it may be the oldest credit history you have and if you hold on to it, and use it again Occasionally, and pay it off every month, when another five year goes by, it's gonna be 10 years old, and your credit score is gonna go up, and it's gonna help your credit score. So paying off credit cards and have a zero bounce is good. Using them occasionally, and paying them off every month is good. But you don't want to close them. Because it not only affects the age of the credit itself, it also affects how much credit you have available, which is another factor that improves your credit score. If you have$10,000 credit available, total credit that you can use, and you have 9900 credit available that you have not used, that looks good for your credit report. If you have $10,000 credit that you can use, and you owe $9,500. So you only have $500 available, that's bad for your credit report. So you got to watch your credit, you got to watch your loans, you gotta watch your debt overall, make sure you don't get too far in debt too fast based on the income that you currently have. And if you're using the debt to pay for your needs, housing, transportation, food and clothes, that's fine. If you use in debt to pay for you once, that expensive car, because you want to race it, or motorcycle, or snowmobile, or whatever, a boat, you don't really need, you get too much of that. You got to be in trouble. Okay, and my second article is from corporate finance institute.com What is personal finance, and the areas of finance come down to what five categories income, money in money that you earn spending bills that you pay on the monthly basis plus whatever else you spend, protection, life insurance, health insurance, disability insurance, different types of insurance is your protection, your savings, how much are you savings, and investing. So if you're just getting started, you need income. And then if you just getting started, if you're living with your parents, you're not spending that much. So, you should be saving a high percentage, then once you have a significant amount of saving, say five or $6,000 Then you need to start planning on investing or planning on you have in your own place and moving out of your parents. And then you need to focus on your spending paying the bills the necessary bills, the needs housing, which includes your rent, utilities, furnishing the house. And then we have transportation, automobile, which is that in maintenance and gas and oil. And then food and clothes. And also in state planning and tax planning is part of personal finances, doing a monthly budget which starts with tracking you got to track your income and your spending. And then if you categorize your spending, he can categorize your income from you know wages, dividends, investment, income, whatever it may be. Then track your spending, rent, mortgage, it utilities, food, clothes, entertainment, and on we go at tracking then you can categorize it because we're gonna use a application may be on your smartphone or on your computer. And you can categorize those things. Then once you get a month or two in you can create a monthly report. Once you have a month report by these categories, now you can create a budget and you have a starting point where this is where I'm going to budget for now we're going to this is what I actually spent that particular month We're looking at categories, and my overspending in this month for that particular category. If yes, why my utilities went up, because it's winter and it got cold out, or it's summer and got extremely hot, I ran the AC, I like a cold, I set it on 68 degrees, my electric bill, skyrocket it, so my budgeting is way off. So what do you do? Well, step one, what I would do is reduce your spending, we set that thermostat from 68, up to 74. Or even warmer, if it's summertime, or lower it down. If it's winter time. It's all about being smart about your money. It's all about knowing where your money is going, and how to control it. I hate to pay two things, taxes, and utilities. That's where you have the least amount of control. But with tax planning, with budgeting, because keeping track of what's going on, and knowing what it's doing, you can keep it under control to a reasonable amount for what your income is, the more money you make, the more you need to do this, because there be the more he have to waste. This if you get a pay, raise or work a 30% pay raise your rents not going to go up 30% utilities not gonna go up 30%, you should be able to have more money to save and increase your emergency fund. So that if something bad would happen, you have the money to pay for it without using credit. It's not that difficult, once you understand. And once you focus on doing it. So keeping track of a budget, you track first you track and categorize your spending. And you create a a print out a report where you use that to create your budget. Then you keep track every week, do a report. What am I spending by categories, how am I doing this month, you plug it into your budget, and you see what's going on. You know your rents due at the first of the month, so that should be paid early in the month and it should come zero as your difference because your your what your budgeted and what you spent should be equal. Your utilities can go up and down. Your insurance should stay pretty much the same. Your homeowners insurance or your renter's insurance. So that's just give you an idea. So you throughout your life, you're going to be using professionals. You may have a tax preparer or tax advisor. Most of them are tax preparers, but they can help you do some tax planning. You may have a financial planner, once you start making investment, investment advisor, financial planner, same thing. You have an insurance agent that helps you with your different insurance needs. You have an attorney to help you do your estate planning when you get older. And these are professionals that will help you achieve your goals and achieve the things that you want in life. And why are you doing this so that you have the money to enjoy life all the time. When you're young, keeping your budget under control, you're going to have more money so that when you get older, you don't have to worry about where's the money gonna come from? I need to pay my rent. I need to pay utilities. My retirement is not paying me anything I can afford anything. He wants to be living like that, or do you want or I got the money. I ain't worried about it. I'm going to go and go and visit some friends for a month because I'm not worried about paying my bills. I'm not worried about the money coming in. I have the money coming in. I get the bills taken care of. I know what my expenses are. I know how much extra I have, I can go and take a vacation, I can travel to whatever I want. I'll be back in one moment was my final thoughts. If you like this podcast, please tell a friend. If you think he can help somebody with their debt, or their personal finances, please refer him to reduce debt, increase wealth. If you can have an app that you listen to this on, and if he can write and review this podcast, please do so. And I appreciate it. If you do personal finances way more than just paying off debt, reduce debt increase? Well, well, I only focus on helping those three dooster debt, personal finances way more than that. That reducing your debt is a good start. Because if you're reducing your debt, or if you're trying to reduce your debt, you should have a debt reduction plan. So you're planning ahead. In order to do that, you need to know your income and your expenses, that would be tracking. And once you get tracking done, you can create a report because you categorize your income and your spending. Now, once you have report over a 30, day Korean, you can create a budget. And that first 30 days is your budget amount where you did your spending, then you can budget you have three columns, the budgeted amount, the actual that you spend, and the difference. Once you got the budget amount, now you just need to do a weekly report by category. How much did you spend that? And this is for the month. So you put in your first weeks of the month? How'd you do? Are you on track? Is any of those categories? Did you spend too much? Well, if you did spend too much, what's the reason? Maybe your clothing budgeting was blown out of proportion, but maybe it's because you went back to school, everybody had buy clothes for a couple children. Maybe your husband bought a new suit for work. Maybe you bought a dress for a party. There's got to be reasons. But the thing is, you know why? And it could be acceptable. And if it's not acceptable, then you need to get your spending under control. The you do that every month, month in and month out. Then you got to do some planning. What your retirement gonna look like, how much money you gonna have when you retire. You got to do tax planning. You got to do insurance planning, you got to do estate planning for when you pass away. What are you gonna leave your children? How do you want to be buried? Do you want to be cremated? You want to be buried? Where are you gonna be buried? Things like that. Everybody needs to do this. And the more planning you do, the more in tune you are with your money, with your finances, what's coming in and going out, the better off you're gonna be. And just knowing where your money is going and he think you know, you probably are not thinking correctly. You need to put it on paper and look at it. That way. You'll know for sure where your money is coming from and where your money is going. And once you do this for a few months you're realize, boy I glad I'm doing this