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In this series, I discuss two methods of eliminating debt. One of these methods is a well known method, which suggests that you pay your debt with the highest interest first. I introduce a new method that I’ve tried, have recommended it to friends and families and many have found it useful. This method of eliminating debt is closer to the realistic life of most people, which suggests to pay the debt of the lowest amount first.

Disclaimer: While the author may have learned and used some of the methods mentioned in this article, he is not claiming to be a financial advisor. The opinions are merely for educational purposes and if used, you are using them at your own risk, releasing the author from any financial responsibility as the result of your actions. It is always advisable that you consult with your financial advisor, prior to making any financial decision.

I would like to thank the user, numada, for inspiring me to write this article. Numada, replied to one of my recent articles titled, “How much money should you save to live comfortably?” posted on the Garifuna Community forum:

http://www.GarifunaCommunity.com

When it comes to dept elimination, one of the common theories that I’ve heard repeatedly, is to pay the one with the highest interest first, by making additional payments, while making the minimum payment on the other ones. After you’ve paid up your target debt, then take the money you were paying on it and roll it up to your next target debt, so the process would be something like this:

Say you have 3 credit cards with a total debt of $4,000:
You owe:

About three years ago I made a trip to New York and visited several community members that were retired or about to retire. The retired ones did not look to be enjoying their lives to the max, while the ones that were about to retire, were happy to approach that spectacular retirement day. It was obvious to me that the retired ones, were not that happy for a very good reason, mostly financial, or the lack thereof.

As I made this observation, a little light bulb lit in my head asking the obvious questions: How much money does a person need to live comfortably for the rest of that person’s life? Or better yet, will the retiree’s reality smoothly transform into that beautiful mental vision of him or her at retirement day or would it be something more scary?

Although these community members knew each other, the ones about to retire blinded themselves from thinking that when they retire, their lives would probably be much like the individuals that were already retired, with nothing to show for and certainly not much to enjoy. At the surface, the coming retirement day looked promising, with many enjoyable opportunities to offer, while leaving the days of sweats and hard work behind.

The excitement of these individuals reminded me very much of my last days at the sixth grade of school. I hated school so much, that I was so happy to complete my sixth grade and put school to rest for good. After my sixth grade, I was ready to become a car mechanic, which is what one of my closest uncles was involved at the time. Gave it a try for one day. At the end of the day I was sweating, with a huge killing headache. I had to reconsider my options, visited the school I wanted nothing to do with and begged them to reissue that scholarship that I had gratefully refused and continued to the next grade and beyond.

Thankfully for me, I had my whole life ahead of me, therefore adopting to the reality of the new things were not as difficult, given the immense energy that I developed for learning.

I can only assume that as you near retirement, your energy for learning new things are not as the energizer bunny. From what I heard, as people approach this critical time of their lives, all they want to do is relax, travel the world and have the best that life can offer.

If the ideal retirement is in most people’s minds, then why is it that most people think that the money that will be used to enjoy their ideal retirement will come from somewhere special as a reward for their hard work?

Have you seen or heard of individuals getting laid off after working in a company for over twenty (20) years? Can you relate to friends and family members that are living their lives paycheck to paycheck, month after month?

Now, where does the notion come from, that after saving zero dollar ($0) per month, a rewarding million dollar ($1,000,000) check will show up at the end of your working days? Did most people with this notion forget the fundamentals of math, particularly that zero times one million ($0 x $1,000,000 ) is equal zero ($0)?

Of course, every situation is different and chances are, your financial needs will be very different than my financial needs to live comfortably. “How much money should you save to live comfortably?” is probably not a question that can be easily answered in a two page article as if it did, you would probably have the answer a long time ago and be on your way to riches.

By now most of us know that there is no magic, and conventional wisdom tells us that your investment of zero dollars ($0) per month, will grow to an amazing zero dollars ($0) in twenty years, which is not much, is it?

If living comfortably is important to you, I would suggest that you invest the time now, to figure out what it will take for you to live comfortably within the timeframe that you specify. Doing something now, will surely result in something later, event if it is a learning experience. Conversely, doing nothing now, will result in a big nothing later.

A more realistic way of ensuring that you achieve your necessary financial goal, would be by figuring out how much money you spend each month. Once you know your monthly expenses, you can fast-forward several years in the future, add the cost of inflation (which has been averaging at 3-4% per year) and that should give you a pretty good idea as to how much money you may need to live comfortably in the future. There may be other factors to consider, but this could be a good starting point.

Most of us work very hard for a better future. For those of us that have families, our greatest efforts of our lives is spent to make our family happy, provide them with the best of the best so they can make the best of themselves. Some of us with spouses, may plan our financial lives, but at times fail to keep track due to the daily activities that leave little or no time to track our finances. The good news is that the Internet is allowing us to stay connected with our loved ones, whether they are away from home during the day or away for months due to work.

Gari Digital (http://www.GariDigital.com) is starting to realize how important it is for individuals and family members to make use of the Internet and its technologies to manage their personal finances among other things. Gari Digital is now making it easy and convenient for individuals and family members to improve their financials and family activities management, through personal secure websites created specifically for those interested in living comfortably. To learn more about how Gari Digital can assist you with tools, such as a personal website, to increase your likelihood of living comfortably, please visit GariDigital.com:

http://www.GariDigital.com

Taking action today, will only bring many benefits to you and your family for the many years to come.

To find figure out your monthly expenses and keep track of them you can download one of the following budgeting spreadsheets for FREE:

Personal budget:
http://office.microsoft.com/en-us/templates/TC062062791033.aspx

Family monthly budget:
http://office.microsoft.com/en-us/templates/TC010233421033.aspx

Once your are ready with your financial numbers you can try some of the following financial calculators for FREE:

Simple Retirement Calculator:
http://www.moneychimp.com/calculator/retirement_calculator.htm

Compound Interest Calculator:
http://www.moneychimp.com/calculator/compound_interest_calculator.htm

Present Value Calculator:
http://www.moneychimp.com/calculator/present_value_calculator.htm

Return Rate (Discount Rate / CAGR) Calculator:
http://www.moneychimp.com/calculator/discount_rate_calculator.htm

Annuity Calculator:
http://www.moneychimp.com/calculator/annuity_calculator.htm

Bond Yield Calculator:
http://www.moneychimp.com/calculator/bond_yield_calculator.htm

Mortgage Calculator:
http://www.moneychimp.com/calculator/mortgage_calculator.htm

Reward yourself and your family by preparing financially to enjoy the best that life can offer!

Please me know what you think either at the comment section or at the forum.

About the author:

Jorge Garifuna is a Computer Scientist and Real Estate professional, who loves to serve his Garifuna community. Jorge has served as vice-president of former New York-based, Garifuna youth organization, Lileiti Dufigati, has been the president to Los Angeles-based, Garifuna organization, SONHOCA, and holds membership with various Garifuna organizations, such as Wafadaha Uwara, and national technology organizations, such as ACM and IEEE. Jorge has donated his time to lecture classes about Computer & Internet usage for Garifuna organizations like, MUGAMA. Additionally, Jorge has trained high school students in programming, for national competition, under the BDPA-LA organization.

Jorge is also the CEO of Garinet Global Inc. Garinet has established itself as the major Garifuna Network since it launched in 1999. It currently averages over one million hits per month from over one hundred different countries around the world.

Garinet has consistently created services to enhance the future of the Garifuna community. Through its GariDigital.com website, Garinet offers the general public, a multitude of Website services for organizations, businesses, entertainers and family members.

Jorge may be contacted by email at jg@garinet.com

The Dream

When I was young

When you were a kid - did you ever say to yourself, “when I grow up, I’m going to become a doctor, to help people”? How about “I’m going to become a pilot”? What about “I’m going to help my parents so much that they won’t have to work so hard”? or were you the type that thought money was not that important in life, like me?

Just like you, I had a dream. A passion to become what I wanted to become. Only to find out that my dream could not be realized without ownership of the world’s dominant, money.

Have you ever heard the term “I’ve been around the world”? That was me growing up. I was born in a place in Honduras called, Trujillo, where my mother is from. Later on in life I moved to another place in Honduras called, Triunfo de la cruz, where my dad is from.

These two places were very different, yet I found something they had in common. In both places, most of the kids very extremelly creative. We used to build our own toys and trust me we had a heck of a great time doing it. In Trujillo for instance, I used to build these things called “carretas.” You can think of it as the bike of today, only better. We did not know where the marbles (mables) came from, but we used to play the games and trade them like crazy. As far as playing top (trompo), I would say I met the best top players of the world in Trujillo. There was this guy named “Marito” AKA “que le truene.” Bests of the bests.

We used to build toy boats (botes), kites (papelotes) out of coconut trees’ leaves and slingshots (ondas) for hunting birds and iguanas. Fishing was my weekend thing with a good friend of mine, “Alfredo Mejia” AKA “Compa” and a few cousins, including, Milton, Jimmy and Rene. I was mighty happy! I felt like I could dream of anything I wanted and in a blink of an eye, I would build it and most importly at $0 cost.

Lesson 1: The Baby step

My first baby lesson, I learned from this. When you truely want something, you make it happen.

The Hardcore Reality

Now that I’m older

Eventually my mother brought me to the states with the help of my step-father. The transition made me feel trapped in a freezer. Not the New York winter freezer, but the creative freezer. I could no longer close my eyes, dream, and implement my dreams as I used to. New York people do not play carretas, nor do they hit the marbles. These folks, party big time. These folks ride bikes, big time. These folks, are in style with fashion, big time. More importantly, all of these things require money and lots of it.

Lesson 2: The teen step

My second teen lesson, I learned from this. When you live in the states, $0 cost does not apply anymore. You have to think the $$$ way.

Work your way

Before I knew it my dreams were overcrowded by reality. New York time flies. I went from Junior High School to High School to College like riding the train from Brookyn to the Bronx.

My loving mother working a night and weekend job. A few friends of hers doing the same thing. Some other people I started meeting worked as hard as they could to support their family as well.

Lesson 3: The adult step

My third young adult lesson, I learned from this. You have to work hard for the money, to get what you really want. Although working smarter will get you there faster.

Think the money way

I’m not a great sports fanatic, but I think is in baseball that they say “three strikes and you’re out.” Well by this third lesson, I started getting serious about this money thing. Although it had taken me a while to realize that my $0 cost concept from back home was not coming back, I had gotten the message.

Amazingly enough, everyone was so much into their daily responsibilities that, I had to notice with my own efforts, how hard they were working every single day and how broke they would be every single month. From my own experience, I can tell you that in my house my mother was working so hard just to pay the bills.

At this point I’m not paying the bills, so I don’t care much. I’ve never been a TV lover, but I love listening to music, so I would leave the radio on all night long. The lights would be on until the light bulb would burn. The water running even when not needed.

No wonder my mother was just working for the bills, hm? Her own son was a contrubution to it. Hey don’t start criticizing me yet. I have an excuse. I was young and stupid. My thing back then was “out of sight out of mine.” But before you continue to hit me in the head more, can you really blame me for this? My mother never sat down with me to tell me how hard she was working to pay the bills I was lovingly creating.

The Money Step

My lucky day is here

Everything was a bliz, until I made the move to live on my own. Only then, I started to slow down to think about the financial implications of playing the radio all night long, wasting water when not needed and talking on the phone for hours and hours about stuff that I wouldn’t even remember the following day. Only then, did I stop to feel what my mother was feeling all along.

To me - the money talk starts from the house. And I remind my visitors when they come to visit my place that the water is draining my pockets and the light is iluminating my bills.

Instead of waiting for my lucky day to win the lotto, or to land that perfect job that pays top dollars or a big miracle that will come to save me from my poverty, I learned to do something with the little that I have. I’ve learned to start saving off the one thing that kills us all, in the states, the bills. I found a way to keep the bills’ money to myself and help out my love ones.

The dream has come true

Now I know that we’re living in a dream world! The only thing is that the dream has been stolen from you and I by the companies that get our moneys every month, making us think that we really need their services and products. I read once, that a product or service is only as great as you perceive it in your head. I know my perceptions are not always correct, are yours?

Let’s play money

Let me give you a practical example of what I’m talking about. I would like to start with the phone. This is something most people have in their home.

Would you be interested in saving money on the phone? If you were, how soon would like to start saving?

Say you’re still reading up to this point, which tells me that to a certain extent, you’re interested in saving money starting today. I’ve met people that spend hundreds of dollars on the phone every month. By the way, I think that I should tell you that, these are regular people like you and I. Not business people that are using the phone to make money off it, but instead they use the phone to have the phone company make money off them.

Follow your guts

I get a lot of opposition about my crazy ideas from many folks. Until they start seeing the results that is. Only then they decide to follow along. Some of these oppositions come from people that are very close to me, such as my father, mother and step-mother. Although, I would take a sound advice from anyone at any time, all the times I go for what my guts tell me, and so far it has work for me.

Unload the extra weight

Most people I know are spending over $60 on the phone bill alone, every month.

Most of these folks feel that they would die if they did not have “call waiting” or “caller ID” or “three way calling” or even a cell phone. My only advice to them is “thank you”. By the way, that was a message from the phone company. You’re paying for convenience when you should be saving that extra $6 a month of “Caller ID.” My father has insisted that I need “Call waiting.” I might be wrong, but I love my $20 a month phone bill without that extra weight that most people carry.

Savings a month from the phone bill alone $60 - $20 = $40. From this I usually put 50% into my bank account, that’s $20, and the other $20 I usually send it to my mother on top of what I’m already sending her. A get big smiles from her everything she gets an additional $20. Did I had to work harder for this extra money? NO, I just got tired, once again, of letting my money go to the phone company.

If you were to use this same technic to your other bills, do you see how you can do a lot more with the little that you already have? You may not want to become a doctor anymore, but you can surely love saving $20 here and $40 there to get what you really want out of life. Remember that $20 is much better than $0 a month. Start this way and you will see how your savings are going to grow over time.

As time permits, I will provide you with tools to help you save money and have your dreams accomplished based on the reality of your life rather than the fantasy world that most of us have in our heads. If you would like to notified when such financial tools become available, send me an email at gk@garinet.com or discuss this topic at the forum.

About the author:

Jorge Garifuna is a Computer Scientist and Real Estate professional, who loves to serve his Garifuna community. Jorge has served as vice-president of former New York-based, Garifuna youth organization, Lileiti Dufigati, has been the president to Los Angeles-based, Garifuna organization, SONHOCA, and holds membership with various Garifuna organizations, such as Wafadaha Uwara, and national technology organizations, such as ACM and IEEE. Jorge has donated his time to lecture classes about Computer & Internet usage for Garifuna organizations like, MUGAMA. Additionally, Jorge has trained high school students in programming, for national competition, under the BDPA-LA organization.

Jorge is also the CEO of Garinet Global Inc. Garinet has established itself as the major Garifuna Network since it launched in 1999. It currently averages over one million hits per month from over one hundred different countries around the world.

Garinet has consistently created services to enhance the future of the Garifuna community. Through its GariDigital.com website, Garinet offers the general public, a multitude of Website services for organizations, businesses, entertainers and family members.

Jorge may be contacted by email at jg@garinet.com