Note: This is a post from Joan Otto, Man Vs. Debt community manager. Read more about Joan here.

When I introduced myself to you guys a couple months ago, I was $70,858.26 in debt on credit cards and loans, and that meant we’d paid down 20% total on our worst-ever balance of $89,687.23.

I’m incredibly detail-oriented – remember, I still keep a check register – so it probably shouldn’t surprise you that I set up a spreadsheet where I keep track of our debt payoffs.

That’s the “big picture” you see above – since I started the sheet in April 2011, we’ve gone from being $84,337.10 in credit-card debt to, as of today, owing $66,436.50 on credit cards in loans.

When is being $66,000 or more in debt a GOOD thing? Well, when it’s more than $23,000 less than you WERE in debt a bit more than a year ago. Even since earlier this year, we’re down considerably – and we’ve hit one of our key milestones, which I’ll talk about in detail later.

But since this is my first real update on our war on debt, I want to show you exactly what we’re keeping track of and why. (I promise future updates will be a lot more to-the-point!)

Our assets

Oh, doesn’t THAT look pretty? This is the top section of our spreadsheet, a look areas where we’re “to the good” a bit. Later on, I’ll talk about our net worth and how we choose to view it, but for now, let me just talk a little about some of these figures. (Also note that, for readability, I’m showing our starting figures from last April, but then I skip to 2012′s numbers – hence some big jumps!)

Our house. Oh, our house.

I agree with Baker that your primary residence is not an “investment.” Right now, we’re keeping track of the approximate market value of our house (using estimates from zillow.com) so that we can get a feel for when we’re no longer underwater on our mortgage. As you’ll see when we talk about the “debt” portion of my finances – that’ll be a while. Even so, we feel like the approximate market value is good info to have. As you can see, our housing market hasn’t changed much in the past year or so.

The Taurus of Wonder and Joy. Don’t forget, this is our only car.

We track this using estimates from kbb.com, the Kelley Blue Book. Again, we don’t intend to “do” anything about our car for some time. But we like having the information on hand, much like we do for the house, and it’s interesting to see this hasn’t changed much in the past year either.

The point isn’t that these are tangible “assets.” It’s that if we’re faced with a life-changing event – whether an opportunity or a crisis – we want to be armed with all the info we need to be as flexible as possible. And for us, that means knowing what we’d get if we needed or wanted to sell our two main physical “structures.”

Our checking and savings accounts. These are pretty self-explanatory, but I’d like to point out two things.

Following Baker’s advice, we are now committed to NEVER having less than $1,000 in our emergency fund/savings account. If we need to fall below that, we will replace that money as our absolute first priority. This is going to come in handy this month, in fact, as our house now needs a new hot-water heater! We’ll use some of that savings, but we’ll keep the balance over $1,000.

We’re also trying to save up a cushion of a month’s worth of expenses in our checking account. That will take a while, but we’re steadily increasing our balance on hand and, in fact, we haven’t had that account under $1,000 in a few months either, which is really an accomplishment!

Our 401(k)s. Here’s where I’ll make a few enemies, I think.

I wish we didn’t have 401(k) plans. I don’t want or need that vehicle for future savings, and it ties up my money when I have other uses for it in the short term. We started participating in them when there was a significant company match, and that made sense, but now, there is no matching, and that money is just sitting. Ugh.

Saving for Sarah. This takes a few forms.

First, Sarah has her own savings account, which she contributes to (and withdraws from) for her own needs and wants. Her “income” sources are basically birthday and Christmas money, the proceeds from selling her crap, and earnings from odd jobs, etc. Her “expenses” so far have been limited to a couple large purchases – a bike and helmet that she chose to buy for herself back in 2010, and her 3DS video-game system, which she recently saved up for.

So that’s “her” money, more or less, though of course Chris and I will guide her on how it’s used. But I’ve also started a 529 savings plan for her as well. The good news is, this money CAN be withdrawn for things other than educational expenses. If she goes to college, she essentially gets more than we’ve contributed, but if she withdraws it to use for another reason, she gets what we put in and basically nothing else.

If I had it to do again, I wouldn’t have used the 529 vehicle for this. To me, it just makes our savings more complicated, much like the 401(k)s do. But we have it, and we continue to contribute to it ($25 every two weeks).

You’ll also see that Sarah has a few U.S. savings bonds – I’m nothing if not thorough in my accounting!

Our debts

As weird as it sounds, this is my FAVORITE thing to keep track of with regard to our finances. Seeing these numbers drop, slowly but surely every month, is incredibly motivating to me.

One problem we’ve historically had with our debt payoff efforts is the sheer volume of what we’re trying to accomplish. We’re paying down a big dollar amount, as well as a long list of accounts, and sometimes in the past it has felt like we’re making NO progress.

So we chart each debt like you see above. We celebrate when we get to lines like the two at the bottom – PAYOFFS! And we do something else, too. Maybe you’ve heard this before…

We set a Very Next Step for each account.

We keep a financial notebook with lots of goals and other things written down, and for each of the accounts in the spreadsheet, we set a “next goal.” Originally, for instance, we wanted to get the Bank of America Card of Doom under $32,000. When we reach that, we go down the page and set another goal. Then another. Then another. And we make sure we always have a goal for each account.

Our current V.N.S. goals are:

• Chris Citi card under $18,000
• Union Plus MasterCard under $8,000
• Joan Citi card under $6,300
• Bank of America card under $25,000 (WHOA – $7,000 down on this one!)
• Discover card under $3,700
• Springleaf loan under $2,500 (look how far we came on that one!!)
• Tires Plus card under $1,300

It turns into a game for us – seeing what goals we can hit. And we purposely make them attainable enough so that we always have something to celebrate!

Our bottom line

I mentioned earlier that in our bottom-line figures, we leave out the house, which we don’t view as an “investment.” So one of my goals is to get the “net worth less house and mortgage” out of the red. That’d be pretty cool.

We do want to figure out our mortgage and housing goals eventually, but for now, we’re pretty sure we’ll be in the same home we currently own for at least the next five to seven years, if not longer, so the consumer debt takes priority!

Those are the lines we live for. What’s our total debt? What’s the total dollar amount of debt we’ve paid off? And how close are we to being 100% debt-free?

25% debt-free

Yes, as of this month, we have paid off more than 25% of our consumer debt, not including our mortgage. As I mentioned before, our current “big goal” is to pay off all credit-card and loan debt – and to REMAIN debt-free from those sources for life.

Next goal? Have paid off more than $25,000 total – and that’s only a month or two away!

I’m actually relieved to have shared this update. You guys really stepped up and supported me after my introductory post, and since then, I’ve been worried that I won’t live up to the “lady who’s paying off debt like crazy” expectation I set up.

But when I take a look at these cold, hard numbers, I realize we ARE making progress. We CAN do this. And we’ll keep nailing our Very Next Steps until we get there!

Will you do the same?

Note: This is a post from Joan Otto, Man Vs. Debt community manager. Read more about Joan here.

Meet our automotive pride and joy – our fully-paid-for, 111,000-plus-miles, has-even-gone-offroading 2003 Ford Taurus SES.

This car is a beast. And, for the past six years (as of this past Sunday), it’s been put to the test – because it’s been our only vehicle.

In early 2004, I’d bought the Taurus for something like $13,000. When I got it, it was “almost new,” never having been titled and driven only as part of a fleet of cars leased to the dealership’s employees.

That car, by the way, marks THE biggest spur-of-the-moment purchase I’ve ever made; my mom was in the market for a new car, and I’d gone to the dealership with her to help her weigh the options.

She found a sage green 2003 Taurus that she loved… and when I test-drove it too, I realized how awesome it was when compared with the not-yet-paid-for-but-always-broken-down 1996 Dodge Stratus I’d been driving.

So I bought a matching one in red, rolling over my old car note and trading in the Stratus, which was in the running to need a LOT of work. Probably not the world’s sharpest financial decision, but at the time, as a single parent, I really needed and wanted a reliable vehicle.

Fast-forward a little; when we got married in May 2005, Chris had a two-door 1999 Ford Escort. He’d bought it several years earlier, and by the fall of 2005, we’d paid off that car loan and it was ours free and clear. The payments continued on the Taurus, to the tune of $250 a month.

With Sarah still in a booster seat, it was a LOT easier to take “my car” almost everywhere we went as a family. The Escort was used here and there… but not much.

Making the decision

In early 2006, the newspaper where Chris and I both worked full-time relocated its offices… to a half-mile from our home, through two blocks of residential neighborhood.

Suddenly, the infrequently-used Escort became the really infrequently-used Escort. At the same time, we started to get pretty serious about paying off our debt.

And we started asking ourselves: Could we be a one-car family?

We thought about all sorts of factors – positives and negatives. We were “side hustling” even back then, so there were places I, especially, needed to go besides the super-close newspaper office.

On the good side, we hadn’t merged our insurance policies quite yet, so this would help us simplify by dropping Chris’s auto insurance. And, of course, there was the bonus of a one-time influx of cash.

I do have to add one caveat here. My mother lives with us, and she has her car, the green 2003 Taurus I mentioned above. But Mom works and goes out with friends and to church and many other places, so her car is pretty much “busy.”

Very occasionally, I’ll take Mom’s car somewhere, or she’ll take ours, but in reality, we only have crossover when one car is in the shop, and then the three of us draw from the other car.

That said, knowing we had that backup became kind of a security blanket to help make the decision.

We also realized pretty quickly that even if we rented a spare car for the occasional times when we really needed it, that would cost FAR less than the maintenance, insurance and other costs that would come from us keeping Chris’s Escort.

So we sold the Escort for $2,300 on May 6, 2006, after placing an ad on Craigslist as well as in the newspaper classifieds. We asked well below Kelley Blue Book value in order to move quickly, and it paid off: We received dozens of calls, and the first “looker” became our in-cash buyer.

That money quickly went toward debt repayment, and within another year and a half (in the fall of 2007), we were enough ahead of the game to pay off the Taurus almost a year and a half early.

That baby is all ours.

Moving forward, we’ve committed to one big goal: We’ll never have a car payment again. We will drive this sucker into the ground, and whatever we can afford at that time – that’s what we’ll get as a replacement.

If that’s a $500 rustbucket, well, it’s lucky we pay for AAA. If that’s a $10,000 late-model used car, great. But either way, we will not take on a monthly payment for a vehicle.

The good parts

In six years of sharing a car with my husband, we’ve found an awful lot of pluses.

1. No car payments.

We have one car, fully paid off. If we’d kept the Escort, I’m not sure it’d still be drivable, and if we were committed to replacing it, we’d probably still have a payment on its successor.

2. Reduced insurance costs.

Since the Taurus is only titled in my name, Chris doesn’t even much “count” toward the insurance cost. We pay my mom’s car insurance as well, and for the three of us on both Tauruses, we pay $71.14 a month. Before, Chris paid that much alone, and Mom and I paid even more (through our former company!)

3. More consciousness about our driving habits.

You don’t tend to drive like a maniac in your vehicle when it’s the only one you have. (Or, at least, Chris and I don’t.) And since we know that errands aren’t just a “go whenever” proposition, we work harder to plan out our trips and avoid things like running to the store for just a few items.

4. More family time.

This wasn’t something that factored into our decision-making, but it’s turned out to be a great added benefit.

Chris and I spend a good amount of time driving each other places. “I’ll take you to tae kwon do, then go to the library, then pick you back up.” That sort of thing.

That gives us time to talk, and just to be in each other’s space. With two cars, we’d spend a lot of time doing the “you go your way, I’ll go mine” thing.

This goes for Sarah, too; she gets Mom and Dad time instead of being shuttled by just one of us.

5. We walk more often.

When I asked Chris what his thoughts were on why this setup works, his answer was simple: “It helps when you live within walking distance of a lot of places.”

Yes, we could walk with two cars. But we didn’t – and we probably wouldn’t. And the great thing is, we DO NOT live in a “city” by any means. We’re 100% suburbia.

Even so, there are grocery stores, convenience stores, parks, a tennis court, churches, our mechanic, a movie theater, restaurants, banks and more – all within an easy walk of less than a mile.

We’re considering changing banks – because ours is a mile away across a large highway, and we’d rather avoid it.

The less-good parts

Honestly, there aren’t too many things I don’t like about our one-car situation. That said, there are a few down-sides that are worth mentioning. Here’s Exhibit A:

1. I hate my driver’s side door panel.

It hasn’t stayed attached – despite repeated gluing attempts with every adhesive known to humankind – for about the past four years.

If you elbow it hard when you sit down, you’re usually good for about 30 miles, or until you open the door, but then it falls in again.

In the grand scheme of things, this ABSOLUTELY doesn’t matter, but along with the dents/dings/scratches/peeling paint etc., it does make me long for a nice, newish vehicle. (Even if I had to share it – newish would be nice.)

2. Maintenance issues.

This particular car has not been without needs in its first 111,000-some miles.

It’s not good on alternators (yes, plural). It’s soon going to need some transmission work, as you can tell when you try (and sometimes fail) to accelerate from a stop.

The water pump has been replaced. The suspension has been overhauled.

It’s not a money pit yet, but our biggest fear is that we’ll cross the “we shouldn’t put more work into this” bridge before we have the money saved up to buy a decent replacement.

3. Lack of hauling space.

If we had NO cars, and had decided to purchase only one for our family, we’d likely have chosen something with a little more room. The Taurus has pretty good trunk space, but it’s not good for moving even small pieces of furniture and what have you.

We’ve made it work pretty well, but it isn’t always the easiest.

4. Racking up the miles.

When we travel (and we do that a lot), all the miles go on one vehicle.

Now, that’s balanced out by our lack of commute – we average about 11,000 miles a year, which is REALLY low.

That said, we don’t have the option to, say, take the “better” car when we decide to road-trip to Vermont. It’s all Taurus, all the time.

Remember how I said we’ve gone off-roading in it? Yup, really. Dirt and not-even-dirt roads in upstate Pennsylvania are no match for this baby. (And it makes for a fun trip to the mechanic, because he starts off your inspection with the line “I have a really strange question to ask you… has this car recently been on a, well, an unimproved road?”)

So is it for you?

Look, I can definitely say that being a one-car family works for us – and barring any HUGE changes in our circumstances and goals in life, we plan to stay this way and probably even to drive LESS.

In a dream world, we’d keep beating this car up until Sarah, who’s 12 now, turns 17 and gets her permit. By that time, we’d be more than two years out from our final credit-card payment, and if we take even half the money we’re putting on the debt and save it for a vehicle in the interim, we’d be able to afford basically any later-model used vehicle we’d like. (That is, of course, dependent on this car making it five more years.) Then, Sarah could finish driving the Taurus into the ground, hopefully not literally.

We realize it’s not for everyone, though. We have friends who each commute an hour – in opposite directions – five days a week. It would be ridiculous to suggest they could become a one-vehicle family, at least not without a LOT of rearranging.

We’re lucky to live so close to all the places we need to go, especially because our town doesn’t really have a huge public-transit infrastructure. And we’re lucky – though I prefer to say blessed – that I can primarily work from home, which changes our situation drastically.

Finally, the biggest factor in making this work is that we want it to. We go out of our way to make it a success. I’ll ask friends for rides – in exchange for gas money, or in exchange for returning the favor at other times. We’ll rent a car when it makes sense, or rearrange our plans if that isn’t in the cards.

It would be pretty easy to say it “makes sense” for us to have another vehicle, but we don’t want one, and so we’ve built our lives accordingly.

I’m not asking you to sell your vehicle today. Far from it. But for many of us, transportation expenses are some of the highest we have, behind maybe only housing and food.

So I do challenge you to ask yourself this question: Is there anything you can do in the next month to save on transportation expenses? (Or anything you’ve already done?)

We’d love to hear your thoughts in the comments… and if you’re led to becoming a one-car or NO-car family, well, I can tell you from first-hand experience that it’s pretty cool!

Note: This is a post from Joan Otto, Man Vs. Debt community manager. Read more about Joan here.

At one point not too long ago, I had one full-time job and five part-time jobs – at the same time.

When I say we’re serious about paying down almost $90,000 in credit-card debt… I mean it. And that means that when Chris and I can make some extra money, well, we take the chance where we can. When we’re hustling, our family income can be over $13,000 NET in a month.

So when I ask you how could you – YOU – make an extra $200 this week if you had to, I’m probably going to be pretty skeptical if your answer is, “Uh, no way I could do that!”

So just keep that question in the back of your mind… “If you had to make an extra $200 this week, how would you?” We’ll come back to that in a few minutes.

***********

As of last fall, our family’s income situation looked like this:

• My full-time job income from the local newspaper
• My husband’s full-time job income from the local newspaper
• My part-time income from helping Baker with some projects
• Our joint part-time income from buying and reselling used books online via our Amazon store
• My part-time income from working as a Weight Watchers leader
• My part-time income generated as a Mary Kay consultant
• My part-time income from doing some private website setup and design
• Our occasional income from selling our crap on Craigslist, eBay, Amazon and our local “virtual yard sale” email group
• Our occasional income from monetizing our personal blogs using Amazon affiliate links, Google AdSense, etc.

Right now, we’re running a pretty similar setup, with a few changes and some streamlining. Today, I’d like to take a look at how I make all these “side hustles” work – in part, to help continue to introduce you to me and to our situation, but also because I have a sneaking suspicion that there are some applicable lessons out of my experience for anyone who’s trying to generate more income!

I’m using last fall’s list as a reference for two main reasons.

First, this was our longest “list of income streams” ever.  It was notably long enough that it earned me a chance to do an interview as part of the Part-Time Money Podcast with Phil Taylor of PT Money about all my side hustles. (Funny story there: If you listen to it, I talk about working full-time from home at some point in the distant future – turns out it was much nearer in the future than I’d have guessed!)

Second, during the same period, I was participating in the Fall 2011 You Vs. Debt class and as part of that, for 30 days, I was tracking EVERY bit of income and expense in our life. That gives us a lot of data to draw from!

Our three main streams of income

This is actually the part I want to spend the LEAST time on today, but it’s an important background to the rest of the jobs.

In the fall, this was my full-time job income from the local newspaper, my husband’s full-time income from the same source, and my part-time income from helping Baker with some projects.

There are two main things to note here.

First and pretty obviously, my “full-time” and “part-time” jobs have swapped. I now (as you hopefully know!) work full-time with Baker, and I’ve remained an employee of the newspaper in a part-time, from-home capacity.

Second, all of this work is salaried. This is extremely important to note, because if I had to pick one piece of advice to give most people on generating extra income, it would be to take the simplest possible path, which is usually to pick up more hours or jobs doing what you’re already doing.

In our situation, though, especially when our full-time incomes came from both of us working at the paper, we had to look outside the box to make extra money. That was good – because that’s actually what led me to the full-time opportunity here with Baker! At the same time, I’d caution you from getting as varied and complex as we are if you have an existing stream of income that you can grow. Don’t create NEW complexities, new jobs, unless your current ones are maxed out for any reason!

Total income per month (average) from these: $8,000 (more in months with three paychecks at the newspaper, which pays biweekly).

One note here: Assume these figures to be net, but realize that with lots of part-time work comes a lot of tax-time finagling, some of which draws out of this pool of “income”; I won’t get into that in TODAY’S post, but please know I have an accountant who helps me out with all of this and keeps us in good shape with the IRS!

Our biggest side income stream: Our Amazon store

This is another post on its own – how we went from selling our own no-longer-needed books and DVDs on Amazon, to running a full-scale store with a massive inventory – but suffice it to say we average more than 1,100 items listed for sale at any given time, with a stockpile of more than another 300  items that will almost certainly be listed in the coming months.

Total income per month (average) from this: Varies; about $180 a month profit on a “regular” month.

That doesn’t sound like a ton, maybe, especially not when I consider this a “business.” However, we’re just now starting to hit our stride (and monetize on some previously purchased inventory), and there are months in which we top $300 to $400 if a big-ticket book sells. This is basically my husband’s hobby – and, over the course of a year, this “hobby” adds about $3,400 to our family’s income!

We’ll talk more about this concept when I talk about our occasional selling-our-crap income, but here’s a point to remember: Selling used goods online – whether they’re yours or someone else’s – can be pretty profitable!

Joan’s original side-income sources: Weight Watchers and Mary Kay

I talked a little about my job with Weight Watchers in my post about how I think being overweight and in debt have a lot in common. Essentially, since 2006, when I lost 50 pounds on the program, I’ve worked as a part-time meeting leader and receptionist.

The great thing about this job in particular is that you can choose how much you want to work.

Right now, for instance, I’m working only on a fill-in/substitute basis, helping out other staffers when they want time off. At my highest, I led 10 meetings a week across a three-county area (still ON TOP OF a full-time “regular” job). At my highest, I brought in about an extra $250 a week from this work.

Mary Kay is similar; as with any direct-sales business, you can certainly be as active or passive about it as you want. I’ve had months where I was really active, going out and doing facials, etc., holding open houses, what have you, again bringing in $250 to $300 profit in a week. I’ve also had months where my reorder business was the only income.

If you’re going to pursue direct sales – and I’ve heard many arguments both for and against these businesses – I highly recommend choosing a product that meets a need, is used year-round, and is consumable.

In a “down” economy, selling a product that’s completely a “want” can be hard to do, and if you sell something that doesn’t get used up, well, then the sum total result from your efforts will only be that one original sale.

With cosmetics, people are using them – and using them up – pretty much year-round, and that means if you’ve built a solid customer – even if you only ever sell them on one “product” – they’ll use it and keep coming back for more, which is pretty nice.

In both cases, the biggest draw for these income sources actually isn’t the income. The great thing about both of these “jobs” is that they spring from products/services I’d otherwise be spending my own money on.

In Weight Watchers, all Lifetime members at their weight goal can attend for free (so I don’t have to work there to attend at no cost), but staffers also get a 50% product discount, which I enjoy.

Same story with Mary Kay. I’d been using the products anyway, and paying full price to a friend. Now, I get anything I want at 50% off, and my income at a minimum covers the other 50%. That means that at the LEAST, in a month, I’ve saved the money I would spend on cosmetics. At best, there’s profit on top of that!

Total income per month (average) from these two sources: Varies; right now, about $100 a month on a “regular” month; can be over $1,000 a month combined.

Making money by making websites

This is perhaps my favorite “side hustle,” in part because it has been very serendipitous for me at various times.

In short, I design VERY basic blog-based websites for small businesses, churches, nonprofits, etc., then train personnel there on how to maintain and update.

I don’t do hosting and I do only light graphic design and technical support. I’m not working with huge companies with big chains of command. Generally, I do about two to three hours of work once, get a check, and then deal with the client by email as needed here and there (usually less than 15 minutes a month if that, unless a new “project” comes up, for which I then get another check!)

My favorite story about this is that one day, I received a Dropbox file shared to my email account. It was from a gentleman asking his web developer to take a look at his files and make some changes. I replied and said the digital equivalent of “Sorry, wrong number. … I’m not who you need, but by coincidence, I’m a developer and I can certainly take a look if your guy is for some reason unavailable.”

Long story short, that worked out, and I’ve now had several “batches” of work from this company, all of which can generally net me about $200 to $300 for a couple hours of work!

This isn’t the type of work I go seeking – other than my serendipitous email project, most of the sites I deal with are from local businesses that I either patronize or have personal connections to – but it’s something I can grow if I have the time to do extra work.

Total income from this per month: Varies, but can be $300 to $500 on a month where I have one to two projects completed.

Selling our crap for cash

This was something I was into even before I became a rabid Baker fan.

At a few points in my life, I was so broke that selling stuff for cash was how I got groceries.

In more recent – and better – years, getting rid of crap was something that I was doing anyway, often to prepare for a move, and since we tend to keep our stuff in pretty good condition, it seemed logical to at least cursorily try to sell it.

We’re very lucky in our area – our Craigslist is well-used and not full of freaks, and we also have a local email group called the “Yard Sale,” which often will fetch higher prices and more reliable buyers than Craigslist will. If you have such an option available to you, I highly recommend it! (Search Yahoo!’s email groups directory here to see what comes up for your area and phrases like “yard sale”!)

Total income from this per month: Varies widely, but can be $100 to 200+ a month, even more if we’re dealing in larger items like furniture.

Monetizing our personal blogs

Both my husband and I run blogs about our passions – his for old books and paper, mine for homeschooling – that we monetize lightly with Amazon affiliate links and Google AdSense.

We’re not going to get rich doing this. These blogs won’t likely become our full-time income sources any time soon (nor, really, do we want or need them to be). However, it’s pretty great to recoup a little money for something we were doing anyway.

Read that again.

It’s great to recoup a little money for something we were doing anyway.

That’s the key to a significant amount of our extra streams of income. I’m going to a Weight Watchers meeting each week anyway – so why not make some money doing it?

I’m going to buy, and some of my friends are going to buy, cosmetics anyway, so why not make some money doing it?

I’m going to be online anyway – so why not design some websites for a couple hours at night and make some money instead of just playing on Pinterest?

I want to get rid of a bunch of my stuff, so why not see if I can get back some of the cost?

And if we’re going to blog anyway, why not try to bring in an extra $100 or so here and there, which more than offsets our nominal expenses and gives us a little extra as well?!

Total income from monetizing our blogs per month: It’s fairly new, but so far we’re averaging about $80 to $100 a month.

So how could I make an extra $200 this week?

That was my challenge to you at the beginning of this post, and I’m willing to take it myself if you are. These “little hustles” can really add up – and when you’re trying to pay off as much debt as I am, or trying to get cash together to start or grow a business, or to fund an emergency fund… well, it comes in pretty handy.

So if I had to make an extra $200 this week, I’d probably start by selling some crap; I’ve got AT LEAST $100 of stuff sitting here that I had planned to donate (for lack of time right now), but I could take the time to list and sell it and bring in the cash.

The other main thing I could do would be to call some Mary Kay clients and see if any of them are in need of product reorders. That’s a quick and easy way to usually get $50 to $100 in sales. Not something I do terribly often, but I do like to check in and try to provide good service when I can, even though I’m very part-time with my consultancy!

What’s the big picture?

Remember how I said I tracked EVERY dollar spent and EVERY dollar earned for 30 days this fall? Well, here’s what that looked like:

Total money outgoing: $10,228 (included mortgage and debt repayment; some credit cards were paid twice in this 30-day period due to how the days fell)

Total money incoming from the sources above: $13,081 

$5,000 of that income came from sources OTHER than our primary jobs. That’s intense – and it allowed us to make our outgoing number higher, as we paid a significant amount above the minimums toward our debt repayment. It’s not a level of dedication we can pull off every month – but if you’re entrepreneurial, even a “spare-time” business can make you some decent change toward getting your finances where you want them.

By the way, my numbers together added up over those 30 days to us being $2,853 ahead – which allowed us to create our emergency fund and start building a buffer in our checking account of a month’s expenses. (We’re not all the way toward that buffer yet, but we’re getting there!)

So can you make some extra money hustling?

I sure think so! Whether it’s $30 in selling on Amazon or $3,000 from a side business that you’re trying to build into a career, in my book, it’s worth doing.

How could you make some extra money this week – what’s ONE THING you can try?

Let me know in the comments!

Baker’s note: This is a post by Joan Otto, the “community manager” here at Man Vs. Debt. Expect to hear from her more and more in the coming weeks!

Hey, it’s Joan! Hi again. So in my introductory post here on Man Vs. Debt, I shared with you the cold, hard truth about our financial picture. (It wasn’t pretty.)

I got into the numbers behind our debt, to the tune of about $70,000 currently before the mortgage, and about $90,000 at its worst. But those aren’t the only, uh, not-pretty numbers I’ve been keeping track of in recent years.

While I was getting deeper and deeper into debt, I was also getting fatter and fatter.

After the birth of my daughter in 2000, my average weight was around 117 to 130. But at worst, in early 2005, I carried about 170 pounds on my 5-foot-4 frame. That’s not the end of the world, but it’s about 50 pounds heavier than I should be, especially in light of some health problems that weaken my joints.

50 extra pounds of weight on my knees meant I was, at one point, looking at having a knee replacement in my early 20s, to which I said NO FREAKING WAY.

That was my turning point.

I joined Weight Watchers, started exercising, and eventually reached a goal weight of 118 pounds around Christmas 2006, essentially dropping 50 pounds from my highest weight. I even became a Weight Watchers leader as one of my (many) side jobs.

Since 2006, my weight has fluctuated like crazy, mostly between 118 and 145, all still in the “healthy” range for my height according to the body-mass index. 145 is my top “healthy” weight, and anything above that is considered overweight.

Well, guess what?

As you can see by my not-at-all-nice graph above (which doesn’t even INCLUDE the heaviest points, because of course I wasn’t interested in keeping track of those) … well, for the past year or so, I’ve been on an up-hill climb, headed suspiciously close to – and sometimes veering scarily into – overweight.

Like, “a heavy sweater on weigh-in day puts me over” kind of close. And my body-fat percentage is about 30%, which means about 43 pounds of ME is made up from fat. You need some fat – but not that much.

And I hate it.

Yes, I’m not back to my highest weight. I’m still in single-digit pant sizes (ladies, you know this is big!) But I’m not doing what I need to do to be my healthiest.

And, BMI aside, I feel fat.

145 is more weight than I’m comfortable carrying. I’m tired, and my knees hurt, and quite frankly I know that I’m not going to stay at 145.

If I don’t make a change, the fact is, I’m going to gain more weight back – weight I once worked really hard to lose.

So why I am writing about this on Man Vs. Debt?

Because Baker’s also trying to get back to a healthier weight? Well, yeah, that factors into it. But what really sparked my interest was a forum topic during our Kickoff 2012 You Vs. Debt class.

We were talking about “Patterns” – things we noticed that lots of class members had in common. And the biggest thing to come up was that being in debt seemed, for a lot of people, to be linked to both having a lot of clutter and being overweight or making unhealthy food and exercise choices.

It turned into an incredibly poowerful conversation, and I felt like one member, Laura, really summed up some of the problem I’ve noticed in myself. She says:

It seems like the urge to overindulge in food I don’t need comes from the same place as the desire to spend money I don’t have. Both overeating and overspending seem to be an attempt to fill a void in my life that can’t actually be filled with either food or possessions, but rather can be filled with relationships and rich experiences. Both overeating and overspending are a form of “giving up hope” and “giving up control” over my life. Tracking feels to me like I’m grabbing back the steering wheel, and making a choice about where I want to put my attention and steer my life.

That’s exactly it.

I firmly believe that when you make a CHOICE to change, you can alter the course of your life. I also believe that those choices and lessons are very transferable!

5 things I learned while losing weight that are helping me pay down debt

1. Write it down. In Weight Watchers – and MANY other weight-loss and exercise plans – a key tenet is keeping track of what you eat. If you don’t have an accurate record, it’s way too easy to delude yourself about what you’re really taking in and expending. In You Vs. Debt, a key tenet is writing down what you spend, and creating an accurate picture of what you owe, for the same reason.

2. Get support from others on the same journey. I was a big fan of the weekly meetings in Weight Watchers, even before I started leading them. (And now that I’m not leading regularly, I miss them!) It felt SO GOOD to know I wasn’t alone, and to get encouragement both when I had successes and when I had challenges. That’s also what brought me to Baker and You Vs. Debt as a participant – I needed a community around me. I’m not someone who can succeed on my own! Find your support system.

3. Splurge where it really matters. When I was losing weight, I would often make some pretty basic substitutions. (Baked chicken, veggies instead of fries, etc.) But if I was really craving a phenomenal cheeseburger, I did NOT follow the “diet” advice of having a low-fat English muffin with a veggie burger patty and low-fat cheese on it. I didn’t even “splurge” by getting a small McDonald’s cheeseburger. No, I would go to my favorite local restaurant and get the most wonderful concoction of feta cheese and ground beef layered on a thick bun, probably the equivalent of about 2,600 calories, and I’d dig in. It’s the same with money. I buy most of my clothing at Walmart or the local thrift store. But I spent $250 yesterday on a purse – because I’ll carry it every day and get years of use out of it, whereas my cheapo purses generally only last me a few months before getting holes in them. Pick what matters – and really enjoy your splurges. But don’t splurge where it doesn’t matter!

4. Don’t get frustrated when your progress plateaus. I’m pretty sure there’s not a human being alive who’s lost weight in a healthy way without hitting the occasional slowdown or plateau. I’m also pretty sure there’s no one in the world who’s tried to pay off $90,000 in credit-card debt who hasn’t had months where they were able to pay just the minimums. That’s OK. Don’t beat yourself up. Just keep doing what you need to do, and your progress will show again soon.

5. Check your progress regularly and assess what’s working. In Weight Watchers, members who are in the “losing process” are asked to weigh in each week. This, combined with the tracking system I mentioned earlier, gives you feedback on what’s working and what’s not. If the scale moves the direction you want, then the choices you made were probably pretty OK ones. If the scale doesn’t move the right way, then you can look back over your tracked food, drink and exercise, and see where you can make a change. The same goes for your finances and your budget. I don’t know how many people I know who’ve set up gorgeous works of art and called them a budget. But these same people – myself included – are often guilty of not revisiting them and seeing what works and what doesn’t. Check yourself. See what’s working, and CHANGE anything that’s not!

5 things I learned while paying down debt that will help me “re-lose” 20 lbs.

1. Don’t overcomplicate it. I am a famous overthinker. Until recently, I had spreadsheets for my spreadsheets when it came to debt reduction, and I was trying 10 different approaches at once. When I narrowed my focus, followed the You Vs. Debt course and didn’t try to throw in 50 other tips, I was successful. Same for weight loss and fitness. I’m struggling now because I want to do too many different things – Weight Watchers, juice fasts, 4-Hour Body… it all sounds great to me, but I’ve got to pick an approach. I’m also not going to be able to realistically schedule the gym AND regular tae kwon do workouts AND sessions with a trainer AND long hikes AND Nerd Fitness. So I’ll pick what seems most manageable and focus on those.

2. Set up specific, tangible “Very Next Steps.” This is a total You Vs. Debt thing. When you have more than your year’s income in debt staring you in the face, the old advice of “pay off your smallest debt first” doesn’t really get you psyched up. If you’ve got 100 or 50 or even 20 pounds to lose, it’s not really very motivating to say, “OK, that’ll be great when I reach that goal.” You need to pick what Baker calls your Very Next Step. Is it to track what you eat for a week? To exercise 3 times? To lose the first 5 pounds? When you reach that, set the next one. Then the next.

3. Don’t be overly restrictive. Ohh, I’m so bad at this. While paying off debt, we’ve gone through phases where we eat cheap hot dogs and don’t buy anything – ever. We use up the little toothpaste samples from the dentist rather than buying Colgate. That sort of thing. And you know what? These periods of “starvation” almost always result in a binge later on. The same goes for food. I’m not someone who’s going to succeed in long-term habit change by saying I’ll never eat a potato chip or a french fry again. I know that about myself. So, while I’m certainly going to limit those things, I’m not going to restrict myself in ways that aren’t sustainable.

4. Remember that it’s a marathon, not a sprint. Getting out of debt takes a while, and so does losing weight. If you take your time and do it RIGHT, you’ll make it to the finish line. If you try to rush – like, say, dumping a ton of money on paying off a credit card, but having no emergency savings – you’re only going to hit a setback later. The same goes with weight loss. I could lose 10 pounds this week, but that wouldn’t set me up with good habits for long-term change. So I need to commit to building good habits the right way.

5. It never ends. That sounds depressing, doesn’t it? But I realize that right now, I’m aiming for this really specific goal of having $90,000 in credit-card debt paid off. Great – but that’s where the real challenge begins; I need to live a life in which I won’t ever carry consumer debt again! I was slow to realize that about weight loss. I hit my weight goal, and I “sort of” maintained, but it wasn’t until recently that it really clicked – this is a forever thing. I’m ALWAYS going to have to work at this. Maybe not as hard at some points, but the fact is, there’s no rest for the pear-shaped!

So what’s next?

Much like with my debt, I’m going to put it all out there for you guys. You get to hold my feet to the fire! My “big goal” is to be down to 125 pounds and less than 20% body fat by the time I take my black-belt test in tae kwon do, in about another year.

My first step regarding my diet is to track what I eat this week and for the following three weeks using Weight Watchers’ system, and to stay within what they recommend for me as a daily target.

My first step regarding my activity level is to go to tae kwon do class at least 3 hours a week for the next month (if not more!) and to get to the gym at least once a week for an hour, preferably twice.

Can I do it? I think so – and the habits that are helping propel me out of debt will help me get there (and vice versa)!

Do you feel like there are parallels between your “money life” and other areas of your life?

What habits or skills have helped you tackle both issues?

Would love to know what you think!

Baker’s note: This post is by Joan Otto. Joan’s been a full-time member of the MvD team for over three months now. This is her story in her own words.

*****

Joan and Chris were doing all right.

And they were TIRED of it. Tired of living paycheck-to-paycheck. Tired of having a six-figure household income and never having quite “enough” to do more than pay the minimums.

Tired of going to jobs that demanded too much of their time, working part-time jobs that sapped their energy and took time away from their amazing 11-year-old daughter, and tired of being broke and tired.

They knew they could do better, but it seemed that every time they tried to make a change, “something” came up. The house needed a new roof. Then a new heat pump. There were car repairs. Braces. It seemed endless, and the treadmill was exhausting.

Oddly, it was almost as if they weren’t doing “bad enough” to make a change.

They didn’t qualify for lowered interest rates or special programs. They could feed their family and put gas in their (shared) car. But there was no wiggle room. They were just comfortable enough to stay stagnant.

When their daughter, Sarah, was diagnosed with Asperger’s syndrome in early 2011, everything changed. Chris and Joan had always wanted to “be there” more in her life, but now, that became an absolute necessity.

They know that if the whole family is going to make it through Sarah’s high-school years, at least one if not both of them will need a work-at-home, flexible-schedule career. And more immediately, they were committed to being able to homeschool their daughter, which brought with it some great possibilities but some unexpected expenses.

When the “why” got big enough, their motivation grew. They started by knocking down $10,000 of their $89K credit-card debt. But they knew they couldn’t stop there…

*****

See how I’m not QUITE smiling in the photo above? That was taken on one of our lowest days, late in 2010. We went to an expensive amusement park with our best friends – even though I knew we had a negative checking-account balance – and only had enough room on our credit card to buy a few snacks. My best friend’s husband took pity on us and bought Sarah and me sweatshirts when the evening got too cold for our T-shirts. Not too long after that was when things finally hit rock bottom.

I’m Joan, and at its worst, my family’s consumer debt was almost $90,000 – and that was BEFORE our $209,000 mortgage.

Now that we have that out of the way… Hi. Nice to officially “meet” you.

I’m part of the team here at Man Vs. Debt, serving as project manager/community leader/Joan of all trades. And in some ways, I’m kind of the “anti-Baker.”

World travel? Not so much.

I’ve lived in the same county in southcentral Pennsylvania my entire life. In a huge move, after getting married in 2005, my husband and I moved one town over from the one in which I grew up.

Flexible living arrangements? Well, note the previously-mentioned $209,000 mortgage.

Also, by way of introduction, besides my husband and daughter that I talked about earlier, our household includes my mom, Joan, who lives with us, a hundred-pound dog and five cats.

That's me at left, with Chris, Sarah and my mom. Oh, and Huggles, the three-legged cat.

Entrepreneurship and career flexibility? Not so much.

I started working at my hometown newspaper when I was 16, and worked there full-time until December 2011. That’s 13 years – I’m now 29. Oh, and I still work there on a part-time basis. My husband has worked for the same newspaper for about 12 years.

The thing is, I’m NOT that different from Baker. Or at least the Baker who wrote this declaration of war on debt in 2009. Chris and I are at war with our own debt, and what you read above is the start of our “success story.”

In AMAZING news, we’ve paid down $20,000 in the past 15 months, dropping our consumer-debt total (not including the mortgage) by 20%.

Here’s the scary part though: We’ve gotten almost this far before – and then racked it all back up. We’ll come back to that in a few minutes – because I want to talk about where this debt came from, and why I think this time will be different!

Before that, though…

Here’s where we stand.

(Note for radical clarity: Chris and I have talked together about disclosing this info and we’re both in agreement with Baker’s policy of radical financial transparency. But, you know, don’t judge. Please.)

PNC Mortgage:  $204,717.84  (5.5% effective APR)
Bank of America credit card:  $27,071.45  (25.24% APR) WE HATE THIS DEBT!
Citi credit card #1:  $19,007.78  (11.15% APR)
Household Finance credit card:  $8,732.82  (9.99% APR)
Citi credit card #2:  $6,414.73  (12.74% APR)
Personal loan:  $3,221.98  (don’t even ask about the APR – the interest is already calculated in, and it’s ridiculous)
Discover credit card:  $4,044.50  (0% APR for 9 months, then 15.24% APR)
Tires Plus (our mechanic) credit card:  $1,564.70  (14.04% APR)

Total debt without the mortgage:  $70,858.26

And don’t forget, that’s the “we’ve made a ton of progress” view.

As I mentioned before, that’s the scary part. We’ve come almost this far before, early in our marriage – and then racked it all back up when our 30-year-old house needed a roof, our basement flooded and our heat pump died.

Legitimate expenses? Well, sure. Or at least that’s what we told ourselves. I mean, everybody owns a house, right? Everybody pays for stuff like that on credit.

And that’s when I found Baker.

That’s when I – when we – started to think differently. Following along with his family’s journey helped to shape our own. It was a wake-up call; it was our “free your mind” phase.

For about two years, from 2009 to early 2011, we started working at our finances. We tried all sorts of things – from the radical “don’t spend a stray dime” mindset, to spending only in cash, to making two extra credit-card payments every single month (even if it was $5), to selling crap on Craigslist, to expanding our online bookstore, a fairly lucrative side business for our family.

It was kind of a shotgun approach. We were making progress, for sure, but then we’d just have those months where we might as well have owned stock in our local convenience store for the money we spent there.

Well, like I said, I’d been following along with Baker’s journey (read that as:  I was a rabid Baker fan) through all this. (I was the crazy lady who made his family drive an hour north of Baltimore to meet my husband and me in person during his RV tour.)

I participated in the Pioneer You Vs. Debt class last spring… and then the Fall 2011 class… And I have to tell you, that’s when I figured it out.

This time is different because we’re different.

Before, we were making things too complicated. And with individual credit cards with debt totals like $40,000 on them at worst, the old mantras of “pay a little more than the minimums” and “snowball by paying off your small card” just weren’t cutting it.

We didn’t feel like we were making progress, and quite frankly, it was just too easy to slide back into old habits when it didn’t seem like we were making a dent. I won’t even say those were bad habits – just careless ones.

But careless doesn’t kick $89,687.23 in consumer debt to the curb.

That’s where I’ve got to hand it to Baker. His radically simple ideas have really made the difference for us:

• Track your spending, every day, with a pencil and paper in your purse or pocket.
• Don’t be afraid to negotiate.
• Sell crap that doesn’t enrich your life, and use the money to put yourself in a better position.

And it worked.

Not because Baker is brilliant or because those ideas will magically double your money. But this system worked because we worked.

The start of this post is my Day 1 You Vs Debt challenge, in which our assignment was to create the beginning of our success story.

And I did. I don’t mean I created it in writing. I mean I started creating the life I want for my family.

I quit a steady full-time job with a major national news corporation to work from home with Baker full-time. I used the negotiating skills I learned in You Vs Debt to essentially create a part-time job for myself at my former company, which still provides a lot of value for them and allows me to continue doing some things that I love, like running my own blog about life in our town.

I got real about committing time to my daughter’s education, and now we’re a homeschooling family. I devoted more time to my tae kwon do practice and started working out regularly outside of martial arts, trying to build a habit of fitness.

Your life can change. YOU can change.

I remember a close friend of mine who was in the Narcotics Anonymous recovery program telling me that it all boils down to one thing – “you gotta wanna.” And, much like in my friend’s program, success for me means surrounding myself with people who will encourage me when I’m doing well, support me when I’m struggling, and hold me accountable to my own personal goals when I’m wavering.

And the cool thing is, my job here with Baker is, in large part, to create exactly that.

My biggest goal as part of the Man Vs. Debt team is to help grow and pull together this awesome community of people who want to sell their crap, pay off their debt and do what they love.

Now that we’ve met, I would be honored to have you walk beside me to create the life YOU want while my family and I keep working on ours. You’ll be seeing me pop up a little more around here, helping Baker out with odds and ends, and I hope you’ll say hi and help me out along the way!

Leave me a comment and say hi! It’ll take me a while, but I’d love to start getting to know everyone!

Baker’s Note: Joan has been a life-saver for me. Her passion for this community rivals my own – and her dedication to making it even better will mean big things in the near future. Welcome, Joan!

In Episode 4 of the Man Vs. Debt Podcast, we cover how you can “Rally Your Friends and Loved Ones.”

We’ve talked about this here on the blog before, as it’s one of the single biggest issues that holds people back.

Note: We also cover this content on the final day of Week 1 in You Vs. Debt. Registration for our new Kickoff 2012 class closes soon, so don’t delay! The class starts together on Monday!

What We Can Learn From The News:

At the beginning of each podcast, I cover three news stories from the past week. We attempt to have a little fun and pull out a positive nugget from each story featured.

• Story #1: Wikipedia Blackout a Grand Gesture or Grandstanding?
• Story #2: What Would You Do With A Billion Dollar Bank Error?
• Story #3: Heroes of the Concordia Crash

Why having your friends and family on board is important:

1. It’s been the #1 factor of any positive change in my life.
2. Realizing that “the meaning of any communication is the response it elicits.”

1. Realize you can’t change them.
2. Let them change organically.
3. Start with WHY it’s important to you.
4. Seek their input. Listen.
5. Leverage outside influences.
6. Lead by example.
7. Make it a routine.

How you can help the podcast explode:

Our first three episode have been downloaded or streamed over 25,000 times!  Whoo-hoo!

If you’ve listen and enjoyed any of the podcasts so far, would you consider leaving a quick, passionate review in iTunes?

Click here to view and/or subscribe inside of  iTunes!

(The newest episode may take a few hours to show in iTunes, but it WILL download if you subscribe.)

Thanks again for everything!

Xoxoxo,

-Baker

Is it possible to change your life in 15 minutes a day?

For the last 18 months or so, I’ve been on a quest to answer that very question.

Here’s what I’ve got so far… YES! It’s absolutely possible.

When you consistently apply your time toward creating the life you love, those bite-sized chunks will create an incredible surge of momentum. They compound. They stack. The efforts multiply each other.

In fact, we’ve found that the person who spends 15 minutes a day for a week – almost always has better results than the person who only focuses once a week for 2 hours.

*****

Today marks the launch of our next You Vs. Debt course – and it’s designed to change your life during the next six weeks using a series of bite-sized chunks that you should be able to knock out in 15 minutes each weekday.

As long-time readers know, we’ve poured a lot of sweat and tears into the development of this framework.

Here’s some of the new structure we’ve created:

• Daily lessons are delivered via video, MP3, and text transcripts.
• Each video contains a lesson, a specific challenge, and a worksheet that you’ll be expected to fill out.
• Our accountability forums offer a place to share your journey to debt freedom with others who are in the same place.
• We’ll send out weekly accountability surveys to track your progress and check your momentum.
• You’ll have the opportunity to unlock badges and publicly display progress on your profile and in the forums.

We all know what we “should” be doing with our finances.

But for so many of us – we’re not doing it. Like I explained in my TEDx talk, that was our situation as well – UNTIL we got serious about changing our habits and our way of thinking.

We’ve been talking about this concept in our posts and podcast episodes this month. I asked you to seriously consider where you are in the phases of debt reduction.

And here’s the awesome thing about You Vs. Debt. Because we’re designed to providing accountability and community support, and to building good habits, it’s an incredible resource no matter WHICH phase of your debt journey you find yourself in.

In our Fall 2011 class, we had people who were currently at their highest debt level ever – and some who started the course with ZERO debt, following the program to make sure they stayed consistent and debt-free.

The last You Vs. Debt class paid off more than $280,000 in debt – an average of more than $1,000 per person – during the six weeks of the course.

And more than that, these class members changed the way they THINK about debt and their financial futures.

For instance, check out this note from Sherice, who paid off $7,372 during the Fall 2011 class. You read that right – more than $7,000 in 6 weeks! She says:

“Your course gave me so much more than I expected. I think I can say my husband and I are successfully winning our battle with debt (but that’s the small part). The big part … my perception of debt was really suffocating me. So much so that I stopped dreaming … I lost my passion for me. You really helped me get that back and inspired me to find my voice again.”

That’s what we know can happen when you surround yourself with positive influences. I can’t make you (or anyone else) show up and focus for 15-20 minutes a day.

But your life CAN change.

You can change it.

*****

Maybe you’re not ready to make that commitment yet. And that’s OK. But if you are, we’d love to tell you more about You Vs. Debt.

You literally have nothing to lose – because not only does your enrollment cover LIFETIME membership, meaning you can participate in the class as many times as you like – we also offer a DOUBLE your money back lifetime guarantee.

Put simply: If you invest the time and the work and you DON’T at least cover the cost of the course in debt paid off, we’ll not only refund your money, but we’ll add in a $97 Amazon gift card (yes, really).

*****

We believe we can empower you to make a difference. Check out You Vs. Debt here.

If you have friends who are ready to be held accountable and get started changing their lives, spread the word. Our team has a goal to help ONE MILLION PEOPLE get out of debt, and to do that, we’re going to need the help of those who have been positively affected by our message!

If you’ve read this far, I know you’re serious about leading the life you want – the one in which you’re truly your own “success story.” So here’s our challenge to you. Learn more about You Vs. Debt. Share the info with a friend or family member.

Then, leave a comment here with one positive change you’ve made in your life in the past six months.

No, silly, this doesn’t need to be a result of this blog or our course.

I just want to hear what sort of progress you are making…

Big or small, what’s on positive change you’ve recently made?

-Baker

Note: You Vs Debt opens today and closes this Friday. First day of class starts on Monday!

In Episode 3 of the new podcast, we cover the “6 Phases of Debt Reduction.”

Having talked to thousands of people (on all different parts of their debt journey) over the last few years, I’ve noticed a couple patterns that have emerged.

It seems that almost everyone, regardless of income level, country, or age, goes through 6 clear phases when taking back control of their financial life.

What We Can Learn From The News:

At the beginning of each podcast, I cover three news stories from the past week. We attempt to have a little fun and pull out a positive nugget from each story featured.

• Story #1: The Most Unusual Job Interview Questions of 2011
• Story #2: NBC’s Super Bowl Ads Sell Out at Record Prices
• Story #3: If you think Suze Orman’s new Pre-Paid Debit Card is a bad idea, you’re an “idiot”.

I also pointed out what was the best Super Bowl ad last year (by far): Young Darth Vader.

The 6 Phases of Debt:

1. Free Your Mind… (I show off my singing voice – can’t miss it)
2. Wake Up!
3. Suck it up and Budget.
4. Stop Buying Crap.
5. Earn More Money.
6. Bringing it all together (for the long-term).

We cover an overview of each of the 6 phases, along with tips on what to focus on if you are in that phase of the game.

Help the podcast reach even more people!

We’re still Top 10 in our “investing” category of iTunes. And still being featured as “New and Noteworthy in iTunes”.

Help us keep up the amazing momentum!

Word of mouth is still the most amazing method to spread the news. Is there a friend, coworker, and family member that would enjoy the podcast? Send it to them!

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Which phase are you in?

Xoxoxo,

-Baker

Our instincts as animals constantly push us to embrace a scarcity mindset.

Do you know what I mean when I say “scarcity mindset”?

It’s the belief that “there’s not enough to go around.” That you need to protect, maintain, guard, defend, or hoard.

It’s basic survival-of-the-fittest.

It starts with a spark in our brains and then manifests itself in our attitudes and actions.

In its most dangerous form, the scarcity mindset can be the default way most of us deal with any situation that enters our life. Good or bad, we immediately turn to how it affects the limited supply of what we have.

Obviously, this isn’t a new discussion. People have been talking about Abundance vs. Scarcity for far longer than I’ve been on this planet. But I’ve been spending a lot of time thinking about it recently, as it’s starting to reveal itself as an issue in my own life.

3 years ago, we had an incredibly powerful scarcity mindset in our financial lives.

And, to be honest, I believe our scarcity mindset was an asset at this point in our lives. We needed it. We had been living unsustainably for a couple years and needed to ruthlessly focus on what we had, what was left, and where EXACTLY to put that extra money.

By leveraging this survival-of-the-fittest mindset we made some incredible strides in taking back control of our money.

But too much of the scarcity mindset can be poisonous.

Focusing through this “lens” for too long or too hard will cause you to become reaction-based, scared, stressed, and selfish.

Luckily for us, our travels throughout the world and my induction into this amazing blogging world helped radically jolt my perspective in this area. Slowly, but surely I began to realize that this isn’t a “zero-sum game.”

My eyes were opened to the possibilities that existed if I could (as my friend Chris Guillebeau says) increase the size of the pie for everyone.

No longer was there a limited supply of resources. No longer was there a fixed amount of income I could generate. No longer was there a fixed potential for what we could accomplish financially in our lifetime.

This was an extremely freeing time for us.

But I’ve realized that an abundance mindset is only really possible (and beneficial) when you actually have the breathing room t0 let it grow.

Let me use an example now. As our business has grown, I’ve picked up a couple team members. With these team members a vital part of this community and my business now – a positive thing – my overheard, expectations, and pressure to perform have all gone up exponentially as well.

This added pressure has generated stress, tightened our breathing room, and made things in general less flexible from a purely financial standpoint. As soon as we began to feel this restriction, our scarcity mindset began to creep back in.

Now, let me point out that intellectually I know this is part of growing any mission in the world. To grow, this is a necessary step along the way.

So the question is… how do you keep a mindset of abundance when times are financially tighter than others?

A scarcity mindset, within reason, can help us ensure we keep our focus. It can help us budget, plan, and forecast so we don’t implode by stepping on a financial landmine in the future. It can help us allocate our resources in the best way possible.

All of that is fantastic.

But in business, just like in life, we  can’t completely lose sight of the abundance mindset that has made this incredible journey possible.

Can we?

I can’t confidently tell you I’ve found the balance, but at least we are aware of the issue. We’re still exploring.

When a scarcity mindset can help (based on my own life):

1. When you first wake up (in life), leveraging a scarcity mindset to rapidly get yourself breathing room is extremely powerful. This is the basis of the passionate “war on debt” and  battle against clutter we always talk about.
2. Once you have sustainable breathing room, it’s important you don’t let the scarcity mindset poison your attitude and outlook. Focus on finding work you love or a mission you care about. This is the best way I know to show you just how abundant the possibilities really are.
3. When you come across a growing pain or downswing, don’t immediately revert back to the scarcity mindset. Be conscious. Evaluate. Slow down.

Most importantly, just be conscious of this dynamic. Be able to enter into and out of these mindsets as you need them.

The scarcity mindset gets an incredibly bad rap from many people. But I know firsthand how powerful it can be in giving you that breathing room to make other dramatic life changes possible.

Are you stuck in a scarcity mindset right?

I’m interested on your own thoughts and experiences in this arena.

• Do you feel at times you’re stuck in a “there’s not enough to go around” mindset?

• Do you feel like it’s ever been beneficial in your life?

• How do you keep from snapping back into it whenever adversity pops back into your life?

Whether you share your answers or not, you need to answer these questions in your own life.

I thought I had this figured out, but maybe not. I’ll keep you updated!

Xoxoxo,

-Baker

I’m really excited to launch the first episode of the brand new Man Vs. Debt podcast!

Our team has been working hard on exploring the ins and outs of the podcasting world – and to be honest – I’m really, really enjoying it so far.

We’ll be taking off next week for Christmas, however starting in 2012 this will be a weekly podcast. One hour a week of action-packed, non-stop fun! Whoo-hoo!

Notes on Episode #1:

• We start with a section that will be named “What we can learn from the news!” in future episodes. News is typically boring, negative, annoying… or all of the above. We try to spin that around and actually learn something from it!

• Next, we talk about finding your “Big Why.” That’s the deep reason that you desire a change in your life.

• Then we visit the audio from my recent TEDx Talk which explores the question, “What does FREEDOM mean to you?” Even if you’ve already seen the video, you may be able to pick up something new while playing the audio in the background.

• Before we wrap up, I share a quick interview I recorded with Hannah Loaring. Hannah is a MvD community member who recently paid off $26,000 in just 9 months and completely changed her internal confidence and key relationships. She sheds a lot of insight into her recent success!

As always, I really appreciate your insight, comments, and suggestions.

We have nearly a page of improvements, features, and fun things we’d like to add in the next couple of episodes – and I know you guys will help us add plenty of fantastic ideas to it!

A special thanks goes out to Cliff Ravenscraft for working with me on getting set-up and optimized and Pat Flynn for inspiring me to “be everywhere” with the message.

How you can help the podcast jump out the gates!

The best possible way to help is to listen to the first 2-3 episodes as we put them out – and let us know what you think!

Click here to view and/or subscribe via iTunes!

(It may take an hour or so for the podcast to show in iTunes, but if you subscribe it WILL download even if it’s not showing yet.)

If you really enjoyed the episode, please leave a quick review (this is done by clicking “view in iTunes”). Great reviews is how iTunes knows which podcasts to share and recommend with others!

So as you are SAFELY driving to your friends and family this Christmas and New Years (or you are hitting the gym for that new workout), pop in the podcast and give it a listen. Exciting times!

Have and amazing holiday season!

Xoxoxo,

-Baker