The Total Money Makeover: A Proven Plan for Financial Fitness: Ramsey
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I have heard of the philosophy of not needing a credit history or credit cards, but never really believed it could work for me until I read this book. Ramsey describes many carefully planted myths about money and money management that hurt normal people and benefit companies and how our ignorance of this is killing us financially. We are trained by meticulous marketing techniques to live a lifestyle that will keep us in debt forever (a lesson I've lived personally).

Read this book to get a practical and easy-to-implement plan that will get your personal finances under control. Stop wasting money, stop worrying about the future, stop being a slave to your debts. And, yes, I'm debt free and have been for more than four years now. Never again.

(Image used under: Creative Commons 2.0 [SRC])

I am constantly telling people to lock down their privacy settings because if you keep this stuff visible, this kind of story becomes possible. Apparently there was a debt collector that spammed friends and family of a debtor in order to pressure her to pay.

Melanie Beacham says she fell behind on her car payment after getting sick and taking a medical leave from work. She contacted MarkOne Financial to explain the situation but says the harassing phone calls, as many as 20 per day, kept coming. Then one day she got a call from her sister saying the company contacted her in Georgia. "I was telling her, 'No way, because you're not even a reference,'" said Beacham, who later found out MarkOne contacted her sister and other relatives via Facebook.

(Image used under: Creative Commons 2.0 [SRC])

Today I found some great and solid advice from "TheSimpleDollar.com" about managing money the right way. I agree with most of this though I wonder about the advice of investing before paying off bills. If your interest rates of debts are always higher than those of investments, it seems you're spending more than you're gaining.

Shouldn't you pay off debts then invest?

Don't fall for the debt trap

(Image copyright Jeremy Duffy)

If you weren't already suspicious of such services, you should be. Companies like this that prety on the weak and defenseless while simultaneously pretending to offer a helping hand are the worst kind of scum.

FTC

(Image is in the Public Domain)

According to their annual report to congress, the Federal Trade Commission recieved over 69,000 complaints that debt collectors were violating the Fair Debt Collection Practices Act (the law that prevents them from harassing you or using dirty tactics to try and get you to pay a debt). In response, the FTC filed against 3 debt collectors.

Thanks FTC!

(Image used under: Creative Commons 3.0 [SRC])

I'm putting out the call for all people who get money unexpectedly to take the unpopular route and use it to pay down some debt rather than spend it. The very idea that you are in a position to spend new money while you're in debt at all is why Americans and America is in so much trouble right now.

Embrace the philosophy of a total-money-makeover and work towards it. Even if it violates the implanted logic that businesses and the credit industry have forced upon you, work your way out of debt before starting new ones and learn to live debt free.

Now realistically, I will probably spend some of the money on something nice like going out to dinner or a small gift for my wife. Psychologically, many of us will need to spend at least some of the money, but I'm OK with doing that if you still apply the vast majority to outstanding debts.

Debt neverending

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Some people still get on my case for being such a strong proponent of business regulation. They think that because of that, I don't put enough of the blame on the consumer (who is obviously at fault for the trouble the get themselves into). However, it's clear that the playing field is not level, the businesses use tricks and manipulations that no normal person has a chance against.

You don't even have to do anything wrong in some cases. Consumeraffairs.com looks at how the credit industry is still as full of abuses as before the Fair Debt Collection Practices Act was passed in 1977.

"Even more startling, debt buyers have learned to work the system to win judgments and coerce payments even when they have the wrong person or lack any evidence that the consumer owes the debt," NCLC and NACA wrote in a filing with the Federal Trade Commission.

…

"Debts that may be a decade or more old are now sold in bundles to debt buyers for pennies on the dollar. Debt buyers then file cases by the thousands in overworked courts. The courts typically enter default judgments even if the collector has no proof that the consumer owed the debt, that the amount owed is legal and correct, or even that the debtor being sued is the right person,"

Using a sound board to deal with debt collectors. Ha!

(Image is in the Public Domain)

This isn't really relevant to anything, but is very, very funny. Apparently the guy in this video has been harassed by a debt collectors for a while because he has the same last name as someone else with a debt. His way of dealing with the problem? Record a bunch of Judge Judy sound clips and use them during the telephone conversation to talk to the debt collector.

The best part is, this debt collector ends up having an entire conversation with a computer!