I have had a number of conversations lately with friends who took me by surprise when they told me how much student debt they have – years after graduating. Some of them have student loans and others have credit card debt from living expenses. I guess I have taken for granted how lucky my wife and I were for graduating with four year degrees without a penny in debt.

Since I firmly believe that you can also graduate debt free, I want to share some suggestions based on what we did. Also, share anything you did to avoid debt in college in the comments below.

If you are still in high school, get good grades

I’m sure that you are sick of hearing this, I know I was. Actually, it’s unfortunate that teenagers have to make decisions (like studying instead of playing) that will last a lifetime when their ability to make decisions is probably at the lowest point in their lives.

Let me put this in teenager terms. All of the people that you think are cool in high school will not matter the day after graduation. That girl/guy that is so cute is most likely going to marry someone else. Your social life will not end if you miss this party. If you earn good grades now, you will get into a better college. Better colleges mean better jobs, more money, more toys and more playing later in life. Good grades can lead to scholarships, leaving you with more money in college to date and have fun.

Some self-discipline now means getting to do more of what you want later.

Evaluate schools based on value for dollars

One of the biggest reasons that I was able to graduate debt free is because I went to a great private university with a small tuition. Tuition cost around $1800 a semester and yet the business school was ranked #7 in the nation by BusinessWeek. I paid little but got a lot. Before applying and selecting a school, spend some time researching the value (cost as compared to career prospects). Here are some links to help you research colleges:

• Princeton Review’s Best Value Colleges
• Kiplinger – Best Values in Public Colleges 2011
• Kiplinger – Best Values in Private Colleges 2011
• Forbes Top 20 Best Value Colleges

Work through college

I worked three jobs while in college. The first was as a night time custodian (though, I never cleaned a toilet). My hours were from 9PM – 2AM Sunday through Thursday. I had Friday and Saturday off. I usually had to take classes that started after 9AM so that I could get enough sleep. And the hours definitely cut into my social life since 8PM is about the time everyone starts to hang out and do stuff on weekdays. However, I was able to pay for all of my bills.

My next job was as an accounting clerk in the university’s budget office. A big improvement. But I had day time hours that again affected my ability to sign-up for the classes I wanted. The last job was as a research assistant for the company where I now work as the Marketing Director.

The two direct benefits from working five days a week throughout my entire college experience was the income that helped me to avoid debt and the experience that led directly to the job I now have. I don’t want to get into a political discussion or make sweeping generalizations, but one of my biggest frustrations with the Occupy Wall Street movement* is the number of people who went to school, took out huge loans, didn’t work and are now angry because they have debt.

*As a side note, I visited Occupy Wall Street and conducted my own interviews in order to form my opinion on the movement. Watch my Occupy Wall Street interviews on YouTube.

Apply for grants and scholarships while in college

Some people may not realize that many scholarships are still available even after you have started school. I was denied a scholarship when I was first accepted. However, after two years, I was able to show through my grades that I deserved a scholarship. I was awarded a half scholarship. But I had to apply for it, which involved writing essays, etc.

The other avenue to explore are Pell Grants, which is free money from the government. Rather, free money to you. Someone else is certainly paying for it in the form of higher taxes. I didn’t qualify for a Pell Grant until I got married, which was near the end of the four years. Here’s some more info on Pell Grants.

It sucks, but ask family for help

I’m a proud guy and I believe in taking responsibility for myself. But when I just didn’t have enough money, I swallowed my pride and reached out to family members that I knew could help. I am forever grateful for that assistance. Also, I spent any money that I received for Christmas or my birthday on school books. At times, I was frustrated when I saw my siblings getting to “play” with their Christmas money while I headed to the Campus Bookstore to buy Economics 110.

My last piece of advice doesn’t come from experience

I didn’t have any money saved up for college. I wish I would have. But that is not a choice that I made. If you have the opportunity to save money before going to college, then do it! You will never look back and say, “Man, I wish I would have graduated from college with some debt. Living debt free has been a real strain on me.”

Though as you can see from me, I still graduated debt free from college despite not having any savings. It just took a lot of hard work.

If you like what you read today, then follow Rabbit Funds on Twitter or Like us on Facebook for regular updates on great, new articles. Also, this article was featured in the Carnival of Personal Finance hosted at Afford Anything.

Recently, my wife and I had what I call a “Come to Jesus” moment. Basically, we had to face reality. We had let a number of areas in our finances slip. Mostly, we just got lazy. So we are currently putting everything back in order. But this experience has left me asking myself, “Why do I have to let things get bad before I shape up?”

Maybe you’ve found yourself in the same boat.

You are sticking to your budget and saving money. But then one expenditure comes up and you decide to dip into your emergency fund (even though it wasn’t an emergency). Then another thing comes up, and then another, and so on. Next thing you know, you are pulling our credit cards again.

Hopefully I’m not alone in this boat (let me know in the comments).

Long before making big, bad decisions, we started by just being lazy about little things. And rather than making changes when it was easy, we waited until things were hard. I’ve repeated this pattern a couple of times in my life.

• Step 1: Get everything in order.
• Step 2: Start slipping in small ways (usually dining out).
• Step 3: Start making bigger, badder decisions (and yes badder is a word).
• Step 4: Realize what I’ve done and work for months to fix it.
• Rinse and repeat.

The problem is that each cycle is costly. It sets us back and puts our goals that much further out of reach.

What’s scary is that our entire nation acts the same way.

We’ve been on a spending spree since the Obama Administration took office nearly three years ago. Although many people and groups warned of the dangers, Congress charged forward. Then, we were hit smack in the face with warnings of credit rating decreases, actual credit rating decreases, and the risk of default. We hit our credit limit. It was only at that point that Congress decided to make some effort to reduce spending.

The scary thing though is that fixing my financial mistakes is not that hard, it just takes a little time. Fixing the financial mistakes on such a large scale – the United States of America – will take decades and a lot of money out of everyone’s pocket. And don’t tell me that it won’t affect your because businesses and the rich should pay more. Businesses and rich people are what drive the economy. They put the money into the economy that gives all of us jobs. So if they have less to spend, then our economy slows and jobs go away.

So why do we as individuals and even huge governments let things get so far out of control before we wake up and have a “Come to Jesus” moment? Why don’t we guard ourselves against deviating from our course?

The government has no excuse.

Elected representatives should represent their constituents and the system of checks and balances should weed out stupidity. But it seems to have failed of late (for a lot of reasons).

But as individuals

We don’t have checks and balances unless we create them. Let me give you a few ideas on how to create self-monitoring mechanisms.

1. Budgets – A budget is a guide and benchmark against which you can weigh yourself.
2. Weekly or Monthly Financial Reviews – Set aside a time each week or month to review your finances with you spouse so that you both know what’s going on and can talk through any issues.
3. Cut up credit cards – Just remove the temptation.
4. Tell your mom about your goals – Okay, so maybe you don’t have to tell your mother per se. But tell someone that will check-up on you about your financial goals. Create accountability for yourself.
5. Automate as much as you can – Make your savings automatic. Make bill pay automatic. Make donations automatic. Get your money going to the right places as soon as you are paid. Then, only spend what’s left.

I’m happy to say that we are headed in the right direction again. But it’s still been costly. Hopefully, I won’t have to wait until it’s out of control again before making course corrections.

Can you empathize? If so, let me know in the comments or on Twitter.

If you have kids and are much of a Dr. Seuss fan, then you’ve probably read Dr. Seuss’s Sleep Book. We were reading it to our two little girls a few nights ago when a part of it caught my attention. I suddenly realized that Dr. Seuss was financially savvy too.

Here’s the excerpt:

“At the fork of the road in the Vale of Va-Vode, five foot-weary salesmen have laid down their load. All day they’ve raced round in the heat, at top speeds, unsuccessfully trying to sell Ziffer-Zoot Seeds which nobody wants because nobody needs.”

What’s interesting is that I feel that I’ve bought these same seeds before. Now granted, they weren’t called Ziffer-Zoof seeds. Rather, I purchased fancy argyle socks, a new laptop even though the old one still worked, and a deal on Groupon that was great but not within my budget.

The point is that I bought products or services that I did not need. I just wanted them.

Dr. Seuss, though, teaches a very interesting lesson. The Ziffer-Zoof Seed salesmen aren’t having any success because the people of Whoville, or whatever realm they are in, don’t want what they don’t need. To help explain, I’m going to talk a little bit about the good ol’ days.

Life in the 1800s – A simpler time

But definitely a harder time by several standards. Due to a number of factors, such as a lack of refrigeration for most of the century, families spent most of their time working to support themselves (whether it be in or out of the home). Many families had to churn their own butter. Money was carefully saved in order to buy land or a home, rather than debt financing one. Clothes were mended and mended and then turned into rags once they could not be mended anymore.

Americans had wants, but their time, money, and energy were spent on satisfying needs and often foregoing wants.

Life in 2011 – Luxury after luxury

For most Americans, we have more luxuries than any other people in any other time has ever had or even dreamed of having. The modern grocery store is a logistical miracle. As a result, we have learned to rely less on ourselves. We spend more time and money pursuing our wants because our needs are so readily met. Everything is $0 Down OAC.

Americans spend their time, money, and energy satisfying our wants and foregoing our needs, which are often future needs such as retirement.

Satisfying wants is not a bad thing

But it can have bad side effects. Since we don’t have to focus on meeting our needs, we can easily become consumed with meeting our wants. So rather than spending our time being productive and bringing home the bacon, we are off spending the bacon on Ziffer-Zoof Seeds, which no one should want because nobody needs.

Late night infomercials have a PhD in selling Ziffer-Zoof Seeds. “Not only does this knife slice-n-dice and clean up after itself, but you’ll receive a second set completely free if you Act Now!” Why do I need or want two sets of the same knives? Why do I even need new knives? I should just sharpen the ones I have.

We simply need a fundamental shift in attitudes. We need to stop masking wants as needs and learning to forego now so we don’t have to forego later.

From now on, call it what it is

The next time you hear the siren call of the Ziffer-Zoof Seeds salesman, which may come in the mall, online, on TV or as the little devil on your shoulder, have the control to call what it is – Seeds of Destruction that Nobody Wants Because Nobody Needs.

What Ziffer-Zoof Seeds have you bought lately?

So every month, we have dinner with some good friends that we’ve been trying to convince to jump on the bandwagon and have a baby. Well, I just found out that she is eight weeks along and we couldn’t be more excited. However, they are a two income family and are now faced with losing the second income.

Many couples find themselves in the same situation. Both spouses work for several years until junior comes along and then mom decides to stay home. Unfortunately, they’ve become accustomed to living on two incomes. So how do you adapt to a one income family and not go broke?

First of all, let me dispel the myth that you must have two incomes to be financially viable in this day and age. Maybe you’ll call me a chauvinist, or a romantic, but I firmly believe that the male gender has a responsibility to get as much education as possible and then work hard. I know too many men that are not willing to work hard and provide for their family. Now, please do not assume that I am opposed to an educated, successful woman. I am proud to say that my wife is a college graduate and business owner. We also have two lovely little girls. The oldest turned three just yesterday.

1) Plan to lose your second income years in advance

Do you realize that many of the financial woes that we are experiencing in this nation would probably not exist if companies and families would have sufficient planned before spending way too much money? For example, if new homeowners had asked themselves, “Do I have enough money in the bank to cover my mortgage for 3-6 months if I lose my job?” then maybe a lot of Americans would have taken out smaller loans.

The point is that if you know that in the next few years you may lose one of your incomes for a variety of reasons (it doesn’t have to be a new baby), then do not put yourself in a financial situation that makes it impossible to lose the second income and stay out of bankruptcy.

2) Reduce your monthly expenses through good budgeting

The second step to prepare to live on one income is to reduce your monthly expenses to the point where one income can cover all expenses. This should seem fairly obvious to you. However, reducing your monthly expenses (and that includes investments) by $1500 to $3000 may be very difficult. Though, if you’ve planned ahead as in Step #1, then you hopefully aren’t locked into any financial commitments and simply need to make a lifestyle change.

You should be using a budgeting tool like Mint.com anyways, but if you aren’t, making this type of change will almost necessitate that you become an excellent budgeter. Basically, create a new budget based one just one income several months before losing your second income and start making all of the lifestyle changes. I say months in advance because it will take you several months to figure out how to consistently stay within a new, reduced budget.

For more information bout budgeting, read Stop Lying, 5 Ways to Stop Overspending and 6 More ways to stop overspending and save money.

3) Save money in a dedicated savings account

If you are reducing your expenses as in step #2, then you will have extra income. PUT IT IN THE BANK AND DON’T TOUCH IT. Open a dedicated savings account that is just for this income. Hopefully, you will build up a nice emergency fund that you can use to ease your transition if hiccups arise. Please be realistic though about what expenses are and are not emergencies.

This account should be in addition to your normal savings since it is coming as a result of reducing your expenses. So don’t think you get to go buy something all shiny and new with it if you are already saving month.

Once you’ve transitioned to a single income, then decide how to best invest the money in this savings account. Maybe it remains an emergency fund or maybe you can invest it in a Roth IRA account or open a 529b account for the new baby.

4) Celebrate your accomplishment

Any good or true goal should have a reward at the end. So plan some way to celebrate a successful transition to income. Maybe it is a nice evening out or other small indulgence. Don’t go too extravagant but you’ve done something amazing and it’s important to recognize that.

Conclusion – The real secret to success

I probably haven’t said anything that you haven’t already considered. The reality is that what I’ve described are simply the mechanics of change. For any successful change to occur in life, you need a change motivator. You need a reason inside of you that says not only do I need to do this, but I can do this. So find your change motivator (I hope it isn’t job loss, which can be a powerful motivator). Write your motivator down and stick it on your mirror or put a picture of it somewhere that you will see everyday. Then the mechanics of change have a living force behind them driving you to make the right decisions.

Do you have experience of going from two incomes to one? If so, please share below.

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As we begin 2011, I find myself still reflecting on 2010 and what I’ve accomplished. Seth Godin recommends making a list of what we’ve “shipped” or completed this year. As part of my reflection, I’ve analyzed the traffic to Rabbit Funds to see what you, the reader, like.

First, thank you. Without you and your readership, this site would not exist.

As I looked at the stats, I was a little surprised to be honest. Some posts that I took great pride in faired okay while other posts that I thought were average were really well received. Apparently, my crystal ball is broken.

I thought you might like to see some of the stats. So I’ve outlined below the 10 Most Viewed Posts and the 3 Most Commented Posts and added some thoughts from me about the stats indicate about readers. Let me know what you think in the comments.

The Top 10 Most Viewed Posts

1. Money Hacks Carnival #104: Have you ever? – A lot of traffic actually comes from searches for Jack Nicholson as the Joker, which was featured in this post. I should therefore devote more time to celebrity gossip ;)
2. 3 Reasons Dave Ramsey is wrong about Credit Cards – Not everyone thinks that every word that drips from Dave’s mouth is manna from heaven.
3. 49 Expenses that are not emergencies – People like lists.
4. 6 More ways to stop overspending and save money – With tough economic times, you are looking to change or improve your financial situation. Keep it up!
5. REVIEW: Mint.com and the new Goals feature – If you are still looking for reviews on Mint.com, then stop it and sign-up today.
6. HOW TO: Dejunk your home, sell stuff, and be happier – Wanting extra cash, you are looking for tips/advice on selling stuff in your home.
7. Why Hubspot fails at social marketing –  Ranting and raving usually seems to get some attention.
8. Dave Ramsey said to sell my stuff and payoff debt – Some more Dave love.
9. 5 Ways too stop overspending – Debt isn’t fun and you are looking for ways to rid yourself of spending habits.
10. INTERVIEW: Seth Risenmay, Founder of MoneyDesktop.com –  You are looking for and researching budgeting tools. Yeah!

The Top 3 Most Commented Posts

1. Money Hacks Carnival #104: Have you ever? – Most of the comments are from other bloggers. So this post almost doesn’t count. But it does show that finance bloggers are grateful.
2. 3 Reasons Dave Ramsey is wrong about Credit Cards – Again, it seems that folks want to have their say if it’s a controversial topic.
3. 6 More ways to stop overspending and save money – It’s interesting that the top commented posts are also three of the most visited posts. I’m happy to see that you are looking at and engaging in discussions about saving money.

The Coming Year

Thank you again for helping to make 2010 a great year for Rabbit Funds and the personal finance community in general. As for 2011, I will work hard to continue providing great content and look forward to interacting with you. As always, your comments, suggestions, and feedback are always welcome.

To stay up-to-date with the coming posts about saving money, budgeting, and financial planning in general, subscribe to the Rabbit Funds RSS Feed or Follow us on Twitter. Good luck and good investing!

P.S. Rabbit Funds was recently selected as an Editor’s Pick in the 288th Carnival of Personal Finance hosted at  DollarMatters.com. If you are looking for some great articles to read, then go check out the line-up.

For the purpose of this post, I am assuming that you already believe in budgeting. Meaning, I intend to review Mint.com as a budgeting software solution and not attempt to persuade you that you should be budgeting (though you should be).

Before detailing my experiences, let me start by saying that I love Mint.com. I had been a hardcore Microsoft Money user for years and was devastated to find out that they were discontinuing the product. Looking for a cheap, straightforward alternative, I decided to attempt Mint.com.

Here’s a brief outline of what I like and don’t like.

Likes

1. Free – If you are just starting to budget, then Mint is a good way to get your feet wet with a strong tool that is user friendly and free.
2. Auto-updates my accounts – This feature is fairly standard to most budgeting software but still worth mentioning. You use an obscure bank or credit union, then auto-updating may not be possible.
3. Offers – Mint.com makes money through third party offers such as credit card companies and brokerage firms. First, the “advertising” is not obtrusive to the user experience and you usually have to go looking for the offers (“Ways to Save” tab). Second, although I am opposed to credit cards and the like, I believe that consumers with credit card debt may benefit from lower interest rates or better terms. So I believe there is value in helping compare offers.

Dislikes

1. Only simple reports – Having used Microsoft Money for years, I had fallen in love with being able to quickly and easily create custom reports to analyze just about any part of my financial house. With Mint, you are restricted to a small set of non-customizable reports.
2. No debt management tool – Ok, so that statement is a little misleading. Until the recent addition of Goals, Mint offered no way to systematically eliminate your debt using techniques such as the debt snowball. Though, I outline my experience with the tool below.
3. Does not take into account savings – I really like the Budgeting feature. It is straightforward and easily accommodates custom budgets and helps you save for non-monthly expenditures (i.e. it tells me how much to save each month in order to pay for my wife’s salon trip every 4 months that always costs more than she says it will). However, I tried to add a budget for what I stick into my Roth IRA account, which is tracked by Mint, and the budget disappeared. Meaning, that investment amount isn’t subtracted from my spending and it appears that I have more money to spend than I actually do (see image to the right). I tried adding a ‘dummy’ Savings budget so I’d know not to spend the money, but then the investment isn’t tracked correctly.

The new Goals feature

Let me start by saying that it’s about time!

I’m honestly a little surprised that it has taken the team at Mint.com this long to add a goals feature. Either way, we have it now. When you click on the Goals tab, you are presented with a number of “off the shelf” options or a create your own goal option.

“Get out of Debt” goal

Excited to see how the debt elimination feature worked, I decided to see how I could payoff my mortgage sooner. To my surprise, the only debt I was allowed to eliminate was my one credit card (which has a balance of $176). Dismayed, I selected my credit card and hit Next. Mint then analyzed my discretionary income (or extra income after expenses), the minimum due on my credit card, and the interest rate. Mint’s advice was to pay the minimum, only $15, for one year despite sufficient discretionary income to pay it off much sooner. Like now. Simply put – Mint’s debt management program failed.

“Take a Trip” goal

Though, I believe everyone deserves a fair chance. So I attempted to create a different goal. My little family will be headed out to Washington D.C. next Spring to see her family. Below is what I entered. This time, I felt everything worked very well. We were able to give the goal our own name and upload a pic to motivate ourselves – very cool.

Despite the drawbacks of the debt reduction goal, I definitely give the Goals feature two thumbs up.

Last question, is it safe?

Let’s be honest. If I am sharing my account information with a site, I want to know that it’s safe. In a video posted to YouTube, Mint’s CEO Aaron Patzer explains how Mint approaches security. I’m pretty paranoid about my identity being stolen and take a good number of precautions. So far though, I have felt completely safe using Mint.

My recommendation is that if you are not currently using any budget software or if you are unsatisfied with the one you are using (this includes Microsoft Excel), then check out Mint.com.

For more tips and reviews, subscribe to Rabbit Fund’s RSS Feed!

A few years ago, my wife and I had the opportunity to invest in a company that we hoped would go public. We were young, just married, and broke. So we took out a personal loan from a family member (for a fairly small amount) to make the investment.

Within months, the company went belly up. Since we weren’t able to recoup a single penny from our investment, we were left to work off the debt. This experience taught us several valuable lessons. Among those lessons was that one should be extremely cautious when using leverage to make an investment or increase the expected return on an investment.

Let me give you four reasons not to use debt to invest

First, you may not  have the right experience to manage the use of debt, such as borrowing from a margin account, when investing. Without the aid of an experienced advisor, avoid using financial instruments such as margin accounts.

Second, for the average Joe, slow and steady will win the race. We all have goals and dreams and it would be wonderful to achieve them today. However, our dreams can become nightmares if we try to run to them too quickly. Realize that if you follow tried and true investing techniques, you will arrive at your goals and have had peace of mind along the way.

Third, your mama was right – don’t spend money you don’t have. This is the foundation for any solid financial house. I read an article several months ago that referred to credit card arbitrage, which is borrowing money from a credit card with a very low promotional rate and then investing the borrowed money. The idea is that you’ll pay off the credit card before the interest charges hit and you’ll have made more money from investing the money than any fees associated with borrowing the money (e.g. cash advance charge).

The problem is that you are building a house of cards. What if you can’t liquidate the investment in time to pay off the credit card? Even though the nice marketing pitch says you pay no interest, it is actually accruing. So if you don’t pay off the credit card within the promotional period, then wham! You’ll be hit with all of the interest charges.

Fourth, we become too emotionally involved. For many people, investment decisions are based on emotions. We see the market begin to fall or rise and we sell or buy accordingly. So if we know that getting out of a bad investment now means we are left owing the debt, then we may choose to not sell hoping that the investment will come back. We may get lucky and the investment rebounds, or the investment will decrease in value even further leaving us with even more debt to repay.

So why would anyone use debt or leverage when investing?

Leverage acts as an accelerant. Just like adding gasoline to a fire, leverage can allow you to gain larger returns than you would otherwise be able to obtain.

Also, leverage increases the percentage return on an investment. Ever heard of OPM? Other People’s Money. Here’s a specific example.

• Scenario 1: I invest $100,000 and gain a return of $10,000. My percentage return is 10%.
• Scenario 2: I invest $10,000 of my own money and $90,000 of borrowed money (or OPM). If the return is still $10,000, then my percentage return is %100. This of course assumes no fees or interest associated with borrowing the $90,000, which is never the case.

Scenario 2 sounds nice because my return is %100 and I only had to tie up $10,000 of my own money. Though, at the end of the day, I’m $10,000 richer in either scenario. And I’m not financially committed to someone else in Scenario 1 if the investment begins to sour.

What are your experiences with using debt to invest? Good or bad. Also, sign-up for our RSS Feed for timely updates on other financial topics.

To celebrate the birth of our nation and the freedoms that we are afforded, I am writing three posts this week with a twist. Each post is based on an influential document which has given us rights.

On Monday, I outlined the Financial Declaration of Independence. Today’s post, based on the United States’ Bill of Rights, is the Financial Bill of Rights.

1. First Amendment – Freedom from debt, credit cards, and HELOCs
   We shall take out no unnecessary debt living beyond our means, which prohibits free exercise of other rights; or overspend through the use of credit cards; or enslave ourselves through the use of HELOCs; rather save the necessary sum to pay cash for wants and needs.
2. Second Amendment – Right to keep and have savings
   A well regulated Automatic Savings Plan, being necessary to the security of a financially free Family, the right to an Emergency Fund, shall not be infringed.
3. Third Amendment – Protection from bank failure through FDIC insurance
   No Investor shall, in time of peace place cash savings in any bank, without FDIC insurance, nor in time of war, but use multiple banks as necessary.
4. Fourth Amendment – Refusal of Interest Only and Adjustable Rate Mortgages
   The right of the people to be secure in their houses, condos, and town houses, against needless foreclosures and bankruptcies, shall not be violated, and no Interest Only or ARMs shall be issued, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
5. Fifth Amendment – Health, life, AD&D and LTD insurance
   No person shall be without Health insurance, or adequate Life insurance, sufficient for final expenses and income replacement, except in cases when no financial means to purchase insurance exists, while actively seeking new employment or other income source; nor shall any income producing person be without Accidental Death and Dismemberment insurance; nor shall any income producing person be without Long Term Disability, sufficient to replace 60% of the normal wage.
6. Sixth Amendment – Right to steady, growing mutual fund returns
   In all mutual fund investments, the investor shall enjoy the expectation of steady, growing returns, by careful fund selection based on principles of positive alpha, fair management fees, consistent performance, and passive management where appropriate; each fund consistent with a target asset allocation plan; to have compulsory purchases avoided and decisions based on sound investing principles.
7. Seventh Amendment – Consistent asset allocation by rebalancing
   In accordance with a predetermined asset allocation plan, where the values are determined through evaluation of your risk and investing objectives, the right of rebalancing, or realigning investments which have deviated from their allocation, shall be exercised, and no given investment, shall be allowed to overwhelm the returns of other investments, which may result in large, unexpected losses.
8. Eighth Amendment – Abolishment of excessive management fees
   Excessive management fees shall be avoided, nor 12b-1 fees paid, nor front end or back end loads paid.
9. Ninth Amendment – Protection of rights not specifically enumerated in credit card agreements
   Where credit cards are used, the enumeration in the Agreement, of certain rights, shall not be construed to deny or disparage others retained by the credit card account holder.
10. Tenth Amendment – Powers of spouses and family councils
    The powers delegated to the Head of Household by the Family, are reserved to the Spouses respectively, and decisions discussed in family council.

Signed this 30th day of June, 2010,

Adam Williams and the Rabbit Funds team

Sign the Financial Bill of Rights by leaving a comment in the comments section below and follow Rabbit Funds on Facebook for more great financial planning info.

As I reflected on the freedoms that I enjoy as a citizen of the United States, I realized that our forefathers would be sadden by the economic hardship which is self-imposed by overspending and enslaving ourselves through debt.

I therefore decided to alter the beginning of the Declaration of Independence, one of the most lasting and influential pieces of literature, to create a Financial Declaration of Independence.

Financial Declaration of Independence

When in the Course of our life’s events it becomes necessary to dissolve the bands of debt which have enslaved us and to assume among the powers of the earth, the financially free and secure station to which the Laws of Nature and of Nature’s God entitle us, an earnest and whole-hearted effort require that we should declare the causes which impel us to liberation.

We hold these truths to be self-evident, that all men are able to obtain financial freedom, that we are endowed by our Creator with certain unalienable Rights, that among these are Investments, Planning and the pursuit of Financial Security. “” That to secure these rights, Budgets are instituted among families, deriving their power from the mutually agreed upon savings and expenditures, “” That whenever any Form of Overspending becomes destructive of these ends, it is the Responsibility of the Family to alter or to abolish said overspending habits, and to institute new Attitudes and Habits, laying a foundation on such principles as Emergency Funds, Retirement Accounts, and Debt Reduction Plans and organizing its powers in such form, as to them shall seem most likely to effect their Financial Safety and Marital Happiness.

Prudence, indeed, will dictate that Budgets long established and effective should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to overspend, yet unsufferable evils that we ourselves must abolish are credit cards to which we are accustomed. And when a long train of abuses and indulgences, pursuing invariably an end design to reduce us under absolute Financial Slavery, it is our right, it is our duty, to throw off such Indulgences, and to provide new Guards such as Credit Card Destruction for our future financial security.

Signed on this 28th day of June, 2010,

Adam Williams and the Rabbit Funds Team

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Join us in our revolution and sign this Financial Declaration of Indepence in the comments below!

Any American who pays even the slightest bit of attention to television commercials or newspaper advertisements – not to mention the many direct mail inserts that seem to daily flutter through the mailbox – has likely seen his or her share of debt relief offers that seem to good to be true.

Certainly, the demands of the marketplace mean that the majority of the nationally renowned debt relief companies are legitimate without question. Of course, simply because the debt relief agencies (and the agency representatives) are not willfully fraudulent does not mean that the very nature of their approach to debt relief won’t end up rather different than the client originally thought.

It’s so very important that you ask questions from the moment you begin talking to a debt relief counselor about the smallest guidelines of their debt relief philosophy so that you’re not accidentally misled. Even though the debt relief professionals genuinely believe in the effectiveness of their own company’s system, that still doesn’t guarantee it’ll be the right fit for your particular circumstance.

Traditionally, when it comes to debt relief scams, most of the consumers who’ve previously fallen for one of the less than trustworthy efforts have one of three common complaints that absolutely must be avoided:

1. The supposed debt relief strategy actually created more unsecured debt than had formerly existed
2. Despite sky high monetary expenses, the debt relief firm did less than nothing to aid the situation.
3. Whether or not the debt relief agency did an effective job reducing the financial burdens, the client’s credit scores were seriously damaged

Now, to an extent, the criticisms of specific debt relief methods could just come down to the customer’s faulty recognition of what the debt relief programs represent. It should seem obvious to any adult that a debt relief plan seeking to lower the monthly payments, the interest rates, the amount of unsecured debt-loads, or all of the above will feature some comparatively less favorable consequences for the borrower alongside. However, since so many of the debt relief counselors (even the ones that work for technically non profit organizations) are paid primarily by the amount of business that they bring in to the company, they’re hardly going to stress the disadvantages of their program.

Also, remember, most of these debt relief professionals truly think their approach would be the best bet for erasing credit card balances regardless of the surrounding household circumstances. As a result, even if they know that the mandatory minimum monthly payments required under one strategy may be a bit of a stretch for one consumer’s income, they might push forward the debt relief payment schedule anyway in the hope that a bit of budgetary discipline’s what needed. Similarly, although they realize that their method of debt relief will wreak havoc upon FICO scores for up to a decade while closing accounts as a part of the process, some specialists might well believe that their clients could do with less capacity for thoughtless spending.

You could hardly accuse these debt relief professionals of scamming their customers, but neither did they take the needs and interests of their clientele seriously. For this reason, even if the company seems thoroughly above board, it’s always a good idea to ask a particular debt relief agent for recent recommendations so that you’ll make sure the debt relief offered will be just what you wish.

Credit card debt is wrecking people’s lives as we speak. The lure of the “easy money” ruins a lot of families because credit card holders are too weak to refrain from buying yet another thing they really don’t need. So what can you do if you are staring in the face of debt – debt that could result in a bankruptcy claim or a divorce because money issues are so bad in your family no one can handle them?

The answer is: use the snowball method

Before I go into explaining how this works, let me clear up an important fact that seems to cycle through people’s minds. Contrary to popular belief, it isn’t easiest to get out of debt by paying off your highest interest rate debt first. This is what many debt-ridden consumers tend to believe, but they are wrong (at least partially because the math proves us otherwise).

The problem with the “math supported scenario” is that people end up giving up along the way because they don’t see instant results. If you are stuck with thousands of dollars of debt and all you do is skimp money, the last thing you want is to wait for several months until you see your debt twiddle.

Instead, pay off your smallest debt first (this is what is referred to as the snowball method).

How to establish a debt snowball method

With the debt snowball method, you put everything on hold financially except the minimum payments and of course your utility bills and essential living expenses (and no, that does not include a subscription to cable TV). Scrape together everything you can.

However, before you start minimizing your financial expenditure, try and save money for an emergency fund. Speed is of the essence here since the interest clock is ticking.

Assemble all of your debts and create a spreadsheet listing them in order of size. Start with the smallest debt first and work your way toward the biggest (most likely your mortgage). This is not the time, nor the place to worry about interest rates as the idea is to start paying down your smallest debt as soon as possible, then move on to the next, and so on.

The snowball starts rolling…

Begin by paying the minimum on all of your debts except for the first one. Pay as much towards that each month as you can. The moment your first debt is paid off – which shouldn’t take too long if you are dedicated – apply that same payment amount to the next debt on your list. Once you’ve paid that off, apply that whole sum to the next one. So, $25 becomes $75, which becomes $125 and so forth.

In a short period of time, your snowball will gather pace and you will feel a massive sense of achievement. This will drive you to keep going.

Seeing results is psychologically important. It helps us to stay focused and result-driven.

…can you feel the rush of wind in your hair?

As you pay off more and more small debts your snowball will gather massive momentum. You will feel elated and actually start believing that is is possible to be debt free.

But it gets even better than that. If the exhilaration of the wind in your hair isn’t enough, how about the fact that you will start to compound your remaining payments as you pay off more of your debts. Money is funny that way!

Every single dollar you pay off your existing debt will help to compound the remaining amount. The more you pay off, the quicker your debt will shrink until there is…

… nothing left to pay, finding yourself debt free.

As long as you keep adding the amount you paid to the prior debt to the next debt, you will see results with the snowball method very quickly. It will be the start of the rest of your life and hopefully re-educate you on money management forever.

This guest post is written by Timothy, a personal finance writer for Credit Card Finder, which specialises in providing credit card comparisons and information to help consumers get into a better financial situation. For more information on ways to reduce your debt, visit the Credit Card Finder website or subscribe to their RSS feed for additional practical articles.

Louise Tillotson writes for a number of websites, including moneysupermarket.com, on debt management, household budgets, savings and other personal finance topics.

If you have debts, then chances are you’ve got less than healthy spending habits. If you constantly find yourself thinking things like “If only I hadn’t bought that, then I could have this” or running short of cash a fortnight before payday, then you could do with taking action, kicking a few bad habits, and tackling some debts before they take over your life completely.

I won’t go into ways of cutting down your expenditure as there is tons of information out there on how to do that, and much of it is common sense anyway. Suffice it to say, if you have outstanding debts, then you need to put yourself in a position where you have enough disposable income to cut a sizeable chunk off of the balances.

Determining your financial situation

In order to do this, you need to know exactly what your financial situation is in. Getting copies of your credit report and score is the best way to understand your finances since trying to remember each debt, income and expenditure means you could easily forget about crucial ones. The goal is to find out how much you have coming in, how much is being paid out, and how much is left over.

Understand your debt obligations and make a plan

As well as knowing what debts you have, you also need to know how much the total amount owed is, the term left on each one, and what the interest rate on each one is. The idea is to pay off the most expensive debts first and get them out of the way as soon as you can. Debt that is taken out over a long period of time and has a high rate of interest is going to end up costing you more than a short-term loan with the same or a lower interest rate.

If you have a few small debts that you think you could pay off in one go, contact the creditors and ask about a settlement amount. They may be reluctant at first; some like to keep you paying interest for as long as possible; but don’t take no for an answer. Ask to speak to a supervisor or manager, and negotiate a lower amount with them.

What about your mortgage?

As for the rest of your debts, commit yourself to paying off a percentage of each one every time you get paid. Structure these payments depending on the interest, term and priority of the debt. For example, a mortgage will technically be the biggest debt you have, but clearing it isn’t really a high priority compared to one which may have some late payments. Any debts which you’re consistently up to date with payments on won’t be harming your credit score, so concentrate on those debts which you may have fallen behind on, and get these up to date.

This form of debt management is slow, but steady. Keeping up with payments is actually easier than trying to play catch up if you get behind. When you’ve had to do it once, you’ll do your utmost not to have to do it again!