Credit: sxc.hu/profile/hotblack

Have you ever awoken from a nightmare that felt so real, that you actually felt relieved when you realized it was only a dream?

Many people each day wake up to a similar crushing fear, but theirs’ is not caused by a bad dream, but instead by a feeling of helplessness, and despair.

Each day, people who hate their jobs, dislike their quality of life, and have an overwhelming desire to live out their dreams of starting a business, instead choose to put on their business suit, pick up the briefcase, head to the office, sit in their cubicle with tropical destination pictures all over the walls, and remain there for the next 8-9 hours.

Why do people do this? Fear. They may hate their job, but they know what to expect. They know what time to wake up, what time to be there, what time to leave, and exactly how much money they will receive in two weeks. It is all they’ve done for 20 years, it’s all they know, and it’s what they’ve come to depend on.

Gripping Fear To Start A Business

This comfort forms a comforting fear around you. It is a fear of change, a fear of risk, and a fear of failure. You know you won’t fail if you keep doing things as you have. Often, it isn’t until you are more afraid of things staying the same, than you are of failing that you finally gain the tenacity to get things moving.

What does it take to get to that point though? Most people finally arrive when:

• They’ve gotten laid off.
• Or they’ve been pushed to the absolute limits of their sanity.

In both of those instances, they seem to be terrible times to start taking on the stress of running your own business! Should someone wait until they are 3 feet from the mental ward before they decide starting a business isn’t such a bad idea?

Coping With Fear

If you want to avoid the above described situation, then you need to address your fear. Coping with your fears up front is the only sure way for you to gain the confidence to make the correct decisions. The first step, in my opinion, on coping with this fear is to accept the fact that you aren’t that much safer in your current job.

There is a high percentage of the workforce who are desperately seeking employment after being laid off, or their companies collapsing. Many of those people felt safe, but weren’t. Employment provides a false sense of safety. Whether you’re an atheist or all the way to the most holy pastor on the planet, we all live on faith.

Each day, we step out of our doors assuming the air is clean enough to breathe, we get in our cars (which use combustible engines) and have faith that they’ve been engineered properly. We get on the roads (no explanation necessary) and we drive to a company that we assume is healthy enough to still have their doors open. You live on faith, even if you didn’t know it.

Starting a Business Responsibly

SCORE.org once stated that about 90% of all business failures occurred because a business was under-capitalized. That means they didn’t have enough money to operate properly. If you want to take the sting out of your failure fears, then you need to get a business plan together, and speak with a SCORE advisor. SCORE advisors are volunteers that will help you look over your plans, and let you know what they think.

In addition to SCORE advisors, you can work with the SBA (Small Business Administration) to figure out how viable your idea is. You can get help anywhere from Starting a Website all the way to starting a manufacturing plant. There is no reason to toss money into the wind and cross your fingers. Starting a business does not have to be a bunch of guesswork, if you start and manage a business responsibly, and have enough confidence and desire, you will be successful. It’s time to get fearless. Remember: Every business started with someone taking a risk.

Starting a website isn’t a very difficult thing, but starting a successful website certainly is. I’m going to cover some of the steps I took when I felt inspired to serve God and the Christian community with my website  for Christian Graphics, Images, Pictures, and Wallpapers: Christian Grafix.

A quick history of this website is: I’ve been working with graphics for a number of years now, and I’ve always enjoyed it. I decided that I wanted to serve the Christian community with my talents by offering Christian inspired images for use in ministry, or as desktop wallpapers.

Some of the steps below won’t apply to my ChristianGrafix.com website, and that is because I’ve created that more out of charity. If it happens to make money, great, but that is not on my list of goals for that website.

Starting a Website

Your website concept may come from an entirely different source than mine did. Maybe you met someone who inspired you, or you’ve always had this overwhelming need to help people, or maybe you have this amazing idea that you know would do well if you could just get it out there.

Regardless of your inspirational source, your website starts with an idea. That idea then takes shape, and that shape will depend on many of the following different steps. I didn’t necessarily lay these steps out in chronological order, this is just how they are arranged in my head when I go through them.

If you want to start a website, but you don’t know what to start it on, then I would advise against starting a website. The horse must be in front of the carriage. An uninspired website will eventually die off. This often happens because immediately expected results weren’t met.

Research

The first thing I do is research. I look for competition and determine who the best is. I then figure out:

• Is there are a market?
• Is the market big enough to serve multiple entities, or will only one entity dominate?
• Can I do better?
• Why would someone choose me over them?
• Am I inspired enough to word hard enough to beat the competition?
• Am I talented enough to beat the competition?
• Do I have the financial resources to beat the competition?

There are so many more questions you can, and possibly should ask yourself, but if you can get through that list with confidence, then you just might have something!

Fortunately, ChristianGrafix.com is being done out of love and charity, so I was able to forego much of this. I just want to help people, and if I can, great.

Business Planning

ChristianGrafix.com

If you are serious about your website, then you should consider doing some amount of business planning. Yes, it is tedious, but it will give you a great grasp on:

• Your ideas
• Your motivation
• Your market
• Your competition
• Your goals
• Your growth potential
• Your financial liability
• and your businesses viability

Technology and Implementation

I can’t get into the detailed little nuances of all the technologies involved, but depending on the type of website you are operating, you will need:

• Website domain name (such as a .com, .org, etc.)
• Web hosting
• A platform
• Depending on your platform: anywhere from a rudimentary knowledge of HTML, all the way to an expert knowledge of web development.

Launching

Launching the site will ultimately come down to preference. For me, I always try to build up some content first, before I truly “launch” the website. This also allows time to tweak the website’s appearance, and it gives me time to get into the search engines while I let the site “marinate.”

Other people might prefer posting a “hello world” message and getting to the marketing, but that is entirely up to you. I find it much more rewarding when I can send people to a website that has content that they might find useful. This was the case for ChristianGrafix.com.

I made sure I liked the layout, I put up content, I added some pages so people can get to know me a bit better, and I made sure I licensed the images so people truly knew where I stood. I did add the option for people to donate to me, but this is only intended for those that feel led to. The images are available free-and-clear to those that want them, regardless of whether they donate or not.

Marketing

This can end up being a very broad subject, so I’ll try to be concise. Promotion will depend greatly upon the type of website it is, and who your customers are. If you are selling a product that appeals to octogenarians, then you probably shouldn’t be hitting twitter as your primary method of contact.

My first suggestion to people promoting a new website is to get your family and close friends on board with you. Let them know about the website, how it might fit their needs, and ask them to help you promote it. Use Facebook, Twitter, and any other social networks your market may be on to get the most out of your free promotion. Be extremely cautious about over saturating though. You don’t want to be that annoying tweeter that people are rushing to unfollow.

Tap your network of people, and you should experience a lot more success in your promotions. Another point of caution: be very careful with emailing. The laws around email spam are extremely strict, and very easy to violate. If you want to get into email marketing, I would suggest starting out with the free option from MailChimp. They are fantastic, and they will keep your emails legal!

You can keep business moving even if chairs are empty.

If your internet service provider went down, your electricity went out, or your credit card processing went down, what would you do?

If you don’t know, then your business may be lacking a backup plan. More formally, this could be considered a part of Business Continuity Planning (BCP) or Resiliency Planning.

Resiliency planning can cover a range of threats such as war or natural disaster. While it is good for a business to plan for these things, when you’re starting a business, you probably aren’t going to be coming up with detailed contingency plans in cases of war.

While this is understandable, this does not excuse you from planning for other more potential problems.

Today’s Experience

What got me to thinking about this today was when my wife and I were doing some shopping. We arrived at the last store we needed to visit for the evening and noticed the parking lot was eerily empty.

We walked up to the door and noticed that we were there within their hours of operation, but as we got closer, we saw a sign on the door.

The sign stated that they were closed for the day because their cash register system went down, and they were unable to accept credit cards. Now, this was not a small store by any stretch of the imagination.

They are one of the top 3 crafts stores in the United States, so I was extremely surprised to see that there weren’t plans in place for such a situation.

What Could They Have Done?

I don’t know the exact root of the problem, but assuming it was an internet issue, I would be surprised that they didn’t have dial back-up systems in place. Obviously, I’m not going to speculate on every type of possibility, but there is always a way to maintain your continuity.

Even if you have no way of automatically processing your credit cards over the internet or phone line, credit card processors provide backup options such as the ability to call in for an authorization, then entering it later when your systems are operational. This is referred to as voice authorization, and is a service provided by all credit card processors that I’ve worked with.

In addition to that, there is always that forgotten payment method: cash. Granted, many customers no longer carry cash, it is still an option, and it should be used.

Planning For Other Situations

This is just one example of many that I encountered, and it shut a massive business down for the day (a weekend no less!). There are some situations that may require plans on your part:

• Power failure
• Internet failure
• Key employees leaving
• Key hardware failures
• Vendors not delivering on time, or not at all.
• Theft

I’m sure you can think of plenty of problems that would require plans, but the hardest part is coming up with plans. Even if your plan is to shut down for the day, that will save you the trouble, and money of having a bunch of people standing around figuring out what to do. Obviously, it would be better for you to figure out how to remain operational, but that is your decision.

Educate Personnel

The final step is to ensure that you probably educate the key people about your plan. It’s possible that the store we wanted to visit had a plan in place, but the personnel may not have known. This does no good, and is an easily avoidable problem. Provide the knowledge to your personnel, and consider having it outlined in a hard copy document that the personnel can access.

Educating your personnel is extremely important, and even more so if you anticipate not being on the premises often. Your business will only manage as well as your personnel are educated.

Do you have resiliency plans in place for your business? Have you had to use a contingency plan? Have you ever had to shut down business for a problem that seemed relatively trivial and easily compensated for with a proper plan? Let us know in the comments.

Pushy Sales People Make Me Feel Like This

Recently, I published an article about how the 9 to 5 hours might be killing your business, but today I was reminded of another business killer that I’ve encountered: your sales force.

According to Advertising Age, a Consumer Reports study found that 65% of people surveyed acknowledged being “Tremendously Annoyed” by a rude salesperson. Rude and Pushy salespeople ranked towards the top of a 10 point scale of Worst Customer Gripes.

What Changed?

What has happened that all-of-a-sudden we are so turned off by pushy sales people? Did pushy sales people appear out of nowhere? Absolutely not! They’ve always been around, but in the past, we were forced to deal with them. Because of that, we were better able to ignore them.

Now, we are so accustomed to shopping online that pushy sales people seem more invasive than they ever have in the past. Pair that up with a tough economy, and sales people hungry for sales, and you end up with a perfect storm of hard-selling, and customers that are highly sensitive to it.

Pushy Sales People: Pushing Sales Away

The problem with your sales people being too pushy is that you have competition like never before. In addition to your local competition, you have an online world of competition.

Not only do you have thousands of independent retailers to compete with, you have individuals selling on eBay, Craigslist, and a host of others, and you have giants like Amazon, Wal-Mart, and every other major retailer online.

Customers can now walk out the door without conscience and have it delivered to their doors in two days using Amazon Prime. Your pushy sales people just pushed a sale out the door, and over to a competitor.

What Do You Do?

Many companies have tried “Soft Selling” as a solution, and it has been met with great fanfare. Apple has employed this tactic very well. The idea behind the soft sell is to remain in the background and wait for buying or question signals. It is quite easy to tell when a customer wants to buy, or has a question. They do, what I like to call, the Meerkat:

This can also be called “Prairie Dogging” (I know that has multiple meanings, but we’re adults here). Basically, the customer stands up straight, and begins to look around as though they are completely lost. Basically, everyone does this – myself included. It’s the universal sign of “I have a question!” Try the soft sell and see what happens.

My Own Personal Story

The worst case of hard selling I’ve ever experienced was about 1 year ago when my wife and I were shopping for a bedroom set. We went to a Kane’s furniture store to browse and met a woman who will forever redefine the way I remember hard selling. She followed us around everywhere, and would intervene on questions I was asking my wife.

Questions such as “what do you think of this set?” should not be answered by the sales person, but she asserted herself at every chance. Finally, my wife and I didn’t feel like we could talk at all, so I had to break my normally non-confrontational demeanor and ask her to go away (I asked nicely!). She stepped no more than 20 feet away, and as soon as another question left my mouth she was back trying to answer it.

In addition to her separation anxiety, this sales person continued to only show us the highest priced sets she could find. She made sure to bring us to the Tempur-Pedic section and forced us to sit on them despite the fact that my wife stated that she hated the way they felt. The salesperson challenged us on that, brought us over, and was surprised to find out that after sitting on them, we still hated the feel of  Tempur-Pedic.

My Escape From Pushy Sales People

After a lot of wasted time, uncomfortable closeness, and an inability to discuss the options, we wanted to leave. I didn’t want her card, I didn’t want the pile of flyers and financing deals that were in her hands, so I had no choice but to produce a decoy.

I asked her to grab the price off of an obscure nightstand clear on the other side of the store. As soon as she made her way over, we bolted to freedom. It’s sad that I feel justified in comparing that moment to the end of “The Shawshank Redemption.” We have yet to return to that store, and purchased our set elsewhere.

The US Government Authorized Only One Website For Free Credit Reports.

I’m sure you’re very busy with your taxes (you remembered, right?), and you might have been too busy to remember that each year, you are entitled to a free credit report.

You might be thinking “I’ve seen those catchy commercials” but would you be surprised to find out that only one website is authorized by the United States Federal Trade Commission to provide you with a free credit report each year?

Indeed, that is the truth, and the Better Business Bureau was kind enough to send out the reminder. I have a contact at the Better Business Bureau who wanted me to help inform people.

Don’t be tricked by clever wording, and asterisks. Each year, the Federal Trade Commission gets numerous complaints about paying fees to get these supposedly “free” credit reports, so they wanted to get the word out.

Free Credit Report History

The Fair Credit Reporting Act was enacted in 1970 and required banks to collect and report information about consumers to Consumer Reporting Agencies. In turn, those CRAs would collect, organize, and disseminate the information so banks could make better financial decisions.

Naturally, consumers didn’t like having these records being sealed up. After all, it isn’t very fair of them to blindly keep score, how do you know the records are even accurate? So, they Amended the act to allow consumers to get 1 free credit report each year.

This would allow for consumers to review their reports, and dispute any inaccuracies. This also had the added benefit of allowing consumers to stop potentially fraudulent activity such as identity theft.

What Are All of Those Free Credit Report Commercials?

As I’m sure you’ve seen, there are plenty of commercials for companies offering “free credit reports” and while many of them do (in some senses of the phrase), most of them are just traps to trick you into purchasing something. Often, you’ll get a free credit report, but you’ll also end up with an expensive credit monitoring service that you may not have wanted.

Recognizing that this was a huge problem, a law was passed that requires these websites to inform you about the free credit report you are owed by law, and they are required to provide the proper website as well. Obviously, websites will get really good at hiding this information which is why you need to be educated about it.

How To Get A Free Credit Report

The real, free credit report can be obtained from only one website authorized by the United States Federal Trade Commission and that website is http://AnnualCreditReport.com. All you have to do is follow the prompts, fill in the information, and you’ll receive your actual free credit report without being tricked into purchasing services that you don’t want or need.

There are a lot of companies out there with catchy songs, and huge marketing budgets, but unless you want to pay for something that you can get free, don’t be fooled. Get your real, free credit report from the only website authorized by the United States Federal Trade Commission: AnnualCreditReport.com.

Be Sure To Pick The Correct Business To Grow

What happens when you want to make a change? You either:

• Donate money to a cause
• Volunteer somewhere
• Or, start a Non-profit organization

What if you wanted to make a change but use a standard, for-profit business model? While this has been a very taboo topic in the past, I wanted to discuss some of the pros and cons to this ideology as a whole.

We will be approaching this topic with the question: is for-profit social entrepreneurship a good thing?

For-Profit Social Entrepreneurship Pros

One thing that for-profit businesses generally have going for them is efficiency. This isn’t to say that for-profit businesses are exclusively efficient, and non-profits are exclusively inefficient, but profit can definitely motivate a company to be more efficient with their cash.

In addition, a for-profit company will most likely be lean in personnel which can allow for more agility in decision making. When profit is involved, a company may be more likely to ensure that products and services are delivered on time by established deadlines.

The for-profit model may be attractive to higher levels of talent. Naturally, bringing in extremely talented individuals is a huge advantage to any company, and this is one of the arguments for a for-profit model.

Think of it this way: would a small social company that produces re-usable water filters for families in Africa have a grrater need for an engineering graduate with top honors than a company such as GE?

I’m sure the graduate would make a much larger impact at the social company, but if they can’t provide the income he needs to live and pay his student loans, then he probably wouldn’t take the position. If they had a for-profit model, then they may have had the resources to obtain this talent.

For-Profit Social Entrepreneurship Cons

While money can be a motivator for many people, it may also become a motivator for the wrong kind of people. A for-profit social entrepreneur who has no interest in the “social” side of social entrepreneurship may be more likely to:

• Sacrifice quality to cut costs.
• Be tempted to use planned obsolescence
• Not work on behalf of the people they are “helping.”
• Continue the problem that creates their demand.
• Put their own needs above the needs of others.

Many of those things sound deplorable, but they are quite common in the for-profit world which is why this subject is so taboo. Without question, a person that considers starting a for-profit social venture will need to be motivated first by the right heart, then profit will just be a motivator through the harder times.

One advantage non-profits have in this arena is they are motivated almost entirely by their cause, but this isn’t to say that some of the above corruptions don’t exist in non-profits. Consider many of the charities that have been brought down because of corruption, or the Presidents that receive exorbitant salaries from their non-profits.

Conclusion

We’ve seen non-profit companies do both great things, and awful things. What this tells me is that no matter what your business plan may be, if the social issue is not the top priority, then you’re heart is in the wrong place, and your endeavor will only serve to prey upon those you are setting out to help.

The last thing this world needs is another predator preying upon the needy and less fortunate. Before you choose to start a for-profit social entrepreneurship or a non-profit organization, examine your heart closely and determine what it is that is truly motivating you. If you exclusively care about profit, then there are many lines of business you can get into that will applaud those desires.

Despite popular belief, clocks still tick while you're commuting.

Are the 9 to 5 hours right for your business? The more important question is: are those hours killing your business?

If one of the problems with your business is the number of customers walking in the door, then this is definitely a question that you need to ask yourself, and you most certainly need to find the answer.

This question came to mind for me recently when I saw a local retail store go out of business after only being open about 6 – 8 months. Additionally, a hobby shop in that plaza appears to be on the same track.

The other day, I realized that I needed to pick something up, and a hobby shop would be the perfect place to get it, so I called this store. They told me their hours were from 9 to 5 Monday through Friday.

Time Is A Business Deal Breaker

This was a deal breaker as I don’t happen to be home at that time, and there is no way for me to get to his store before closing. I would also be willing to bet that a majority of his clientele are unavailable at those times.

I have a huge heart for entrepreneurs, and I want entrepreneurs to live the life they want, but even entrepreneurs have bosses: customers.

The Boss Is In

Like it or loathe it, your customers are your boss, and if they demand you to be there at a certain time, and you don’t show up, you’ll get fired (so to speak), Henry Ford has excellent quotes about a customer’s role in a business, such as:

“It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.”

- Henry Ford
Think Exist

Here is another gem of a Henry Ford Quote:

“A business absolutely devoted to service will have only one worry about profits. They will be embarrassingly large.”

- Henry Ford
Brainy Quote

You work for your customers, and you better make sure that your hours are convenient for them too. If you don’t, then not only do they not have the motivation to go to your business, many times they are physically unable to!

My Business Hours Are Non-negotiable

Life has its obligations, and I understand that. Maybe you have kids that need you at home at certain times. This is a perfectly legitimate reason, what are some of your options?

• Exchange one week day for a weekend day.Find out which day of the week is consistently the worst for business, shut down that day, and open up on a Saturday. You can even reduce the number of hours you are open on a weekend, but it will still be convenient for your 9 to 5 clientele.
• Bring your kids to your store after school.I’ve met many adults who grew up helping their parents run a business and it was a great experience for them! You get to talk with your kids if no one is around, and teach them the responsibilities of working.
• Change your line of business.I know this is a drastic one, and I toss it around  a bit, but I’m constantly astonished at how many people get into the wrong line of business, even if they did it for the right reasons. I’ve also read it in Entrepreneur Magazine and Inc Magazine numerous times. Sometimes the best answer is to cut losses, and find something that works for your situation.

Business Apathy

Don’t give up just because things are going badly. The worst thing you could do is continue with the decisions that are killing your business. Identify the problem, and think of all the things that could solve the problem. Now is not the time to take anything off of the table.

There is an excellent book titled Weird by Craig Groeschel which I reviewed. The tagline for the book works perfectly here: Because Normal Isn’t Working! If normal just isn’t working for your business, then it might be time to get Weird!

Is Etsy Right For You?

Our article “Making Money on Etsy” was extremely popular, so I thought it would be good to follow up with some additional information to help make your business more successful.

Etsy is an online marketplace where you can buy and sell handmade and vintage items. It is a wildly popular marketplace that has allowed many closet entrepreneurs to realize their dreams of starting a business.

This article will discuss some of the ways that you can enhance your success on Etsy. If you are just starting out, I suggest you read “Making Money With Etsy” first.

Community Is King

One of the things that makes Etsy such a powerhouse is how much business is generated from within itself. Etsy was able to create a tightly knit community of people who share a common goal/interest (that’s the power of Niche Marketing). With that tightly knit group of people comes business.

There are a number of ways to participate in community on Etsy such as Discussion Boards, the Activity Feed, Etsy Teams, and Treasuries. Each of these bring different levels of community to Etsy, and using them consistently will help to ensure greater success on Etsy.

Etsy Discussion Boards

You’re probably familiar with discussion boards, but at their most basic, they are a place for people to congregate and publicly post messages. Etsy offers discussion boards for many different topics, and this will allow you to join in on the conversation with other fellow Etsyers.

In addition, there are forums to make suggestions for new features, and problems that you might find which are a great way to try and have your say in the way Etsy works.

Etsy Activity Feed

Did you ever wonder what happens when you favorite a shop or add someone to your circle? Head over to your activity feed and you’ll see the results. The activity feed allows you to keep up with your favorite shops, and friends on Etsy. It lets you know when your friends add others, favorite items, and favorite treasuries.

The activity feed does a great job of keeping you up-to-date on what your circle of friends are doing on Etsy.

Etsy Teams

Two heads are better than one. How about potentially hundreds or thousands of heads? Etsy Teams is an area of Etsy where you can apply to be a part of a team to help one another. Teams are organized any number of ways such as Christian groups, groups of people located in a certain geographic area, and so forth.

Each group has a leader, and their own set of rules, so be sure you agree with the requirements before applying. Often, the requirements are to your benefit. An example would be to tweet at least 5 members products on Twitter each day, or create 1 treasury a week, etc.

If you want to get a great leg up on Etsy, then join an active team of people and participate like crazy. Remember: out-of-sight is out-of-mind. Promote others selflessly, and you will eventually be promoted.

Etsy Treasury

Etsy Treasuries are collections of products that you assemble into a list for the world to see. These lists are then publicly available for people to browse. As an example, for valentine’s day, I might create a treasury titled “Caring Crimson” and find products that I like that are red, and possibly heart themed.

When creating treasuries it is important to have a theme, and stick to it. The world of Etsy treasuries is extremely vain: looks matter. If you make a Treasury that looks good enough, it might be featured on the front page of Etsy.

What does this have to do with community? Etsy Treasuries have a certain etiquette:

• You should only feature 1 item per seller
• and, you should not include any of your items in the treasury

Additionally, the people that you feature in it are alerted that you’ve included them in the treasury, and often they will go to it to comment. You build a great rapport with other sellers by promoting their items, and commenting with them.

How Does The Community Help Me

When you help others, you build a reputation, and you also build a rapport. Think of someone in your life who is always willing to help you, but asks for nothing in return. If they ever asked you for a favor, would you do it?

I know in my life that not only would I do it, I would go out of my way to help that person. The Etsy community makes this type of interaction possible. You can answer questions on the discussion board, or brighten peoples’ day with a joke, you can promote a teammates products, or you can reward random Etsyers with a place in your Treasury. This is the kind of rapport that you will be building with the Etsy community. You won’t see immediate ROI, but you will in the future.

Enjoy the community that Etsy has become. If participating in the community seems like too much work, then you might not be the right fit for Etsy. It is a lot more than a marketplace. I hope these tips help you, and I pray the best of success for you, your family, and your business.

Your Snowball Could Get This Big!

Guest Post by Ed O’Brien

There are many consumers searching for the ideal way to pay down their debt to have more financial freedom and improve their credit. While there are varied ways and methods for eliminating debt effectively, no one program will work for every consumer.

The first step in effective debt relief is researching the various methods available to determine which one will work best for your lifestyle and financial situation. There are many ways to pay down debt and many agencies claiming they can do everything you need done – but often at a very high financial price tag.

There are other ways to effectively stabilize your financial life and remove the debt clutter weighing you down. Here we’ll take a look at the popular debt snowball method.

Considering the Debt Snowball Method

The debt snowball method of debt relief is often touted as one of the best methods by personal finance guru, Dave Ramsey. In many cases, consumers are not sure where to start with the debt relief efforts. Using the snowball method is often an ideal way to start your debt relief process at the same time gaining momentum and motivation for your efforts.

The debt snowball method involves focusing on one debt at a time while continuing to pay just the minimum amount due on all other creditor account. By doing this, you are able to put a clear focus on debt goals as you take each step and actually make some headway rather than struggling to pay what you can here and there.

Steps of the Debt Snowball Method

Step 1: Emergency Funds & Getting Started

To start the process, you need to first gain some financial stability. Starting out with an emergency fund of cash, at least $1,000, is a good way to prepare for any unexpected expenses that can otherwise throw your plan out of whack.

Consumers in debt often have difficulties choosing the order of debt payoff. It is the advice of many personal financial experts that you select the smallest debts first as it will likely be more motivating to eliminate debts in a faster period of time small debts grant than the longer payoff periods of the largest debts.

Step 2: List Your Debts

Make a list of the debts you owe to creditors minus your mortgage payment in order from smallest to largest. Only pay attention to interest rates when two creditor debts are similar in size and repayment terms. In that case, you can put the one with the highest interest higher on the priority list.

Step 3: Pay Your Smallest Debt First

When you have the list outlined, the smallest debt will be your focus. Pay all of your other debts with the minimum amount and put all of your other available cash towards that debt until it is paid off. So if you have $500 available towards debt and your minimum amount total for all other debts is $300, put the remaining $200 toward the smallest debt. Continue that trend each month until the small debt is eliminated and then move on to the next one on the list.

Step 4: Roll Payments Into Next Debt

With the second debt, you’ll continue to pay the minimums on all other debts but you will now take the minimum amount for the next debt and apply the $200 you used on the first debt. If the minimum payment on the second smallest debt was $50, you’ll pay $50 plus $200 until the second debt on the list is paid off in full.

Step 5: Eliminate All Remaining Debts

When you reach the third debt on the list, continue with minimums on all other debts. Put a $250 payment plus the third debt’s minimum payment (let’s say $60) toward the third debt for a total payment of $310. Continue with the snowball method throughout the rest of your list.

Step 6: Invest Back Into Yourself

When you reach the end of your debt priority list, make note of the total amount you were putting towards the final debt payoff. Take that amount of cash you no longer have to use for debt relief and invest it in your emergency savings account where you stashed the $1,000. Continue putting just as much focus on saving as you did on eliminating debt and you will have few financial worries in the future.

Re-Prioritizing Financials

One important lesson to learn after successful debt elimination is never to let history repeat itself. After taking the time and energy to eliminate debts of the past, organize and prioritize your financial goals and management skills to prevent debt from accumulating again.

Start using a budget worksheet each month so you’ll be aware of just where your money is going. Avoid financial temptations that will get you back into trouble and remember to keep your savings going strong.

Any consumer has the power to relieve their own debts but it takes time, consistency, and follow-through to find success. Improving your overall financial situation by eliminating debts, building savings, and improving credit profiles is the cornerstone of financial stability during your life and long through to retirement.

Ed O’Brien is a seasoned writer in personal finance, specializing in credit repair. You can find more of his articles located at CreditRepair.org.

Photo Credit: Kamshots

One can learn a lot from a snail.

If you’ve ever seen a film such as The Illusionist, or the Shawshank Redemption, then you’ve seen a theatrical interpretation of the power of patience.

While the films themselves may show unlikely scenarios and feats by the use of patience, this should not diminish the power of patience.

Indeed, patience can be your greatest asset. Patience is powerful because it is a command of time.

The most powerful variable in compounding interest is time. It doesn’t matter if the interest rate is 100%, if the time is only a second, you get very little.

Mathematical Deviation:

(sorry, I love showing numbers):
$1,000,000 in an account for 1 second at 100% interest will earn you about 3-4 cents, but $100.00 in an account for a year at 3% will yield you $3.00 or 100 times more money. When you include compounding interest, over longer spans of time, the numbers become staggering. Patience (time) can trump all numbers.

The Power of Patience

When I speak of patience, I don’t just mean sitting around passively, and doing nothing. I would consider that apathy. When I talk of patience, I talk of someone who is confidently trying to achieve their goals, not taking shortcuts, and not rushing. I am speaking of a person who thinks carefully, and methodically.

As I said, patience is really just the purposeful command of time, and this is what makes patience so powerful. Patience allows you to think with a sound mind, it allows you to consider all variables, it earns respect, and it allows you to leverage time to your advantage. When applied, patience will allow you to accomplish anything.

What Does The Bible Say About Patience?

Whoever is patient has great understanding, but one who is quick-tempered displays folly.
Proverbs 14:29, NIV

A hot-tempered person stirs up conflict, but the one who is patient calms a quarrel.
Proverbs 15:18, NIV

Better a patient person than a warrior, one with self-control than one who takes a city.
Proverbs 16:32, NIV

A person’s wisdom yields patience; it is to one’s glory to overlook an offense.
Proverbs 19:11, NIV

Through patience a ruler can be persuaded, and a gentle tongue can break a bone.
Proverbs 25:15, NIV

The end of a matter is better than its beginning, and patience is better than pride.
Ecclesiastes 7:8, NIV

Infomercial Syndrome

Patience seems to have experienced a degradation due to our microwaveable, drive-through, instant gratification society. You can’t drive down the road without having someone tailgating, you can’t turn on the television without hearing about a get-rich-quick scheme, and you’ll be hard pressed to find someone who saves for a large purchase rather than putting it on their credit card.

All of these are symptoms of a larger problem: impatience is running rampant. Impatience is what has our world running 24/7/365. Impatience is why we have the debt problem we do, and why so many people are always so upset. While this all sounds bad, it can also be an opportunity.

Patience Is An Opportunity

With everyone being so impatient, you have an area of opportunity: being patient! This is an opportunity, because it will be noticed. Like anything else on Earth, scarcity primarily determines value. With everyone being so commonly impatient, your exhibition of patience will be seen as extraordinary.

People will respect your level of patience because it will be something that they’ve seldom experienced. Your patience will be appreciated because it will be seen as an act of kindness not often displayed. This gratitude will turn into respect. Being able to consistently display patience will eventually earn you a reputation as well.

Developing Your Patience

You can develop your patience, but it is a hard thing to do. It requires that you objectively, and constantly assess your attitude in situations that you would ordinarily find extremely agitating. Impatience spans many situations that I can’t cover entirely, but you know what makes you impatient and I’m sure you can figure out ways to work on your patience.

Some ideas to increase patience:

• If you are obsessed with time, and getting things done, then purposefully take the long way.
• If certain people annoy you, get to know their story. Often, getting to know people will give you a better understanding about why they are the way they are. This alone may be enough to change your attitude.
• Work with less fortunate people, and do it with a soft heart.

There are no guarantees that you’ll overcome every little sticking point, but everyone can improve their level of patience. You just have to make it a goal, and always have it on your mind.