The following is a guest post by Craig Ford from MoneyHelpforChristians.com who writes about personal finance as a set of tools to manage life, not money. He is also a missionary in Papua New Guinea.

In your lifetime you will need discipline.  Discipline primarily comes from one of two sources – internal or external.

Internal discipline shows that you are self-aware enough to recognize dangerous limits and unhealthy habits.  Once you’ve recognized those inadequacies, you discipline yourself and exemplify control over your life.

External discipline means that you have shown an inability to recognize or control your limits and unhealthy habits.  Since you cannot control them, someone else (police, government worker, or family member) will be forced to intercede.

Those with internal discipline have the potential to better manage their finances.

What I’m going to suggest to you today I cannot enforce, but I promise that if you enforce them on yourself you will see an improvement in your debt situation.

So, don't cheat yourself.  Don't cross your fingers behind your back.  What you're about to swear on will lead you to financial freedom.

Now, raise your right hand and repeat after me …

6 Promises That Lead to Debt Free Living

I will not take on any new debt.

You’ve got to stop digging if you ever hope to get out of a deep hole.  You cannot take on any new debt.

Commit that you will not take on any new debt, and when a crisis arises, solve the problem without using credit as an option.  Creativity is usually unleashed when your options are reduced.  Don’t cheat and take on new debt, but work really hard to solve your financial issues without credit.

If you are trying to get out of credit card debt then you may find that you’ll need to do something drastic like cutting up your credit cards.  Just be willing to do whatever it takes.

I will get organized and take an inventory of my debt.

You cannot fight an enemy that is unknown.  You need to know (even if it is scary) exactly what you are up against.  You’ll need to develop a plan, and you can’t develop a plan until you can properly diagnose the seriousness of your situation.  But if you are organized and committed, you could get out of debt by the end of 2011.

Any time someone goes to the hospital, that person is immediately evaluated in terms of the seriousness of their injury.  If you have a runny nose, you’ll probably wait longer in the waiting room than someone who just cut off a hand.

Get online.  Open your filing cabinet.  Make a few calls.  Your end goal is to make a list of how much money you owe to creditors and at what interest rate.

I will get on a written budget... and will stick to it!

Hopefully getting organized and taking an inventory of your debt will put you into enough of a state of shock to motivate you to do whatever is necessary.  Good.  That means you’re prepared to learn how to budget, but more importantly, how to stick to it.

Budgets only have one rule – what you spend cannot be more than what you earn.  If you are in debt, you need to try and push that rule a little further and say – what you spend must be less than what you earn.  This way you’ll have some available cash for debt repayment.

I will establish a debt reduction plan, and I will stick with it (unless it is a bad plan and needs to be revised).

At this point, you’ve already figured out two sides of a very important equation – how much debt you have and how much income you have available to attack the debt.  It may also help to shop around for a loan that would allow you to consolidate your debt into 1 monthly payment.

Now you need a formal debt reduction game plan.

• You could start by paying off the debt with the lowest balance (usually called the debt snowball).  Here’s a sample debt snowball spreadsheet.
• You could pay off the debt with the highest interest.
• You could pay off the debt you hate the most.

Whatever plan you use, this is the time to develop and commit to a plan.

I will sacrifice and start using the word ‘no’.

You cannot say ‘yes’ to everything and still get out of debt.

Sometimes you’ll need to say no to yourself.  Sometimes you’ll need to say no to your children.  Sometimes you’ll need to say no to your friends.  Until you learn to sacrifice, your pile of debt is likely to continue to grow.

I will do geeky things like crunch numbers.

Typically, those with debts tend to be more unorganized.  However, you’ll need to get set up with a good personal finance software so you can track your spending and debt repayments.

At this point, you can look into the value of credit card debt consolidation.  You might even consider calling to ask your credit card company to reduce your interest rates.

Too often people think they will solve their debt problem by focusing on credit tricks and interest rate reductions.  These make no difference until you’ve first set up the first five rules mentioned above.  However, after you have make some firm commitments to yourself, you might as well get the math on your side to help you pay off debt faster.

Remember, there is no one who will be able to force you to say or keep these rules.  However, if you commit to following and implementing these ideas, you’ll officially be walking in the direction of debt free living.

Image courtesy of Carmela Fernando.

Here we are today: the most anticipated and talked about shopping day of the year.  The day that marks the unofficial start of the holiday season. Since 2005, Black Friday has become the busiest retail day of the whole year, both in terms of pedestrian traffic at shopping centers and in terms of actual sales volume.

Almost all big retailers participate in such an event with hopes of luring consumers and increasing their sales.  But this concept has also permeated into the financial services industry with ING Direct and Service Credit Union adopting the newly created tradition of special sales promotions on Black Friday.

There are several explanations for the origin of the term "Black Friday", but the one that really stands out for me personally is that it indicates the period during which retailers begin to turn a profit for their fiscal year, or go "in the black."  For anybody with basic accounting training, this means that a debit on their books, becomes a credit somewhere else... where?  that would be on YOUR books, "in the red."

Today, just like David from MoneyNing.com, I'm staying at home enjoying a relaxing day.  But if you are shopping this Black Friday, I wish you much commensuration and conscience when venturing out there for a good sale. Be careful with overspending what you don't have, and getting yourself into more debt that you may lament later.

Happy Shopping Day!

@RobGarciaSJ

Image courtesy of inacentaurdump.

The rise of alternative financing platforms and methods such as Microfinance, Crowfunding and Peer-to-Peer Lending have clearly set a paradigm shift in motion.  We seem no longer need a financial institution to sit in between people to transact and move money.   This shift seems to permeate in many areas of financing such as helping a family in a third world country lift themselves out of poverty, fund a gallery display from an amazing artist from New York City, invest in creditworthy consumer loans or even provide venture capital to entrepreneurs.

Four companies that have pioneered in this space will meet to debate the future of financing: how will this shift transform the way we exchange money, who will benefit or need to evolve?  What does it mean to the existing financial models and industries?

The Next Generation Financing MarketPlaces panel will take place in New York City on Tuesday November 30th with @LendingClub @SecondMarket @IndieGoGo @davidsrose from New York Angels.

What? Next Generation Financing MarketPlaces
When? Tuesday November 30th at 6:30 PM
Where? Pillsbury Winthrop Shaw Pittman LLP

1540 Broadway
New York, NY , NY 10036

Space is limited. Register now >>

Whenever you get a loan, you have to pay interest and most likely an origination fee (aka application or processing fee). Whether it’s for a home loan, credit card, auto loan or personal loan, you will have to pay for access to cash.  And, because interest is money that goes straight into someone else’s pocket, it is obviously a good idea to shop around so that you get the lowest interest rate possible. Here are some ideas that can help you as you shop around for the best interest rates:

• Know your finances: You should have a good idea of what your financial situation looks like. This includes being up to speed on having a good credit score, and knowing what you debt-to-income ratio looks like. When you know that you have a good financial situation, you have more leverage.
• Understand the market: Take the time to find out what is average for your market. In many cases, you might find that you can get a lower interest rate than the national average if your market supports it.  Sites like BankRate.com, CreditKarma.com and Money-Rates.com are great resources to research the local market and the specific financial institutions available around your area .  Once you decide which financial institution to call, ask for the best rate available, rather than relying on the posted rate.
• Compare apples to apples: Make sure that you are comparing similar loan products and services to each other. Tell different lenders, as you shop around, what you are looking for and compare fees, terms and other loan characteristics that are similar.  Also, consider all fees, compare APRs and get a total cost of borrowing.  This will help you avoid falling in common traps used by advertisers who put a lot of emphasis on the rate only.
• Make banks compete: Once you have engaged into conversations with financial institutions, don't just take the rate they give you.  Make them work for your business.   It helps to have pristine credit history, but independent of your situation, you should always try to make them aware you're talking to several companies, and if possible, share the rates.  You'll be surprise how many of them will adapt their offer based on that knowledge.  Websites like LendingTree.com and MoneyAisle.com make it easier to hit a few banks without having to pick up the phone and spend a lot of time checking in with each one.
• Let them know you are “just shopping around”: Don’t fill out a full application just yet. Be honest about your financial situation, and tell prospective lenders that you are just shopping around. It will give them more of an incentive to offer you a good deal. You can visit three or four lenders, and compare the rates available online, before you make a decision.
• Get it in writing: Ask if the potential lender can write down his or her best offer, and find out what you financial situation will need to show in order for you to get that offer.

You will always have to pay when you borrow money. But if you shop around for the best deal on your interest rate, you may not have to pay as much.

You are cordially invited to join the Lending Club Running Team this coming Thursday, November 25th (Thanksgiving day) and run (or walk, or trot) the Silicon Valley 10k Turkey Trot with us.

Yes, you! Our loyal investors, partners, borrowers, or simply a follower.

Perhaps this is the excuse you were looking for to justify all the eating you'll be doing that afternoon. More importantly, you'll score a special edition "Lending Club team" dry-fit performance running shirt.

Race will benefit Santa Clara Family Health Foundation, Housing Trust of Santa Clara County and the Second Harvest Food Bank.

So put your running shoes on, get excited, and join the Lending Club running team on Thanksgiving day!

But hurry, space is very limited.

@RobGarciaSJ