Free Family Finance

The following is a guest post by Rob Kuban. Rob is the author of “Dollars & Doctrine: What Does The Bible Actually Say About Money“. Find out more information about him and his book at DollarsandDoctrine.com. On a more personal note, Rob is a close friend of fff and a trusted resource of Biblical finance.

Ok, so plenty of people have written on the fundamental advantages of living debt-free. This post is a little different. I wanted to provide ten “lesser known” reasons for living debt free. I want to shed light on things that don’t really show up on the surface of analyzing leveraged living, but become evident as one begins to live freer and freer of debt. In no particular order:

1. It teaches you self discipline. Walking away from a purchase you can’t afford flexes your “self-discipline muscle.” It teaches you to make more and more disciplined decisions in your life.

2. It causes you to make better decisions with your money. When you decide to spend only what you make, there is less to spend. Therefore, you are more cautious to spend your money. By doing so, you tend to make much wiser decisions with the resources that you have.

3. It increases your patience. You simply have to wait longer to have things when you deny yourself “20 Easy Payments of 29.95″. You learn patience as you wait to purchase things with cash.

4. It increases your planning. You must begin to think with longer time-tables to be able to purchase anything expensive. You have to plan ahead to make things happen.

5. It simplifies your life. While waiting to purchase goods you “can’t wait to have” you realize that you don’t really need quite as much as you previously thought. The debt free person has a much deeper understanding of the difference between “wants” and “needs”.

6. It teaches you contentment. When you have to wait longer to purchase things and your life is increasingly simplified, you become more and more content with what you do have. In a sense, you become unplugged from the instant gratification bigger is better culture in which we live.

7. It deflates unnecessary ego. I remember the first time I had to tell a friend I couldn’t afford something. It hurt my ego for sure, but on the other side of the fence it was liberating to not feel as if I had to “keep up with the Joneses”.

8. It increases your creativity. When spending money is no longer the only option for having fun, you begin to become more creative with your time and entertainment. You find things to enjoy that are “free” and often more enjoyable.

9. It decreases your regret. With less to go around you become more focused and spend money on the things that you actually desire. You make less and less impulse buys.

10. It will affect all areas of your life. So many of the skills listed above will translate into other areas of your life: your health, your marriage, your career, your friendships, and on and on. Living debt-free requires a skill set that will inevitably have a positive impact on all areas of your life.

photo | alancleaver_2000

Here’s a guest post from Kyle at HENDERSON HUTCHERSON & MCCULLOUGH. Kyle joined HHM full-time in 2007 after spending a year as an intern. He was a Provost Scholar in the undergraduate accounting program at UTC and is currently enrolled in the MBA program.

We have all heard about the Health Care Reform that the President and Congress are trying to work out. Well on June 9th the Joint Committee on taxation released a preliminary plan on outline how they plan to raise revenue over the ten years to fund this new reform. Basically, it is a plan to take away tax deductions from individuals and businesses that have been allowed in years past. There are two items listed in the plan that will have a direct affect on individuals who incur substantial medical bills or participate in a Flexible Spending Account or Health Reimbursement Account.

In years past individuals that itemize their 1040 have been able to deduct any medical expenses not cover by insurance up to 7.5% of their Adjusted Gross Income. Few people probably spend this much, but people with serious medical conditions can spend that pretty easily. This new reform does not prose any change to this at all. It simply plans to repeal it leaving people no deduction for excessive medical expenses.

Another item that would affect individuals is the proposal to eliminate income tax exclusion for healthcare expenses paid through Flexible Spending Accounts (FSAs) and Health Reimbursement Accounts (HRAs). FSAs and HRAs are a tax advantaged financial account that can be set up with an employer through a cafeteria plan. Basically, it is money that can be set aside from wages to pay for health expenses. Wages that are deducted to be put into an FSA or an HRA are not subject to payroll taxes, therefore they can provide a pretty significant tax advantage to individuals that want to participate in these plans.

Overall, these things mentioned above will affect people that spend significant amounts on health care expenses each year. This is probably a small percentage of the population, but these people typically need all the financial support they can get. As mentioned above, this is just a proposal congress has made, but it shows their thoughts on how they plan on funding this healthcare reform that will most likely be proposed in the near future.