Updated on 09.17.14

Financial Recovery Toolkit: 10 Tools I Used

Trent Hamm

A few days ago, I wrote about the details of my financial turnaround, going from a big mountain of credit card debt to enough financial freedom that I can actually chase my dreams of being a writer and spending much more time with my children.

I would have never been able to do this without a handful of elements in my life, things that made such a transition possible. Here are the ten key things I used to turn the ship around.

My wife
Although this list is largely out of order, it almost goes without saying that without the support and mutual respect given to me by my wife, I wouldn’t be able to turn things around. We are equals in every way, and because of that we have a certain deep level of openness and support with each other that would be hard to achieve without this equality – I feel no need to keep things from her, nor she from me. Because of that openness and equality, we are free to be incredibly open with support and incredibly frank with criticism. We both know we’re not trying to hurt the other when we criticize, and thus we often shoot straight from the hip with suggestions for improvement and ways to solve the problems we both face.

This relationship was the most valuable piece of our financial turnaround. We committed to make some major changes in our life over the last few years and without that mutual support (and ability to criticize without negative ramifications), we wouldn’t be able to do the things we do.

ING Direct
One of the first things I did when I started to turn my finances around was to seek out a new bank. I previously used a very large bank that had a bunch of offices in my area, but they frankly treated me pretty badly. Their savings account gave only 0.5% in interest (and their checking offered none) while they charged $10 or more in “standard” fees every month, plus tons of ATM fees. Even better, they’d often wait to hit me with the fees all at once and more than once, these fees emptied out my account and then dinged me with an overdraft fee. Just banking with them was costing me $20 or $30 a month, but I thought that was normal.

It’s not. I discovered ING Direct, which is a heck of a lot better. I’ve been using them as my primary bank for about eighteen months and have not been dinged with a single maintenance fee, ATM fee, or overdraft fee. Their national ATM network is huge, they offer killer online bill pay and an easy interface for all of your banking, and their interest rates are strong, even on the checking account.

Basically, it caused an immediate $40 swing in my money every month, plus it made it a lot easier (and provided more motivation) to start saving my money.

ymoylYour Money or Your Life
This book, more than any other, provided the motivation and ideas I needed to turn things around. It reframed the relationship between the lifestyle choices I made and my own personal freedom from money that I hadn’t considered before and it really showed me that I couldn’t live my dreams until I truly tackled my spending and my money management.

The book really focuses on the idea that we’re locked into our jobs because of the stuff we buy, not that we buy stuff as a “reward” from our jobs. We might sit around and dream of freedom, but until we really get that these purchases keep us from doing things we dream about (like, say, walking away from our jobs and taking up a writing career), we won’t make that leap. This book did more for my mindset than anything else I’ve yet read, and I still pick it up all the time.

Here’s my first review of the book along with a reading guide I wrote for the book later.

A telephone
This might seem strange to a lot of you, but the telephone made a huge difference in my financial state. Why? I used it to call almost every single creditor I had and also every company that I had a monthly bill with and I asked all of them to reduce my rates or remove optional services.

Your monthly expenses eat you alive and trimming those expenses is really the best way to give yourself some breathing room to really tackle the debt. The best part is that many of those expenses can be trimmed with a couple hours’ worth of phone calls. When I sat down and did this shortly after realizing how bad our situation was, I trimmed more than $100 from our monthly expenses just with an hour or so on the phone.

Here’s what you can do: take out all of your bills and grab the phone. Call your credit card companies and request a rate reduction – be persistent and suggest that you’ll be transferring the debt if they don’t reduce it. Call some of your service providers and trim some of your services – drop that movie channel that you rarely watch or maybe trim out the unlimited text messages.

If you’re like I was, you probably have a closet full of stuff that you’re not using. I had all kinds of things in my closet: old video game consoles, mountains of games, a large baseball card collection, a large Magic: the Gathering collection, several boxes of DVDs that I’d never watch again, and so on.

For most of this stuff, it’s easier to just get rid of it in bulk. I sold most of this stuff at secondhand stores in big groups. However, for individual items that you know have value (like some of my specific collectibles), you can do very well on eBay, far better than you can reselling them locally. I sold many individual cards and DVD sets on eBay and turned some of these collectible “investments” into some money that I could actually use to get rid of some of my debt.

The point is that if it’s sitting around your house unused, you’re probably better off liquidating it and using that cash to eliminate debt, and for some things online auctions can really help.

My children, as well as other friends and family
Although my wife was paramount in my turnaround, other elements were quite important as well. My children were often my inspiration to keep going and keep making hard choices that would benefit all of us in the long run. All I have to do is look at them to understand that it’s very important to make the right long-term choices so that their future is a beautiful one.

My parents, my wife’s parents, and the rest of our extended family were quite supportive as well. At this point, half of them are readers of The Simple Dollar and I regularly hear advice and concerns from all of them. Just talk to the people around you. They’ll listen and they’ll help.

ttmmThe Total Money Makeover
I read Dave’s book early on and at first read it didn’t click well for me. So why is it listed here? I kept finding that a lot of his concepts – the debt snowball, the general “baby steps” towards financial recovery, and so on – kept popping up over and over again in my thinking.

Dave is an adamant motivator for the idea of freedom from debt and The Total Money Makeover lays out the most clear and concrete plan for reaching it that I’ve yet read. Even if you don’t agree with all of Dave’s perspectives (he wears his Christianity on his sleeve and can be dogmatic at times), there’s so much that this book gets absolutely right about debt reduction, particularly in terms of the psychology of it, that it’s well worth reading. I can say that it was an invaluable reading for me personally.

Microsoft Excel (or another spreadsheet)
I’m a numbers person, but I didn’t have a good grasp on my financial state at all when I started. Without Excel, I’m not sure I ever would have. I used Excel to figure out the real picture of my debt, keep track of my financial improvements over time, and figure out which debts I should be paying off first. It helped me model how much our home mortgage would cost and whether we should be doing it, and also helped me figure out target dates for our next vehicle purchases so I could start saving now rather than later.

Excel is a powerful tool, and it offers a lot of templates for beginners who are trying to figure things out for the first time. If you’re just trying it out, I suggest building your own net worth calculator from scratch – it’s not too tough and it teaches you how a spreadsheet works. Don’t have the nickels and dimes for Excel? Try using OpenOffice or Google Spreadsheets.

My top dresser drawer
This one will seem strange, but it was incredibly useful. I put all of my credit cards in my top dresser drawer, underneath my socks, and left them there for a long time. It kept me from putting things on my credit card – if I absolutely had to buy something, I used my debit card.

The top dresser drawer worked well because I knew where the cards were, but they were out of sight enough that I didn’t really think about them, ever. Gradually, I weaned myself from using the plastic for purchases and, eventually, I was able to put them back in my wallet without the constant urge to buy, buy, buy.

onOn Writing
So why is this one here? Inspiration.

I dreamed of being a writer since I was a little kid, but I was often convinced to do anything but write all the way along. I was encouraged to write by my high school English teacher, but after high school, I was pushed (and convinced myself to go) in the opposite direction, often going towards things that I was interested in, but didn’t fill me with the burning passion that the written word fills me with.

I’ve read On Writing a ton of times, and each time I felt this warm feeling, a sense that this is what I should be doing. Then I’d close it and face the cold reality of my life, which didn’t afford me the freedom to write. When I started to recover financially, I started to think more and more about this dream, and as my life changed and opened the door to this dream just enough for me to step through it, I realized that if I didn’t jump through that door right now, I’d never make that leap.

Little tastes of this dream, idle daydreams about it off and on, and the realization that I was moving in a direction where it just might be possible added up to a lot of motivation to keep going with my financial recovery – and to keep writing about it. On Writing was my inspiration to keep chasing it and, eventually, to make that leap.

You can read a passionate ode about this book that I wrote a while back, but if there’s one thing that you can take from all of this, it’s that you need to keep dreaming and keep trying things until the pieces fall into place. Never stop dreaming, no matter what.

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  1. Andy2 says:

    Nice post. I am also a huge fan of Your Money or Your Life and The Total Money Makeover. I am actually getting ready to reread the former. With ING, how do you deposit checks (non-direct deposit ones)? Do you have to mail them in? That is one thing that is keeping me from switching my checking account to an online bank.

  2. Mark says:

    I had never heard of Ramsey before last fall when we took his FPU class at our church. He takes some getting used to – mostly because he goes against the grain so much. However, I finally understood his approach. He tries to get a person to act on several levels: intellectual by giving you information, emotional by getting you fired up about getting out of debt, and even spiritual for those so inclined. The second is the hardest since it sometimes is at odds with the first. Paying off the smallest debt regardless of interest rate goes against what the financial planners all say. Dave’s response, though, is to ignore them. You escape debt the same way you got in – by being emotional about it. The reason many people go into severe debt is a lack of self-control/planning for many purchases. They get emotional about that HD TV and go into debt. Only by getting mad and emotional about getting out will you change your habits. I don’t agree 100% with Dave, but his approach is well-rounded and gives you a lot to pick from. He’s a very good resource.

    BTW, I *highly* recommend his 13-week class to anyone. At $90 a pop at your local church, you will easily get enough information to make it back throughout the class. It’s the biggest bang for your buck you can get on financial planning. It’s much broader than TMM. If you are looking for a place to get started – that’s it.

  3. Mark says:

    Also, I should mention that E*Trade has very competitive accounts to ING. I only mention that because I have an E*Trade account through my company. If you don’t have a similar account to one of the two, look into them.

  4. Very interesting take, seeing things like these as tools. Motivations, really, but it’s interesting how the people in our lives can be used to help us make better decisions.

    A tool is something that helps you accomplish more work, and the people, books, websites, software, and things you listed certainly DID help you accomplish a great deal more.

    Very nice post, Trent.

  5. Ben says:

    For paper checks you need to deposit at ING, you mail them in. I was a longtime customer of NetBank before they went under, and have mailed checks in for years now. I’ve never had a problem with it. You always can look for a local free checking bank and link it up to ING if that makes you feel more comfortable.

  6. Andy2,

    Because ING, or Emigrant, HSBC, etc., are primarily Internet banks for us in the US, they need to be funded from an external account. The easiest way to do this is to open an account with a local credit union or local bank that has branches convenient to home and work, but they can be a a MEGA bank (Bank of America, Fifth/Third, Wachovia, and the like) if you travel a lot, specifically for this purpose. You can deposit your grass-cutting money, an expense check from work, or rent from a tenant at the local branch. Once the deposit has “cleared,” you can electronically transfer it to your online bank to earn the better interest rate. The key with this set-up is to ensure that you aren’t getting ripped off by the bank you choose as your “transfer account.” NO FEES WHATSOEVER. No direct deposit, no monthly maintenance, zip. Then you have created a road to transfer your money freely to the better interest-rated banks with a slight detour for the all-important side income. Check out some of my banking posts at Common Cents for Everyone.

  7. Trent Hamm Trent says:

    Andy2, the only checks I’ve ever put into ING Direct were done at an ATM.

  8. Ryan says:

    I was pretty bold when I made my turnaround. Probably did some things that I shouldn’t have such as went through a credit counseling service that charged me a fee and tarnished my credit report. But one thing that I did do that worked was I posted my budget on my refrigerator and whenever I spent something, I’d immediately write it on this list on the refrigerator under the budget category.

  9. jay says:

    FWIW, I just opened an online checking AND Savings acct at Washington Mutual. If you do both, the savings acct will pay 4% (at the moment) and no fees for either account. They have GREAT, GREAT customer service, too.
    Love ING, but you need a landbased acct to link to it, and there are limits on how often you can w/draw from the Savings accounts. Great customer service at ING, too. We had a complicated situation with accts for all family members and they worked it out over the phone in a few minutes.

  10. Minimum Wage says:

    I have a storage unit full of stuff to sell. About $10K worth of stuff. (I got a very good deal on an estate liquidation.) My landlord decided I had to move it to a storage unit. I cannot sell the stuff when it is in a stoage unit I can’t get to. I am a very unhappy camper.

  11. Chris says:

    Could you please describe how you used Excel to make decision on mortgage, buying car and for any other things? I see a lot of tools are available online. Thanks.

  12. DNA says:

    Just a comment that I think you give the impression that “being a writer” means having to strike out on your own as a freelancer. To the contrary, I and most of my colleagues at work write everyday and publish regularly on ideas, analysis or findings that are significant in our field. To the point that I would have no trouble referring to myself as a writer even though I’ve not written any NY Times bestsellers.

    True, an entry level job say, ringing groceries (my first job), won’t allow much opportunity to write; but volunteering at work to write the bulk of a report might help you climb the career ladder and still satisfy the desire to write.

  13. Kathryn says:

    Great tips! I wouldn’t have thought to include some of these – like On Writing which is a terrific book that I love as a writer – so it’s really great to see them compiled like this. It just points to the fact that there are many different tools that we can use to protect and improve ourselves financially and that we shouldn’t limit ourselves to just the basic resources that are listed everywhere else. Thanks!

  14. CB says:

    I had an e-trade account but kept getting dinged by monthly charges when I went under a certain amount. This is not the case with ING direct.

  15. NotSophie says:

    Your wife is a tool?


  16. Adam Lehman says:


    Great post!
    thanks for the resources.
    keep on equiping us.


  17. moonimus says:

    I must agree that a supportive spouse has to be tops on the list of any financial turnaround. Without their support, our finance would be similar to picking up sand.

    Also 100% agree on your two book choices. Your or Your Life and Total Money Makeover are excellent primers to not only think differently about money but also feel differently about them.

  18. Great list Trent! I especially love that On Writing is in there: it’s one of the few books I’ve read more than once and it motivates me to write like no other. I started my stack of rejection slips thanks to King.

  19. Norman MIller says:

    Again, adding On Writing was great. I’ve read several author’s “On Writing” including The Spooky Art: Thoughts on Writing by Norman Mailer, Ernest Hemingway on Writing by Ernest Hemingway, The Art of Fiction by Ayn Rand and Marguerite Gavin.

    For the same reasons Trent lists for reading King’s On Writing, I’d recommend these.

    I am currently recovering from a tremendous financial calamity and I’ve toyed with writing all my life. I’d like to take writing more seriously and I think once I’m free and clear, later this week, I’ll set my plan in motion.

  20. Kerry says:

    You mentioned that you put your credit cards in your top dresser drawer and then over time were able to put them back in your wallet. Why not destroy them completely and close the accounts?

    If you cannot pay cash for something, then you do not need it.

  21. Sarah says:

    In response to why keeping credit cards in a drawer and not cutting them up is a good idea, if you destroy them and close the accounts, it impacts your credit scores because of the way they figure your FICO. It’s better to show you have open accounts that you occasionally use, but always pay off in terms of making your credit look better, which will save you money later when you need to finance a home or car because you’ll get a better interest rate.

    I love the ideas shared on this website. I am currently digging out from being “young and stupid” with my credit and now understand what my parents have been harping about for years. It’s strange how smart they’ve gotten in the last few years…

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