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Hacking at the Sequoia

March 16th, 2009

In our long process of paying off an embarrassingly large amount of credit card debt we’re down to the last half of one smaller card and one last card, the one that in the Dave Ramsey snowball plan you do last because you have built up momentum and it gets paid off faster and you’ve got passion to kill it.  Its our sequoia: the big one.  We’ll go full force on it in August, I think.  It should allow us to get it paid off some time in the earlier parts of 2010 if all goes well.  Being this close to the end feels good.  I haven’t felt like we’re going to finish this until recently.  If it wasn’t one thing it was another and we’d be back to rebuilding the emergency fund or doing something else.

However, the big timber is going down and I’m hoping to knock it out and then start building up the big, big emergency fund and then whack at our mortgage and save up for retirement and all that fun stuff.

OK, that is all, just wanted to publish a bit of an update since its been so long.

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Posted in Debt, Debt Redux

Two Interest Rate Reductions This Week

November 13th, 2008

I had two credit card companies lower my interest rate by 1% this last week.  No explanation, just a lowered interest rate.  I think they want their balances paid off faster.  Has anyone else seen this?

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Posted in Debt Redux, General, Savings Opportunities

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Cholestrol, Fat and the Economy

October 10th, 2008

Did you know that your body needs Cholestrol and fat? I bet that all of the negative ‘news’ you hear doesn’t lead you to believe that you do, but you do.  In fact some fats will keep your brain healthy, and some cholestrol actually helps your heart.  Crazy, huh? [disclosure: this is not medical advice - seek a doctor and all that jazz].  Here’s the kicker: some debt in the economy, as a tool to help companies get started seems to be OK.  Some debt for consumers seems to be helpful at times when major things need some attention.  I don’t recommend debt, but small levels in specific locations are safer than others.  The safe types of fat and cholestrol in appropriate quantities keep your body moving and grooving.

Here’s the deal: too much of the debt doesn’t keep things moving, it makes things stop up and causes strokes just like regular human body blockage.  Adding more debt to the economy’s ‘breathing room’ by ‘unfreezing’ the credit opportunities is just like putting a stint into an artery but them immediately going out to guzzle down the largest fast food meal you can find.

Trent of the Simple Dollar posted on twitter that he had a person asking how they should tell their children that they’re losing their home.  More credit doesn’t help this situation.  If I lose my home due to foreclosure having access to more credit doesn’t fix the problem that I’m in over my head.  The ability to infinitely borrow doesn’t help anyone.  The ability to aggressively pay back the debt and get to a positive cash flow matters a lot.

If I cheat and have a nasty, super-duper grody dripping rack of ribs all by myself but then go run a mile and then eat another sloppy rack of ribs (which is wrong, because ribs do not have to be prepared like that) I’ve not fixed the problem either.  If I got into debt, pay back most of it and then buy a bigger TV on it, but am not saving for retirement I’ve blown it.  If I go into retirement with money saved, but still have stupid amounts of debt, I’ve blown it.  Debt, much like a medical condition that needs attention, can’t be put off indefinitely.

So, watch your diet, watch your spending, take care of any debt or health issues, and don’t be fooled into thinking that we can quickly fix the economic situation with more debt.  More debt doesn’t help like more cholestrol doesn’t help.  Which is why I’m going to stop typing and go eat a carrot.  The Vitamin A will help my eyes so that I can read more of the stuff coming in over the wire on this screen;)

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Posted in Debt, Debt Redux, Foundations, God & Government, Taboo & Money (religion, sex, and politics)

Three Things About Gas and My Trip to Indiana

June 5th, 2008

With this last trip to Indy I was watching the price of gas because every ten cents of gas price increase cost me roughly $20.00 $10.00 [editor: fixed bad math from tiredness] more for the trip. My car is a Honda CRV, it gets roughly 32 miles per hour (not the EPA gas rating, but with AC and various other things in play, that’s the average). I had to drive over 1,000 miles and so that meant about four fill ups (including driving around in Indiana) per direction. Each tank fill up was 12 gallons or so [it holds 14 gallons, but you have to pick where you can get gas driving through Kansas]. We ended up paying closer to $4.00 a gallon at most locations. The first lesson learned: know the gas math of your trip so you’re not surprised.

I mentioned the $4.00 a gallon above. We left on Memorial Day Weekend. This is a classic time for gas stations to jack prices up. Somehow they don’t call it price gouging :) I watched the price of gas jump by ten cents between Thursday and Saturday when we left. By taking a day off and leaving one day earlier, I could have saved some money (though it would have cost me a day off).

Lastly, we’ve still got one Discover card and this Discover card has a special 5% cash back bonus on various purchased at different times of the year. We’re doing our best to pay off the discover card as quickly as possible. However, since I knew we’d be spending so much money on gas we pre-paid the amount we had budgeted for gas on the discover card to get the cash back bonus. This is part of a paradigm shift I’ve gone through, but I’ll write about that later. Credit cards are a major temptation when our minds aren’t focused on heavenly things and so we get caught up in their trap – a clarifying blog post will be forthcoming. We’re not using credit cards for credit, this was a pre-paid spend that will allow us to get some relief, minor as it is, on the cost of gas. We didn’t use it for anything but pre-paid, known expenses and came out having pre-paid more on the card than we spent. Between June and September Discover is offering 5% cash back on gas – we’re going to participate in that discount.

So: remember to do the gas math, remember to plan, as best as you can, around known pricing schedules, and figure out how to maximize your dollar.

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Posted in Debt, Debt Redux, General, Tips'n'Tricks

A Letter From Abraham Lincoln to Mr. Johnston

March 25th, 2008

Dave Ramsey mentioned this later on a recent podcast episode (which could have been a repeat) and so I looked it up.  It can be found online in a collection of his writings here.  However, I thought you might like to read the letter because it is quite interesting to see Abe’s approach to helping his family.

Dear Johnston, Your request for eighty dollars I do not think it best to
comply with now. At the various times when I have helped you a little
you have said to me, “We can get along very well now”; but in a very
short time I find you in the same difficulty again. Now, this can only
happen by some defect in your conduct. What that defect is, I think I
know. You are not lazy, and still you are an idler. I doubt whether,
since I saw you, you have done a good whole day’s work in any one day.
You do not very much dislike to work, and still you do not work much,
merely because it does not seem to you that you could get much for it.
This habit of uselessly wasting time is the whole difficulty; it is
vastly important to you, and still more so to your children, that you
should break the habit. It is more important to them, because they have
longer to live, and can keep out of an idle habit before they are in it,
easier than they can get out after they are in.

You are now in need of some money; and what I propose is, that you shall
go to work, “tooth and nail,” for somebody who will give you money for
it. Let father and your boys take charge of your things at home,
prepare for a crop, and make the crop, and you go to work for the best
money wages, or in discharge of any debt you owe, that you can get; and,
to secure you a fair reward for your labour, I now promise you, that for
every dollar you will, between this and the first of May, get for your
own labour, either in money or as your own indebtedness, I will then
give you one other dollar. By this, if you hire yourself at ten dollars
a month, from me you will get ten more, making twenty dollars a month
for your work. In this I do not mean you shall go off to St. Louis, or
the lead mines, or the gold mines in California, but I mean for you to
go at it for the best wages you can get close to home in Coles County.
Now, if you will do this, you will be soon out of debt, and, what is
better, you will have a habit that will keep you from getting in debt
again. But, if I should now clear you out of debt, next year you would
be just as deep in as ever. You say you would almost give your place in
heaven for seventy or eighty dollars. Then you value your place in
heaven very cheap, for I am sure you can, with the offer I make, get the
seventy or eighty dollars for four or five months’ work. You say if I
will furnish you the money you will deed me the land, and, if you don’t
pay the money back, you will deliver possession. Nonsense! If you can’t
now live with the land, how will you then live without it? You have
always been kind to me, and I do not mean to be unkind to you. On the
contrary, if you will but follow my advice, you will find it worth more
than eighty times eighty dollars to you.

I guess we could call this a guest post by Abraham Lincoln :)

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Posted in Debt, Debt Redux, Foundations, Guest Posts

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Credit Rate Reduction: What Does it Mean to My Wallet?

March 19th, 2008

If you’re a newer reader you may not be familiar with the Credit Rate Reduction Rally.  One of the purposes behind the rally was to build a movement that is about optimizing interest rates for people paying off debt.  In my case doing this on one of our cards reduced the interest we’re paying per month (which also includes a lower balance from making payments) by $125.00 a month.  That would be like saving roughly $1,400.00 in one year’s time [calculated loosely with the assumption of a reducing balance with minimum payments].  Or three Nintendo Wii’s, several car payments, a very, very nice bottle of wine, a Mac Book with memory upgrade, or a nice donation to a charity.

Have you sat down and calculated how much money you might save by getting your interest rates reduced?  Be persistent, be consistent, and make them change your interest rate.  It could change your future!

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Posted in Debt, Debt Redux, Tips'n'Tricks

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Why I Could Personally Give a Flying Flip About When My Stimulation Check Arrives

March 19th, 2008

I will more than likely enjoy my economic stimulation check for all of two seconds as I flip it over, sign it, and then cash it in at my bank.  Upon actually receiving the funds in my account it will go towards paying off my debt.  The ‘fun’ of the spending money will be gone in a flash, but the excitement of being that much close to debt free is there.  In fact last night I got paid for some work and that money is going straight into the debt snowball.  Five hundy down in all principal since I’ve already made the normal monthly payment on  the Disguster Discover card.  It is this kind of extra payments that are exciting, but at the same time are a monument to my folly.

There are very few things in life that don’t come with lessons, but when they kick your pocketbook, the lessons feel a little more like sandpaper than satin.  I’ve found that each check gets me closer to the short term goal of debt paid off, but serve as a reminder, as I sign them,  that I’m signing off on the consequences of my previous stupidity.  I don’t say that to be melancholy, but more to emphasize that I recognize the consequences of past actions, and in the future, as I sign other checks after having my debt paid off, I’ll be signing them as a monument to where I’ve been, where I’m going, and to help build the foundation of the long term goal: financial independence.

Do you care about your economic stimulation check’s arrival date?  I figure that a few months difference in interest payments can be somewhat important, but the short term difference to me is insignificant.

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Posted in Debt, Debt Redux, General

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Playing House: Everyone at the Card Company is Lying

February 15th, 2008

If you’ve seen the television show ‘House’ then you’ve probably heard the lines about everyone lying.  In each episode something goes wrong with some patient and they have to find out what is causing the ailment.  Often the problem has to be ‘dug’ into and they have to find out who is lying about information so that they can get to the truth of the problem.  They don’t take ‘no’ from anyone.

If you have tried to get a lower interest rate from a credit card company and they’ve said no to lowering your rate and you’re paying anything like 18%: they’re lying.  Don’t take no for an answer.  Dig deeper.  Go up the chain of command until you’re speaking to Warren Buffet’s cousin.  Get to the person who can and will say yes.  Don’t put it off, don’t delay, call now.  Get a lower rate and save yourself some big cash!

Excuses that drones at the card companies will use include:

  • Your rate is the best we can do – that is not possible
  • Your account has been locked for rate reductions because of late payments – this is a totally bogus issue that is policy.  Policy that can be over-ridden by a higher up manager
  • Your card offers you rewards, those rewards are funded by your interest rate – bull pucky.  Those rewards are paid for by any number of things – but the interest rate doesn’t fix things.  If you have to switch card companies now may be the time to do it

Kick the credit card interest rates in the butt.  We got our interest rates dropped twice and each time they dropped the rate we saved $50.o0 in interest per month!  Of course we’ve got enough debt that we’re paying a lot anyway.  However, getting the lower rate will help us pay it off faster.

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Posted in Debt, Debt Redux, FAQ Friday, Outside the Box, Savings Opportunities, Tips'n'Tricks

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Interview: Pay-Day Loans with “John”

January 14th, 2008

I interviewed a buddy, “John” who was willing to talk to me about a bout with “Pay-Day” loans and lessons learned. Check out the audio podcast to learn more.

Pay Day Loans 4.5MB requires iTunes or Quicktime to listen to.

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Posted in Debt, Debt Redux, Podcast

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Three Reasons Not To Try to Lower Your Credit Card Interest Rate

January 10th, 2008

We’re on the second to last day of the Credit Rate Reduction Rally – tomorrow I’ll cover what to do if your reduction attempt failed – but today we’ll look at reasons not to participate if you’re sitting on the fence.

You’re already getting zero percent interest -  If you’re already getting a special interest rate then this isn’t for you.  Clearly you’ll need to jump onto the bandwagon when those rates jump up at the end of your ‘interest free’ period.  Kudos for your great rate and keep it up.

You like giving your money to others – If you love paying money to others for ‘services’ rendered in the past this is great – but I’d suggest giving your money away to charities that could use it for better things than lining credit card company wallets.

You pay off your credit card every month – This one is a double edged sword.  If you do pay it off every month and have the discipline to do so, great, but its still good to make sure that you’re getting the very best rate possible.  That way if you accidentally let a balance roll over you’re not going to get hit with as high a finance charge.

The last, faux reason would be that you hate being on the phone with the people in charge of taking these sorts of phone calls.  Get past your concern and save yourself a buck or seventy and get this taken care of.  If you could invest that money laster instead of paying it now, you’d be much better off!

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Posted in Debt Redux

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