February 2009 Net Worth Report (-$719)

Mar 02, 2009 @ 11:51 am by EMS

Given the market’s performance in February, one might look at my $719 loss for the month and think that I dodged a bullet.  However, once you account that this number includes about $3,500 that I received as a tax rebate, then the picture doesn’t look so rosy.

I did have some out of the ordinary expenses this week, including a $700 hot water heater and a $300 Panasonic Video Camera.  While the hot water heater was not an emergency purchase, it had been something I wanted to install to increase our home’s energy efficiency.  The camera was something we’ve been thinking about getting for several years and the rebate check made it a possibility.

So, where did the rest of the rebate check go?

  • $1,500 went into savings for a new vehicle.
  • $1,000 went into a Roth IRA and bought PFE, which of course has lost some value already.
  • The balance went into kids college savings.

In March, I expect to pay off at least $4,000 worth of credit card debt which has been riding on a 0% interest deal for the past 10-11 months.  Additionally, March will be the month in which one of our vehicles becomes 99.99% paid for. We’re looking forward to going car payment free for at least 12 months!


Ughhh – Late Charge!!

Aug 30, 2008 @ 07:54 pm by EMS

Just realized I got hit with a $39 late charge on one of my Chase credit cards.  Not a bill that I couldn’t pay, just one that slipped through the cracks somehow.  Too many credit cards, not enough time to keep track of them.

It’s definately time to consolidate.  I want to be down to 3 cards by this time next week (1 primary, 2 backup).

Results from Playing the Arbitrage Game

May 11, 2008 @ 10:37 am by EMS

In June of last year, I decided that I was going to experiment with earning interest off of a 0% credit card promotional rate. Ideally, I would have liked to have found an offer where I could write a credit check to myself, cash it, and then just let that balance sit in a high-yield savings account for the full year. Unfortunately, I couldn’t find an offer that didn’t tack 3+% off of fees for the total amount cashed, so this didn’t work out.

Rather, I opened a 0% for one year credit card with Chase.  I used that card solely for daily purchases until I came to within about $1,000 of the card’s credit limit.  It took me about 5 months to reach this level, all the while paying just the monthly minimums when I received statements.

The money that I traditionally would use to pay these purchases was deposited into EmigrantDirect.com’s high yielding savings account.  Unfortunately, high yielding wasn’t so high once the Fed starting cutting rates last fall, so I didn’t make out quite as well as I would have hoped.

I’m going to pay off the card in full this month (Yes, I know I have another month to work with, but I’m playing on the side of caution here).

During this time period, the interest paid on my EmigrantDirect account was about $325.  I’m estimating that about 66% of that is from this scheme.  Therefore, I figure I’ve made about  $214 (before taxes) on this plan

All in all, it was pretty easy money.  I was able to keep up on the status of the accounts via Quicken, and I was very careful about making sure the payments were made, etc…  Once simple screw up could end up costing me money.

That being said, I don’t think I’m going to do this plan again unless rates get back up to 4.25%+.  The 2.75% that Emigrant’s offering now isn’t enough to entice me back into the game.

Maxed Out – Not Impressed

Jun 19, 2007 @ 01:17 pm by EMS

I spent my last couple of lunch breaks watching Maxed Out over Netflix’s “Watch Now”. For those who haven’t heard of this movie, it’s basically a Michael Moore style documentary focusing on the credit card and consumer debt industries. I was hoping a lot more from this movie, such as suggestions on what we can do about reducing consumer debt as a society and a focus on personal responsibility. This movie basically bashes the credit card industry and the Bush administration for allowing consumers to become so debt ridden as they are today. While I’m definitely no fan of Bush (I honestly believe he’s the worst president in the history of our nation), and I’m also hate dealing with credit card companies, this movie places the blame on the wrong people.

The problem with our society today is that people feel that they have to have the latest and greatest in everything. Cars is under 2 years old? Buy a new one. House only has 1:2 bathroom to person ration? Move into one you can’t afford. Sure, the credit card companies are extending debt to those who can manage it least but they aren’t holding a gun to your head and telling you to spend-spend-spend.

Perhaps I’m taking an overly-simplistic view of the problem, but I just can’t understand how people are unable to realize that their financial actions have repercussions (good or bad) and that they need to think before buying on credit.

Getting and Keeping Good Credit

May 09, 2007 @ 09:37 am by EMS

We have a college age intern here at work who was talking to me about how to obtain a good credit score. I’m not an expert in such things, but my wife and I both have excellent credit scores (both just slightly below 800) so I feel somewhat qualified to give at least some rudimentary advice.

  • Be an honest and responsible consumer – this is by far the best way to keep and maintain a good credit score and it encompasses all of the other tips I’m about to share with you.
  • Don’t maintain a balance on your credit card – I still remember being in college and using my credit card for a stereo receiver that I wanted for my dorm room. Being quite new to the world of credit, I bought the stereo on my card without any idea (or even understanding) the finance charges that I would receive if I didn’t pay the balance in full the first month. I received my 2nd credit card statement and was astounded to see a $26 finance charge. Only then was I able to wrap it around in my little head that if I continue to buy things on this card and don’t have the money to pay off the bill within 30 days, I’d be paying a good bit of “extra” money for the things that I buy. This whole concept was foreign to me at the time. Realizing that $26 was about 5 hours at my then minimum wage job, I halted all extra spending until that credit card debt was paid off. Since that time, I’ve only carried a debt on my credit cards twice in my life, and both times I had formulated plans to pay off the debt within 3 months BEFORE making the purchase.
  • That being said, apply for a credit card early in life – I had my first credit card fully in my name at 18 and I’d recommend others do the same. Get the card, but don’t use it. Establishing credit early can make a big difference down the road, as long as you are responsible with it.
  • Pay your bills on time – I’ve been fortunate enough that I’ve never experienced the hardships that are related with medical emergencies or large unexpected expenditures of cash, so I’ve always been able to plan ahead for the bills and expenses encountered.  I would recommend to everyone that they set up and stick to a routine for paying bills.  I use a bill basket and pay the bills as they come.  Others wait to pay them once a month.  Either way works, just choose one and stick to it.

I know I’m not writing anything earth-shattering here, but they are just a few tips I want to share with those who are looking to start building good credit.

Oops – Stupid Credit Card Error

Nov 21, 2006 @ 11:46 am by EMS

Like many people, I pay most of my bills through my bank’s online portal. Their web interface is decent, I usually have no problems with it. However, yesterday I found out that I made an error that’s going to end up costing me a few bucks.

I have two credit cards that I generally use – one solely for gas purchases because it gives me a 3% rebate, and the other is for pretty much all other purchases. They are both issued by Chase and when I go to my bank’s Bill Pay page, it lists both cards as “Visa Credit Card”. I have to pay close attention to which credit card I’m paying by knowing the last 4 digits of the cards and comparing that to what shows up when I’m paying the bill.

Well, apparently I wasn’t paying too much attention paying bills last month because I ended up paying the balance of my gas card ($360) to my other credit card (which had about a $1200 balance)! Fortunately, I my gas card setup to automatically pull the minimum payment required from my checking just for cases like this, so I won’t end up with a late payment fee. Once I saw what happened, I went in and scheduled a full payment to the gas card. However, I’m sure I’ll end up paying a bit of interest when my next statement comes around.

I suppose I could call Chase and explain what happened.  They might reduce or remove any interest charges based upon my customer record, however I do feel that since it was clearly my error, I don’t have the right to ask them to bend the rules for me.

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