I have already shared my analysis of the best cash back credit card, and for those of us that have the financial discipline and habits to not overspend and pay off the bill each month, credit card rewards can be a nice bonus with relatively little effort. My question is whether or not the fiscally responsible are living off the debt and fees of the fiscally challenged. Before you dismiss me or get up in arms, let’s take a look at the math. Credit card companies card charge about 2% give or take for interchange fees on each transaction. By [...]
Read MorePsychology of Debt
I promise that eventually I’ll quit referring to the Nitty Gritty post. But a subject was brought up in the comments that I thought should be explored further. The idea of selling our vehicle for a cheaper one. I can’t say that the thought has never crossed my mind. In fact, a case of “Buyers Remorse” arrived almost immediately upon purchase, but it never fully set in, instead it comes and goes. On one hand our van (2004 Honda) is by far the nicest vehicle that either me or my wife have ever owned. The leather seats are easy to [...]
Read MoreI was honored when Frank told me that I was chosen as the Happy Rock’s second writer. But as the days have passed, that feeling has gone away and a new feeling has begun to come over me. I call it the “How did this happen?” feeling. I bet a lot of you are familiar with this feeling. It has many variations (It’s not exclusive to personal finance matters by any means) and it usually sets in upon any sort of personal reflection. Some examples are: the “How did I get roped into a day of antique shopping?” feeling, the [...]
Read MoreA few weeks back I ran a contest that required the participants to explain why they wanted to get out of debt. The responses were wonderful and I wanted to share them with all the readers. I have categorized the reasons as best as possible and listed them in order by number of votes. Some participants supplied multiple reason. The Happy Rock readers top seven reason for getting out of debt. Security/Peace of Mind Freedom/Debt is Slavery Net Worth Increase/Savings/Investing Children Giving Frustration Simplicity Two of the entrants can serve as inspiration since they are already out of debt!!! One [...]
Read MoreNot much can kill your debt reduction momentum like a $500 dollar expense that you haven’t planned for. Without some savings set aside we often are forced to go into debt to pay of the bill and that destroys the plan and demoralizes our already fragile money psyche. When just starting out on your debt reduction journey it is quite easy to budget and plan for your normal monthly bills like credit card payments, rent/mortgage, utilities, etc, but the type of expenses that derail the train are not the monthly expenses. There are the irregular bills, the ones due every [...]
Read MoreThis post is in response to Free From Broke’s tipping point contest. For those that don’t know a The Tipping Point is a book and term coined by Malcom Gladwell in 2002. It refers to “the level at which the momentum for change becomes unstoppable.“[1] The term was an attempt to quantify and understand what makes certain phenomenon and ideas take off. Why does an unknown book vault into the best seller list or a website like I Can Has CheezBurger go viral. Click Here for the link to the book on Amazon and here for the book preview from [...]
Read MoreTom : I just paid off a nice chunk of my debt. Mark : Really. Tom : Yep, we paid off one of our credit cards! Mark : That’s great, how did you find the money? Tom : I used a balance transfer for a new credit card that my wife signed up for. Mark : So you didn’t actually reduce your debt at all? Tom : Well, I guess technically you’re right I hear these types of conversations all the time. Let me be clear, moving debt from one account to another isn’t debt reduction. Buying a new car [...]
Read MoreThe thing about debt is that our financial systems are setup to make it as easy as possible to spend money you don’t have. Your mailbox is littered with credit applications, and if you sign up at a store they give 15% and you are approved in about 3 minutes. At a car dealership all you have to do is sign a few papers. Even a mortgage is easy, although you have to sign a lot more papers. Thousands of dollars can transfer hands in a few minutes, and you are usually left with a depreciating asset and the obligation [...]
Read More“Symptom – A characteristic sign or indication of the existence of something else” Source Picture yourself driving down a familiar street. Out of the corner of your eye you see a huge nail in the road. You swerve, but only enough to drive directly over the nail with your tire. Arghhhh! You don’t hear a pop or a hissing, so you continue on. Everything seems fine until two weeks later when you go to leave for work and your tire is flat. It has been long enough that you forget about the nail, so you borrow an air compressor from [...]
Read MoreFirst things first, making bi-monthly payments on your mortgage WILL cut your mortgage repayment time down significantly. Using bi-monthly payments on a $200,000 mortgage at 6.0% you will have the mortgage paid off 6 years early and save about $50,000 in interest. What happens is that you are paying 26 bi-monthly payments which is the same as 13 monthly payments. In essence you are paying one more monthly payment a year. If bi-monthly payments can save you a lot of money, then why do I mention them as a myth? Well, most of the programs that banks offer their lenders [...]
Read More
