Thursday, August 30, 2007

Family of 9 Lives Debt Free on $35K per Year

I just read the article on site (20/20) about America's Cheapest Family. They live on $35,000 per year and there are 2 adults and 7 kids. The most amazing thing is that that they live DEBT FREE. There was a video on this morning as well. As most personal finance blogs seem to re-iterate, it's the small things that add up. This family goes to the store once a month and they literally save hundreds of dollars each trip using coupons. Over the course of a year, that's thousands of dollars. Thousands of dollars adds up to a huge percentage when the total salary is only $35K! They even wrote a book called America's Cheapest Family Gets You Right on the Money: Your Guide to Living Better, Spending Less, and Cashing in on Your Dreams

Monday, August 27, 2007

Credit Card 0% "Loans"; IT REALLY WORKS

In this post, I'll discuss how to use those introductory 0% credit card offers to your advantage. The basic premise is that you apply for a credit card that has a 0% introductory rate and use the credit limit that you are granted to get cash. You take the cash and put it in a higher yield savings account or money market account. Each month, you only pay the minimum due and keep the rest of the money earning interest for you. At the end of the introductory period, simply pay off the balance on your card. With enough of these cards, you can easily earn thousands of dollars a year. This method was discussed on other PF blogs as well: and

Now, there some negatives associated with this practice. You must remember that since your income to debt ratio will be way out of wack, your credit score WILL GO DOWN. This is not really that big of a deal if you don't have any near term needs for credit. Even though you credit SCORE is affected, your credit report will still be showing on-time payments and your history will be increasing. After you're done with this "loan" idea, it will take quite a few months for your credit score to go up. It's very important to forecast when you might need to apply for normal credit (i.e., you really need to buy something like a car or house) so that you can begin to pay your loans off.

Another thing to remember is to stay on top of your payments. Do not be late! If you apply for many offers, you could easily have 5, 10, 15 or more cards to keep track of each month. The method I use is to have paperless statements sent to me each month in the form of an email alert. As soon as I see the alert, I go to that card site and schedule my next payment (I either pay the minimum or I pay off the card if the intro period is about to expire). To do this I use electronic funds transfer (EFT) from/to my savings account to the account I pay my bills out of it. Honestly, each bill pay only takes me about 5 minutes from the time I read the alert, transfer money, update my check registry, and schedule the payment.

Here is a very imporant point. When you are researching for new cards to apply for, of course you want to look for the 0% offers but you absolutely must read the fine print in regards to the fees. The best offers are the ones that have no fees associated with a transfer or cash advance. Others have something like 3% of the transfer amount but cap it off at $50 or $75. The worst offers are the ones that have no maximum fee for the amount trasferred. For example, if you apply for a card that has a 3% transfer fee with no max and you write yourself a check for $10,000, you will be assessed a $300 fee. I DO NOT RECOMMEND THESE CARDS because your margin will be very small. You really have to do the math when it comes to the term of the intro period, the transfer fee, and the max transfer free details. If the margin is very small, I do not apply for the card.

Here are some links for 0% card offers:

Here are some links for savings account with decent yields:

In summary, you can make money using 0% introductory rate credit card offers. However, you should read the fine print to determine the fees involved (hopefully they're none). Additionally, set up a method that works for you so that you can stay on top of all your payments. You definitely don't want to be late with you payments. Finally, be sure to track your expiration dates so that you don't forget to pay your card off when the intro period is up.

Tuesday, August 7, 2007

Get Rich Slowly Book Review

...just read the book review of "Debt is Slavery" from the blog Get Rich Slowly and I must say it was a great review because he summarized all the key points and explained each very well. I'm going to list each point but honestly, to appreciate the post, please read it:

Get the book here:

Here are the points:

1. Debt is slavery.
2. Money is time.
(see the book Your Money or Your Life)

3. Possessions are a prison.
4. Don’t let advertising brainwash you.
5. Money buys freedom.
6. Don’t sell your soul for a salary.
7. Own.
8. Spend less than you earn.
9. Save 50% of your salary.
10. Control your money.
11. Start doing this now!

How to Protect Your Precious Credit & Identifty

I received this in an email and most of it makes sense but take it with a grain of salt. Research a little before you decide to do anything. Here is the email:

Read this and make a copy for your files in case you need to refer to it someday. Maybe we should all take some of his advice! A corporate attorney sent the following out to the employees in his company.

1. Do not sign the back of your credit cards. Instead, put "PHOTO ID REQUIRED."

2. When you are writing checks to pay on your credit card Accounts, DO NOT put the complete account number on the "For" line. Instead, just put the last four numbers. The credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check processing channels won't have access to it.

3. Put your work phone # on your checks instead of your home Phone. If you have a P.O. Box for a mailing address, use that instead of your home address. If you do not have a P.O. Box, use your work address. Never have your SS# printed on your checks. (DUH!) You can add it if it is necessary but if you have It printed, anyone can get it.

4. Place the contents of your wallet on a photocopy machine. Copy both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to call and cancel. Keep the photocopy in a safe place. I also carry a Photocopy of my passport when I travel either here or abroad. We've all heard horror stories about fraud that's committed on us in stealing a name, address, social security number, credit cards etc.

Unfortunately, I, an attorney, have firsthand knowledge because my Wallet was stolen last month. Within a week, the thieve(S) ordered an Expensive monthly cell phone package, applied for a VISA credit card, had A credit line approved to buy a Gateway computer, received a PIN number From DMV to change my driving record information online, and more. But here's some critical information to limit the damage in case this happens to you or someone you know:

5. We have been told we should cancel our credit cards immediately. But the key is having the toll free numbers and your card Numbers handy so you know whom to call. Keep those where you can find them.

6. File a police report immediately in the jurisdiction where your credit cards, etc., were stolen. This proves to credit providers you were diligent, and this is a first step toward an investigation (if there ever is one).

But here's what is perhaps most important of all: (I never even thought to do this.)

7. Call the 3 national credit reporting organizations immediately to place a fraud alert on your name and also call the Social Security fraud line number. I had never heard of doing that until advised by a bank that called to tell me an application for credit was made over The Internet in my name. The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit.

By the time I was advised to do this, almost two weeks after the theft, all the damage had been done. There are records of all the Credit checks initiated by the thieves' purchases, none of which I knew about before placing the alert. Since then, no additional damage has been done, and the thieves threw my wallet away this weekend (someone turned it in). It seems to have stopped them dead in their tracks.

Now, here are the numbers you always need to contact about your wallet, etc., has been stolen:

1.) Equifax: 800-525-6285 (NOTE: I looked this up on and found the number to be 888-766-0008 so you should call this number; all other numbers below matched).
2.) Experian (formerly TRW): 888-397-3742
3.) Trans Union : 800-680-7289
4.) Social Security Administration (fraud line): 800-269-0271

Friday, August 3, 2007

6 Ways to Kill Your Savings (DON'T DO THESE)

1. Don't have a budget - If you squander every penny you get, you'll never be ready for the unexpected or retirement. Plan your spending that is within your means. And by all means, pay yourself first (i.e., save some money).

2. Indulge in your whims - If you like it, buy it, right? Wrong! There is no reason to buy things just because they seem nice at the time. Think about the long term uses of the item or the long term implications of spending $250 on a watch "you should have to have". Even spending $30 that you don't need to spend could go a long way to other things like paying down your credit card or adding principle to your mortgage payment.

3. Splurge on gifts - We all know that true love is demonstrated by how many gifts or how much you spend on your children, siblings, family, friends, etc... Yeah, I know: ridiculous. Unfortunately, some people fall into that trap each and every holiday season and end up spending way more than they should and have debt left over until the summer. It's just a bad move. Value is not always about the money! Find that perfect little gift will go a lot further than spending $$$ just to spend it on someone.

4. Go ahead; buy an SUV - When you get the super-dooper SUV that get 15 MPG or less on the highway, your checkbook will be screaming for assistance! See the "Silly Song" about an SUV.

5. Rely on credit for emergencies - Don't worry; you'll never get sick or get into an unexpected accident (like we expect accidents) and have to pay a deductible. Always have an emergency cash fund. It's okay if you pay with a credit card. Just be able to pay if off when the bills comes in!

6. Skip routine maintenance - As long as your car seems to be running fine, why should you do anything, right? WRONG! Get your oil changed regularly. Get your brake pads checked. If your check engine light comes on, go get it looked into immediately. Many times, it may not be a big deal. The key here is to remember that preventive maintenance is WAY CHEAPER than "oh man, my car won't start at all and is really broken" maintenance.