No More Credit Card Debt

By on Sep 25, 2010 in Credit Card Debt | 0 comments

I have paid off all my credit card debt and can proudly say I have no more credit card debt! It feels good. Find out how I did it! How I paid off my credit card debt and have no more credit card debt. I’m so happy. 1. Pay Yourself First So my first step was to make a plan. I took how much I was making a month and since I’m on a salary base, I can know for sure what to expect on the 1st and 15th. You’ve heard it before: “Pay yourself first.” Well, in this case, it was to pay the credit card companies first. For example, I knew to expect $2,000 each paycheck and I knew how to allocated every dollar of that paycheck. I set a goal to get out of credit card debt in 6 months, so I took the amount I owed and divided that by 6. Then I calculated how much I need to pay each paycheck to reach that amount. Pretty simple, right? Not exactly. 2. Following the Plan The easiest part is to make a plan. We all make plans to lose weight, get in shape, save up more money, spend more time with the family, etc. But how many of us actually follow through? The follow through is the hardest part. With finances, it’s a bit easier because you can set up automatic withdrawals which go to savings accounts, pays off debt, or goes to retirement funds. As long as you are certain when you will get paid and how much, this is relatively easy. Make sure to set up auto-withdrawals at least a couple days from after you get paid just in case something goes wrong and you don’t get paid exactly on the 1st and 15th. Also, make sure to keep a reserve in your banking account so that you won’t get an automatic withdrawal when you have nothing in your bank account. 3. Be Meticulous Along with setting up automatic payments, I was meticulous about paying down debt. I made sure to also add manual payments on top of the automatic payments. This made sure that I was on top of things and it even helped to pay down debt faster. Even if it was just $100 here or $150 there, those small payments add up over time. In terms of savings, it goes the same way. On top of my automatic savings, I would also make manual transfers into my brokerage funds so that I would reach my max Roth IRA limit faster or reach my goal of savings faster. 4. Cut Down Expenses If you have to eat cup of noodles or pasta with just sauce for 3 months, do it. Do whatever you have to do to reach your goal. That’s that. Cut your expenses and be disciplined to not buy things that you don’t need. Sell things you don’t use on eBay or Craigslist. Do what you have to...

Savings Plan for the Next 5 Years

By on Jun 1, 2010 in Personal Finance, Savings | 0 comments

Prioritizing is important when involving your finances. Your next paycheck and either go towards that new $600 watch you want or to pay off some credit card debt. The logical thing to do is to put that money towards the debt and don’t incur any more debt. The main problem is some people choose to ignore their issues or act on impulsive emotions. Here is some simple math to help you get from sinking underwater: Expenses < Income In other words, keep your expenses less than the money you take home. Spend less than you make. Live below your means. Only spend what you have. Whatever you want to call it, it’s simple math. Now if you do this properly, it should give you a good amount of money to save each month. The question is what do you save for and why do you need to save. Depending on where you are in your life and what you want to achieve, it can be different for many people. But here are some examples: Saving up for a down payment on a house Saving for a rainy day — unexpected medical expenses, emergencies, loss of job, etc Saving for retirement Saving for children’s education Saving for a big purchase — car, boat, ring, etc. Saving for a wedding Those are some of the more common reasons to save. Now some of these things in the list don’t apply to me — I don’t have children and not looking to marry soon. I do have a plan for the next 5 years and buckets on where my money should go. This list is prioritized and once the first bucket is full, I’ll move on and fill up the next bucket. I may decide to fill up each bucket at the same time, but it’s important to get that first bucket full before continuing on. Here are my 5 buckets: $10,000 saved in a high-interest yielding liquid account to act as my “6-month emergency fund” Max of $4,000 each year in my Roth IRA $200,000 down payment for a house Max of $16,500 put into my 401(k) every year Put $10,000 a year towards long term investments – stocks/bonds/mutual funds If you add that up, I’m aiming to save $362,500 in 5 years. I need to be making a million dollars a year to save that much, right? Well yeah something like that. But since I already have some money in each of these buckets, I can still get by with what I’m making. Usually, maxing out your 401(k) would go after maxing out your Roth IRA, but I’m looking to buy a house in the next 5 years so I have shifted that up the priority ladder. Also note that I am in California so a typical 20% down payment on a million dollar house would be $200,000. For my first home, I may only need half that down payment for a smaller house, but I like to aim high. Your list might be different. Sit down and prioritize what you want in life and stick to the plan. Save a little bit each month make that amount consistent. What you will see is the total amount compounding as you keep working towards your...

High APY Liquid Accounts

By on May 26, 2010 in Personal Finance | 0 comments

I had my ‘6 Month Living Expenses – Emergency Fund’ account in my TD Ameritrade account, but I wanted to find something that yielded more than 0.25% APY. With such a low APY, I would probably be losing money if inflation rates were higher than that. With the inflation rate at 2.2% in April 2010, I certainly would be losing money having it sit there and do nothing. So I did some research to find some High APY Liquid bank accounts in the nation. The current top 3 High APY Liquid Accounts: At 2.00% APY up to $35,000 (remainder at 1.00%): evantagebank.com Also at 2.00% APY up to $35,000 (remainder at 1.00%): americanetbank.com Sounds cheesy, but claims to be 2.00% APY up to $35,000 (remainder at 1.00%): redneckbank.com There are also Reward Checking Accounts available that give an even higher APY, but there is a catch. You must follow certain requirements that they have such as exceeding the number debit card transactions, using bill payments each month, having direct deposit, and also having a minimum amount. If this interests you, check out: danversbank.com at 4.01% APY and firstnewengland.org at 4.10 APY Be sure to clearly go through and read the terms and conditions before you apply. I opted to go with the ING Direct account just because I had an account open with them and they’re easy to use. Also at 1.10% APY with no minimums, it’s not too...

I Want To Be a Billionaire

By on May 26, 2010 in Inspiration | 0 comments

Credit Card Debt

By on May 25, 2010 in Credit Card Debt | 0 comments

I hate credit card debt. I hate it with a passion. It is basically highway robbery. I’ve never been in credit card debt for the 10 years or so that I’ve owned credit cards. I got in some business with people I shouldn’t have fully trusted and ended up in credit card debt of about $10,000. It really shouldn’t have gotten that bad and I blame myself. This was less than a year ago, I would say about 9 months ago. Here are some lessons I have learned from this experience: Business and emotion don’t mix. Do NOT let emotion get in the way of business. Keep it in check. Business is business. Pay yourself first. I got involved in business with a friend. They say to not mix business with pleasure. It still can be done, but remember to get paid first. I thought that my friend would be good with the money and have no issues with paying me. Then he was involved in a lawsuit and hasn’t paid me the full amount owed to me. Make sure you get your payment in full before continuing into the next project. Maintain good credit. Luckily I was able to transfer my balances into a 0% APR credit card — all because of my good credit. Albeit, I still had to pay the transaction fee of a hundred dollars or so, but the money I saved from the interest alone was worth it. Keep your credit up to par and check your credit report for free annually. Right now I have chipped away at that debt and it is currently at $3,300. I scheduled a payment tomorrow for $1,000 so by the end of this week it will be down to $2,300. I plan on paying the rest of the balance by July even though the 0% APR is until October. I really just want to aggressively pay it down so my money can go into saving and earning...

Recurring Expenses

By on May 24, 2010 in Expenses | 0 comments

Here are my recurring monthly expenses: (Groceries and Gas are estimates and the groceries estimate does not include dining out) Rent: $800 Groceries: ~$200 Gas: ~$200 Cable Internet: $19.99 Phone Bill: $46.49 Server: $49.95 Electric: ~$30 —————— Total $1346.43

My Total Net Worth

By on May 23, 2010 in Personal Finance | 0 comments

Brokerage Account #1: $15,000 Brokerage Account #2 $40,000 ($21,000 in Roth IRA) 401(k): $20,000 Brokerage Account $3: $2,500 ‘6 Months Living Expenses’ account: $1,400 Credit Card Debt at 0% Interest: -$3,300 ————– Total Net Worth= $75,600 $924,400 away from my goal.