I have a hodge podge of things to talk about today...the first being Dave Ramsey. I'm not a big fan but I did read a review of his new book and in his debt plan he believes you should pay down your debt from smallest balance to biggest...ignoring the APR. I gathered that his argument was the emotional satisfaction of zeroing out cards would keep you motivated to continue to follow the plan. It's not a terrible idea to me IF and only IF the APR's are similar across all of your cards. I wonder if anyone is following this idea and can share some feelings on this (I know the numbers people...me being one of those...are a little miffed at Dave's trade of emotion for interest. You will feel better...but you'll pay for that feeling IMO!)
Next I got an email from Fair Isaac (for those not familiar with Fair Isaac they are the creators of the most widely used credit score...the FICO score. They are the authority when it comes to your credit score.) about what to do with old or unused credit cards. The message was plain and simple. Do NOT close any unused cards becuse it will more than likely damage your FICO score. I've learned from personal experience that utilization is the key to success with FICO and that's why closing your unused cards is a bad idea when it comes to your score. If you added up all your balances and then added up all your limits you could divide the balances by the limits and get your utilization. The higher the number the more it hurts your score. It's the same with individual accounts...the higher the amount to limit the worse off your FICO score will be. It's something to keep in mind if you're mortgage shopping or car shopping and you know you'll need a loan. Now there are a lot of variations of the score (Auto enhanced, Mortgage enhanced, etc.) but you can pull your Classic FICO on MyFico.com (and trust me this is the ONLY place you need to pull your score from if you want to know where you stand!) I'm not advocating people to go out and just buy scores but if you haven't ever seen it or are planning to buy a car or house in the very near future and are not paying cash for it I'd advise you to pull your scores from there. There are a lot of scores out there that claim to be your actual score but MyFICO is really the only place you can get all three true scores in one place. CPPSAVINGS code will get you 20 percent off each score if you need to go over there.
Spending today should be zero but we'll see what happens. Tomorrow for me and the wife is payday (yay!) so it will be a refill on the cash stash and we'll go into what I'm going to do with the money (I'm still figuring that out knowing I have a mortgage payment in two weeks that will eat up a sizable chunk of the next pay period's paychecks so I need to account for everything we'll need to have money for over the next few weeks to make sure we're covered 100 percent.)
Oh and in about 45 minutes an ebay auction of mine is ending and the current bid is around $150 for an old laptop I'm selling (with 25 watchers...so hopefully it keeps going up!) I could use a little bit of a cash burst before payday tomorrow to help attack cc debt!
***Update***
The laptop sold for $230! This thing was just gathering dust so I'm glad someone bought it. So 2 items down and we're at $239 made on Ebay! The buyer also paid immediately with Paypal so the money is in my Paypal account and I'm sending it to my checking account.
I paid the ebay seller fees today ($12.50) so taking that from the $239 we still end up +$226.50 in the black. If I take the 12.50 from the $44.26 that leaves us with $31.76 to last until tonight!
A cornucopia of stuff
March 6th, 2007 at 04:29 pm
March 6th, 2007 at 05:12 pm 1173201153
When we were in debt, I remember realizing that after taxes and mortgage, our net take home pay for one year would cover our entire debt: In other words, we could wipe out all debt (including car payment) in one quick year if we didn't have to eat or buy clothes or gas or heat the house! When I looked at it that way, I started playing a game: Can we spend less this week than we did last week? And we tracked it on Quicken. We raised deductibles on car and house insurance, bought groceries in bulk, borrowed movies from the library instead of paying to rent them, and so on until we'd pared back each week as far as we could, and it was actually fun. You can get kind of smug, actually, when you've pared back really, really far and are enjoying the process; it's kind of the opposite of feeling deprived.
I have my own new little blog about our current efforts to scale back:
http://20dollarsaday.livejournal.com/5595.html
March 6th, 2007 at 05:53 pm 1173203616
March 6th, 2007 at 06:16 pm 1173204971
March 6th, 2007 at 07:03 pm 1173207792
Grant thanks for the input. It just bugs me that the banks are still calculating interest on the higher balances while you're paying down the lower ones. I'd think you'd end up having to pay a lot more in interest charges on the higher balances once you got caught up to them (but it makes sense that you could get to them quickly by having less actual cards to pay on...something to ponder!)
Ima is being silly me thinks!
March 6th, 2007 at 10:36 pm 1173220614
March 6th, 2007 at 10:38 pm 1173220687
March 6th, 2007 at 10:38 pm 1173220717
March 7th, 2007 at 03:43 am 1173238994