Friday, July 5, 2013

An Update and Explanation

I have two blogs. This one is newer. The other blog is over at I'm a regular over there. I'm not sure why I haven't kept this one going as well. I think it's because you, the reader, aren't commenting here!! Of course, you aren't commenting, because I'm not writing anything. It's a circular problem!!

We are currently saving over 15% of our gross income for retirement. Two thirds goes to max out our Roth IRA accounts. The remaining is automatically saved in my husband's TSP account. We are saving $334 per month towards our girls college educations. We have our mortgage which was taken out a year ago this July. It is at 2.75% interest, so you won't see us refinancing anytime soon.

With interest rates at an all time low, I have recently begun opening credit cards to take advantage of the bonus offers and rewards. I realize that this may seem odd based on my blog name of Creditcardfree. That name was established five years ago when we had eliminated credit card debt from our lives, including all credit cards. It was the right thing to do at that time in our lives. We lived on $40K per year, and didn't save much of anything for retirement. We now live on just under $100K per year and save significantly more money. We have more disposable income as well. The goal in opening the credit cards is to increase income in a way that just can't be done with low interest rates.

Opening credit cards is serious business and is only for those of us responsible to pay them off in full each month. I definitely don't look at the credit as extra money waiting to be spent. That is a dangerous line of thinking. We will activate the cards, spend the minimum, pay off the balance in full, redeem the reward and close the account. And repeat until there are no cards to open or bonuses to obtain. I currently have three cards open in my name. Those cards will provide $250 in cash and $250 in gift cards. We will then open three or four cards in my husband's name and repeat the process. He likely will get an additional card offering $100, that I wasn't able open. Thus between the two of us, we will 'earn' $600 in cash and $500 in gift cards, simply by spending money on things we already do everyday. That is way more than we would earn in a year on our money market savings account.

We have cash from the sale of our home last year equal to over $24,000. We have paid down $4315.30 on the principal since our first payment on September 2012. The loan is a VA loan with zero down. We were eligible, rates were and are still low, and we wanted to get into the house as soon as possible and were not sure if we would have the cash from the sale of the original house at the time of closing on the current house. We would have had it, but again we didn't know then. For now we are holding the cash. We may decide different later.

So it right now we are just looking at increasing cash and paying down the mortgage even if only in small amounts. I made my first EXTRA principal mortgage payment at the beginning of this month in the amount of $56. It's not little, but not a big amount either. It all adds up.

Do you pay extra on your mortgage? Do you have a set amount? How do you determine how much to send in to your mortgage? Are you taking advantage of credit card bonuses? 


  1. This is Wino from over at SA. I see that you have a VA loan. I tried looking in to those a while back, but I kept seeing some blurb where I'd have to pay some fee equal to like 4% of the loan amount for the "privilege" of using the VA benefit. I really went no further. Can you expand on that fee, and what it means/costs?

    1. Hi Wino! Thanks for visiting over here. Yes, the VA loans have a fee, and the percentage varies based on how much you put down, whether it is first use or not. The fee can be rolled into the loan and is deductible in the first year. It is similar to PMI for conventional loans, but is paid upfront. Here's a link to check out for more information:

      I don't know that I will ever do a VA loan again, but overall it has been fine and we have a very low 2.75% rate for five years, which about as long as we expect to be here. So the low payment, plus the fee, still puts us cheaper than renting something similar in this area.

    2. Thanks for the quick reply. Yeah... that's about how I remember it. It seems I will never use any of my VA "benefits" unless I become destitute and homeless. I was promised benefits when I went in, and in most regards, the US government has reneged on all of their promises. There was no "fee" for VA loans when I got out, and I'd already fulfilled my end of the bargain. Now, the USG can change the rules after the fact.


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