Opportunity for You to Earn $50

Earlier this month, I opened a Capital One 360 checking and savings account for some bonus money. $176 to be exact. They are still offering a bonus for opening accounts. Right now the 360 Checking is $50 cash (taxable) for making 3 debit transactions within 45 days. No minimum deposit and no fees.

If you want to sign up for some free cash to pay down debt or save for a goal, I'd be honored if you use my referral link. I do get $20 if you open the account. And if you read my blog often enough you know that I will put that money to good use!!

The link will take you to a page like this, which shows they are offering various bonuses for different accounts.

I think a separate bank account is key if you are looking to save money and not dip into it. I recently mentioned this to a friend and she seemed intrigued at the idea that this would be helpful. Do you have savings or checking accounts at more than one bank? Why or why not? What do you do with your second (and third) accounts?

An Update and Explanation

I have two blogs. This one is newer. The other blog is over at SavingAdvice.com. 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? 

Low Spend Weeks

I have decided to make the first two weeks of this month low spend. Low spend for us will mean keeping our variable expenses down to $450. This is half than we normally allow for this same period of time. This set of time will be a little easier with my husband working out of town. All his expenses will be covered there. Our regular bills and investments have already been accounted for.

I started this self challenge on May 2. So far we have spent $55.72, this included a small grocery trip and a $1 vending machine purchase. I feel fine with that amount so far. I hope it doesn't get too hard, but just tight enough to have the difference applied to some overspending we have done in the last few weeks.

I expect I will need to put gas in my van. There will be one more trip to the grocery store. My daughter came home with an order form to her yearbook, due this Friday. I will pay that out of this spending amount. It is twenty dollars.

I will spend tomorrow making a meal plan for the three of us. I will shop our freezer, fridge, and cupboards first in order to keep as much money as possible in our pocket. I will also make our meals out of inexpensive and healthy ingredients. I will not buy in bulk, stock up, or buy extras while on this challenge.

I think it is a good idea to take a spending break for several weeks a year at times that make it the easiest. Do you think you could take on a low spend week or some type of other challenge to make up for your overspending? Have you done a no spend challenge? How did it work for you? Do you have any advice or tips to share?

Time to Consolidate Investments

I recently realized that I really would like most of our money at Vanguard. You really can't beat their low fees for investing. Right now, we have money in four different places, between college funds and retirement. I would like to get it down to two. Vanguard and my husband's TSP.

The first one I will be dealing with is Fidelity. We only have Fidelity because that is where my husband's previous 401k was and we simply rolled it into an IRA and even moved most of it to a Roth IRA. Currently, Fidelity holds 15% of our total portfolio. And sadly, about 31% of that amount is in cash (which is 5% of our entire retirement portfolio).

My first step is to determine where at Vanguard I want to move the money. Since this is a small portion and we do not have any international investments, I think I will suggest to my husband we put it into the International Stock Index. Most of that will be in a Roth IRA, but about $5K is in a traditional IRA. The nice thing about moving retirement money around, is there is no tax implications...unless we convert the money from the IRA to the Roth. I don't think that is currently in the cards.

I will end up doing most of the work for this change, hopefully online. I will likely need a signature from my husband. And if he can agree to the change tonight or tomorrow than I can get any paperwork done this week, otherwise, I will need to wait until his annual training is over.

We have about $10K at American Funds. This is a loaded fund, which means you pay the broker/dealer every time you make a purchase into the fund...usually 5.75% of your purchase. The fund has to be doing pretty well to offset those kinds of fees! Luckily, we did not pay the fee on these, since at the time my father in law was the broker and he was able to invest us at NAV (Net Asset Value). We have a UTMA account for each of the girls and a Roth for my husband there. We haven't been adding to these accounts, so I think it is time to get them moved, too. I will work on these once Fidelity is completed. I need to think about any tax implications on the UTMA, each of them has less than $1500 there.

A new goal to work on, I'm excited!! Oh, and right now I'm thinking half of our down payment in a CD paying 1.2% for 15 months, and the other half in Vanguard Dividend Growth Fund (VDIGX). If we put less in the fund, we have less exposure to market risk, but still an opportunity to benefit from the market. If we lose money, it could change our plans for housing, but it isn't a huge deal at this point for us. We will be accumulating more cash in the mean time too!

Do you have your investments in one place? If not, how many different companies do you do your investing with?

A Blue Chip Down Payment

I've been looking into high yield dividend mutual funds as a possibility for investing our down payment money for the next house. This would be an alternative to keeping the money in our money market account paying 0.85%.

Blue Chip stocks are those companies that are generally worth billions, thus established in their field, often a household name, and pay steady or rising dividends each year (paraphrased from Investopedia). The mutual funds I'm looking at invest in these blue chip stocks, like Coca Cola, IBM, UPS, and Exxon.

The returns on these funds the last few years are definitely better than the 0.85% we are getting on our money market. Of course, the money market account is less risky than stocks. Stocks do fluctuate, thus that risk scares me a little bit given this is a short term investment of 2 years...maybe 3.

I do need to convince my husband it is the right thing to do. I think he will trust my judgement. Thus I really need to convince myself!!

Generally, this isn't something I would advise anyone to do because of the risk, but with additional risk, often comes additional reward. Does anyone reading this know of anything that should keep me from taking the risk of investing in a Dividend Growth fund?

I'm looking at VDIGX and VDAIX, which are both held at Vanguard. Both have 5 star ratings from Morningstar. If we had held VDIGX two years ago, our money would have increased by nearly $7K by now. However, if our two year period was April 2007 to today, we would have lost $6,700 from our initial investment.

The dividends that are paid would be reinvested to buy more shares, and would be taxed just like ordinary income, which is no different than if we earned interest. If someone were to hold this fund in a retirement account, those reinvested dividends are tax deferred until retirement.

I feel positive about the over all outlook, so I think it should be a buy. What do you think? Anything else I should look at?

Thoughts on Debt Consolidation

Debt is a common struggle. Particularly here in the United States. It is readily available to nearly everyone. Some of us get great rates because we pay our bills on time, take out reasonable amounts and pay them back. Others have a hard time repaying their debts for various reasons, which range from unexpected expenses, low income, lack of organization and so forth. Those individuals are usually charged much higher interest rates. This can make paying back debt even slower, or harder depending on your point of view.

You might be reading this because you want to consolidate your debt. You might be searching for a miracle to solve all your financial problems. The truth. Do you want to know? The truth is there is no miracle. Sure a few people have won the lottery and a few people received an inheritance. Lucky them, right?

Lucky you, I say. I think you were brought here to read this blog post, because you are looking for a way to fix where you are. That is smart. That is a sign of someone ready to face the fact of where you are financially, and make a plan to change your finances for the better. You are strong, you are determined. You can make the changes you need to fix your financial situation.

Now, I am generalizing, but I really do think everyone can get out of debt. I am not a fan, nor a promoter of bankruptcy. However, if you are determined to make things better, I am a promoter of consolidating debt. If you can, especially if it will save you money AND you won't turn around and rack up more debt.

Hopefully, you have already cut back your lifestyle to make room to pay off some debt. I hope you only have a cell phone or a land line, and not both. I hope you buy used when you can. I hope that your priorities are food, utilities and shelter before all else. You don't need a new lipstick, a new shirt, movie, golf club, or another beer. You don't. You will survive without all the extras. You are on  a new path, one that will lead you to a secure and less stressful future. Sounds nice doesn't it?

So if you have many, many, many bills and they are coming in the mail every day or every other day your financial life is chaos. You need to do some consolidating. Don't use a company to do this. You can do this on your own for free. You need to look at what you owe. You need to know the minimum payment for each debt. You need to know what interest rate you are being charged.

Next, you need to think about what your options are for getting additional credit. This could be the equity in your house. A credit card you already own, or a new one. Student loan organizations often put loans together under a special consolidation plan. You may be eligible for a private loan from your bank or credit union. I am going to ask that you do not borrow from your 401(k), also known as a 401(k) loan. There are many, many problems there. Also, please DO NOT go to a payday loan lender. This is too expensive for ANYONE and in my opinion should be illegal.

I would guess that your highest debt balance, and likely your highest interest balance are the debts that are freaking you out the most. Am I right? I would look into getting this one refinanced or moved in some way to a less expensive option. Tell any lender that you may be speaking with what you are trying to do. You are going to use their loan to pay off another one of your debts. Tell them which one and why. If you can get this most scariest of debts into a lower interest loan, most likely your payment will be less, or you will be paying it off over a smaller period of time. Do not accept the terms of any loan if you will not be able to meet the payment. This consolidation is probably not worth it in that case.

Some of you probably have lots of little debts. A $100 for the dentist, another $55 to the vet, $120 to a department store, make that four department stores. Oh, and that credit card you got to buy new tires. And there are several more too, right? It's can be hard to make payments on ALL of them all of the time. This is where another loan could be opened for an amount equal to all of these debts, so that the cash from it can be used to pay all the little debts off in full. What a relief right? Yes. But you have to find a loan, again, where you can make the payment. If any of the little debt amounts you pay off are on any type of credit card...you must close and cancel the card. You don't want that card to tempt you again. Of course, it won't because you have stepped back your lifestyle and you don't need new shoes, right?

I will tell you that when we had some credit card debt, I was always looking for a new card. Any card with zero interest was a possibility, even if I only had that rate for a few months. It was that much less money that I had to pay to someone else. I wanted every dollar I could squeeze to go to pay off debt. I know that my husband had multiple student loans at one point. I know that we did opt to consolidate them for what was a very low rate at that time. I kept making the same payments, even though the minimum was much lower. That put us paying it off long before the loan ended.

Consolidate your debt if you have to, especially if it helps with your cash flow, but do it smart. And don't ever get yourself into so much debt again that you are worried about making the payments.  And if you can't find any better credit offers, that is okay. Just take it one debt at a time. Pay off the vet today. Next paycheck find another debt you can pay. If there is some you can't pay, then so be it. Take it one debt at a time. If you can send $5, do it. Even small amounts indicate to the lender you are willing to make payments. Make a plan and keep moving forward!

Financial Tip: Check Credit Report

Since we are currently debt free, except our mortgage, we don't have much need for credit. However, I still think it is important to check it with some frequency simply because of identity theft. And it is also far better to find out about any errors before you need credit. Before the need arises you have the time to take care of any disputes or items in need of correction.

I spent about 10 minutes last night checking our credit reports online at annualcreditreport.com. That is the free site where you can get a copy of your credit report from each of the three reporting agencies. You can get one free from each of them every 12 months. I actually check just one of them every four months, so that I'm checking with some frequency, but still just getting one from each agency per year.

It had been awhile since I checked. To get back on track, I decided to put reminders on email calendar for April, August and December. I also indicated in the reminder which agency to check with.

All was good with this check at Experian, with a small exception. I noticed that my husband's report showed a previous employer that he never worked for. He did apply there years ago. I asked that it be deleted and as of this morning that report no longer shows that employer. Easy!!

Do you check your credit report on a regular basis? Do you have a system to remember to do this simple task?