July 2008


In May 2008, the Fed issued 4 new proposals designed to eliminate some practices from the credit card industry. They’re also proposing better disclosure of their rules to the customers. Below is a brief list of the proposed policies, detailing how it is currently being handled and how they want to regulate it.

Ben Bernanke, Federal Chairman, stated: the proposed new regulations are “intended to establish a new baseline for fairness in how credit card plans operate. Consumers relying on credit cards should be better able to predict how their decisions and actions will affect their costs.”

1) Credit card issuers can’t raise interest rates arbitrarily, they must have a legititmate reason. (more…)

If you already have credit cards, looking to get a credit card, trying to pay down the balance on your cards or using your cards to stay afloat month to month you must read this post!

According to the Federal Reserve Statistical Release of May 2008, outstanding consumer debt reached $961 billion for revolving (credit card) accounts! Which translates to the average American carrying a credit card balance of $8,000.

It seems in our society we must have credit cards to survive! I don’t advocate using credit cards, cash is absolutely the way to go. However, if you do have/need them let’s at least be smart about the kinds of cards we do have.

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In an effort to reduce my debt load, I have taken an additional job in order to increase my accelerator margin payments. The good news is, in the 4 months I’ve been doing this new routine we’ve paid off four credit cards as well as a vehicle loan. The great news is that this new job offers a SEP account. Well, what exactly is a SEP account, is it just a different term for a 401k? Let’s take a look and find out.

Employers will typically offer one of these plans: 401(k), 403 (b), TSA, SIMPLE, SEP, or Keogh.

401(k) is the most popular type of employer sponsored retirement plan. This is also the most complex and costly to maintain for the company. The employer can elect to make a matching contribution to the employees salary-deferral contribution . Within 401(k)’s you can take out loans, set up a vesting schedule, and profit-sharing plan. Maximum annual contributions are $15,500.

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Having a hard time living within the constraints of a budget? Dislike the idea of budgeting altogether? I have a solution. I tried budgeting for six months and failed all six months! Not once we were able to stay within the limits. Which, to be honest is quite discouraging and makes you want to forfeit the whole idea. So instead, I have redirected my focus to TRACKING spending.

Tracking lets you know exactly where every dollar is going, how much gas you’re using each month, if you need to adjust the thermostat settings, maybe you’re just overspending in one category and underspending in another. I became so immersed in crunching the numbers and populating my excel sheet that I went through my backlog of statements up till February 2006. I wanted to have a clear picture of our average spending each month as well as annually. (more…)

As you may have noticed, yet again, my writing has been sporadic to say the least. Back near the date of my last post, I was reviewing our financial situation in anticipation of large upcoming expenses. Towards the middle of March, I became fearful as I began calculating all these expenses, my brother’s weddings, my husband’s brother’s destination wedding, paying the income tax we owed, dental work that totaled $1500, major car repairs…

I had also just finished reading Dave Ramsey’s book, The Total Money Makeover. The testimonials of grown men earning six figures having to pick up pizza delivery jobs to eliminate debt hit home with me. I knew there was no way we’d be able to afford any of these upcoming expenses (more…)

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