Break the Pay Check to Paycheck Slump

Holy cow! Where does the time go? I mentioned in my last post that I had been busy but I hadn’t realized that almost two full months had gone by since I posted. I’ve been working on a house that I purchased for resale and we’ve just about got it done. I’ll be posting more about it later but I thought would at least try and explain my absence.

Let’s get back to the task at hand. I read this article on the difficulty of living from paycheck to paycheck in today’s society and made me realize, even more, the importance of getting out of the paycheck to paycheck cycle.

With the rising cost of fuel leading to $80.00 tanks of gas and enormous heating bills to come this winter building a little cushion in the checkbook becomes even more crucial as we head into 2008.

While I still maintain that the key to extra cash flow is eliminating debt there are still many other things a person can do each month to reduce spending. While many of them have been discussed already on this site here are few ways you give your pocketbook some relief at the grocery store.

I’ve said it before on this site and its worth saying again. Buy your groceries for the month and not just for a week or two. Every time you go to the grocery store you are tempted to buy some things we don’t need. The fewer trips we make per month the less we spend on things that aren’t a necessity.

Make a grocery list. Go to the grocery store with a plan and stick to it! Having a list helps keep you focused and away from the impulse stuff. Also if you’ll sacrifice things like soda drinks for Kool Aid and cut back on junk food for two or three months you’ll be shocked to see the savings it brings you.

Compare and use coupons. Buying your groceries at the convenience store/gas station is a bad idea. While the local 7-11 may be “convenient” you are going to pay more for just about every food and beverage item then you would at the local supermarket.

Do your homework, find out where the deals are and shop there. Every city in America has the mega supermarket with the mega savings that pride themselves in putting the smaller stores out of business. Shop there! Take advantage of their “Rock Bottom Prices.” Sure, they’re going to put Ted’s Corner Mart out of business but Ted isn’t feeding your family and paying your bills. Always, always, always take advantage of savings.

Speaking of savings, why do so many people throw away coupons? If I walked up to you on the street and gave you a quarter or a dollar or anywhere in between you wouldn’t just throw it away would you? Clipping coupons from the newspaper or the mail leads to dollars upon dollars of savings.

Like so many other financial areas of life you can build a plan for your grocery needs that works for you and saves you money. It only requires some thought and discipline and the result will lead to extra cash left over at the end of the month.

Almost There!

Things have been so busy lately that I had actually forgotten about this little blog project. I actually am so close to being debt free that I can taste it! I even beginning to think of names to rename this blog (should I decide to do so) once I am done with debt.

Here’s where I stand. My inheritance money from my grandma came in and it was enough for me to make a down payment on a new house, payoff the loan to my 403(b) account and then payoff an 8,461.29 credit card debt.

Here’s the rest of the news and the final part of my plan. To make sure all the taxes were covered one third of my inheritance was held back and will be released to me in April of 2008. I only have one more credit card balance to payoff and will once again borrow from myself using my 403(b) retirement to pay off that balance. Once the last portion of my inheritance comes in I will then pay back the 403(b) and be debt free!

Well, ok I’ll still have a mortgage and a car payment to deal with but that is smooth sailing compared to where I’ve been. My target goal to be totally free from bad spending debt is June 2, 2008. My 34th birthday.

Thanks Grandma!

My grandmother was one of the most influential people in my life. She had strong moral convictions and guided me through several stages of life from childhood to adolescence to adulthood. In fact, the first person I was ever in debt to was my grandmother. She loaned me $500 to buy my first car, a 1981 Chevy Chevette.

In 2001 my grandma was diagnosed with Alzheimer’s and she succumbed to the disease last month at the age of 83. While saddened by her loss the fact that she had a disease that robbed her of her dignity, intelligence, and the knowledge of the great family that surrounded and loved her made her passing a little more acceptable but not necessarily easier.

Then I found out last week that I am getting a percentage of the inheritance she left behind. This totally blew my mind because I fully expected it all to go to my dad but it turns out that the small percentage that I am going to receive will be more than enough to pay off my debt.

Suddenly I find my quest to become debt free coming to an abrupt halt and my grandmother still watching out for me even in her passing.

My grandparents had a farm so while growing up I certainly learned first hand not to count my chickens before they hatch. So, I’ll continue moving on with my own personal debt reduction plan until the money arrives and then we’ll see what happens from there.

Gas Saving Myths

I gassed up my truck today at $3.28 per gallon and I really think I was fuming more that the fuel that I was pumping into my truck. My debt retirement plan is taking a serious hit because of the price gouging of the oil companies!

When I got home I decided to do an internet search on some gas saving tips and I actually came across these myths. I can remember being told some of these as a teenager by my parents.

There have been additives, special magnets and even a pill that has promised to improve a car's fuel efficiency by as much as 30 percent in some cases.

"With all the pressure car companies are under, if one of these inexpensive devices dramatically did improve fuel economy, they (automakers) would be all over it," said Rik Paul, automotive editor for Consumer Reports.

Windows, air conditioning - who cares?

In two separate studies conducted in 2005, the automotive Web site Edmunds.com and Consumer Reports compared the fuel economy of both a sedan and an SUV at highway speeds with and without air conditioning and how open windows affected gas usage.

What they found was no significant difference in fuel economy in either sedan or SUV under either condition.

Some drivers insist the best time to buy gasoline is on a Wednesday, when pump prices have cooled from the weekend run-up when oil companies typically raise prices.

That's true to a point, says Tom Kloza, chief oil analyst at the Oil Price Information Service. Gas prices tend to be higher on the weekend, but there's no ideal day of the week to purchase your gas.

It's probably a myth that goes back to the days when cars were equipped with carburetors, but many drivers believe that starting up and turning off your car repeatedly is a fast way to drain your gas tank.

Because of modern fuel-injection technology, drivers actually save gas by turning off their engine than letting their car needlessly idle, says Consumer Reports' Paul.

There are also some real and practical gas saving tips out there like making sure your tires are properly inflated, removing excess weight, using cruise control and actually driving the speed limit.

Internet Nazis – No Links for You!

I’m more into telling my story than I am into trying to make money from blogging (Not that I wouldn’t be interested if the opportunity presented itself) but I have met several people who earn a little extra scratch through their blogs. Several of us have heard the horror stories from other bloggers who have agreed to use Google Adsense only to be dropped when it was time to receive payment.

The fact that people are looking elsewhere to make money with their blogs seems to be a bit puzzling to the Evil Empire of the internet, so much so that they are now devising a way to punish bloggers and advertisers who sell and buy links.

Google Exec. Matt Cutts explains clearly on his blog that they do not want advertisers buying text links on blogs nor do they want bloggers selling the space. They’ve even gone so far as to set up a system to report when you see paid links.

It all seems hypocritical to me seeing as how Google makes a ton of money from their Adsense and Adwords programs. Both are geared towards getting your readers to click on a link. Here’s how it works. An advertiser pays Google money to place the links on your blogs and you in turn get paid, very minimally I might add, every time a person clicks on the link.

Ummm… isn’t that the very thing that the people at Google are “trying to prevent”? It seems to me that what they are really saying is that you either sell text links through them or you don’t sell them at all. Kinda like the marketing bullies of the internet.

Way to go Google! You just seem to always do your very best to make friends in the bloggiging community. The problem is that no one likes to be forced into a friendship.

Another One Bites the Dust

The loan came through from my 403(b) account and I’m proud to say that I have paid off another credit card. My remaining balance on the credit card was $1,839.70 at 28.24% interest. Paying the minimum payment due ($91.00) would have ultimately taken six years and eleven months to pay off and would have cost me an additional $1318.00 in interest according to the debt reduction calculator.

Instead I took a $1,900.00 loan from my annuity at 5% interest and if I only make the $95.00 minimum payment each month it will take me four and a half years to pay back with only an additional $145.00 in interest. Doing the quick math I just saved myself $1,173.00 in interest.

Now the great thing on top of all this is that with the 403(b) loan all the interest goes back into my account.

Pros and Cons of Investing in a CD

I’m looking at possibly saving up some money to invest into a CD so I thought I would look up a few pros and cons of the investment.

Here are the pros of investing in a CD rather than other investments.

Your money is in a safe place with higher interest than it would get in a savings account. While there isn’t much of a chance of making big money, it is a safe investment.

The FDIC (Federal Insurance Deposit Corporation) insures CDs up to $100,000 so you can be assured that you will get the money back when the CD matures.

You can take a loan out with a lower interest rate than the normal bank interest rate.

The cons of investing in a CD would be:

There is a lower risk, so therefore lower yield. While you can be assured that your initial investment is safe, you don’t have the possibility of earning greater amounts of money that you may earn with higher risk investments.

The CD is susceptible to market fluctuations. While the economy is doing well, interest rates will be higher. There isn’t a need for the government to encourage people to borrow. If the economy isn’t doing as well, interest rates will decrease, allowing people to borrow money less expensively and put that money back into the economy by shopping, adding an addition to their homes, etc.

There is a penalty charged (unless you have a brokered CD) if removing the money earlier than the term of the CD.

The jury is still out on my decision but at least all the facts are on the table.