Week #16 - Charge It!

If you read last weeks blog then you know that I gave you a little bit of homework. I asked you to think about the credit cards you have, why you use them, when you use them and what you get out of having them. Credit card debt is a huge problem for a lot of people and usually once someone gets out of debt, IF they learned their lesson, they are very hesitant to ever use cards again. I realize there are some people that can't handle the huge responsibility of having credit cards and if they know that a certain amount of credit is extended to them they are going to max out the card, but there can be a happy medium.

I actually started applying for credit cards before I was even of legal age to do so because I would be at the mall with friends and there would be some table set up where if you applied for a credit card you could get some kind of free gift. Usually it was some kind of candy or coupon for something free, but at 16 years old anything free was awesome! I remember the first credit card I had as an 'adult' had a $300 limit and at the time it may as well have been a million because I could never have paid a $300 bill! I think I only used the card a couple of times, the first being to buy some action figures that I really wanted but didn't have the cash for. When I got the bill, a whopping $35, I was panicked, but I paid it and didn't touch the card again for a long time.

For many years I continued to apply for every card just to get something free. I would be even more excited if it was a card that had a cool picture on it or had some gimmick to it. At some point I stopped getting new cards but never did anything with the open accounts until someone suggested I close the ones I didn't actually use. In one day I canceled over $40,000 in open credit card accounts! It was around that time that I smartened up and decided that I would keep credit cards for emergencies the occasional purchase. I kept only 2-3 cards with higher limits thinking to myself that if need be I could get out of almost any situation using the credit I had.

 

 

Currently my credit card use is a weekly occurrence, but it because I have finally smartened up to the point that I only use credit cards that pay me to use them. I use my cards for things that I would normally use my debit for, like gas and food and I just pay the card off before any interest is accrued. I use either my Discover or my new Citizens Master Card that offer cash back of 1% or more on every purchase. After only a little over a year of using my Discover card I had earned over $300 in money that was completely free because I had never paid interest on any balance on the card. I recently switched from the Discover to the Citizens Master Card because the Master Card offers 2% cash back on all gas purchases and 1% on everything else where the Discover is 1% across the board and why not get an extra 1% on some stuff if I can!

What I'm suggesting to you is that you use your credit cards, don't just keep them locked up for emergencies and don't fear them! You can be responsible enough and you owe it to yourself to earn free money when ever you can! Start slow and pay the card weekly pretending like it was your debit card if you have to, but don't let the free 1-2% slip through your hands!

 

 

Ok... that was kind of long, but hopefully you take something from it. Now lets get down to this weeks nitty gritty. I got a paycheck for $602.79 this week, with $38.26 taken out pre-tax for my 401k. It being the 3rd check of the month I decided to put it in my mortgage account, but I'm also going to take $50 off the top and put it in the account I use to pay the interest free loan I've told you about. That left $552.79 going towards paying my mortgage for the month. As usual I also made my weekly $20 vacation transfer and since I had Monday off for Patriots day I made a trip to the supermarket with my deposit bottles and added $3.35 to the piggy bank on top of the fridge. It was not a bad week savings wise actually!

 

Here is the week 16 wrap up:

$38.26to my 401K

$50.00 to the quarterly loan payment account

$20.00 to my vacation fund

$3.35 to the piggy bank

which makes the 2013 totals:
$483.47 in my 401K
$320.00 in the vacation fund
$30.25 in the piggy bank
$150.00 in the quarterly loan payment account
$50.00 in my vet bill savings
$259.95 in my money market
$259.94 in my car account

 

 

Last weeks blog had mentions about being prepared if you lose your job because we just experienced a lay off at my work. There were some suggestions made by readers that I wanted to share with you...

 

- Try to pay ahead 2-3 months on your mortgage

- Stock up on non-perishable dry goods (toothpaste, toilet paper, shampoo, cleaning products, etc)

- Don't make any huge purchases if you fear a potential lay off or downsizing at your company

- Try to keep credit debt as low as possible

- Keep an active and updated resume on hand

- Try to keep a couple of months worth of cash on hand if you can

- Grow your own food

- Can or prepare your harvest for future use

- Compost your waste