Too Much Nonsense – My Personal Blog

My background on finances is just what I have read. It was the Suze Orman books that got me started thinking about our overall finances and credit card debt. In fact my ex-wife actually read her books to. I thought she was following along with the advice, but I was oh, so wrong. So keep in mind I am not a financial expert, I’m just passing along my story and what has been working for me.

Luckily for me I was one step ahead of the finance game when she lowered the, “I have a new boyfriend” boom on me. About seven months ago I had a traumatic brain injury. (I’ll post the story later, although I almost died, the events leading up to it where quite hysterical) After being released from the hospital I had to stay at home for about 3 months. While at home my ex-wife kept telling me we had no money. That’s all I heard. I sat there pondering….., together we take home about $5500.00 a month, now that’s take home, not gross. Our mortgage is only $953 a month. We did have about $40,000.00 in credit card debt, but I know she was only paying minimum on them. There is only 3 of us in the house and our 17 year old doesn’t eat that much. Something just wasn’t right.
So after about a month of lying in bed and watching every show on the history and discovery channel I felt well enough to drive. So I cruzed down to staples and picked up the Deluxe edition of Quicken. Got home, installed it and for the entire month of October of 2008 I just tracked what she spent money on. I started feeling the resentment, she always had a smart remark when she handed me the days receipts. I didn’t use any of the fancy tools because without good data they would be useless. After diligently inputting every dime we spent and categorizing each purchase for the month it was absolutely freaking amazing. I was shocked and awed at the way she spent money. $800.00 on groceries, there is only 3 of us, $500 on household items, her countless trips to the dollar store buying useless items that I would throw away 3 days later. Oh, the soap, we have enough soup, shampoo and conditioner in this house to last us the next 10 years.

The most amazing discovery that I made was how she had been tracking our money for the last sixteen years. She wasn’t. Her check book register was all out of whack, you could see where about every three weeks she just started over. I asked her how she was keeping track of everything? She said that she did it all in her head. Just great, she kept it all in that inept little head of hers. Now this is my entire fault. I chose to live in ignorant bliss about our finances for the last sixteen years. I have only myself to blame.

Financial Software
So, needless to say, I took over the finances. With the help of the financial software, because believe you me I am no math wizard, I put the family on a fairly strict budget (Groceries cut in half and household cut down to $75 at the most amongst other things.) This pretty much eliminated her soap buying excursions and trips to the dollar store which is probably the real reason why she left me. Within four months we were no longer living paycheck to paycheck and we were on track to pay off our credit card debt in less than 4 years. Pretty damn good. I was impressed.

I strongly urge people to use some kind of financial software. For me, it was a god send. The software gives you the ability to analyze your spending habits. It will help you determine where you can make some cuts. The financial planners are also extremely useful. The most useful tools for me are the cash flow graph and the Credit reduction planner. With the Cash Flow graph, once you have input all of your upcoming bills and paychecks into the software you have the ability to look out weeks, months or years in advance. If I’m thinking about making some big purchase I can input it into the software and look months down the road to see how it’s going to affect my finances. The debt reduction planner makes it very easy for you come up with a debt reduction plan that is workable for your budget and paying off your credit card debt a year or more in advance.

When you first get the software it can be a very daunting task to input all of your finances. The key is to remember to just set up your checking account first. That’s easy. This way you can start tracking your daily spending habits right away. As for everything else, just take your time. The software is no good to you until you have at least a full month worth of data. Because I was working with a limited brain at the time I only entered one or two accounts a day. By the end of the first month, everything was entered with minimal stress and I was able to take full advantage of the software.

Purchases on Credit Cards
I stopped. Zero, Zip Nadda. If you put yourself on a debt reduction plan it defeats the purpose if you still continue to your credit cards. So stop, unless it’s an emergency.

Credit Card Consolidation – Take Advantage of Zero Percent Credit Cards
With the credit market in the tank at the moment these 0% credit cards are harder to come by. But as the market rebounds we’ll start seeing more, in fact I received one today that promises 0% until June 2010 from Bank of America. That’s 11 months of no credit card finance charges. Depending on how much you owe and what the finance charge is, you could potentially save hundreds if not a thousand dollars or more in finance charges alone
The critical thing you do not want to overlook is the fine print. Yes, you actually have to read it. You don’t want to pay any kind of service fees. You need to see how strict they are about payments. Are they going to bend you over with 28% interest if you’re a day late? How much in minimum payments do they want. It’s usually 1 or 2 percent but it could be higher and you need to make sure you can make that monthly payment. Make yourself completely aware of all there restrictions so you don’t fall into a trap. That just defeats the purpose. Things will get a little easier when the new credit card bill goes into effect , but trust me there will be a whole new set of pitfalls too look out for. So READ THE FINE PRINT! Here are a couple of links to some good credit card rating web sites where you can find those low finance charge cards:

Credit Rating.Com
Credit Card Guide.Com

Close Those Credit Card Accounts
Once you have transferred the balance of a high interest card to a low interest card close that high interest credit card. Too many open credit cards could adversely affect your credit rating.