They Don't Get The Hint...

As I caught up on mail over the past few weeks I noticed something...a slew of Credit card offers. Now this is nothing new as credit card companies are trying to find anyone with a pulse. It costs over $30 (probably closer to $100 now) to acquire a new credit card customer, and most of those have to be rate flippers.

So like I said nothing really new, except that I noticed I am getting bombarded by Chase Visa and American Express. I am now getting multiple offers...per week from both of them. It costs, even with great marketing consolidation and bulk, probably between 40 and 50 cents to contact me, just through the mail! $20-30 per year in junk just to me!

Now I know I can save trees and my mail carrier and probably kittens in a third-world country by blocking my adress either through the DMA (Direct Marketers Assc) or True Credit, where I get my credit report, but truth of the matter is I like to see the offers.

One, it is a great early warning system about how your credit ranking is currently. The offer reflect your credit FICO band...I have crept into the 700 band now, so we are getting pretty darn good offers, but not the Captain Insano ones (you need 720+ to get those). Second, I like being able to weight moving debt around if I can save money and I am not above call my card company and grinding them for a better deal.

So we dance...

Dance the "I may ask you out, but I am waiting for a better looking gal (or fella for the ladies)" sort of dance. However, if they want to save some money I will tell them NO for $10 :)

How's your mailbox?

LifeLock = Life Crock?

I was reading some of my favorite blogs and I came across a post about how the blogger had just signed up for LifeLock and they were very happy to have their credit protected for $198/year for the family. Now, I applaud taking extra measures to protect yourself, and I had heard the radio ads so I was interested in what this was all about.

But after I read the post, and then checked out their website I was concerned.

Here is there 5 point plan from their website:

Here is what LifeLock Offers You

• Proactive Identity Theft Protection
• Reduce Junk Mail
• Reduce Credit Card Offers
• $1 Million Service Guarantee
• Only $10 per Month

The only problem with that is that is a free service that the credit bureaus offer. People can easily place a fraud alert on their own account, for free, by calling Experian at 1-888-397-3742. A Fraud Alert blocks your name being rented to Credit Card Companies which reduce the junk mail, the proactive protection is LifeLock working with Experian to set the free lock.

So what you get, is the $1 million insurance policy. $198 for $1MM in protection isn't crazy, but like a bad potato the deeper I peeled the more rotten this looked to me...

It must work the CEO gives out his Social Security Number!

Well sort of, this protects you from someone opening a regular credit card at a bank as they all use the big clearing houses like Experian. Actually after the ads hit CEO Todd Davis WAS hit with identity theft as this Phoenix New Times piece explains further. He found out when a collection agency contacted him about a $500 loan he took out and didn't pay on, surprising him as he never took out the loan!

Other disturbing things came up as well. Apparently the Founder of LifeLock Robert J Maynard's story of starting LifeLock didn't check out either. He was arrested because of HIS own gambling debts not due to identity theft, in fact his own father accused Mr. Maynard of committing Identity theft...on him!

After that story hit in May, Mr Maynard resigned from LifeLock and is no longer involved in the company.

So how did the Identity Theft work out for the current CEO Todd Davis? It did get resolved...the company hired an outside firm to fix it!

Too many warning bells for me. Run Forrest!

Detective Racer X...out :)

College the Poor Kids Way

Mrs. Micah featured a post recently about a sister who was talked into co-signing for her sister's student loans. Not surprisingly this did not turn out well. But it raises an interest point. Many of us are ill prepared for our financial life when we go off to college, or on our own.

Oh sure we think we are. We get signed up for credit card, and maybe even get a FREE t-shirt for signing up! We probably then only use the card for emergencies...no pizza or beer left in the house! Taking our girlfriend out! Maybe even rent once or twice.

Pretty soon that one is maxed, bummer, luckily you get a second one to help pay the first minimum payments. If you are lucky this ponzi scheme keeps up until you leave school and get a real job. Now you are saddled with big student-loans and credit card bills!

Some kids are "lucky." Their parent fit the entire bill down to spending cash and help with those pesky Credit Card bills. They want their kids to have the best start possible. Unfortunately, either situation sets up for potential failure. You either engage in the workforce with pre-made debt chains, or no real sense of how life works.

Our kids won't be like this. First we have made a conscience decision NOT (and I smell the angry emails already) to pay for their education past High School. We will help them with 100% free rent and food, in exchange for chores if they chose to go somewhere close.

Why oh Why you cheap *#$^ !?

Every single kid we knew that went to college on the parent express left school 100% unprepared for real-life, if they graduated at all. They took basket weaving and Klingon 301. They never worked the menial jobs that give you an appreciation for honest work, honest wages.

No I don't want our kids saddled with an insane amount of debt leaving school either. I would rather see them take 5-6 years to graduate and come out 100% paid.

Everyone that I know paid their own way had it hard. But they studied hard and really wanted it. Guess what? When they did graduate they had a huge sense of accomplishment! They, on their own completed one of life's milestones! What independence!

I call this: College the Poor Kids Way!

To do this you can't just throw then in the deep end at 18. You have to make sure they know what they need to succeed in the world. The whys and hows of Credit. The basics of budgeting and money management. Even a bit about investing.

Their first real investment will be in securing more income by having a college degree. Their investment will be in themselves! And what a great investment to make!

In conclusion:

Don't think for a minute that this means we don't value a college education. There are way to many studies that show the value of post-High Scool Education. We just believe that giving the lifetime gift of independance, through life experience, is worth 5-6 tough, but managable years.

(please throw tomatoes..they are softer!)

Be Treated like a Credit Card Superstar

Credit Card companies are raising their rates, service fees and anything else they can, especially those that need to pay their way out of the sub-prime loan mess they created. Guess who is paying for that mess...you. That is unless you stand up for yourself.

In 2004 the average cost of customer acquisition for a regular credit card was $100-$120. A Platinum level customer $150-$200! And this was before the credit crunch. These figures are going up...way up.

It is the law of diminishing utility. Less available good customers are available, as they already have cards, multiple actually. However the credit companies have to still hit their numbers for Wall Street so what did the do, they expanded the available customer pool by lowering barriers to entry. Lower income, lower FICO, etc.. But now that has backfired so what can they do...steal each others customers and charge their current ones as much as they can.

Have you seen your offers lately? Are they getting bigger or smaller? It is a great way to see how creditors see you and your file. Read them! Look at the offers and rates. Are the terms generally improving? If so you are one of those that they want. Now that you know it, it is time to get a little Lindsay Lohan on their butt :)

Let me stop here and explain something...to have leverage, you have to have to be one of those coveted customers. Good (but really doesn't have to be too high) income, good credit (720 FICO) and a decent amount of credit longevity, say 5-10 years of paying regularly and only 35% or less utilization of the credit. If you aren't start working to get your FICO up to that semi-magical 720.

So ,you just got the BofA letter that says the charges are all going way up, what do you do? First really review the changes and see how they will impact you. No use getting upset if they just increased your late fee, and you are never late! However, this doesn't mean that you should call.

• First know what you want, or what you will take instead. - They can't take the charges away, OK, what can they do with the APR% to compensate! Can you get a longer Grace period? What else (bonus points) can they do?
• Call Customer Service - Explain that you do not want to be affected by these changes, and if they insist you are considering closing the account. Usually they will send you right to retention. If not, be very pleasant and ask customer service what they can do, if they say that they really cannot do anything it is policy, etc..Ask to speak to the manager. Once again as pleasant as possible!
• Management - Explain again in detail what was discussed, they will usually have the information, so don't try to stretch the truth at all. They will 99% of the time cough something up. Usually a few APR points to retain you. Bargain for as much as possible! If they just shut you down, explain that you are very disappointed and that you will have to really consider closing the account (But do not close it!)
• Work your Competing Offers - If they didn't do what you needed the next time you get an offer from a competing bank that is close, call them and ask them to beat your deal! For example, "Tom I really like the offer, but I get 3% better from BofA and xyz bonus, what can you do to get my business!"

The point is YOU have the leverage not them, there are a lot of banks that want your business...including your own! Get what is yours and don't just accept your fate! My point isn't to pick on BofA, this is and will happen with all major banks, just remember, if they lose you it costs them $200 to replace you!

Over the course of 20 years being proactive to get the best deal, with a little negotiation, can save your budget and you significant money.

180 Degrees in Less than 180 Days

Simplicity in Kansas suggested in a comment yesterday, taking a look at a post about how my family has changed since we began our journey together in October. A reflection on five changes I have noticed as we work our Success Map and through the Dave Ramsey Baby Steps.

It hit me immediately as a great idea, since a lot has changed in less than 6 months. In fact, regarding finance, nearly a 180 degree turn-around. It might be easiest to explain by listing some positive advances, and contrasting them to how they were being done before.

Change #1 Bill Paying:

• Then: We haven't had a 30-day late pay in a long time, but it was very close. Basically we paid them as they came in without a plan. This led to silly $20, $30 late charges from the cards. It also lead at times charging a payment to a credit card, or having wave after wave of Ninja Bills.
• Now: We track every bill in MS Money including yearly ones and know exactly when we are going to pay them to maximize cash flow and eliminate late-fees.

Change #2 Spending Habits:

• Then: It kind of used to be first come first served! If I wanted to go Golf, I checked to see which credit card had some credit and I was off. The kids would hit up their Mom for everything with little thought of earning or saving for what they wanted.
• Now: Everyone in the house know where a bill is allocated, down to getting a Tea on the way to work. All of us are on allowances, we can spend it on what we want, but when it is gone, its gone! We try to pay with cash anything that we can...oh yeah, the Credit Cards are chopped and haven't been used in four months!

Change 3# Success Plan:

• Then: Don't worry, we'll always make more money...It will work out. Hey, there is the sand, I am going to be over there with my head in it!
• Now: Each person, including the kids, has a good idea to where the money is going. They know we didn't handle our finances well and we are now cleaning them up. They now know that a budget is a lifestyle, not a prison sentence to be paroled from. We all know that whatever we want...we have to save for it. A great example is with the tax return that we are getting. While questions came up about vacations, etc., when I explained that we were putting it away for taxes, everyone understood why. My oldest daughter told me to find the best interest rate, so there would be more for Christmas! (Both Girls are budding CFOs)

Change #4 Attitude Towards Money:

• Then: When my 10 year old daughter was four, she asked for a credit card for Christmas...so she could shop whenever she wanted.
• Now: Just last weekend she said she never wanted one because it was silly to pay extra just to get it now! Today I was with my 7-year old son at the bank getting the cash for our envelope system and he asked if we could go to McDonald's for lunch...just us two. I said sure, but reminded him that since the family wasn't all there, we each have to use our allowances to pay for our meal, because that was fair. He turned to me and said, well, how about I save this for a Bionicle instead...Good choice Son!

Change #5 Stress:

• Then: Never knowing what would turn up next, always waiting for our next check. Everyday felt like a rainy day.
• Now: Never is everything perfect. But the stress level around money is 10% of what it was. What stress there is really due to our understanding of what opportunities we blew by not having our stuff together...

So looking back we really have turned 180 degrees in less than 180 days. We are not perfect by a long shot but we got a budget, planned out our Success Map, are working our baby steps, built our snowball, and the light at the end of the tunnel isn't a train anymore!

If you haven't started, start. If you stopped, restart. If you are doing well, look for improvement! You can do it!

You Need to Develop a Success Map

How many of you have paid off all of your debt before, only to say "Never Again" and then few years later do the same thing? I have. Not to the level I am working towards now, but multiple times I have worked for a bit until I paid it off and then went back to how I charged before!

What's worse is that each time its a bit deeper, isn't it. Well the Credit Card Companies raise your credit line since you paid it off! This becomes a vicious cycle. If this has happened to you before, or it you don't want it to, I suggest you put together a Success Map.

If I look back to all of those times I paid it off just to recharge again, there is one thing that happened each time. I thought I had reached my goal...heck I did, but I didn't reach my end-goal just a stage-goal. This is why I say often that Budgeting is a lifestyle, not a prison sentence to be hopefully paroled from!

This is were I really like Dave Ramsey's Baby Steps, or other guides that help you plan out what comes next. First, you really have to have your goals together. Is it buying a house? Saving for your kid's college? Retire early? Buying your own business? It doesn't matter, but you need to plan for it now, before you have paid off your debts, because you need to apply that same drive and moxie that killed those debts to the next project.

For us here it is:

1. Emergency Fund - Done
2. Pay off all consumer debt - In process
3. Save 6 months expenses -Next
4. Fully fund Retirement accounts - up to 15% of gross
5. Pay off house
6. Invest all available funds
7. At $1 Net Worth -Buy own business

You can go to step 10 or beyond, my brother is a planner like that, but the point is to have a plan for what to do next. If you don't, you could be restarting the process at step #1 all over again, and each time it is a deeper hole to get out of, with less time to do it.

So set your plan up soon if you don't have one and make sure that you review your goals frequently enough that they still match where you want to go in life, before you get there!

Personal Finance QuickTake: Fed Cuts Rate 3/4%

Early this morning, in a surprise mood, the Federal Reserve cut the Federal Funds rate by a whopping from 4.25% to 3.5% . A cut was expected at the next meeting, but by doing this they obviously are showing that they feel the economy is headed south ...fast!

The cut is not only surprising due to the timing, but also the size. .75% is an outsized drop at the Fed where the have been making small .25% cuts.

Unfortunately the market took this as further evidence that the economy is in worse shape than though of earlier. The stock market dropped over 450 points at the opening of the day, but bounced back as some tried to lock in lower prices.

What this means to us! It will be very hard for all of these high Interest Rate savings account not to cut the same percent, so it look like 4% is the new 5%! Credit Card Rates should come down a bit, and it may become a good time to refinance your house or debt.

The worst thing to do is panic. You will only lock in losses. Downturns happen and looking at them as potential buying times can secure good returns later.

Remember in budgeting or managing your money it is Buy Low, Sell High...not the other way around!

Personal Finance QuickTake: Credit Card Rewards

As I have said many times, even though there are cash back and other rewards available, for most of us it is a slippery slope that leads us back into overcharging more then you can pay off every month and enormous fees.

That being said, if you are going to use them, or are using them for work, get the most out of them you can. It can cost a credit card company more than $100 to get a new customer through the process of signing up. That is why every major card company has a good sized retention department to try to keep you as well. But as this story from Yahoo Finance states, half of people enrolled never collect their points/rewards!

Talk about money being left on the table! They get you to hold a balance, then you don't even get the reward!

Some of these rewards are never retrieved since we might not find anything we want. I had this issue with my CitiBank card. I kept saving our ThankYou points for the enormo-dome sized TV, meanwhile we probably would have been better off taking the gift cards and using that for holiday spending. (Actually we would have been better off not charging at all!)

Here are a couple quick tips:

1. The longer you hold them the more likely you are to not use them - Sure the vacation to Mars would be nice, but are you really going to get to the 2,000,000 point minimum bid? Probably not. Get the $50 gift card to Home Depot and fix your deck!
2. Point on Business cards -All it took was me paying the $75 to join and my company let me keep my American Express Points! It couldn't hurt and it is often an easy perk to give an employee,especially when you are a smaller company. This leads to #2.
3. Always sign up for the Mileage Points on Airlines - I hear so ofter that I only fly 2 times a year...as long as you fly every 18 months you miles won't expire. I did this for years before I became a frequent flyer and I had a nice 30,000 point pool built up when I did get status.
4. Sign up for the Hotel points too - Even if you don't stay to often at the Royal Pacific in Hong Kong, get the card. For having it i got free bottled water and Wall Street Journal.
5. Donate them to charity - Still have nothing that you can do with these? So many United miles that they carry you to the plane? Donate the points. The charities can use them to sell off or for their own travel. Many medical charities will use the miles to fly families to be together!

Overall point is that I wouldn't chase credit card points just to chase them. But is I am going to work my budget and clip a .20 off coupon for Peanut Butter, why wouldn't I take my $50 gift card to Home Depot!

In Managing Your Money; Hope for the Best, Plan for the Worst...

How do you know a crisis is coming? When you aren't prepared for it.



It at least seems like that to me. I would have money in my checking account, my bills paid, so I would go buy something pretty for myself (like a nice Sand Wedge :) ). The next day a bill would arrive from the IRS asking for $1200 I didn't realize I owed them. Scramble time! I would run around, maybe do a Direct Deposit loan at Wells Fargo, use a credit card, whew..all is well. Of course, I racked up debt, blew my budget and didn't manage my money well at all.



I have extolled the virtues of having an Emergency Fund before, but I believe being prepared for success mean, not setting yourself up for failure. Here are my top five ways I have seen me and my friends set ourselves up:

• No Emergency Fund - Enough of me beating a dead horse to death, but I disagree with some that say pay your Credit Cards off first, because you can charge any issue that comes up. This was my fervent believe, but I didn't pay it off right away. Plus I never broke the Credit Card vicious cycle.


• Budgets like a dictatorship couldn't live under - You really want your budgeted amounts to be based in reality. Not, we'll I read you can live on $40 a month per person even though we always spend $150. You are setting yourself up for failure. Nothing wrong in beating your budget! Successes breed more Successes, Failures breed Pop Stars..sorry I meant Failures.


• Not reviewing at least the last two years expenses - You will miss large swaths of land if you don't. Like "oh yeah, I need a car battery every x year, and tires."


• Cut up your cards, but don't cancel your accounts, yet - I disagree with Ramsey a bit here. Bad things do happen. As you are paying off your credit leave the accounts open. This is in case something happens that swamps your Emergency Fund. Not to mention that a big part of your FICO Score is your percentage of available credit and credit length. Better scores mean better rates.


• Expect Everything to get Better in a Month - You hopefully didn't spend it overnight, ingrain the habits overnight, don't expect now that you are working it rain will stop falling. Too many get discouraged by a setback. Setbacks are learning experiences! Embrace them and move forward

As with everything I post I am not a CPA, nor did I sleep in a Holiday Inn last night, do what works for you and your budget, it is the only way you will ever stick to it and that's all that matters...

$1,000,000 and Paris Hilton Shows Up...

LAX Nightclub in Los Angeles paid Paris Hilton $750,000 to show up to their club and party on New Years Eve. The article didn't say how much it paid for her to leave afterward...:)

I actually understand why the Club did it. From a marketing budget perspective it actually makes sense. A hot club has a one to two year lifecycle. You have to get the high paying players in and away from last years "hot" spot. The power of referential selling lives!

This wasn't the only club doing this either. All over LA, Vegas and New York clubs lined up all the "B" talent they could: Ex-American Idol-ers, Ex-MTV VJs and various Reality show winners/rejects.

So I don't blame the club, and if I was the "personality" I would take the money (and so would you). So who is to blame?...consumers. In this case those consumers who believe that their self-worth is tied to where the can get in and where can they can be seen. Often these are 20-somethings that can ill-afford the lifestyle, but thats OK, "Life Takes Visa (r)!"

I am going to let you all in on a secret most marketers won't tell you...You really don't need most of this...merchandise. There is a reason all of these companies spend millions to advertise, cause you spend billions buying what they sell!

"Do I really need this" should be your mantra each and every time you grab that Credit Card. I bet if you ask yourself this, 50%+ (or more) of the time you will say you don't. In order to be successful in Budgeting and Money Management you have to really be able to compartmentalize Needs, Wants and Desires.

Once we do that we free ourselves from our debt chains and really begin living.

That being said I am available next New Years Eve to open your club, for just $28,800 ;) ...

December Final Debt Reduction Numbers...

Well the final numbers for December are in...and we did pretty well in regard to our debt reduction!

As of the end of December our Net Worth Increased $2570!

Here are the December high points:

• Paid off our #6 Snowball Debt! - Already rolled our snowball to our next debt on the list; The State Farm CC, we will now be paying about $100 over the minimum payment.
• Paid off a total of $1122 in Credit Card debt - Two more cards to go!
• Paid off $1191 in Loan Debt - Our consolidation loan has really helped to lower our average interest rate and minimum payments, so more can go into our snowball!
• Added $327 to savings towards 2008 Property taxes - Do not want to borrow to pay this off this year!

Points to Work on:

• Overspent Grocery/Entertainment this month by $100, due to hosting family for New Year's Eve - Well make it up over the next couple pay days
• Overspent Gas Bill -Ninja Bill Taking this out of January's discretionary fund (dining/Entertainment)
• Lots of travel coming up - Make sure to quickly process business expenses!

So we had a great month, especially by not going over on Christmas. The debt reduction will be out of the norm, but was paid for out of a bit of windfall on my check. Once you hit the maximum contribution to Social Security they stop taking it out of your check. In the past we would have spent this away as fun money or on Christmas, but now that we are on plan we took it all and applied it to debt retiring a credit card debt earlier than we hoped!

I don't expect January to move the budget needle as much, as my check goes back to normal and we have picked a lot of the low hanging fruit. I see Personal Finance and Budgeting as a marathon, not a sprint, but it does feel good to run every now and then...

Our Top 10 2008 Financial Goals...

OK, time to put it on the line with our Top 10 2008 Financial Goals. Over the course of the year I will provide updates on how we are doing and hopefully knocking these off of the list!

1. Pay Off State Farm CC - $2836.22 - We only have two CC's left to pay off, but they are both good sized with horrible Interest Rates. This is our current #1 snowball debt and we are overpaying the minimum. I hope to pay this off when my bonus comes.
2. Pay Off Car - $4594.87 - We were overpaying on this loan until we began following snowball payoff plan. This would be really nice to retire this year as it is a $350/mth payment...on a Taurus...doh!!!
3. Pay Off CitiBank Platinum CC - $8989.16 - Our oldest CC. When we got into trouble though they jacked the rate. High $ + High Rate + High Suck factor! I am going to work the Rate down and if my bonus will pay off the first two debts, our snowball may be able to kill this one too!
4. Pay Off all CC debt - This would be accomplished with the above and not charging anything at all! We would still have our Lines of Credit to pay off, but they are at interest rates 66% lower! This would be a big boon to our FICO scores as well.
5. Save 100% for 2008 Property Taxes - $5000 - Don't want to borrow to pay on this one this year. Already saving for it. Hope my neighbor isn't "helpful " again. May fund part with bonus...can you see I am really counting on a good bonus :)
6. Keep Snowball 100% Intact - If we pay off the above debt our snowball amount shouldn't change, but it is easy to justify other uses when minimums are much less...Must protect Snowball!!!
7. No CC use - We will use Debit card were we have to, but it's Cash and Direct Electronic Payment where possible.
8. Increase Average FICO Score to 720 - Current: 692.7 over three bureaus - Need to refinance house in 2009. ARM will end with bang otherwise. As soon as I can afford to , want to move to fixed loan. I will sleep much better. 720 is the basement for the best loans, really want 750...one step at a time!
9. Stick to Cash Budget System - This has been key to not letting us go over budget. However, it is a pain. Our society IS trying to be cashless so they make you go inside to pay for gas, cannot use the self-checkout at the grocery store, etc..
10. Net Worth Increased by $20,000 - This would be a great move and poise us well for 2009.

Our stretch goal for the year - This would be to get to a break even Net Worth. This would be a tough goal given were we are, but if we stick to budget and work our plan we may be able to do it.

Thanks to all for your support in 2007 to reach our goals in budgeting and money management. We can't wait to mark some of these goals off as well!

Budget vs Ninja Bills...

I have talked about Ninja Bills before in the blog. They are when you aren't expecting a bill from somewhere, or a lower balance, then...Bamm! Something comes up that could potentially blow your budget.

Well, for the past three months we have been pretty good about our money management and budget. Nothing popped up and the Ninja from the picture hadn't attacked. Until yesterday.

I am currently hard at work on 2008 budget and goals and got the mail yesterday. We received our gas bill. Now we are lucky in Southern Oregon that it is pretty temperate. Never super cold or hot. This has been a big savings compared to out bills when we lived in Utah.

So imagine our surprise when I received our gas bill yesterday for $280! OUCH! This is nearly $200 more than last month and WAY above our average. This happened due to it being colder and bad thermostat wars breaking out. Well luckily we will be able to pay it due to our more recent ability to better manage our money.

To pay for it we will reduce all of our fun money (dining, entertainment) and take a bit from our Emergency Fund. Given that we all participated, we all pay! Before I would have had to pay for this by not paying another bill, or even worse using a credit card.

So next time you are deciding between putting a little away in your Emergency Fund or Freedom Fund, remember: this guy could be lurking in your mailbox next...

Emergency Fund vs Ninja Bills...

Many self-help finance books discuss the need to have some back-up Emergency Fund. Well for years I resisted, and I am sure some of you are right now as well.

"I have Credit Cards! Why would I stick my hard earned money in a savings account with less then 1% of Interest. I am so much more flexible this way I have the access to emergency funds in my wallet at all times!"

Problem was I was using my card for everything: car expenses, golf clubs, trips, signed pictures of Bradgelina (kidding). I wasn't paying them off every month and often when something would come up I would rob Peter to pay Paul (or at least blackmail him).

For the last 90-days I have had a $2000 Emergency Fund in my Wells Fargo Savings attached to my Checking account. We came up with that amount by looking back for the last few years issues that have come up. Car issues, Home issues, illness and found that while most were under $1000, a couple (car) were closer to $2000. This cushion helped us sleep at night knowing that if most things came up we could handle them.

How did we get it saved up? Basically we paid the very minimum on anything we could, i refinanced a much lower rate on some bills and paid our property taxes and we had some left over. (Before we would of spent this as a bonus to ourselves for being so good!) It took a couple of months with NO extras for us.

But now we have it. This fund is especially great for what I call Ninja bills. When you are first getting your finances together bills seemingly pop out of nowhere...like Ninjas..."Honey what is this bill from a Wine Club?" "What is this old gym bill still being sent", etc..

In the old system Ninjas were deadly. If we had the credit we charged it, if not we would get some stupid interest signature loan until my next (hopefully) bonus.

This is known in psych terms as a viscous circle. No money to pay debt so you borrow to pay debt which you can't pay back because of your debt...

Now we have had a couple Ninja jump out at us, but we have defeated the evil "nomoney clan" with our emergency fund armor.

We broke the circle. Now even when things come up we can handle it. We only use the fund for emergencies (non-shopping kind!). Since then we haven't yet had to touch a credit card!

In the words of Keanu Reeves...we know Kung Fu...

.25% Fed Move vs the Tortoise and the Hare...

So the Fed makes another rate move of a quarter point today. This apparently chapped everyone living in Manhattan 'cause stocks got beat up.

A little closer to home, I wonder how fast all of the savings rates will flip vs the rates on credit cards mortgages, etc.. I bet before I can zap my lunch in the microwave at work we'll see a couple major banks make a move regarding savings rates. Those same banks will probably make a move on lowering my credit card rate in 2108!

One of my goals for January is to contact all creditors and re-negotiate all of my rates. It is worth a shot and my FICO scores are climbing, so...