Sunday, May 15, 2011

Day 216 - Mid Month Debt Payoff Report

May 15, 2011

Day 216: Mid-Month Debt Payoff Report

The first and fifteenth of each month I will update you on the status towards our goal of paying off $60K in one year.

** Check out the Real Time Debt Tracker!!! Keep up to the minute tabs on our debt balance and whether we can pay it off in 365 days! **

To date, we have paid off $46,068 of our debt in 215 days.  In order to pay our debt off within one year, we will need to pay approximately $2,800 each month for the remaining five months.  We average almost $4,000 a month in debt payments so we are way ahead of schedule.

Challenges: We have some significant expenses looming due to upcoming birthdays, bachelorette parties and weddings. Luckily we have planned ahead and already paid for all of the airfare. Even though we have some cushion since we are ahead of schedule on debt payments, we are determined to stick to our original budget.

Highlight: Even though I had an emergency car repair a few weeks ago, it really wasn't as big of a deal as it would have been a few years ago. I paid for the repair out of my checking account as opposed to needing to use a credit card. Then I moved on and didn't think twice about it. I used to freak out when my car went into the shop because I didn't have any extra money available for an emergency. I 100% prefer the worry-free version of this story. Paying off debt DOES  make a difference!!

Light at the end of the tunnel. We are so close!! I'm excited to start thinking about what our next steps will be when this is paid off!

Stick to it! You can do it! Do you have a debt payoff update? Stay accountable and send me your status.

Stay tuned,

Saturday, May 14, 2011

Day 213 - The Hidden Cost of Cheap Gas

May 12, 2011

Day 213 - The Hidden Cost of Cheap Gas
Salvatore Vuono /

With the steadily increasing price of gasoline across the country, many people have made a concerted effort to find the cheapest gas prices in their area. Websites such as have been highly touted by reputable news sources as extremely effective in your quest for cheap gas. Way back when gas cost $3.91 a gallon in San Diego, I discussed Ways to Save, including using the internet to find the cheapest gas in town. The 76 station near my house - and where I buy 95% of my gas - is one of the cheapest stations (even cheaper when you pay with cash).

I own a 100% paid-for 2005 Subaru Forester with 55,000 miles. Up to now, the only major repairs I have had done- aside from oil changes and scheduled maintenance - are replacing the fog lights and buying a new set of tires. Last week my beloved Subaru began to idle erratically. By the next day, it was dying at every stop light and the check engine light was staring me down. Luckily my very first car - a 1975 orange Volkswagon Beetle with cow-print seat covers - also enjoyed dying at stop lights so my heel on the gas/toe on the break technique has been perfected. I heel/toed it all the way to my Subaru mechanic and was told that a $300 repair was ahead of me because the fuel line was gunked up due to using low quality gas. Unsure of exactly what this meant, I grilled the mechanic for more details. Below is a summary of my understanding. Note that certain words, such as gunk, are my interpretation of mechanic lingo. For a more scientific explanation, click here.

What is low quality gas? Different brands of gas use different quality levels of gas/additive mixtures. Typically the cheaper brands of gas are not as "clean" and are therefore more likely to build up gunk much faster than a brand that includes a richer mix of detergent additives. The mechanic recommends only using brands of gas known to be "cleaner" than others. Brands specifically mentioned as clean were Shell and Chevron. These brands do typically cost a little more but are apparently worth it.

What about the gas grade? Unleaded gas comes in multiple grades - 87,89 and 91 are most common here in Southern California. According to the mechanic, you should use the grade recommended for your car type (usually can be found in the owner's manual). As a general rule, higher performance cars such as BMW or Mercedes require a higher grade of unleaded gasoline. My Subaru is fine with the 87 grade. So if I understand correctly, moving up in grade would not necessarily be worth the extra cost for me.

The caveat. All of this information is based on my discussion with my mechanic. And BEWARE the "cheap stuff" - it may end up costing you in the long run!!!

Do you agree with my mechanic? Post a comment and let me know your thoughts.

Stay tuned,


Friday, May 13, 2011

Day 214 - Weekly Roundup

May 13, 2011

Day 214 - Weekly Roundup
Blogs and articles of note from the past week:

Student Loan Debt Keeps Growing via @HuffingtonPost A great visual comparison of credit card, mortgage, auto and student loan debt trends. Just wish there was a little more explanation of the chart.

Rocket Men via @BokehBooth Full dislosure - this is my brother's blog/business site Bokeh Booth. Aside from him being a great brother, husband and father, he also works a full time job, runs a side business and is preparing for a brand new baby while chasing around his two year old. Somehow he still has time to create ridiculously good movies about his family. What a talent. Check it out.

5 Tips for a Smooth Mortgage Application Process via @CNBC Interesting that paying down a large debt ahead of purchasing a house can actually be construed as negative. Unfortunately the article doesn't go into detail as to why.

The Last Post: Read and count your blessings. One of the best blog posts I've ever read. Suddenly that guy who cut me off on the freeway isn't worth the energy I would use to yell at him. Save that energy for something positive in your life. I LOVE LOVE LOVE this website. Maybe it's the entrepreneurial spirit in me but I could spend all day looking for inspiration and guidance on starting my own business - someday it WILL become a reality.

Stay tuned,

Wednesday, May 11, 2011

Day 212 - Debt Consolidation Service Dangers (Guest Post)

May 11, 2011

Day 212 - Debt Consolidation Service Dangers
(guest post via Louise Baker)

Louise Baker is a freelance blogger who usually writes about accredited online colleges for Zen College Life. Her most recent article ranked online criminal justice degrees.

Debt is something that can pile up very quickly. As the debt amount grows, this can easily escalate into something that is unmanagable, and people usually begin to look for a way to get a handle on their debt. There are many different options for getting out of debt, and one of those is using a debt consolidation service. While these services do have their positives, there are many negatives that need to be addressed.

Not a Quick Fix
Many people who seek out the services of a debt consolidation service go there thinking they find the quick answer right away. This is not how a service works. They will have a few different options for you to consider but none of them will be quick. They all will take time, energy, dedication and hard work.

Maintenance Fees
These services are in business and they seek to make a profit. One of the ways they earn money is through maintenance fees. These fees are charged a few different ways. Some charge a monthly fee just for the use of their services. Others may charge a fee upfront before and services can be used. In addition to monthly fees for any services that are provided, such as loans, those will have fees assigned to them as well. Before seeking the help of any debt consolidation service, be sure to know about their fee schedule so there is no shock later on.

Debt Consolidation Loans
These types of loans are the main service that debt consolidation centers provide. They take all of your outstanding debt, combine them all into one and a single loan is created. The customer will pay the debt service and then the service will turn around and pay the creditors on your behalf. There are a few worries with these loans. Most people who seek the assistance for debt services do not have the best credit. Because of this, the consolidation loans will have a higher interest rate. This rate may or may not be any better than a traditional loan and could cost much move over the life of the loan. Another downfall of a debt consolidation loan is that you are relying on the service to pay your creditors for you. They do not always pay on time and this can damage your credit further.

If you are in need of assistance with your debt, seek all options in full before deciding the best one for your situation. While debt consolidation services may work from some, they are not the best for all. Getting rid of debt does take time and lots of dedication but it is a goal that can be achieved.

Wednesday, May 4, 2011

Day 205 - Keeping Up With The Joneses (Guest Post)

May 4, 2011

Day 205 - Keeping up with the Joneses
(Guest Post via @flipside_down)
Image: M - Pics /
Mike eagerly anticipates the day when he can stop shaking his head at the financial mess this country, and many of its citizens, has become. In his spare time, he is the mastermind behind The Real Estate Newsletters, a simple and cost effective online solution for real estate agents who want an easy way to keep in touch with clients. Follow Mike on Twitter @flipside_down.

I’m going to start off with two numbers. Two very big numbers.

16,139,094,832,234 and 311,235,445.

Let’s just say 16 trillion and 311 million to make it easy– but let’s put these aside for a moment.

Our nation is inundated with the consumer culture . Turn on the TV and you’re bombarded by commercials. Driving or walking it’s impossible to avoid the billboards. On airplanes and buses, in taxis, malls and restaurants and even bathrooms, there’s one consistent message – buy, buy, buy. Even worse, a psychological element of keeping up with your neighbors has been added into the marketing arsenal. When you’re neighbor buys a new BMW, you want, no, you need one too.  Of course, you don’t want to be the only one of your friends without the latest phone, sunglasses, or Ed Hardy tshirt.

This is what is commonly called Keeping up with the Joneses. We want to own the same things as our friends to seem as ‘good’ or as ‘cool’ as them. We want to buy the new gadget to avoid looking poor or old fashioned.

I’ll be the first to admit, it’s near impossible not to compare ourselves to others. That’s what we, as people, do – it’s how we measure our own personal success and failure.  I do this all the time.  If a stranger walks up to you and hands you $30 (no strings attached), what’s your reaction? But what if they hand the person next to you $100?  It’s amazing how a point of comparison can mess with your mind.

Over time, I’ve tried to ignore these comparisons. But I’ve found that I have had better luck learning to make sure I follow the comparison all the way through – I do the full analysis.

Let’s return to those numbers - 16 trillion and 311 million. One of these is the current projected population of the United States. The other is the amount of total personal debt in the United States. (These numbers were accurate as of the end of April, although they are both constantly moving).

Considering the forum, I’ll let you guess which is which. According to my math, this puts the average person in the US in $51,000 of debt. Plus, since this population includes children, the average adult is probably in a lot more debt.

So when you watch the Joneses pull up in their shiny new car and stop by to talk about their new kitchen and their upcoming vacation - guess what they’re not talking about? They can’t afford it –  the Joneses are broke.

Sure, they might think they look good in their new car (you might too), but I can guarantee you’ll feel a lot better when you go to bed at night without debts hanging over your head and without counting the days until your next paycheck hoping you can scrape by. I consider both of those comparisons; once I do that, I’m happy to let the Joneses pass me by.

Tuesday, May 3, 2011

Day 204 - 5 Money Tips From My Nephew

May 3, 2011

Day 204 - 5 Money Tips From My Nephew

"If you spend too much money, you're stupid!"
~ Maverick

This past weekend I drove up to "Awesometown" to visit my sister, brother-in-law and my eleven (and a half!) year old nephew, Maverick. As always, I was well taken care of and made to feel right at home. My sister and brother-in-law (who are both 16 years older than me) were one of the earliest positive influences I had growing up when it came to money. I distinctly remember being in complete awe when they talked about paying off their student loans early - at the time getting rid of debt was a completely new concept to me. When I was in college, they opened up their home to me for the summer which allowed me to work a lot and save a bunch of money to help get me through the next year. They also gave me a very generous amount of money in order to get me through my semester abroad in Prague my junior year - something I have never forgotten and expect to pay forward to my nephew when the time is right. My sister mentioned to me this weekend how lucky they are, but I know without a doubt that most of the luck she talks about was really created by them. Pretty much nothing was just handed to them - yet they made an amazing life for themselves despite some bumps in the road. Sometimes perseverance + hard work = luck.

So Sunday night after Maverick pointed out to his Aunt Sarah that she looked like she had a blonde mustache, we decided to sit down and have a serious conversation about money. Not surprisingly, he is wise beyond his eleven and a half years when it comes to handling money. His parents have taught him - and me - very well. Check out Maverick's five tips on being responsible with your money. I know many adults who probably couldn't provide as valuable advice as Maverick.

1. Don't spend money like a crazy person. Straight to the point - that's Maverick. He is very knowledgeable about money saving techniques like turning off the lights and TV when you leave the room, and not using too much printer paper and ink on stuff you really don't need to print.

2. Don't go on too many vacation. Again, there is not much explaining to do here. Maverick understands that going on really big vacations costs a lot of money. He suggests taking smaller vacations closer to home. Many people put their entire vacation on a credit card - not really the way to find that relaxed feeling while you are sitting on the beach sipping a $15 mai tai, is it? Why not take a page out of Maverick's book? Annual passes to a nearby theme park give the entire family something to do most weekends. Maverick is content to spend most of his weekends at Six Flags. And by the way, Maverick can tell you absolutely everything (not joking) about any significant roller coaster in the US - G-force, inversions, height, speed, you name it. I dare you to stump him.

3. Get a car that gets high mileage per gallon. This advice is almost a no-brainer for this California kid. With gas prices over $4 bucks a gallon, Maverick knows that when Mom drives him around Awesometown it's costing a pretty penny. Take a look at all those hybrids available or at least opt for the more fuel efficient car rather than the gas guzzler. Your wallet will thank you.

4. Don't spend your money unless you really want something. This is one of my favorite tips from Maverick. His perfect example - sometimes he really wants a candy bar but he knows that in order to save up for an X-Box Kinect he can't be spending his money on little "wants" all the time. So he has enough willpower to tell himself that he doesn't need to buy the candy bar - eventually he will get some candy and most likely won't have to pay for it (e.g. Halloween, Easter, parents, friends, etc). Adults - are you listening? Key word: willpower. Go find some!

5. Don't fall for advertisements. Maverick has been studying the concept of propaganda in school and completely gets it. That ad on the Six Flags map that reminds you how thirsty you are with a well placed Vitamin Water next to it? You guessed it. And sorry to say those beautiful ladies will most likely not be showing up at your front door once you buy that brand new car or use that Axe body spray. Even subtler - beware of price anchoring. Ever seen the "sale" labels at the grocery store that show both the original and sale price? It's not a deal unless you know the original price - but is the original price on the label the original price you paid a month ago? How about the restaurant that has two sizes available for a dish? The more expensive and larger version is the anchor that leads you to believe the smaller, cheaper dish is a better deal. In all likelihood, the restaurant is making more money off of the less expensive dish and expects you to purchase it.

Thanks to my nephew for tearing himself away from the Nintendo DSi (and my alleged mustache) and offering his advice about money. The apple doesn't fall far from the tree.

What lessons have you taught your kids, nieces or nephews about money? Or vice versa, what have they taught you? Leave me some comments!

Stay tuned,

Sunday, May 1, 2011

Day 202 - May Update

May 1, 2011

Day 202 - May Update
The first (give or take) and fifteenth of each month I will update you on the status towards our goal of paying off $60K in one year.

** Check out the Real Time Debt Tracker!!! Keep up to the minute tabs on our debt balance and whether we can pay it off in 365 days!

Killin' it! To date, we have paid off $43,460 of our debt in 202 days! That's about $215 bucks a day since we started.

Paid off Mike Student Loan #2: A few months ago we expected to pay off this loan by June but we ended up paying it off in April - two months early!

Challenges: Five and a half months left to pay off $16,540. This equates to approximately $3,007 a month in debt payments. Since we typically pay a minimum of about $4,000 a month towards debt, we can possibly meet our $60K Project goal ahead of schedule (barring any unexpected emergencies)!! Thanks to a well-timed retroactive raise and tax refunds we were able to pay $14,000 towards debt in April. 

Upcoming Expenses: Bachelorette party (Las Vegas), wedding (San Francisco), and Mike's birthday party (New Jersey/NYC) are just a few of the upcoming trips/events we have planned over the next couple of months.  We have already purchased and paid for the airfare for all of these trips so hopefully we can keep hotel and other expenses down as much as possible. Otherwise we will slow down our progress.

At this point, it is important that we stay focused and not let up even though we are technically ahead of schedule at this point.  We can't lose sight of the fact that even after paying off $60K, we still have one outstanding student loan left that I haven't even really talked about on this blog yet - and it's a doozy.

Stay tuned,
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