Just as I thought life was getting back to "normal" things were slightly derailed. Once I have a chance to mentally regroup I'll go into more details. In the meantime enjoy this great guest post by Michael D. from Credit Card Forum.
From past blog posts, I know Mr. and Mrs. NtJS aren’t exactly the biggest fans of credit cards to say the least. I actually run a credit card forum/blog myself, and as ironic as this may sound, I actually agree with most of their viewpoints on them! There are definitely quite a few problems that come about with using credit cards. Today I want to talk about one of those problems that most people don’t consider.
First, let’s rewind back to the 80’s and 90’s… do you remember how little credit cards were used? In the small town I lived in Michigan, I remember grocery stores only accepted cash or checks for payment. In fact back then, the only places that always took credit were department stores and the like. Nowadays it seems that almost everyone takes plastic… grocery stores, doctors’ offices, and even charities. That last one is what I want to talk about, let me give you an example…
A while back I read a book called the The Hole in Our Gospel: What does God expect of Us? It’s written by a man named Richard Stearns, previously a “jet set” CEO who ended up becoming President of the Christian charity World Vision, initially against his own will. In a nutshell, this raw and brutally honest story is a must-read for everyone and the message is so powerful that World Vision is now my favorite charity. But what does this have to do with credit cards? Let me explain…
Since reading the book, I’ve been sponsoring a child through World Vision. I have this amount automatically charged to my credit card every month. In addition, the bulk of my giving is made to their general fund, another amount which is charged to my card. Now this is a very efficient organization (a very important criteria for me when giving) and while reviewing their most recent annual report, here’s how the numbers break down:
For every dollar:
Now that’s pretty impressive… only 4 percent goes to actually running the organization. But what about that second number, the 7 percent? Make no mistake about it, that is an extremely low amount to pay for fund raising regardless, but what if everyone used checks instead of credit cards for their donations? How much lower would that fund raising number be? Because yes, unfortunately the credit card companies don’t even give charities a break… they still charge them those pesky processing fees.
Now I’m not an expert on credit card (interchange) fees, but according to Wikipedia the average is 1.79% in the United States. That means 1.79% of transactions goes to the credit card company. I’ve been using my Chase Freedom card, which is a rewards card, and those typically carry a fee that's even 0.30% or more higher. So according to those calculations, probably around 2.09% or more my giving to World Vision is being eaten up by Visa and Chase Bank. It may not sound like much, but if you take 2% of all their credit card donations, that ends up being a lot of money!
So what’s the lesson? I definitely need to use the check book from now on. If every one of their donors skipped credit cards, just imagine how many more people could be helped… with the same amount of money given! Of course at the same time, I do realize there is a “convenience factor” of credit card giving that may bring in some money from people who normally wouldn’t give because of the “hassle” of writing a check (and obviously a 98% donation is better than none at all!) but for everyone else, please don’t be lazy… use your checkbook and your money will go even further.
About the Author: Michael is a forum moderator and blogger at CreditCardForum.com, which is a website for credit card reviews and discussions. Although he’s fanatical about raking up his rewards, he does acknowledge that credit cards truly do have a lot of drawbacks, are definitely not suitable for everyone, and can lead to nightmares if a balance is carried.
Just as I thought life was getting back to "normal" things were slightly derailed. Once I have a chance to mentally regroup I'll go into more details. In the meantime enjoy this great guest post by Michael D. from Credit Card Forum.
Buying and selling vehicles is not something new to us. We have done is several times however, this time around things have been very different. Quite the adventure really...
It all started around March. After complaining (again) about not being able to give a neighbor's kid a ride home from school I saw a tv commercial for a Chevy Traverse. I will whole heartily admit that the GM marketing team did a great job. They sold me. I could fit 8 people in a spacious vehicle, be able to tow a camper and get great mileage all while looking cool in the school car line (LOL). I was sold.
After doing some research I found out the Bluebook value of my car and then did some research on the best way for me to obtain a 3rd row SUV that was not a gas gussler. After a couple phone calls I was able to get connected with a family friend who has a used car dealership. He offered to buy me a vehicle at auction. I would pay the auction price, taxes, auction fee, gas to drive it home, and a $250 finder's fee. After going to a couple auctions he felt like he could get me a Traverse in my price range.
With the good news in hand Mr. Not the Jet Set was more then happy to help me sell our current car and upgrade big time. We just needed to finish saving up the difference between what we could get for our car and the cost of the new one. With lots of pennies pinched we made it happen by the end of April. Now, during this time I had not re-pulled the blue book value of my Pontiac Vibe. No, instead I watched the news and saw that Toyota was taking a good kicking from the media, government, and anyone else who didn't like them. Well, I guess I should have realized that I the market changes would effect us but it honestly didn't click.
We went to list our car for sale by owner at the beginning of May. I re-pulled the KBB value and was in tears. The value dropped big time. I had worked so hard to have it all taken away. We talked, prayed, and weighed out our options. The decision was to sell the car. By the end of the month the car was gone and we had the cash in hand. We were able to get slightly more then the blue book value but it was still about a $2k hit from what the value was pre-toyota recall.
The whole time our car's value was dropping like a rock the demand for the type of vehicles we wanted went way up. So far up that we decided in mid-July that none of the original things we wanted would be in our price range at this point in time without taking out a loan or dipping into our emergency fund. It was a horrible feeling of defeat, but looking at the auction stats the prices had steadily increased and were showing no signs of slowing down. Once again I cried, then we talked, prayed and weighed out our options. We made a short list of mid sized cars and wagons that would at least be slightly bigger then what we had before yet we could afford the auction prices based on the last month's post-auction sales lists.
I'm happy to say that after two month's of living with one car we now have a new vehicle in our lives. It might not have been the car I was dreaming of but it sure is nice and the best part is that I don't have any payments!
I will admit it was an extremely hard two months with sharing our one truck. The a/c quiet working about 2 weeks into it, the truck starting having issues starting two weeks ago and just last week we had to replace the wheels and tires. Not great things to have to deal with when you only have one vehicle and summer camps for the kids, along with a vacation road trip. Even through it all it was worth it. It also gave me a great appreciation for those how only have one car and do not live in places that have public transportation.
We bought a 2008 Volvo V50 wagon with around 80k miles for a grand total (after all taxes and fees) for $12,105.60. That price alone made it worth the wait for us.
Have you had similar experiences with buying or selling your cars lately? I'd love to hear your car transaction stories!
I would like to start by apologizing to all our faithful readers out there. Thank you to all of you who have emailed or commented asking about our well-being. We truly appreciate the concern. The past few months have been crazy (almost insane) at our house. I'm really not sure were to start so what I'm going to do is just list out some of the crazy stuff with a few photos.
- Mammoth garage sale
- Sold car and have not bought another one yet (going on 2 months with one truck!)
- Painted house
- Built a fence
- Cut down a tree
- Went on a much needed vacation
- Tending my enormous garden and added more landscaping
- Grandfather's health is not good so lots of trips home
- Canning lots of goodies
- Daughter broke our camera (at least she dropped it while waiting in line instead of from 100 ft. in the air)
- Worked to help get legislation passed to help promote local foods
- Working on potty training and trying to stay sane with my 2 1/2 yr old
- Running the 6 yr old to summer camps (with the one truck)
- Be there for a friend who's baby will die shortly after birth (anencephaly) early this fall
- Restore a vintage Gibson guitar
- Mr. Not the Jet Set has had an injured hand/wrist all summer
- And last but not least, trying to act like it's summer break!
As you can see a lot has been happening. Things have started to slow down a bit so I'm going to try to expand on some of the fun projects that have been going on. I've also had a few money and stewardship posts that I'd like to write in the near future.
Last night was not a good night for our poor chickens. We believe that a mink got into the coop. The two eggs that I had left in the nesting box were gone without a trace and one of our chickens was murdered. It is a sad day in our house. Even though we know that these chickens are animals and not "pets" we treat them with love and care. Of course the Mr. is out of town this week for work so I'm left to deal with the mess and the kids. We will all survive and until we come up with a good plan the chickens are going to be on lock down at night. I hate to fence in our chickens in a small area, but I'm not sure if letting them roam in our fenced in backyard/ravine is safe. We see a coyote on a weekly basis, hawks circle daily, raccoons live in the trees, and now minks have moved into the area as well. I hate to take their freedom and happiness away to save their lives but I'm not sure what else to do.
Have you ever wondering what you are supposed to be doing with your life? Do you feel like your current job is not satisfying? Still trying to figure out what to go to college for? Are you really called to be at home with your kids? Did you miss God's calling? If you answered yes to any of these questions you need to get this book!
Max Lucado does a great job exploring God's word while helping you to personally self explore your true talents and callings. He continually reminds the reader that God had a unique plan for all of us. No two are a like. I personally found that I needed to stop and reflect at the end of each section. Lucado pushes you to reflect on your past to help you find yourself in the future. This book helped me to have a better understanding of the way I'm wired and brought more peace to my life decisions.
This book is a great read for any christian. I don't think that you can be to young or to old gain some wonderful insight into the God's will for you.
This book was provided by BookSneeze.com in exchange for the review. No other compensation was received and the opinion stated above is my own.
Maybe your family was like ours this spring break. We dreamed of taking the kids some place warm, fun and south. The reality is that our priorities dictate how we spend our money. Our big dreams will have to wait one more year. Instead we drove north about 5 hours to Boyne Mountain and spent several days having fun at the indoor water park, eating dinner at restaurants, and enjoying a great view of the greened up ski slopes out our window. In the end we all had a great time and enjoyed our vacation. I would have to guess that the kids didn't even realize that they had missed anything since there was tears shed when we had to leave the resort. All of this was done on less then $650 including all our meals, gas, tips, etc. I'm sure that was just a fraction of what our dream vacation would have cost.
As we got back to normal life this week I was happy with what we had done with our vacation time and money. In fact, I'm still very much at peace with the decision as I write this. However, I wonder how many people feel the same after they get back from their more expensive vacations. They might not verbalize it and maybe it really just doesn't click in their minds that they just set their priorities by how they spend their money.
Here is what I mean. Since being back in town and having kids back in school I've been able to hear about a what everyone did for their spring breaks. After hearing the first 5 I started to notice a trend. A really sad trend. Here are my observations.
The Big Vacation Families~
The Small to No Vacation Families~
I find it interesting to look over these two lists and see the differences. It really shows you that no matter how much you make YOU need to set your own values and priorities. YOU need to make a written plan and stick to it. MONEY is not what stops you from reaching your goal, YOU are what's stopping YOU from reaching your goal.
If you feel it's important for your children to receive a non-public school education then you have to sacrifice other wants. If you want to stay at home full-time with your little ones you have to sacrifice other "stuff" to reach that goal. In either situation your goals are obtainable no matter what your income. It is a matter of self control and stopping the desire to keep up with the Joneses. Let me tell you, they are broke and their kids are spoiled brats. That's not what you want for your family is it?
Don't get me wrong, I'm okay with you taking a nice vacation with your family. We have done it before and we will do it again when we can pay for it in cash that doesn't come our of our kid's tuition savings. The point is that you can't tell me that the private school tuition (which is really not that much) is too expensive when you make more then double what our household makes. Instead of telling people a lie, tell them the truth. You set your families priorities and you decided that sending your kids to the Catholic school was not a top priority.
Sorry if I offended anyone, but I really do get sick of hearing about grand vacations over every break just to have the same people pull their kids from the school or complain about the tuition. As I stated above, there are always a few exceptions and these are just my personal observations. And before you say this in the comments, no I'm not jealous because there is nothing to be jealous about.
She started out by gloating about being the "go-to" financial adviser and then moved on to actually talking to the contestants - about the similarity of the burdens of the extra pounds and the burdens of money. Mostly harmless statements, some of which were actually on-point. But really, that's not why she's here. She's here to pitch for FICO. After a few pithy statements, Suze proceeds to throw it in everyone's face that she picked the season 8 winner, Danny. How did she do that?
- Did she follow the show closely that season?
- Did she look at contestants record of weight loss and potential for continued loss and analyze it like she would company stock?
- Did she look at the contestant's psychological state and compare it with that of people successful in gaining control of their finances?
NBC apparently collected the contestants financial information to which they made the Suze privy to. By her own account, she reviewed "their finances and their FICO scores". That's it. And, yes, she specifically said "FICO" scores - not credit scores, not credit reports, not even generically lumped as 'credit', but "FICO scores" - so yes, she was pitching for FICO by being on the show.
So what is she here to do today? Help the contestants with budgeting? Give them a primer on financial fitness? Naahhhhh... she's here to strut her stuff and make her prediction for the Season 9 winner. Too bad she totally botched it. You see, based on her sophisticated analysis - again, finances and their FICO scores - her prediction was for Koli to be the winner. Unfortunately for ol' Suze, Koli had just admitted that he wasn't counting his calories as he should be for the show. You know, something actually relevant to the process of weight loss on the Biggest Loser. In light of that, she had to back pedal and revert to her second choice, which was Sunshine. Now of course, they didn't reveal any details as to the contestants finances, but here is an interesting detail - Sunshine, her new pick for season 9, is 24 years old. Maybe her more preferred credit and finances is due to her youth? No mortgage, limited other debt, maybe lives at home? I don't really know, just guessing.
So here's my issues with Suze, this time.
1> Suze is using a terrible method. As noted above: She's not analyzing the contestants like they were stocks and mutual funds which would require looking at relevant information. She's not comparing them to folks shedding debt and likening those successful behaviors to those shedding weight. What she is doing is auto-underwriting as if they were applying for a mortgage - a process that is under heavy scrutiny right now since it bears much of the blame for so many of the inappropriate loans that brought about the housing crisis. Even beyond that, her declarations go directly against one of the basic tenants of the show: She's saying that you are a number - this number defines you. This number says who you are and who you'll ever be. This number so accurately says who you are as a person, that it can be used to predict your future success or failure. Only that number is not their weight - that number is their FICO score. I'd be interested to hear what Jillian's take would be on that.
2> Suze is opening Pandora's box. And she's likely too dumb to know it. Maybe, that's too harsh.... Likely it was at the request of her puppeteers at Fair Isaac to which she more than willingly complied once she got done counting the zeros on the check. You see, it was some years ago that the auto insurance industry decided to draw the conclusion that low FICO scores indicate a higher likelihood of filing a claim. Many have labeled this practice as an inappropriate use of FICO scores and unfair to the consumer. For now, it's reality, and Fair Isaac reaps the rewards for the uptick in FICO score requests. Now Suze is opening the door for the health insurance industry to do the same. Does a low FICO score indicate a higher likelihood of poor health? Obesity? Diabetes? Of course not. But this is Suze's message. And in turn, a higher FICO score gives a person a higher likelihood of overcoming obesity. Again, I don't think she realizes what she is implying with her random-crazy-Suze method. But that is exactly what she is saying. And with the recent health care reform bill passing, I would guess that health insurance providers will be looking for any reason to charge you more seeing as pre-existing conditions and other practices were just taken away from them. Scary stuff - Thanks, Suze!
- FICO is meaningless when it comes to your money. I could inherit one million dollars tomorrow and my score wouldn't change one point.
- FICO is meaningless when it comes to your driving. I could be foreclosed on and it wouldn't affect my driving habits one bit.
- FICO is meaningless when it comes to your health. I could stop exercising and start consuming a liter of high fructose corn syrup per day and FICO wouldn't have a clue.
Stay tuned for our continuing coverage of Suze's path of destruction.
We have made it no secret that we are not fans of the current FICO scoring process. But what do you do about it? How can you change the industry standard? Well ladies and gentlemen, this might be our one chance to make a difference. Here is my plan and how it came about.
I live in Michigan and have been know to write letters via email to my elected officials. Even if I'm confident it will land on deaf ears at least I know that I tried my best. These emails have added me to all of my reps. mass emailing lists so I get to hear what issues they are working on. Today I received an update email from Senator Levin discussing the Financial Crisis investigation hearings he is helping to conduct. In the email he talks about the next three hearings. One of them is for the credit rating agencies.
This got me thinking. What if Senator Levin's office received lots of emails and phone calls from Americans who felt that the current FICO score was inherently bad? Would it make a difference? Would it shed some light on the problem? Well, there is only one way to find out.
Dear Senator Levin,
I received your email entitled "My Hearings Investigating the Financial Crisis". I found both your email and your statement very insightful. I was also glad to see that there are three more hearings in which you will look at others who had a role in the Crisis, especially the credit rating agencies.
The current FICO scoring criteria forces consumers into making poor financial decisions if they want to maintain a high FICO score. This is extremely dangerous for families and our country’s economy. The reason it is so dangerous is that it does not take into account four key factors: income, savings, investments, and net worth. How could you honestly say that someone is able to pay back a car loan, mortgage or monthly rent if you don't take into account these four factors. Instead the score is solely based on 5 debt factors. This forces consumers to stay in enough debt that it keeps them from ever being able to live beyond paycheck to paycheck.
Senator Levin, I strongly urge you to consider the ramifications of allowing the credit rating industry to continue to abuse the American people. The formulas that they use to judge one's ability to pay their bills are in need of reform. They need to be based on the person’s entire financial picture not just their current debt load. If properly restructured it would encourage Americans to be wiser with their money. This would help to prevent another financial crisis.
Thank you for taking my opinion into account.
Mrs. Not the Jet Set
I would also welcome other bloggers to link back to this post and non-bloggers to feel free to email this to like minded people. Let's make a difference!
Life is full of scary things. Even as an adult there are just somethings that seem scary. One of the biggest ones for me was taking the plunge to stay home full time with my kids. Just the thought brought so many scary ideas to my head. What if the Mr. lost his job? What if we can't live on less then half our current income? What if I want to go back to work but can't because I've been out of my field to long? Even with all those scary thoughts running through my mind all's I could think about is how different life would be if I could just stay home with my babies. If I could just be there for when they needed me. If I didn't have to miss all of their firsts. Needless to say, my motherly instinct kicked in and I kicked my fears to the curb.
We have successfully lived on my husbands income for over 3 years now. It has been one of the best decisions that we ever made. However, if we had not carefully planned it out it could have been the nightmare I feared.
- Plan ahead of time- Like most things in life it takes time to work out all the kinks in the plan. On average it takes 6 to 12 months to fully implement the changes and take the plunge.
- Unified Dream- The most important key to making this dream happen for your family it to make sure that you and your spouse are both on the same page. It truly takes a team effort to cut the expenses and make such a drastic lifestyle change. If you spouse is not on board then it's not going to work no matter how hard you try.
- Evaluate- Take a hard look at why you want to stay home. Is it because you want to be there for your kids 24/7 or is it because you really just don't want to be at work. If your reasoning is more on the job side then you might just need to find a new job or career.
- Make the cuts- This is the toughest step. It's time to sit down and make the cuts. Looking at your budget together as a couple you need to decide what stays and what goes. Vacations, kids sports, new clothing, and eating out are the main things that go when you start to make the harsh cuts. It's important to do some practice budgets on paper to make sure that the math will add up.
- Have a plan- What are you going to do at home all day? LOL, It's never boring around our house but I have friends who could not handle the "isolation" of staying at home. Make sure you have a plan for your time. Think about what you can do at home to save your family money (coupon clipping, sewing, gardening, garage saling, etc) as well as ways to get out of the house with your kids (story hour and play groups) during the day.
- Support Network- This might sound odd to some people, but its a sad fact of life. Not all working moms will want to continue your friendship. Everyone has their own reasons, but a lot of times your working friends will fade away or you will want them to because of their criticism. Make sure that you start to surround yourself with people who support your decision. It will make your life much easier once you take the plunge.
- Check into the Details- Double check things like health insurance, taxes, investments. All of them will change as your jobs and income levels change. Make sure to include these changes in your practice budget.
- Debt Free- Some people are going to say that this is not required but in my book it is. It's hard enough to work your way out of debt with two incomes, do you really want to try to do it on half the amount you were living on? Unless you did the math and you were losing money by working, focus on getting out of debt so that you can realize your true dream. It will help you to become gazelle intense when you realize that the debt is keeping you from your kids.
- Emergency Fund- Before you turn in your notice at work make sure that you have a fully funded emergency fund. It will help you to enjoy being home with the kids. If you don't have one you will be constantly worried about things like hubby losing his job, a major car breakdown or a house fire.
- Trial Run- You have done it. You have walked through the first 9 steps and now it's time to give it a try. Minus childcare expenses and other expenses that you are incurring solely because you work sock away the rest of your income in a savings account. Test it out to see if you can really life on just one income for 3+ months while saving the rest. If you can do it then you are ready to make the switch. If not, then you need to take a hard look at why it's not working for you and make some adjustments to the plan.
It's hard to believe that the first quarter of the year just came to an end. Time flies at our house. We try hard to run out house like a well oiled corporation so along with setting annual goals and monthly budgets we also do reviews of each at the end of every month/quarter. How did we do with our goals during this quarter? Our 2010 goals are well on track!
Here is how we are doing on our goals for 2010.
Goal 1: Spend more time as a family. Check! Some weeks we have more then others but over all we are spending a lot more quality time with the girls and it shows. Everyone is happier as we bond as a family. I'm sure that the dividends from the time spent with them will continue to pay off as they get older and more independent.
Goal 2: Eat healthy, organic, and local. Check! We have been mostly living off our freezers and canning shelves full of preserved local foods. We even took a cheesemaking class and tapped our own maple trees this quarter! Just a couple days ago I started planting some early spring crops in the garden. I'm hoping that our garden will be able to help us stay on budget will staying healthy, organic, and local.
Goal 3: Save for a car. Check! We were able to start funding the car fund this quarter. It's exciting to think that we will be able to get a newer vehicle (specifically an SUV w/3 rows) in the near future. So far we have apx. $4k saved. Which is great since the car we are replacing rolled past 100k miles this quarter.
Goal 4: Have some fun money. No Check. I hate to say this but we have not been able to add the fun back into the budget yet. We have a couple large projects that need to be funded this summer like painting our house and some other smaller projects are that "have" to be completed during our short Michigan summer. Maybe by the third quarter we can have some slush money.