Only suckers balance their checkbooks

1 January 2008

One of my coworkers asked me how we had discovered a fraud transaction so quickly. I told him that my wife came across it when looking at our online statement.
“Oh I don’t ever balance my check book!” he declared, telling me that he knew roughly how much was in there, and when he goes to the atm and can’t pull anything out, this is how he knows he has no money. This worked for a while for me too when I was 18 and a complete fucking moron.
You don’t have to obsessively check every transaction of your banking, but somewhere between here and there is a happy margin of managing your money.

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Look honey I bought something!

1 January 2008

Like most people, a lot of our friends are in debt. Unable to understand how to eliminate it, they often use it as a crutch for their life situation. There are many strategies, and endless advice on getting out of debt. But before you can build an emergency fund, or begin any well thought out plan you need to stop continuing your debt before all else. It’s bad enough that many people are paying the minimum payments on their credit cards, but every month they’re adding more and more purchases onto that bill. Cut up all of your credit cards. Stop accumulating more debt. This should not be a very emotional thing to do, and if it is then you have a long road ahead of you, and perhaps you’re not ready to get out of debt, and maybe never will. There are a vast number of people who do not see anything wrong with carrying heavy debt. There are people who do not see how the advertising industry has perverted our lives, people who do not understand that hyper consumerism is escapism. For these people endless meaningless buying is not a problem, but a solution to something more empty in their lives. Until you know where you stand on these things, you will never be able to take your financial situation seriously. You will never understand frugal living, and financial responsibility. Where do you stand?

Living Debt Free

14 December 2007

After last years tax return, which was admittedly more than I should have let it be, even after spending half a year in a tax free combat zone, we paid off all of our remaining debt. We all know the importance of getting out of debt and the impact that it can have on all of our lives. I’ve read quite a few financial books lately who all stress the weight of compound interest, the dangers of making minimum payments on credit cards, and the staggering facts of how much debt the average American household is really carrying. What they don’t talk about is how great it actually feels to be completely debt free.

flickr: lemon jenny

Imagine that static in the back of your mind that you carry throughout your day, the stress of paying bills, and making ends meet being replaced by the clarity of possibility. Where I used think about how long it would take to get free, I now think about how compound interest will work for me, and how I can better save and creatively invest my money. The trick is getting out there and informing yourself, absorb as much financial knowledge as possible. While public schools still debate the need for standardized testing to grade our children’s skills in math, science, and reading, the average graduate is unable balance a checkbook, or fully understand the full concept of credit. The more you empower yourself with this kind of knowledge the better off you will be financially. Along with that the more you read, the more you will develop a style that works for you, and disagree with many of financial writers out there. While there are varying extremes, and different opinions on the details the fundamentals of financial happiness is relatively the same.
The best thing that I ever did for myself financially was to set up an emergency fund. Some people will say that this is the first step to independence, and will disagree with the amount needed to be saved. For us it was a thousand dollars. We were able to save it fairly quick, and from then on this has helped us absorb life’s little emergencies that have come up in the past few years. Though we have been a bit more dynamic on dipping into our savings than most would recommend, we have always recovered the minimum thousand dollar balance before moving on to the next steps. This has been a great foundation to help us eliminate our debt. It took several years, and we used a variety of methods, but now we are debt free. I drive down the road and know that I am in the minority of people who actually own their car. I was fortunate enough to have my financial hardships early in my adult life. My wife and I have gone through what could take some a lifetime to endure, in the first five years of our marriage. From living in a dilapidated farm house near south Detroit we carry our lessons with us, thankful that we are not making those same mistakes that I see people all around me making in their thirties and forties.