Pardon my American term of soccer those of you who call it football. I blame my parents, they called it that because football was an awkward game with very large men attempting to damage one another while not getting damaged themselves. Its like politics only with more distinguishable words that the common man feels comfortable with. You see, my wife wants to sign up the girls for soccer [read: football/futball]. I want to sign them up, too. Just not for a combined total of $270.00. I’m going to declare that watching them play it is fun (we went to a free day where they could practice with a coach so as to hook us into the program). Its greater fun than watching the politicians for sure.

Our getting out of debt budget simply doesn’t have a $270.00 gap in it. Maybe if we saved up for a few months we’d have enough, but that would be money we’d be taking out of debt deduction instead of money going into the debt reduction process. In short we’d be paying our way out of debt for several months longer (or to put it in my wife’s terms: delaying our cash-only anniversary trip). In my mind its not worth it. I’m more than willing to do it once the debt is gone, but at present putting the debt as a lower priority feels like a violation of all that is mostly good (except for the politicians who are mostly not good).

So we’re going to have to discuss this because while we could eek it out of the zero budget, its not my first choice.  We love our girls, we love to see them get exercise and fun, we love to see them get the opportunity to dominate spheres and cause mild pain and suffering in (non-competitive youth) soccer, but this may just have to wait for one more year to go by.  We think next year we may just have all or most of our debt paid off.  Maybe we can buy a soccer ball and kick it in the backyard.  I know it isn’t the same, but neither is American Soccer and Football.  I blame the politicians.

If you’ve seen the television show ‘House’ then you’ve probably heard the lines about everyone lying.  In each episode something goes wrong with some patient and they have to find out what is causing the ailment.  Often the problem has to be ‘dug’ into and they have to find out who is lying about information so that they can get to the truth of the problem.  They don’t take ‘no’ from anyone.

If you have tried to get a lower interest rate from a credit card company and they’ve said no to lowering your rate and you’re paying anything like 18%: they’re lying.  Don’t take no for an answer.  Dig deeper.  Go up the chain of command until you’re speaking to Warren Buffet’s cousin.  Get to the person who can and will say yes.  Don’t put it off, don’t delay, call now.  Get a lower rate and save yourself some big cash!

Excuses that drones at the card companies will use include:

• Your rate is the best we can do - that is not possible
• Your account has been locked for rate reductions because of late payments - this is a totally bogus issue that is policy.  Policy that can be over-ridden by a higher up manager
• Your card offers you rewards, those rewards are funded by your interest rate - bull pucky.  Those rewards are paid for by any number of things - but the interest rate doesn’t fix things.  If you have to switch card companies now may be the time to do it

Kick the credit card interest rates in the butt.  We got our interest rates dropped twice and each time they dropped the rate we saved $50.o0 in interest per month!  Of course we’ve got enough debt that we’re paying a lot anyway.  However, getting the lower rate will help us pay it off faster.

My bride came up to me and in her normal, ever so sweet way, told me that our debt reduction plan was insufficient.  Normally this sort of thing would be a good thing, except that I exaggerated… she was ticked that we weren’t further along.  She wasn’t angry at me so much, it was just that she wants to go on a romantic anniversary trip and the debt is hindering that.  She’s fired up.

So she called up Discover, with whom we have a large line of credit [and accompanying balance] that we’re paying off and talked to an employee to find out if they could give us a better rate yet.  They’d told us not until March the last time we asked.  Well, upon asking for a lowered rate the gal on the other end of the phone told her that she would give us a 12.9% rate.  My wife, being fired up, asked for a lower rate than that.  To which she said, “No, I can’t do that.”  But at least my wife tried.

So we’re now paying half as much interest as we were 7 months ago because we were persistent.  The Credit Rate Reduction Rally is going to be semi-annual, but just because the rally is not happening right now doesn’t mean you shouldn’t call and press for lower interest rates.

I interviewed a buddy, “John” who was willing to talk to me about a bout with “Pay-Day” loans and lessons learned. Check out the audio podcast to learn more.

Pay Day Loans 4.5MB requires iTunes or Quicktime to listen to.

If you’re new to the Watch My Money Maker blog you’re possibly not familiar with the Credit Rate Reduction Rally that is taking place next month.  From January 7th through 11th the world is invited to get blogging, posting, thinking, calling and making change to their credit card interest rates for the better.  Not everyone is aware of the fact that they can often negotiate lower interest rates for credit card debt.  Card companies make good money on charging interest, but they’d rather have you pay the cards off than leave them hanging with bad debt (even if later they come back with collection agencies).

Take a moment to check out the Credit Rate Reduction Rally homepage and consider blogging it yourself.  Or better yet: tell a friend.

In an effort to get rid of all debt and opportunities for debt I canceled my Discover card this morning.  First I called their toll free number and spoke to Penny in Utah.  After telling her that I wanted to cancel my card she asked why.  I asked her if she knew who Dave Ramsey was and she said, “No.” So I said that he was a financial adviser and I was closing my account on his advice.  She said she was sorry to hear that I wanted to close the account and that I would have to be transferred to someone else to close the account.  Apparently she didn’t have permission to close the account.  Right.  And monkey might fly out of my bum.  A recording told me I was headed to Arizona.

So I was on hold for a good while, just in case my patience would run out and I’d choose to keep the Discover card.  Diana in Arizona picked up the phone and began by re-assuring me that I was a valued card member since 2006.  She then asked me what she could help me with.  I told her I wanted to close the account.  She told me that closing out the account would take a bit of time and began her script/schpiel/drivel.  She had numerous reasons to keep the account alive.  At one point in time she was telling me that her dad earned $400.00 a year from Discover card.  Who is Diana’s dad?  Why does his financial practice of utilizing the card effect me?  Should I also have named my daughters Diana 1 and Diana 2 so that I could be even more like her dad?  What kind of car does he drive because surely I would want to be like this wise, older man!

Then the gasoline prices came into play: I could make money on gasoline!  Like my car didn’t have any expenses except gas and that Discover was going to pay me to have gas in my car.  Nope.  No dice.  Please cancel my card.

Ah!  Credit scores impact various things in life and I should keep this card so that my credit score could go up and the world would be a better place!  Nope, please cancel my card.

So I pulled out my big gun, the one that you’re looking at right now: I told her I was going to blog about this experience because it was abnormal and not customer friendly.  Miracle of miracles she said the account was closed and that I would still have 90 days to call back and ask them to re-activate it.  No thanks, I think I’ll avoid that headache a second time.

As a US Citizen, who is trying to be financially responsible, I am disheartened by the blatant abuse of debt that the federal government has displayed.  If you look at the current total federal debt you will see that the United States, at the time of this writing is in debt by over nine trillion dollars (which is their conservative estimate).  This debt has not been so severe historically and reflects the general attitude of the three branches of the United States Government.  They have had a paradigm shift as has been reflected by their constituents in some regards.

I would love to see the government try to operate on a genuine, limited by the amount of income, budget.   According to the latest information I could find (from 2005) the government received around $934,703,000,000.00 in taxes from US citizens [this does not include other debts that were paid to the US from other countries and returns on any federal investments].  That number should indicate a budget of around nine hundred billion dollars.  If the federal government were to spend one tenth of that (ninety billion dollars) to pay off debt and stopped accruing more debt it would take it one hundred years to pay off that debt!  That’s a long time, but its possible that they could pay off the debt with some major trimming.

This site is not about political activism, its about financial management, and so I don’t want to go into politics on a specific level.  However, I do think that the federal government and the state governments need to get their act together or the problem of debt will effect the US economy severely - worse than its current dollar value decline.  I don’t have an answer as to where ninety billion dollars can be trimmed out of the budget (plus the $536,550,000,000.00 a year of excess debt they’re accruing) but I think it is reasonable for the United States citizen to communicate with their congressmen to get things changed.

Of course if I were to try to live like the US government I would accrue  $147.00 a day in new debt.  Or to put that into perspective $53,655.00 a year.  And if I live for another 40 years operating like that I would have over 783 million dollars in debt.  I bet I would have the sweetest hummer, though.  Oh, and a great sized house.  And I would have every iPod ever made.  And a recording studio.  And interest payments like you wouldn’t believe!  I would have to pay 3.62 million dollars a month in interest [assuming a federally available 5% interest rate]. Sweet googly-moogly that’s just insane!

Be financially responsible, tell your government they should be responsible, and for goodness sake don’t run with scissors!

One of the best ways to block identity theft according to the Discover Card mailing I got is to pay them $12.99 a month (sure glad I could keep the penny out of the thirteen dollars).  However, I’ve got another theory: dump the cards.  Once I pay off this credit card I’m going to dump it.  Gone.  I’m hoping, like Dave Ramsey, to have a credit score of 0 (zero, zilch, nada, nothing).  I’d rather pay with cash.

I’d love to seem them steal the identity of George Washington, Thomas Jefferson or Benjamin Franklin [I actually know a guy named Benjamin Franklin, so technically I guess they could take his ID, but it wouldn't be the guy with his face on money - at least yet].  If you pay Discover $12.99 a month for a year you will have spent $155.88.  That would be enough money to go have a nice dinner with my wife.  That would be enough money to sock away for 20 years in a moderate investment (returning 8%) and get $8,430.59 saved up.  If you could get more interest and save longer you’d really have something.  Say for example that you got 12% interest for 30 years: $46,803.36.  You know that Discover/Novus is going to be using your money for investing while you don’t have an ID theft issue.
I’m going to side with me making money and not risking identity theft by using cash on the off chance that my children want an inheritance.

Today I called back a younger guy whom I have discipled in the past at a church I used to attend in Texas.  He asked, “Randy, what do you think about mutual funds?”  And that started off a long 109 minutes of conversation about finances.  A really, really good conversation that was full of his questions and my past mistakes.  You see I wanted to warn a younger person about the mistakes I’d made and give him the chance to be well grounded from the get-go.  The few things I want to communicate about include debt, investing with interest, and planning for the future.

Debt

I warned the young man about the dangers of debt and how debt steels your money from you in the future even if the present you gets something with instant gratification.  I also warned him that a good emergency fund could help reduce the chances of you needing to be in debt due to an emergency.  Debt being what it is he got the idea to ask me if he were to get married should they try to live on one income and save the other.  I told him that’s exactly the idea!  Save up money for the future needs you’ll have as well as the opportunities that you will to invest.

Investing with Interesting

We spent some time with him asking me about various investing opportunities and what the long term gain would be.  We started with the lower investment returns such as 5% so that he could see that even a lower return can build up over time.  Then we moved onto evaluating what higher interest rates would bring.  He was excited to think that even if he didn’t have huge amounts of money to put into things in the near term that long term his wealth could grow.

Planning for the Future

I suggested that he figure out what future goals he have and save up for a good house down payment, save up cash to buy (used) cars ahead of time.  By looking at the future and planning for it this young man can be way ahead of most of the people his age no matter their income.  He’ll be prepared.  Retirement won’t be a mystery, it’ll be a plan.  All of the elements that distract the indebted individual will just not be part of his life.
What would you warn younger people?

If you’ve embraced the old maxim, “Ignorance is bliss.” then you’re possibly wrong.  You see not so long ago my wife and I were a bit distressed because we had debt of an unknown amount and bills coming in of unknown amounts kicking my sorry bum at unknown times.  Basically our ignorance of our financial state kept us spending with credit cards, panicking over those bills, and wondering where all our money was going.  We were ignorant and in despair.

However, after going over a very, very thorough plan of our budget we discovered that we had a lot more money left over if we were disciplined and that we could tackle the debt issue.  What you have to do is find out where you’re at so that you don’t step onto any land mines.  Just like the Windows game “Mine Sweeper” we were clicking in the dark with fear that we might be clicking on an explosive month with more month than money.  Now we’ve got a goal, peace and a plan.

If you’re frustrated with bills, now is the time to get ahead.  I’d strongly recommend reading “Your Total Money Makeover” by Dave Ramsey if you want a good plan and some motivation.