Tuesday, March 22, 2011

Take the Kickback

From the credit card company. I use a cash back card but miles are fine if you could justify the flight normally. Did you always want to go to Italy or are you just using miles? If using cash back, don't settle for .025% (Discover gives me this, lately). Some will give 1% on everything plus 5% bonus categories. As we continue to pull out of recession, look for 2% cash back across all categories to return to the market.


Tuesday, April 14, 2009

Debt-Free is as Debt-Free Does

Some of these will seem too austere or radical, but this is how I've stayed out of debt my whole life. I still have lots of fun.

1) If you are not in debt, stay that way; which means stay liquid!
2) Save 20% of income. Cutting coupons will reduce grocery bills by 20%. Save that money also. Impulse buying is not as healthy as impulse saving.
3) The only defensible debt is debt to buy housing. Put 20% down (at least) to avoid mortgage insurance fees.
4) Have the cash to buy any vehicle, even if you finance it. So, if you have $30,000 saved, you can spend that much on a vehicle. In this case, I would actually finance the vehicle (at a favorable rate) and keep the $30,000 invested at a better rate. I could pay cash for a new Mercedes, but my newest vehicle is a 1992 model. Cheap, cheap (but a free man).
5) YOU MUST HAVE A BUDGET! A person cannot otherwise be expected to balance debits and credits. I lived on 15K last year, comfortably (I even took a 2 week vacation out of country), because I budget.
6) When investing, money market interest is not much preferable to putting money under a pillow.
7) Buy second-hand. Make your used stuff available for others to buy (if in good shape). It's a way to help one another. What goes around comes around.
8) Grow as much of your own food as possible. Seeds are cheap. Safely hunt for as much food as possible.
9) If you don't have a health insurance policy that is a 80/20 or 90/10 plan you are wasting your money (unless you have a chronic condition). Sorry, it's the truth.
10) DON'T PAY CREDIT CARD INTEREST! It will put you in the toilet. Pay your bill in full every month. Live within your means and do not get over-extended. Take advantage of kick-backs (cash-back , airline ticket, etc. incentives).