Credit Card Customer “Service”

Posted on February 2, 2009
Filed Under Credit Cards | Leave a Comment

I’ve been reading how certain credit card companies are tightening up and canceling card accounts that are in good standing for whatever reason. “Never happen to me,” I thought – usually when I read a story like this, there seemed to be an underlying reason – the account was inactive, something not related to the card had caused a downgrade in the user’s credit score, etc. Neither situation applied to me – I had committed no credit altering financial sins since the card was issued, and we use(d) it for almost everything except our house payment. We also paid the full balance every month, on time, without fail.

It came as a big shock, then, when I tried to use the card last Sunday and it was denied. I thought maybe something was wrong with the card reader. The clerk entered the information manually (several times) and got a manager to try as well. Luckily I had enough cash to pay for the purchase – I usually don’t carry cash. After leaving, I called the customer “service” number on the back of the card and was informed that our account had been canceled. According to the person I talked to, they had done a periodic check of my Experian credit report and determined that I was now too much of a credit risk, so they just canceled our account – no warning, no courtesy call, nothing. No new negative credit issues since the card was issued, no change in usage pattern, no late payments ever.

I know my credit score is ugly, but then they didn’t have to issue the card in the first place. To add insult to injury, they sent us a letter after canceling the card saying that “it may be reported negatively” to credit reporting agencies (we’ve done nothing wrong) and threatening to send our account to collection if we don’t pay the remaining balance in full (after a perfect payment record. When I called and asked about our cash back bonus that they owe us, the person I spoke to said we “should” get it, but she couldn’t tell me when.

I always thought of this card company as a first class operation – not one of those fly-by-night outfits you sometimes read about. I don’t know what to think of them now.

I have many thoughts about this, most of which aren’t suitable for a web site that aims to promote a Christian world view. I’m sure there is some upside to this, and I’m working on developing a positive attitude towards this. I guess I’ll wait and see if they try to rip off my cash back.

Cheers,

Ken

Christmas Eve Bean Soup

Posted on January 6, 2009
Filed Under Frugal Gourmet | Leave a Comment

One of the best things about the holidays is hanging out with family. I especially enjoy eating my mom’s home cooking. Here is one of her recipes. In spite of the title, this soup is delicious any time of the year, but especially on a cold winter night. Makes about 8 servings. Enjoy!

  • 8 ounces dried small lima beans
  • 8 ounces dried small navy beans
  • 1 quart chicken broth
  • 1 whole bay leaf
  • 1/2 teaspoon dried thyme
  • 2 whole carrots, peeled and chopped
  • 2 stalks celery, diced
  • 1/8 cup olive oil
  • 1 large brown onion, peeled and chopped
  • 1 pork shank
  • salt and pepper to taste

Wash beans. Place in large stock pot and cover with water. Bring to boil, cover pot with lid and turn off burner. Soak beans until liquid returns to room temperature. At this point, I like to transfer the beans and liquid to a Crock Pot.

Lightly saute chopped carrots, celery, and onion in olive oil until celery and onions start to turn translucent. Add to pot of beans. Cut meat from pork shank into small pieces and add to pot. Add chicken broth, bay leaf, and thyme. Bring to boil, then reduce heat and simmer. When beans are almost completely cooked, add salt and pepper to taste. Continue cooking gently until beans are very tender. Soup should be thick and creamy. This also works great with a Crock Pot.

Note: This soup is great for a “cozy” supper. We like it with corn bread just out of the oven. It would also go great with a toasted slice of garlic bread.

This soup is delicious, inexpensive, and easy to prepare. It works great around the holidays because you can use leftover ham in place of the pork shank. It also freezes well. My wife and I like to make a double batch and freeze single portions for inexpensive “instant meals.”

Cheers,

Ken

Looking Forward – Goals for 2009

Posted on January 2, 2009
Filed Under Attitude, Couples | Leave a Comment

After a disasterous 2007 (completely my fault), 2008 was a very good year for us financially. 2009 isn’t starting out to look quite as good though. Our biggest challenge will be to maintain our current level of income. My wife works in the casino industry, which is being hit hard by the recession. They are predicting that 2009 will be one of the slowest years in recent memory. As for myself, I am a state employee on a year to year contract which expires in June. Our state is in the middle of a budget crisis, so my once secure job is no longer secure after next June. With that said, we have some pretty hefty financial goals for 2009.

Savings

I would like to increase our savings account by at least $12,000, not including interest earned. This sort of acts like an emergency fund, and also like a self employment fund. The eventual goal is to have 2 years’ worth of living expenses so both of us can quit our jobs and pursue self employment.

Investing

In 2008, I put $500 per month into a 403(b) at work. For 2009, I’m going to change this account to a Roth 403(b) and up my contribution to $1,266 per month (making my annual contribution close to the maximum allowed, $15,200). We will also fully fund my wife’s Roth IRA early in the year to take advantage of the current stock market levels. For 2009, I will also open my own Roth IRA and fund it to the maximum allowed.

As for what to invest in, my 403(b) at work is 100% in Fidelity mutual funds and will stay that way. Our Roth IRAs will be a mix of mutual funds and individual stocks.

Spending

My wife wants new blinds (our old ones really do suck) and I don’t know yet what that will cost. I also want to spend about $15,000 fixing up my Barracuda and about $3,000 on a deer rifle and related gear.

Conclusion

If we consider ourselves as living on one income, we will need to earn about $170 above what I make at work each and every day in order to meet our goals. A lot of this is covered by my wife’s earnings, but I’ve decided to make a goal of earning $170 net every day, above my regular salary. If we can achieve that, we should be OK even if both of us lose our jobs.

Cheers,

Ken

Looking Back On 2008

Posted on January 1, 2009
Filed Under Attitude | Leave a Comment

Although 2008 was a pretty bad year for the economy as a whole, personally it was pretty good. Both my wife and I managed to stay employed, and we did OK financially in spite of some large and unexpected expenses. Here’s a recap:

The Good

I managed to avoid all (most at least) of the bad habits that got me into so much credit card debt culminating in late 2007. I rebuilt my wife’s trust in me (still an ongoing process). I set up online access to ALL of our accounts so she can check on me any time, not just once a month when the statements come. This also eliminates the problem of statements getting “lost.”

We were able to fully fund my wife’s Roth IRA and put $7,500 into savings. This in spite of over $5,000 in repairs to our (only 5 years old and well maintained) Subaru. I may never buy a new car again. I was also able to purchase (with my wife’s permission) a really nice model railroad locomotive and a Glock 23.

We have a good budget plan in place. Although both of us are still employed, the possibility that one or both of us will lose our jobs by next June is fairly high, and we have plans in place to deal with that eventuality as well.

The Bad

Our retirement accounts lost about 40% in value. I’m not really too worried about this. We are at least 14 years away from being able to access this money without tax penalties, and I look at it as a good time to be buying.

The Ugly

I invested about $2,500 and a lot of time trying to start a second job as a Realtor. Despite the money and time, I wasn’t able to close a single transaction. Actually, 2008 was my third year of trying to break into real estate, but this year I finally promised my wife that if I didn’t have anything to show for it by year’s end, I would give it up.

Although I wish I had some monetary return on the money I spent, I did learn some valuable lessons. First, people who don’t think that Realtors earn their pay are idiots. Second, it’s very difficult to spend the time necessary to build a real estate business while holding another full time job, maintaining a family, etc. Third, I should have realized point number two after the first or second year.

In Conclusion

I feel we made good progress in our financial situation, and I personally learned (finally!!!) some valuable lessons about trying to start a second job. We are also well positioned for the coming year, regardless of what happens with our current employment. All in all, 2008 was a very good year. I hope yours was as well. If it wasn’t, then I hope 2009 is better for you.

Cheers,

Ken

No New Year’s Resolutions for Me

Posted on January 1, 2009
Filed Under Attitude | Leave a Comment

I’m not making any resolutions for 2009. I know from past experience that they are largely a waste of time. I used to come up with all sorts of grand plans which were forgotten or put aside by the end of January. I don’t think I am alone in this.

The problem with New Year’s resolutions is that many treat them as a “thing” that will somehow magically transform their lives. As one of the hookers in Forrest Gump put it, “Everyone gets to start over.” Real life doesn’t work that way though. Self improvement is an ongoing process, not a once a year event. Change occurs over time, not at the stroke of midnight. It’s easy to come up with a list of resolutions, but actual change requires work. As my pastor put it in last night’s New Year’s Eve sermon, you can resolve to change or you can actually change.

I do think the end of a year is a good time to reflect over the past and look towards the future. It’s kind of silly, though, to come up with a list of things you need to change in your life in the coming year. If the changes are really important, why wait until January 1st to start working on them?

Cheers – and Happy New Year,

Ken

Useful Article, but…

Posted on December 10, 2008
Filed Under Uncategorized | Leave a Comment

I love reading Personal Finance blogs. Usually I find good information, but sometimes I read something that just doesn’t make sense. Earlier this month, Rich Credit Debt Loan had a pretty good article on getting out of the paycheck to paycheck cycle. Most of the information is solid. Then, out of nowhere, towards the end he talks about leveraging debt to create a passive stream of income. Now, I think leveraging debt can be a good way to generate income, but what he’s talking about (getting a low interest loan and putting the money into a high yield savings account) makes absolutely no sense.

Let’s do the math. The cheapest loan I could find advertised anywhere is a 3/1 ARM at 4.125%, while the highest yielding account I could find pays 6.01%. The 6.01% is not guaranteed (it could go down at any time) and the amount of deposit is limited to $25,000. So let’s borrow the $25,000. Let’s assume that we’ll be able to get our loan at the best possible rate, there won’t be any loan origination fees, and the interest we earn will never go below the initial 6.01%. Our net earnings will be 1.885%, so on a $25,000 deposit we’ll earn about $471 per year, or less than $40 per month. I’m not a big fan of taking equity out of one’s primary residence unless it’s for a very good reason – and to me, $40 per month doesn’t seem like a very good reason.

So, how could we do better? One easy way is to use a credit card that pays cash back. For example, my American Express card pays 3% on gas purchases, 2% on restaurants, and 1% on everything else. My partial budget looks something like this:

We buy most of our groceries at Costco, so we get an extra 1% back on those. By using my American Express card, I’m not doing too bad compared to borrowing money to put into a high yield savings account. In fact, by the time loan origination fees, etc are considered, I’m probably doing better.

There are other ways you can do better than $40 per month as well. Consulting. EBay. Freelancing. Writing. All of these can earn you more than $40 per week with just a few hours invested. To me, this is a much better return for your time and effort than borrowing money to get a very low net rate of return.

Cheers,

Ken

Why I’m Not Worrying About the Economy

Posted on December 9, 2008
Filed Under Biblical Principles | Leave a Comment

If you pay attention to the news, it’s difficult to avoid hearing negative viewpoints on the economy. No matter how bad the news gets, though, I’m not letting myself succumb to worry. Why not? Maybe I should… my wife works in the casino industry, which in Northern Nevada is being hit hard by the down economy. Many casinos in Reno have started laying off dealers, while others are cutting hours. My wife’s job hasn’t been affected yet, but there is no way of knowing how long she will be able to keep her hours. My own job with the state is not safe either, given that Nevada is facing a 30% budget cut for the next fiscal year, and I’m on a year to year contract.

Still, though, I’m not going to give in to worry. It’s a waste of time, it saps my energy, and it’s in contradiction with God’s will for our lives. Consider Luke 12:22-31:

22Then Jesus said to his disciples: “Therefore I tell you, do not worry about your life, what you will eat; or about your body, what you will wear. 23Life is more than food, and the body more than clothes. 24Consider the ravens: They do not sow or reap, they have no storeroom or barn; yet God feeds them. And how much more valuable you are than birds! 25Who of you by worrying can add a single hour to his life? 26Since you cannot do this very little thing, why do you worry about the rest?

27“Consider how the lilies grow. They do not labor or spin. Yet I tell you, not even Solomon in all his splendor was dressed like one of these. 28If that is how God clothes the grass of the field, which is here today, and tomorrow is thrown into the fire, how much more will he clothe you, O you of little faith! 29And do not set your heart on what you will eat or drink; do not worry about it. 30For the pagan world runs after all such things, and your Father knows that you need them. 31But seek his kingdom, and these things will be given to you as well.

Clearly, we are not to worry. Trust in God, and He will provide for our needs. I have found this to be true from personal experience. God provides for my needs – always, even when I don’t trust in Him as much as I should. I’ve found though, that the more I trust Him, the more He provides. For example, the more I worry about extra income streams, the less extra income I actually get. Some might say that my wife and I still have jobs, so it’s easy to say “don’t worry.” What if we lose our jobs? Will I be so optimistic then? The Bible also provides guidance on this, in Romans 8:

28And we know that in all things God works for the good of those who love him, who have been called according to his purpose.

Even if my wife and I both lose our jobs, we are to continue trusting in God, secure in the knowledge that God works out all things, including the bad things, for the good of those who love Him.

When I started this blog, I really wanted to write about Biblical principles of money manage. That’s what I started to write about with this post. While I was looking for a verse to base this post on, I stumbled across these 2 though, and decided to write about (not) worrying instead. If you are in bad financial straights, I hope you find this encouraging.

Cheers,

Ken

Selling Stuff on Ebay in Today’s Economy

Posted on December 8, 2008
Filed Under Snowflakes | Leave a Comment

I’ve done pretty well on EBay over the last couple of years. I mostly sell items that have some collector value – models railroad items, vintage electronics, etc. In other words, stuff that probably wouldn’t sell if I was limiting my sales to a local market. The beauty of EBay, of course, is that you have a potential market of thousands, and it only takes a couple of them to decide they really want your item in order to get a good price. As recently as 6 weeks ago, I got $47 for a set of 5 magazines, $71 for a small model engine part, and $153 for a CDROM of obsolete computer software.

In the past month, though, I’ve started to notice a trend – less bidding and lower selling prices. I guess the econmomy is finally starting to affect sales on EBay. As a result, I’m changing the way I do business on EBay. Here is what I’m doing different:

  1. Setting higher starting prices. Previously, I would just set my starting price at $0.99, both for the lower insertion fee and to encourage earlier and more plentiful bidding. Buyers were prevalent, and the price would soon go up to “market value” or higher. Lately though, many items might only get 1 or 2 bids. Setting the minimum price to $0.99 could very well result in the item selling for that price. Now, I set my starting price to the minimum I am willing to sell the item for. I figure the higher insertion fee into my price. It may discourage bidding, but at least I don’t get low-balled.
  2. Maximize visibility. I’m not talking about the extra cost options that EBay offers, but making it easier for buyers to find and bid on my items. Previously, I did both 5 and 7 day listings, not worrying too much about what day the auction ended, or what time. Now, I list all my auction items for 7 days, and make sure they end on a Saturday or Sunday. This gives potential buyers more time to notice my items. I also make sure my auctions end between 1:00 and 5:00 pm. This makes it more likely buyers will have time to get in a last minute bid and not be busy doing something else.
  3. Being more consistent. EBay has always been sort of a haphazard affair for me. I’d need some extra money, I’d look through my stuff to find a couple things I didn’t want or need any more, and just like magic, I’d have an extra $200 or so. Since I can no longer depend on a few desirable items selling at a high price, I’m relying more on less expensive, “bread and butter” items. It takes more work to generate a certain level of revenue this way, but the upside is that I’m getting rid of a lot more stuff than I otherwise would. I try to consistently prepare 3 items per day to list. I photograph the items and write descriptions throughout the week, then list them on Saturday or Sunday.
  4. Pulling items with no bids. One thing I’ve noticed is that some items attract a lot of watchers but no bids. Before, I would just let the auction run its course, counting on late bidders to drive the price up. Now, it’s more likely that a single bidder will get the item for your starting bid. Even when following New Rule #1 above, sometimes I feel an item has better potential than my minimum acceptable price. In such instances, I will pull the auction early if I’m within 30 hours of ending time and the item has no bids. If the item does have a bid, you are ethically bound to sell, even if you’re not happy with the price.

I still think EBay is still a good way to make money, but the old ways of doing business don’t work as well any more. The changes I have made have helped me keep my income level consistent. If you sell stuff on EBay, I hope you find these suggestions useful.

Cheers,

Ken

Avoiding a Layoff

Posted on December 4, 2008
Filed Under Attitude | Leave a Comment

I’m a state employee in a state that is facing a severe financial crisis. This fiscal year, we had to cut our budget 14%, and rumor has it we will have to cut up to 30% more for the next fiscal year. Naturally, administration is promising there won’t be any forced layoffs, but a “Staffing Consultant” has been hired. It got me thinking about ways I can help insure that I won’t be one of the people cut if (when) the cuts come. If you are in a similar situation, here are some helpful suggestions:

All of this might seem obvious, but if you’re worried about keeping your job it’s easy to lose perspective and forget about the basics. I hope this list of suggestions is useful.

Cheers,

Ken

Minding My Own Business

Posted on November 24, 2008
Filed Under Attitude | Leave a Comment

Have you ever wanted to start your own business? It is something I have been thinking about for a long time. There is always something that holds me back though – mainly the need to support my family. Quitting a stable, well paying job to become self employed is a risk I won’t put my family through, especially with the economy the way it is right now.

However, for me it is a dream that just won’t die. I want the freedom and potential wealth that can come from being my own boss. I’m not going to quit my job (yet) to get it though. What I’ve decided to do is make my life my business – “Me, Inc.” Here is what I mean:

I’m redefining my life in business terms. For example, instead of working for my employer, I provide services under contract to a customer. The money I receive for doing my job isn’t a paycheck, it’s revenue I receive for providing services to my employer (who is now my customer). And so on down the line in each area of my life. Maybe it sounds kind of silly, but I think redefining life in these terms will be beneficial – not only now, but when I’m ready to have a real business of my own.

Cheers,

Ken

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