Monday, December 23, 2013

Credit cards with annual fees: keep, cancel or convert?

Today I will answer the question: “What do you do when you get charged with a credit card annual fee?”
The credit card programs offering the best sign up bonuses almost always have annual fees. Most of the time, this annual fee is waived the first year of being a card member. This is great because you get to test out the card for one year to see if it's worth keeping the next year.

When your credit card gets charged the annual fee, there are 3 options: keep, convert, or cancel your credit card.

Sunday, December 22, 2013

Does applying for credit cards ruin my credit score?

When it comes to finances, we have enough to worry about: saving enough for retirement, paying the rent, buying a house, buying a car, paying the bills, entertainment expenses, etc.  Wouldn't it be great if you didn't have to worry about your travel expenses?  Wouldn't it be great if your airline tickets and hotel stays could be paid for with credit card rewards points instead of cash?  

This is where travel hacking comes in.

By taking advantage of credit card sign-up bonuses, doing some manufactured spending (Amazon paymentsVisa gift cardsVanilla Reload cards, and more) and using our credit responsibly, we've been able to generate a large amount of airline miles and hotel points to use for our vacations over the last 2 years.

We open many credit cards on a regular basis, usually opening 1 or 2 cards at a time every few months. 

When people hear about how me and my wife have been traveling for free on credit card rewards points, I often get asked 2 main questions:

Does applying for credit cards ruin my credit?” and “What do you do when you get an annual fee?”

Today I will answer the first question.

Monday, December 16, 2013

My favorite Christmas gifts

It's that time of the year again.  In the month of December, people spend too much money and eat far too much unhealthy food.  People stress out, fight crowds and traffic to find the "perfect" gifts that don't really benefit their recipients.  This is the month where people start going into crazy amounts of credit card debt and gain extra pounds of weight along the way.  

By the time New Years comes around, these poor and fat individuals then make resolutions to get out of debt, finally lose that weight and get into shape

Okay, I'm making broad generalizations.  But hey, I've been guilty of all of the above and I'm sure many of you have as well.

I've heard lots of friends and family complaining about how "hard it is" this month and how "money is so tight right now."  Bear in mind that these are people making anywhere between $50,000 a year to over $100,000 a year. 

In our society of consumerism, it has been ingrained into our minds from childhood that giving gifts is the best way to show how much you love someone.  Millions of dollars worth of advertising is done yearly to convince us which gifts are the right ones for your mother, father, spouse, and children.  People show off their gifts on facebook with pride.  People spend way out of their budget to get the right gift for the one that they love.

What happens when you get a gift that disappoints you?  How often have you heard people complaining about the Christmas gifts that they've received?  Weeks after Christmas, millions of consumers, with their gift and gift receipts in hand, go back to the stores where their gifts were purchase to exchange them for what they really want.

"I didn't get the exact purse / wallet / jewelry / camera / iPad / headphones that I wanted."  

The gift giving situations can get worse when you're married.  Once you are in a committed relationship with your significant other, your finances are connected.  When a man gets a gift for his wife, he's basically spending HER money on the gift.  And when a woman gets a gift for her husband, she's basically spending HIS money on the gift.  How does this benefit their financial futures?  

I know of couples who go deeper and deeper into credit card debt, just for the sake of impressing each other with fancy gifts.  Why should your happiness depend on gifts from others?  And if you have to ask your spouse for a specific gift, what meaning is there really? Make sure you have the money talk with your significant other or spouse as soon as possible. 

Instead of working separately to "out-gift" each other, what about working together towards the best gift of all: reaching financial freedom.  If you're in any debt whatsoever, giving gifts to your spouse is unacceptable.  Save that money and use it towards getting out of debt.  You will never become wealthy if you're always spending all of your income or going into debt.

Now with all this being said, it can be difficult if not seemingly impossible to get out of our gift giving traditions.  We still give our family gifts for important days like birthdays and Christmas.  I don't think my mom would take kindly to not receiving a gift.  Hopefully when we have children one day, we will be able to teach them never to worry about getting gifts for mommy and daddy.  

This year, the two of us decided that we already have everything that we could possibly want.  We will not be going through the stress of worrying about what gift to give each other.  

Sunday, December 15, 2013

We just switched to low flow shower heads

I'll admit it, I love taking a good, hot 10 to 12 minute shower daily.  I find showers to be one of the few things I find relaxing.  Sometimes I take a shower to help me wake up in the morning and I always take a shower after my 30 minute bike commute home.  

According to the Environmental Protection Agency (EPA), showers account for nearly 17% of indoor water use.  A typical 10 minute shower uses up to 25 gallons of water from a 2.5 gpm shower head.  Showers also use up energy to heat and deliver water to your shower head.  
Low flow shower heads offer an inexpensive and easy way to save water, money, and energy.  Low flow shower heads can reduce the normal flow rate by 1 gallon of water per minute and reducing water usage by 40%. I've read estimates on how much money we can save on water and energy costs ranging from $70 to over $150 a year. This savings can be especially important if there are several people living in your home. At any given time, we have 4 people total in our home (me, my wife, and 2 roommates). 

I first read about the benefits of a low flow shower head from a post by Mr. Money Mustache.  Later I stumbled upon another post about switching to a low flow shower head by Mustachian Acolyte.

While the benefits of using a low flow shower head were clear, this was a purchase that I kept putting off and forgetting about.  Maybe I should have put it on my to-do list earlier. 

Monday, December 9, 2013

Continuing to increase my 401(k) contributions

While my employment has changed slightly (new ownership) over the last few years, I've been with my new company for a little over 2 years now.   When I was re-hired by my new company, one of the benefits that I was most excited about was the opportunity to participate in a company 401K plan. Prior to that, I had a trivial amount of savings and only contributed a little bit into my Roth IRA.

I started contributing to my first 401(k) account in October 2011. 

Currently, any employee can contribute up to a maximum of $17,500 a year into their 401(k) or 403(b) if your employer offers it.


Wow, sounds like a ridiculous amount of money doesn't it?

When I first read about my 401(k) contribution limit of $17,000 (limit was lower in the past, recently increased to $17,500), I rolled my eyes and scoffed.

I will NEVER be able to contribute THAT much.”

Sunday, December 1, 2013

Our American Express Small Business Saturday experience

As many of you know, yesterday was the 4th annual American Express Small Business Saturday. This year, AMEX cardholders could earn a $10 statement credit after making a purchase of $10 or more at participating small businesses. 

While the promotion was not nearly as good as it has been in the past ($25 off $25 spend), free money is still free money.   We had 9 American Express cards between the two of us to work with:
Related Posts Plugin for WordPress, Blogger...