No Debt Plan

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I just saw a post over at FIRE Finance about Smart Money (magazine) running a “March Madness” tournament for stocks. Basically it says that you can win $10,000 just by playing in this contest — sweet deal, right?

But wait.

Look at the contest ad over at Smart Money’s page: Market Madness.

From the rules:

“3. Prizes. The Grand Prize winner will receive USD$10,000 which may be used towards payment on a car lease. The Grand Prize will be awarded as a check made payable to the Grand Prize winner. Only one Grand Prize will be awarded.”

Hogwash. Win $10,000 towards a lease on a car? Specifically, the Nissan Murano. Who wants that? No, thanks. I’d rather have $10,000 cash, but Nissan wouldn’t like that too much.

Plus, stock picking like that doesn’t encourage intelligent investing. Don’t get me wrong, it’s a smart campaign. You’re giving a discount on a lease to one consumer and you’ll have thousands of people play and get exposure to your brand. And in the end, you’re still “selling” a product to someone — just at a significant discount.

Update: Smart Money has clarified the rules, and the money can now be taken just as cash. You don’t have to apply it to a lease with Nissan.

I recently discovered a new blog, brip blap. An interesting name with some well written content to boot.

Steve is running a book contest. He’s giving away several awesome books, and two e-books. Getting Things Done, Your Money or Your Life, The Greatest Salesman in the World, X Marks the Spot, and Zen to Done are on the list. You can find out how to win one of these great titles over at his blog. And you might want to subscribe, too. I’ve been really impressed with the writing over there. Keep it up, Steve. (And no, this isn’t brown nosing trying to win the books.)

Round 1 of Free Money Finance’s March Madness is well under way.

The first 8 games have finished up voting, and the results are in. Results for Game 5-8 are above.

You can look at the full bracket I developed with Excel. I’ve noted who voted last in each set of games so I can go back periodically and update. I also highlighted whoever was in the lead (or has won for finished games).

Finances can be complicated with the number of accounts that are involved. 401k, 403b, Roth IRA, Roth 401k, online savings accounts, CDs, taxable investment accounts, checking accounts… I could go on and on. That’s a lot of different things to keep up with. In my view, the fewer accounts you have — or at least the fewer financial institutions you are dealing with — the better. This is valid to a point; more on that later.

The smaller the list the more simple your life will be. All of our financial transactions are done online. The more accounts involved, the more logins and passwords we have to remember. It can really start to get daunting.

I wrote about What Accounts We Use in January. Here’s what we are currently dealing with: 1 paper checking account, 1 online checking account, 1 online savings account, 1 taxable investment account, and 1 (soon to be 2) Roth IRA accounts. Additionally, I have a 401k through work and my wife has a retirement plan as a teacher. Thankfully some of these overlap and reduce the number of logins I need to know.

Granted, multiple online savings accounts allows you to move the money to the bank with the highest return on your savings. I know some people out there have two or three different savings accounts for this. That’s all well and good, but to me it seems like a lot of hassle for a tiny bit extra return. Plus when it comes tax time, you’ll receive more forms from more banks. Too much hassle for me.

This is Only Valid to a Point

Let me stress that you shouldn’t be consolidating your accounts solely for the sake of simplicity. That can be a major mistake as you will be hard pressed to find one institution with a “one size fits all” program. Some diversity is healthy; don’t close accounts just “because”. Online savings accounts exist for a reason. You wouldn’t want to close all of them and give your money back to your brick and mortar bank that pays 0.02% interest just to get all of your money under one roof.

Here’s how you can effectively limit the number of accounts you have to deal with:

• Understand your financial needs – You need to be able to see the whole picture of your finances before you start making any decisions. Figure out where all of your money is currently located.
• Make choices where it makes sense — Pick the one online savings account with the highest interest or best customer service. You can leave the other accounts open with $1 (or the minimum required if it has one) to give yourself the option of switching back in a few months if you end up regretting your choice. After 6 months if you are still satisfied, drop the others. You can always go back.
• Roll over old investment accounts — This is something Money magazine always harps on. People tend to move jobs and leave their 401ks behind. The funds sit without any investment direction, or worse, a direction that was correct ten years ago and is now way off base. Dumping all of these old accounts into a rollover IRA would gather all of the money in one location, with one investment direction. Obviously, that is much easier to manage.
• Avoid fees — Financial institutions like to throw in little fees that nibble away at your money. They seem harmless alone, but can add up together. Make sure that when you close or rollover your accounts that you won’t incur any fees (or at least minimize what you do incur).
• Don’t worry about it — If you go through this exercise and close just one old account, you’re making positive progress. As they say, Rome wasn’t built in a day. Make your system work for your personal preferences.

How many accounts are you currently wrangling with?

I can pretty much wrap up February with this: Thank you, Get Rich Slowly!

February was a great second month for No Debt Plan. A guest post over at Get Rich Slowly brought a huge influx of traffic in. That post, Dumb Money: The Movie Theater, generated a ton of comments (102!) over at GRS.

February vs. January:

• Posts: 30 posts vs. 13 - a 123% increase. I’m actually pretty surprised I had averaged on post per day. I didn’t think I came even close to that.
• Comments: 57 comments vs. 8 - a 612.5% increase. I wouldn’t mind if we averaged an increase like that every month!
• Visits: 1,750 vs. 158 - a 1000% increase. Of course a big jump is expected when you get to guest post on a hugely popular website like GRS. Thanks again, JD!
• RSS Subscribers: 9 vs. 28 - tripled the number of people reading the site via the RSS feed. If the subscriber number tripled each month for 7 months, I’d have 59,000+ readers. Okay, maybe that is just a bit of wishful thinking…

Most Popular Posts

• The Automobile Gas Log
• Planned Trips: NYC
• The Savings Snowball

I also posted the first true step in the No Debt Plan with Step One: A Budget.

In short, thanks for coming by. Your readership and comments make writing worth while. I hope you find something useful here. Please don’t hesitate to contact me with a reader question, comment, or suggestion.

And please tell your friends about the site!

Free Money Finance is hosting his very own March Madness Tournament. He’s accepted 64 posts, put them in brackets against each other, and is letting his readers vote on a champion. It’s a very interesting take and a great way to get a lot of bloggers together.

Of course I had to throw a post into the mix, and I bracketed into Game 11, Post #22. My post, Dollars Before Cents, is facing off against The Ugly Payday Loan by Life Lessons of a Military Wife.

I’m relying on your votes to take me all the way to the top! So head on over to FMF, have a read of all the posts, and get your vote on!

Update: This is what I love about the blog carnivals and things like this… it brings you new content, new blogs, new people to read. I found a few great articles in the different brackets:

• How Do I Organize 181 Accounts by MyDollarPlan. All I have to say is… wow. My hat is off to you. Playing arbitrage with $200,000 is just past my risk level. Impressive, no doubt, but good grief! I would be afraid that when I tried to transfer the money at the end of the opening period that I wouldn’t be able to find a card that would take me.
• Little Steps: 100 Great Tips for Saving Money by Trent at The Simple Dollar. I’ve glanced at this a few times in the past, but a great read nonetheless.
• I also really enjoyed A Little Too Late Advice on Building Wealth at brip brap. Really enjoyed your writing style, brip brap.

I am apparently out of the loop. (Thanks to Flexo at Consumerism Commentary for filling me in.)

February 24 through March 2nd has been named America Saves Week by the non-profit coalition, America Saves. Basically, a week to encourage all Americans to spend less and save more.

I think this is a sad reflection of the state of our society. We have to have a non-profit group tell us to save money, rather than just doing it on our own. It should be America Saves Year!

And besides February 24 - March 2 is technically a week and a day. Last time I checked, a week was only 7 days.

I’m no blog design guru, so I’m still working out the kinks with the site. Thanks for your patience.

If you look at the top of the page, you should see some new additions to the header bar. Nothing special, but here’s a run down of each:

• Home - brings you back to the main page from anywhere on the site.
• About - tells you a little bit about me and this blog.
• The Plan - links to the individual posts of the No Debt Plan.
• Contact - how to contact me.
• Privacy and Affiliate Policy - information on how your information is used on this site (for the curious).

You can use the RSS feed to subscribe to my posts. I am working on installing a method for you to subscribe via e-mail if you prefer.

A continuation of my Dumb Money series has been allowed to grace the front page of J.D.’s Get Rich Slowly. You can read Dumb Money: The Movie Theater there.

For those new GRS readers, Welcome! I’m Kevin, your local No Debt Plan blogger. I’ve been an active member of the GRS community for quite some time now. I’ve answered many questions over at the GRS Forums, too.

This blog is designed to help people get out of debt. I’ve started writing my very own No Debt Plan that you can check out. I’m a fan of credit cards (paid off every month) and ING savings accounts. One day I would love for this blog to help thousands of people get out of debt and on to financial security.

Some of my most popular posts include:

• Planned Trip: NYC
• Credit Cards are Not Evil
• Dumb Money: The Gym

I truly appreciate you stopping by. Want to know more? You can read additional information on this blog at the About page. You can subscribe to this blog via RSS. Please do come back!

Getting out of debt can be a daunting task. If you are really in over your head, you may have creditors calling you on a daily basis. If you are in that kind of a situation, this post isn’t for you. However, if you are cash-flow positive at the end of every month, even after paying your debt payments, then listen up:

Don’t Forget to Live!

It sounds simple, but when you start really focusing in on your goals you can easily forget it. You think you are on the right track by tracking every penny and applying every last dime to your debt. And you are. But don’t forget that life is short.

My wife told me a story she heard at her job the other day. Apparently there was a teacher who put in her 30 years and retired from the school system. She saved diligently and was ready to enjoy retirement to its fullest. Shortly after retiring she was diagnosed with an illness, and passed away two years later. She didn’t get to enjoy much of that retirement she had saved for.

The same could happen to you and me. I’m not hoping for it by any means. Saving money and living within your means is definitely important, but personal finance does not have to be kin to living in a monastery. You need to have balance in your life.

So if you’ve got a budget, you are cash-flow positive at the end of the month, you’ve got an emergency fund handy, and you’re saving for retirement… then by all means, enjoy yourself! Even if you haven’t completed all of those steps, you can enjoy yourself along the way.

Here are some ways we have balanced our life:

• I recently took a road trip with three college buddies to Memphis. Not only had I saved up more than enough money for the trip, but we crashed at someone’s house. The total cost of the trip was less than $70 per guy including transportation, gas, and food… and it was incredibly fun!
• Date night. We’ve established (with varied success) a date night where we get to go out to eat. The money is tied to a category in our budget. This helps us stay connected as a couple.
• Weekends away. She surprised me once with a weekend trip to Atlanta. Romantic, and she saved up money for it.
• 1978 BMW. This past summer my wife encouraged me to buy a 1978 BMW 320i off of eBay. I was interested, but then reverted back to my conservative self (”I don’t need it.”, “It’s a waste of money.”, etc.). Having an old BMW to work on has been a dream of mine since I had my first car (a ‘95 BMW 318is). She really pushed me to look at this car seriously. I bought it in July, and it is currently sitting in our garage.
• Renting a movie. This is going to sound stupid, but I hate renting movies. But renting is better than the movie theater, so I’m okay with doing it every now and again. On top of that, we are both pretty picky in wanting to avoid most mainstream movies (think American Pie or Wedding Crashers). Just this past weekend we rented We Are Marshall for $4 and change. It was a great night just relaxing together. And the movie was great, too.
• A dozen roses. Bringing roses home makes my wife’s day. Thanks to the Fresh Market here in town I can get them for $6-9 per dozen — an absolute steal! In fact, I brought some home last night.

There are a million different ways for you to balance your life. Don’t go overboard, but don’t limit yourself to sitting at home every night, every weekend, and not getting enjoyment out of life. That is the polar opposite of what should be an end goal: financial freedom lending itself to personal happiness.