week of 11/3 pf roundups

November 11, 2008

fwp

carnivals roundup

last week, fwp hosted an issue of the carnival of debt reduction #164. unfortunately, i was unable to submit an article of my own, as i have been neglecting writing up debt-reduction focused posts lately.

fwp also participated in the following carnivals:

money hacks carnival #37: wonders of the world at living almost large — put aside $1000 for you, now!
rich life carnival #18 — bulging wallets not so good for your health, or wealth

fwp will be hosting the finance fiesta carnival this week!

debt bloggers network roundup

how i save money wrote about 3 principles of personal finance:

The Three Principles of Personal Finance are:

Spend less than you earn.

Make the money you have work for you.

Be prepared for the unexpected.

#2 is quite timely — incidentally, i have an article precisely on this principle (extracted from the richest man in babylon) that will be coming out quite soon as part of my friday cures series!

i believe that #1 is supremely important. if we can follow at least that guideline, we would be able to avoid so many financial problems! if i had spent much less than i earned the past 7 years or so, i wouldn’t have accrued continuous debt, i might have paid off my school loans by now, have a savings i could beam about and guard, and even larger retirement accounts!

it is so easy though in our society, to spend too much, becoming dependent on and relying on credit cards for extra (but very costly) financial resources.

on a quest to be debt free advises us to pay the minimum of our monthly credit card payments, else suffer the consequences of late fees and higher interest charges and changes.

she points out something very interesting. she wrote,

According to the cardholder agreement you signed when you accepted the credit card from the lender, the answer to your question is “No, you may not.” You must make at least the minimum payment due on your statement or you are violating the terms of the agreement.

why do so many of us complain about getting charged late fees and higher interest rates when we fail to make the minimum amount by the designated due dates?

it IS true that when we signed up for our credit cards, we are also signing on with an agreement that says we will pay at least a certain minimum fraction of what we owe the credit card company by certain due dates. the credit card company’s occasionally exorbitantly high interest rate jumps or fees may seem a bit unfair, but at the same time, they DID warn us that that could happen, should we fail to meet OUR end of the cardholder agreement.

i am one of those people who have complained before, but i will concede now that the above line of reasoning has its place. especially since i not long ago read larry winget’s you’re broke because you want to be, in which he takes a stance similar to above.

debt reduction formula shares a tidbit he found online about how consumers have been paying their debts off lately at a rather fast rate:

On Tuesday, government data showed U.S. families are cutting back on credit card use and paid off consumer debts at the fastest pace in more than 10 years in August, a sign that consumers are rushing to pare back their spending and save more money as the economy slips deeper into recession.

that’s cool and interesting — it is great to hear that people are taking responbility for their expenses. i believe though, that although i too have been more proactive about paying off my debts and have been paying large chunks at a relatively fast rate, the timing for me is just coincidence.

i did not begin to pay off my debts intensely several months ago because i sensed that the economy was suffering. rather, i was simply sick of blowing away hundreds in interest rates over the years and just wanted to stop throwing away so much money. i was tired and frustrated of having minimal savings.