The Pièce de Résistance

The final blog I'm posting is one that I have emailed to people, read multiple times, and quoted often. Apparently Frugal Dad received a lot of criticism about this, but he probably stirred up some powerful negative emotions from people who identified themselves in the article. I myself have said some of the things in it such as, "I work hard so I deserve it." As a result of this article, I have tried to stop using the word "deserve" in my active vocabulary and replaced it with other buzzwords like "want" or "need" instead. If one continually thinks they "deserve" a reward or treat at the end of the day, end of a project, or end of a work shift, then over time, it is not a reward or treat, it is a normal part of the day. This way of thinking leads to a slippery slope of overspending and that is why it is so dangerous.

And the #1 blog of the year is Language of the Perpetual Poor by Frugal Dad.

Almost there

This next post is one that is often written and talked about, but I think that the advice is worth repeating. It is from Trent at The Simple Dollar once again, my favorite daily read. Credit card debt is a huge problem in the land of instant gratification and buy now, pay later, aka the USA. Fact of the matter is, if one has credit cards that are not paid in full every billing cycle, one is living beyond his or her means. Abusing credit is similar to drug use such as alcohol since some people can use in moderation and others spiral out of control. I have witnessed several of my peers getting in over their heads and having to claim bankruptcy or get tiresome second jobs. It does not help that creditors have tactics to keep one using credit such as limit increases and the ability to write checks. Eliminating credit card debt can relieve stress, create more financial freedom, and improve one's credit score. Good credit is essential for obtaining financing on a vehicle or house with the lowest interest rates. If you have any amount of credit card debt, this article may be of use to you. It is great, simple advice.

#2
Got Credit Card Debt? Ten Tactics to Use Right Now to Get it Under Control

Another excellent article

#3
The Extraordinary Power of Compound Interest from Get Rich Slowly

I wrote a short blurb about compound interest a few months ago, but this article does a much better job explaining just exactly how much compound interest pays off over time with some great, concrete examples. I firmly believe that one does not need a high income or high return on investments to build wealth.

"The rich are not rich because they earn a lot of money; the rich are rich because they save a lot of money."

The countdown continues

#4
Avoid Frugality Burnout from Frugal Village

I like to compare money management to things like weight management and exercise because they have similar principles. To save money, you have to spend less than you earn. To lose weight, you have to burn more calories than you consume. In the short term, most people can simply eat less and exercise more, but many people burn out quickly and return to old habits. Likewise, people get tired of scrimping and saving all the time and feeling like they are not having as much fun as the next person. This article reiterates the focus on the long-term goal while celebrating small steps .

Countdown of great blogs from 2008

I have read and applied so much helpful advice this past year. I am not new to the world of saving and investing, but reading on the subject empowered me to take charge of my own financial future instead of consulting with someone will overcharge me for the same information. Over the next few days, I will post 4 more great blog articles from the past year.

#5
Ten Things I Wish I'd Done Differently While Buying a House
From Trent at The Simple Dollar comes an almost Captain Obvious approach to planning for buying a home. His 20X20 hindsight makes for a great read. This article will no doubt be one that I return to in the future since I hope to buy a house in a few years when I have a significant down payment saved.

Here is a related article I recently discovered on MSN, I recommend printing out and saving for later because following the given advice could save you from buying a lemon of a house or save a lot of frustration.

DIY home inspector checklist

Great Reasons to Have an Emergency Fund

A friend's recent medical emergency reminded me that having an emergency fund can make a potentially stressful and expensive situation a lot easier to handle. If you do not already have an emergency fund in place, I urge you to start by setting up an automatic deposit into a savings account that you can easily access. Even having $20 in there will be able to help you at some point. Ideally, you would have enough to cover insurance deductibles at the very least. We've all heard about having 3-6 months of income available, which is a rather lofty goal, but every deposit should create a feeling of ease and lessen potential anxiety and worry.

1. A sudden medical problem for your or your dependents such as injuries, appendicitis, or an asthma attack can land you in the emergency room and chances are good your insurance has a hefty co-pay. Not to mention any prescription medicine costs and if you don't get paid if you miss work.
2. A car accident that causes damage of any kind will not be paid for until you meet your deductible. Just think what you would do if your car suddenly was not available. An emergency fund could help you pay for a rental or quickly arrange to have your car fixed if possible.
3. Theft of your your wallet, purse, or credit card means you will have a harder time accessing any money that you have. This is especially true if someone uses your credit card to make purchases. It can take several days and even weeks to reconcile your account and credit you with the money you lost.
4. A sick or injured pet can unexpectedly cost you big time. One of my cats had a seizure awhile back and the emergency vet charge was $74 just for a veterinarian examination.
5. Any household problem that results in filing a claim on your renter's/homeowners insurance such as a fire.

I can think of many other reasons but these are probably the most commonly-utilized reasons to take money from an emergency fund. Remember to only use it for emergencies.

Nothing like a little identity theft

Today I became one of the millions of people every year that is an identity theft victim. I was just checking my balance online on my checking account and noticed a charge from Wednesday of $21.99 from "Big Loud Head" in Florida. I googled the company and it turns out they sell headphones, not porn (lol). So someone got my Visa debit card number and then bought some stuff. Great. I called the bank first to have my card canceled. The woman on the phone was not very helpful for some reason, usually they have excellent customer service at my credit union, and I also had to go to the bank to fill out some additional paperwork. They informed me at the bank that I would need to file a police report and let them know the number of the police report before they can credit me back the money that was stolen. There are a lot of hoops to jump through here but I was more than happy to do all of this to ensure my information would continue to be safe. They informed me at the bank that this happens all the time and there is really no way to tell how someone got my number. I am glad I am meticulous with my account! Also, it is a common practice for identity thieves to charge a small amount, then wait a week or 2, and charge a much greater amount in the hopes that you won't notice the initial small charge. Just a reminder to be wary and pay attention to your accounts, even for small purchases.