MoneyWise and Personal Musings

To all AAA members a new benefit is available.  Please sign up immediately.  This service would normally cost anywhere from $15 to $30 a month.

Note: excerpt from recent letter from AAA…

Keeping an eye on your credit—and your identity—has never been more important. As a AAA member, you now have the tools to do both with free CreditCheck® Select* identity theft monitoring included with your membership.

Although free of charge, you must enroll online to take advantage of this membership benefit. There are no hidden charges or fees.
Enroll now and receive Identity Theft Monitoring:

* One Free online Experian® Credit Report
* Free daily monitoring of your Experian Credit Report
* Free email alerts of key changes to your Experian Credit Report
* Free Fraud Resolution Support
* AAA Premier® members receive the additional benefit of $10,000 in identity theft insurance** provided by Virginia Surety Company, Inc.

If you’re worried about identity theft, go to AAA.com/identity to enroll.

Scary, I know.  Let’s say she decides to plow $500 more dollars into her retirement accounts each month.  What will that do to that shortage?  Well the shortage drops to $99K.  Better but not good enough.

Okay, let’s back up a bit and put that extra $500 into paying the mortgage off.  With United First Financial’s MMA system that 25.6 year mortgage will be paid off in less than 13 years so Carol will go into retirement without her $1500 mortgage payment (expenses lowered to $3250).  Look at that!!  Carol no longer has a shortage but now she has a surplus of $110K! 

 This was so clear for Carol’s situation (I’m not saying this is what everyone should do).  Using the UFirst MMA her mortgage will be paid off before she enters retirement and so her largest expense will be eliminated and her retirement savings will be able to stretch and cover that much more.  Carol is a firm believer now that she is on the MMA.

Why do folks use their credit card and then not pay the bill off when the statement comes in?  They look at that minimum payment and maybe make a bit more than that amount.  Then when they finally hit the wall and cut up the credit card because they are so in debt they start using debit cards.  These are the cards that immediately remove the money from your checking account.  Most folks don’t know what’s wrong with this.  Why do folks think that is the only way out of their predicament?

Debit cards seem to work for some people.  I think that’s because they get immediate feedback on what they have.  I think we need to change the way credit cards work.

1.  We can no longer allow credit card companies to list a minimum payment amount unless they also state how long it will take to pay off the existing debt at that payment amount.  That should help people know that if they make such a low payment they are going negative and they will be paying for a very long time.

2.  There should be an easy way for consumers to find out the negative balance on their credit cards.  A text to the company should give them the amount owed for the last cycle and the current balance charged.  Then customers will know what they have already charged.  Come on, the Credit Card companies already know what the balance is as soon as that charge card box calls for the approval.  Then consumers would know their balance owed but will have the ability to keep their money in their accounts until the balance is due.  That is good money management.  Debit cards do not carry the charge card protections and so are more dangerous for illegal activity.

Credit cards when used properly are a smart use of credit and are valuable in emergency situations.  Read more about the 4 steps to Financial Freedom.