The “In the Black” Plan

I’ve started putting together a few ideas for when the time comes that I’m finally in the black (excluding the mortgage).

My first idea was sparked by a recent comment that Dedicated made on my posting about my rapidly approaching dilemma of uncertainty.

After running the numbers this morning, over the past 36 months, I’ve been paying down my credit cards at an average rate of $2441.66 each month, or in weekly terms, around $563 per week.

With that monthly expense eliminated 100%, I should, in theory, be able to reach my goal of $10k in savings by applying that former payment towards savings in a little over 4 months. That is astounding to me.

More realistically though, with my income down somewhat after dropping numerous clients on my side business, I think a slightly smaller goal of $400/week to ING is within reason.

This too may be difficult as I’m not taking into account the additional money I’m paying towards the mortgage on a weekly basis, but I’ll give it a shot and see where it leads me.

At a rate of $400/week and not including any interest earned, $10k is just 25 weeks away or less than 6 months.

That sounds like a plan for now, but first I’m going to concentrate on paying off the auto loan…

The 2008 goals all seem to be falling into place nicely — especially considering we’re just beginning our 13th week of the year.

Posted on March 24th, 2008 at 6:44 am by Brainy Smurf
Finance, 2008 Goals | 1 Comment »

Thank You, Easter Bunny!

Posted on March 23rd, 2008 at 6:24 am by Brainy Smurf
Current Events, Retro | No Comments »

Not So Lucky Lotto Winners

You can’t win if you don’t play. That’s my problem. I don’t play.

But for those out there who do play and are hoping to get rich via the lottery, here’s a story from Canada that may make you re-think the “lucky” numbers you select…

239 2nd-prize tickets cut payout

Second-prize winners of Wednesday night’s Lotto 6-49 draw probably thought Lady Luck had favoured them in a big way, but she actually smirked instead of smiled.

The draw for a $3.99 million jackpot saw 239 tickets with five of the six winning numbers plus the bonus number, making for a smaller second-prize payday than some ticket holders might expect.

Total second prize money was valued at $285,294.30, but holders will only receive $1,193.70 each after the loot has been divided.

The number of second-prize winners is striking when compared to recent draws for similar jackpots

Don Pister, a spokesman for the Ontario Lottery and Gaming Corporation, said a draw on March 15 yielded only three second-prize winners, while no one picked five numbers and the bonus on March 5.

Pister conceded Wednesday’s result was unusual, but said only one factor is to blame.

“6-49 draw results are determined solely by random chance, so every set of possible six numbers coming has exactly the same chance as any other set,” he said in an interview.

Pister said the nature of the winning sequence also played a role in skewing the number of second-place finishers.

The numbers 40, 41, 42, 44 and 45 were all winners while 43 rounded out the consecutive string as Wednesday’s bonus number. The opening number was 23.

In addition to the 239 second-prize winning tickets, a further 106 winners picked five correct numbers without the bonus. The top prize went unclaimed.

Pister said many winners play consecutive numbers as a matter of course, but cited the popularity of that particular string for the high number of winners.

He said that particular set often corresponds to people’s ages or the years in which they were born, making them common choices for habitual lottery players.

Tom Salisbury, a professor of mathematics and statistics at York University, was less surprised by the sequence of Wednesday’s winning numbers as by the number of people who appear to adopt a losing strategy.

He said lottery fortune-hunters who consistently choose numbers in a pattern run a much higher risk of having to share the wealth than those who play random numbers.

He said Wednesday’s results only prove that playing consecutive numbers in a popular group like the 40s is not a surefire route to easy street.

“The moral of the story is that if you’re one of the people who chooses six numbers in a row, it’s certainly not going to help you win. And if you win, it’s going to guarantee that you don’t take much money home,” Salisbury said.

One thing that did appear to be well dispersed was the location of Wednesday’s numerous second-place winners.

Although 120 of them hail from Ontario, 16 prize cheques will be bound for Atlantic Canada, 63 for Quebec, and 40 for the western provinces.

Can you imagine going to collect your winnings, expecting $285k and walking out with under $1200?

I wonder if they’ll even bother with the giant oversized novelty checks (or in this case, cheques) with this many winners?

The quoted article above was by Michelle McQuigge.

Posted on March 21st, 2008 at 2:20 pm by Brainy Smurf
Current Events | 1 Comment »

Monthly Payments vs. Weekly Payments

While paying down my debts, I’ve noticed that there is one thing that stands out more than anything else as being responsible for my success.

I’ve been doing some calculations recently on how I’ve managed to pay down my debts as rapidly as I have.

What I’ve found is that the pace seems to exceed my income — I mean, I can’t believe that I made $4615 in payments to credit card companies during my January 2008 billing period, but I actually did.

The secret?

Weekly payments. More specifically, automatic weekly payments.

Some will say that the difference it makes in finance charges alone is reason enough to go the weekly route (or the often mentioned twice-monthly mortgage payment), but for me, it’s just easier to part with, say $100 each Wednesday than it is to part with a big number like $400-$500 once a month.

That’s a big noticeable drop in the checking account for people like me who generally only have between $1000 and $2000 in there at any given time. $100 is like a new outfit or something — I dunno, it’s totally a mental thing, but it really doesn’t hurt the wallet as much as a huge one time payment.

The $4615 “payment” in January is admittedly very high for me and I’m not usually able to make payment even close to that.

It’s also a little deceptive because of the way my credit card due dates overlap — January isn’t just 4 weeks, it’s more like a time period of 6-7 weeks depending on when each billing period begins and ends.

Besides the down payment on my house, and a couple of the high priced renovations, I have *never* written a check for even close to $4615 dollars. I don’t have the funds available to write checks that large.

But let’s divide that $4615 by 7…

$4615 / 7 weeks = $659.29 per week

Still a high number, and not an amount I’d like to part with, but it’s an amount that I’m at least capable of parting with.

Yeah, it’ll bring my checking account balance down by over 30% with each payment, but on a short-term basis it won’t wipe me out before the next pay day comes around.

It’s this process that allowed my debts to fall so quickly.

I’m certain that I wouldn’t have been mailing in $1000 each month to the credit card companies (that’s a hefty sum), but $250 per week? Well, that’s not so bad.

So that’s what I did.

And you know what?

It worked.

Posted on March 21st, 2008 at 6:01 am by Brainy Smurf
Finance, Credit Card, Success | No Comments »

Mission Accomplished. Now what?

Okay, okay, like President G.W. Bush, I spoke too soon. And I’m not referring to Iraqi freedom either…

I’ve been working on eliminating my debts for years now. I’ve used quite a few methods to get to where I am, both good and bad, but now the end is in sight.

I can see it. I can taste it.

Sometimes I even even pace back and forth hoping it will come sooner. But the fact is, my goal will be reached and the mission will be accomplished in a matter of months instead of years.

Problem is…then what?

I don’t know.

I guess I set up a bit of a wishlist of sorts back in January.

And I hinted at what another option might be in my “I’ve hit the 401k, IRA, and Roth IRA Contribution Limit” post, but I don’t have a real concrete — as it would be called in Washington — exit strategy.

Savings snowball? Nah…

Well, maybe… I mean, I still have my 2008 goal of reaching $10k in savings but that doesn’t really excite me the way getting out of debt has.

It’s bizarre how it was so easy to have a plan and stick to it while in the red, but when I finally hit the black, I’ll be in a bit of a haze… Unsure of what to do.

Right now I’m thinking a decent option might be to “spend” myself back into debt by buying into the down market — if I can get a few decent offers from the credit card companies…

We’ll see. Luckly I still have a few months to come up with something…

Posted on March 20th, 2008 at 6:48 am by Brainy Smurf
Finance | 2 Comments »

Re: Pending Rate Cut

There’s no telling how the market will react to the Fed’s rate decision and accompanying economic statement.

Anything less than a full-point cut could trigger frenetic selling, while anything more could rekindle the feeling that the credit markets and economy are in worse shape than Wall Street thought.

What?

It’s nonsense like this that makes me wish the Fed would just let things fall as they should and stop trying to meddle with it.

Not enough of a cut will trigger “frenetic selling” and too much would be even worse???

How about no cut at all? Fake everyone out.

Sigh…

The quote above is from an article this earlier today by Madlen Read.

Posted on March 18th, 2008 at 12:35 pm by Brainy Smurf
Rants, Current Events | No Comments »

You can put lipstick on a pig…

But it’s still a pig.

Or a recession.

Slowing economy.

Credit crisis.

Call it what you want, but let’s just put the lipstick down.

I’m sick of all of action the Fed and the government have been taking over the past few months to try and feed the ecomomy.

Save people’s houses.

Bail out the banks…

Even the tax rebate stimulus plan is bunk.

C’mon, you can’t really think it’s possible to cover this with make-up?

Posted on March 18th, 2008 at 10:47 am by Brainy Smurf
Rants, Current Events | No Comments »

E-Bills are the way to go…

I was really late jumping on this bit of technology.

Back in December, I decided to consider abandoning the check book for most of my monthly bills.

I signed up to pay online with the various utility companies and my cell phone provider. Those are pretty much the only variable monthly bills I have.

I went to all of their various websites and filled in my information, set up a gazillion logins, passwords, and security questions — most of which I’ve forgotton because they require upper and lower case with a few symbols thrown in for good measure — and then paid my first bill (but still requested to be mailed paper statements).

That turned out to be a big old waste of time as my checking account with Bank of America offers free BillPay and they have a nice drop down list of the companies that you can “pay” using their service. As luck would have it, all of my utility companies were listed.

I should have checked there first. Duh?

Now I’ve always been one to pay my bills the day they arrive in the mail. While that may not be a smartest move — sending payments in weeks before they’re due — I’ve never been close to missing a payment.

One less thing to have to sweat.

But with the online payments, it’s even nicer. You get to pick the date, and that’s the date the money comes out of your account. I’m still paying weeks in advance (though that may change once I get used to it), but it’s so much easier to balance the account when you’re not waiting for checks to clear.

Really, Comcast would hold on to a check for an average of 18 days, often making me wonder if my payment was “lost in the mail.” It’s like Bill Slowsky is actually working there and not just the on-air talent…

On Saturday, I set up my natural gas bill to be paid on March 18 (today) and guess what? Yep, my checking account shows that I’m $313 poorer today. Excellent.

Nothing fuzzy about that.

It’s not so much about saving money (I’m sorry, stamps are still a bargain), or time (does it really take that long to write a check?), or even the environment (since I’m still receiving paper statements, going “green” evidently doesn’t interest me all that much either)…

It just allows you to be more organized and on top of things when it comes to your finances.

Or maybe it just has that effect on me.

Posted on March 18th, 2008 at 6:40 am by Brainy Smurf
Finance, Cutting Costs | 5 Comments »