Anyway, I live in Connecticut so I’m going to focus my attention there.

Huffington Post – January 22, 2012
Credit Card Debt: $7,730 (3rd highest)
Median Household Income:$64,032 (4th highest)
Average Credit Score: 672 (9th highest)
Cost of Living: 4th highest

Connecticut is often recognized as one of the country’s wealthiest states. This is a well-earned reputation. The state has the fourth-highest median household income. The cost of living is also higher than that in all but three states. Residents, therefore, spend more than those in most other states. Average credit card debt is the third highest in the country, but not surprising, their credit scores are also high.

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Hartford Courant — February 2, 2012

Classic example of how you can make numbers say whatever you want them to.

Niether article really listed how they came to these values but I think it’s funny that the largest newspaper in Connecticut came to the conclusion that we’re number one while the Huffington Post (with a more national audience) only put us in third.

All of that aside, where do I stack up?

My current credit card debt totals $6635. Lower than either stat above.

Less than a year ago, it was $28165 which far exceeds them both.

So since I’ve been on both sides, above and below, I think I’m equipped to have a knowledgeable opinion.

Well, not surprisingly, I do.

The Huffington Post puts Connecticut in third place in the nation with an average debt balance of “just” $7730.

No freakin’ way.

First off, I don’t think $7730 is nearly high enough to be third in the country. No way.

How many women between the ages of 18 and 45 do you see walking around with $400 Coach purses with matching $250 rubber boots? They’re all over the place around here.

I don’t have a problem with it (the boots are pretty fugly, though) but I don’t have the income to justify spending that kind of coin on some ugly accessories.

As our household income is considerably higher than the stat listed, I’d pretty comfortable saying that 80% of those Coach accessories were purchased with a Visa, Mastercard, or, heaven forbid, a Discover Card.

And that’s just the tip of the iceberg, I mean, we’re just talkin’ purses and boots here… and, for the guys, I’m pretty sure it’s not cheap to pimp out a Subaru either…

So I’d say the average 24-30 year old in Connecticut is carrying a 5-figure credit card balance. Easily.

And a $20k auto loan too… with an income well shy of $64k per year.

So… I’d say the Hartford Courant’s $15k number is more accurate — but probably not high enough to rank number one.

I mean, Connecticut isn’t New York or California… We’re third.

But combine the two articles and I think you’ve got the accurate result!

I haven’t researched it (at all) but I’m assuming that this is some kind of after-the-fact reactionary federal government proposed “solution” to the housing crisis of the past few years, you know, an attempt to quell the number of foreclosures that dot the landscape.

But that’s where I lose the connection.

Refinancing at a lower rate (at best, 3 or 4 percent lower which, technically speaking, is nothing) doesn’t solve the foreclosure problem.

For instance, my newest neighbor moved in back in 2006 and paid around $275k for their home.

In general terms, it’s pretty much the same house as mine except that I only paid $141k for mine in 2002.

Following the housing “slump” our homes are currently only worth around $200k.

It’s not rocket science to come to the conclusion that my neighbors are underwater (they owe more than the house is worth) and are likely prime candidates to “walk away”.

The re-finance “solution” won’t ease their pain.

It’s not the interest rate on their mortgage to blame — it’s that they paid too much for their house.

So what’s the point of this government proposal again?

To make it easier for people who can’t afford homes in the first place…again?

It’s too soon for history to repeat itself.

This blog apparently is repeating itself…

Back in 2008 I asked, Are Home Values Important to the Economy?. That post was along the exact same line.

It was a better read, though…

I’ve lost my touch.

No, really…

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Full Disclosure: I freely admit that I benefited from the easy and available money back when I purchased my home with a tiny tiny tiny down payment.

Yes, mortgages were easy to come by and I’m fortunate enough to have rolled the dice, made a “wise” investment with the money loaned to me, and come out the other side a winner with a low rate, a low monthly payment, and a house worth more than double what I still owe.

What do they have in common besides Christmas? Well, the culprit is at the top of the list.

$2324.17 : Property Taxes
$922.22 : Day Care
$722.57 : Christmas Presents
$498.72 : Mortgage
$350.99 : Gasoline
$310.00 : Cash
$225.39 : Auto Insurance
$201.86 : Electricity
$138.11 : Cable/Internet
$134.68 : Natural Gas
$71.74 : Business Expenses
$68.29 : Finance Charges
$40.08 : Life Insurance
$21.27 : Cell Phone
$13.02 : Wicked Cool T-Shirt
$12.00 : Hockey Tickets

That totals $6055.11.

For those that haven’t read super closely in the past — and I would never expect you to — the lines in red are infrequent or unusual expenses.

When you omit them, my spending starts to look a lot more reasonable. Sadly, though, it takes real money to pay for those infrequent or unusual expenses.

Anyway, property taxes come along twice per year. Most folks have the property taxes on their home (along with the insurance) built in to their mortgage so that they never have to worry about them.

When we re-financed back in 2010, though, I opted to take care of those myself so as to ensure a *much* lower monthly mortgage payment.

The downside is that twice a year, I get hit with a HUGE tax bill. It’s okay though — I budget for it.

The only other line worth nothing in this month’s report is the $68.29 in finance charges.

In November, I paid $129.14 in finance charges.

In October, I paid $135.14 in finance charges.

In September, it was $196.20 and prior to that it was over $200. Ouch.

In today’s report, it was just $68.29.

What does this signify?

Well, first, I think it shows that I’m doing an awesome job of achieving my goal for 2012 but also that I’m utilizing all of the options available to me when it comes to credit cards.

Someone is *always* offering an outstanding promo rate.

You just have to have a zero balance (and a high credit limit) on the card that has that rate. I’ve been fortunate to have this occur repeatedly allowing me to make some pretty large purchases (like a $40k renovation) at a difficult-to-believe rate.

Fine — I won’t tap dance around it anymore. I was offered a balance transfer offer that I couldn’t turn down and it’s already saving me money.

Lots of it.

Here are the three puzzle pieces that determine success or failure: Payments Made, Interest Charged, and Purchases Made.

The total balance doesn’t matter one bit. $20 in the hole or $200k in the red, it doesn’t matter.

In hockey terms, it’s a lot like a player’s plus/minus rating.

For those that don’t follow ice hockey, the +/- is a statistic that doesn’t take into account how many goals a player has scored. If you’re on the ice when your team scores a goal, whether or not you’ve influenced the play at all, you get a plus one. If you happen to be on the ice when the opponent scores a goal, you get a minus one. Pretty simple, huh?

Well, sometimes the most valuable player on a team is the guy with the fewest points. Some players are just “good luck charms” for those around them and the +/- rating is what showcases an otherwise un-noticed talent.

Brad McCrimmon, who sadly died in that hockey team plane crash a few months ago, has always been the “stud” of this statistic.

He was a defenseman who never once scored more than 13 goals in an entire season. Thirteen goals isn’t very many.

Casual fans thought of him as a, well, just a generic and totally replaceable player. I know I was never “excited” to see him on the ice — really, just a boring player among the likes of an offensive lineman in football or the guy who bats eighth in baseball.

Simply put, no one was chanting his name.

But when you took into account the +/- statistic, well, he was second to none. It became crystal clear that his team scored often and the opponent pretty much never scored while he was on the ice.

So, even though he wasn’t on the score sheet very often, he was, in a technical sort of way, the best player on the team. By far.

Back to finances…

So, first and foremost, my payments for the month (goals for) must exceed the sum of my expenses and the finance charges (goals against).

It’s really that easy.

I don’t even need to address the total balance — as long as the above holds true, I’ll always be headed in the right direction.

Duh?

I know, this isn’t rocket science but so many people somehow manage to lose track of how simple it all is…

So far, in January, I’ve charged $399.06 and I’ve submitted $1473.95 worth of payments. There have been no finance charges as of yet.

That means that my plus/minus rating is plus $1074.89.
And we’re less than halfway through the month…

Winning!

(I know, I know, I’m 6 months late with the Charlie Sheen references…)

Yep, that’s right, I’ve reclaimed my status as a quarter of a millionaire.

Cash:
December was a three paycheck month for me so there’s a little bit of extra padding here.

Savings:
Oh no! What happened? Well, property taxes came due. That’s okay, though. It’s totally built into my budget that when they come due (every six months), I’ve got enough in savings to cover it… no matter what.

Gov’t Bonds:
Will I hold on to these for the entire year? I doubt it. But while they’re still in my asset tank, I’ll gladly take the six or seven bucks for nothing each month…

Home:
Zillow.com currently lists my house as the most exensive on my street. This makes the roof of my mouth nice and warm. I know it’s not really true — but it’s still nice to see.

Auto 1, Auto 2, and Auto 3:
With no movement on the BMW or Land Rover, I’m thinking that their values may have bottomed out. I can’t tell you how awesome it’s not having to pay a car payment for almost four years now…

Credit Cards:
Crazy considering all of the Christmas expenditures but it’s on like Donkey Kong. Yep, I got started on my Goal for 2012 already.

Auto Loans and Other Loans:
Nothing to report.

Mortgage:
Just another minimum payment.

As a result, my finances have been, well, farting around. They’re okay, sure, but I’m not moving in any kind of direction. Just kinda treading water.

In 2007 and 2008, I was on a mission to eliminate my thousands upon thousands of dollars of car and credit card debt and I did it…quickly. Total success. Cheers all around.

In 2009, though, I got sloppy and set goals having to do with imaginary numbers from dream land. Save for “this” and “that” which don’t have pricetags attached to them. There wasn’t anything concrete.

It’s like the, “I’m saving for college” line you hear so often. I always want to follow-up and ask, “Any idea how much you need to save?” knowing full well that what they’re saving will barely put a dent in what they’ll actually need to spend.

Sorry, a few hundred dollars tossed into a 529 plan each year won’t add up to anything.

In 2010, I started to paydown all of my new found debt resulting from “this” and “that” which I didn’t save enough for in the previous year but I never really got serious about it.

Sure, the balances were falling all year long but it was a lot like a 529 plan — my payments weren’t getting me very far.

I could have done better. I should have done better.

I should be debt free again already…but I’m not.

I’ve been like a broken record player for two years now. It’s time to replace the needle.

(Where would one but a new needle in 2012?)

My goal for 2012 is simple — to be debt free and able to realisitically convince my wife that we *need* and can afford a third smurfling.

Here’s how I’m going to do it:

• Weekly $300 Auto-Payments – I’ve been doing this for months now and it’s what’s always driven all of my debt paydown efforts in the past. This is nothing new.
• End-of-Month Lump Sum Payments – This is what went by the wayside after I first cleared all of my debt. On the last business day of each month, I used to make as large a payment as I could afford so as to “pad” the numbers reported each month in my net worth updates.

The second bullet point is key to the success of the plan — I must-must-must start doing this again.

This site (the net worth updates) held me accountable to myself and even motivated me as I saw progress, real progress, each and every month.

Once I achieved my original goal of becoming debt free, well, that kinda stopped.

As for the third smurfling side of things, having kids has certainly forced me to cut my out-of-wallet spur of the moment spending drastically.

Before we had kids I used to hear people talk about how much formula costs, and doctor visits, and clothing, and this-and-that relating to having kids.

I haven’t found those things to be terribly hampering — it’s the daycare costs that kill you financially.

Did you know that we pay four times our mortgage payment for daycare?

That’s the crippling part. And it’s also the part that has us on the fence about a third.

Can we afford it?

Right now, the answer is no.

But when you take out the $1300 I’m autopaying to the credit cards to get out of debt each month, the answer leans more towards yes.

Can we get a new kitchen too?

Well, I wish but that puts us back to no.

And while I’d really like a new kitchen to match the rest of the renovation, when I look at my two angry birds, I know without a doubt that they’re the best thing I’ve ever done and they’re the best thing I’ll ever have.

So much more rewarding than a new kitchen.

So I’m getting greedy — I want another.

I just have to get my finances in order pronto.

And then we’ll start “saving” for that kitchen without a “pricetag”.

Cash:
There’s no real strategy here at all. I get paid every two weeks and I’ve got automatic payments pulling from my checking account right down to the $2000 balance level (to avoid bank fees). It’s like auto-pilot.

Savings:
I withdrew $600 from here early in the month (to pay off a credit card balance) but managed to replenish it almost 100 percent. Unfortunately my property taxes are due this month so it’s going to drop off considerably but that’s what I set the savings account up for — property taxes.

Gov’t Bonds:
Month after month I question why I still have these. The return is just so much better than a savings account that, for some reason, I just can’t part with them completely…

401k:
It’s up. It’s down. It’s…whatever…

Home:
It’s worth far more to me but the mortgage payment says otherwise. It’s a total win-win.

Auto 1, Auto 2, and Auto 3:
Just this month I realized that we have four “older” cars (my wife owns one that isn’t reported here) that all have insanely low mileage. It doesn’t really mean anything, I suppose, but I’m starting to think that when you have a mini-fleet of cars to choose from, they all last longer.

Credit Cards:
I’m kinda shocked this went down, actually. That week after Thanksgiving turned out to be pretty expensive but I guess I didn’t charge quite as much as I thought I did. That’s a good thing — we’ve got to get this slate wiped clean by May 2011.

For the record, nearly the entire balance is on a Chase Slate card. See what I did there? Pretty cool, huh?

Auto Loans and Other Loans:
Nothing to report.

Mortgage:
Just another minimum payment.

$922.22 : Day Care
$618.97 : Christmas Presents
$501.30 : Business Expenses
$498.72 : Mortgage
$398.65 : Gasoline
$360.00 : Cash
$164.65 : Electricity
$145.57 : School Pictures
$137.78 : Cable/Internet
$129.14 : Finance Charges
$122.82 : Vacation
$114.37 : Water/Sewer
$92.69 : Natural Gas
$85.24 : Groceries
$13.02 : Clothes

That totals $4305.13.

The daycare at the top is really starting to wear on me. That’s actually only half of the total bill as my wife pays the other half (as well as for 99% of the groceries and eating-out expenses.)

I mean, just over two years ago we somehow had nearly $2000 worth of extra disposable income per MONTH?! Now I’m not saying the kids aren’t worth every penny — they are, which is why I want another one — but if you haven’t had kids yet, starting thinking about doing something intelligent with your “extra” money before the kids come along.

I’m just sayin’…

The holiday season is upon us. I almost wanted to wait and combine the November and December spending to showcase how crazy I went with Christmas this year. Christmas was all but cancelled last year following the death of my dad (while decorating for, get this, Christmas).

While trying to remember what the “big” gift for Duncan was last year, I was coming up blank. Reason being, we didn’t get him anything last year. Sure, we had Christmas (there’s even a picture) but it was pretty low key.

Now, with Henrik in the fold (and in the picture at the top of this post), I wanted to make up for it.

Tomorrow morning is going to be smurf-tastic.

Business expenses were high in November too but it was mostly on hardware and equipment, you know, real things that’ll serve a purpose for years to come. Most importantly, I added two terrabytes to my fileserver which is something I’d been dragging my feet on for, well, forever.

School pictures are a rip-off. We even got ripped off worse as they took one picture of both of our kids like it was a 2-for-1 special or something. I’d have much prefered individual sittings, though I suppose then it would have cost me twice as much…

Yes, I still want three.

Vacation in November? Well, sort of. We spent a night in a hotel following our awesome Thanksgiving feast. I’m not usually a fan of big sit-down type meals (burger and fries are more my thing) but there was plenty for me to hunt-and-peck at — and then not have to drive for two hours to get home, well, totally worth the expense.

Honestly, though, seeing my two boys and they’re three cousins running wild for a few hours was worth the room rate all by itself. Can’t wait until they’re all a bit older….

And those pesky finance charges… Argh!?

Well, great news on that front too — it’s going to drop like a rock.

A year ago now, I wrote about Smart Credit Card Strategies and, once again, I’ve followed my own advice and made a wise money move.

After years of being debt free and then suddenly finding myself paying over $200/month in finance charges again (as recently as August) as the 0% offers expired, I’ve transfered the balances again to a more manageable offer where I’ll have the balances paid off in full long before the offers expire.

Just taking advantage of the tools in my wallet…

Yeah, I know, it’s December 24th and I’m just now posting my spending report for the month of October. No excuses.

But worry not! After all these years, my finances are practically on auto-pilot. Occasionally there’s some turbulence but never anything too extreme.

Here are the expenses from October:

$922.22 : Day Care
$498.72 : Mortgage
$450.00 : Auto Insurance
$276.52 : Gas
$271.78 : Clothes
$260.00 : Cash
$150.52 : Electricity
$135.43 : Finance Charges
$131.85 : Groceries
$128.06 : Cable/Internet
$80.16 : Life Insurance
$54.47 : Business Expenses
$49.09 : Natural Gas
$24.75 : Toys
$14.00 : Bank of America Maintenance Fee
$5.00 : Car Wash

That all adds up to $3452.57 which, while high, is the second lowest total all year. Hooray for me!

I’ll spare you the line-by-line analysis since, well, all of this spending occured months ago and there isn’t really anything terribly unusual or hard to comprehend on there…

I mean, just look at the last year’s worth of updates and all of the movement has been huge…

Here we go…

Cash:
Still tight. I think I even inadvertantly went under the “threshhold” this past month. Booo…

Savings:
Nothing new here — just where I’m tossing $135 in per week to cover my property tax bill (due in December) and anything else unexpected.

Gov’t Bonds:
Treasury Direct’s login process just switched again. They claim that it’s easier but I’m finding it even more annoying than ever. If I weren’t earning nearly 6% on what I have left in there, I’d sell out in a heartbeat.

401k:
Months like this are why I don’t support the whole Occupy Wall Street movement.

Home:
A big snowstorm and tons of tree damage apparently had an impact on the value of my home. Or maybe it was a coincidence.

Auto 1, Auto 2, and Auto 3:
Not much movement here.

Credit Cards:
Not as much progress here as I’d have hoped but still over $1000 wiped out. I was really hoping to have it under $10k at month’s end…

Auto Loans and Other Loans:
Nothing to report.

Mortgage:
Just another minimum payment.