It has been a busy week for us here at Our Fourpence Worth. We partipated in another PF Bloggers Network Group Writing Project, the topic of which was our Personal Experiences with Loans. We wrote about the first time we purchased a car on our own and got in a little trouble by being clueless as to how the credit, loan and auto sales industries work. It was a once in a lifetime mistake that you can be sure we won’t ever be making again – Learning From Our Mistakes: Our First (Auto) Loan.

Check out the PF Bloggers Group Writing Projects page for more, and if you are a personal finance or frugal living blogger, you are invited to join in our Extended Group Writing Project. We also hosted the 16th Edition of the Finance Fiesta, the theme of which was “Devote Your Life to Money!” a cynical poem by David Kessel about the virtues of money.

A quick note before we begin with today’s roundup, we have been doing roundups once a month for the past few months, but plan to begin doing them twice a month. The reason we don’t do weekly roundups as many other bloggers do is simply because of our personal, work and blogging schedule. As you’ve probably noticed, we only manage to publish about 3 original posts a week so weekly roundups would not be a good balance of original and linking posts. OK, now on with the roundup.

PF Bloggers Network Members

• Wide Open Wallet shares her reasons for eating out. $400 a month is quite a lot, but if you enjoy it and can afford it, bon appetit!
• No Debt Plan talks about his “Thing”: Keeping a Bunch of Old Magazines. We have a similar “thing”. My Wall Street Journal pile, for instance, will soon be a WSJ mountain.
• Living Almost Large asks: is spending wrong? As with eating out, it really is all about what you can afford.
  
• Master Your Card gives a guide on How to Balance your Checkbook. In this electronic age, it probably is the norm to not know how to do this. Might I also suggest our Monopoly Game Expansion #2: Personal Checking Account for a fun way to practice this important skill.
• Girls Just Wanna Have Funds offers some car buying advice (something I was planning to do as well to follow up our experience with our car loan): Put On Your Lace Gloves: Get The Car You Want At A Price You Can Afford.

Elsewhere in the Personal Finance Blogosphere

• The Simple Dollar gives us Why Many “Alternative Income” Ideas Aren’t Worth Your Time – And What You Might Do With It Instead.
• I enjoyed Money Ning’s What Motivates You to Make Money? It is important to know and not lose sight of your true motives.
• Living Well on Less explains the beneifts of Life without a microwave. We did this for a while when our 12+ year old microwave died. It was a little inconvenient sometimes, but not at all impossible.
• Saving Advice gives us Ten Money-Saving Reasons to Get Out of Bed Early.
• Taxguy instructs on Items to Bring to Your Individual Tax Preparation Appointment.

Carnival Participation

Lately I’ve been really disorganized and have consistently forgotten to submit to blog carnivals, but I did manage to remember one. We’d like to thank The Personal Financier for including my post on Switching to Paperless Statements in the Carnival of Personal Finance #170 – Famous Last Sentences Edition. This edition features many [entertaining] statements, hopefully fictitious, that have not always resulted in a good end for the money manager or investor who said it. One of my favorites is #20: “It just can’t get any lower than this…”

Head on over for more personal finance reading recommendations.

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Related posts:

• Interesting Reads from Fellow Personal Finance Bloggers
• Interesting Reads From Fellow Personal Finance Bloggers #12
• Interesting Reads from Fellow Personal Finance Bloggers #2
• Interesting Reads from Fellow Personal Finance Bloggers #3
• Early to Bed and Early to Rise Makes a Man [or Woman] Healthy, Wealthy and Wise

This month’s Group Writing Project is about Personal Experiences with Loans, so we’ll tell the story of our first, somewhat disastrous experience with loans, of how we got in trouble and rectified the situation.

In May 2003, when we moved from Hawaii, we lived in a tiny garage apartment in Hayward, CA (more about this in Our Family Financial History). After a few harrowing experiences of walking as long as 3-4 hours through the dodgy neighborhoods to run errands, we decided we needed to buy a car ASAP.

Not knowing the first thing about buying a car or obtaining a loan, we set out on foot on Memorial Day 2003 and walked several miles to the car shopping district. The first used car salesman we spoke to asked us about our credit history, of which he had none. He told us we wouldn’t be able to buy a car without credit history and made some suggestions that we buy some jewelry on financing to build credit. Well, we needed a car then, not a year after owning jewelry we didn’t need, so on we went.

At the next used car lot we stopped at, a young salesman hurried out to speak to us. I can’t quite recall what was said in the conversation except perhaps that we were looking to buy a used car. Before we knew it, we had been whisked off in one of the used cars and driven over to the KIA dealership a block down the road and seated at a table with 2 car salesmen.

Again, they began by asking about our credit. We told them we had no previous credit history, but they went ahead and pulled our credit and came back shaking their heads and tsk-tsking about it, saying it would be really hard for us to buy a car. But good news was that I had an Old Navy credit card account (which I had never used), so I could actually get a loan – at an interest rate 24% APR. It was the only way, they said, that we could get a car.

We believed what they said and settled on a used 1999 Sephia LS, which was listed at $7,000, with a monthly payment of $230 (about $190 of which turned out to be interest) for 36 months. I didn’t like it, but by this time, we had been there for hours, were famished and really just wanted to get out of there. We also felt that we had to get a car that day, because we were too tired to walk all the way back home in that hot weather, and we couldn’t go on walking to buy groceries (Hayward is a scary place and our experience with public transportation there hadn’t been good).

So we finally gave in, put a down payment of $1,500 and took the “deal,” which upon later examination of our loan documents and after licensing and taxes (another $1,500) would have us paying a total of $11,300 for a not-so-great used car. We also made the mistake of not planning ahead and looking into auto insurance, so we had to take the dealership’s deal for insurance until we could get our own.

After we bought the car and spoke to our cousin, who had lots of advice for what we “shouldn’t have done” after the fact, we decided that we would do our best to pay off the loan as quickly as possible. The one good thing about this awful loan was that there was no pre-payment penalty. So we made our monthly payments and saved as much money as possible. By the beginning of June 2004, after 13 monthly payments, we had saved up enough to pay off the remaining balance of about $4,300.

By paying the loan off 2 years early, the final amount we ended up paying for the car was around $8,800. So we were able to save about $2,500. It was a mistake to go car shopping armed with no knowledge, but we did learn from our mistake and you can be sure we will never make the same mistake again. We’ve decided that next time we need to buy a car, we’ll order a new one from Cars Direct and pay in cash.

* * *

About the PF Bloggers Group Writing Project

The Personal Finance Bloggers Network currently consists of 7 active personal finance and frugal living blogs. The Group Writing Project is a monthly project wherein each blog will write a post on a pre-determined topic and publish it on the same day of each month. Be sure to visit the PF Bloggers Group Writing Project page for the others!

Extended Group Writing Project Invitation

If you are a blogger, we would like to invite you to write your own post on this topic and submit it for listing with our entries on our Group Writing Project pages. Please visit the following page for details on how to participate in our Extended Group Writing Project.

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Related posts:

• Interesting Reads from Fellow Personal Finance Bloggers #9
• Interesting Reads from Fellow Personal Finance Bloggers #8
• Poorest Time of Our Lives
• Insurance Matters: The Cost of Complacency
• Falling Off Your Financial Horse: If You’ve Never Fallen Off a Horse, You Just Haven’t Ridden Enough

Looking for Blog Carnival Hosts

We are looking for personal finance, frugal and green living bloggers to host editions such as this starting October 22, 2009. Hosting a carnival is a good way to gain traffic to your blog, so if you are a blogger and are interested in hosting, please visit the hosting guidelines page to learn more and apply.

Now on with the carnival!

I thought I’d celebrate Fall TV Premiere month with a stroll down memory lane of one of my favorite shows from my college days, Friends. Thanks to TheWb.com, I am now able catch up on the last few seasons which I have yet to see because we stopped getting cable in 2001.

Below are a few clips from this great show. Enjoy!

Editor’s Picks

• Fiscal Fizzle presents 7 Ways to Find Your Financial Heart.
• Budgets Are Sexy presents Finance is really not that complicated.
• Get Rich Slowly presents Sweating the Big Stuff.
• Man Vs. Debt presents Negotiation Tips For Beginners.

Frugality

• Suburban Dollar presents Be Frugal, Not Cheap.
• Pay Less For Food presents Nine Simple Ways to Avoid Supermarket Impulse Purchases.
• Modern Tightwad presents Updated: Top Fifteen Garage Sale Rules.
• The Financial blogger presents 4 Tricks to Save Money on Groceries: How to Cut Your Grocery Bills by 20% while being lazy.

Jobs, Income & Economy

• Bible Money Matters presents Dealing With A Job Loss: What To Do When You’re Laid Off.
• Gather Little By Little presents What I Don’t Like About Mary Kay and other Multi Level Marketing (MLM) Companies.
• Christian Finances presents 25 top careers without a degree .
• Darwin’s Finance presents Best Places to Work: Surprising Survey Results and Analysis.
• The Happy Rock presents Necessity vs Luxury: Research Shows That The Economy Shapes Our Perspective.
• Don’t Quit Your Day Job… presents The Minimum Wage Mistake.

Debt, Credit & Loans

• PT Money presents 0% Balance Transfer Credit Cards: Using them Effectively.
• The Digerati Life presents Secured Credit Cards To Boost Your Credit.
• Banker, Saver presents Compare Auto Loan Financing Options Before Buying A Car.
• The Smarter Wallet presents Avoid Bankruptcy! Information To Help You Stay Afloat.
• Money Help For Christians presents Good Debt vs. Bad Debt.
• Financial Highway presents Basics of Credit Score and Credit Report and How often to Check.

Saving & Investing

• Bargaineering presents Roth IRA Account Explained.
• Free From Broke presents 9 Reasons You Need An Online High Yield Savings Account.
• My Dollar Plan presents Writing Bylaws for Your Investment Club.
• Go To Retirement presents Asset Allocation Strategies and Online Calculators.
• Good Financial Cents presents Understanding Your Beneficiary Options for IRA’s and 401k’s.
• Investing Toolkit presents Facing Investment Risks: Watch Your Money!

Well, this wraps it up for today’s carnival. Be sure and submit to next week’s edition which will be hosted at Fiscal Fizzle.

Thanks for stopping by!

Related posts:

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• Pecuniary Links ~ July 2009 #2
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• Pecuniary Links ~ August 2009 #1

As some of you already know, I am the worst of procrastinators. And taxes being so unpleasant, I naturally tend to procrastinate when it comes to filing my taxes every year.

First of all, I do put off filing my tax return for one valid reason: we owe each year so I prefer to wait till April to file and pay in order to earn more interest in  savings. But this also gives me an excuse to put off working on our returns.

This year I was worse than usual, and my procrastination and 2 unforeseen events almost got me in trouble.

My Taxing Experience

• Dec. 31, 2008–April 11, 2009 — Procrastinated
  We have a few different sources of income so there are a lot of elements involved in our tax returns – calculating various types of expenses and almost 20 different forms between the two of us. Needless to say, this takes a lot of preparation, which I just kept putting off.
• April 11 9:30PM — Started to panic
  3 days, 2 hours before April 15th, I finally realized just how little time was left and kicked myself into action.
• April 12–13 — Worked like mad
  Pulled an all-nighter and finished my “first draft” of the PDF forms.
• April 13 11:00PM — Crisis #1: Printer wouldn’t print
  After double- & triple-checking the forms and calculations, I was ready to print and be done with it — only to find that the printer wouldn’t print. I re-filled the ink cartridge but print quality was awful. Thinking the ink needed time to settle and let the air bubbles work their way up, I called it a night.
• April 14 5:45PM — Crisis #2: Power outage
  After more ink re-filling and printer maintenance, it was printing properly again, but half-way through approx. 40 pages, our power went out due to wind storms in the area. the outage was all over town and lasted until 11:00PM, so I didn’t finish compiling and packing everything up till around 1:15AM.
• April 15 — Phew!
  Got to the post office and got everything mailed out. Thoroughly exhausted.

I was extremely lucky that I was still able to get everything done by the 15th. Had I delayed just one more day, I probably wouldn’t have made it. When the power went out on the 14th, I started contemplating all the other things that could possibly go wrong, such as:

• What if my car won’t start when I need to go the Post Office tomorrow?
• What if the wind storm gets worse tomorrow and I can’t drive?

Any number of things could have prevented me from being able to get our returns postmarked on the 15th. The amount we owe is high enough that a penalty and interest charge would be quite unpleasant.

This experience got me thinking about other ways procrastination can set back your financial health. I have been thinking about this for the last 2 days and here are my conclusions.

Other ways procrastination can lead to financial disease (and possible eventual death)

Putting off . . .

• Contacting service providers, insurance companies, etc. to lower your bills
• Canceling services you no longer need
• Minor maintenance and repairs on your home or car until they become major repairs
• Paying off credit card debt by just paying the minimum payment
• Refinancing loans when interest rates are low
  

I have to admit I have been guilty of all but one of the above (I don’t have credit card debt). When I was in college, my fellow students and I often joked about how we procrastinated studying for our exams or writing term papers. The fact is, I’m the type that works better under pressure. Oftentimes, when I sat down to write a paper that wasn’t due for a few more days, I would get writer’s block. But the night before the due date, I would get serious and the ideas would start flowing.

Thus, I have always operated under the premise that this is just how I work so it’s O.K. to procrastinate. But now that I’m a grown-up dealing with grown-up matters where it’s no longer just a grade at stake, I’m beginning to see just how self-destructive this type of behavior can be. While this past week has been torture, I have learned a valuable lesson, so perhaps it was good for me that I had this harrowing experience.

It seems the tax gods were with me this time and let me get by with a lesson learned and no harm done. I shouldn’t expect to be so lucky again and must start getting things done ahead of time. Not only could it save me potential financial penalties, but keep the stress and blood pressure levels to a minimum.

Related posts:

• Interesting Reads From Fellow Personal Finance Bloggers #19
• Funny Money Lessons from Fiddler on the Roof: If I Were a Rich Man
• Holidays Should Be Happy: Have a Party-Preparation Party to Reduce Stress
• Interesting Reads From Fellow Personal Finance Bloggers #20
• Interesting Reads from Fellow Personal Finance Bloggers #10

If this is your first time here, please have a look around (popular posts to the right) and consider subscribing to our RSS feed.

About Debtor’s Prisons

In the time of Charles Dickens, men were arrested for debt and imprisoned until they could repay what they owed. This was sometimes achieved by the help of family members, but as not everyone had that advantage, the system was somewhat nonsensical especially because living within the prisons required the spending of money with virtually no opportunity to earn it.

“Pray remember ye poor debtors.”

Editor’s Picks

I Pick Up Pennies presents Are we too optimistic?.

Passive Family Income presents Recession in America – Gardening.

Five Cent Nickel presents Debt Reduction vs. Retirement Savings.

Personal Stories

Debt Kid presents Going from Broke to Blessed.

Bible Money Matters presents Don’t Let Unexpected Stress Be An Excuse For Spending.

Man Vs. Debt presents My Debt-Recon And Current Battle Plans.

My Money Minute presents Don’t Laugh, It’s Paid For!.

Daily Saving & Budgeting

PF Credit Cards presents Lower Your Monthly Subscriptions Cost by Calling.

American Consumer News presents What a Difference Control Makes.

The Smarter Wallet presents Money Saving Ideas To Create A Frugal Household Budget.

Greener Pastures presents It’s EPA Fix a Leak Week.

Money Management

My Dollar Plan presents Would You Take a Loan Modification?.

Automatic Finances presents 3 Bank Fees You Should Never Have to Pay.

Free Money Finance presents Review Your Credit Card Bill.

No Credit Needed presents Beware The Dangers Of The Abuse Of Credit.

The Sun’s Financial Diary presents PIN vs. Signature Based Debit Transactions.

Investing

Investing School presents Realized and Unrealized Gains and Losses.

Prime Time Money presents 5 Reasons Not to Borrow from Your 401k.

My Retirement Blog presents Earning $20,000 Equals Half Million Dollar Nest Egg.

Gurus & Books

The Paycheck Chronicles presents A Dollar Saved is Two Dollars Earned.

The Digerati Life presents Dave Ramsey’s Baby Steps To Financial Success.

The Dough Roller presents Debt Cures by Kevin Trudeau–Do his “secrets” really work?.

Making Money

Counting My Pennies presents Sell your gold and get rich!.

Destroy Debt presents The Part Time Job Method of Increasing Your Income.

Miss Thrifty presents Making Money From Your House in 2012.

Studenomics presents Successful Business Venture Checklist.

Miscellany

Clever Dude presents Is Hip-Hop Teaching Americans Money Lessons?.

J. Money presents Our church is $125k in debt…and guess what?.

Christian Debt Help presents Video of Peter Schiff predicting the crisis and getting mocked!.

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This concludes the Charles Dickens Debtor’s Prison Edition of the Carnival of Debt Reduction. Remember, if you’d like to be included in my next carnival, the 1st Edition of the Carnival of Pecuniary Delights,  submit your best post by April 1st 6PM PST!

Related posts:

• Interesting Reads From Fellow Personal Finance Bloggers #18
• July 2008 Finance and Frugality Blog Carnivals
• June 2008 Finance and Frugality Blog Carnivals
• Hosting the 3rd Edition of the Finance Fiesta Blog Carnival
• Giveaways Ending Soon! And Hosting 2 Blog Carnivals Next Week

Welcome to the 188th Carnival of Personal Finance! Our theme for this week’s edition is Jane Austen, as I am a admirer of both her novels and the films based on her novels, which are graced throughout with witty commentary on society — and in particular, money and marriage.

If this is your first time here, please take a look around and consider subscribing to our feed to have new money saving tips delivered to your feed reader of choice or your email inbox. We are also currently holding our first ever giveaway for a free 6-month print subscription to the Wall Street Journal. Please be sure to stop by the contest page and see how you can enter to win.

Single women have a dreadful propensity for being poor – which is one very strong argument in favour of matrimony.

Jane Austen, Letter to Fanny Knight, 13 March 1817 Photo: Anne Hathaway as Jane Austen, Becoming Jane (2007), Miramax

~ Editor’s Picks ~

• Coffee For One presents Paying the Bills
• FruGal presents Joining the gym? Read this first
• Sound Money Matters presents That Makes Me Stabby: Do We Have an Obligation to Spend?
• Beyond Paycheck to Paycheck presents Lessons from Flight 1549
• Free From Broke presents Just Enough Is Not Good Enough
• Pimp Your Finances presents 10 Financial Commandments for Your 20s
• Money Ning presents 50 Ways to Budget Travel and Save Money on Vacations

If the loss of what is most valued is so easily to be made up by something else, your resolution, your self-command, are, perhaps, a little less to be wondered at.

Marianne Dashwood, Sense and Sensibility Photo: Kate Winslet & Emma Thompson, Sense & Sensibility, Sony Pictures

~ New Year’s Resolutions ~

• The Passive Dad presents My Latte Factor In 2008. Automatic Millionaire Goals for 2009
• Destroy Debt presents Did You Give Up On Your New Year’s Resolution Already?
• My Money and My Life presents New year, new goals
• Think Your Way To Wealth presents Tips for Making Your Personal Finance Resolutions Stick- Turn Your Resolutions into Habits

Imprudence or thoughtlessness in money matters would be unpardonable in me.

Jane Bennet, Pride and Prejudice Photo: Rosamund Pike as Jane, Pride & Prejudice (2005), Working Title

~ Frugality ~

• Passive Family Income presents Live Frugal – But in moderation
• Living The Frugal Life presents What Would You Do If You Lost Your Job Today?
• The Paycheck Chronicles presents Space Heaters or Turn Up the Thermostat?
• Getting Rich in Grad School presents 5 reasons why the best financial advice is always free
• The Smarter Wallet presents Buying A Computer? Check Our Computer Shopping Tips First

People always live for ever when there is an annuity to be paid them…. An annuity is a very serious business; it comes over and over every year, and there is no getting rid of it.

Fanny Dashwood (in regards to Mrs Dashwood), Sense and Sensibility Photo: Janet McTeer as Mrs. Dashwood, Sense & Sensibility (2008), BBC Warner

~ Budgeting ~

• Monogamoney presents What’s in my pantry
• Yielding Wealth presents Do You Need a Gatekeeper for Your Personal Finances?
• InsureBlog presents Wallet Biopsy
• About Financial Software Blog presents 8 Tips for Choosing Budgeting Software

And we mean to treat you all, but you must lend us the money, for we have just spent ours at the shop out there.

Lydia Bennet, Pride and Prejudice Photo: Brenda Blethyn, Jena Malone & Carey Mulligan, Pride & Prejudice (2005), Working Title

~ Consumerism & Spending ~

• Not Made of Money presents How Has the Current Economy Changed Your Wants and Needs?
• Budgets are Sexy presents My tipping rule: Everyone gets 20%! Nice and easy…
• Second Child, Last Born presents What Type of Saver/Spender Am I?
• Making My Own Payday presents The Not So Perfect Gift (Card)

It is a truth universally acknowledged, that a single man in possession of a good fortune must be in want of a wife.

Pride and Prejudice Photo: Colin Firth as Mr. Darcy, Pride and Prejudice (1996), BBC/A&E

~ Money Management ~

• FIRE Finance presents Advantages of Online Banking
• Dawn’s Evolution presents 6 lessons in personal finance from my mother
• Prime Time Money presents How to Care {Not Worry} About Your Finances
• The Strump – Financial Blog presents How Detailed Should Your Financial Plan Be
• The Sun’s Financial Diary presents Where Did Our Money Go?
• Your Money Relationship presents Do You Still Balance Your Checkbook? I Sure Don’t!

A single woman, with a very narrow income, must be a ridiculous, disagreeable, old maid! the proper sport of boys and girls; but a single woman, of good fortune, is always respectable, and may be as sensbile and pleasant as anybody else….for a very narrow income has a tendency to contract the mind, and sour the temper.

Emma, Emma Photo: Gwyneth Paltrow as Emma, Emma (1996), Miramax

~ Debt ~

• Managing Money God’s Way presents Debt? What debt?
• Shrinkage is Good presents 5 Steps to Combat Holiday Debts and Ward Off Future Relapses
• Personal Finance Ology presents Understanding Good Debt Vs. Bad Debt
• American Consumer News presents Playing the Credit Card Balance Transfer Game
• Done To Zen presents Credit Cards Suck
• Secrets For Money presents How To Shop For A Legitimate Non Profit Credit Counseling Service

A large income is the best recipe for happiness I ever heard of. It certainly may secure all the myrtle and turkey part of it.

Mary Crawford, Mansfield Park Photo: Alessandro Nivola & Embeth Davidtz, Mansfield Park (1999), Miramax

~ Career ~

• Blueprint for Financial Prosperity presents Success Finds Hard Work, Talent & Passion
• Greener Pastures presents The Power of Positive Psychology
• Happiness Is Better presents 6 Reasons Why I Joined Toastmasters
• PennyJobs.com presents 6 Options for Students To Consider with Respect to the Economy

Business, you know, may bring money, but friendship hardly ever does.

John Knightley, Emma Photo: Jeremy Northem as George Knightley, Emma (1996), Miramax

~ Saving & Investing ~

• My Wealth Builder presents Get Higher Interest for Saving – Up to 6%
• Generation X Finance presents How to Roll Over Your 401(k) When You Leave or Lose Your Job
• Four Pillars presents Can You Invest Your House Down Payment In The Stock Market?
• Lazy Man and Money presents Greed or No Greed
• Cash Money Life presents Increased 401k Contribution Limits in 2009
• Dividends4Life presents Dividend Stocks Role In The Future Recovery
• Military Finance Network presents 2009 Thrift Savings Plan Contribution Limits
• The Personal Financier presents Is the Stock Market a Big Ponzi (Madoff) Scheme?
• Stock Trading To Go presents Beginner’s Guide to Currency ETFs

But there are not so many men of large fortune in the world as there are pretty women to deserve them.

Mansfield Park Photo: Bennet family, Pride & Prejudice (2005), Working Title

~ Economy ~

• The Digerati Life presents Studying Business Cycles: Economic Graphs of The Current Economic Cycle
• Amateur Asset Allocator presents Unemployment At Highest Level In 15 years: Or Is It Even Worse?
• The Happy Rock presents [Video]The Government’s Money Hole – Recession, Taxes, and Bailout Commentary
• Personal Finance Analyst presents Can You Really Opt Out of a Recession?
• BankAround presents List of Banks that Took TARP Money

Pray, my dear aunt, what is the difference in matrimonial affairs, between the mercenary and the prudent motive? Where does discretion end, and avarice begin?

Eizabeth Bennet, Pride and Prejudice Photo: Jennifer Ehle as Lizzy, Pride and Prejudice (1996), BBC/A&E

~ Taxes ~

• The Financial Blogger presents How To Withdraw Money From Your Holding Without Paying Taxes – The Split Dollar Strategy
• Personal Finance Reviews presents 2009 Income Tax Brackets
• My Journey to Millions presents Did you Forget your RMD this Year? All may not be lost

After all that romancers may say, there is no doing without money.

Isabella Thorpe, Northanger Abbey Photo: Carey Mulligan as Isabella, Northanger Abbey (2007), WGBH Boston

~ Real Estate & Mortgages ~

• Mighty Bargain Hunter presents Running through payback time on a mortgage refinance
• Stumble Forward presents Mortgage Refinance Tips That Could Save You Thousands
• The Credit Toolbox presents Why Would You Choose A Variable Mortgage Rate?
• Funny About Money presents Can’t Sell the House? Try Swapping
• Debt Free Destiny presents How to Get Ready for Your First Home
• Growing Money presents Rental Property Update December 2008

Money can only give happiness where there is nothing else to give it.

Marianne Dashwood, Sense and Sensibility Photo: Kate Winslet as Marianne, Sense & Sensibility (1995), Sony Pictures

~ Reviews ~

• My Dollar Plan presents Have You Checked out Lending Club?
• The Dough Roller presents How to Buy and Sell Loans on Lending Club’s New Trading Platform
• Christian Debt Help presents Sharebuilder promotion and review

And to marry for money I think the wickedest thing in existence.

Catherine Morland, Northanger Abbey Photo: Felicty Jones as Catherine, Northanger Abbey (2007), WGBH Boston

~ Other ~

• Money Beagle presents Wasting Money on Poorly Timed Traffic Lights
• LivingAlmostLarge presents A difference between rich and poor
• Centsability to Wealth presents Insurance- The Fortress the Protects Your Financial Army
• Steadfast Finances presents When the Expense of Plastic Surgery is Justifiable
• Free Money Finance presents Four More Uses for Gold Dollar Coins

He is rich, to be sure, and you may have more fine clothes and fine carriages than Jane. But will they make you happy?

Mr. Bennet to Lizzy, Pride and Prejudice Photo: Keira Knightley as Lizzy, Pride & Prejudice (2005), Working Title

* * *

This wraps up the Jane Austen Edition of the Carnival of Personal Finance. I hope you enjoyed the pictures and quotes as much as I did putting them together. Again, be sure to enter our giveaway for a free 6-month print subscription to the Wall Street Journal which ends this Saturday, January 24, 2009 at 11:59PM EST! Thanks for stopping by!

A Parting Shot

Photo: Gwyneth Paltrow as Emma, Emma (1996), Miramax

Related posts:

• Friday Fun: Calvin and Hobbes Lemonade Stand Economics Lesson & WSJ Giveaway Reminder
• Interesting Reads From Fellow Personal Finance Bloggers #15
• Hosting the 3rd Edition of the Finance Fiesta Blog Carnival
• Recent Blog Carnivals (February 2009)
• Finance Blog Carnivals of Late

I know I should have thought to post this earlier, but only just remembered to pay my own mortgage now instead of tomorrow. If you own a home and have not yet made your mortgage payment due on January 1, 2009, do it now before 2008 is over. This could cut the income taxes you will have to pay in April 2009 for you may be able to take a deduction for mortgage interest paid in 2008.

I am not a tax expert and there are some limitations, (i.e. if you deduct your Jan. 2009 mortgage interest from your 2008 taxes, you can’t do it again for 2009, if your 2008 income exceeds a certain amount), but here is a link to an article on MSN Real Estate which might tell you if you would benefit from doing this:

Early year-end mortgage payment could cut taxes

If you pay your mortgage online, do it now as our bank’s website is super slow today, perhaps due to the rush to customers trying to get their payment in before the year ends.

Happy New Year!

Related posts:

• It Never Hurts to Ask: Getting Late Fees Removed
• Dear Taxpayer: Good News! Your Property Tax Has Decreased … P.S. So Has Your Property Value
• Tax Form & Publication Guide for the Newly Self-Employed
• Daylight Saving Time: Turn Your Clocks Forward Today!
• No-Air Conditioning Summer Part 1 – How It Started: No-Heat Winters

Originally posted 2008-12-31 09:18:02.

This month’s topic for the PF Bloggers Network Group Writing Project is “Rich People Gone Broke.” Our chosen subject for this project is Wolfgang Mozart, one of the greatest composers that ever lived. While a genius in everything musical, he was less lucky when it came to money management.

Prodigy and Breadwinner

Mozart first went to work at the age of five. As a child prodigy, he traveled extensively and made a living as performer, composer, conductor and curiosity. These travels were documented by his family’s letters to their friends in Salzburg.

At first Leopold proudly related the enormous sums of money earned by his children, especially Wolfgang, and described the generous (resalable) gifts they received from kings and princes. Then he got wise and began to conceal their earnings, claiming that they made virtually no profit after expenses. This later strategy made it hard for us to know the exact amount of Wolfgang’s earnings, but it was surely a fortune. In addition to cash, the gifts accumulated on these journeys were mostly made of gold and were described by a friend to resemble a church treasury.

Until age 23, Wolfgang Mozart increased his family’s wealth on journeys in Austria, England, Italy, Paris, and other places where he was often received by royalty and nobility. If they did not collect enough gifts at one location, Leopold sold tickets to the public to hear his children perform—anything to make a buck . . or a florin. But this venue lost him some patronage because the upper class didn’t want anything the commoners had.

Although Leopold successfully concealed the earning of his children, it is clear that Wolfgang Mozart was the primary breadwinner of his family, and as such was jealously guarded from theft. His trips were always chaperoned by one or both parents, his father constantly warned him about the deceitful and ensnaring nature of women, and his mother whisked him off to Paris (at the orders of his father) to save him from a girl he desperately wanted to marry.

Rebellion and High Living

“I could not go about Vienna looking like a tramp, particularly just at this time. My linen was pitiable; no servant here has shirts of such coarse stuff as mine, — and that certainly is a frightful thing for a man. Consequently there were again expenditures.” – Vienna, September 5, 1781, in a letter to his father

Mozart’s financial troubles began when he rebelled against his father (after his mother died) and quit his unfulfilling job (something we all understand) as the Archbishop’s musician. In his time, musicians were regarded as craftsmen and ranked as servants in a household, but Mozart’s early experience of being cherished by the highest people in society convinced him that he was special and caused him to be offended by this condition.

Mozart’s early career furthermore harmed his financial prospects by giving him a taste for high living and expensive clothes. The Empress Maria Theresia even once gave him clothes outgrown by her own children and to the end of his days, he was said to have a love of buttons.

Mozart lived a bohemian existence in Vienna, getting the occasional commission, putting on concerts, giving lessons, and selling published works. By comparing the currency of the time with the USD in 1989 William and Hilda Baumol estimate Mozart’s average income during his Vienna years to be about $175,000 annually. His opera The Marriage of Figaro alone earned a fee of $30,000, the same amount as his annual rent.

He would have had enough to live on had he not “needed” luxurious apartments and clothes. Mozart excused his extravagances by saying that he had to look and live a certain way to fit in with his noble patrons. We have to admit that to a degree he was justified in needing premises to teach and the best piano available at the time. His wife was said to be equally extravagant a spender and in later years spent much time at a spa, supposedly for an illness but possibly carrying on an affair.

Pecuniary Problems

In later years, Mozart’s financial state became increasingly desperate. His earnings decreased drastically due to inflation and the economical climate during the Turkish War. There are also rumors that the court composer Salieri sabotaged him somewhat (but didn’t kill him). His failure to secure a permanent post may be because he was not respectfully servile and lacked Beethoven’s ability win everyone’s love while being terribly rude.

To make matters worse, Mozart’s father died and left everything to his sister to punish Mozart for deserting the family business. Much of the money bequeathed to Anna Maria was likely to have been earned by Wolfgang in his youth and concealed from him by his father. He was not even allowed one of the many trinkets given to him at his performances. The disowned son was reduced to begging loans from his friends and the clandestine composition of a Requiem which he failed to complete before he died.

Sadly, things were starting to look up for Mozart at the time of his death. His last opera, The Magic Flute, had made him immensely popular and he had been appointed the next Kapellmeister at St. Stephen’s Cathedral. But had he lived to enjoy a larger income, who is to say he would not have incurred proportionately larger debts? Would he have increased his standard of living and the number of buttons on his coat to keep up with his new degree of fame?

Posthumous Prosperity

As for his wife, Constanze Mozart became a shrewd businesswoman when she found herself a widow with two young children. After her “friend” and Mozart’s student Süβmayr completed the mysterious requiem, Constanze cheated Mozart’s customer Count Walsegg who intended to perform the piece as his own composition. She pretended ignorance of the exclusiveness of the contract and sold the work to a publisher . . . after she sold Count Walsegg his copy. She procured a pension from the Emperor and took advantage of her status as a poverty-stricken widow to make sizable amounts of money with benefit concerts.

The Mozart family prospered. The widow made a good living selling the works of her late husband, putting on concerts with his music, and later writing his biography with her second husband. Though poor in life, Wolfgang Mozart was able to provide for his family in death and in that sense, was not a financial failure.

Sources:

• Mozart: A Life
• On Mozart (Woodrow Wilson Center Press)
• Mozart.
• Mozart: The Man and the Artist Revealed in His Own Words

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Related posts:

• August 2008 Finance and Frugality Blog Carnivals
• Ludwig & Wolfgang
• More About Us
• Shop
• Motivating Children to Practice Music (Part 2)

I had always believed that if my accounts all showed up in “Excellent” standing on my credit report, that it would be a positive thing, and therefore kept old and unused accounts open. Now I am glad I haven’t acted hastily.

First of all, I currently have 4 credit cards (shared with my sister):

1. Old Navy Store Card
   Opened 2001, the earliest/oldest account on my credit history, never used
2. Bank of America Platinum Visa
   Opened 2004, unused since June 2006
3. American Express Blue Cash
   Opened 2006, primary card
4. Amazon Visa
   Opened 2008, used on Amazon.com where we do the bulk of our online shopping and wherever Amex isn’t accepted

I had seriously considered closing my Old Navy store card recently and also contemplated the Bank of America Visa, which I had been keeping around for emergencies. But, last night I happened on article at Bankrate.com “Closing credit card dings credit score” by Leslie McFadden, which tells us that there is actually no harm in keeping old and unused credit cards open, and that it could actually harm your future credit history to close them, and am really glad that I saw this article before I had done anything.

Before we start, here is a breakdown of the components of a credit score and how it is calculated.

FICO® Score Breakdown

• Payment History – 35%
  Types of accounts (credit card, mortgage, etc.), accounts paid as agreed, number of past due accounts, etc.
• Amounts Owed – 30%
  Balances of current loans, debt to credit ratio, proportion of installments still owing, etc.
• Length of Credit History – 15%
  Time since accounts opened, last activity, etc.
• New Credit – 10%
  Recent inquiries, new accounts, etc.
• Types of Credit Used – 10%
  Mortgages, Credit, Retail, etc.

Reasons Not To Close Credit Cards (from a scoring perspective):

• Contrary to popular belief, FICO does not penalize you for having “too much” available credit.
• Once you close an account, the credit bureaus will only keep it in your credit history for 10 years. After 10 years all that “good” credit history will be gone.
• A creditor may choose to delete your records prior to 10 years, erasing your “good” credit history even sooner.
• It is better to have 20 years of history for an old account in good standing, than to have fewer and newer open accounts, because length of history accounts for 15% of your credit score.

Reason to Close Credit Cards

While it doesn’t really hurt to keep multiple accounts open, if you have so many cards that you have a hard time controlling your spending or keeping track of payment due dates, then it would be a good idea to close some accounts.

Here are a couple of factors to consider and figure into your decisions when closing credit card accounts.

Debt-to-Credit Ratio

Debt-to-credit ratio is the ratio of how much you owe compared to how much credit limit you have. For example, if you have a credit card with a $5,000 credit limit and your current balance is $1,000, your debt-to-credit ratio is 20%. Lenders look at your debt-to-credit ratio to determine your financial stability and the risks of lending to you.

Recommended debt-to-credit ratios:

• On any given account, it is suggested that you not exceed 50% of your credit limit for that card.
• Total debt-to-credit ratio for all accounts (combined credit limits), debt not to exceed 30% of total limit (this means if you have a total of $10,000 credit limit from all your credit cards, you should have at least $7,000 of available credit – not charged).

Example of how closing an account (changing your debt-to-credit ratio) can hurt your credit

1. You have 2 credit cards
   1. Card A has a credit limit of $7,500
   2. Card B has a credit limit of $2,500
2. You are carrying a balance of $5,000 on Card A, but no balance on Card B
3. Your current debt-to-credit ratio is 50%
4. You close Card B, lowering your total credit limit to $7,500
5. Your debt-to-credit ratio is now 67%, exceeding the recommended ratio

Store Cards vs. Bank Cards

Bank cards have more impact on your credit score, and if you must close some cards and it came down to choosing which one(s) to close, you’d most likely be better off closing the store cards.

BUT - If your store card was your first credit card and the account with the oldest history, which for many people it is, you need to consider the following:

If your first account was a store card opened many years ago, and your only other bank issued cards are newly opened, closing your store card will have some negative impact.

How to Decide Which Credit Cards to Close

When trying to decide which cards you should close, you should consider the following:

• If you are carrying a balance, how much available credit do you need in order to not exceed the recommended total debt-to-credit ratio of 30%?
• If you do not carry a balance, how much is your average monthly balance and how much available credit do you need in order for your average balance to not exceed the recommended 30% each month?

When you have figured out how much available credit (what makes 70%) or credit limit (100%) you need in order not to exceed the recommended 30%, take a look at the limits of each card and figure out which ones would allow you to keep your 100% at the necessary rate.

And if you have store cards:

• Which store cards are newest and therefore of smallest consequence and impact to your credit history.
• If your longest credit history is from a store card, keeping it open might benefit you more than closing it.

Conclusion

I am greatly relieved that I saw that article by Lesile McFadden when I did. Had I not seen it and gone ahead and closed my Old Navy store card, my oldest and very first account, I would have truncated my credit history by at least 3 years because I did not get my Bank of America Visa until 2004. And if I had also closed my Bank of America account, (after the bank purges my records) my credit history would only begin from 2005, when I obtained a mortgage.

Credit cards are a very good and easy way to build or re-build credit history, provided that they are used responsibly. If you have older cards that you don’t use, as long as you are not charged an annual fee for them, I don’t see any harm in keeping them open to maintain that good credit history and also as backup for an emergency (ATM or Debit card failure, travel or medical emergencies, etc.).

For more information on the benefits of using credit cards, please refer to a previous post: Credit Cards Really Aren’t So Bad

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Allow me to remind you at this time that I am not a financial expert and that all information is based on personal experience and research for personal purposes. It is offered here to supplement your own research and not to be taken as professional financial advice. It is recommended that you consult other sources and/or a finance professional before making important financial decisions. ()

Sources referenced in this post and recommended further reading:

• What’s in your FICO® score at myfico.com
• Closing credit card dings credit score by Leslie McFadden
• How many credit cards is too many? by Bankrate.com posted on MSN Money
• What is considered a “good” minimum amount of available credit? on Yahoo Answers

Related posts:

• April 2008 Finance and Frugality Blog Carnivals
• Interesting Reads from Fellow Personal Finance Bloggers
• Credits Cards Really Aren’t So Bad (Re-Post)
• Blog Carnivals
• Pecuniarities (Our Fourpence Worth) 1 Year Anniversary

When we moved to our current hometown, located 40 miles from the closest Bank of America branch, we started researching local banking options of which there are three: 2 banks and 1 credit union. I visited all three websites and compared the account options and noticed that while the 2 banks charged monthly fees for checking accounts, the credit union didn’t. This led to a little research of banks vs. credit unions, and this is basically what I learned:

• Credit unions are not-for-profit organizations (and banks are for-profit organizations)
• Credit unions are “owned” by all of its members (anyone who holds an account and deposits money there)
• All credit union earnings after taxes and expenses are returned to the community by way of low-interest loans, higher dividends, and low-fee or free services
• Funds deposited in credit union accounts are insured by the National Credit Union Share Insurance Fund (NCUSIF), a federal government agency

After learning the above, the logical choice was to go with the credit union instead of one of the banks. After all, why pay monthly fees for a checking account when you can open a free savings and checking account at the credit union and earn more interest? The only requirement was a $25 non-withdrawable deposit as long as the savings account is open, and that $25 is eligible to earn dividends.

Our original plan had been to deposit our checks in a local bank and then transfer the funds electronically to our Bank of America accounts. We opened our credit union savings account with $25 in the beginning of June 2006. On June 30th, we received our first quarterly dividend and found that we had earned $0.84 on about $1,000 in that first month. That was almost 10% of what our Bank of America savings account had earned us in one year with a much higher average balance that we immediately changed our plan, closed our Bank of America accounts, and moved everything to our credit union savings account.

We now put everything in our saving account and transfer what we need to our checking account to pay our bills a few times a month, leaving the funds in the savings account for as many days as possible. (Read our article for tips on optimizing your earnings.)

We have been with our credit union for almost 2 years now and have never regretted it. Here is a comparison of our experiences with our credit union vs. our prior experience with Bank of America:

• Customer Service is always friendly and truly helpful. The tellers don’t mind spending time answering or making an effort to find answers to all your questions. Whenever I email our credit union with questions, they respond promptly with a personalized and relevant message. With Bank of America I often received form letters that didn’t address my questions at all.
• Because it’s not-for-profit, our credit union never tries to sell us anything. When we were with Bank of America, their telemarketers were constantly calling to try to get us to sign up for services we didn’t need. They once called and spoke to my sister about services for one of my accounts, and even though she told them that it was not her account and she was not authorized to make any decisions, they went ahead and signed me up for a service anyway. They charged me for that service for 2 months in a row before I was able to get them to cancel the unauthorized service, but I never did receive a full refund of those charges despite several requests.
• We can visit the teller as many times a month as we need to. At Bank of America, we were only allowed 2 teller visits a month and additional visits would incur charges. I know you can make deposits at ATMs, but we just weren’t comfortable sticking large checks into a machine out-of-doors. In any case why should you have to pay to go deposit money in the bank when you’re already paying for your account and they’re making money just by taking your money?
• In our first year with our credit union, our savings account earned over 6 times the amount of interest than we had with Bank of America.

I don’t know if all credit unions are as good as ours, but I’m sure that for the most part they must be better than banks, because the #1 priority for banks is to make money, while the aim of a credit union is to help support the community.

Related posts:

• Homemade Coin Bank for Saving Wayward Coins
• Pay Bills Online and Save
• Pay Bills Online and Save (Re-Post)
• Interesting Reads From Fellow Personal Finance Bloggers #12
• Interesting Reads from Fellow Personal Finance Bloggers #9

In every online discussion I have seen about credit cards, there are always at least a few contributors whose only comments are “Credit cards are evil” or “No credit card is best”, etc. This post is mostly for those people.

For several years, we also believed that credit cards were bad, having been thus informed by our stepfather, a compulsive spender who is constantly in debt. But over the past few years, we have learned that credit cards are actually a good thing and provide many benefits and advantages:

• Building Credit History
  If you plan on buying a car or house in future, chances are that you will need a loan, and if you have no credit history, it can be difficult to get a good interest rate on a loan. Interest rates make a huge difference in the amount you end up paying or saving. Credit cards, if used responsibly, are a good and easy way to build a good credit history, which can ultimately save you thousands of dollars.

• Tracking spending
  Credit card statements provide an good way to track and analyze your spending habits. By charging all your purchases, you will have a printed statement of where every dollar has gone, a useful too for budgeting.

• Safer than carrying cash
  If you carry a lot of cash and lose your wallet, you can usually assume that money gone forever. If you mostly use your credit card and carry very little cash though, all you have to do is call the credit card company as soon as you discover the loss and you won’t be liable for any unauthorized charges to the card.

• Backup for emergencies
  Credit cards can be a backup source of funds for emergencies when you don’t have cash on hand. Though these should be true emergencies and not things like “fashion emergencies”.

And best of all, the reason we use our credit cards whenever and wherever we can:

• Credit cards can earn you money
  Credit cards can “make” you money in 2 ways:
  • There are many cards out there that earn you cash back or rewards. Some earn you as much as 5% cash back on grocery, drugstore and gas purchases. If you get a card with no annual fee (there are many out there), use it responsibly for regular purchases (not cash advances), and pay your balance in full every month, you can earn money without paying a cent to the credit card company. We have an American Express Blue Cash Credit Card that earned us over $300 cash back last year.
  • In addition to the cash back, credit cards also earn you money by allowing you keep your money in the bank longer. Depending on your billing cycle, you can charge your purchases and bills to a credit card and your money can sit in the bank earning interest for up to 6 more weeks. For example, our propane bill was due on January 30, 2008. Our credit card billing cycle ends on the 28th of each month. If we charge our bill to our credit card on the Jan. 30, 2008, it goes on the new billing cycle which ends on February 28, 2008, and the due date for that billing cycle is in mid-March 2008. So the money for that propane bill that was due and paid on Jan. 30, 2008 won’t actually leave our bank account until 6 weeks later. That’s 6 extra weeks of interest on money that would have left your account immediately had you paid by cash or check.

These are just a few basic reasons we use and approve of credit cards. However, if you know that you won’t be able to control your spending, then perhaps it is better to not go this route. If you need advice on applying for credit cards, visit your bank or credit union and someone can usually recommend a good card for you and help you with the application.

Continue reading for tips on choosing the right card and a few tips for safe and responsible credit card use.

Choosing the right card for you

If you have no or very little credit history, a low income, or a blemish on your credit record, it is possible that you won’t be approved when applying for a credit card. If this is the case, don’t keep attempting to apply for different cards as each denied application will hurt your credit rating and lessen your chances of being approved. Instead, go to your bank or credit union where you have an account and ask to speak to someone who can help you with selecting and applying for a credit card.

You may have to start out with a secured account with a deposit held as collateral and a low credit limit. After a while, perhaps a year, if you have responsibly paid your balances on time each month, your bank will probably upgrade you to an unsecured card with higher credit limit. Make sure you read the terms and conditions of your new card when this happens and check for changes in rates and fees, including annual fees. When Bank of America offered my sister an unsecured card a year after she got her secured card, the card came with an annual fee. There are many cards out there that don’t have annual fees, so why settle for one with an annual fee if you can save that $30 or $100 a year?

Today, there are credit cards for all sorts of people with all sorts of interests and lifestyle. If you travel a lot, you’d be interested in cards that offer travel benefits and discounts and rewards for flights, hotel stays and car rentals. For families and households, cards that offer cash back for household purchases such as utilities, gas, grocery and drugstores can save you a lot of money.

Tips for safe and responsible credit card use

• Never spend money you don’t have. Just because you have a $5,000 credit limit doesn’t mean that you have to use it all. In fact, for best credit practices, try not go over 1/3 of your total credit. Therefore, if you have a $5,000 limit, you should try to keep the balance below $1,600.
• Always pay on time and in full, not just the minimum payment due. If your credit card company has automatic scheduled payments, it may be a good idea to use it. Just make sure your bank account has sufficient funds on the due date.
• If you’re concerned about security and unauthorized charges, sign up for online banking and check your online statement every so often for suspicious activity. (We’ve never had any problems. There was only one incident when someone made a suspicious charge on my card and my bank caught it and contacted me to check if I had authorized it, which I didn’t, so they immediately canceled my card and sent me a new one.)
• Don’t leave your wallet, cards or card information lying around.
• Never send credit card information over email, instant messengers, etc.
• When using a credit (or debit) card online, make sure the site is SSL protected. You can tell by the little lock icon in the browser window – usually around the bottom right-hand corner.

Related posts:

• Pay Bills Online and Save
• Credits Cards Really Aren’t So Bad (Re-Post)
• Closing Your Credit Cards Can Hurt Your FICO Score
• Why I Will Not Change My Mindset, Plus the Difference Between Justifying and Being Optimistic About Spending
• Pay Bills Online and Save (Re-Post)