Friday, August 13, 2010

Breaking Up...It's Hard To Do!

Dave Ramsey talks about how you develop an emotional attachment of sorts to your first credit card, it's like your first teenage love! I never really got what he was talking about until I got a credit card in the mail awhile back for a credit card we have not charged on in YEARS. It was *that* card, the first card that took a chance on me and Matt and gave us credit. The first card that offered us a *gift*, which was a watch that I still have for some strange reason. But, I looked at that shiny new platinum card with the pretty gold letters on it, "cardholder since 1998". Wow! That card and I sure went back some years. More years than I've ever worked at a job, more years than I've had kids! So I almost held onto it, you know, just in case. But then I came to my senses and realized I don't NEED that card! I don't need Chase to give me any sort of assurance in my financial future. I called the number on the back and boldly asked to cancel the card, just close the account, we're DONE. Thankfully the break-up went pretty well, they didn't try and persuade me to keep the account or anything. It was a pretty touchy moment there so had they offered, I might have even fell for it.

Over the past few years I've held onto a bank acount that I wasn't really using for much. Granted I was getting a pretty good discount on my car insurance by being part of the group and when we used the account for all of our banking, it was great. But once we moved and started over in our new neck of the woods, the account pretty much just stayed open for my car insurance withdrawls. I've watched the account creep up from no service charge to $3/month charge, $5/month charge, and then last month it took the leap to $10/month! That was enough to push me over the edge. My car insurance savings needed to be at least $120/year to justify having this extra credit union account and I just wasn't seeing it. I called my insurance agent and explained the situation to her and we did some digging around and found a comparable group that I am already a part of that brought my discounted amount down a little, but even so, I am coming out ahead because I am not losing $120/year to keep open another bank account. The credit union apparently was fine with losing me as a 14year customer over $10/month, so good riddance to them. I am not paying anyone to hold my money for me!

So at this point, we are really moving towards our financial indepdence. We have our few household utility accounts and a single bank account, and not an open line of credit to be found. Our emergency fund is safely tucked away and growing and the Earth is still moving steadily around the sun. It is possible to live in a world without credit and we're doing quite well at it, something I never imagined I would be saying!

I've also taken the HUGE step to move my banking to almost strictly online. My goal is to write as few checks as possible. The bank (yes bank, not credit union) we are using at this time has a great FREE bill pay program where you can enter all of the places you need to pay bills at and they will either transmit the payment electronically on the due date, or print and mail a check by the due date. Not only do I not have to pay for paper checks, I don't have to pay for postage to mail them either. How can you go wrong with that? No more running the waterbill over to the payment station or even dropping a check in the offering at church. I just log in on payday and set up everything for the next 2 weeks and let it rip.

In the process of breaking up with our credit union and starting at the bank, there was a month where I didn't make my student loan payment, and then a month where they took the minimum payment due instead of the amount I was having them withdraw. Sadly, that makes my "ticker" look like we haven't made much progress, but we did fully fund our emergency fund this summer again plus beef it up a little, so it's not all that bad in retrospect.

August Status
Starting debt: $39,216.30
Amount paid: $26,093.98

$13,122.32 until we are debt free!!!

The student loan people sure make it hard to make extra payments! I have my account set to autopay out of my checking account every month and I couldn't just go to my online account and manage it. I had to send in a written request with my signature on it stating how much I want coming out every month. So starting next month, my auto pay is going to be nearly FOUR TIMES the amount of my minimum payment! At that rate, I should have my student loan completely paid off in about 2 years instead of the 13 they have me projected to pay off at!