On a website and blog that's focused on dispatching debt, padding savings, and improving net worth, I feel it's important that I keep readers abreast of my own money situation. Moreover, when it comes to achieving debt freedom, in my case, I've accomplished much more since I've made myself somewhat "accountable to the world" in this fashion.
A Brief History
I've been in hefty debt, and I've been debt-free except for the mortgage.
Debt-free is better.
As I relate in my IYM: About Us page, we spent a good portion of 2005 being debt-free, except for our mortgage. That all changed in December, 2005 ("How Quickly It All Changes"). Automobile debt ("There's Something New in the Garage") slipped back into our financial picture.
What Debts Do I Have Now, and Why?
• A Mortgage
At an effective interest rate of 2.75% (thanks to MCC tax credits) for 15 years, I'm in no great hurry to pay this off. It's not included in my Debt Paydown.
• Nothing Else
On the right column, the amount shown in my Debt Paydown reflected my balance on our last auto loan. When we bought our 2006 Accord in December of 2005, we put $4,000 down and financed the balance for 5 years at 3.95 percent. We paid this loan off in early September of 2008, after a mere 990 days.
• And Credit Cards
We became free of credit-card debt in December, 2004. And yes, it felt really good.
These days, a glance at my household balance sheet almost always shows that I have some credit-card balances outstanding. Don't have a cow; rest assured that if there's credit-card debt on my balance sheet, it consists of portions which are either (1) non-revolving, and paid off every month; or (2) for 0% credit-card arbitrage. I hold these balances in either my ING Direct (review) savings accounts or in short-term Treasuries.
I fully understand the pitfalls of playing this game. However, to this point, I've been pretty adept at reading fine print, and I'm pretty good at setting up automatic payments, and I'm pretty good at tracking dates and setting Outlook and Quicken to remind me when it's time to close the zero-percent deal (early) and avoid charges. I paid the card companies a fair amount of interest in my younger years. Now, with my financial situation what it is, and my credit score what it is, I think it's only fair that I get some of that interest back.
Credit-card arbitrage (when I have one in play) allows me to do just that. I mind the details, set up automatic payments, and pay close attention to the fine print. In return, the kind folks at Chase and Citibank indirectly pay my electric bill every month.
Those guys sure are swell.
And that's the lowdown on my Debt Paydown!
Labels: Automobiles, Credit Cards, Debt, Mortgages, Taxes
