Gather Little by Little

Dave Ramsey has done well for himself as a financial advice guru. He was one of the first people to recognize that our culture is steeped in debt, dependent on debt and that debt was enslaving the American culture. Ramsey has not been successful in changing our cultural dependence on debt, however, there are many individuals and families who owe him a great deal when it came to turning their financial house around. One of Dave Ramsey’s more controversial pieces of advice deals with FICO scores, also known as a credit score. Ramsey has said things such as: your credit score is an “I love debt score” and, Americans today are “worshiping at the altar of the FICO score.” He downplays the importance of a credit score on a regular basis and emphasizes his strategy of paying cash for everything.

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I think that on the whole, most Gather Little by Little readers are not major credit card users, so most of you will not notice any credit card changes. Last Monday, several new laws regulating credit cards went into effect. I listed the changes in a post here at GLBL a couple of months ago. This month, we start to see the effects of the new laws. Here is what I have noticed so far this year:

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Recently, I read a report about prepaid debit cards and their use. I was surprised to learn that more than 60 million Americans are using this alternative to a bank checking account. And most surprisingly, prepaid debit cards are not only used by people with poor credit. In some cases, it is the best way to manage your money with the lowest fees.

In order to better understand them, I decided to list the pros and cons of using prepaid debit cards:

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A while ago, Larry wrote a very interesting post about how to start an online store. He well defines the right way to start your online store. I also share his point of view on making more money in order to pay back debt faster. While reducing your expenses is always a good budgeting exercise, you still have to stay alive and hopefully enjoy life along the way. To me, this is where online income comes into the equation.

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Since the major cut in the interest rate back in 2008, we haven’t heard much about the FED cranking up the intraday rate so far. However, with recent GDP stats (5.7% annualised rate for the last quarter), we will surely hear some whispered rumors about the prime interest rate going up.

What is the intraday interest rate?

The FED has control over the inter bank rate. This is the rate established for banks lending to each other for one day. At the end of every day, banks look at their balance sheet and borrow or lend money in order to balance their assets with their liabilities. These loans are for 24 hours since their balance sheet changes daily. This is why we have an intra day interest rate.

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In February of 2010, the new Credit Card Accountability, Responsibility and Disclosure Act will go into affect. If you do not use credit cards, you will not be directly affected by this change. The only changes that you will see are higher fees on your regular bank usage as financial institutions try to find other ways to increase revenue. Here are the changes with a few comments from me (as usual):

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chase blueprint

In recent times, I have been receiving email from Chase and their “fabulous” new concept: Chase Blueprint. I was a bit reluctant to look into this “new concept” as I wondered how it could really help a person to manage his debt better”¦ especially since the idea came from a bank ;-)

However, I have received more information about the Chase Blueprint features and they appear promising.

chase blueprint

What is Chase Blueprint?

As the name suggests, Chase is offering you a way to create a Blueprint to pay off your debt. Blueprint is a free debt management system that allows setting repayment goals for specific expenses.

Christmas is not my favorite holiday. I enjoy the spirit and the meaning of the season. I am all in favor of celebrating the birth of Christ and I am not all that opposed to a fat man sliding down my chimney to steal my milk and cookies. However, the stress of gifts, gift giving and parties is too much for me to handle. No matter how much my wife and I try to keep a lid on things, we over-extend ourselves financially every year around Christmas. That is why I like Thanksgiving so much.

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As I previously mentioned, most of the growth present in the US economy is coming from the money injected into our capitalist system by the Government. The housing market hasn’t seemed to pick up that much and the real unemployment rate is closer to 17% than 10% (unemployment rate doesn’t count people that are on welfare or those who gave up and quit looking for a job).

This is why so many people are asking if we will get another stimulus check in 2010?

So here’s what we know so far:

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I have been doing a lot of thinking about family finance and especially the financial relationship between a husband and wife. I do not have all of the answers to solve every problem in this area, but I thought I would share just a few thoughts:

Family finance is about priorities. Both the husband and the wife should contribute to these priorities. It is our money, regardless of who may have directly earned it. My paycheck might be bigger, but Mrs. Stew does a whole lot of things that allow me to do the job for which I am paid.

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