I’m getting ready to close the books on October, and things are looking much better than expected. I have no idea how this happened, but I managed to spend less this month than I have since at least the beginning of 2005.

It helps that I have not yet had to pay the deductibe due to the car accident.

I’ll put together the details in the next day or so.

The Balanced Life Center is organizing a “Season of Gratitude:”

The Season of Gratitude, is a consciousness experiment of sorts to see what can happen in our lives individually and collectively when we focus on what we enjoy. It will run from October 24th through November 22nd, 2006.

This sounds like a great project leading up to the Thanksgiving holiday in the United States. I’ll be participating over the next few weeks in some form.

After recently finishing the last of my formal education (so far), I was able to consolidate my student loans. I received two pieces of information in the mail from the lender, one good and one not really that good. First, the good news.

You are eligible to receive a 0.25% interest rate reduction when you enroll in our automatic payment program… Enrollment will save you both time and money, and will prevent any delayed or forgotten payments.

This would lower the interest rate from 4.25% to 4%. That’s a good deal. However, another piece of mail—you know, they could probably lower their interest rates further if they’d stop wasting so much paper—makes me want to accelerate my payments as quickly as possible.

The lender has provided an amortization schedule for the approximately $20,000 I have in student loan debt (outstanding undergraduate loans plus graduate loans I didn’t pay back with my reimbursements). Even with a cool 4.25% interest rate, after the twenty-year schedule they suggest, providing a monthly payment of $127.04, I will pay $9,973.84 in interest before this loan has completely disappeared.

That is way too much money to spend on interest in my opinion. While some people say it’s not horrible to carry debt at favorable rates, and I may agree in some cases, I need to find a balance in order to avoid the interest payments that add up to a massive amount year after year.

Ann C. Logue is the author of Hedge Funds For Dummies, which was recently released. She contacted Consumerism Commentary and offered to send a book for my review. I’ve been interested in hedge funds, and specifically in what individual investors can learn from these investments which are normally closed to everyone but very high net worth individuals and organizations. I agreed to review the book, and Logue has provided an excerpt: Read the rest of this article »

Through some discussion about placing blame for poor money management, we managed to gather several differing opinions about the source of the problem. Kids with no skills and parents who don’t teach seemed to be the biggest culprits, followed by schools without money management classes (which, when attempted, do more harm than good), and finally if at all, the credit card companies.

We have a litigious society in which people like to displace blame to corporations, who have the big packets to pay for damages, yes. And on the other hand, we have people who believe companies should promote their products however they want, and blame falls squarely on those naive enough to believe the advertisements.

An article in the latest issue of the University of Illinois Law Review says that credit cards, by design, take advantage of deficiencies in the human brain. (Link courtesy of Consumerist.) Here’s a summary of the author’s problems with credit cards:

• Banks that offer loans screen applicants thoroughly but much less rigorous screening takes place when those loans are in the form of credit cards.
• Individuals that take advantage of banks’ products, such as loans, are penalized by higher interest rates on their credit cards.
• Marketing techniques and inventives are designed to encourage debt.

• Credit card payments reduce sensitivity to price and promote impulse buying.

  I am living proof that humans can break down the cognitive barrier that credit cards are designed to manipulate; if it weren’t for credit cards, I wouldn’t be earning cash back on every purchase and several recurring bills.

  Yet, perhaps I do spend more because of my access to credit than I would otherwise. That may have been true several years ago. Once again, I’ll use my notebook computer as an example. Five years ago, I used credit to buy my current laptop, which recently died. Prior to the purchase, I had been doing web design work on a friend’s computer, but thanks to a day job where I was earning less than the cost of employment, I was having a little trouble locating cash.

  I purchased a $1,500 computer—definitely not top of the line—on 0% credit, offered to me at the store where I was making the purchase. This provided me with a way to do web development without bugging my friends. As it happened, I also installed on this computer Moneydance, and later Microsoft Money, and managed to work my way into a better financial position after I saw the numbers were actually going down each month.

  Now, when I buy my new notebook computer, it will be with a cash-back credit card, but I’ll be able to pay the entire balance off with cash when the payment is due.

  The questions remain: Am I truly “beating the system” (I haven’t paid an interest charge or late fee in years) or am I still a victim of the credit card companies’ design despite my apparently intelligent use of credit? Are there any victims of credit cards or do people really have more control than this article claims?

When I was a little kid, I had this relatively large, yellow calculator. I had no idea what it was called until I did a little Internet research yesterday. I matched photographs until one jogged my memory: the Little Professor Calculator (more info). Not only could it perform the basic arithmetic functions (I think), but it could test you with increasing levels of difficulty. It was a fun way to spend an afternoon before Nintendo, I suppose.

Well, if you get a kick out of calculators, you should love the mother of all financial calculator websites, hidden away at the Motley Fool. If the Motley Fool is the mother, then you could consider DinkyTown the great grand-daddy.

We’ve finally come to the last installment of Money Magazine’s 25 Rules to Grow Rich By, which has a catchy title, but is more or less just a list of “rules of thumb” that may or may not be applicable to any one individual. And let’s face it, you are all individuals. (Yes, we are all individuals!) ¹ Now without futher ado, here are the final five. Read the rest of this article »

A few hours ago, I checked Edmunds.com to get an updated on the street value of my 2004 Honda Civic LX 4-door sedan. Once again, despite a later date and a higher number of miles, the value has hardly changed.

At the beginning of the year, the car was valued at $12,074 for private party resale, and by today it has only decreased to $11,767. I’ve adjusted my net worth in Quicken going back to March, the last time I checked the value. You’ll see the new numbers on my October net worth balance sheet.

Now that the car has been in an accident, I might want to deduct a certain percentage off my calculation. When I get the car back from the body shop with new door panels and the rest of the work completed, it will be in excellent condition. However, I might not be able to get full value if I sell. My plan is to keep the car until it no longer runs, but the car’s history should probably figure in my net worth. What would you do?