Where to Start

[saluki9]

Quote:

Originally Posted by riskaverse Congratulations, you're on the fast track now. I would suggest swapping you Visa credit card for a Visa debit card in your wallet.

I agree that it sounds like you're doing well. but I would think long and hard before trading a credit card for a debit card. Lots of things not to like about debit cards, consumer protection being one of them.

[Tommy_Dolitte]

Quote:

Originally Posted by farmerEd >>Should I stop contributing to my 401(k) at a certain point, Yes you should, the trick is knowing when that "certain point" has been reached; Thats what I did. Its true that there are ways to get at IRA money w/out penaly before 59 1/2, but you don't really want to be doing that at age 40 or 45...maybe a few years early, but not a few decades early. The trick is to know how to balance the two; I was self-employed at had a Keough plan for my small corp which allowed me to save 30K per year pre-tax, so that account grew pretty quick; then once I felt that hit critical mass (such that it could grow big enough with modest gains for 30+ years), I focused on getting out of debt (including the house), and once the house was paid off, I focused all new savings into a regular after-tax brokerage account that I now live on. In my mind, I always took care of things in reverse order from when it would matter...i.e. take care of your regular retirement years (after 65+) first, then get the mortgage monkey off your back, then focus on the money you are going to need to fill the gap. The "gap" is a lot easier to fill if you have no debt and live below your means. Good luck.

Very insightful....very insightful....

[maddythebeagle]

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Congratulations, you're on the fast track now. I would suggest swapping you Visa credit card for a Visa debit card in your wallet.
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I think if you pay your credit card off every month, there is not great sin of using a cc esp. if you are getting rewards. I personally dont spend any more paying with a cc vs. cash. I find a cc a great tool and know that I have to pay for it at the end of the month. I love putting stuff on it auto. (phone and electric) so that I have 1 bill to pay.

[riskadverse]

Quote:

In the past year, we have paid off $25k of credit cards (don't ask),* ... $5k on the final visa (ironically, this is mostly the cruise, will be paid off shortly), ... For the first time in 10 years, my Visa has no carryover balance -- next month's payment will be less than our grocery bill.* * * *

I would still recommend to Otis swapping the card he carries in his wallet to be a debit card vs a credit card.

Consumer protection can be achieved by using the Visa credit card he keeps at home, although using a cruise charged to the credit card as a reward for paying off the credit cards, doesn't sound too kosher to me.* *As for paying off the balance every month, a ten year history is hard to overcome every month.*

It sounds like he's doing most everything right at this time - no sense in tempting fate.

[Otis]

Quote:

Originally Posted by riskaverse I would still recommend to Otis swapping the card he carries in his wallet to be a debit card vs a credit card. Consumer protection can be achieved by using the Visa credit card he keeps at home, although using a cruise charged to the credit card as a reward for paying off the credit cards, doesn't sound too kosher to me. As for paying off the balance every month, a ten year history is hard to overcome every month. It sounds like he's doing most everything right at this time - no sense in tempting fate.

The credit card has been tucked away for several years now in favor of a debit card or cash for most purchases. The balance stopped growing significantly many moons ago. It's just taken this long to get enough momentum to pay it down, for lots of personal reasons too complex to explain here. Yes, I use a Visa for online purchases and other mail order because I don't like giving out my debit card number, secure server or not.

To some extent, I resent the implication that we'd run the visa back up after working the way we have to pay them down. I suppose that's expected. Lots of people would look at the $0 balance and drive to the local shopping mall with drool on their chin and a goofly little smile. However, this particular lesson cost us several thousands of dollars, not only in interest paid, but also potential lost growth on the investing we should have been doing. "Tempting fate" or not, that's a hard lesson to forget. Perhaps most importantly, if I ever expect to escape the job that I hate, I cannot carry a visa balance again. Ever.

[riskadverse]

Let me change that last sentance:

It sounds like he's doing most everything right at this time - no sense in tempting fate.