Overdraft protection is a dangerous thing

This is simply my experience with a little something we once thought was a good idea: overdraft protection.

My bank started offering overdraft protection several years ago….or maybe we just discovered it for ourselves a few years ago. Either way, we thought that was a great idea. We would set up our checking account with overdraft protection. Basically, anytime our account went negative, our credit card automatically transferred enough to cover the overdraft. But it did this in multiples of $100.

This meant every time we went over by a few dollars, $100 was credited to our account from our credit card. If we went over by $112, we were credited $200. Because we had this “protection”, we grew lax with the checking account. We always intended to transfer the money back to the credit card the first chance we got but that rarely happened.

At one point, about a year and a half ago, we sold our old house, made a decent profit, and paid off some of our credit cards, including the one we were using for overdraft protection. Now, a year and a half later, due SOLELY to overdraft protections, I just paid off this credit card again….it had built up a balance of over $14,000 in a year and a half!!!!

I have maintained the overdraft protection for now, as we get our finances under control and start living on a budget. Only this time the money will come from our savings account, so at least we are not accruing interest and finance charges.

The next step will be weaning ourselves off of this dependence on the overdraft protection. A good budget that we will stick to should take care of this problem.

Financial peace?

So despite my wife being a big Dave Ramsey listener, we refinanced our house to pull some equity out and pay off our credit cards. We still have about $30,000 in equity in the house and are now credit card free.

So we kind of did something Dave probably wouldn’t really approve of. Now we have to look ourselves in the eye and make the decision to stick to a budget and change our ways in order to stay out of the credit card trap.

According to Mr. Ramsey, here are the baby steps we need to follow:

1. $1,000 to start an emergency fund
2. Pay off all debt using the debt snowball
3. Three to six months of expenses in savings
4. Invest 15 percent of household income into Roth IRAs and pre-tax retirement
5. College funding for children
6. Pay off home early
7. Build wealth and give! Continue to invest in mutual funds and real estate.

Now we kind of skipped the first step and went straight to paying off debt, step #2, but used home equity instead of doing the debt snowball. Next we are going to work on step #1: getting together a $1,000 emergency fund. Dave says not to invest until after step 3, saving 3-6 months living expenses, but since we are in our early-mid 30’s and have no savings or retirement, we are going to invest at least by putting as much as my employer will match into a 401-K. Simultaneously we’ll start saving the 3-6 months of living expenses.

I think we’ll do steps 4 & 5 simultaneously as best we can. We need to invest for our retirement but for our kids education as well…..E is 3 in April and time just slips away from you.

The hard part so far is going to be changing our behavior. We both, but my wife especially, tend to do what we think we need to do whether we can afford it or not. We just think, “It has to be done, so we’ll do it and pay for it later”. That always gets us into trouble. We have two credit cards that are paid off completely and two that are pending being paid off, and my wife is already talking about what we have to do in January as if our finances and being able or unable to afford it is irrelevant.

What I am doing is trying to figure out just how much money we can set aside to save and/or invest. Once upon a time, when living in Phoenix, AZ, I would sell plasma to get money for cigarettes and miscellaneous other things. (I didn’t have a job really, or much of anything). I have even considered doing that again just to have more money to put up.

We allot ourselves a certain amount of money each week that we can individually spend on things like going out to lunch, my morning coffee, etc. I may try to keep that money aside to invest/save. I have a lot of CDs and books I could try selling to used CD and book stores. Anything I can pull money from to save and invest would be great.

What do you think? What are you doing to cut costs in order to save/invest?

Is your position in traffic really that important?!

I’m driving home last night and just after the Cool Springs exit, traffic starts backing up. There’s a car accident in one or both of the two left lanes up ahead, and a couple police cars are already there.

We are moving at a crawl, when moving at all, and I am amazed and disgusted. A few hundred yards in front of us is a probable injury wreck. At best, someone is up there in pain….at worst, someone up there is dying and scared to death. They may be lying there wishing they had hugged their kid one extra time, wishing they hadn’t had an argument with the spouse over some non-issue, wishing they could see their friends and family one last time…

…in the meantime, idiots in the other cars are so worried about other people getting ahead of them that they are tailgating each other, cutting each other off, most likely cussing each other in the comfort and security of their car. People merging from the on-ramp are zooming as far ahead as they can so they have less time to wait, cutting people off in an effort to get one more car length ahead.

An ambulance enters the interstate headed toward the accident. They can’t get any farther left than the very right lane, so those of us in the right lane are trying to get into the next lane to clear a path for the ambulance. I can see the flashing lights in my rearview mirror a few cars behind me and hear the siren, but no one can do anything because the jerks in the lane next to us don’t want to lose “their place” in line.

It just disgusts me that, for all we know, someone could be in the car ahead dying, contemplating their last few painful breaths, and here are all these assholes fighting for position as if this were NASCAR.

Get a clue people. Get out of your little selfish bubble and realize there are other people in the world besides you, and your idiotic driving can cost others their lives!

Illegal immigrants have rights?

I’ve been hearing a lot lately about illegal immigration and lawsuits filed on the behalf of illegal immigrants. Ironically the ACLU is sometimes helping the illegal immigrants sue.

The ACLU? Suing Americans on behalf of non-Americans? Isn’t it the American Civil Liberties Union?! Personally I have found the ACLU to be more appropriately named the LACLU: Left-leaning American Civil Liberties Union. Sometimes I simply find them INSANE. (They defended NAMBLA?!)

What unmitigated gall does it take to sue Americans for supposedly infringing upon the rights of illegal immigrants? Illegal immigrants do not have the rights granted to us by the Constitution….they are here ILLEGALLY! If an illegal immigrant comes over and is hit by a car and critically injured, I am all for saving his life. The hospital ER should do everything they can to save his life. It’s a basic human right. But they should not be able to go the ER for the flu or something like that when they don’t have insurance and don’t pay taxes.

Here’s a case I find completely ridiculous and proof that there are some folks out there who are all for illegal immigration: A rancher in Arizona was sued for injuring an illegal immigrant who was coming across the border. To take a man’s land and give it to an illegal immigrant is ridiculous, no matter the circumstances! Should he have been punished for injuring him? Yes. But if someone allegedly hit me with a gun, would I get their land? NO!

Why are illegal immigrants getting better treatment than legal Americans?!

Getting organized

I am back from the holidays sick, but wanted to post a few things here today to keep it up to date. Over the last two months (my birthday is in November) I have been using gift cash and gift cards in an attempt to get more organized.

I bought a Palm T/X last month, and this month got a refill for my dayplanner, which still had the pages from 2003 in it, which shows how organized I generally am. I also bought Pocket Quicken so we could keep more up to date on our checking accounts and budget, since we took the trouble to refinance the house to pay off credit cards.

My latest purchase, which was just made yesterday and will hopefully arrive in the next couple of days, was a leather briefcase bag made by Ellington Leather in Portland Oregon. I was looking for a place to keep all my organizational tools together, as well as my cell phone, iPod, etc., and something to carry all this paperwork I always seem to bring to work. I always have some bill or something or other to take to work to get some information.

Anywho, I mostly wanted to discuss this as a way to plug two things: Elliston Leather and Paula’s Fine Leather.

The leather briefcase I selected, the Ellington Leather Hawthorne briefcase in brown, is a gorgeous leather bag with a lot of functionality. Ellington also has a lot of other high quality items without such a high quality price. Somewhere I saw their leather described as “Coach-quality leather without the Coach price”.

I purchased the briefcase from Paula’s Fine Leather. At Ellington’s Web site, the briefcase is priced at $298, which is a good price considering the quality of this item. The shopping sites I checked (shop.com, mysimon.com, etc) all had prices ranging from $283-$298. I eventually found a site that listed the item at $253 and another listing it at $249.

Paula’s Fine Leather had it listed at $222.00, but they say to call for their best price and have a form you can submit to get the best price. I submitted my name, e-mail address and phone number and they called me literally no more than 2 minutes later to tell me they had a special coupon code I could use that was expiring that day. I got 10% off of the item, which made it $199.80!

So if you’re looking for leather goods, I would recommend Ellington Leather. Their items all come with a one year warranty. If you want to buy them at better prices, look around online, but look first at Paula’s Fine Leather. Their Web site isn’t fancy but the prices are terrific. I spoke with someone there (they are out of NJ) and apparently they buy in bulk, so that explains their pricing.

And I don’t get anything in return for plugging either place. I’m just very happy with the bag Ellington had (it’s exactly what I was looking for!) and the price I paid for it at Paula’s.