Dollar Tamer Helping you tame your money

You’ll find that the theme here when it comes to this blog is that I press personal responsibility.  For me, that means that you are the one responsibile for how you decide to spend your money.  If you cannot afford something, you should not purchase it.

The Fannie Mae/Freddie Mac situation is largely due to people taking out loans they should not have.  People were given loans that they could barely pay off running a bare bones budget.  It’s not just the bank’s responsibility to say “you can’t afford this”, it is yours.  Some lenders (I didn’t say all, there are some honest lenders out there) don’t care if you can afford it or not, they will take their commission and sell the loan off and never have to worry about it. 

It is up to you, as a purchaser, to take a hard look at your ability to pay.  Give yourself some overhead to survive a disaster.  Missing a payment can set off a chain-reaction that will make a bad situation even worse.  You can end up with fees, penalties, and higher interest rates.  If you had a difficult time paying without these extra expenses, imagine how much harder it is with them.

Bad decisions are hard to get out of.  Even simple things like charging an extra $100/mo to your 15% credit card that you don’t pay off will add up in a hurry (look at 1 year worth of time)

1. $100 + 15% interest = $115
2. $115 balance + $100 charged + 15% interest = $247.25
3. $247.25 balance + $100 charged + 15% interest = $399.34
4. $399.34 balance + $100 charged + 15% interest = $574.24
5. $574.24 balance + $100 charged + 15% interest = $775.37
6. $775.37 balance + $100 charged + 15% interest = $1006.68
7. $1006.68 balance + $100 charged + 15% interest = $1272.68
8. $1272.68 balance + $100 charged + 15% interest = $1578.58
9. $1578.58 balance + $100 charged + 15% interest = $1930.37
10. $1930.37 balance + $100 charged + 15% interest = $2334.93
11. $2334.93 balance + $100 charged + 15% interest = $2800.17
12. $2800.17 balance + $100 charged + 15% interest = $3335.19

$3335.19 racked up in 12 months on only $1200 of spending!  It is very easy to spend $100/mo if you’re not paying attention.  You can see how expensive a mistake that could be, and the longer it goes the more expensive it gets.  Compound interest is an ugly thing if it’s not on your side (though it’s another beast that can be amazing once tamed…  I’ll share what I know of that soon).

Everyone needs to take a look at their situation and decide that they want to control it.  If you are not committed to it, you will not succeed.  It is up to you, and you alone.  The bank cannot do it, the credit card company cannot do it, and the government cannot do it… only you can!

Are you ready?  Keep coming back to the blog, follow the series so that you can become a dollar tamer, and find a class to learn these skills.  I will share all the experience I have to help, as will many other sites out on the Internet, but only you can take control of your situation.

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Posted under Spending

I saw this on the local news tonight and thought it’s definitely worth passing along.  Students are busy learning trades such as automotive maintenance, hair care, and culinary arts.  For these students, nothing beats the opportunity of working for real people with real needs.  To our benefit, these services are offered at lower prices than comparable services offered at professional locations.  The downside is that the service might take a little longer, and there is often a waiting list for the services. 

Overall, it is a win/win situation.  The students get an opportunity to face real-world issues, and you get a discount on services you need.  Look around in your local area and ask at the technical/professional schools in your areas.  You are sure to find good deals on these services.

Read the entire WLWT article here.

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Posted under Deals

Isn’t it sad how obvious this is and how many people (and even our Government) don’t get it?  It took me longer than it should have to understand this concept

Big hat tip to thinkyourwaytowealth.com for remembering this skit.

NOTE: There appears to be a bug with IE6 where this isn’t appearing on the main page.  Click here if it’s not loading for you.

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Posted under Budgeting

I came across this and figured I had to share it…  According to an AP Article, a woman in Chicago won a house for $1.75 on EBay.  The house was under foreclosure and has $850 of back taxes and yard costs, but it’s still a heck of a find.  Not sure how much profit she’ll be able to turn (it certainly doesn’t look like it’s in good shape), but I’m sure she’ll get something for it!

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Posted under Weird

The Senate passed the latest revision of the bailout bill 74-25.  It is now heading to the house where its fate is unknown.   A Yahoo article points out that the length of the bill has swelled from 3 pages to 451 pages, and it still could grow more in the House.  This is all due to adding provisions to the bill to give representatives an out to vote for the extremely unpopular bill.  I suppose it is important in an election year to be able to say “I was voting for tax breaks” instead of getting hammered for voting for a $700 billion bank rescue.

Some of the additions to the original bill are:

• Expanding the FDIC Coverage from $100,000 to $250,000 (I covered FDIC in a recent post).
• A one-year patch to the Alternative Minimum Tax (AMT).
• $100 billion in tax breaks for business and middle-class.
• $8 billion in disaster relief for Texas, Louisiana and the Midwest for Hurricane Ike.

So what does all this mean for the regular citizen?  What we are seeing is the government putting itself another $700 billion in debt by buying subprime mortgages.  A subprime loan is given to someone that is expected to have a very high rate of default (i.e. low income, high debts, history of default, etc).  To compensate for the risk, the loan is given a high interest rate which in turn makes it even more difficult for the person with the loan to pay it off.  This is a very risky investment for the lender.  What we see now is the result of the risk not paying off.  Now the Government wants to take over these poor investments using our tax dollars.

I can appreciate the fact that massive lending failures will cause all sorts of economic calamity, but what we’re looking at is making the public pay for the bad investments that the banks made.  There are all sorts of political fingerpointing going on (I do not want this to turn into a political blog), but the fact is that the end result is a bigger Government that will need more funding.  The money is going to have to come from somewhere to cover this.  Can you say more taxes?  The last thing this economy needs is additional taxation!

Dave Ramsey is talking about an alternative plan, that I must say looks very appealing.  The details are available here.  It is another option that should be considered (though I fear now it’s too late).

To put it into perspective, here’s a comic that Brokeass-Student found that’s a pretty good sum-up of the situation.

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Posted under News