My 825 credit score… How I earned it.

I have a credit card that provides my FICO score as a benefit.  I keep close tabs on this, and can view as adjustments are made.  I track closely and want to share my tips for how I reached this level.  For your information, the max credit score is 850 and I read on that 13% of the population lands between 800 & 850.

1) I never, ever miss payments!  When a bill shows in the mail, I pay it THAT DAY.  I don’t wait for the deadline date for fear I may forget.  This is the biggest way to improve  your score.   Even if I don’t have the money in the account, I’ll set the bill pay date fcredit scoreor out in the future when I know the money will be in the account.  The main point is that the bill is scheduled and will be paid on time.  You miss one payment and they will ding you.

2) I don’t carry balances.  I charge most everything just for points status, but I pay it all off during the month of purchase, and I don’t buy anything that I can’t afford to pay in cash regardless.  If I can’t afford it in cash, I don’t need to buy it.

3) The only debt I carry is my mortgage.  No car is worth the debt for me.  Why tie money up in a depreciating asset??? Makes no sense to me.

Three easy steps.  Nothing to it.  Anyone can do it.  This isn’t rocket science though people try to make this personal finance game more difficult than it needs to be.   Good luck…


RIP to “The Millionaire Next Door”

Have to give an RIP to Thomas Stanley, auther of “The Millionaire Next Door.”

I mentioned his book in another posting of how it changed my financial outlook.  A real game changer for me.

Here’s a link to the Atlanta Journal Constitution from yesterday.

If you haven’t read it, I highly recommend it.

Home Energy Savings….

I hate spending money on utilities.  I feel like I get nothing out of them, so I try to cut as much as I can.  Living in AZ it’s a different cycle than most of the country.  Our utility bills drop off the map during the winter months and skyrocket during the summer.  You can pretty much count on running your air conditioning 24/7 from May through most of September, however late Fall through Winter it could be as low as one-fifth of a typical summer month’s bill.

I tend to run my AC less than most and keep the thermostat higher in the house during the summer months.  I “cool” the house to about 82 degrees during the summer months.  To most people that would be insane, but when you’re walking in from 110 it makes quite a difference.  I keep ceiling fans running in all the rooms and it helps to provide a breeze too.  When I tell locals what I set my thermostat at, they think I’m crazy.  I admit it, I’m cheap and am willing to put up with slightly less comfort to save some money.

During the winter months, I turn the heat on only in the morning if it’s been a very cold night and I’m going to take a shower, or I just want to heat up the house for a few minutes.  However, I use an electric blanket when I sleep to stay warm, and often a space heater if I’m just watching TV.  Space heater gets turned off when I go to bed.

All my lights have energy efficient bulbs, and in locations where there’s multiple bulbs I have turned half of them off by loosening the inserted bulb.  This also goes for the canned lighting in kitchen.  Loosening the bulbs really doesn’t make much of a difference in the lighting needed either.

So this past week I received a Home Energy Report from APS, our local power provider in the Phoenix area.  This is a new report by them, and it provides a comparison between my own energy usage and my neighbors.  I fared quite well I must say.  Results are below.

Total report:


  • A few things to point out: Over the past 12 months, I’ve used on average 46% less electricity than my neighbors, saving about $696 dollars per year.  Very happy about that.


  • Every month I used less energy than the average household, and all but two months did I use less than more efficiently rated savers.


  • I received a “Good” rating for efficiency and though I used 18% more electricity than my most efficient neighbors, I was much closer the “efficient” than the overall average.  A goal of mine will be to reach the most efficient level in 2015.


  • Finally, in 2014 I decreased my energy usage by 26% of my overall total from 2013.  And even though we are just over 1 month into the year, the report states I’m on pace to use less in 2015.


So my goal for 2015 is to now party with the most efficient households.  Maybe I’ll pop up the thermostat a degree in the summer & I’ll definitely be more vigilant in making sure lights and extras are off when leaving the house.

Would welcome hearing some tricks you find are useful for saving…

Credit card debt… Who needs it!

I operate debt free, other than my mortgage.  If I can’t afford to pay something off by the end of the month, then I don’t buy it.  I do use my credit card for airline points, but I know I can afford the monthly payoff.

UnknownI don’t sign up for credit cards from retailers that have “teaser rates,” as it is just asking for trouble if you miss one payment.  One missed payment, and that 0% for 12 months and it’s going to revert to the 22% that the card regularly charges.  Not to mention the ding on your credit report.  A $7 default on an Old Navy card stayed with me for 7 years!  It’s just not worth the risk, and since I don’t buy anything that I can’t pay off right away then what’s the point.

Even my most recent vehicle purchase was paid for in cash.  2006 Honda Accord w/ 87,000 miles.  The dealer tried like crazy to get me to finance, but no dice.  I was getting a strong deal and knew it.  They wanted to make it up by me paying interest on a loan.  I wasn’t having that.  This was a lesson that had been learned the hard way.

This is how I currently operate, but it hasn’t always been this way.  I’ve had my share of bad financial decisions.

I once purchased a brand new Toyota 4Runner with a balloon payment at the end of $16,000.  Thus after I traded them my previous 4Runner (which was paid off) and paid $283 for 48 months, I still had to come up with another 16k or lose the vehicle.  Well, I lost the vehicle.  Turned it in.  So basically I lost two cars and a boat load of cash.

I remember the day I purchased the vehicle.  The salesman played me like a violin.  They kept telling me that I “owned” the vehicle, and it wasn’t a lease even though there were mileage limits.  At the end of the day, all I needed to do was refinance the $16k and that baby was all mine.  What a deal!!!!

I remember my first night with the car. I couldn’t sleep b/c I had a pit in my stomach about how much I had just gone into debt.  The next day I tried to return the vehicle to the dealer.  No dice.   I learned this lesson the hard way.  Never again will I finance a vehicle.

When I was in college, the cc companies were still allowed to set up on campus and get new enrollees.  This was like leading the pigs to slaughter.  A whole bunch of college kids who are on their own for the first time with no financial education.  That Natty Light wasn’t going to buy itself…  Got me a nice fresh Chase card with a $3,000 spending limit.  And of course I spent.  Lord knows how much I actually wasted in interest.

I carried credit card debt for probably 15 years years or so.  I never got into ridiculous trouble like some stories you hear, but I would always have $3-5k floating on the card.   Eventually I decided enough was enough.  Here’s what I did in straight bullet point form.

  1. Set weekly auto payments from my checking account to my credit card.  This way I would never miss a payment which will help to raise your credit score as well as cut down the balance.
  2. Throw in extra money that I had at the end of the month.
  3. Checked my balances on my cards non stop.  I mean I was checking the card on line pretty much every day.  I still check my card every day.  I always know what’s coming in.

If I was a person with multiple cards, I’d follow the Debt Snowball method made popular by Dave Ramsey.  Line up your cards from least amount to most amount owed.  Pay the minimum on each, except for the card with the smallest balance.  This card you are going to throw all the money you can to get it paid off.  Once that card is paid off, take all that money and add it to the next card and so on.  Basically you are creating a snowball effect and gaining lots of little victories.  Makes you feel like you are doing something.   Mathematically it makes more sense to pay off cards by paying the highest interest rate cards first, however this is about BEATING DEBT! And I feel that the psychological victories are greater and help more in the long run in achieving freedom from debt than paying a few extra dollars in interest.

Also, I don’t believe in and am not organized enough to be opening multiple cards and transferring around my balances for 0% rates.  The debt is still there regardless, and I’d rather just be done with it altogether.  Just pay them and be done with it was my feeling.

Now most “experts” will say to cut up your cards or do something like place them in a freezer ice block.  These ideas are set to create a barrier to using your cards and reduce impulse purchases.  If you have to thaw out your card every time you want to use it, then maybe that purchase won’t be as “necessary” by the time the card is ready to use is the reasoning.

I just used good old fashioned discipline.  I have 3 cards.  I posses an AMEX card from my bank which is rarely if ever used, my MasterCard airlines card which is used very often, and my Visa card that’s used for overseas travel.  I only use this card overseas because many places won’t accept the MasterCard.  For the most part the AMEX & Visa aren’t even carried in my wallet.

Through following these simple methodologies of my own, I’ve gone from having credit card debt with a credit score in the 650 range to being well over 800.

The simple thing to remember is to be disciplined and consistent.  You’ll get that debt down and you’ll sleep better at night.

Side Hustles & the “Big Game”

SIDEHUSTLEFor those of you not familliar with the term “side hustle,” it refers to picking up work outside your normal means of making money.

I’m always looking for ways of creating extra money outside of my current job.  With the Super Bowl here in Phoenix this week and everyone making money, I wanted in myself.  Thus on Friday I put an add on Craigslist offering a ride to and from the game for $100.

Well I received a call on Sunday morning.  Two round trips  for the same group, and I had earned $180.  Minus gas, I netted about $165.  No complaints there.  This should cover all my groceries for two months.  Not bad for 4 hours of driving.

So what I’m trying to say, is that there’s always ways to make money.  You just need to be creative.  People always need something done.  Scour Craigslist and other local bulletin bords to find a “job” that fits the skills you already have.  There’s value in what you can do just outside of your job.

I’ve already picked up my next side hustle, as I’m going to help one of my co-workers sell her baby grand piano.  I’m going to take 10% fee.  Based on comps, we are looking at about $5,000 for the piano itself.  This could be a nice $500 in my pocket.  I’m going to take the photos, do the write up and handle the Craigslist posting.  Easy money.

Also, I’ve been pretty active at selling non necessities on Craigslist.  Recently sold two space heaters for $40.  Other people want your junk!  Just take good photos, and write a good explanation of what you are selling and why.  People tend to be really cheap when buying off Craigslist, and you’ll get some lowball offers, however just turn them down.  Another person will come along.  Then just be sure to go in and update the listing every few days to have your listing bumped up to the top of all the listings in that category.  Very easy.

So get out there and hustle.  We all have free time, and I’d wrather make some money than spend time sitting in front of the TV.  And who doesn’t like cold hard cash!

It would be interesting to hear what kind of side work you’ve picked up in the past… Do tell.

New Years Resolutions…

There’s a lot of talk about “New Years Resolutions” when it comes to personal financial changes.  I don’t believe in them…  Saving and investing properly is hard enough, wiUnknownthout the added pressure of some “resolution.”   Besides, financial growth is a marathon, and not a sprint.  And we know that going to the gym resolutions are usually forgotten in about two months.

So here’s what I’m going to do, exactly what I’ve been doing for the last several years.  Continue to max my retirement accounts, and use automation (as discussed in my previous post) to keep adding to my non retirement accounts.  Simple as that.  It’s not rocket science.

And of course I’m always looking for additional ways to increase income and savings.  Thus if something comes up, I’ll start it today rather than wait till January 1st, 2016. To me, March 1st is no different than January 1st, and I think practicing good financial methodology is learned skill more than it is a gimmick to be pulled out upon the calendar changing.


Financial Inspirations…

Before about 10 years ago I really had no methods to the madness when it came to my finances.  I put money in savings when I could, and would go with the standard 401k contributions.  Then I started reading and there became three inspirations which really gave me a focus and base methodology for how to structure and grow my financial balance sheet.  Two are books that you have easy access to, and the third is my father which I’m going to assume you won’t have such easy access.  Ha ha.

The Millionaire Next Door:

Originally printed in 1996 and written by Thomas Stanley, the basic premise of this book is that most people who are “Millionaire’s” have achieved this status by living a very modest lifestyle.  They aren’t living in the McMansions, buying the latest gadgets and purchasing / leasing (the total suckers bet) vehicles that are draining to their finances.

These people are saving more than they spend and not succumbing to the “images” of modern day success and excess.  It’s a methodology I myself now follow with a strict dedication, and you know what, it makes life a lot easier and removes a lot of clutter as well.

It’s a very inspirational read, and easily found at any library or for a penny + shipping on Amazon.  About the best $3 I ever spent.

The Automatic Millionaire:

Written in 2005 by David Bach, the Automatic Millionaire helped to create a baseline and process for how I save and invest.

Automation is exactly what it means.  Money is automatically pulled from my bank account placed into savings and investment accounts.   I can’t spend money that I “don’t have.”  With current online banking systems setting up these “auto pulls” are easier than ever.  Automation provides a consistent stream of movement to help build my accounts which I never touch.

Personally I’ve set automation of money to be pulled on a weekly basis rather than a monthly or by paycheck setup.  I find that it gives me a more “real time” status of my accounts, and what I have to spend on bill coverage and everyday life.  It’s just my preference, but everyone has to decide what they feel comfortable with for their own situation.

This is another easy acquisition through a library or a penny through Amazon.  I’ve included links for both books in this posting.

Dear old Dad:

My father is the quintessential “Millionaire Next Door.”  We never wanted for anything growing up having all the essentials, and he put three kids through college.  We now talk about finances often, and he told me he never made more than $120k in any year and my mom didn’t work “for pay” other than part time teaching assistant and baby sitting gigs.  Well Dear old Dad was able to retire at 52 through hard work, frugality and saving/investing.

Dad wore a Seiko and drove a Honda, and he’d wear that Seiko till it died and drive that Honda till the wheels fell off.  Nothing fancy but the watch told time and the car got him to where he needed to be.  He never succumbed to the “keeping up with the Jones’s” mentality.

My goal is to beat his 52 and retire at 50 years of age.  I’m 42, going on 43.  I think I can do it at the pace I’m going.  I don’t have any kids which financially is a big boon to my progress.  Back in August CNN/Money put out a report that the cost of raising a child to 18 years of age is now estimated at $245,000, and that’s just the first 18 years, meaning no college included!

But I do have the Seiko that I bought for $70 online, and the Honda that I purchased at 87,000 miles and paid in cash.  seikowatchNo car payments for me.  For a single 43 year old guy, it’s not the ultimate chick magnet, that’s for sure..  Oh well, I can live with that.

How do you do your saving?