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We’ve spoken a lot about different ways to pay off your bills in our articles, but this is probably the most fun way I’ve seen so far.

The website JosephSangle.com has a number of downloadable .PDF files for visually tracking either paying off or saving for a bill or major purchase. Say you have a truck you’re saving up for, You go to the web site and download the Small Pickup Truck tracking chart and you get; 

You then calculate how much you have to go on paying up (or saving up for) the truck, divide by 426 (the number of squares on this picture) and post this picture on your refrigerator, bulletin board, bathroom door, or wherever you want, so that you can see your progress.

The Simple Motivators are the Best

It seems like an easy and simple way to me to keep enthusiasm and excitement up about reaching your financial goals. It’s easy to track, easy to tell progress, easy to update and visually interesting.

Great for the teenager that is looking towards getting that first car, or for the family saving up for the house (as seen in our next example).

Not all of the pictures are in the shape of the actual items that are being saved/paid off, but the idea is the same. A visual picture (of the enemy!) to continually track as you work toward your goal.

Police use this technique to keep them focused on the cases they are working on, and dieters have ‘before’ pictures of themselves on refrigerators to help them reach their weight goals.

Some of the links on the web page aren’t working right now, but with the influx of CreditWithdrawal readers   I’m sure Joe will get on the ball and fix things.

Go see if he has a picture motivator for YOUR goal!

Do you have any simple but effective ideas for reaching your financial goals? Leave us a comment and let us know!

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For a country that popularized the motorized transportation field, and that’s had a multi-generational love affair with the car, saying that Americans are driving less is indication of a serious problem.

According to U.S. Transportation Secretary Mary E. Peters

"We have seen the longest decline in vehicular miles traveled since we started collecting this data,"

The high price of gas has gone on long enough and has stayed high enough that it’s starting to effect the driving public. That’s an excellent thing,.. sort of.

With gas prices hovering around $4.00 per gallon, and the ripple effects of this heightened price moving through the rest of the industry (food costs going up, transportation costs skyrocketing, fuel/energy costs increasing for both business and residential usage) it’s finally made it to the tipping point where the everyday American makes real changes in their daily habits.

First, the Good News

This is GREAT news for a number of reasons.

Environment - With 40 Billion less miles traveled by American motorists in the first four months of the year, that adds up to a distinct drop in carbon emissions from those vehicles. Less emissions equals cleaner air. 

Sustainable Resources - As the price of oil tops $120-130 per barrel and stays there businesses have a profitable reason to research alternative sources of fuel. With previous oil prices around half that a year ago, no business would sink the billions and billions of dollars into the necessary research to find the next fuel source. With the price where it’s at, and with no indication of it dropping, businesses can invest in even formerly unprofitable lines of development and research, and work towards a viable alternative.

Even today infant industries such as Biodiesel and Ethanol have taken off because of the higher price in gas. I’ve heard news stories about different vehicles; GM talking about a fully electric car by 2010, others wanting to release cars that run on natural gas, or hydrogen. And even the fuel-cell discussion has started again, despite high battery costs and the relatively low efficiencies of current technologies.

Strategic Independence - With the United States getting a significant percentage of it’s oil from overseas sources, there is always the specter of threat that a foreign power (Venezuela, Iran, Russia, etc) might use oil as a weapon against the U.S. at some time in the future. I’m not so keen on wandering the U.S. Southwest, Mad Max -like looking for my next meal and tank of gas. Guaranteeing a source of fuel, of WHATEVER type, is important for U.S. and world stability and safety.

Now the Bad News

The only problem with this picture is that it should have started 20-30 years ago, at least. While it should not come as a shock to anyone about the price of oil, the recent huge increase in the price has brought the importance of oil back into the public eye. We know that there is only a finite amount of oil available on the entire planet, and the rate of demand and consumption has continued to increase. China, India and other quickly developing nations will need at least an order of magnitude more oil to fuel their economic expansions in the next few decades, not to mention the existing demand.

This is why Americans cutting back on driving is starting to be a ‘bad thing’.

Tax Decreases - The taxes that are collected at the pump go to maintaining the roads and highways of the nation. And with less people driving, and less gas being purchased those revenues are going to be way down. That along with the fact that overall spending for road improvements, highway expansions/repairs and bridge/overpass maintenance has been decreasing in the last decade or so, adds up to a huge shortfall in necessary funds to maintain the roads.

Food Shortages - As American farmers have shifted to growing Ethanol-friendly crops, the world supply of corn and grain has seen a measurable decrease. This has caused prices for food products based on corn and  feed for livestock to increase dramatically. Again, the ripple effect is being felt through higher overall food prices. 

Public Transportation - As more Americans leave their cars behind, they take public transportation. This is bringing a strain on a system that has never been particularly robust to begin with. American public transportation is a pale shade of what other national transportation systems look like. The European public train system is a huge, efficient system compared to the American public transportation system.

Additionally many public systems have been unable to increase their prices for riders because of statutes and laws limiting their fare increases. Since they have to pay an increased price for fuel just like everyone else, this puts a strain on them as well. The extra money has to come from somewhere.

Car Purchases - With the huge jump in gas prices, it’s not surprising that Americans have stopped buying the gas-guzzling SUV’s and started buying gas efficient cars. The problem is, it’s a virtually overnight change in buying patterns. This means that the major car companies have been caught, with large supplies of vehicles they can’t even give away, while trying to scramble to re-tool a number of plants to produce smaller, more gas efficient vehicles. Both problems are resulting in billions of dollars in losses for the auto industry. And those losses are passed on to the consumer eventually (Layoffs, increased car prices, etc).

No Pain, No Gain

It’s not going to be an easy road until gas prices level off and stabilize. Adding to the matter is the soft economy, and the picture isn’t going to be pretty. But in the long run, developing alternative sources of fuel is a good thing for many reasons.

With more research going into alternative fuels, people concentrating on saving energy and traveling less, the BIGGEST win is that people are taking this seriously. When we Americans actually pay attention to a problem, that problem usually gets solved quickly. The bigger the problem, the harder it is to get people to address it. Now that we’re staring wide-eyed at the gas prices as they climb out of sight, I believe we’re waking up to the idea that ’something needs to be done’.

What are YOU doing to help the situation? Leave us your comments and let us know how you’re changing your daily habits because of high gas prices.

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I’ve been on one or another debt snowballs for quite a while now, and they’ve been great for getting rid of debt. But now, I’m to that stage where there are nothing but BIG bills left to fight. And they’re starting to gain ground on the psychological battlefield. I’ve decided to change my plan of attack by trying something new.

There are more than a few opinions going around about what is the best way to pay off debt.

Psychology (or Mind over Money)

Those Dave Ramseyites (believing in the Dave Ramsey Debt Snowball method) are concerned with getting people to change their spending and money management habits by achieving ’small wins’ of paying off some bills right off. This appeals to those starting out with debt elimination, but isn’t the most efficient way to kill the bills. It concentrates on changing habits, at the expense of additional expense(s).

 Science (or What Makes Cents)

Once you run the numbers, the Highest Interest First snowball shows that money-wise, it’s the best for using your money to the fullest extent. However, the problem there is that once you get to the larger bills, it seemingly takes forever to pay off one. The psychological effects start to affect you;  "It’s taking too long." or "I don’t seem to be making very much headway." thoughts, start running through your head.

I’m There Now

This is the spot I find myself in now. I’m left with the ‘big’ bills (any bill that will take more than 6-8 months to pay off by itself), and it’s getting difficult to maintain the focus and pace. I’ve eliminated all the little bills already, and have switched long ago from the Dave Ramsey Debt Snowball to the Highest Interest First snowball. The problem now is keeping up the morale in these tough times.

When you see all the money go out and don’t have very much left over to do any living, it tends to cause disillusionment with the whole ‘get-out-of-debt’ process. Why suffer, scrimp, and save when you can spend now, and worry about it later. That seems to be the recurring theme with the American public in recent years;

Housing Bailout - Congress is passing a bill that will help bail out those people that decided to do the ARMed robbery of our mortgage system. Allowing them to stay in houses they clearly couldn’t afford, by guaranteeing them new loans with my tax money, and forcing the banks to write down the loans to more realistic levels. Reward for getting yourself into too much debt.

Bankruptcy Reforms - The new reforms addresses an issue where too many people were buying into the champagne and caviar lifestyle, and using bankruptcy as a ‘get out of jail free’ card. The huge push by the credit card companies and other banking/loan companies indicates to me that they were seeing too many bankruptcies. Another case of getting in debt and opting for the ‘easy-out’ solution.

I’m not saying that there aren’t deserving people in either of these programs, but the original impetus for these reform programs was caused by too many people living WAY beyond their means. My problem nowadays is that it seems like they’re getting rewarded for it!

Ok, Back to Earth

So when I look around and still see a stack of bills that suck out every penny of my paycheck each payday, it’s hard to keep the faith and carry on sometimes. Everyone else is living beyond their means without serious consequences (in many cases). Kids are young only once, and some things you can only do once in your life. Why not do them right and have a life.

Balance in debt repayment seems to be the name of the game for me nowadays. I have lots of incentive to get out of debt (blogging friends, the economy, retirement concerns, college savings, etc). but I’m starting to see just as many reasons to put off some of that repayment in favor of things that bring enjoyment to life. (Vacations, doing things with the family, fixing up the house, buying new appliances/clothes/stuff).

I know, a lot of you are already thinking, "Well, if you were already out of debt, this wouldn’t be a problem." True enough, but that’s not the case. Once I get out of debt it will be, but there’s a bit of time before that day comes.

New Focus - The ‘Laid Back Debt Elimination Snowball’

I’ve decided to come up with a new debt snowball method to try to integrate my desire to get out of debt, with my desire to live my life as fully as possible.

The Laid Back Debt Snowball goes like this.

Make two lists of all your bills you’re going to pay off. Order one list of all your bills by interest rate, biggest to smallest. Order the second list of ALL your bills, from smallest balance to largest.

Then, take the top entry from the Balance list, and add it to the top of another list.

Next, delete the entry selected in the balance list from the interest rate list, and take the top entry from the highest interest rate list and add it to the bottom of the combined list.

Continue alternating back and forth like this, until you are out of entries. When complete, you should have a list that gives you a combination of efficiency and emotional self-gratification. The efficiency, from killing the highest-interest bills, and the self-gratification from completely killing off a bill every so often.

It’s not a perfect system, but for those getting jaded by a just one-or-the-other approach, it might reinvigorate you to get rid of those bills.

I’m going to try this for a few months and see if it helps get me back to the ‘old debt-hater’ I used to be.

Do you have an alternate way to get rid of debt that you’d like to share? Leave us a comment and let us know!

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In a fit of desperation and mind-boggling strangeness, I received an e-mail offer from Capital One the other day to open a debit card with them. This doesn’t sound that unusual, since virtually every bank account in the world nowadays comes with a connected debit card.

The weirdness begins when you start reading the details about the card itself.

No need to change banks or open a new checking account
You can enjoy all the great benefits of the Capital One Debit Card without ever having to change banks or open a new checking account. The Capital One Debit Card links to your existing checking account, similar to electronic payments for your mortgage, car loan, or gym membership. We will automatically deduct your debit card transactions from your existing bank account, wherever you currently bank.

From the Capital One website

So now, I don’t have to open an account with them, I can just get a card that magically pulls money from another bank as if it were connected to that bank.

So Impressed, I’m at a Loss for Words

I’m not quite sure how Capital One actually came up with this, or how they’re able to get away with it. They charge $19.95/month for this ’service’, when the debit card you usually get from your bank is free. You do get points for using this card, but you’d have to rack up quite a few sales to counteract the $239.40 annual cost of this card. *

Also, they offer to track your spending, thus you have to reconcile an extra card against your bank account now too. Yay!

Oh the Wonders of this Device

This card works almost exactly like your existing bank’s debit card. (Well, actually it works EXACTLY like your debit card to be precise, except your bank debit card probably doesn’t come with a fee). It’s recommended that it be attached to a checking account also, as the savings account and/or money market accounts will probably have usage limitations (preventing Capital One from withdrawing money more than a few times per month) .

They also mention that other banks might impose fees for this service from their end. I can’t imagine why?!?? Another bank attaches a debit card to their accounts, charges their customers $19.95/month year for the same service they’re giving away for free and they don’t get a piece of the action!! No problems there.

Competition Must be Fierce

While this is arguably the most interesting offer I’ve seen recently, I can’t for the life of me come up with a decent excuse for actually using this service. If I’m banking with a bank nowadays that doesn’t offer debit cards, I’m probably also limited to live-teller service and hand-stamped bank books at that bank too. Maybe someday my neo-Luddite bank will come into the 21st century, or maybe I could just switch banks to one that actually gives out free debit cards.

Sorry Capital One, no sale here.

Can you figure out a circumstance where this card would be useful? I’d LOVE to hear about it. Leave us a comment today!

* It was pointed out that the $19.95 is an ANNUAL fee, not a monthly fee. Thanks to Mrs. Micah for the correction

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Last Friday after the market close, IndyMac reported that it was in serious financial trouble. By Monday, the Federal Depositor Insurance Corporation (FDIC) had stepped in and taken over the bank. People had started lining up to withdraw their savings, similar to the bank runs of the Great Depression.

Was their money there?? Of course. The FDIC has been around since 1933, with the sole purpose of guaranteeing the money of depositors is safe in times of bank uncertainty. This is just the first HIGHLY VISIBLE takeover of a bank since the Savings and Loan crisis of the 1980’s, so people are nervous. 

Look, Up in the Sky, It’s a Bird! It’s a Plane! It’s a Frog!. A Frog?!??

The FDIC steps in and assumes control of banks that are on the edge of serious trouble (and serious trouble is defined as not having enough operating capital to continue to operate as a bank) and guarantees the money is there, up to $100.000 per depositor.

It acts as an insurance company, that pays out to depositors so they don’t lose their deposits. This recent IndyMac default is estimated to eventually cost the FDIC between $4 Billion and 8 billion dollars to cover all affected depositors.

So why is there still a run on the bank this week?? The FDIC only insures up to $100,000 per depositor. If you have more than that, you might have some issues. Currently the FDIC is allowing people to withdraw the full $100k PLUS 50% of any funds above that amount in their accounts. There is still money at risk, but at least most of the money is being covered. Eventually, it is been said that all the funds are likely to be available, but that might be a while as the FDIC re-organizes the bank.

Here I Come to Save The Day!

The limits on covered deposits isn’t just the $100k that is commonly known though. Depending on the type of deposit, and the number of depositors in the family it can be quite a bit more.

There are four account types that have deposit insurance on them.

Single Accounts - This is the standard type that everyone hears about. A single depositor in the bank can have up to $100k of funds that are covered completely by FDIC.

Retirement Accounts - This includes, IRAs, SEP-IRAs, and other types of retirement accounts held at the bank. The sum of all these accounts is protected by the FDIC, up to a total of $250,000 in addition to the coverages of other account types.

Joint Accounts - For accounts with multiple people on the account each person has a claim to $100,000 of coverage for the money in the account.

Revocable Trust Accounts - Trust accounts such as Payable-On-Death or Living Trusts also have insurance, based on the beneficiaries on the trust. That means if Grandpa sets up a Living Trust for the grandkids, and he has 5 grandchildren, the account is protected up to $500,000.*

*Other requirements exist. For exact requirements, consult a financial professional for your specific situation.

A Typical Scenario

Let’s say that Joe and Jane Sixpack have been really saavy with their savings. They each have an individual bank account with $100k, a Joint account with $200k, each has an IRA with $250k, and they have set up a Living Trust for their 5 grandchildren with $500k in it.

They are completely safe, even though they have  $1.4 Million in savings!

So if you’re still worried about the bank, and the money in it. Maybe it would be better to spread it out a little more widely, and you can sleep easier.

Do the current banking defaults have you worried? Leave us a comment why!

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