Saturday, we head to the beach! I can’t wait. My two older kids, ages 8 and 4, are super-excited. We decided to schedule our vacation a bit earlier than usual, due to the fact that our summer schedule is full of activities. I spent several hours, online, looking for a condominium to rent, and I think I found a gem. Built in 2005, the three bedroom, three bath unit looks to be a perfect fit for our family. Mommy and baby girl will share a room, big sister and big brother will share a room, and I’ll have a room of my own. The condominium is surrounded by several public golf courses, has three pools, and sits right next to the beach.

When looking for a condominium online, be aware that the price you see listed on many sites does not include several fees and taxes. Be prepared to pay about 25% more than the list price - You may have to pay cleaning fees, processing fees, usage fees, etc. Be careful and do a lot of research before giving anyone your credit card (or in our case, debit card) number. (Once we get back, I’ll let you know where we stayed and whether or not I would recommend using the Realtor I found.)

The condo we are staying in has free high-speed internet access - so I should be able to blog, even while we are on vacation. We really wanted a three bedroom unit that had direct access to the beach and a pool. In the end, due to the price of the units, we settled for a really nice unit, but it doesn’t face the beach. Instead, it overlooks one of the golf courses and a small lake. But, it is right next to one of the pools. By choosing a room on the inland side, we were able to save more than $600. Sure, it would have been nice to go with the beech front condo, but life is about making choices. And, $600 is $600!

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This is a guest post from nickel, who writes about personal finance over at FiveCentNickel. And since that, combined with his four kids, don’t keep him sufficiently busy, he has recently launched yet another site, this time focused more narrowly on credit cards. Unlike me, Nickel uses credit cards. We’ve had several back-and-forth discussions about the subject.

If you’ve ever read my writing at either of my finance-related sites, you know that I’m a big fan of ‘gaming’ the credit card system. Why not? If you’re careful, you can make a good bit of money via credit card bonus offers, reward credit cards, and (for the really brave) playing the 0% credit card arbitrage game. Hmmm…

Why not? Well, let me tell you…

Credit card companies want your money. It’s as simple as that. They don’t offer these deals out of the kindness of their heart. They’re after one thing: paying customers. Obviously, card issuers end up earning enough money (on average) from those that apply for these deals to earn a healthy profit. If you’re in this to turn a quick buck, the key is to be below average. Unfortunately, that typically requires being very, very careful.

So what are the risks?

Signup bonuses are relatively innocuous, in that you can simply cancel the card after getting your bonus. Moreover, a single application can net you $100 or more. Sounds pretty easy, huh? It is, but… The vast majority of these deals typically require a purchase before you get the goods. The card issuers are thus counting on you getting the card, making that first purchase, and then keeping the card in your wallet. The good news is that, in many cases, your first purchase can be as large or small as you want. Nonetheless, you still have to keep track of the card, make sure you pay off that initial purchase, and then cancel it.

Next up, reward cards. What could be easier than earning cash back on things that you already buy? You’d be foolish to turn your back on up to 5% off every purchase. Right? Well… The other thing to keep in mind that is that studies have reportedly shown that (on average) people spend more with credit cards than if they were paying with cash. Moreover, if you don’t have the discipline to pay things off in full every month, you can quickly find yourself mired in credit card debt.

Finally, what about 0% balance transfer credit card offers? While these can be a great tool for killing of your high interest debt, they can also be used to generate cash on the side. In short, the goal of balance transfer game is is to borrow money at zero percent, stick it in a high yield savings account, pay the minimum amount due each month, and collect your profit in the form of interest payments form the bank. Sounds simple enough, but there are a number of risks here.

For starters, if you make a late payment, the card issuer might jack up your interest rate. Moreover, you have to keep close track of the end date of the promotional period or you could get stuck with a hefty interest charge at the tail end of the game. And guess what? If you make any purchases on the card, chances are any payments that you make will be applied to the lowest rate portion of balance first. In other words, that purchase that you just made will accrue interest until you pay off the balance in full.

Admittedly, this was a much more attractive proposition before the recent spate of interest rate cuts. But even when rates were hovering around 5%, you’d have to carry upwards of $20k in 0% credit card debt in order to pocket $1,000 of profit over the course of a year. Is it worth the risk? For some people, yes. But for others, no.

Setting aside the specifics of any particular offer, another thing to consider is your credit score. While the effects of credit card deal chasing on your credit score are typically short-lived, the extra credit checks associated with applying for a bunch of credit card deals can ding your credit score, and carrying large balance on a 0% credit can likewise drag down your score.

So there you have it. The world of credit cards is fraught with risks and, for many people, it’s just not worth it . As for me, these factors haven’t been enough to discourage me from taking advantage of credit card deals. That being said, I treat it a bit like a hobby, and thus don’t mind spending the extra time and effort to keep things in order. And since we already have all the credit we need, I’m not particularly concerned about temporary dips in our credit score.

As you can see, Nickel and I both agree that there are risks associated with the use of credit cards. Nickel chooses to use them, and I think he does a good job of managing those risks. And I choose not to use them, so as to avoid the risks altogether.

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Recently, I published the online version of the No Credit Needed Debt Reduction Guide. Today, I’m releasing another version of that same guide - a free eBook. Simply click on the link below to download your copy. (Depending on your browser setup, you may need to right-click and select ’save as’ or ’save file as’.)

No Credit Needed Debt Reduction Guide eBook

The eBook is copyrighted. Feel free to share it with your family and friends. Please, do not make any changes to its content. At only 8 pages long, the eBook was designed to be a simple, step-by-step guide to reducing debt.

I would love to read your feedback. Download your free copy and let me know what you think about the guide.

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Click here to visit the No Credit Needed Podcast homepage to download or stream the latest episode -

No Credit Needed Podcast Episode 6 Of 2008

(For more information about podcasts - and how to listen to them - please read this handy guide that I wrote a few months ago: How To Listen To A Podcast - You Do Not Need An Ipod - Free Audio And Video)

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Inspired by a recent article by Nickel, over at Five Cent Nickel, about his current asset allocation, I thought it might be a good time to take a look at our current asset allocation.

Between us, my wife and I have five retirement accounts - two Roth IRAs, my 403(b), a SEP-IRA, and my wife’s pension. The calculations in this article are based on four of those accounts - and exclude my wife’s pension.

Our current asset allocation:

100% stocks, broken into the following -

Our allocation will shift over the coming months, as we continue to make contributions to my wife’s Roth IRA and my 403(b). Current plans are for future contributions to the 403(b) to be invested in an S&P 500 Index Fund and future contributions to my wife’s Roth IRA to be invested in a Total US Stock Market mutual fund.

Like my buddy, FMF, over at Free Money Finance, I prefer investing in Index Funds. I’m still working to refine my investing strategy, and it feels good to have a snap-shot of my current situation. Just like Nickel suggested, I have decided to treat all of my investments as ‘one big pot of money’ - and I’ll make adjustments to our allocation using my SEP-IRA contributions throughout 2008.

Edit:  After reading a comment left by Nickel, I wanted to make a note about the aggressive nature of our investments.  Instead of bonds or a bond fund, we have my wife’s pension, which grows at a guaranteed rate.  If we did not have her pension, we would change our asset allocation.

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