2008 June | No Credit Needed

My Story

Archive for June, 2008

Life Without Credit Cards And The No Credit Needed Experiment

June 17th, 2008

NCN

I want to thank those of you who have clicked over from Money Magazine. Author Donna Rosato interviewed me a few weeks ago and yesterday, her article, Life Without Plastic, was published on the Money Magazine website. My family and I are profiled on page 6 of the article. The print version of the article will be in the July issue of Money Magazine – on newsstands this week.

(If you missed it, please click here to read my original welcome message, written yesterday when the article was first posted on the Money Magazine site. You’ll find tons of general information about me and my websites.)

Since so many of you are new to my site, I thought you might like a little background information.

Thee years ago, in April of 2005, I sat down at my computer. I was depressed and worried. I had two kids and a great wife, but our finances were a mess. We had less than $500 in our savings account, I was barely funding my retirement, and we were almost $12,000 in debt. Feeling frustrated, I decided that I was tired of being broke – and I determined to do something about our situation.

For months, I had been listening to Dave Ramsey talk about debt reduction. I decided to follow his ‘Baby Steps’. But, I didn’t really know anyone else who seemed interested in talking about debt reduction and I really wanted a way to connect with like-minded people. So, I found a site where I could start a ‘blog’ for free – and No Credit Needed was born.

Since that day at my computer, my life has changed, dramatically. I managed to pay off all of my debts, build up a decent emergency fund, fully-fund several retirement accounts, purchase a newer automobile with cash, and live without using my credit cards. Now, instead of living life worried about bills and paperwork, I look forward to planning for my future and managing my finances.

No Credit Needed is more than a blog. It’s an experiment. Can a modern family of (now) 5 live without borrowing money? And, my honest answer is, I don’t know. But, for more than three years, I’ve managed to not only live without debt, I’ve managed to thrive without it. So, until further notice, I’m still rocking on, No Credit Needed!

I’ve written several articles about credit cards and why I don’t use them, including -

I Do Not Use Credit Cards

Preparing For Life Without Credit Cards

Philosophical Reasons For Not Borrowing Money

How I Live Without Credit Cards

For those of you considering this way of life, let me assure you of two things – it can be done and it does take a lot of work. I strongly recommend that you live on a written budget. My preferred budgeting software is published by the good folks over at You Need A Budget.

I’ll remind you that I am not a financial professional. Instead, I’m very much just a regular guy. I have an awesome wife, three great kids, a job, bills to pay, and a future to plan for. No Credit Needed is my attempt to share my own story. And, hopefully, from time to time, it will inspire or encourage someone else.

Thanks again for stopping by, and if you have not already done so, please consider subscribing to No Credit Needed via RSS or via Daily Email.

For those of you who arrived here via StumbleUpon, thanks for visiting! Before you leave, please consider stumbling this post. Thanks! For those who have never heard of StumbleUpon, click here to view my profile and consider signing up.

Posted in Debt Story, Press

18 Comments »

Welcome Readers Of Money Magazine

June 16th, 2008

NCN

I would like to welcome those who have clicked over from CNN Money. Online, I go by NCN, and this is my website, No Credit Needed.

I have been blogging about debt and debt reduction for more than three years. No Credit Needed started out as a simple blog – designed to track my progress as I paid off my credit cards and automobile debt. Over the course of time, No Credit Needed became more than just my blog, it became part of my identity. After getting out of debt, I continued to write about life without credit. I hope you enjoy the site and I thank you for stopping by.

For more about me and my site, check out the links below -

Click here to read the story of my debt reduction – from start to finish.

Click here to view the online version of the No Credit Needed Debt Reduction Guide or here to view the eBook version of the No Credit Needed Debt Reduction Guide.

Click here for a list of all of the posts that I have written.

I also have a weight loss blog – No. Calories Needed and a personal development site – 99 Changes.

For more information about me and my sites, please read my about page.

Again, I want to thank you for visiting my site. I tend to publish one or two articles a day. I write about all kinds of personal finance topics, including debt, debt reduction, frugality, saving money, retirement, investing, family finance, kids, credit cards, and budgeting.

Before you click away, please consider subscribing to No Credit Needed.

You can click here to subscribe to No Credit Needed via Email. Once a day, you’ll receive the site’s most recent content, sent directly to your Inbox. Or, click here to subscribe to the No Credit Needed RSS Feed. You’ll be able to read new content, just as soon as it is published.

Posted in Press

13 Comments »

A Fully-Funded Roth IRA At Age 18 Could Net You 3.5 Million Dollars

June 16th, 2008

NCN

This post is part of the Money Blog Network monthly project – Finances at Graduation

Dear High School Graduate:

I’ll keep this short and sweet. One day, you’ll probably want to retire. But, in order to do so, you are going to need money – and lots of it. Do yourself a huge favor. Open up a Roth IRA and do your very best to fully-fund it. Need some motivation?

Here’s a chart depicting what could happen if you invested just $5000 at the age of 18 – left it alone – and withdrew it at the age of 72.

As you can see, rate of return is a big deal. I encourage you to read one of my favorite books – The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Book Big Profits) – It will help you understand the stock market and rates of return.

Please note, the calculations above are based on a single $5000 contribution, made at the age of 18.

Imagine if you made $5000 contributions, each year, until the age 72 -

Wow. Even at a conservative return of 9%, your ending balance would be over 6 million dollars. Pretty cool. And, if you get ‘lucky’ – you’ll have more than 31 million dollars with which to play!

There are several ways to open a Roth IRA. Visit your local bank and ask them about opening a Roth IRA – or do it yourself, online, at sites like TradeKing or Vanguard.

I realize $5000 is a lot of money – especially when you are 18. But, look at the potential rewards!

One final note – Money inside of a Roth IRA grows tax free! That’s right. Pay taxes now, while your tax rate is relatively low, and watch your contributions grow and grow and grow. Then, when you are ready to retire, you can withdraw money from your Roth IRA – and you will not have to pay taxes on those withdrawals.

Your debt free friend,

NCN

This article is part of the MBN Group Writing Project on finances at graduation. Be sure to check out the other contributions to this project:

Consumerism Commentary – Financial Tips for College Graduates
Free Money Finance – Money Advice for Graduates
Get Rich Slowly – Personal Finance Made Easy
Mighty Bargain Hunter – Graduates, You Might be Shocked
No Credit Needed – A Fully Funded Roth at Age 18
Wise Bread – My Best Advice for New Graduates
Five Cent Nickel – Four Tips For Recent Graduates

Posted in Retirement

30 Comments »

Reader Poll – Just How Much Is 6 Months Worth Of Expenses?

June 13th, 2008

NCN

Many popular personal finance ‘gurus’ suggest maintaining an emergency fund with enough money to cover 6 months worth of expenses. I thought it might be interesting to see what my readers thought about this advice. If you are reading this post in a feed-reader, you will need to click through in order to leave a comment and vote in the poll.

n

How Much Is 6 Months Worth Of Expenses?

Now that you’ve voted, a few questions -

Question 1: Where do you keep you emergency fund? In a savings account, money market, checking account, or under the mattress?

Question 2: What about six months worth of expenses? Is this too much… or too little?

Question 3: Would you sacrifice a fully-funded emergency fund in order to fully-fund a Roth IRA (or other retirement / education savings account)?

Question 4: What is the smallest emergency fund with which you wold be comfortable?

Thank you for your participation. Your answers will help me write a future post. If you are a blogger and you write a post about this subject, click the contact button at the top of this page and let me know about it. I’ll be more than happy to link to your post.

Posted in Debt Story, Emergency Fund, Polls

58 Comments »

Do Your Own Melon Slicing And Save Some Serious Money

June 12th, 2008

NCN

My kids love to eat melons, specifically watermelons and cantaloupes. When I go grocery shopping, I always buy one or both for the kids. Most grocery stores sell both whole melons – that you can take home and slice yourself – and pre-sliced melons – that come in handy little plastic containers. Since melons are heavy, I wanted to find out just how much more the pre-sliced melons cost than the whole melons. Also, I wanted to see if the cost differential warranted lugging those whole melons around – Or would I be better off purchasing the pre-sliced melons?

I picked up a medium-sized seedless watermelon. It cost $6.00. I brought it home and separated the edible fruit from the rind. The medium-sized watermelon, which weighed about 15 pounds before I sliced it open, produced 6.25 pounds of edible fruit. (40 % of the melon was edible, the rest was rind). For $6.00, I was able to purchase 6.25 pounds of edible watermelon.

The pre-sliced watermelon at the store was selling for $3.50 per pound. 6.25 pounds of pre-sliced watermelon would cost $21.00! Yikes. That’s more than 3 times as much money. (3.36 times, to be a bit more exact!)

When it comes to watermelon, I’ll be sticking with the whole melons, even though they are heavy and bulky. I can’t see paying 3 times as much – for the same end product.

I also purchased a whole cantaloupe. It weighed 4.25 pounds before I sliced into it and it contained 2 pounds of edible fruit. The cantaloupe cost $2.50.

At the same store, pre-sliced cantaloupe was selling for $2.50 per pound. So, buy purchasing the whole cantaloupe and slicing it myself, I paid half as much as I would have, had I gone with the pre-sliced melon.

For me, the verdict is in. When it comes to buying melons, it’s better to go with the whole melons, instead of the pre-sliced versions. The added convenience simply cannot justify the markedly higher prices.

As a side note: If you need to make a quick in-store calculation for how much edible fruit is in a whole melon, simply weigh the whole melon and estimate that between 40% and 50% of the melon will be edible. Then, you can use this information to compare the cost of the whole melon with that of the pre-sliced melon.

For those who enjoyed this post, you might also enjoy – Beware Of The Laundry Detergent Cap.

Posted in Frugality

10 Comments »