Categories
Personal Finance

Pay off debt, then start saving and investing

I took the plunge this weekend and expunged my debts to the depths of the hell from whence they came. It was a tough move for some reason, even for a cold, calculating accountant. Subconsciously, I held on to the debt in order to keep my asset balances high. Artificially high.

This is a bad move, and you don’t need to be a bean-counter to follow the logic. I had credit card debt at 18%, a personal line of credit at prime + 3%, savings earning me 3.5%, and a chequing account costing me the monthly plan fee less a paltry amount of interest. In summary, a net cost to me.

I had enough cash in the savings and chequing to pay off the debts, but for some reason I had held off on doing so for months, all the time allowing the interest costs to pile on. I felt more secure maintaining the artificially high cash/savings balances. Why is that?

It wasn’t until I started tracking my expenses using the so very Web 2.0 tool expensr.com about two weeks ago that I realized the time had come to man up and pay the debt off. Only then could I save with a clean conscience, knowing I had no interest expense completely wiping out the interest I would earn on savings.

Note: I plan to write a post soon about expensr.com. It has really helped me get a hold of my expenditures and features a mobile version I can access on my cell phone to capture cash outlays as I make them.

So now you all know my dirty little secret. I’m an accountant and auditor, I find other people’s mistakes and control weaknesses, and until this weekend I wasn’t even managing my own finances like a pro!

Categories
Personal Finance

Always have exact change

CoinsThis struck me as sort of interesting, possibly useful, and probably a little compulsive. One blogger’s way of slowly using change is to carry the optimal number of each denomination of coin in his pocket.

Everyone has coins they want to get rid of. I randomly thought of an easy way to carry change and always have enough change for a purchase. For the sake of this article, I consider change to be less than $1 of coins. To be able to make any change combination, you need to carry $0.99 of change through 10 coins…

I almost never pay with exact change, but that’s probably because I find a sick satisfaction in rolling my coins every few months and taking them to the bank. I crave that big mountain of coins because when I was a kid it was easy to imagine a big pile of coins were treasure.

(Via Lifehacker.)