Goals Are Great Motivators

Marathon de New York : Verrazano Bridge

Goals can be great motivators to help you achieve! I find that when I have a specific goal it’s much easier to focus on what I want to accomplish.  For example: For me to save money is one thing but when I have something specific to save for I find that I can save up much quicker.  When I was younger I wanted a new stereo (the hand-me-down I was given still had an 8-track in it).  I made a goal of saving up for a new stereo.  When I sacrificed some expense for savings I knew i was to help me get that stereo.  When I worked extra hours in the supermarket I knew it was for the stereo.  In no time I had enough to go out and buy a new stereo, equipped with not one but two tape decks! (Have I dated myself or what?)

Let me give you some other goals I’ve set for myself and accomplished:

Ran the NYC Marathon – In 2005 I decided I wanted to run the NYC Marathon.  I knew I needed time to train and run enough races (you have to run 9 NYC RoadRunner races for guaranteed entree).  In 2006 I mapped out what races I would run to qualify for the next year’s race.  It was tough to keep up but I ran and finished all nine races for entry.  In 2007 I started a training program to get me in shape for the marathon.  In June I started my longs runs every weekend to get me ready for the distance.  The first Sunday last November I woke up at the crack of dawn and hopped on the Staten Island ferry to get to the start of the marathon.  Later that afternoon I would be able to call myself a marathon runner.  I don’t think I ever would have run the distance without a specific goal of running the marathon.

Paid off my credit cards – Some years ago I finally got fed up with how much I was paying monthly in interest for my credit cards.  I resolved to pay them off.  It started slowly but bit by bit I started to gain ground.  After an incident that led me to move back with the ‘rents I was able to turbo charge my payments and finish off my credit card debt.  I haven’t had more than a month’s charges since then (I pay my cards off in full every month).  Without resolving to pay off my credit cards once and for all I would still be idling along with minimum payments and a ton of debt piling up.

Started a personal finance blog/site – In October of 2007 I had discovered blogging via Zen Habits then Get Rich Slowly.  I was already itching to find something productive to do with my time and had healthy interest in personal finance.  I set a goal of starting up my own blog and making it successful.  I’m still in the middle of this goal but I feel like what I’ve done so far has been a success, especially when I look back at my first month of original posts on my Blogger site.  Without my goal I might be surfing fantasy baseball sites instead of writing this article.

Build up our savings – My wife and I wanted to make sure we had enough in savings for any emergency and then some.  Rather than hope to put some money away with what was left over at the end of every month we calculated a specific amount we could afford to do without and set up our ING savings to automatically withdraw money from our checking every week.  We have since achieved our emergency savings goal and exceeded it.  If we didn’t create a specific plan our savings would be considerably less and we’d be scratching our heads wondering where our money went.

The lesson here is that I was motivated to accomplish different things because I set a goal to achieve!  Having a goal in mind keeps my mind focused.  Without a goal set I would have just floated along in many cases.  My savings would be lower, my credit card debt still existing, my running much less, this site just a thought…

One way to accomplish a goal is to make it SMARTSpecific, Measurable, Attainable, Realistic, and Timely. (Thanks to Cash Money Life for turning me onto that concept.)

I also like to think in terms of short and long term goals. For example – The goal of saving up for a down payment on a home, while an admirable goal, may seem a bit too big to ever accomplish.  That could be a long-term goal.  To make it more achievable you can create a short-term goal of saving X dollars a month towards a down payment.  This way you see your small goals achieved which helps build up the confidence to achieve your bigger goal.

Check out this article on the science of setting goals.  When you set a goal you are actively engaging your brain to help you with your goal!

What goals have you accomplished?  What are your current goals and how will you achieve them?

Sign up with ING Direct and get a $25 bonus –  Free From Broke.

photo credit: Martineric

7 Credit Card Tips From ING Direct

Pile+Of+Credit+Cards

I was just on the ING Direct site checking out my savings accounts and decided to check out their tips. They list seven great credit card tips. Check them out (descriptions are mine):

  • Make your payments on time – Very important! Late fees can be very expensive on credit cards and can negatively affect your credit score. If you have problems with the due date you may be able to change your credit card due date.
  • Try to pay off the full balance every month – Pay off the full balance to avoid any interest charges.
  • Avoid cash advances – Cash advances on your credit card have different rates than normal credit. Yeah, it’s gonna be more expensive than if you just charged it.
  • Shop around – Compare rates and services from different credit card companies to get the best credit card offers.  Find one that fits your spending habits.  Make sure to read the fine print as well.
  • Use savings to pay off the cards – It’s great that ING Direct exists offering high interest rates on savings but that high rate doesn’t compare with the interest on your credit card (unless you have a low introductory rate).
  • If you’d like a better rate, just ask – If you have been a good customer you can call the credit card company and ask for a better rate. Try telling them that you received an offer from another company with a better credit card rate; odds are they can lower it for you. Make sure you understand what the new rate is though. It may only apply to new purchases not your outstanding balance.
  • Don’t be left holding all the cards – If you have a lot of cards it means you can do a lot of spending damage. This is bad for both you wallet and your credit score. Get rid of credit cards you hardly use or ask that the credits limits be lowered (a high credit limit can hurt you for some credit card companies).

Of course you should also watch your spending as well.  Don’t abuse your card and know what you can really afford.

Do you have any credit card tips to share?

Interesting Credit Card Marketing From AAA and Bank Of America

My wife paid her credit card a couple of days late.

Between work and taking care of the kids (that includes me too) she forgot the exact due date.  It isn’t a card that’s used often.

It happens.

Unfortunately we got hit with a no payment fee (about $30) and an interest fee (a couple of bucks). There were no other late payments on the card so I decided to call the company and ask if they can drop the fees. We’ve been good customers and have been paying in full every month.

So I called the number on the back of the credit card.

I go through all of the phone hoops and get to an account person. He asks who I am. I give him my name and tell him I’m calling on behalf of my wife (this is a credit card she had before we were married). The account rep then says he sees my account. My account? This is my wife’s card! It seems that Bank of America is the issuer of the AAA card and since we have a banking account there he could see my account.

So I tell him our situation, that we never pay late and always pay in full, could you drop the late fees? He tells me since I’m not on the account he can’t authorize it. My wife has to tell the rep to put me on her account. So now I give her the phone which kind of defeated the purpose of me calling since she was taking care of the kids, and she gives him permission to add me to the account. Took two minutes maybe. Easy process. I get the phone back and go back to the original question of removing the fees. He looks at the account and says he can remove the no payment penalty but there’s nothing he can do about the interest fee. I press on the interest but he won’t budge. It was a couple of bucks and it was our fault so OK we’ll pay that. At least we got the no payment fee taken off! The whole process was a bit annoying but in 15 minutes we were able to eliminate a $30 charge.

Fast forward a week or so and we get a package in the mail.

Two new credit cards for the account. We didn’t ask for a new card. Since they added me to the account they assumed that I too would need one of their cards.

Hmm…interesting. I guess they want me to start charging on the account too! Now they double the chance of a late payment or interest charges (not really for us but hypothetically)! What they did wasn’t wrong from what I can tell but it annoys me that they automatically sent out another card assuming I wanted it. Very aggressive marketing on Bank of America’s behalf.

This gets me thinking though.

What cards do we have between us? Should we consolidate some accounts with both of us on the accounts? Until now it hasn’t even been a thought. We’re both responsible with our spending and very open with our spending habits. I like the idea of one separate card between us so we can buy gifts for each other without the cost popping up on a shared statement. How can this affect our credit scores? I need to do some research on this.

P.S. To prevent future late payments we signed up for email alerts from the bank that tell us the payment is due in a few days.

Do you think Bank of America was sneaky in sending us another card?

For those married folks out there – How do you handle credit cards between you and your spouse? I’m interested in hearing your stories.

How AMEX And ING Gave Us A Wedding Gift

My wife and I have been married for almost two years now.

When we were planning our wedding (which we planned in three months) we didn’t want to get too extravagant and end up in debt because of the wedding (not a good way to start a life together). Still we knew there would be some hefty expenses to cover.  Luckily for us I got an offer for an American Express credit card with 0% interest on charges for a year.

I know, some of you may be thinking “Uh-oh credit card debt!”

Well yeah but look at how we made a new credit card work for us:

  • We charged what we could on the card. This included not only wedding expenses but also the honeymoon and many other charges over the course of a year (we would have charged more but some vendors preferred cash or check).
  • When the monthly bill came we paid only the minimum. I know, another red flag – Never pay just the minimum. Stay with me it gets better.
  • We took as much of the remaining monthly balance as we could and put it in our ING account and labeled it AMEX. This money would only be used to pay the Amex bill once the 0% offer was over!
  • Fortunately we already had money saved for the wedding so we were able to add money to our ING “AMEX” account. Essentially we could have covered the credit card bill at any time but let it sit since we weren’t being charged interest.
  • At the end of the offer we paid our bill in full. We continue to use the card paying off the statement in full every month.

Basically what American Express did was give us a free loan for our wedding! On top of that we were earning decent interest in our online high-yield savings account for money that could have paid off the card. AND for the charges we made on the card we were earning rewards points as well. The points translated into a nice gift certificate to the Pottery Barn! Thank you American Express and ING!

Understand, we had to be disciplined to do this. At no time did we go crazy making charges we couldn’t already pay off. We had a plan and stuck to it.

This shows you that credit cards don’t have to be bad if they are used correctly. Money can be saved and earned in all sorts of ways. We just have to be open to how it can be done.

Let me know what you have done creatively with a credit card or online bank account!