Time for my annual checkup

Author’s Note: This started as something else entirely, but it quickly shifted. I’m still happy with it because it needs to be said. And lived.

I hope this is something you all do on an annual basis. It’s not only important for you, but it is important to your family. You’ll be happier, you’ll live better, and you’ll have the confidence that things are going right. Yep, time for your annual financial checkup.

This is a habit I got into a few years back. At the end of each year, I call every business who holds an account in my name and review my account. I call every creditor and ask for a change in my rates. And I check my credit reports for any problems as well. If necessary, I also re-opt out of receiving credit card offers since, let’s face it, I don’t want nor do I have a need for credit cards. I haven’t even owned one since last March and despite all the “wisdom” of the experts and what not, I’m still breathing. No, change that. I’m thriving. Last but not least, I do a year-end review of the budget to find the big trends and weak spots, and we fix them.

Yesterday, I called my car insurance company. I spent about 10 minutes talking with the lead agent (always go to the top if you can), and I cut my annual insurance bill by $220 while increasing most of my coverage. If you’ve got a clean bill of health on your driving, make that call immediately. You’ll be surprised how simple it is to tweak what you have to save you a lot of money.

I’ll also be calling our mortgage company this weekend. We’ve been with them for several years now, and it’s time to see what they can do for us. Likely nothing since changing a mortgage typically requires an expensive refinance, but mortgage companies want to hold on to the good loans they have, and there may be some pressure I can apply. If you are a “good mortgage” don’t think you are left out in the cold on the assistance being thrown around. Go straight to the top, demand assistance and a change, and if they don’t, go elsewhere. Don’t be rude about it, but be firm and honest. You’ll have to work harder to get it, but you can do it. And while you’re at it, do a serious look at going to a 15-year mortgage. It’s a bigger payment, but if you can scrounge up the extra cash, do it. You won’t be sorry.

And of course the credit report. We’ll do that soon, too. There are lots of different sites out there, but remember this one: annualcreditreport.com. This is the only credit report site that is offered in accordance to federal law. Every other site is not. You can still get the information other places, but you’ll likely pay for it. Why pay for something that is offered free? And you don’t need to know your score. Just make sure the information is correct and your score will take care of itself. Besides, if you have to borrow money to buy it, doesn’t that automatically mean you can’t afford it? Just a thought.

Last but not least, the budget review. Courtney hates this part because she’s much the free spirit in our marriage. I am too, right up to the second someone says “spreadsheet” or “bar graph.” I could sink into the bitter depths of a spreadsheet for hours and analyze and configure and graph and chart and otherwise bore Courtney’s free spirit nigh unto death. To spare her, I typically do this alone. I like it better that way since I don’t get frustrated with her boredom and she doesn’t have to put sedatives in my water to get me to calm down. And when I’m done with my marathon analysis, I can present “The Budget” on stone tablets as Moses of old descending from Mt. Sinai. “BEHOLD YE WICKED GENERATION (that would be Courtney)!!! THE BUDGET!!!” Hopefully, the Lord cooperates by granting a single crash of thunder. For Courtney’s part, she typically rolls her eyes before going back to the Golden Calf.

We found an idea from Dave Ramsey to help us with the budget. I get to create it all I want, but I only get 15 minutes of Courtney’s time to present it. And by rule, she has to make at least one change, and I have to accept it. It keeps us both honest and interested in the budget.

This last year, we made a significant change away from credit cards (we had 6 with over $70,000 in credit available to us) to a cash system. We’ve tried to become, as Dave Ramsey calls it, Gazelle Intense on getting out of debt and being financially free. We’ve done what we can. Recently I saw a report that said Americans have, on average, about $3,500 in credit card debt and that number is expected to go up by $1,500 over the next year. Wow.

And no thanks.

I wonder sometimes who is going to get my share of that credit debt.

Let’s face it: I make a median income wage. I live in a house that is only 750 sq ft with two bedrooms for 4 people. I drive a car that I paid $15,000 down on and will pay off in full 3.5 years early on a 5 year loan. We don’t go out to eat because we’d rather our money went to our debts and our future. We save money to pay for things. We have no credit cards. We don’t have the mega-ultra plasma TV. We budget faithfully and then live our budget. We give generously.

We are happy.

Our lives our by no means comparable to the bounty of many of those around us, but we are more than happy with what we have. Bigger and better will come when our budget is bigger and better. Until then, I see little reason not to be satisfied and perfectly happy with enough.

Besides, like I said, if you have to borrow money to buy it, doesn’t that automatically mean you can’t afford it? Just a thought.

Now go get your financial checkup.

The doctor is in.

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7 Responses to Time for my annual checkup

  1. Sarah Bailey says:

    Thanks for the reminder. I too find financial check-ups very interesting and fun. Unfortunately so does Ammon. 🙂 We literally spend hours and hours going over our goals and plans (can you say obsessive?).

    For your readers who missed it in your original post: at annualcreditreport.com you can get your credit report from all three credit bureaus for FREE. I like to check the reports throughout the year (i.e. Experion in Jan, Transunion in May, Equafax in Sept). Obviously the reports don’t give you the same information, but I like having the assurance that my account information hasn’t been stolen and taken for a joy ride.

  2. Courtney Loveless says:

    I honestly try not to roll my eyes, but the whole graph and pie charts thing just doesn’t do it for me. Sometimes Dave has to settle for listening to me grind my teeth instead. 😀

  3. nosurfgirl says:

    Courtney…. I hear ya. When I sit down for a “budgeting night” all I want to do is look at our accounts, look at our credit cards (yes we use them, but we pay the full amount every month, and we only use them for certain, specific expenses)… anyway, but my husband wants to get out the huge bag of leftover reciepts from the last six months and categorize them and circle pieces of them and THEN sit in front of the computer… comparing them one by one with each transaction. I could seriously go insane. It turns “budgeting night” into solitary obsessing over which receipts are lost night. And instead of an hour or two, it ends up lasting ’till one in the morning… I have learned not to suggest them anymore. I just decide I’m in charge of the groceries, he’s in charge of car repairs and scheduling monthly payments on all our permanent bills… and we leave it at that. For now. haha.

    I’d say that this is one point in our marriage where we have come close to fighting. Usually we just have an intense discussion, try to see it from each others’ perspective for a few moments, and leave it at that.

    But Dave, I think your idea might be a good one. HE can spend a whole saturday finding and categorizing receipts, present me with information, and THEN we’ll have “My” budgeting night.

    Sigh. Anyway,

    ain’t marriage grand. It really is.

  4. nosurfgirl says:

    sorry, above should read, “we TRY to use them only for certain, specific expenses…” Except for last month. I used one of them for most of our grocery expenses last month. Specifically 🙂

    So… yeah. I can see the value of a cash-budget, too. WE’ve wanted to do that before, but this is something my husband is actually resistant to. He likes using credit cards because of the cash-back benefits. And he’s pretty good at using them… because he categorizes every single receipt!! Whereas for me (the non-categorizer…) i’d rather just have every transaction somewhere where it is easily tracked, and not too bothersome to figure out where the money went… ie, either cash or on our debit card where we get a spreadsheet of every single transaction just by clicking into our account. With the cards, you have to “request” an account summary. sigh.

  5. daveloveless says:

    I used to feel the same about credit cards because we got air miles and other rewards. The thing that finally convinced me was a study (I REALLY wish I had the reference) that showed that people who spent with credit cards, even people who were “good” with credit cards tended to spend, on average, about 20% more than those who paid with cash.

    The study talked about how your brain registers spending with cash as physical pain. Credit cards don’t register as pain, which makes it simpler to overspend.

    I doubted the study at first until we made the switch. We saw roughly a 30% decrease in our monthly spending. We didn’t change any thing else, but using cash helped us be more aware and conscious of our decisions.

    So for us, the decision became more of a “is spending 30% more to get 1% cash back really worth it?”

    No. It’s not. At least for us.

    Oh, and the 15-minute budget meeting rule has saved us a couple good solid fights. It’s really worth it. If you want to try it, I have a short CD that explains the basics. It’s about 45-minutes long and talks about the dynamics of marriage finances. Very worthwhile.

  6. nosurfgirl says:

    That’s interesting… something that maybe JEff and I should both read. Because the debit card might even work the same way, right? I can completely see that.

    What about credit cards purely for planned, large purchases, to raise credit scores? (eg the family vehicle, a rent deposit, etc?)

  7. daveloveless says:

    The study showed the paying with cash registered physical pain, debit cards and checks less pain but still painful, and credit cards had absolutely no pain. Debit cards are still useful.

    Dave Ramsey (my source for most financial stuff) opposes credit scores for some basic reasons. The truth of the matter is that credit cards form only a small portion of your credit score. Your regular accounts at banks and what not are sufficient. Two examples of this that come to my mind immediately is Courtney and a friend named Laurel.

    Courtney never had a credit card, never used one, never had debt of any kind. She only had a savings account and, after we were married, a checking account. I did eventually get her a credit card, but she never used it. When it came time to buy our house, her credit score was significantly higher than mine (high 700s).

    Laurel was the same. No credit cards, no debt, no nothing. She paid cash for her cars and every major purchase. She was looking for a house, and she was scared because she didn’t have credit cards. When they pulled her credit, she had high 700s.

    The point is that the credit card companies have sold America on this perceived need that success comes only through credit cards. It’s the single greatest marketing success ever. Having said that, a well-used credit card will certainly help your credit score, but it is not needed, you tend to spend more when using one, and, in my opinion, why run the risk?

    As someone who once had, used and paid off my credit cards without ever incurring a penny of interest, I’m much happier and financially healthier without them. It’s scary to cut them up and cancel them, but it was totally worth it.

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