My husband and I purchased term life insurance a few years back with the idea that if either one of us kicked the bucket, so to say, earlier than anticipated, we wouldn’t be financially decimated by that experience. (Emotionally is another topic, obviously!) Our policy was inexpensive, about $40 a month, for a policy worth $100,000 in case of death and it covers us up to the age of 80. Term life insurance policies have no cash value, so there would be no way for us to cash it out. When we signed our policy, this was best option for our situation since we still weren’t financially responsible at the time and couldn’t afford the premiums on a whole life policy.

Last year, we added a travel accident rider that is worth twice the amount of our original policy. This covers car accidents, plane accidents, pretty much any accident where one is physically moving to and from a place. This week, my husband had to travel to a funeral. As I was booking his flight on Monday, I realized I had forgotten to pay the annual premium on this rider! Now, I’m not wishing any ill-will on my husband (I love him!), but the idea of him traveling clear across the country and NOT having this additional policy in place made me nervous. As he was traipsing across the country on a total of 4 plane rides then renting a car and driving on snow-covered roads, I knew we had to remedy this before he left. With a quick call, we made our payment and settled my uneasy mind.Yes, I know. This sounds very shallow, wanting to make sure I eek out every dime possible in case of death. But that’s what life insurance policies are for!

A few years ago, National Geographic posted a chart showing all the possible and probable ways to die. With death being a 100% sure thing at some point in one’s life, it was an interesting tidbit of information. If you look below, you’ll notice heart disease is the primary killer among humans followed by cancer, but motor vehicle accidents are 4th! Plane accidents involving deaths are pretty low, coming in 13th, just after bicycle accidents. Funny thing, I’m not so sure my rider covers biking, an activity I do frequently. Take a look for yourself:

Ways to Go from National Geographic and 10 Minute Math

Do you have a life insurance policy that covers your spouse? What about travel accident insurance? If you don’t have a policy, what reasons made you decide to forgo one? Is this just a morbid topic that you rarely discuss with your loved ones?

Cut up those credit cards?

One of my goals for this year, that I have partly accomplished, is raising my credit score. I need to get my score above 740, at minimum, so that when I apply for a mortgage loan, I’ll be able to get the best rate. I still need to raise my score about 40 points (this is an average as all 3 credit bureaus are reporting slightly different scores). One thing I’ve learned about improving my credit score, is keeping my debt to credit ratio low. Since I’ve paid off all of my credit cards, I’m looking pretty good here. However, another factor that affects a credit score is how much total credit banks are willing to loan you. Since I’ve been on a mission to improve my poor credit history, I haven’t had much credit extended to me these past few years leaving me with very low credit limits.

So, here is my dilemma: I have two credit cards with low credit limits that are charging me monthly fees and/or annual fees (totaling approx. $155 for the year) . I don’t use these cards at all anymore. However, there is a catch with these two cards: they were originally a way to pay off old collection debt. These cards were offered to me about 6 years ago to pay off two other credit cards that had gone into collections. Once I paid the old debt off in full, they extended a limited amount of credit to me. I’m now thinking of canceling these two credit cards now that they are paid in full, but then my overall total available credit limit will be reduced by almost $1,000. How will this affect my credit score? Will it ding my score by a few points? Since I’m hoping to apply for a mortgage loan with in the next year or so, I’m trying very hard to keep the activity on my credit report to a minimum.

After doing some research, canceling my two credit cards would probably affect my credit score a little bit. By how much, I don’t know exactly. I have two options; A.) I cancel these cards and save $155 annually, with the potential of losing a few points off my credit score, or B.) I keep these cards until I am able to purchase a home.  That could be up to 18 – 24 months meaning I would have to spend up to $310 on fees, but I’d be saving my credit score.

For now, I think I will keep the cards. If purchasing a house becomes ever more elusive and my time frame extends to more than 24 months, I might just go ahead and cancel these two cards. I do know that when I obtain that mortgage loan, these two cards are getting the ax!

What do you think? Would canceling these cards now be beneficial? Am I making the right choice by keeping these cards a little longer?

The Yakezie Badge

The Yakezie Group and the Alexa Challenge is going strong. Now with so many blogs involved in this challenge with the idea of networking to build up our readership and promote well-written personal finance blogs, I want to send a thanks to those carnivals and blogs that included one of my posts.

• Fiscal Geek: Thanks for including my Rainwater Collection Ideas post.
• Consumer Boomer: Also included my Rainwater Collection Ideas post.
• Beating Broker: Visitors really liked my Rainwater Collection Ideas post! Here it is again.
• Planting Dollars: Finally a different post shared, The Young and the Homeless. Thanks, Ryan!
• Out of Debt Again: Thanks for listing The Young and the Homeless post.
• Start Tags: I’m not really sure if this is a blog or not.  I think it is a link aggregator or RSS feed, but thanks for mentioning my Rainwater Collection Ideas.

Enjoy your Sunday!

I'm burning my candle at both ends this week.

I’m posting this mid-week because 1.) I didn’t post any round-ups this past weekend, and 2.) I’m really behind on some projects…crap!  Some terrific articles have been written on various Yakezie member sites that I’d like to share, instead of banging out an article of my own. Enjoy!

• Sweating the Big Stuff and How to Raise Your Credit Limit (This also touches upon hard inquiries and soft inquiries)
• Young and Thrify and What’s Your Latte Factor? Of course I had to read this one! I love my Starbucks. However, it does make me think about spending my $2.50 daily. It sure adds up!
• Ultimate Money Blog is running a whole series on state economies. I love statistics! This one is about Alaska. So who wants to live near Sarah Palin?
• Rainy Day Saver changed the look of her blog too. I like it! Check it out. (P.S. I’m still working on mine )
• My Money Minute and Wine on a Budget. I personally am more of a beer drinker, but who doesn’t love wine? Okay, me. But most people like it.
• Monevator plays devil’s advocate on Wasting Money on Memories. Yet, the conclusion is well done.

Since I’m burning the candle at both ends this week (to use a figure of speech), I will make a point to post something meaty in the next day or so. Please hang in there,  I’m just juggling too many jobs right now. (That’s a good thing, though. Right?  )

Wells Fargo ATM

Until recently, when I would deposit checks into an ATM, it would take about 2 business days or longer for them to clear the bank. Since Wells Fargo has introduced the “No Envelope” deposit method at the ATM, they now post that day if deposited before 8 PM. What a convenience! Here’s what’s different, there are no deposit envelopes to use and fill out anymore. In the past, a bank teller would have to pull out the envelopes and manually enter them as deposits into your account. Now, I deposit the checks directly into the slot (up to 8 checks can go at once, I think) and the ATM scans the routing and account numbers at the bottom of the checks. The ATM asks for confirmation of the amounts of each check and total amount.  Those funds are available the same business day, as if you went into the branch itself and deposited them.

The new method decreases the likelihood of human error, and it also reduces the amount of check scamming. With the envelope, people could deposit toilet paper and withdraw money they really didn’t have. This wasn’t caught until a human opened up the envelope and realized the scam. Now, the ATM visually sees the check numbers and can credit your account that day. If you feel uneasy about depositing checks sans-envelope, you have the option to print a receipt with copies of the checks you deposited. This is very helpful if you enter individual deposits into your check register or Quickbooks program.  I admit that I love this new method.

However, this means that if you are writing checks, you need to make sure the funds are available in your account. Something most of us do, but now it is crucial. I’m sure that Wells Fargo isn’t the only bank electronically scanning checks and crediting funds immediately. If you write a check, you had better make sure those funds are there!

Here’ an overview of the new check scanning ATM:

• Saves you the time of filling out an envelope and adding checks manually. The ATM will automatically add the amounts for you, you just need to confirm the amount.
• Checks are credited that day, just as if you went into the branch. What a time saver!
• A receipt with copies of the checks is available for your records. Just like you receive a deposit receipt from a bank teller, the ATM can not only print a receipt, but also print one with the check copies in case you are uncomfortable with this new method.
• You can also deposit cash directly into the ATM and print a receipt with a copy of the bills you deposited. I’ve always been wary about depositing cash, but because the receipt prints the bills, I feel more comfortable now.

Do you use the ATM to deposit checks? What about depositing cash? Is your bank offering this type of ATM service? Would you use it if they did?

The Cap Light - Our passive income generator!

For years my husband has been on a mission to make money while we sleep, or figure out a way to make passive income. The beauty of this plan is simple: work more upfront, profit more later on and in the off hours. His plan is finally coming to fruition 11 years later. We’ve tried many side businesses on top of his web and graphic design business (our primary income) to get to this point. Some businesses include:

• Hot dog stand – Ended up being way more work than we thought, little profit. We quit 6 weeks into it. This wasn’t really passive income, since we were up at dawn brewing coffee, handing out danishes, and freezing on the street corner!
• Photography business -This just evolved into our successful graphic and web design business. I guess I can’t really count this as a side business or passive income either.
• Child ID Kits – My husband originally thought ID Kits would be the idea that would make us money while we sleep. It didn’t really catch on.
• FROG – Three years ago my husband had a brilliant idea (before the iPhone had launched), create a mobile portal for smart phones making accessing the internet a breeze. FROG is still going strong, but isn’t generating any income. We are still working on this one, I’m sure someday we’ll figure it out. For now it is passively working (over 10,000 active users) and adding new users daily. If anyone thinks they can help with FROG, please let me know!

Well, we finally hit one idea that is making money without a lot of work: The Cap Light. My husband’s goal this year was to begin networking with small businesses that he took an interest in. He could help design their website and marketing materials for a percentage of their sales. Now with the marketing in place, the orders are rolling in. My husband makes a small profit off each sale without much work on his end. Many of the ads came out this week in a few different travel and RV publications helping create most of the orders. As goofy as this product seemed in the beginning, it is a huge hit with campers, RV travelers, and just about anyone who needs a third hand to hold a flashlight.

We are working on another passive income generator that is a more lucrative business idea with a company that produces dependent eligibility audit software. In exchange for building their new website, we will profit 10% on every online or web sale. Since their product ranges from $8,000 on up, our profits could become very lucrative. With the success of The Cap Light this week, we can only hope that this next venture will also make us money while we sleep.

Ya’ gotta love that passive income! My 2010 motto: Work smarter, not harder.

What experiences have you had with passive income? Have you tried different business ideas to help generate additional income? Do you currently have a successful passive income generator you could share with us?

Our Honday Element "Ellie". It's what inspired up to go camping!

Today, my husband refinanced our Honda Element. I wasn’t too thrilled about the idea at first, because it meant having car payments for a longer period of time. But after doing the math, we realized we would be saving money.  Over all it means we will be paying a few months longer, but will be saving over $2,400!

Here is how it played out, you can be the judge and decide if it was a good move or not (I love feedback!)

• Our current auto loan APR was 9.98%. Not great, but when my husband first financed the vehicle, his credit was in the low 600’s, not very good.
• Our current auto payments with the 9.98% loan was $475 a month. We’ve owned the car almost 4 years, so this was a high payment for the length of time we’ve owned the car, and we still had 22 months to go. We owed $9,500 on the car.
• The new refinanced loan is now 7.25%, this is more than 2 percentage points less. Better credit score equals better APR.
• Our new payment will be only $319 for 33 months. This is the stinker part of the refinanced loan, the length of time. This adds almost a whole year onto the new loan. However, there isn’t a penalty for paying it off early. We can also save another half a percent on the loan if we set up auto-debits and we will definitely be doing this!
• I calculated my monthly savings: $156 saved per month. This equates to a savings of $3,432 over 22 months (the original length of the first loan). Since I’ll be paying about $1,000 more in interest, because the loan was extended, I deducted the $1,000 off the saved monthly amount. This leaves me with a total savings of $2,432.

Overall, I think this was a good move. I don’t like that we will be paying for the car longer. However, because there is no early payoff penalty, I might still be able to pay the car off in two years. If I don’t pay it off early, at least I know I’ll be able to stick the savings of $156 a month into savings. With a meager savings rate of 1.14% in two years I should be able to save:   $3,786.21 based on Bank Rate’s simple savings calculator and compound interest. (This is if every dime of my savings get deposited into my savings account!)

What are your thoughts? Was this a good move? Should we have stuck it out with the higher payment and APR, but shorter time period?

This is the last part of the Half Dome hike. When I first saw this, I said no way! But then I did it and it wasn't that frightening.

As I am remaining to keep my blog quasi-anonymous, I realize that there are some things you should know about me. (I’m kinda stealing this post idea from Ryan’s 8 Random Things About Me post from Planting Dollars – Sorry Ryan!) So here are just a few quick and dirty facts about me:

• I’m short. Barely 5′ 2″. My husband, on the other hand, is a foot taller than me.
• I’m a Starbucks addict. You probably already knew this, especially if you checked out my guest post at gobankingrates.com.
• I love my green, Raleigh, Comfort bike. I bike as much as I can to Starbucks (of course!) to school, to the bank, to the grocery store. (Though lately I’ve been a little lazy !)
• I use Quickbooks to help track my spending. I’m the bookkeeper around my house, including handling all of my husband’s client invoices (he’s self employed), purchase orders, and even help out on projects occasionally.
• I’ve been able to pay down about $8,000 in debt. I still have more to go, but I’m getting there. I should be seeing that finish line in under 24 months, whew!
• My husband and I are hoping to purchase a house in the next year to year in a half. Perhaps a little house, under 1,500 square feet.
• I’ve increased my credit score by almost 200 points this past year. I need to raise it about 60 more points, but if I continue making on time payments and using my credit cards lightly, that should happen this year.
• I love architecture, especially little house plans. For those of you who are looking for terrific house plans, I finally created a ‘House Plan’ category and organized my posts that include links to house plan sites I’ve found. You can see this category on the right side bar. I notice that much of my Google traffic is from people searching little house plans, so here’s to you!
• I like to hike. I’ve hiked the Grand Canyon twice, hiked Yosemite’s Half Dome in a day (up and down), hiked Vernal Falls twice, and I hope to someday hike Mt. Whitney. (I’m not at all interested in Mt. Everest!)

Random facts that confirm I’m boring!

This photo reminds me of the journey towards financial freedom; lots of steps that are sometimes elusive.

I’m realizing that my goal to purchase a house with in the next year is still many months away. I started out with a 3-step plan: pay down debt, raise my credit score, save for a down payment. My first two goals are going swimmingly; I’ve paid off close to $8,000 in debt and am working towards paying off my line of credit and my car loan. I used a debt repayment calculator and found that at the rate I’m going, I should have both paid off in under two years. That’s great news, if I can pay it off before then, even better. I’ve also raised my credit score by over 100 points in a year. All there is for me to do is keep making my student loan payments, use my credit cards lightly, then pay them off in full every month. If I keep this strategy up, I should see a 740 score this year.

However, I’m struggling with the 3rd step of my plan: save a down payment. These last few months my income has waned. As a a temporary employee with a school district that is running out of funds, I’m seeing this as a long-term pattern. My husband’s business is doing okay, but he is only bringing in enough income to equate to one salary plus a part-time employee (who is a programmer). This means I have to develop a new plan for bringing in more income.

My plan is still in the fuzzy- vague-I’m not sure what I’m going to do yet stages, but at least I have a direction:

• Option A: Be a marketing genius and bring in more work for my husband, which would create a job for me. This plan is more long-term and the results wouldn’t be immediate. However, if I am successful, it would be my ideal option.
• Option B: Take on a part-time position with a local company or the Census Bureau. This would bring in extra cash for a few months while I develop a more long-term strategy, still allowing me to take teaching gigs.
• Option C: Stick it out with the current school district and hope their budget improves. This is a risky scenario, I don’t want to wait until the bitter end only to find out I was right all along.
• Option D: Go get a permanent position and switch professions. I’ve been teaching for almost 9 years, I haven’t had to work in a corporate office or go on a job interview in a very long time. I like my summers off and my three weeks of winter break. This option scares me!

As I switch gears and begin moving towards option A, I realize I need to be really organized and manage my time wisely. I can easily fall into a pattern of sleeping too late, or wasting time running errands when I ‘work’ for my husband. To optimize my time, I’ll begin focusing on tasks using my task manager in Outlook. This should keep me in line.

Have you had to change jobs lately? How do you manage your time when you’re at home? Which option would you choose if you were in my position? Do you use a program to help organize your tasks?

Our coupons save us money!

One area of finances that I’m getting good at reducing is my grocery budget. I’ve been diligent about making sure I have a coupon for most of the items I purchase, use my club rewards card, and purchase items on sale. Utilizing all three strategies to reduce my bill, I’ve cut my grocery bill by 1/3. I’m not one for clipping coupons, so I’ve been using eBay to purchase really large dollar off coupons and my club card coupons I receive every 3 months. Here are a few coupons I’ve purchased online that were worth the small price I paid:

• $10 off Iams coupons: I purchase a bag of cat food every three weeks for my 3 lovable furr-balls. With a $10.00 off coupon and with the cat food on sale, I purchased 5 bags of cat food for $18.00. I don’t know where these eBay sellers find these coupons, but they are great!
• $3.00 off World’s Best Cat Litter: I’m sure you see a trend here, saving money on pet items! This litter is the best, it is corn-based and completely biodegradable. On sale for $6.99 plus my $3.00 off coupon, I bought 4 bags for $16.00!
• $1.00 off any two Gatorades: My husband’s favorite drink, on sale for .89 cents plus his $1.00 off coupon, he purchased 10 Gatorades for $3.90.

The remaining coupons I use are based on my quarterly grocery purchases from my local grocery store, Ralphs. Ralphs has a great rewards program, earn $1.00 reward for every 100 points (or $100.00 spent). I also earn 5 points for every reusable bag I bring, which usually equates to 25 points. In a three month period, I usually spend between $750 – $1,000 on groceries. So, when I receive my rewards coupon there is usually a $10.00 off coupon towards any purchase. It’s a great incentive to keep me shopping at Ralphs!

It’s a good feeling to walk out of the grocery store spending less than $14.00 for 25 items, and seeing a savings of $21.88 at the bottom of a receipt. Now if only I could apply this kind of savings to my utility bills, I’d be golden!