Get Out of Debt Blog – Month 6

October 2009 was sort of a ying yang month. Stocks fell, but I became fully vested in my company’s pension plan. Over a thousand dollar water bill, but my retirement accounts finally exceed $50,000. Our credit cards are paid off, but my wife continues to use them for points. That brings me to the question of the month…should my wife and I continue to use a credit card to build up points for various rewards. For example, we have accumulated 30,000 points in a credit card’s rewards program over the year. The approximate value of merchandise we can purchase with the points is equivalent to roughly $500. I will assume that requires about $1,000 worth of credit card charges each month to accumulate. Now that my wife and I are in a position to pay off the credit card in full each month, should we continue to use the card to build up points for these rewards?

If you haven’t been following my quest to get out of a half million dollars in debt, I suggest you begin with My Journey to Payoff half a million in debt or check the Get out of Debt Blog master page.

How to Get My Wife to Stop Using the Credit Card?

As most of you know who have been following this blog, my wife has completely dismissed my attempts to get her to read Dave Ramsey’s “The Total Money Makeover.” She is beyond reason, and doesn’t believe that continuing to use a credit card is dangerous to our effort to get out of debt. If I remember right, Dave Ramsey stated that using a credit card with the intention of paying it off each month is foolhardy. I don’t have the book in front of me at the moment, but the consensus was that only 15% or so will actually fulfill that intention and pay off the credit card debt every month. I don’t think the points are worth it, what are your thoughts?

Get out of Debt Goal Reminders

Goal 1: Achieve a Net Worth of $0 by paying down debt and increasing savings and investments.

Goal 2: Have $0, and I mean ZERO debt and liabilities.

Goal 3: Increase my net worth to $500,000.  Basically, turn half a million in debt to half a million in assets…a daunting task to say the least.

Get out of Debt Status – Month 6

Financial Status for the end of October 2009:

My Get out of Debt Monthly Budget

I’ve tracked our income and expenses for the month of October 2009. 

Finally, $50,000 Worth of Retirement Savings

Although, the stock market wasn’t singing of profits this month, we still managed to pass the 50K mark worth of retirement savings. Being in our 30’s, that isn’t half bad…not considering the half million in debt we’re still working on. The addition of becoming fully vested in my company’s pension plan was a big boost to the overall retirement portfolio. I’m quite happy and proud of this, but I’m also aware that paying down the debts would net better results in the long run. However, most of the remaining debts are long term loans with low interest rates and the stock value of the market is still underpriced. Which is better, paying down loans or investing in retirement? In my case, where the credit cards are paid off (per say) and the economy is the way it is, I’m on the fence.

My Get out of Debt Progress for November 1st

My Get out of Debt Conclusion for the end of October

I’m quite pleased with this month’s progress, the 5th week salary, the pension vesting, and the over 50K worth of retirement savings has definitely brightened my day. However, I really need an answer to the overlying question for the month; Should my wife continue to use a Credit Card to build up points for rewards and is it worth the risk? If anyone has any arguments in my wife’s favor or ammunition I can use in my argument, it would be much appreciated. If all else fails, I stand by Dave Ramsey’s statement in “The Total Money Makeover.”

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