Fugality - from enforced to welcomed

[Bryan]

We left the rat race just on 3 years ago and have had to radically change the way we spend money. At first, we were forced to be frugal and found it a chore. But once we discovered the compounding freedom being sensible with your money gives we now love every purchase we don't make. Trust us, the advertisers are spinning a web of deceit and happiness is not a purchase away - slavery is.

[rosarugosa]

I got a credit card statement today (we run most of our purchases through a CC for points/rewards, but pay the balances in full every month). The statement said "Your account has a zero balance, but please remember that your available credit is $17,000." It sounds like the bank is disappointed with us, all that unused credit potential. :)

[Bryan]

They don't like it when you dance to your own tune and not theirs. I hope many people find the simply living forum and escape. (-:

[MaryHu]

Thoreau said: a man is rich in proportion to the number of things which he can afford to let alone. (https://genius.com/Henry-david-thoreau-where-i-lived-and-what-i-lived-for-annotated#note-1823804) Welcome to these boards and to the wonderful world of intentional voluntary simplicity. It's a lifelong adventure in finding new ways to be frugal and ever more things you can do without! If you haven't already discovered them here are a couple of resources you might like: Mr Money Mustache.com and the Tightwad Gazette books by Amy Dacyczyn. Each person's frugality is a custom fit, no one gets to tell you what you do or don't need. Good luck on your journey and keep us posted!

[sylvia]

I agree I get all kinds of promos from credit cards, yes they encourage you to spend. My credit card has around $400 , and minimum payment is $0 this month (?). Perhaps they are desperate to accrue interest? Banks live off debt. Its good to keep them begging.:cool:

[Tenngal]

my credit score dropped over 100 points this past year or so. When I asked my banker for advice she says you have to use credit to keep a good score? So, how important is this credit score? I've started charging my groceries and will pay them off each month. Maybe that will help?

[Tybee]

I think it probably will, Tenngal. I use my credit card each month and pay it right when I use it. My score has gone up about 70 points since I have been doing this over the last three or four years. No other changes, and we don't have a mortgage, so this surprised me.

[rosarugosa]

Tenngal: It's nice if you can do this with a card that has a decent rewards program, because then you can get cash back, too.

[ApatheticNoMore]

my credit score dropped over 100 points this past year or so. When I asked my banker for advice she says you have to use credit to keep a good score? So, how important is this credit score?

depends on if you want to buy a big ticket item for credit (a house or a car pretty much). Employers sometimes check credit record but I don't think they care much and in some states are probably legally limited what they even can do with it. Landlords check but if the score is good 100 points here and there probably doesn't matter, they only care about one thing really: can you afford and will you pay the rent, so perfect credit isn't needed for that. I think it can be used for auto insurance in many states (not here I don't think).

[Simplemind]

We have an Alaskan Airlines card and put everything on it and pay it off every month. When I went to buy a car five years ago I intended to pay for it in cash but I was momentarily balking from taking all the cash out at once. Bank of America which has the Alaska card refused to give me a loan. Even though we put a couple of thousand on it a month and pay it off early and entirely..... nope, nadda. I basically had no credit history. So it was a good thing I financed the car for a few months just to get my score back up. Am I planning on purchasing a big ticket item, no but it is the principle of the thing. I could not believe I was turned down when I had the cash many times over and nothing negative in my history. Not carrying debt is considered a negative. Jeeeez Louise.

[pony mom]

Yup. Paying it off on time leaves you without a history. I had trouble getting a different card a few years ago for that reason.

[rosarugosa]

I think it's possible your credit score is being adversely impacted by your utilization ratio if you only have 1 or 2 cards. We don't have a mortgage or any other debt, but we do have an untapped HELOC and a pile of credit cards, so our available credit is a very large number. At any given moment, we owe current month-to-date gas and grocery expenditures, which we pay off at the end of the month, but only represents a tiny number relative to available credit. Our current FICO is 856.
I open new cards for the sign-on bonuses and then often never use them again. Occasionally one is a winner though, like the Amex we opened last year that pays 3% on groceries and 2% on gas with no annual fee. That has become our primary card most of the time, although right now we're working on an initial spend to get a $200 bonus on another new card.

[Gardnr]

I could not believe I was turned down when I had the cash many times over and nothing negative in my history. Not carrying debt is considered a negative. Jeeeez Louise.

That happened to us 2y ago. We were ordering new furniture and a mattress set-planned to write a check (well CC for points and write the check the next month). They talked us into 2y no interest. We needed$8500. Oops, you only got approved for $5500. We laughed and laughed while they were mortified and couldn't understand our amusement. So we decided to come clean: we own 2 homes, we own 2 cars, we have no debt, we make 6 figures....who knew a credit score could drop 100 points for all of this success.

Outcome: we took the credit to get some activity and paid the rest as planned...CC followed by payoff next month.

We have sufficient cash "on hand" to cover life for 2years. We're not going to try to revive that 820.

[Gardnr]

but we do have an untapped HELOC .

Our HELOC was going to start charging us a monthly fee because we weren't using it. Hence we closed it up. Bank was NOT happy and tried to talk us into "home upgrade/remodel" or something to keep it going. Nope. Nadda. No thanks.

i suggest you check the terms of your HELOC so they don't surprise you with a fee.

[rosarugosa]

We haven't tapped our HELOC for 6 years and they haven't charged a fee. Actually, it's going to expire in a couple of months and I think I would like to open another line. We liked having the potential "just in case."