Friday, May 8, 2020

Coronavirus Cleaning Day 8: Files and Drawers

Today I continued in our office and went through all of the drawers in the desk and started on the filing cabinet.  No pictures today.  I didn't think you would care about our old warranties and I shredded papers we no longer need.  Speaking of Warranties, when was the last time you went through all of those warranty booklets and papers?  About 25 percent of the ones we had were for things we no longer own.

I went through a folder of credit card statements for the last year.  I wanted to make sure that we didn't have old papers for credit cards that were old or no longer used.  I also cancelled a couple of credit cards that we found we didn't like or didn't use.  I am now down to two:  one American Express and one Visa.  That is plenty.  I would ditch the American Express, because I haven't liked using them in the past, but I do like Delta miles.  That is the only reason I keep it.  But, who knows if I will fly very often in the future.  Covid-19 has made me a bit hesitant to fly.  We kept the past 7 years of tax returns and I shredded one year that we don't need any more.  I need to include my spouse for the rest of the folders, so I am done for now.

Questions to ask yourself:

How many credit cards do you have?  Do you even know?  Do you use them or would it be good to close some of the accounts?  It will affect your credit score to close accounts, so if you are planning on buying a house or a car in the near future, you may want thing of a long term strategy that works best for you.

Do you still have all of the items that you have warranties for?  If not, maybe it is time to let go of those as well.  You can find many of them online as well.

When we were first married and in college, we struggled like everyone else trying to make ends meet.  We made our share of mistakes along the way.  We once took out a student loan just to be able to buy a car big enough for our growing family.  It was used and only lasted a couple of years, but we were left with the debt to pay after we were done with school.  Despite our mistakes, we paid our loans off as quickly as we could after school and made the commitment that we would only pay cash for cars.  We started out buying a super old 1976 car with 15,000 miles that was 25 years older than our car at the time.  It was all we could afford at the time, but the insurance was cheap and it lasted for several years.  We followed the advice in this video above, and it has saved us money over the past years.  I still remember how hard it was to give up the cash when we finally got to the point where we saved 10,000 and bought a better car.  When you pay a lot of money at one time, you feel the pain deeper than when you borrow and pay monthly.  But, it is wonderful not to have any payments or pay any interest.  It has been a while since we have purchased a car.  One of our cars is 20 years old, but still works pretty well.  It is tempting to go buy another car and make payments, but we are committed to wait until we have enough money to buy another new/used car.  We will buy what we can afford.  Buying cars this way provides a wonderful freedom.  You make the sacrifice BEFORE and get the reward after, instead of getting the reward first and having to pay for it after. 

So, what does this have to do about cleaning today?  Well, I didn't have to worry about whether my credit score would go down or not when I cancelled the credit cards today because it has no bearing on buying a car that it would IF we were taking out a loan.  If someone were to have their credit score go down, they may not qualify for a loan or they may get charged a higher interest rate.  But, if you pay cash, you don't have to worry about any of that.   

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