This Christmas break when I went home for the holidays my family has persuaded me to pay off the two credit cards I don’t use. Those two are just sitting in a drawer collecting dust and I’m making regular payments on them but I couldn’t really think of a convincing argument as to why I don’t pay those off other than it makes me feel better to have X amount of assets. Well, to pay those off I’m going to have to use up my “emergency” savings. What argument is there really?

The total debt is less than $2,600 but that’s more than half of my savings. The amount I have saved up is just pocket change compared to what most people have saved up but it’s my hard earned money. Although my net worth is going to stay the same, my assets will be dropped heavily!

I’ll have to do this next year when my interest for the savings account goes through, then I’ll pay everything off on my Citi Diamond Preferred and BofA World Points. Those two credit cards I’ll just be able to crumble up and toss away. However, Citi has been treating me extremely well and they sent me a letter asking what they can do for me regarding reward points, lower APR, and other services.

Also, I just got money for Christmas. Money is the best gift of all.

On the last post, it seems that I’ve given too little of a thought of the numerous occasions in the future. Christmas is in December. Valentine’s Day is in February, 2 year anniversary is in March, and Ro-chan’s birthday is in April. I am dead. I will pay off $350.00 of my Am Ex each month starting in November of this year until I can finally bring it out of the credit card grave. That will happen in less than 6 months. I’m so determined that I’ve decided to make a bar graph that will show my progress.

It’ll start at $2000 on this bar graph because I’ll just assume that the interest will bump it up somewhat. Even though it won’t accumulate $100, I like even numbers and I’ll round up. Enjoy.

I’m giving myself a 1% for the start-up effort.

Also, I had to correct my numbers in the previous post since it was way off.

According to my Bank of America My Portfolio feature, my debt is at a whopping $4,554.75, and my total assets are at $4,180.97. Now, my net worth is -$373.78. I previously said I wouldn’t post this since I’m a wuss but I don’t think I care anymore.

Here’s how my assets and liabilities are allocated:

Assets
Checking: $906.64
Savings 1: $308.54
Savings 2: $2,965.79

Liabilities (only credit cards)
Am Ex: $1,900.08
B of A: $1,399.84
Capital One: $0.00
Citi Card: $1,254.83

My goal is to pay off at least one of the credit cards. So, there are three methods towards this: the mathematically better way, quickest way, or the psychologically better way. The first way is to purge the debt of the card with the highest interest since I’ll accrue more interest overtime. This method is what pretty much every financial adviser will tell you since it’s smart. The second way is something Dave Ramsey made it popular, and it’s known as the “Debt Snowball Method.” You prioritize your debt in the order of smallest to the biggest balance and paying off the smallest ones first. The last option is to pick out the card that irritates me the most and paying that off as fast as I can.

Well, after figuring out my smartest choice using these methods, it turned out to be that the Am Ex needs to go. I want to do this before this year is over. But it probably won’t happen so quick, so I’m setting the goal to end of January 2008.

I’m pretty bored at work today. I got to go have lunch at this Chinese buffet with Ro-chan soon, so I’m going to write this post before I head out.

So according to my My Portfolio services (free) at Bank of America’s website, I am currently worth -910.90 after adding up my total assets and subtracting all my liabilities, which is only just credit card debt. And add -175.25, rolleyes hosting bill, to that so I’m really worth a -1086.15. That’s not good, but it’s not terrible considering I will be getting paid on Monday to bring the total worth to a small negative sum very close to an even zero. Still, it’s nothing to be brag or feel wealthy for. I’d rather not say how much I have and how much I owe right now because it’s a tiny number, so maybe when I’m super awesome financially I’ll post something.

Out of my four credit cards I have, American Express Blue Sky, Bank of America World Points, Capital One Platinum, and Citi Diamond Preferred Card, the AmEx has the highest balance and the highest APR of 13%. I guess I have a weird goal of getting enough reward points to earn some free travels later on in life, but I know I’m too lazy to keep up with the points. Fortunately for me, the points never expire.

After doing some decent sized spendings ($175 for rolleyes hosting; $240 for Laker tickets; $95 for hotel in SD) for someone who makes less than $25k/year, I decided to retire my AmEx, and only use it for trip related purchases. Which means it’ll go in to Ro-chan’s and my credit card grave.

Starting January, I’ll hopefully be able to start a new job as a police officer in my city. It certainly pays well and it’ll easily destroy the debt I have. My debt is pretty small compared to most people’s, but as a recent college graduate without a “real” full-time job, any debt is a semi-serious issue. But even if everything goes well, to become an actual police officer, the process will take a long time. I’m going to go with the worst case scenario and say 6 months. Hopefully by beginning of 2008, I will be situated in my new career. Wish me luck.