PocketCoinage

This is the third in a series of weekly posts titled “How I Did It”.  I’ve been so inconsistent with the weekly postings, I’m not sure that I can call it a weekly series.  The past week has been very unusual with two blizzards and getting stuck overnight at work.  I will try my best to post on a weekly basis. Throughout this series I will be describing my methods of personal finance, frugality, and what it took to get where I am today.

If you’ve read the series from the beginning, you’ll notice that I received my first credit card when I opened my checking and savings accounts.  This was around 2004 when they were giving credit out like free pancakes at the diner.  To recap, my local bank offered me a credit card.  I was hesitant at first and I asked a few of questions that were important to me:

• Is there a monthly/yearly fee associated with this card?
  • No
• Does it cost anything to apply?
  • No
• What’s the benefit of holding this card?
  • Reward Points: 1 point for every dollar spent
• If the card it paid off every month, will I incur a finance charge?
  • Not unless cash advances are made

Once I had the questions answered, I sat and thought about the positives and negatives of holding a credit card.

Positives

• Building a credit history at an early age
• Have it in case of emergencies
• Order items online without too much worry; It’s not linked to my checking account
• Ability to reserve hotels and rental cars without putting a hold on my checking account

Negatives

• I could slip into debt if I did not think about my spending.
• Someone could steal my card number and use it.
• The company could change my terms of agreement at any time.  If I did not pay attention to the changes, it could cost me in fees.

After careful consideration, I decided that the pros outweigh the cons and I went for the credit card.  About a week later the approval letter arrived in the mail.  The credit limit: $500; not too bad since this was my first card and I haven’t held a job for too long.

Using this card responsibly, every month, opened up another door from my local bank.  About two years later, they were offering me another credit card.  After reading their terms and talking with the local representative, I decided to go for it.

The advantage of this card was:

• It was from the same company as my local bank
• It had a better rewards structure
• A higher credit limit

Now I had two credit cards in my name from the same bank.  A few weeks later I understood what their reasoning was.  I received a letter in the mail about how my first credit card company was separating from my local bank.  I believe the local bank wanted to keep me as a customer.

In the end, I am glad I signed up for these credit cards.  It’s been 5 years since my first card and I’ve had a great experience ever since.

By making this small first step, I was able to build my credit history at an early age.  Keep in mind, I always pay my cards off.  It does not make any sense to leave a balance on them.  You’ll never gain back the money in interest payments through a savings account.  If I overspend, I tap into my savings account to pay it off.  Yes it hurts, but it hurts less than owing more money in interest.

This is the second in a series of weekly posts titled “How I Did It”.  Throughout this series I will be describing my methods of personal finance, frugality, and what it took to get where I am today.

Education can and will open up new doors in this adventure of life.  I found it helped me grow to where I am today.

While in high school (vocational school), I specialized in Commercial Art – Advertising and Design.  I really enjoyed photography, product and web design.  However, I also found another passion while there: technology.  This came almost as naturally as graphic design, but was less competitive.

Because of my high grade point average (GPA) during high school, I could have gone to a two year community college followed by a four year state college at no cost.  However, I opted to attend a one year technical school instead.  This was not the most frugal choice, however, there were many reasons for it:

• It was the most direct route to a career in technology.
• To enjoy learning what I wanted to learn.
• To meet others with similar passions.
• The ability to hold job(s) while attending class full-time

Education Tip: Technical schools usually get right to the meat allowing you to learn and experience the career head-on and reap rewards sooner.  You can always pursue your degree afterward.

Attending a technical school to specialize was, in my opinion, the quickest way to kick start a high-paying career (and it showed).  Even though class was full time, I was still able to work a part-time job at a local electronics store while being a technology consultant.  During slow periods at work, I would bring a book to study and create flashcards.

Even though I was in a technical school, college credits still accumulated for me.  At the time, they offered 6 months of online (core) classes after graduating to complete my Associates Degree.  The technical school approach allowed me to obtain a full-time career in technology while working towards my degree.

Job Tip: While in school full-time, see if you can find a job that’s flexible to accommodate school and studying.  If you ask your current employer to adjust your schedule, they may work with you.

I obtained my first full-time technology job at a VoIP start-up after technical school.  The best part about this job was that they had me on 2nd shift.  This allowed me to focus on my school before going to work.  However, a few months later, I obtained a technology job at a local hospital working four, 10 hour shifts over the weekend.  This allowed me to have three days off during the week to focus on my studies.  The job could be slow at times, so I was able to squeeze in some extra studying.  While I was there, I obtained various technology certifications and continued my education online for a Bachelor’s Degree in Technology Management.

While working full-time in my career, I was able to pay for most of my schooling without the burden of high-interest private student loans.  Why pay money in interest unless you have to?  Sure, I still took out the government loans at $5,500 per year as these low-interest loans helped ease the large monthly payments.  At one point in time I was making payments of $1,000 per month to the school.  I’m not going to lie, it was a lot of money!  It bummed me out to see more than 60% of my check go over to school.  However, it was for the better as it helped me focus on things that were important to me.  I paid pure principle and accrued no interest.  For me, this was the beginning of budgeting.

All-in-all, I walked away with numerous technical certifications, two degrees, and roughly $18,000 in student loan debt — not too bad!  As of today, that debt is down to $16,400 and accrued roughly $1,900 in interest this year alone.  This debt needs to go; That could have been $1,900 more in my pocket!  The worst part is, I am unable to claim this interest on my taxes.  Since my auto is paid off, I’m looking to redirect some of the funds to go towards paying down school.

Looking back, I wouldn’t change much.  The only thing I would have done is increase the amount I was paying on my student loans.

Job Tip: See if your current job pays for education.  My current employer pays $4,000 a year to further educate myself.

Tax Tip: Consult your tax advisor to see if you are eligible for education credits.

Because I was humble, hungry, and had the drive to go forward with my education, I applied for a position within the hospital and moved up!  If it was not for my education and drive, I truly believe I would not be where I am today.

How did you obtain your education?  Have any tips?

I like to think that I started my journey toward financial freedom when I turned 18 with my checking, savings, and credit card.  However, the more I think about it, the journey began early in my childhood with my parents.

When did you open your first checking, savings, and credit card accounts?  Did you do things in a particular order?  Any reasons why?