Six Figures and Broke

GMAC Requires 700 Plus Credit Score for Auto Financing

BigSpender — Tue, 14 Oct 2008 22:42:02 +0000

General Motors has been hit hard over the past several months. The stock has dropped considerably and then yesterday saw a 33% rise. The company is currently involved in merger conversations with both Chrysler and Ford Motors. Now GMAC, a company that General Motors has a 49% share of, has stated that only consumers with a 700 plus credit score will qualify for auto financing. The reason is the current volatility of the market.

From an Automotive News article on the topic:

“GMAC spokeswoman Sue Mallino said the finance company had to cut back on retail financing because of the company’s shrinking access to capital and rising costs.

“This is an unprecedented credit market environment right now,” said Mallino.

GMAC has also suspended some sales bonuses for its highest-volume “Platinum” dealers. Dealers say the bonuses applied only to standard-rate contracts without incentives, which is a small percent of their business. They say the bonuses amounted to $300 to $400 per contract.

For the first seven months of 2008, prime customers with scores exceeding 700 represented 74.3 percent of the U.S. new auto loan market, according to information services company Experian Automotive. A year ago, prime borrowers made up 71.1 percent of the new auto loan market. “

The article goes on to say that the used car market will be more severely affected by this restriction as less than 60% of used car buyers would qualify.

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How Has the Financial Crisis Affected You?

BigSpender — Tue, 14 Oct 2008 22:32:41 +0000

I’m starting this blog back up again in light of the current economic status here in the United States. I’m curious, how has the financial ‘crisis’ affected you? I’ve read online about families with both wage earners out of work, people with non-adjustable mortgages losing their homes to foreclosure because of employment and elderly living off of retirement having to cut back.

It saddens me to see so many people affected to such severe levels. I am thankful that we are not being affected much. Sure the 401 (k) took a hit but we’re in our 30s so we have plenty of time to make that up. Some of the grocery prices are higher but this year my son is attending a school that is closer to home so our savings in gas more than makes up for the increased grocery prices.

Additionally, my freelance writing has really taken off and I am supplementing our income at a level that I could have never imagined for part-time work from home. I got a bit off track the past few months but am now more motivated than ever to continue my debt snowball.

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Sold My Infiniti G35

BigSpender — Tue, 03 Jun 2008 21:58:43 +0000

When I started my 6FiguresNBroke blog, I mentioned that I loved my 2006 Infiniti G35 which was financed at a “fantastic interest rate.” Well even with the great rate, the payment was still $820.00 per month. Not only was the payment high, but upkeep was also expensive. See, it wasn’t just your typical 2006 Infiniti G35 coupe, we put several thousand dollars of after-market parts in to the car (to the tune of $13k-$15k). As a result, the rear tires needed to be replaced twice a year. These were 20″ tires and wholesale price on each tire was close to $300.00. So there is $1200/year in tires.

Oh wait, this is a luxury sports coupe. Gotta have the luxury synthetic oil changes. Those run about $75-$95 an oil change. You have to get that done at least four times a year. It doesn’t stop there, the car runs on premium gas. Sure you can put 87 into it but with a $45,000 car, why would you put 87 in it? Yup, that’s right - each fill up was with 91 (the best you can get here). I quickly realized that my car was causing much bleeding.

About a month ago, close to the two year anniversary date of purchasing the car (I loved the car, I remember the date I purchased it) we traded both that car in plus our 2001 Chevrolet Malibu with 98,000 miles on it and purchased a 2005 Nissan Murano with 46,000 miles on it. Now I know those that follow Dave Ramsey’s Total Money Makeover plan will squawk at taking out a new car loan. I am dedicated to getting out of debt but honestly not comfortable driving a $2,000 car. I am a freak about safety and even felt uncomfortable driving around in the 2001 Malibu.

So now I have a $300-ish a month car payment, I’m saving $100/mo on insurance and believe it or not I am getting better gas mileage in my Murano than I was in my G35. Something about the roar of the engine when you get on the gas makes even the most docile driver a lead foot behind a sports coupe like the G35. Overall I am looking at a net savings of about $700/month. This means we are going to be getting out of non-mortgage debt much, much sooner.

I still miss the car and I fear the time I see it on the road and am honestly hoping that I don’t. I had a major emotional attachment to the vehicle and evidently it is still there. I did, however, leave my virtual tiara in the driver’s seat. I am no longer a Princess and I believe I have made a responsible adult-like decision in letting it go.

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In Debt We Trust DVD Review

BigSpender — Tue, 03 Jun 2008 21:33:04 +0000

I have recently had the privilege of watching the documentary In Debt We Trust by filmmaker Danny Schechter. The film is different than Maxed Out in that it takes an in-depth look at the credit-lending scene. It touches briefly on collectors but discusses credit cards, predatory lending, cash advance/payday lenders and more. The filmmaker also queries users to ask the question if the next bubble to burst is going to be the credit industry, much like the mortgage industry is going through woes (as a result of the subprime/predatory mortgage lending market). He didn’t present this concept in a doom and gloom the sky-is-falling way but instead as a question that consumers must ask themselves.

Two parts of the film really stood out to me. The first was of a Baptist church in Virginia that helps members pay off non-car and non-auto debt. Parishioners donate what they can to a chosen member and then their credit cards are paid off. That member then cuts up the credit cards and the whole parish celebrates. As Dave Ramsey says often, debt is merely a symptom. I don’t know the whole program that the church uses but I would hope that they address the core root of the problem which can be different in each individual. Cutting up the credit cards is definitely a good step and having support from friends and family will likely help that one parishioner stay out of debt.

As the movie came to a close, a brief description of 2005 NYC helicopter crash in which six executives from MBNA (who was the primary backer for the 2005 bankruptcy reform laws) were rescued. One bankruptcy attorney mentioned that several people thought that perhaps this was divine intervention. I’d lean more towards karma perhaps but it does make a person go hmmm? Of course no one would ever wish this on the executives but considering what they were working on at the time, it is quite a coincidence.

The film runs a total of 98 minutes and was definitely eye-opening. I can definitely tell you that it helps keep me focused on getting out of consumer debt!

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A Billion Dollar Home

BigSpender — Tue, 13 May 2008 22:51:51 +0000

Billion dollar hotels aren’t super common but there are more than a handful so no one would scoff at the idea of a new billion dollar hotel. What are your thoughts on a billion dollar home? Forbes.com is reporting that a home is being built in Mumbai, India that will cost close to two billion dollars. Yes, two…billion…dollars. The owner, Mukesh Ambani, is estimated to be worth approximately $45 billion. So this is a drop in the bucket.

The property will be 27 stories high, have a six level parking lot, nine elevators and a health level complete with a man-made snow flurry room. This brings the term excess to a whole new level.

Source: Forbes.com Inside The World’s First Billion-Dollar Home

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A How To Guide for Spending the Tax Rebate Check

BigSpender — Sat, 26 Apr 2008 17:58:25 +0000

As I was spending my time reading a variety of websites today, I cam across on article on CNN.com that talks about how different people in the United States plan to spend their tax rebate checks. The news reported in the past few days that the first of the economic stimulus payments are going out early in hopes of stimulating the economy now, instead of a week later like the original plan. I’m not sure if that extra week is going to make a bit of a difference but hey, if it makes life easier for some to get their check early then that sounds good to me.

CNN features seven Americans and their plans for the rebate checks:

Mark from Georgia will be paying off bills.
Laura from California will be paying off back taxes with hers.
Kathryn from New York discusses how two of her working children won’t get the checks but they could use them. She claims them on her tax return as dependents so neither the parent or the child will receive payment.
Melissa from Wisconsin is in a financial bind with rising food prices and hopes to use the money to get ahead.
Trista from Minnesota is planning to donate a portion of her rebate check to charity.
Tana in Georgia is taking her daughter on a vacation in celebration of her graduation from elementary school having made straight As.
Karen from Washington will be putting her payment towards starting a small business that will be run during her retirement.

I don’t see much in the way of economic stimulus here. The last two will be putting the money back into the economy. If this is a good representation of what Americans will be doing, then about 28% of the checks will be spent on non-necessities while the remaining 72% will either be donated or used to pay down debt or help ease a financial crisis.

Ours is going towards my future education. I’m not sure if that stimulates the economy but in the long run, it is going to stimulate my economy.

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Six Figures and Broke Debt Update

BigSpender — Mon, 21 Apr 2008 18:33:41 +0000

I try to update my chart over at the No Credit Needed Network once a month, today was that day. Over the past month, we have a net reduction of $1510 on our credit cards. As I’ve previously mentioned, I have not included my automobile loan, home equity loan or student loans in that chart. The amount would have been lower but my husband has had about $800 in charges hit his account for his upcoming business travel. So in a month, when we receive the expense check, we’ll be able to apply that chunk of money to the debt.

Since we started with NCN at the end of 2007, we have paid off 12.49% of our debt. At this rate, we’re looking at about 32 months to pay off the debt. As my income goes up a little bit (I am a freelance writer so it isn’t much right now) this will go a little bit faster as 100% of what I make goes directly on to debt.

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Maxed Out Documentary Review

BigSpender — Sun, 20 Apr 2008 17:31:42 +0000

After seeing Maxed Out (a documentary) mentioned on several websites, I decided to check it out. What better way to spend a Saturday night than cuddling up on the couch and watching a movie about debt, right? The film, by director James Scurlock, provides an insider’s view of debt collectors and the credit card industry. In all honesty, as a user of credit, the documentary was a bit scary to watch. I’ve seen enough documentaries to know to take everything I see with a grain of salt but even if only a portion of what was presented is true, it is definitely the right time to stop using credit.

One of the facts that I found most disturbing was that MBNA, who is now owned by Bank of America, helped to write the Bankruptcy Abuse Prevention and Credit Protection Act of 2005 (BAPCPA). According to an article that appeared in the Journal of Economic Issues, “MBNA (one of the country’s largest issuers of credit cards) spent more than $17 million lobbying Congress from January 1999 to June 2004 for reform.” Now I’m not trying to support bankruptcy as an easy way out or the right decision for everyone, but knowing that credit card companies, those that would benefit from more stringent bankruptcy laws, had a major hand in the passing of the bankruptcy reform act. Food for thought, indeed.

Dave Ramsey, author of The Total Money Makeover and Financial Peace Revisited, has several scenes in the show. The documentary’s creator not only interviews Ramsey, who tells of his own personal financial woes, but also has some clips from his call-in radio show. Ramsey fans everywhere will be pleased to see his inclusion in the film.

This documentary is not a light and fluffy look at debt and the credit card industry; it is a serious examination of the flaws of credit and at times can move a viewer to tears. For anyone who is considering a move to get out of debt, I highly recommend the film Maxed Out.

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Visiting a Few Personal Finance Blogs

BigSpender — Thu, 17 Apr 2008 17:20:42 +0000

In reading through some of my favorite personal finance blogs, I decided to do my own blog entry highlighting some of their articles today.

No Credit Needed 5 Rules of Spring Training (for your finances) - Fun entry and correlates personal finance to baseball’s spring training. The five rules are: Pitchers and Catchers Report First, Start Slowly, Go Somewhere Warm, Practice the Fundamentals and Have Fun. A must-read.

Five Cent Nickel’s Ten Things to do With Your Tax Refund - Yes, it is tax time again and many Americans will be receiving a tax refund. A few of Five Cent Nickel’s ideas include invest in yourself, prepay your mortgage and invest in your children. For the rest of the ideas as well as the justification, head on over to fivecentnickel.com

Six Figures and Broke’s 2008 Economic Stimulus Payment Information- Yes, yes I know this is my own site, but it is good information. If you’re coming to this post from Google, Technorati or another site, you may not see the Featured Post on my main page. Anticipate your Economic Stimulus Payment with the latest information from the IRS.

If you have a favorite personal finance blog, I’d love to hear what it is. I’m always looking for more sites to help keep me motivated as I walk this get out of debt road.

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The Top Five Personal Finance Sites

BigSpender — Wed, 16 Apr 2008 16:59:34 +0000

As consumers across the United States are being affected by the housing crisis and the credit crunch, personal finance websites are noticing an upswing in traffic. Consumers are using Google as their financial counselor and looking for information on how to secure their personal financial future. Read on to learn more about the top five personal finance sites.

Kiplinger.com
Kiplinger is known world-wide for providing fantastic personal finance news. The main graphic on its website touts “Timely, Trust Personal Finance Advice & Business Forecasts” and Kiplinger.com lives up to this claim. The website is fantastic for both those new to personal finance and experienced professionals.

“The Basics” section of the website provides information on investing, money management, credit and debt, taxes and more. In addition, the site provides several in depth guides on topics ranging from Going Green to Paying for College. Check out Kiplinger.com today.

Dave Ramsey Online
Personal finance and real estate expert Dave Ramsey is known for his in your face, tell it like it is style. With a nationally-syndicated radio show, a television show on the Fox Business Network and the most popular iTunes business podcast, Ramsey listeners reach upwards of 3 million per day. While Dave Ramsey may not have the best in personal finance bedside manner, the majority of his information is great and perfect for those looking to get out, and stay out, of debt.

On the Dave Ramsey website, he offers several free services including referrals to Endorsed Local Providers so that consumers can meet with a professional in their area. In addition to the free services, Ramsey also has the subscription-based My Total Money Makeover Online and Financial Peace University Online.

The Motley Fool
The Motley Fool’s motto is “To Educate, Amuse & Enrich” and the site absolutely lives up to this claim. Not only does the Motley Fool provide the latest in personal finance news, they also provide a humorous spin to their articles which instantly engages the reader. The personal finance section of the Motley Fool provides information on saving & spending, credit & debt, home & real estate and death & taxes. That pretty much covers every aspect of personal finance.

CNNMoney.com
The internet site of Money magazine, CNNMoney.com provides consumers with information on a variety of personal finance topics. One of the most popular parts of the CNNMoney.com site is the “Ask the Expert” section. Recent topics include cashing out or holding firm with an IRA, understanding all of the terminology and acronyms used by financial advisors and asset allocation information.

MSN Money
Microsoft has its hand in everything; personal finance sites included. The MSN Money website is fantastic and easy to navigate and provides a wealth of information for consumers. The message boards at the site are hosted by noted author Liz Pulliam Weston. Whether you are looking for information on family and college planning or preparation for a comfortable retirement, MSN Money can meet those needs.

The five websites listed here are just a sampling of some of the fantastic personal finance sites on the internet. If you have a favorite site that isn’t listed, please post a comment below with a link so that others can check it out!

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