Credit Card Question

A friend of mine was considering opening up a new credit card in order to pick up a 5% discount on gas. It seems like everything these days comes with a gas incentive, but that's beside the point. His question was on whether or not it was a good idea to open a new card. He's 24 years old, has no credit card debt but several cards, and will likely be buying a house in the next two years but probably not in the next six months.

It is generally a bad idea to open a new credit card if you are planning a major purchase such as a car or house in the next 18 months. Also, you should try to keep the number of cards you have to a minimum. Most sources recommend no more than three cards. That said, you don't need to close the major credit cards you already have, but try to remember and use them all once every six months to keep them current. You definitely don't want any cards which have an annual fee. As far as rewards go, I prefer the cashback versus the points system. I'd rather get a guaranteed 5% back on gas than earn points which are impossible to redeem.

Although not necessarily part of getting a new card, it is always a good idea to know what's on your credit report. I'm not advocating those "services" which give you a monthly update, but you should take advantage of the free report you can get three times per year (make sure you alternate reporting agencies). Visit AnnualCreditReport.com to get your credit report. This is the official site for getting your credit report.

Sources: Military One Source , Army Times
(It's only a coincidence that they are both military)

Housing Market Affects Stock Market

The AJC has a couple of articles on Home Depot (an Atlanta-based company) this week. Home Depot is at their lowest price since January of 2003 and has dropped from the second largest retailer to the third. Obviously, the housing market is being blamed for the loss in the company's momentum. Normally, Home Depot is touted as a solid company with great growth. I'm planning on buying a house in the next year and I'm glad the timing will work out to where I will be getting in at a low point in the market, but another way you can take advantage of the drop in the housing market is by buying housing dependent stocks. Home Depot and Lowe's are two obvious examples. I am sure there are lots of other companies that are based on the housing market. Perhaps a tile or lumber company. Maybe a company that specializes in home fixtures or appliances. Perhaps even a realty company. What companies do you think will be bargains as a result of the downturn in the housing market?

Book Review: How Did You Do It, Truett?

How Did You Do It, Truett? is the story of S. Truett Cathy, the founder of Chik-Fil-A. This book, written by Cathy, tells how Mr. Cathy got started in the restaurant business and how Chik-Fil-A was born. It gives some interesting insights into his life growing up and the challenges he faced in starting his business. It also talks about his business model and philosophy.

Mr. Cathy is a firm believer in putting people first. He prides himself on customer service. One key point that stuck out for me is when he says that he likes the response "my pleasure"
when someone thanks you for providing a service. He really drives home the point that providing excellent service should be something you pride yourself on. It makes a lot of sense to me. If you're going to be part of a company, you should be proud of the service it provides and be proud of the part you take in it.

At the end of the book he gives Eleven Do's and Don'ts of Proven Success. I'll list a few here just to get your appetite going, but I really think you should read it for yourself.

1. Don't be burdened with personal debt.
1. Car payment
2. House Payment
3. Establish a nest egg
4. Live simple
2. Start early as a teenager. Concentrate on what brings you happiness in your career. Have a tremendous "want to" determination.
3. Sacrifice material things. Reward yourself later.

Those are the first three out of the eleven. Overall, I really enjoyed this book and I like the principles he preaches. S. Truett Cathy truly has a good professional and moral compass that has obviously served him well and I think everyone can learn from and appreciate his experiences and examples.

The Magic of Vinegar: 1000+ Uses

I've mentioned the amazing versatility of vinegar before. Today I'm going to share some of the vinegar tips that seemed interesting and give you some links to even more tips on this surprisingly useful household item.

Here are just a few of the tips:

• Kill weeds and grass growing in unwanted places by pouring full-strength white distilled vinegar on them. This works especially well in crevices and cracks of walkways and driveways.
• Prevent lint from clinging to clothes by adding 1/2 cup white distilled vinegar to the wash cycle.
• Lighten body freckles (not facial freckles) by rubbing on full-strength white distilled vinegar.
• Create an all-purpose window cleaner with a few ounces of white distilled vinegar in a quart of water.
• Kill fleas by adding a little white distilled vinegar to your dog or cat’s drinking water.
• Clean under arm stains - Soak stained shirts in vinegar for a few minutes and wash. (Thanks Cece!)
  

Here are some good sites where I found these tips. There are plenty more where these came from.

• http://www.vinegartips.com/
• http://www.angelfire.com/cantina/homemaking/vinegar.html
• http://odyb.net/food-cooking/62-little-known-uses-of-vinegar/
• http://www.versatilevinegar.org/usesandtips.html
• http://heloise.com/hints_vinegar.html
  

Now I need to go out and buy a big jug of vinegar! :)

Paying More for Milk than Gas?

When it comes to milk, lately I've chosen dry milk over regular milk. There are a couple of reasons for this.

• Dry milk is just as healthy, if not healthier than regular skim milk. There is no fat and it is fortified with vitamins and minerals.
  
• Dry milk can be stored indefinitely in its dry state and I only have to mix up small amounts at a time to use. It will go bad eventually after it is liquid, but it lasts a good amount of time and the small servings mean it will be used up faster.
• Dry milk is cheaper than liquid milk. Last week I paid $2.89 per gallon (based on the liquid amount it would make). This compares favorably to the approximately $3.50-$4.00 / gal. for liquid milk.

Recently there have also been some concerns about illegal price gouging with respect to milk. NY seems to be feeling it the most with milk as high as $4.39 / gal. I never knew this, but it looks like NY actually regulates the price of milk. (See Regulators reportedly probing milk price scheme and Milk jumps over the moon.) You can avoid all this price gouging by just going for the powdered milk.

Some people do not like the taste of dry milk, but I don't mind it at all. There are some things you must do, however, to ensure your milk will taste alright. Putting warm tap water and dry milk in a cup is a guaranteed way to ensure whoever drinks that will never go near dry milk again. You have to mix it up really well and put it in a sealed glass pitcher. Then you should let it chill overnight. The colder it is (without freezing, obviously) the better it will be. I originally used a curved open top glass pitcher and covered it with cellophane. Getting the glass pitcher with the lid works much better (see the pictures). I paid $4.92 for the pitcher. I have also heard of people mixing normal and powdered milk. Also, if you don't want to drink it, you may still be ok with using it for cooking or cereal. For cooking and other ideas about dry milk, check out this hillbilly housewife's article, Saving Money with Powdered Milk.


Please let me know about your experience if you choose to try it out.

Ten Tips from The Simple Dollar

While reading through headlines in google reader today I found an article from The Simple Dollar that turned out to be really good. It was titled, Ten Clever Money Savers You Might Want To Try This Weekend. Two tips I really liked were the cheapest fruits and vegetables by month and using vinegar for fabric softener. I recommend you check it out.

The vinegar tip reminds me of a list of uses for vinegar I found a while back. Vinegar is quite versatile and can be a really frugal alternative for a lot of things. Hopefully I can do a post on it one of these days.

Downfall of the Gas Guzzlers

From the AJC,

General Motors is closing four truck and SUV plants in the United States, Canada and Mexico as surging fuel prices hasten a dramatic shift to smaller vehicles.

CEO Rick Wagoner said Tuesday before the automaker's annual meeting in Delaware the plants to be closed are in Oshawa, Ontario; Moraine, Ohio; Janesville, Wis.; and Toluca, Mexico. He also said the iconic Hummer brand will be reviewed and potentially sold or revamped.

Wagoner said the GM board has approved production of a new small Chevrolet car at a plant in Lordstown, Ohio, in mid-2010 and the Chevy Volt electric vehicle in Detroit.

Wagoner announced the moves in response to slumping sales of pickups and SUVs brought on by high oil prices. He said a market shift to smaller vehicles is permanent.

GM shares rose 25 cents, or 1.4 percent, to $17.69 in morning trading.

Well it looks like there will be a permanent shift towards fuel efficient and alternate fuel vehicles. GM says that the closing of these plants is in response to slumping sales which were caused by high oil prices. They also said that fuel prices hasten a dramatic shift to smaller vehicles and that the shift to smaller vehicles is permanent. Using a transitive relation, I believe this means that GM predicts high fuel prices are here to stay (*transitive relation: if a is related to b and b is related to c, then a is related to c). In other words, high fuel prices lead to a market shift towards smaller cars... market shift to smaller cars is permanent... therefore high fuel prices are permanent. In other words, I think GM is betting that gas prices are going to stay high.