It may be a month old, but it’s just as relevant as ever. After all, I’m still battling my credit card demons.

So how does their list of lies compare with the lies I’ve told myself? Let’s take a look. I’ll run down their list, then add in a few of mine.

1. It’s an emergency

Even if we have an emergency fund, we may not really be using it for emergencies. If life or liberty isn’t at stake, it’s not an emergency.

This is something I’m about to fall for. I’m going to use my emergency fund to pay for some home repairs. While not an emergency, I still consider it urgent, as I could end up with long-term drainage problems if I don’t do something soon.

2. We deserve it

I think we’ve all used this to justify some unnecessary purchases before. We worked hard. We had a stressful week. I’ve been doing good. There is never any shortage of excuses.

However, doing things because you “deserve” them only sets you back an equal amount. If you’re not careful, you’ll end up with a constant stream of celebrations, but no progress to back it up.

3. It’s a bargain

When you find deals, the question should still be “do I need this?”, not “how much am I saving?”

Buying something you don’t need is never a bargain, regardless of how much money you’re saving.

4. It’s not that much money

Small charges add up. It’s easy to dismiss $5 or even $20 there because it doesn’t seem so bad on its own. But if you’re already carrying debt, it’s even more expensive than you think.

And even though it’s a bit of a cliche, if you can cut back on $20 a week, it adds up to more than $1000 a year.

5. The payment is small

When making big purchases, you should consider the total cost (and interest), not just the minimum or suggested payments that you’re given.

A small example is buying a big-screen TV. You can go to any store, and they’ll gladly point out how it can be yours for only XX dollars per month.

Or on a bigger scale, you can shop for houses, and banks will tell you that you can afford to pay XXXX a month on your mortgage.

But it’s never that easy.

Their plans almost always never include interest, or any of the details. What happens after the initial grace period wears off? What about finance charges? Property taxes? Etc….

The devil is in the details.

6. The card rewards make it worth it

Reward cards can be a good deal – if you pay off your balance every month. But if you keep a less-than-ideal card and carry debt just for the sake of those “free” rewards, you’re really getting hosed.

7. 0% Introductory purchases

It’s a good deal while it lasts, but the whole point is to let you build up a big balance before the introductory rate turns into a high interest rate that you can never get out of. Don’t fall for it!

8. 0% Introductory balance transfers

Again, these can be a great deal. I’m using a few to save at least hundreds, possibly thousands now.

But if I don’t pay off the cards before the intro period wears off, I’ll end up getting burned. It’s a good deal, you just have to make sure you don’t fall for their trap.

9. It’s for my business

Credit cards can be a valuable tool for businesses, just like consumers. However, you don’t want to say “it’s for the business” as your excuse to spend whatever you want. You have to show restraint, just like you would in your personal life.

10. I’ll pay it off after graduation

Ah, I’ve said this before! Sure, build up debt in college. You’ll have a real job after you get out.

But a funny thing happens… it takes longer than you think to find a job. Or you can’t find one that pays what you hoped. Or even if you do, your spending goes up anyway.

You should judge your spending on what’s happening now. Now what you hope or expect to happen in the future.

…and now for a few I’ve learned from my own experience.

11. I’ll start paying down my debt… next month

It’s easy to make the decision to change, but the hard part is following through. If you know you have a problem and need to stop, do it NOW! Don’t put it off until next month, or it will keep getting put off.

12. Things will be different once I make more

You assume that as you make more, you’ll have less problems with money. In reality, the opposite normally happens.

You can’t just assume that once you get a raise, you’ll start using more of it to pay down debt. You have to have a plan ready, as well as the intentions to actually do it.

13. But this time is different!

After you’ve decided to get out of debt, you’ll inevitably face some hurdles. Hurdles that make you want to throw caution to the wind, at least one more time.

Maybe some unexpected crisis has come up. Or there is are concert tickets, gifts, or a dress you just have to get. Normally you wouldn’t indulge, but this time is different!

You tell yourself that after this one last purchase, you won’t make any more with your credit. But it always happens again.

Debt is a slippery slope. Try to quit it cold turkey if you can.

I hope you enjoyed their original ten lies, and my additional three. Hopefully I’ll be putting them all behind me soon!

Should five percent appear too small,
Be thankful I don’t take it all.
‘Cause I’m the tax man
Yeah, I’m the tax man

- The Beatles, “Taxman”

Well, it’s that time of year again – tax day! Hopefully you haven’t put it off until the last minute. If you have, you should probably be working on your taxes…not reading blogs

If you’re already finished, I’ve got a great set of links for you.

• Green Panda Treehouse has a great article on 5 Things to Do to Build Wealth in Your 20s. It’s an older post, but I just found out about it this week. Your early years are the best ones to make an impact on your finances, thanks to compound interest. And all 5 of his things are realistic.
• Gen X Finance put together a list of 20 Free Online Finance Courses. The best investment you can make is in yourself, and many of these classes are offered by colleges like MIT, Yale, Rutgers, Purdue, etc…. I plan on signing up for a few of these!
• LLama Money writes about Debt Motivation, and how we’re going about things backwards. Instead of going into debt for purchases, assuming we’ll be able to pay it off later, we should be saving first then indulging ourselves.
• Punch Debt in the Face (a site I just discovered this week) has an article asking What’s Your Favorite Dumb but Fun Expense? Mine? probably music and alcohol.
• Stetchy Dollar has some more tips for Converting a Super-Spender to a Frugal Saver. This is the second part of a two-part series.

And for the fun link, I’m going to keep it seasonal. The company behind Peeps, those marshallow chicks that we love to eat every spring, hosted a diorama contest. You can check out the Peeps on Parade 2009 Finalists here.

I hope you have a good week!

Make sure you check out some of these carnivals… the hosts put in a lot of time and effort to put together the best articles they can.

The ABCs of Invested hosted the Carnival of Personal Finance, and included my interview with Ramit Sethi. Make sure you check it out – it’s a 3000 word interview with the author of the latest PF best-seller, “I Will Teach You to Be Rich”.

I Pick Up Pennies hosted the Carnival of Everything Money, and included my post on 26 Tips for Surviving Your First Job.

Weakonomics hosted the Carnival of Twenty Something Finances: Final Four Edition. It was a great theme, and he included my article on Ten Tips for Young Investors? The Media Doesn’t Get It.

Money TLD hosted the carnival of Personal Development – Gandhi Edition, and was nice enough to include my post on Paying it Forward, Every Day.

And last but not least, Kavmerica hosted the Carnival of Economics, and included my article on Canned Goods and Condoms – What are People Still Buying?

Sorry if I haven’t been replying to comments as quickly. I’ve had some family and friends over recently, and I’ve got to give priority where it’s due. I’ll be back in full force next week though!

His latest enemy is Nouriel Roubini, a NYU economics professor often known as “Dr. Doom” for his bullish take on the economy.

I laugh at your puny rally and feeble notions of recovery

Roubini first caught my attention back in July, 2008, when he said that the recession was only half over, and would continue for another 12-to-18 months. He also added that although we’re in:

…the worst crisis since the great depression…

we’re not heading into financial Armageddon, or even a Japanese-style prolonged period of stagnation.

Earlier this year, he was back in the headlines, when he admitted that things were worse than he thought. Instead of 12-18 months (which would’ve been between July 09 and Jan 10), he revised his estimate to 24-36 months (I’m assuming that this is from the original prediction, but can’t tell for certain).

The Cramer feud began on March 25th, when Roubini spoke to Bloomberg Magazine and said:

The stock market is a bit ahead of the real macroeconomic and financial news…. We’ll have some major banks going belly up that will need to be taken over.

Also on March 25th, Roubini wrote an editorial in the New York Daily News in favor of Secretary of Treasury Timothy Geithner’s toxic asset plan.

While largely in favor of the plan, he ended by pointing out that the government may have to take drastic actions if it still doesn’t work:

What happens if removing toxic assets from a bank’s balance sheet at near-market prices shows it is effectively insolvent? Then we will have to face the elephant in the room. We may then have to start asking, “Why keep insolvent banks afloat?” And having asked that, we will have to search for ways to manage the ensuing systemic risk.

By the next day, Cramer was already on the attack. He opened his blog on The Street.com with the following insult:

Noriel Roubini, the New York University professor intoxicated with his prescience and vision, comes out with the astounding view that “some” U.S. banks will be nationalized. Forget that we have had one of the largest rallies in history since the oracle of Greenwich Village spoke last.

What I think matters is that I don’t know anyone who would disagree with him. It is obvious that more banks will be nationalized. What has mattered since the beginning of this crisis is that we have a few banks that are not going to be nationalized.

It seems as if Cramerthought that the strength of the big banks would be enough to turn the financial sector around.

I know Roubini and Nobel laureate Paul Krugman are both on the nationalization jihad, and they are compelling figures to believe in. However, if JPMorgan Chase, Wells Fargo, Bank of America, US Bancorp, PNC Financial, and Capital One keep rising they will be able to raise equity making it easier for them to take losses and will make them more profitable as investments.

Cramer then turns his attention to Roubini’s pessimistic views market and the recent rally:

But what Roubini and Krugman might be missing is the ability to build, through earnings and higher stock prices and forbearance, a perfect combination of lower loan charge-offs, more equity, and therefore increased solvency.

Or, in other words, those who think that things are not better off since the March bottom strike me as people who are as unrealistically bullish during the 2008 top. You have to adjust if the facts adjust and perhaps Roubini’s doing that by saying that “some” banks will be nationalized. If he isn’t, I think he will be wrong.

As far as I know Roubini did not respond to Cramer’s blog. But that didn’t stop Cramer from continuing on the warpath. On March 31st, he appeared in a video on The Street titled “Roubini is Wrong“, where he was interviewed on the topic of bank nationalization.

 When you look at Roubini, what he’s making a mistake on is Geithner. GeithnerI think is going behind the scenes as Treasury Secretary and saying “Listen, we’re done with that. We’re done with that.” It started with Bernankesaying on 60 Minutes “we’re done with that”, it’s now extended to Geithner saying “we’re done with that”. If the people who would be in charge of nationalizing are saying point blank they’re not going to nationalize, then Roubini’s logic has a fatal flaw in it.

Now he’s been a bear, and one of the things I like to judge people on is their calls [David's note - HA!], and what happened subsequently. When the market was at 6300, he came out very boldly and said we’re going down another 1000 points. Now I came out with a piece that said “you got to start buying here”, because if we only go down another 1000 points, you better get in….

I think that he has to be judged on this nationalization call, and I think that he’s going to look foolish because of the Treasury’s attitude towards nationalization.

Again, it’s worth noting that Roubini only said that some banks may need to be nationalized.

Yesterday, Roubini finally replied to Cramer, and he definitely took off the gloves:

Cramer is a buffoon. He was one of those who called six times in a row for this bear market rally to be a bull market rally, and he just got it wrong.

And after all this mess and Jon Stewart, he should just shut up because he has no shame….

He’s not a credible analyst. Every time it was a bear market rally he said it was the beginning of a bull, and he got it wrong.

He keeps insulting me personally and saying a bunch of lies. He doesn’t even know I was supporting it, so he lies.

The article also points out that Roubini has a history of accuracy. In 2006, he predicted that the worse recession in four decades was on it’s way.

With regards to the recent rally, Roubini thinks it’s just a bear market response to government intervention, and not the sign of a turnaround. He thinks we’ll test previous lows because of poor economic news, disappointing earnings, and also because banks will fail after the stress tests come out.

So what’s Cramer’s response? As far as I know, none yet. But if the Stewart feud taught us anything, it is that Cramer is not one to back down when challenged.

It’ll be interesting to see where this goes. Cramersaidhe wanted someone he could debate economics with, not just a comedian. It looks like he got his wish.

I’m not saying that you should try to follow their path, as they’d certainly be considered outliers in the financial world. Instead, we can learn about their way of thinking, and apply it on a smaller scale in our own lives.

Here is what Forbes found out about the 657 self-made billionaires they studied:

• Many had parents with a high aptitude for math
• The most common professions are engineers, accountants, and small-business owners
• Nearly 2% worked at Goldman Sachs early in their career.
• 20% never completed college
• Those who made their money in finance are the most educated – 55% have graduate degrees, and 90% of MBAs got their masters from Harvard, Columbia, of University of Penn’s Wharton School of Business
• Several suffered “bitter professional setbacks” early in their careers, but consider them valuable learning experiences

There were a few other commonalities, but they’re too specific to really be applicable (unless you’re considering working at Goldman Sachs or joining a secret society like Skull and Bones).

Here’s what I’ll try to apply in my own life:

Education is key

Even though 20% didn’t finish college, they all know the value of a good education. Getting a degree is still the best ticket we have towards a lifetime of higher income – and job mobility. The skills we learn in college and on the job can be applied towards finance and entrepreneurship, and vice-versa.

Another takeaway is that a strong understanding of finance and economics is critical for success, regardless of what your career is.

It’s important to do your own thing

Many of these people left a successful career (or dropped out of college) to go into business for themselves. Even if you don’t start a business full time, there are always things you can do to supplement your income as well as broaden your horizons.

You learn more from your failures than your successes

The lessons you learn from mistakes and failures will stick with you more than any success. That’s why billionaires consider early failures something that helped them in the long run.

Failure early on is necessary condition for success, though not a sufficient one.

- Pharmaceutical tycoon R.J. Kirk

As you may know from previous posts, I have a problem with drainage on my property, and have made it a priority to fix. I have water flowing towards the house in a few places, and that could cause problems with my basement walls and foundation.

To fix it, I decided to put in additional drainage in three spots, as well as a small retaining wall to make sure I fix the problem the first time. Because of the importance of drainage (and the difficulty I had in putting in a previous retaining wall), I decided to hire someone to do this project.

I used the yellow pages to find contractors in the surrounding area that specialize in the type of work I need. I called 10 people, and asked to setup a time for an in-person interview. Even though I contacted the businesses and basically said: “I’m looking to spend several thousand dollars. Will you help me?”, only 5 called me back.

Of those 5, only one person showed up on time. The rest showed one hour late, two hours late, five hours late (showing up at 5:30 on a Friday night without calling first), and a day late (although they did at least call before showing up on Saturday).

After an in-person inspection, four of the companies promised a written estimate as soon as possible. One expected me to pay him $5000 without so much as a written estimate or statement of work. No thanks.

And even though it’s been two business days (four days altogether), I still only have one estimate. It’s no surprise that it’s from the lone company that showed up on time.

Simply put, I’m amazed with the lack of professionalism.

We’re in a recession, right? Shouldn’t businesses be trying harder for my business? I thought I’d be an ideal customer: someone with an urgent need to have thousands of dollars of work done, and wants to pay for it in cash. Maybe I’m just weird to expect customer service to improve when the market is more competitive and demand for work is down.

I had hoped that companies would act like they are eager for my business. At the very least, I expected them to return my calls, show up on time, and follow through on their word in a prompt manner.

I know that not all businesses are not like this, and the ones that practice good customer service are the ones that will survive the recession. As for me, I’ll be “voting with my dollars”, and going with the only company that showed up on time and gave me an estimate when they said they would.

In addition to mowing the yard, planting new grass, and planting wildflowers, I’ve been doing some Financial Spring Cleaning as well. It’s a list of what I’ve been up to recently, but what is everyone else doing? Let’s take a look.

Living Almost Large writes about The Importance of Customer Service. This is something I can relate with, as I’ve suffered some poor customer service recently (more on that later this week).

Bargaineering has a Credit Score Q&A with Liz Weston. Liz is a great financial writer, and one of the few that targets the younger audience. You can never take your credit score too seriously, so make sure you check it out.

The Oblivious Investor has a good post warning: Don’t Let Your Ego Get in the Way. Sometimes, the things you think you know are even more deadly than the things you don’t. Make sure you recognize your limits.

The Checkbook Diaries has an article on the importance of Diversifying Your Financial Mind. The best investment you can make is in yourself. Make sure that learning is part of your financial road map.

And last, but not least, Christian PF has an intriguing article about how Money Doesn’t Solve Money Problems. If it did, you wouldn’t hear about professional athletes and lottery winners going broke.

And for the fun link this week…10 Commercials that are Exercises in WTF.

Hope you enjoyed this week’s roundup. And spend some time outside!

Today marks a special day for me – my first interview!

Your Money Relationship has a weekly segment called Saturday Sneak Peakwhere he interviews up and coming bloggers. This week, he’s chosen me! It’s quite an honor!

Make sure you check out his post to see me answer the following questions:

1. What inspired you to start a PF blog?
2. You have had some pretty rapid success getting your name out there over the past few months. How do you explain that?
3. Which article has been your favorite so far?
4. Do you think we’ll ever have too many PF blogs?

The Guest Post

I’m also really proud of a guest post I have up at Divorced Dad Frugal Dad. It’s about a topic that is very close to me: grilling!

In it, I share all my Top Tips for Backyard Barbecues.

• Choosing meat
• Freezing/thawing
• Preparing meat
• Preparing the grill
• Cooking

I take grilling very seriously (as does Divorced Dad Frugal Dad), so make sure you check it out. Now is perfect time to be outside cooking, and you just might learn a few things.

I hope you have a good rest of the weekend!

The Writer’s Coin hosted the Comics and Cents Carnival. It’s a festival combining finances and humor. My post on The Top 43 Songs About Money was included as an editor’s pick!

Pecuniarities is hosting the Carnival of Pecuniary Delights – Madoline Hatter Pecuiniary Arts Edition. It’s a new festival that puts an emphasis on quality writing. They included my article on 20 Questions with J.D. Roth, Author of Get Rich Slowly. If you haven’t read it yet, check it out. J.D. has some great thoughts on starting a business/website, personal finance, and goals.

Ask Mr. Credit Card hosted the Money Hacks Carnival – April Fool’s Day Edition. It’s a fun theme. It includes the story of the most famous April Day’s tricks throughout history. He included my post that asks, Are Savers Dooming the Economy? No!!!

Make sure to check the carnivals out! Two of them are new, and the other is always full of good links.

I’ll be back in even more carnivals next week. I fell behind in my carnival submissions, but I’m making it more of a priority again.

Here are a few things I’m going to be working on over the next few weeks to make sure that I’m ready for whatever lays ahead.

Take another look at my goals and priorities

I recently decided that I’m trying to take on too much at once. I’m trying to build an emergency fund, a vacation fund, pay off all my debt by the end of the year, and I’m about to start a 401K. All at the same time

To tell the truth, I don’t think it’s sustainable. I have two options – I can either drop some of my goals (not going to happen), or I could change some of my schedule.

I’m not paying any interest on my credit card debt, so I could extend my timeline. Instead of paying it all off by the end of the year, I could just pay it before any interest is due. It would help me meet my other goals, at no extra cost to myself.

Start a Roth IRA

This is my biggest financial mistake I’m making right now. I need to start one ASAP. I’m missing out on the power of compound interest and tax free growth, not to mention a down stock market.

Re-tool my monthly budget

My budget is a work in progress. I’m constantly tweaking it and adding things. If I’m going to be changing my goals and adding in another big expense – Roth contributions – I need to make sure I have a budget that can handle everything, and is still flexible enough to allow for things like vacations and home improvement.

Adjust my tax withholding

I got a big refund last year, which sounds fun, but is really money lost. I gave the government an interest free loan. I should try to adjust my federal withholding so that I get a small return instead.

Re-balance my 401K

This has nothing to do with how the market has done recently. It’s about making sure that my 401K is still balanced in the way I intended.

Some of my funds may have done better than others, so I need to take a look and see if I need to change future contributions to bring things back in line.

It’s also a good time to make sure that I’m taking advantages of the low-expense funds that are available in my account.

Why now?

In spring, warmer weather gives us a chance to get a head start on our yard work before everything starts growing, and it’s even harder to manage.

The recent downturn in the economy has given us a chance to make sure we’re ready when everything finally does turn around.

If you somehow don’t know what an LOL cat is, here’s how you make one.

First, you take a cute picture of a cat. Then you add a funny caption that is hilariously misspelled.

I spent a long time looking through old LOL cat submissions, and put together 23 lessons that can teach us about money, the economy, and personal finance.

Why 23? I like prime numbers. Enjoy!

1. Don’t let the news get you down

2. Your lifestyle needs to be sustainable

3. Everybody is feeling the pinch of the economy…

4. …but it’s important to remember how good we have it

5. Look for additional sources of income

6. Be careful what you post online

7. Find a job that you enjoy, and your life will be much easier

8. If you want to make it big, you’ve got to think big…

9. …and have a plan for getting there

10. There’s no such thing as an expert

11. Make sure you keep good records, and have a system for keeping track of them

12. It takes a long time to build your ideal career – so don’t get discouraged

13. To save money, look for ways to cut back on utilities

14. You can’t count on the government to bail you out

15. Be on the look out for scams – no matter how cute and cuddly they may appear

16. Your food budget is another great place to save money

17. Make sure you’re realistic about your limits – and get help if you need it

18. If you’re going to be rich, you can’t have everything you want

19. To live happily, live simply

20. The economy could be down for a while, but it’ll come back eventually

21. With the economy hurting, you’ll have to make sacrifices

22. Good things come to those who wait

23. There are more important things in life than money

I’m not the only one who agrees. Liz Pullam Weston just wrote a great article about how if you’re under 35, you should be happy about the meltdown:

If you’re young… the biggest threat to your future isn’t the current crisis. Your greatest risk is that fear will cause you to miss some once-in-a-lifetime opportunities.

And she’s right. The job market sucks right now, but other than that, there’s not much of a downside to this economy for us young folk.

Chances are that we’ve lost much less than others, because we have less invested in stocks. Even though the market is down, I’m breaking even after the employer match on my 401K.

What else should we be happy about and taking advantage of? Let’s see what Liz thinks.

Stocks are on sale

Past performance is not an indicator of future performance, but if it gives us any clues, the market will eventually recover. It may take some time, but we can afford to wait.

We’ve a long time away from retirement – probably at least 30 years. Over the history of the S&P 500, it has never lost money over any 30 year period. Even if you started investing in 1928, you still would’ve made 8.47% if you stayed in the game for 30 years.

Although there’s no guarentee that it will come back, the S&P 500 has fallen more than 50% off from its peak. I feel like I’m getting a discount. I’m buying the same stocks (through low-expense index funds of course) that I was a year ago, only now they’re 25-50% cheaper. I think that’s a great deal.

I know that the market may never recover. But I don’t buy it. If the US and global economy really do collapse, what could we really do about it, other than stock up on gold and guns and settle disputes in the thunderdome? We’ve got to put our money somewhere.

Forget toxic debt. Where’s the bailout for post-apocalyptic families?

Houses are on sale

According to the S&P / Case-Shiller price indices, home prices are down 26% across the board from their peaks in 2006, and may be down as much as 40% in some areas. While this puts sellers in an awful predicament, it’s a great time to be buying (assuming you can get credit

Credit is tight again

How is this a good thing? People and corporations are finally being realistic. They’re not as willing to let people borrow themselves into debtor’s prison, be it through mortgages or credit cards.

People are borrowing less…the savings rate jumped to 5% recently (a record high). So hopefully, when things finally do turn around, it will be sustainable for the long run.

How to take advantage of it

Work on your credit score

Hopefully you’re starting from scratch, and don’t have many blemishes on your credit report. Even if you do, it’s more important than ever to have a good credit score.

Make sure you know where your credit score comes from!

• 35% comes from your history of making payments on time.
• 30% comes from your debt/credit ratio – the amount of debt you have compared to your limits.
• 15% is from the age of your open accounts, so make sure to keep the cards you’ve had the longest.
• 10% comes from the frequency that you apply for credit, so don’t try to get any new cards/loans before you start shopping for house or car news.
• The last 10% froms from a variety of factors, such as the types of credit you hold. It’s better to have a mix of things like car loans, credit cards, and consumer cards at stores than it is just to have one type of debt.

Get in the habbit of saving

No matter what your goals are, you should have a cash reserve.

It helps in the short term, in case you face unexpected expenses like car repairs. It also helps in the long term.

If you lose your job or get sick, having an emegency fund could be the difference between keeping your house and getting evicted. At the very least, it could keep you from going into debt any time you’re short on cash.

Pay your credit card balances in full

You should always be doing this anyway, but it’s even more important now. Many cards are jacking up their rates, so you could find yourself paying even more for impulse purchases.

My addition – learn from your mistakes

This wasn’t on the original list, but it’s important to try to learn from your mistakes, as well as the mistakes of others.

Are you happy with your finances right now? Are you worried about the economy? About your job?

Never forget that. And start making plans so that the next time the economy crashes, you’ll be ready for it.

Here are my mistakes, and things I’ll have ready for the next time:

• I won’t have any credit card debt
• I’ll have an emergency fund with at least six months of expenses saved up
• I’ll have more money available to invest, so I can take advantages of the low, low prices
• I’ll be the one making money from the crash, not the one losing sleep over it

Many people feel helpless, and wished they lived in different times. But that’s not possible. In the words of someones much wiser than me:

So do I… and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.

- Gandalf

February was a great month for me. I used my tax returns to pay down 23% of my debt. However, I didn’t make nearly as much progress in March.

I paid off another 2.8%, which isn’t that good, but I’m still on track to achieving my goal of getting out of debt this year.

The red and green squares are visual reminders of my progress. Each time I pay down another 4%, I change the color of one square from red to green.

I didn’t get to change any squares this month, but I did make some progress, even if it wasn’t that much. Why didn’t I make more progress? Two reasons.

First, I took two weekend trips. It was worth it. I love travelling, and had a great time with friends and loved ones. I didn’t use credit on either trip, but my spending did eat into my debt payments.

The second reason I didn’t make as much progress is that I’ve been saving all all of my extra money for a landscaping project. Our irrigation is out of control. Our back yard is a muddy mess, and water is flowing towards the house in a few spots.

I need to hire someone to do this, as I’ve tried several times and failed. I’m not going to put my house and foundation at risk, nor do I want to deal with a tore-up yard and muddy dogs.

It’ll cost a pretty penny to get it fixed, but luckily I saw this coming last month. I’ve set aside a good amount, even on top of my other commitments (like my emergency fund, vacation fund, and paying down debt).

My March progress was disappointing, but I’m still on track to accomplish my goal of being debt free by December 31st. Even after a slow month, I’m a little ahead of schedule.  By this point, I should be 33.33% of the way there.

However, most of my progress came from my tax returns, which only happen once a year. I need to pay down $867 a month if I’m going to do this. Right now, I’m only setting aside $700, which is good, but will still leave me short in the end.

So what’s my next step? First, I’m not going to get discouraged. I’m going to keep plugging away. And second – I’m going to rework my monthly budget to make sure this goal actually happens.

Jeffery Kosnett at Kiplinger thinks so. He wrote an article called 10 Financial Myths Busted, where he describes 10 financial rules that were disproved by the recent crash.

I’m going to give you his list, along with my explanations and thoughts about whether anything has changed or not.

WUT IM BOUT 2 DO 2 TEH ECONOMY CUD BE DANGEROUS.DOAN TRY DIS AT HOME!

Myth 1: There’s always a hot market somewhere

In the past, it was thought that investments in places like Asia and Russia could prosper even if the US market was in the tank. There’s no way that everyone and everything can crash at once, right?

This time around, the whole world is doing just as bad as we are. Rather than disproving anything, I think the downturn just shows the importance of diversification, even if portfolios are generally down across the board.

Myth 2: Real estate behaves differently from other investments

When real estate kept climbing even thought the dot-com bust, many people thought that real estate acted independently of other financial investments, and could only keep growing. Boy, were they ever wrong.

Real estate and mortgages turned out to be the spark that bled, and took down the entire economy with it. It was a classic investment bubble, and showed that real estate plays by the same rules as anyone else (and may not even be as good of an investment as stocks).

Myth 3: Reliable dividend payers are safer than stocks

I’ll be honest and admit that I don’t own any individual stocks, let alone dividend payers. But the myth goes that some stocks with mediocre performance are worth keeping because you could always count on them to generate income. The current economy has changed that, and many companies are slashing their dividends.

Myth 4: Foreign investors can drain the economy overnight.

The author says that despite foreign investors holding $3.1 trillion of US Treasury debt, they can’t have an impact on our economy.

I’m either confused or paranoid, because that does seem like a potential threat to our economy and security. I’m not trying to say we should be xenophobes and cut off the rest of the world, but we should be aware of the impact that others could have on our economy.

Also, the fact that foreign investors haven’t sold US debt doesn’t prove anything. The author acknowledged that the entire world economy is in the crapper in the first myth, so where else are they going to go?

Myth 5: Gold is the best place to hide in a global economy

In early February, an ounce of gold traded for $910. That’s just where it sat a year ago, when world economies weren’t so bad off.

Gold has performed better than other types of investments recently, but typically does worse when times are tough. There is increased demand as an investment, as people look for protection against inflation. On the other hand, there is less demand and a greater supply for gold right now. Not only are people buying less gold in the form of jewelry, but many people are selling the jewelry they do have.

Myth 6: Life insurance is not a good investment

I strongly disagree with this one.

I acknowledge the importance of life insurance – I hold some myself. But it’s not an investment. It’s protection in case I die.

The author touts the benefits of life insurance, saying that the guaranteed payouts are enough to offset the higher expenses that go along with investing through insurance. If that wasn’t enough, he asks:

Have you checked your 401K recently?

I have a rebuttal.

Have you checked the interest rate on ING online savings recently? It’s been performing better than my 401K.

That doesn’t mean that you should put all your money in online savings. You’d actually lose money over the long run, as ING’s interest isn’t even keeping par with inflation recently.

Why do you need an additional middle man for your investments? If you want to invest in stocks or bonds, do it through an investment company. Not through your insurance.

Myth 7: The economic downturn dooms the dollar to irrelevance.

Normally when a country goes deeper into debt, it’s currency is worth less. But the dollar has actually been holding it’s own recently. Why is that?

There’s not many other places to go, and in spite of our massive national debt, the Treasury has never defaulted. Plus some foreign currencies were temporarily inflated by oil and commodities speculation.

Myth 8: Mass layoffs reward investors

Some people think that stocks go up when the number of employees goes down. It’s not always the case. Allstate stock lost 21% when they laid off 1000 employees – roughly 1.4% of it’s workforce.

Getting rid of people could show that you’re cutting costs and becoming a stronger, leaner company. Or it could signal that the bottom is about to drop out.

The bottom line? There’s no way to know what it means when pink slips are handed out.

Myth 9: It’s crucial to diversify a stock portfolio by investing style

This one is about the difference between growth and value stocks.

Growth refers to companies with expanding sales and profits. Value describes stocks selling for less than the the business is worth.

In a market where everything is down, it’s hard to tell what is what. According to the author, diversification is still important to any portfolio, but right now it’s not as useful to try to classify companies according to their style.

I don’t think that this myth – or any diversification rules – have been busted by the recent economy. It’s just as importance as ever to diversify.

Myth 10: A near perfect credit score will get you the best rate

This is another area where I strongly disagree with the author.

He’s trying to downplay the importance of a credit score, but that’s a load of rubbish. He can’t even come up with good examples:

Mortgage lenders prefer large down payments. Credit-card issuers are just as apt to reduce your credit line or raise your interest rate. And those 0% car loans? Often they last for only three years.

Again, that’s rubbish. He couldn’t even close list with a strong point.

Having a good credit score isn’t everything, but it gets you a heck of a lot further than anything else will. It’s normally the biggest determining factor for the interest rate for any debt you’ll take on.

I don’t get why the author is downplaying the importance of credit scores.

My take?

The more things change, the more they stay the same.

To tell the truth, I don’t think any of the myths about economics or investing have changed. If anything, the bubble has finally popped, so people are returning to the rules they should have followed all along.

What’s your opinion? Have the rules finally changed?

Divorced Dad Frugal Dad is a man of my own mold. Grilling out is my favorite thing in the world to do, and he made an awesome surf and turf meal at home for only $26! Not only do you save a lot by cooking at home, but it can be incredibly satisfying to make a quality meal for yourself.

Always the Planner has some intriguing thoughts about what it means to be Frugal vs. Cheap, and how it can be dangerous to take it too far. She also has a good sense of humor, as she didn’t get mad when I called her a “he” in the carnival earlier this week. Just goes to show that you shouldn’t make assumptions.

Your Money Relationship did some interesting homework on the average net worth of Americans. If you’re under 25, it’s $1475. If you’re between 25-34, it’s $8525. If you’re me, it’s probably negative right now, but is on the way back up.

The Digerati Life has a thoughtful post on financial gurus.  I’ve taken some cheap shots at Jim Cramer recently, so it’s only fair that I be fair and point out that financial experts are human too.

And last, but certainly not least, No Credit Needed has a list of Reasons We Fail To Stick to Our Budget. It’s a great article, full of some common budget miscues, as well as a list of hints and tips from readers via twitter. A helpful post, and a creative use of technology.

And for the fun link, I’m linked to an article on Cracked.com. (warning – some of their stuff may not look so great if people see you browsing it at work…it’s still safe for work, but some of their ads and such are risque).

They have a funny list of 6 Reasons the Economy is More Depressing than You Thought. They intentionally take things over the top, but it’s nice to laugh at things for a change.

That’s it for this week. I’ll end it by asking a question of you that I’ve been asking myself a lot recently.

What are you doing to achieve your goals?

- this blog post