K.I.S.S. as most everyone knows is the acronym for “Keep It Simple Stupid” or “Keep It Simple Silly” or “Keep It Super Simple” which is my favorite because it gets the same message across without being insulting.
Dave Ramsey talks about K.I.S.S. the most when discussing budgets, but I’ve personally taken it a step further across all aspects of my personal money management, especially while I’m in the throes of Baby Step 2 – Debt Snowball, or as I like to think of it, my Debt Avalanche.
Having started my BS2 in February, I am nearing the end of my 7th month. So far, so good. I’ve paid off roughly 30% of my total debt and, despite Murphy’s best efforts, I am still on track to be debt free by sometime in 2010.
K.I.S.S.-ing works for me, so when something happens to make things more complicated, I naturally resist. I like keeping it simple. I like not having to look at all of my financial spreadsheets every day. I like not having to worry about multiple files and accounts. I like not having too many envelopes. I like doing things with actual, physical cash. I can do the details, but I don’t enjoy them. I hate balancing my checkbook – in fact I went for years without doing it until my sister found out and scolded me for it. And so one might easily see how keeping it simple would be a very appealing idea to me.
When I got my bonus check in February, I was able to knock off a lot of my credit card debt. This was a major help in getting things simple because it made for fewer accounts I had keep track of. Some I closed completely, others I’ve left open just to let them build some zero balance history before I shut them down. Regardless, I only have 2 credit cards left that I’ve been working on.
One of the cards is no big deal and has 0% interest through April 2009. The other one is a nasty little bugger (Bank of America) with a 10.99% interest rate and a $8,500 balance. I get annoyed every month when the bill comes and I see the $75+ in stupid tax…er, I mean interest charges…that gets tacked onto the balance so that a $150 payment to the card only actually brings the balance down by about $75 making progress on this one seem snail-like.
Yesterday I got an offer from one of my other credit cards which had been paid off since March – 0% APR for 12 months on balance transfers. Hm. I read the fine print which outlined that there would be a maximum charge of $75 for each transfer, but that was it fee-wise. I wouldn’t be able to transfer the full balance because the card with the offer has a limit of $5,000 but transferring $5K off of an $8K card would certainly drop the interest charges down significantly.
I thought it over. I only had 2 cards left to pay off, but now I would have 3. I calculated it out. The thought of putting a balance back on one of my other cards made me cringe and be completely against my whole keeping-it-simple strategy…but the savings! I figured out that I would actually save myself almost $700 in interest payments and shave an entire month off of my debt-free target date. That’s no small thing.
Of course it came down to a WWDS (What Would Dave Say) moment. While I don’t know him personally, one good thing about the guy is that he’s pretty predictable. If you listen to him enough, you can pretty much intuit what his answer would be. So I ran the scenario through my Ramsey Filter. Dave is a numbers guy, but he doesn’t usually counsel people to act based on the math of a situation because he’s more concerned with behavior modification. On this matter, I think he would see that my behavior has already been altered. My way of viewing my personal finances has undergone a complete paradigm shift, so I don’t think he would have a problem with my doing the balance transfer. If there were any concern that this could lead to a slow-down of my Debt Avalanche, he would probably say don’t do it. But it wouldn’t. I know it wouldn’t because I’m so freaking mad about the whole debt thing, I can’t rid myself of it fast enough. Transferring this partial balance would be just one more way to speed this along.
And so while keeping it simple is still a priority for me and something I know I need, I do feel that this one little “complication” of adding another card payment to the mix will actually do more for me in the long run. Besides, the other card which will now have a lower balance should be paid off by March and then I’ll be back to 2 credit cards again. Then a year from now, I’ll pay off my last credit card and only have loans and things to throw my money at.
In summary, I am a big advocate of K.I.S.S.-ing. I K.I.S.S. everything I can - my money, my budget, my debt snowball… It would be great if this wasn’t the only action I’m getting since I wouldn’t mind having a guy to kiss too, but maybe one will slide in here at some point…and I hope the simpler everything else is in my life, maybe the more likely I’ll be to notice him!
