Archive for the ‘debt slavery’ Category

Where Do They Go?

October 31, 2007

Old blogs that is. I considered calling this “coda”, but I’m not sure it’s time just yet to cash in the chips, call it a day, and so on. In glancing over the more recent posts I note that there’s nothing about my passing the licensing exam. And that’s ancient history.

We are back in debt, to the tune of a few thousand at least. That I only have a ballpark idea indicates where we’re at. Still, it’s confined to one card now. We just hit that wall of “I want that.” That wall is tough. Plus, what do you do when your bank balance is $0.00. That was a new one, courtesy of overdraft protection. But it didn’t last for long and soon we were at -$207.

Hitting the Financial Reset Button

September 27, 2007

I’ve been Missing in Action. It’s been a busy summer. First we had to deal with fumigating our house. Then I was away for a few weeks on a vacation and then work-related trip. Upon our return we were scrambling to unpack and get ready for the beginning of a new school year. During all of this our blogging feel by the wayside. This doesn’t mean we haven’t been thinking about our finances and ways to run a tighter ship. Still, I must say that it was really therapeutic to get away from the day-to-day grind.

When we got back from vacation I found a big check waiting for me. This check was the result of our decision to sell a mutual fund. We decided to sell this asset so that we could pay off our credit card debt. We were sure to put a good chunk of the money aside in a high-yield CD so that we have the money available to us when it comes time to pay taxes. We used the rest to help wipe out most of our debt. I have no doubt that we did the right thing as the level of stress we were living with trying to pay down our debts was really not healthy.

Our challenge now will be to keep on top of our bills and really build our emergency fund so that when big expenses arise (and they always do!) that we don’t have to use a credit card to pay for it.

Tonight when I was updating our debt/assets and paying bills online I noticed that the one credit card I had paid off in August was showing a $242 finance charge. I was enraged and called the cc company to ask them to get rid of it. Amazingly enough they did! So, I am now back to a $0 balance with that.

I’m still hoping the Bizarros will rise from the dead.

Pissing On American Express, or, Hot Air into Action

August 31, 2007

The hair that broke.
Oh, I meant pissing off. So sorry. Do I sound angry, bitter, resentful? I am and have been all those things, but the overriding mood is one of sweet, unalloyed triumph. As I mentioned early in August, American Express really pissed us off. I don’t know why. We should really not be so naive. They simply pulled the old bait and switch tactic, 0% followed by two late payments and then whack! 30%. Will we ever learn?! So I wrote of drastic measures. I even mentioned Thunderbirds.

Napalm for debt. Napalm for Chase. Napalm for Amex.
In any case, we converted some of this hot air into some active warfare. We liquidated an asset. We are sad about this. This was not part of the dream. But, as John Lennon sang, the dream is over, time to move on.

Recent payments, made August 3o:

United Mileage: $3207.32

Chase/ Amazon: $5999.24

American Express: $15,770.15

I am ecstatic that we have the resources to do this. Amazingly, we still have a couple grand of debt. But the bulk is paid off. I’m delighted that we didn’t take out a home loan thereby prolonging, and multiplying our debt for 30 years.

Not doing it again!
Now the trick is not getting back into a debt that even remotely resembles this morass. Since canceling credit cards hurts your credit rating we are pondering what do with the couple we won’t ever use again. I said never. Shame on me. Freezing them is not enough. How about preserving them in plexiglass? Or amber, maybe. Another idea is cutting them up and burying them in the back yard. Admittedly, these solutions are more based in poetic justice than any real contingency.

The morass.
This last bit about not doing it again is very serious. We still want to maintain a credit card for airline fares, that sort of thing. But we really need to get into a mindset where that card is literally frozen, is treated like a hand grenade, is kept under lock-and-key, sort of like a firearm that you wouldn’t want your kids to get their hands on. This will be the challenge. I’m hoping we’ll be more than up to it.

The addiction model — a little psychology.
I think debt is a little like addiction. It is, after all, largely a result of compulsive behavior. It creeps up on you. Little mindless impulse purchases, CDs, video rentals, trips to Vegas and then — kablooey — $20,000 in the hole. (I realize this scenario is not as common as some people would like us to believe, thus normalizing large debts. But it is fairly common, nevertheless.) So back to the addiction model. In Alcoholics Anonymous addiction is viewed as a disease. On a charitable day I view this as wrong-headed, perhaps even dangerous.

Biological determinism.
I am familiar with the brain science. Much of it is compelling. But I’m still not convinced that it fits the disease model. And as with much biological deterministic thinking there is the chicken-egg problem. What causes these mechanisms in the brain to activate? Another side to the disease model is that there is a high genetic component to alcoholism. This is undeniably true. But why is it that some become alcoholics and others don’t? What is the mechanism that activates the gene? My point is: We are not doomed to fulfill all the scenarios scripted in our genes. This makes for hopelessness and a willingness to shirk off responsibility.

Behavior.
In Marlatt’s relapse model relapse (in our case, think Doctor Debt shows up at the doorstep, “Damn, you again?”), relapse is viewed as inevitable. This is not fatalistic. It is just viewed as part of a process. Relapse is part of the process. It is not looked upon as being shameful. When it is viewed in this way, it is easier to pick oneself up and get back on track (hey, two cliches in a row!). You are not a failure! Your life is not over. You can be debt-free again. One does not have to return as a newbie and start all over again. Time and again I’ve heard from relapsed AA members that this can be a very shameful, even shaming experience. When relapse is a process it is treated matter-of-factly. And it is dealt with accordingly.

Making it official.
Once the transactions clear I’ll update our debt meter. But I want it to be all, like, official.

A Second Chance with Money

August 3, 2007

For years Noma and I were excellent about managing our money. When we met we were both making under 25K and living in NYC (this was a while ago). Noma worked an extra job to make enough money to invest in Microsoft stock, which he later cashed in to help with the down payment on our home. He also ate rice and beans so that he could save 2K so that we could go to Europe together.

We didn’t have any credit card debt until the last year or two when it seemed to have sprouted up from no where. It was like we grew extra heads overnight. How did this happen?

The problem was that we were living on one salary with very high expenses and such hectic schedules that I don’t think either one of us even knew that we were carrying so much debt. I knew that we had put some expenses on the cards but I hadn’t been watching it build up. We have only ourselves to blame and yet I do think the credit card companies make it very difficult for a person to see their debt. For instance, I recently had to call American Express to understand what my minimum payment should be…this wasn’t listed on my bill.

Anyways, my series of revelations this week about our financial situation has spurred us on to action.

As Noma mentioned I don’t know why we didn’t think of this before…I think the biggest reason we didn’t think about it before is that being mindful about one’s financial situation takes a lot of time and attention. We’ve been neglecting our financial health for too long.

We’re lucky enough to have invested in some mutual funds a while ago. In looking at our situation we’ve decided to sell these and take the money to pay off our debts. We’ll then be at zero debt.

I will feel incredibly relieved when we can do this. We will have to save about 3K to pay for the capital gains taxes but even so we’ll be able to pay off our debts and have a bit to put into the emergency fund. Do I feel great? Yes and yet I also do not want to rest on these laurels. From the moment we hit zero debt I want to make sure that we are managing our finances better. I’m hoping this experience will have scared us straight. I can’t say I have 100% confidence because of all of our expenses. We may need to make some childcare changes. We need to make some difficult decisions.

Once emancipated I want to stay that way.

Debt Extermination — 1 card down, 3 to go

July 27, 2007

I just got off the phone with American Express. I’m happy to report that this member since 1990 paid off her personal card and closed the account. I found it immensely satisfying to tell them to get rid of the $55 membership charge (which was just applied this week!) and to close the card. They tried to ask personal questions and even said “what can we do to keep you with American Express?” I said, “I don’t mean to be rude but I don’t feel like I’m being heard. I’ve asked to cancel my card.” Once I hung up the phone I got my big scissors out and cut that sucker up. Chaching…that’s the sound of becoming closer to $0 debt.

So, the positive part is that we’re down to 3 cards. My goal is to get down to 1 shared credit card and $0 debt. The downside is that while we’re down to 3 cards our debt has gone up as I had to put the second half of the bill for the extermination company on a credit card since I don’t get paid until 31 July. I’ll be sure to pay that down once I get paid.

It sometimes feels like I make a baby step and then have to take a big step backwards. Today however I’m not feeling discouraged by that. At least I’m aware and doing everything I can to help us move forward.

Happy Friday.

Confessions from a Debt Whiner

July 26, 2007

Blogging about our financial goals allows me to do the following:
(1) focus on our goals
(2) communicate with my husband about staying the course
(3) track our progress 
(4) create a community in which we can share stories and inspiration
and
(5) have an outlet to whine and complain about how much it sucks to be in debt and how god awful it feels to start digging your way out….(shoveling a mountain of s&*t with a toothpick)

Confessions from a Blog Whiner
Lately I’ve been using this blog to really have a good whine about it all. When I mentioned that I’ve been whining a lot on the blog my darling husband kind of nodded tentatively and agreed by saying “no one really likes hearing it.” When I said “you’re right. I think I should delete it” he countered with “no, it’s part of the process.” Yes, it is definitely part of the process. Does this whining help us though?

Financial Exorcism
I still feel like I’m in a bit of a financial exorcism. Some ugly feelings have definitely come up since I’ve woken up to realize I can’t afford that coffee I’ve been drinking for the past 2 years. It ain’t pretty. I want my latte along with a generous heap of credit, thank you very much. Did I just say that? No, bad ladydough, bad. Time to drink the office brew.

Noma, the smart husband, is right in that this whining is all part of the process.  

While I realize this grumpiness is part of the process I’m going to also try to remind myself to be thankful for all that I have and to be more patient with myself. After all I am so incredibly fortunate for so many things. Also, we just started our new lives as debt warriors in May. It took us a few years to build up this debt and I need to just take a deep breath and realize it may take me a few more before I get rid of it again. That’s ok.  But it’s so hard. Now that I’m ready to face reality and make progress I have to wait. That’s tough.

 So, without further ado, here are some things I’m thankful for (not in any particular order):

1.) I have a wonderful husband and two healthy, beautiful, curious, interesting kids
2.) Everyone in our extended family is healthy
3.) After many career changes my husband has found a field that he loves and enjoys. He knows he will never want to retire and he is sure he will find success as a therapist.
4.) I have wonderful, lovely, supportive friends
5.) We own our house. Although we are cashpoor our networth is high due to the value of our home and my retirement savings
6.) For the past 5 years I’ve been able to save about 20-30% of my income towards our retirement
7.) We are lucky enough to live in an area of LA with a good public school
8.) I work at a stable company where I never have to worry about being laid off
9.) I live in a blue state
10.) I’m not on any medications

Failure to Post: Blog Avoidant

July 15, 2007

Noma has been asking me why I haven’t posted recently. Hmm…It’s true I have become a bit blog avoidant.

I think this is due in part to our recent set back with having had to dip into our emergency fund. And because I know we’ll have to dip into it again to pay for the termite tenting we have to do in the next couple of weeks/months (unscheduled so far). I’ve got my head down and my blog between my knees. Who am I to write about battling debt? Perhaps I can offer some schadenfreude to those who have avoided dipping into their emergency funds this month.

The optimist in me thinks these are small setbacks and that we are still in a better place than we were before because we are much more aware of our spending. This awareness, however, does, not in and of itself bring any feeling of progress. In fact I’ve noticed it makes me feel more anxious and lackluster about life. This is probably because I’m more aware of our situation and how impossible it feels to get ahead.

Feeling more lackluster about life because of my financial situation doesn’t make me feel proud. Why should any of us not enjoy what we have in the moment because of something we’ve done in the past (incur debt) or something we want to obtain in the future (a car, a remodelling project, a vacation, keeping up with the joneses)? How is it that our financial situation can dictate how we feel about life and ourselves to that degree?

How can we work on achieving financial goals without losing a sense of balance? Any tips from fellow debt bloggers would be appreciated.

Kinda like finding out the hardware store owner sells crack on the side.

June 27, 2007

I got a really good buzz off this one. Check it out, here at the consumerist. The above comment is a reaction big banks funding payday loan companies. I’m feeling kind of naive, reading the comments people posted. But this sickens me. I know there are credit unions in Southern California.

I’m going to look into the options.