Archive for the ‘despair’ Category

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 Debt Reduction Carnival

August 6, 2007

Our First Carnival.
Warning: Many exclamatory statements ahead. I guess we’re just excited, excited, excited about hosting our first ever debt reduction carnival. It certainly has been inspirational to be a part of the debt reduction community, really.

Would You Consider Helping Another PF Blogger?
We’ve learned a lot. So, sit back and click. Would you mind? The pf community is a great place for otherwise scarce information about debt reduction. Pf bloggers are making a public commitment to debt reduction — a powerful motivator. Perhaps you will post something to the next carnival, respond in kind? Since you’re reading this, it only makes sense.

[If the previous paragraph reads like utter dross — please pardon, there’s a reason, to be explained in a later post about marketing that exploits our deepest, largely unconscious needs. Look for it on Wednesday, most likely.]

For the record, these are in absolutely no particular order! Enjoy.

Two Investment Mistakes:
I’m partial to this post, perhaps because it looks into two mindsets, cognitive rules of thumb, heuristics, that can get us into trouble when investing. That’s psychology folks. So read on… It’s hard not to want to spur someone on that has just started a pf blog, whatever the focus — debt reduction, money management, frugality, investment. Check it out!

Building A Better Snowball:
Is it possible to resist such a title. This is an awesome post. If you haven’t read it yet, get thee to consumerism commentary and check it out. It’s got Pink Floyd, it’s got a killer financial plan for getting out of debt, it’s got a credit reduction calculator, did I mention it’s got a plan. For my money, setting up the emergency fund is key, this message cannot be crowed off the rooftops enough. Check it out!

When You Put Your Mind to It:
Clever Dude is not kidding. He shares his method for destroying $58,000 in debt. There’s hints galore for even the most world-weary debt gladiator. One of my favorites is “We Fix Things Ourselves.” It doesn’t take much — not that I’ve done it — to change the oil in your car, does it? Check it out!

Free Credit Reports, A Cornucopia:
Hustlerama offers no less than 15 ways to get a free credit report. Not that I’ve actually ever done this, but this could be the inspiration that finally puts me over the edge. I’m actually kind of worried that some of our behavior has led to some nasty credit comments. Maybe not. An important step in reducing debt: Know where you are, financially. (And for the not-faint-of-heart, scroll down about halfway down his homepage and look in the left gutter — something to roil the emotions of any debt reductionist.) Check it out!

Alternate Income Streams:
I’ve ventured into this area, but think it is underutilized. An occasional CD sold on amazon has bought me the occasional lunch. At businesscreditcards, the focus is New Media Ways to Raise Capital. Some tips you’ve probably not considered. If you’ve got a little time, these could really pay off! Check it out.

David On Finance:
Has got some well considered thoughts on when to consolidate debt. He also uses the phrase “raw power”, which I think is highly under-used in the pf world. If it was good enough for Iggy… David makes some excellent points about credit unions (not always…) and extra payments (ah, the power!). Check it out!

Grad Money Matters:
He calls them myths. I call them heuristics, cognitive shortcuts, rules of thumb. Well, some of them, anyway. There’s a goldmine of good advices and links here. I particularly like what he’s done with the I’ll-never-get-out-of-debt-so-I’ll-give-up mindset. Check it out!

Mighty Bargain Hunter, Putting Things in Perspective:
This is a refreshing post that puts a little forest into the viewfinder (rather than trees). Your debt needs the context of your life. Not other people’s lives. An important thing to be reminded of, that. Check it out!

Sex for $3:
Can you beat that for a deal? Another whale of a post from one of the funniest bloggers around. If you’re not conversant with the ways of Bianca and Basil, you’re in for a treat. Check it out!

OOPS: It appears that the Bizarros have “scrapped” their blog. I’m not sure what this means, but hope it’s temporary. The link may not work. Sorry.

A Book Review. Now I Want to Read This Book.
Books are invaluable motivators for re-focusing. Get it at the library or one of those great used books sites (I kick myself when I think of all the new books I’ve bought — used books are simply no longer the coffee-stained acid-ravaged items we encountered in less-than-savory warehouses.) And of course, Trish at blogging away debt is a certified maven of personal finance. Check it out!

Another Lie About Debt:
Here’s another perspective enhancing article. (Or a link to it.) In the circle of linking, I got this one from blogging away debt. I found it so interesting I broke my goal of having 10 links for this carnival. So now we have a nice prime number. Check it out!

Am I Really Ready to Get Out of Debt?
Okay. So Let’s Make It An Even Dozen. NCN submits some interesting points, ready starting points for self-inquiry. I particularly liked the one about being ready to withstand the opinions of others. Let’s face it, turning down lunch because you don’t want to spend money is awkward, in many circles. Check it out!

Comments?
We’ve enjoyed hosting this incarnation of the debt reduction carnival. If there was anything you particularly liked or disliked, we’d like to hear about it.

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.

Nut Shell Game — or How to Transfer Funds to Cover My Ass

July 7, 2007

We don’t have enough money to pay our bills. We’re trying to pull everything together and be more responsible but we just don’t have enough breathing room to cover everything. This week we had to pay an extra money for childcare since our daughter is out of school and an unexpected $200 for a structural engineer to come by our house to look at the massive cracks in the side of the house. While our networth is very good it’s hard not to feel like chicken little. Is the sky falling down? All I know is that it feels impossible to make any progress towards paying off our debts let alone moving on to bigger, more exciting financial goals.

Today we realized that our emergency funds needed to be dipped into to cover the EPPP exam costs, the engineer, the increased childcare. So, we’ve gone from down to $4100.98 in emergency funds and our credit card debt has jumped up $700 as well. Ugh. We also know we have to tent our house for termites soon. Someone told me to expect that to cost about 3K. It’s not like we’re paying for some extravagant marble countertop we’re just making sure our biggest asset (our house) doesn’t fall apart. And even then it’s too much money to keep up with.

I’m grumpy. Definitely not feeling like an empowered debt warrior…more like an anxious sucker.

Scanning the Horizon For Black Ink

June 25, 2007

Dear Diary,

I think we might be doing too much laundry. It seems it’s all I do. Of course, this is one of the first times in my life that I’ve done multiple loads of laundry in a row, so that may have something to do with it. Maybe we’re wearing too many clothes. And then there’s the dishwasher. Its hunger knows no bounds. Forever gorging and disgorging flatware and china.

Everything is mixed up. I went to a new gas station. Who knew that gasbuddy could point out a station right under my nose, even closer than the habitual haunt, with cheaper gas. In fact, looking at some old receipts I was appalled, simply appalled at the price I’ve been paying for gas.

But this Saturday, intoxicated by the sheer madness of a mid-day gas purchase, I forgot the receipt, so my number crunching will have to wait another day. My number-cruncher alter-ego is seething with anticipation. We bought the gas at high noon. It was about 83 degrees Farenheit. Twenty full degrees warmer than the usual Saturday run. So it was, perhaps, high volume gas. How will I ever sort it out the cost-benefit analysis?

What strange ways I’ve taken up. Pulling plugs out of sockets without a thought. Driving 55 m.p.h. (but trying not to piss people off, if possible). Being very aware of when I can coast down a hill. Noticing with no small amount of smugness the other drivers ludicrously weaving in and out, spilling their precious fuel — and then arriving at the light at the same time as I do. Thinking very seriously about whether we are laundering too much.

Have I studied a whit for the EPPP, the national licensing exam for psychologists? No. Not of late. I have drifted into a fringe subculture of frugality, blogging, and plug pulling. Does this mean that I am figuratively “pulling the plug”? One wonders.

I wonder if there is a parody of personal finance sites out there. There must be, no. Maybe an Onion piece? This drifting into the trees, losing sight of the forest. I have lost sight of the budget. Just for a few days, but it nags at me. The budget. There’s where the goodies are. Not this niggling penny pinching. The big plans, the straight and narrow, the total control — the end of debt. How far off is it? When shall we strike it? Like a sailor up the rigging, looking for land, I scan the horizon for black ink. Thirsty.

National Debt — Boomer Legacy?

June 21, 2007

Recently in my listening this track has struck me as being somehow related to the frugalist mindset.

Papa’s faith is people
Mama she believes in cleaning
Papa’s faith is in people
Mama she’s always cleaning
Papa brought home the sugar
Mama taught me the deeper meaning

Thoughts about this?

Since I’m not a baby boomer, I won’t list the artist, but you can check out her extraordinary fan website here. It includes tons of cool stuff like all the alternate guitar tunings for her songs, full lyrics, art, etc. As fan sites go it is stunningly competent, thorough, and useful.

Speaking of boomers — Ken Wilber (shudder?) has an interesting book called Boomeritis. One of the premises is that boomers eat their young. Highly pertinent regarding parenting we’ve observed. The book itself might be okay if it was the first of his you’ve read, but otherwise is mind-numbingly repetitive. Still, the guy obviously knows a lot and has lots of interesting ideas. Beware of New Age sentiments. To be fair, he is as critical of New Age marketing as the next skeptic.

If you’re in a reading type of mood, have bent toward social commentary, I highly recommend this book by Christopher Lasch, The Culture of Narcissism. A lot of it relates directly to spending habits, consumerism, current trends in helicopter parenting (eternal hovering). I just did a search on this site. I am dumbfounded that I’ve not mentioned this before. Dumbfounded.

My dad (depression-era generation) driving in parking lot: “Okay, here we go.”
“What?”
“Look at this, crikey. It’s a very interesting phenomenon. The me-generation in action. Look at them.”
The couple in front of us are wandering through the parking lot in front of traffic, seemingly oblivious to their holding it up.
“It’s a fascinating phenomenon. Other people simply don’t exist!”

My dad is, as he likes to put it, “a trained social scientist.” So he does have a frame of reference in his observations. Not sure I’ve connected all the dots here. One thought is that when the baby boomers are gone, it’s possible that the cycle of debt slavery at the personal and national levels, if it hasn’t collapsed already, will begin to subside.

Another thought is that with the boomer parenting in evidence, living without limits and incurring debts as ways of being in the world are actually going to get worse. Bummer. Must think good thoughts!

Debt Reduction: 7 Crucial Habits to Cultivate

June 19, 2007

The field of psychology has a history of debating just how people learn. Is it through reinforcement? Social modeling? Good examples to follow? What you want to learn is how to cultivate the good personal finance habits so you can eliminate credit card debt and get on with your life. You want this. I think I can help.

  1. Reward yourself. The sooner after the thrifty behavior the better. Rewarding yourself before, during, or some time remote from the behavior will not have the desired effect — creating a positive reinforcing association with the habit you are trying to cultivate.So reward yourself right after you defer the impulse purchase, make a menu plan, buy gas in the wee hours of the morning… Make sure the reward is something you love, ice cream, playing soccer, spending time with the kids, whatever it is for you.
  2. In the beginning, reward yourself often. If you are just beginning to develop habits they require constant reinforcement in order to stick. This is in the beginning. So for the couple of weeks reward yourself as often as you can, again, as close to immediately after the desired habit as possible. We start to believe, somewhere in our brains, that looking for bargains actually causes ice cream to materialize.After a couple of weeks you need to taper off the rewards, otherwise they become meaningless. But in the beginning, continuous reinforcement is powerful. It is the strongest reinforcement schedule for establishing a habit. This is well documented by lots of empirical research.
  3. Make your rewards non-routine. When I say non-routine, what I really mean is unpredictable. After continuous reinforcement, which has limited utility, unpredictable rewards are the next strongest reinforcement schedule.A good example? Slot machines. This is why people get hooked. The reward is unpredictable, but it comes, and that has a powerful effect on people. This is not to say that routine rewards are not good, they are fine. But mix it up a little.
  4. Make it a ritual. This may seem to contradict the last point, and in a way it does. But ritual has its own power. Going for gelato after the kids clean their room every Saturday may not be, strictly speaking, as reinforcing as a random treat, but it sure will work miracles on Saturday!More importantly ritual provides continuity in our lives, comfort in order, and helps us focus on what we value. I would not rely solely on ritual, as it is not the most powerful reinforcer, but having a ritual or two can be very powerful.
  5. Join a community with similar debt reduction goals. Truly the internet is fantastic for this. You can go to personal finance blogs and read about things that people on the outside generally are very reluctant to talk about, including their big financial blunders, how much money they make, how they choose to spend it, how they got into credit card debt, and what they are doing to get out of it.Community offers a variety of food for thought, ways of looking at things you might never have come up with on your own, handy tips, as well as the emotional support that comes from knowing your predicament is not yours alone. Do not underestimate the power of being able to identify with people you like and respect.
  6. Find a debt guru. I am not a big fan of gurus. They tend not to live up to their initial radiance. So gurus aside, find someone you like and respect who has walked the walk for longer than you. It might be someone you’ve known personally for ages, or someone you strike up a rapport with on a personal finance blog. It’s probably more effective if you actually know the person in actual time and space. Have an appreciation for their personality and how they make their finances work for them.I know a lady in her late 60’s (I’m guessing) that I’ve known since I was about five years old. I now recognize her as being a titan of frugality. We saw her during our vacation. She offered to take us and the kids out to lunch. She said “we can go to [crappy chain] or [a local Chinese restaurant].” That part was a no-brainer. The chinese food was good and inexpensive. When my wife remarked that she wished our kids were more adventurous eaters, that she wished our kids would eat sushi, my guru bridled. “You don’t want that. That’s expensive!”Now that might sound cheap. Her point was that if you can avoid fostering expensive habits in your kids, then avoid it. When they grow up and get jobs they can acquire whatever expensive habits they like. She had picked both restaurants because they were adjacent to parks, planning to take the kids there if they got squirrelly. She had thought of everything. Would it surprise you to know this lady grew up in the Mid-West?
  7. Consider psychotherapy or some kind of debt counseling. This may strike some of you as very non-frugal. It is not for everyone. It may seem draconian (the expense!) or even counterproductive. It may fall under the heading of “treatment of last resort.” But some of us are really going to need some outside help if we are going to make substantial changes in our habits.Debt counseling may be an excellent option. Another is psychotherapy. If you are overwhelmed with negative thoughts that have evolved into larger attitudes and the way you are in the world, a good cognitive-behavioral therapist might be able to help you get some perspective.Are some feelings — regret, vulnerability, powerlessness — hard for you to get a handle on? Do you tend to be very energized and optimistic only to collapse when faced with the outcome of your decisions? This sort of pattern tends to be entrenched. Even when we know exactly what we need to do in order to get out of debt, save money, whatever the goal is — we stumble. This can be very frustrating and lead to plummeting self-esteem and self-punishment, not to mention mounting credit card debts.A good psychodynamic therapist, one that looks at some of the deeper meanings you attach to money, may be able to help you make sense of and even overcome this type of problem. The goals in this sort of therapy are ambitious, including making adjustments to our character. You can’t change your character, but you can modify it in ways that are helpful. Are you are confused about how your finances got to be such a mess? Then you might want to pursue psychotherapy.