“May, 2007” Archive
May
31
My debt load has some obvious impacts on my finances, i.e. a lot of money I make goes toward paying my debts and not toward saving, investing for retirement or saving for my daughter’s college expenses. That said, there are some other, less obvious ’side effects’ from my ‘debt disease’ that have a fairly significant impact on my life:
Job Choice — Although I am by no means miserable at my current job, I would certainly love the opportunity to do something different that gave me a deeper sense of satisfaction. Unfortunately, for the moment I must take a job that pays me well, has AMAZING health benefits for me and my daughter with a company that has virtually no risk of a layoff. No, this isn’t such a bad thing, but my ability to ‘experiment’ or otherwise revamp my career is on hold until my debt is gone. I often wonder if I would be a happier person if I could actually pursue a career where pay was not the overriding, motivating factor.
Stress — Does being this far in debt keep me up a night, cause me some sleepless nights and cause me undue stress? YOU BET IT DOES! This stress used to cause me to take on other destructive behaviors such as binge eating which in turn led to weight gain. Through my diet and exercise program I have found new outlets for this stress. Even with my debt progress however, I still have the occasional sleepless night thinking about the mistakes I’ve made and how I will manage to get myself on the right track again.
Retirement Savings — Given that I must put a good deal of my earnings toward repaying my debt, my ability to save for retirement is very limited. I do contribute to my company’s 401K plan because I don’t want to give up the ‘free’ money I get from the match, but for now that is the extent of my retirement planning. By being in debt at the levels I am, I have easily added 10 years to my working life, or alternatively, significantly increased the levels of saving I will have to achieve in future years in order to reach my retirement goals.
Are you experiencing any of the same ’side effects’? Any others?
May
30
Since I know I didn’t have a clue how much debt I had until very recently, I figured a good question for the poll this week would be “Do you know EXACTLY how much credit card debt you have”. My guess is that a fair amount of folks don’t really know how far in the hole they are; should be an interesting poll.
I’ve received a few emails and comments from folks asking when the credit card balances would be updated. I’m in the process of making my monthly payments so I should have the balances posted in a few days. Also, look for an IMPORTANT update regarding AMEX.
Also, as promised, I wanted to reveal the results of the prior two polls:
Poll # 1 — Do you feel guilty about the amount of money you charge to your credit
A total of 87 people voted in this poll and the results were not all that surprising:
- 23 (26%) people said they feel ‘Very Guilty’
- 31 (36%) people said they feel ‘Somewhat Guilty’
- 33 (38%) people said they feel ‘Not Guilty at All’
This poll indicates that among my readers, there is a tremendous amount of guilt about debt. I know this feeling and frankly the only way to get rid of it, in my opinion, is to ELIMINATE THE DEBT!
Poll # 2 — Are you currently hiding debt from your spouse or significant other?
A total of 86 people voted in this poll and the results, in my opinion were stunning:
- 23 (27%) people said ‘Yes, and the guilt is killing me’
- 63 (73%) people said ‘No, my spouse or significant other knows our financial picture’
To me, the fact that there are 27 people out there, a small microcosm of the population, that are hiding debt from their spouse indicates to me that this problem is HUGE. For those readers who find yourselves in this situation I urge you to come clean, even if that means involving a marriage counselor. I’m not a trained professional, but in my experience, hiding debt will eventually destroy your marriage, particularly if there are other stressors present.
May
30
My main focus over the past few weeks has been on getting things resolved with AMEX and in recent days exploring a Debt Management Program (DMP). What I have ignored and seemingly continue to ignore are the root issues that caused me to get into trouble in the first place. In an earlier post, I sort of glanced on this issue but I realize looking back that this post focused more on the logistics rather than the root causes. So, in the first of probably a two or three ‘parter’, let me try and address some of the root causes of how I got into debt.
“Keeping Up With The Joneses” — Like many of us these days, I fell into this trap once I graduated from college. Whether it was having the latest gadget, nice clothes, the latest bestselling book, nice car or big screen television, I always seemed to have a desire to impress my friends and neighbors. In addition I always seemed to want to go on a nice vacation, staying at fancy hotels that in retrospect I simply couldn’t afford. Throughout this period, I wasn’t paying any attention to my checkbook. my credit card bills or my spending overall. I’ve truly come to realize that “keeping up with the Joneses” will not only put you in a dire financial situation but it will also make you a fairly unhappy person overall. I’m learning to be thankful for the things I have and I’m also learning a hard lesson in “needs” versus “wants”. For those readers who are coveting their neighbors house, car, furniture, gadgets or gizmos, I would posit that those folks are in debt up to their eyeballs in order to support their lifestyle. Don’t fall into this trap.
Not Living on a Budget – Yes, this may seem like an obvious one, but living on a budget not only would have controlled my spending but it would have provided me a wake up call much earlier as to just how BAD my credit card situation was. I know this may seem hard to believe, but until I started this blog I didn’t know precisely how much credit card debt I had. I knew it was bad, but I didn’t know just how bad. I didn’t know how much money each month was truly going to the credit card companies. Making a budget forced me to look at this and it was an amazing eye opener. For those of you in a mountain of debt, your first step, today, should be tracking your spending for the next 30 days, down to the penny, so you can prepare a workable budget. This will force you to confront your debt head-on and will enable you to examine ways to cut.
I don’t want to write a novel in this post, so I will continue with my top reasons I landed where I am today in another post. I’m anxious to hear some feedback from my readers as to why they have landed in debt.
May
29
My apologies to all my loyal readers for the brief posting hiatus. I have been visiting with my daughter up in Alaska this long weekend and I vowed to remain ‘unplugged’ during the time I spent with her. Thus, I haven’t been posting. I’m heading back to Seattle tomorrow so look for my posts tomorrow. I have lots of new things to report including some info regarding the first DMP proposal; mostly good news but we aren’t there quite yet.
I hope everyone had a good Memorial Day Weekend. To all our men and women in uniform throughout the world, I say with all sincerity, thanks for providing me the freedom to enjoy my life with my daughter. Nothing I will do can compare to the sacrifices you make daily and for that I am eternally grateful.
To any readers with son or daughters or other loved ones in the military, my thoughts are always with you.
May
23
Some of you may know from reading my post about Moonlighting ideas, I am a home-based travel agent. I work for a host agency that does all the ticketing for any airline reservations I book, and collects and distributes the commissions I generate; I get a 90% share. Well since this is my blog and I have already decided I will not take donations from folks, I am willing to say I am willing to earn your money as your travel agent. I am a certified Hawaii Destination Specialist which means I know the great places to stay, things to do, places to eat in the Hawaiian islands. That said, I can book you any vacation package, any cruise, any hotel and in the coming months any airline ticket; US airlines don’t pay commissions on tickets but many overseas carriers do.
Now I know many people question the value of a travel agent, particularly with online sites such as Expedia, Travelocity and Orbitz out there. Well, having worked in the business for one of those companies I can tell you that there are pretty good margins built into the packages. So, what can I do for you? Well, clearly if you are planning a trip to Hawaii I can absolutely offer some value-added advice given my familiarity with the place. I can also give you very good ideas for trips to Seattle and NYC. Now, for your price shoppers out there, I will just about guarantee you that I can beat any price you find online and still make a few bucks from your business, all of which goes directly toward my debt.
So, for all you altruists who are stricken with the travel bug, I’d urge you to contact me at travel at dollarbuydollar dotcom before finalizing your travel plans. Even if you know EXACTLY what hotels you want, like I said, I’ll just about guarantee you a better price.
UPDATE: I forgot to mention that I get AMAZING deals on cruises, so if you are a cruiser, I’d urge you to check in with me as well.
May
23
So I met with the attorney this morning regarding AMEX, who I have now fallen behind with by 60 days given their astronomical rates. She told me something I frankly expected, which is they won’t really want to deal with me until they get close to a charge-off situation. This is essentially what their internal collection folks told me without being explicit. So I have a few options:
- Go directly to Consumer Credit Counseling and enter a DMP
- Wait to see what can be worked out once AMEX feels they truly will not get paid from me. This means a black eye (perhaps a temporary one) on my credit report for sure. The other danger here is that my other cards, all of which are current could evoke a “universal default”, although Citibank and Bank Of America, at least on my accounts, don’t have this clause. Chase does but I have already had that account closed in an effort to keep my interest rate down
- Keep paying the other cards and do everything possible to get back on track with AMEX. This is unlikely given how much money they want from me at this point unless I make a withdrawal from my 401K: a possibility I am looking into. I would pay off one or more of my cards in hope of securing a good balance transfer rate; such a rate may or may not materialize
As I am not a homeowner, nor do I frankly plan or desire to buy anything in the next 3-4 years, the DMP is sounding like the more reasonable option to be honest. It avoids bankruptcy and will certainly get my interest rates down, including those with AMEX. I’m a little torn between waiting it out and playing hardball with AMEX, as they will inevitably try and work something out before charging it off to a collection agency.
On this matter, I’m seeking YOUR feedback. Did my lawyer give me bad advice? I’m really uncertain as to what to do. I’m willing to work hard, taking on extra jobs to get the debt paid off but AMEX is really screwing me up. With my credit already in the tank, I almost feel like it is worth waiting it out with AMEX and seeing what kind of settlement we come to.
UPDATE: Made use of my telephone legal services and have found an attorney who will make a proactive attempt to negotiate with AMEX, using my potential for bankruptcy as a lever. This is what I wanted. The worst AMEX could say is no, at which point I will consider other options, i.e. DMP.
May
23
This morning I will be meeting with my attorney to discuss options to deal with AMEX. I’ve made it clear to my attorney that I don’t want any kind of debt settlement or partial payment of the debt unless she feels this is the best way to go. I would only agree to some sort of partial, “lump-sum” payoff if AMEX agreed to report the account as paid in full and current. I anticipate we will be discussing several options during our meeting so I will try and keep an open mind about things. My meeting is at 11AM Pacific Time, so hopefully before the end of the day for those readers on the East Coast, I will have some news. If nothing else, I will be able to report what the go forward strategy is with AMEX. Look for an update sometime later today.
May
21
I didn’t get any responses to the giveaway, so I’ve decided to extend it until Wednesday, midnight Pacific Time. If nothing else, just drop a comment here so I can give something back to my readers.
May
20
Several of my readers suggested that I add a donation tab to my page so people can donate money to aid in my debt repayment. At first blush I thought why not, as long as part of that money went to charity. Anyone who donated would be doing so of their own free will and presumably because they want to help me or thank me for telling my story. What harm could come from that?
After some further thought, I decided this would be a bad idea for one main reason:
While good money might come from this tab, it doesn’t address the fundamental behavior shift that will be required to KEEP myself out of debt once it is paid off
To those folks who have said in email or in comments that they want to thank me for telling me story or think that I deserve some help since my blog is helping others, I sincerely thank you for those kind words, but I cannot accept your donations to help with my debt. As an alternative means to showing your appreciation, I’d ask that you spread the word about my site to others who may benefit from it, so they too can see that it is possible to dig yourself out of a huge hole like the one I find myself in.
For those who absolutely INSIST on making some type of donation, I will make this concession. You will have to contact me via email in order to get my PayPal account. In addition, ALL donations you make will go right into my daughter’s 529 College Fund and will not go toward my debt. My guess is that this will discourage folks from donating. Again, to those who would like to contribute to my debt repayment your generosity is appreciated but please understand and respect my need to conquer this “beast” on my own. I honestly didn’t think I would confront this issue with my blog and I must say this was a very difficult decision to make but I need to maintain my integrity, pride and self-worth. Taking donations to pay off my debt would just send out the wrong message and violate my principles and values as a person. I hope everyone can understand this and yes, I do expect some people to tell me how stupid I am for NOT taking the donations. Perhaps, but my pride is still intact and that will last longer than anything else.
May
16
Okay, so I had an opportunity to speak with AMEX and they offered me 25.9% interest rather than the 30.24%. An improvement? Yes. That said, it isn’t what will allow me to get this debt paid off and allow me to meet my basic living expenses. So, next stop is the attorney to see what she can do for me. I have fallen behind on AMEX because the interest rates are astronomical and they are getting very impatient about getting paid. I got one of those “14 days or else” letters in the mail yesterday, which is another reason I am seeing an attorney.
I’m also contacting my family members to see if I can get a loan from them in order to pay off AMEX and get rid of these jokers once and for all. The fact that they are completely inflexible really annoys me. They honestly WOULD like to have me go through credit counseling or declare bankruptcy rather than try and work out something reasonable. Oh well, lesson learned. I will have to have credit again, but it won’t be through AMEX that is for sure.
