broke207- now broker than ever!

this past thursday at the socialmediaFTW conference, i learned that 94.5% of all blogs end up being abandoned. and as friday was my 2 year bloggy-versary (though i’m not blogging with quite the gusto that i once did), i wanted to take a minute to celebrate the accomplishment of actually lasting this long. even if i stopped today, i’d still have been blogging longer than i managed to stay married, or longer than i have ever gone to the gym consistently.

in addition to celebrating my unlikely survival in the blog universe, i also have something else kind of exciting to celebrate. on october 12th, i’ll be starting a new job!

it’s pretty exciting stuff actually. it’s a position where i will have a chance to learn something new, better benefits, and a whole bunch of vacation (even snow days!), and an actual ladder to move up (you know, if they like me). unfortunately, with all this awesomeness, comes one minor downside: SUBSTANTIAL PAY CUT.

the plastic files.

first and foremost, i would like to apologize for not posting yesterday. i am still getting the hang of the daily posting gig, and also drank one too many bourbons after a particularly rough day and ended up face down on the couch at 8:30 instead of  writing my post. i repent. also, i am hungover as hell today- so my body is repenting too. but on to the promised content!

so i am very proud to say that a year has come and gone, and i have not used my credit cards even once. i did have to borrow money from the boyfriend on a couple of occasions, and i did certainly have more than a few months of barely scraping by (including and especially this one), but it still feels like progress to me. am i delusional? is learning to control my finances a gradual evolution, or should i have figured my shit out by now? i worry that it’s like being an alcoholic, where i either need to quit cold turkey or never get better…

as usual, i still have dreams and hopes of getting a tighter grip on my money and finally making a bigger dent in my debt this year. i’m still way behind from xmas and more other random unexpected shit (burst pipe!), but i’ve started a new habit to help defray at least a little of any future emergency money madness: i have become a gift card hoarder.

usually after xmas, i take any gift cards i might have and rush my little ass to the mall and spend spend spend…  but this year i promised myself that i would hold on to them for a bit and see what happened.  i have also amassed a few more from rebates and online surveys (i’ve had great luck with these guys), and my cache is looking quite tidy (see above). here’s my master plan:

resolved.

i was lucky enough to come into a bit of an xmas windfall this year. nothing earth shattering (most of it went to bills and to my saving’s account), BUT i decided to give myself a small allowance to spend on whatever i wanted. DANGEROUS. it could have been anything, or everything… i have a bad habit of burning through cash without really paying attention to where it goes, or really caring too much when it’s gone. i’m all like “oh, that’s was fun”, instead of feeling the intense sense of guilt and shame that keeps most people from getting in financial trouble.

the last year has overall been a good one for my financial evolution. this was the first year in over a decade that i didn’t use my credit cards even once. i also managed to have a savings account with actual money in it for more than 15 minutes. on the other hand, i didn’t pay off my credit cards as much as i would have liked, i didn’t manage to keep the majority of the money in my savings account, and i still didn’t start an HSA.

so for 2011, i have only one resolution. it isn’t to save more, or spend less, pay off the credit cards, or even open an HSA… (although all of those things are certainly worth keeping in mind). my resolution this year is just to PAY ATTENTION. wherever my money travels should take me this year, i would like to be watchful and be thoughtful about every dollar i spend. i’m thinking about leaving my debit card at home, giving myself a cash allowance, being more careful about monitoring my mint account… but it doesn’t really matter what i do, as long as i’m being vigilant.

i decided to lube up my resolution and get started a little early with the aforementioned windfalll. instead of just throwing the money into my checking account and going apeshit on whatever i happened to find first, i sat down and really thought about things that i wanted, needed, and would generally be too cheap or too broke to afford the rest of the year. here is what i came up with:

getting to the mailbox.

i pay my therapist to give me advice. that’s the way it works, right?  but today we talked about something we had never talked about before- MONEY. which is a little bit surprising that it took us this long to get to it… but what wasn’t surprising is that just like everyone else in my life, he gave me unsolicited financial advice. which is not what i pay him for.  and it made me really agitated for a minute.  i got a little sassy. there may have been some eye rolling…

but then, back to the part that i do pay him for, he made me talk about it.

step 1 of the 12 step process is admitting you have a problem, and i’m really good at that. probably too good. at the crazy doctor this week, i realized that I AM STALLING. i’ll admit my wrongdoings up and down and all over town, but i use my transparency as a shield to draw attention away from the fact that i’m not actually doing anything (other than making my slightly more than minimum payments), and i’m not sure why.

i have netflix movies from april sitting on my credenza. 4 of them actually, and i can’t seem to get them to the mailbox. theoretically, i should just put them in my purse and drop them in the mail slot at work, but it just hasn’t happened. it’s the simplest thing, and somehow i can’t manage to pull the trigger. it’s the same thing with money. yes, cutting back and saving money to throw on the blazing inferno that is my debt is difficult. changing lifestyles and making sacrifices totally sucks dick. but you know what’s not difficult? opening an HSA, or transferring my high interest credit cards to lower rate cards, or taking out a home equity loan and using it to pay off my debt.

every time i get agitated and defensive about money, it’s when someone who loves me has given me a sound piece of advice that i am just unwilling to follow. i try to turn it around to make it like they’re the jerk for meddling in my affairs, but i’m the jerk for being stuck, for being unwilling to listen and try. maybe i will make some big changes in the new year, or when i’m not so busy, or when i get my tax return money… but i probably won’t.

the good dr. and i didn’t get far enough to figure out why the hell i’m shooting myself in the foot like this, or how to stop being so stubborn and pointless, but it felt like a significant breakthrough anyway.

tomorrow, i’m gonna mail back my netflix, and maybe call my insurance company about setting up an HSA. at some point i need to realize that if i’m really serious about getting rid of my debt, i have to do EVERYTHING i can. not just the things that are easy.

please tell me that i’m not the only person who gets stuck on stupid shit.

actually, i’m pretty sure it is your fault.

so i’ve been hearing these commercials on my morning radio show where some dude starts yelling off a list of horrible financial woes:

debt collectors knocking down your door?
up to your eyeballs in credit card debt?
thinking that bankruptcy is your only option?

but then he brings it down just a notch to let you know:

IT’S NOT YOUR FAULT.

sure, people hit hard times. medical bills, lost jobs, some other things that i can’t think of right now… but the majority of people that i know who are financial wrecks (myself absolutely included) are that way because they made poor choices. it fills me with rage to hear the debt consolidation/credit counseling agencies preying on people’s need to be in denial about the reality of their financial situations. nobody wants to take responsibility for fucking up, but if you ask anyone in a 12 step program, admitting that you’re a fucking mess is the only way to make it better. so fuck you debt consolidation agency. IT IS MY FAULT- and here’s why:

1. i don’t pay attention to what i spend. i put my credit cards in the freezer over a year ago, which is a distinct improvement, but my debit card is with me all the time. i go out to eat constantly, buy crap on a whim (can you say series of 4 horse paintings?), overspend at the grocery store (i was in the whole foods for 5 minutes yesterday and still managed to spend $14). even thought i’m not creating any new debt, i’m not giving the money that i have the reverence it deserves- i just keep unceremoniously shoving it out the door.

2. which brings us to admission #2-  i don’t save enough. probably because i’m spending all my fucking money on nothing. for the most part, the really bad debt disasters happen when people are spending up to the hilt of their income and don’t have a cushion saved up for emergencies. then, the first time that shit goes really wrong, they bust out the credit cards. like i did. repeatedly. from the ages of 18-30.

3. even though my 2 cards are in deep freeze at the moment, they got in there in the first place because spent the first 10 years of my adult life spending beyond my means. i wanted to have grown up clothes, i wanted to buy people decent xmas presents for a change, i wanted to find out what it felt like for money to be no object. except that it is an object, a very big object with an 19% APR. too bad i don’t pay more than the minimum on my cards every month. it’s good that i’m not racking up new debt, but if i can’t control my cash flow enough to afford to make bigger payments on my credit card, then i’m never going to get out from under it.

maybe it’s because i just watched confessions of a shopaholic AND maid to order back to back, but i’m sudden feeling possessed to try to make some greater changes in my life. i’ve made progress from where i was, but i’m stalled out. i still have $13,000 worth of credit card debt, and i’d really like it to be gone by the time i’m 35 (that’s T-minus 2 years and counting). maybe i hate dave ramsey because i know that he’s right about making severe lifestyle cuts in order to cut my debt… actually, it’s probably the religious thing, but i am definitely in denial about the fact that real debt reduction does require some sacrifice. now, i’m not going to go all crazy and start making drastic lifestyle changes (eat out less? stop shopping? start buying produce at walmart?) or anything… but i am going to admit that what i’m doing now is definitely not working.

step one down… 11 more to go.

what is the one habit/addiction that you SHOULD cut out of your life for financial reasons, but just can’t seem to let go?

where’s candy finnigan when you need her?

so, i read an article this morning entitled “6 signs you’re a shopaholic“.  now i’ve seen confessions of a shopaholic (meh). i’ve watched multiple episodes of intervention. so i figure that it’s going to be all like: sign #1– you hide your purchases from your loved ones.  or perhaps sign #3– you’re in complete financial ruin. going into this article, i was feeling exceptionally confident that i definitely was NOT a shopaholic. but now, i’m not so sure.

1. you spend more when you’re emotional. um, yeah. doesn’t everyone? i’m not exactly cleaning out the macy’s every time my boss and i have an awkward moment, but a really nice meal or a totally unnecessary pair of completely impractical shoes after a period of high stress or general bummed-outness is a beautiful thing. nice things feel good. so when exactly am i toeing the line between appropriate reward and blatant shopaholism?

2. your spending habits result in added stress. yes, every time i buy something that i really don’t need/can’t afford, it makes me feel a little guilty. yes, every time i get to the end of the month and realize that i don’t have any more $$$ to throw at my debt above the minimum payment, it makes me feel like a failure. but no, my apartment is not filled with bags of garments with the tags still on, my FICO score in the healthy 700s, and i haven’t dodged a creditor call since i was 19 (sorry columbia music house! 15 cds for $9.99 my ass!).

3. you’re a compulsive spender. check. once the dam breaks for me, it’s all over. if i choose to get one thing that i don’t need/can’t afford (usually both, see question #5), i am also simultaneously making a decision that i can have everything i want/can grab. 1 pair of full price pants at the gap usually equals $300 (or more) in new clothes.  i actually find that it’s easier for me to pretend i can have everything and let myself try things on. when i leave my brain open to the concept of buying, rarely do i ever find something so amazing that i can’t leave it behind. it’s the times when i tell myself that i can’t have anything, that i go apeshit and come home with a briefcase and 3 pairs of 4″ heels (true story).

4. you can’t live without plastic. this used to be true about me, although since the cards went into the freezer, i’ve definitely learned to live without them. that said, i still cheat a little with my gap card (i do it for the points!), but i always pay it off completely every month.  however, there is still something very seductive about credit that makes it hard for me to close my legs.  i always make sure that i have enough cash in my bank account to pay my bills, but if i want something additional and don’t have the actual real money, somehow i can always convince myself (see question #5) that i will have it next month, and that i’ll pay it off before interest even starts to think about accruing. do you know how many times that logic has turned out to be true? ZERO. yet i keep doing it. that’s seriously f-ed.

5. you’re constantly making excuses. guilty. actually, i’m the best excuse maker i know. everything from “i don’t want to  let that coupon expire” to ” i really need to start building a more professional wardrobe”.  i’m good at it because i can generally find a genuinely valid excuse to buy something. it’s not like “that top will look amazing one me when i finally get that boob job” or “my mom will really love these be-glittered gnome figurines”.   i’m smarter than that at least.  but the truth is that i’m a smooth talker, and if i want it, i can figure out a way to bring it home with a clear conscience. (until i actually get home and then the guilt settles in- see #2).

6. you’ve tried to control your spending in the past. hey wait! what if i’m trying to control my spending in the present? how exactly is that a bad thing? the best part was that their advice was “set up a budget”. um… so you mean “keep  trying to control your spending”? i’m confused!

so, do i have a problem? probably a little. i wouldn’t have $15,000 worth of revolving debt if i didn’t. but i also don’t think that candy and the intervention posse will be sending me off to detox anytime soon. i completed step one (admit you have a problem) a long time ago, and i’m making (slow but steady) progress. today’s little check-in however reminded me that i still have a long way to go.  maybe it’s time for some outpatient financial therapy?

do we inherit our spending habits?

yesterday was my mom’s birthday, and i’m telling you right now- she is one amazing lady. i’m talking about a woman who made us quiche out of government cheese when we were on welfare. if that isn’t the definition of class (and resourcefulness for that matter), i don’t know what is. however, if i did have to choose one thing about my upbringing that i would change, it would most definitely be my financial education.

our little family would eventually climb out of the welfare system, and make a pretty nice life for ourselves. there was private school, themed birthday parties, 16th birthday cars (not that i ever learned how to drive…). life was good. but somewhere in the transition between poverty and  upper middle class-ness, the lesson about how not to end up back in poverty again got lost. i was never taught the value of saving. i didn’t learn the rudimentary aspects of bank accounts, and certainly the mysteries of the credit card APR were never discussed. and the day i learned that i would have to pay back my student loans… shocking! i entered into a world of financial independence not even knowing how to write a check.

what i did learn about was shopping. for necessity, for celebration, for fun- new stuff came into our home in a steady stream. cars were traded up every 2-3 years. new living room furniture arrived on roughly the same schedule. it was no tragedy really, my family could afford what they bought- but all i came out with was the understanding that shopping is a constant need, the ultimate way to fill up the empty spaces in life. it’s still my biggest crutch. in times of crisis, some people might get drunk, or pick a fight, or eat a whole cake… but nothing cheers my broken spirit more than a good spendy trip to the mall. not good. especially for a person who doesn’t make a lot of money or have any sort of savings cushion (what’s that again?) to fall back on.

when i was first starting out on my own, i knew so little about money- and wanted so much to maintain that flow of stuff into my life, that i made all the cardinal mistakes:

1. i took out bigger student loans than i needed to so i could spend the money on “fun” things (all of which i no longer even remember buying/having/enjoying).

2. i opened a store credit card, bought one set of calvin klein underwear, and then never paid it. the black mark only just slid off my credit report last year.

3. i opened 2 high interest (not that i ever really knew what a fair interest rate would have been) credit card accounts, and kept convincing myself that i “needed” to buy things that i couldn’t afford, and that i would pay it all of on my next paycheck, or student loan, or tax return, or birthday. i never did.

4. i didn’t save. anything. ever. so when i lost my job and unemployment didn’t kick in for 2 weeks- i had to sell all my CDs just so i could eat.

i think it’s pretty obvious from the contents of this blog that i still struggle, all the time. i still have crazy debt. i still spend too much. i still think that shopping is the cure-all for my problems. but i’m learning, and at the ripe old age of 32, i finally feel like i’m pulling the airplane out of the tailspin.

but absolutely no disrespect to my mom. kids are hard! i think that parents are expected somehow to know everything- to do everything the exactly the right way for their children, and i don’t really think that’s fair.  for all of my lack of financial education, my mother gave me my sense of humor and style, my ability to love and forgive, listen and empathize, my eternal optimism, and my general gratefulness to be alive in the world right now. i may have some debt (ok, some serious debt), but i’m not a hooker or a ponzi schemer. i rarely have more than 2 drinks, i give really  good presents, and i can still name all my US presidents in order in under 15 seconds.

i guess the point here is that i think we should never stop trying to be better (for ourselves & our kids). i will learn from my mother’s mistakes as well as her successes. although i’m sure i’ll find some other fun way to screw up my future children, they will most definitely be taught how to balance a checkbook, and how to properly sacrifice to the gods of FICO.  and they will most definitely be loved- even if they manage to fuck up their credit anyway.

you’re the best mom! happy birthday!

snowed in.

as evidenced by the 2 feet of snow currently carpeting the streets of portland, january is usually a pretty tough month here in maine. january is also traditionally a tough month for me. stupid clean slate/new year expectations!! it’s so easy for me to make that list, to fantasize out loud about how at this time next year i’m going to be somebody way better than i am right now…  but it’s so hard to get it started. and if by the end of january i haven’t quite gotten things moving, i have a hard time not giving up completely and writing my goals off for yet another year… no wonder i’ve had $16,000 worth of unchanging revolving debt for the last 5 years.

the punch line here is that my credit score is in the high 700s. i pay my bills! on time! i have a decent job, and had i been more disciplined, my debt probably could have been long gone right now.  but the high hopes and the bad habits are always at battle, and right now, the bad habits are winning.

why such a bummer today? well, yesterday i decided to take a look at my debt tickers and make sure they were all sufficiently updated. here is what i learned:

in the 3 months since i tallied and posted my total debt, i have only paid off $1,395.57.

actually, one of my two credit cards went up in balance by $190.

oh, and despite throwing over $1000 at my other (highest balance & highest interest rate) credit card, my total went down by a mere $369.87.

depressing. depressing. depressing. what went wrong?

1. well, thanks in good part to xmas and the burlesque, i spent more money than i had. i was stressed out and wasn’t careful about my spending. i ate out instead of cooking, and bought stuff to masque my stress.

2. research shows that people who write down their food intake lose more weight. it stands to reason that i gained more debt when i stopped balancing my checkbook.

3. i’ve only been paying the minimums on my credit cards, and according to my favorite financial calculator at free-financial-advice.net, at the rate i’m going, it will take over 4 years for me to pay off my high-interest (20%) card (you know, the one with the $10,000 balance). i could SHAVE OFF A WHOLE YEAR OF PAYMENTS if i gave them $100 more per month.

but anyway,  as much as i’m good at ruminating about what’s wrong, i’m less good at formulating plans of action, and even less good at implementing them. regardless,  i think that the goal is still to never stop trying. so here’s my plan:

1. call up credit card companies and beg them to lower my interest rates. i haven’t asked in a while, this could be my year!

2. make an effort to pay at least $50 more per month on my higher interest card. $100 would be better.

3. balance that checkbook!

i’m sure there are many more things that i could do (any brilliant suggestions out there?), but a small start could be just do-able enough to keep me motivated until the snow melts.