Thursday, October 07, 2010

Americans reduce debt spending -- we got the message

If the Federal Reserve or the nation's banks are waiting on U.S. consumers to heat up the nation's economy by going back to our old ways and spending more money on credit, it's going to be a long wait.

The Federal Reserve reported Thursday that credit card debt is down for the 24th straight month.

There are a lot of us out here that got the message that you don't trust us and that you think we are over extended on credit. The truth is, we were overextended, even though we didn't know it until you SCREWED us and jacked up our minimum payments and interest rates, while the Fed rate and the rates banks charge each other plunged to near zero.

You pushed a lot of us to the brink, or past it, financially by pulling the rug out from under us. There are a lot of us that you are charging 20 or 25 percent interest, or more.

I am one of the fortunate ones, in that I still have a job. But my paycheck isn't getting any bigger in this economy, and hasn't for a couple of years now. So, there is only so much money I can pay to banks and creditors, and they are already getting all I can give them and still eat and have a roof over my head. The credit balances are coming down, because I haven't used the cards in a while. But, none of you banks have dropped the interest rates you are charging. So there will be no more charging. My intent is to make that a permanent condition.

The industry commonly refers to credit card debt as "revolving credit." Well, there are plenty of us that are tired of the revolving. We are tired of circling the financial drain, while you make profits off of us that are more than fair, above and beyond covering the losses on credit that goes bad.

I am fortunate that, at least at this point, I got my wake-up call in time. I still have an opportunity to pull back from the drain IF my job doesn't disappear. I'm optimistic I will come of of this economic downturn far better off than I was when it started.

In a way, you did me a favor. Some of you will still get some money out of me for a few more years, based on the credit already extended and the outrageous interest you continue to charge. Before all this started, I was on pace to pay, and keep paying, all of you for decades to come. That will end. Not soon enough, but as soon as I can make it happen.

That may not help the economic recovery today, but it will make me a much wiser consumer in the future. And it is going to make me much more critical of how my money is used, not only by me, but by those I buy things from, those I bank with, invest with and pay taxes to in the future.

Wednesday, October 06, 2010

Debt snowball is starting to roll

I've paid off my first credit account since deciding to use the debt snowball method to tackle my outstanding debts.

One down. Nine to go, including $100 dollars I owe a family member.

Actually, that $100 should have been the first bill I paid off, but I wanted to tackle the interest-charging creditors first. If all goes as planned, I should get 2 more small debts paid in the next 3 to 4 months, including the family debt, but I am anticipating that the holidays will throw me off my budget, as I have not yet factored in those seasonal expenses into my new budget, the snowball may grind to a halt in December.

Still, it feels good to be not only seeing the total debt number slowly falling but to now know I will be paying one fewer creditor each month.

I am also well on my way to making this whole thing an official Total Money Makeover, a la Dave Ramsey. I actually found a used copy of Ramsey's "The Total Money Makeover: A Proven Plan for Financial Fitness" book last week and bought it. I finished reading it in three days. The steps farther down the line, like aggressive saving for retirement, even wealth building, seem far, far away.

But it's a start. The debt snowball is starting to turn over.

I also closed two credit accounts this week I had, which were active but had no outstanding balances.

Onward and downward.

Tuesday, September 28, 2010

Getting off my can to earn some coin

I've spent part of the last two days carting recyclable cans and bottles and taking them back to stores for refunds. And I'm still not completely done.

I guess I let the cans and bottle stack up for a while. I haven't bought any beer or soft drinks in months, and still I had a ton of cans and plastic bottles stacked up and tucked away.

I hate taking the cans and bottles back. It takes so long and its messy. The machines that you have to put the bottles and cans in to be counted always seem to be needing serviced, and often they don't count some of the cans at all. It's a huge pain in the ass.

The maximum most stores say they will let you return at once is twelve 12-packs, or 144 bottles and/or cans. That seems like a lot, but for all the lugging, sorting, hassle and inconvenience, it nets 7 dollars and 20 cents.

So, I spent that last two days driving to multiple stores, waiting in lines, and sticking far too many cans and bottles into machines one-by-one, to be counted. The last stop was the worst. I was taking back a bunch of plastic and glass bottles. There was a large crowd at the machine and the machines kept breaking down on the people I was waiting on. Then, when I finally got to put my recyclables in, the machines quick working on me three different times. I finally gave up and brought about a third of the bottles I had hoped to turn in back home. So, I will still have to go back.

I hate to calculate just how much money that would equate to by the hour. I'm sure it wouldn't even be minimum wage. And the gas spent driving all over town will cut into my net return.

But I'm almost done. And so far, I've received $53 and some change. And I've got room again in my cabinets and closet.

I can say it's nice to earn some money, rather than think about spending money in my free time. It's kept me busy.

Now I'm debating whether to raid my coin jars and turning them in at Coinstar machines. I'm not a fan of paying 10 cents on the dollar for the machines to coin my coins. But maybe it's time to get rid of that clutter too.

Friday, September 24, 2010

Vision quest

It was not that long ago that I used to make a point of buying a lottery ticket every time one of the jackpots got big.

Sure, I knew I wouldn't win, but I could still dream, right? I justified the expense, even on weeks and months where I was stressed about finding a way to eat until the next pay day, by saying it I got days worth of daydreaming about what I would do if I won. It cost less than a movie ticket. Thus, the money seemed worth it.

Sometimes the dreams were grand, like buying homes for myself and family members, paying for my daughter's dream college education, setting my parents up for the retirement they deserve, and taking care of family members the best way I could. And of course I dreamed about toys. Lots and lots of toys. Cars, computers, TVs, electronics, cameras and vacations.

But on some of those tough months, it was hard to dream that big when I was consumed merely with trying to figure out how I could get the clothes I needed for work. Sometimes it was enough just to dream of winning one of the smaller drawings and getting some relief from the oppressive, paralyzing fear brought on by debt.

But tonight I had a new realization. I am no longer dreaming of some magic, quick fix to my problem. I was no longer fantasizing about what it would be like IF I somehow had money. I was merely daydreaming about what I look forward to doing WHEN I no longer have to pay so much of my salary for debt. It is amazing to think about and realize what I could do with the money I already make available to use for what I need and want, instead of paying of stuff bought years ago on credit out of convenience, or trying to buy the affection of family members who I rarely got to see, or due to lack of planning for large purchases.

The ability to do that is still a fair distance off. But I am growing more confident that I will one day get there. I am beginning to see it in my mind. It's not a daydream, but the visualization of what can, and will, one day be.

Sunday, September 19, 2010

Spread sheets are becoming my life

My new hobby seems to be crunching numbers. I am learning how to prepare, and stick to, a personal budget. I seem to spend a lot of my evening and weekend hours working on spreadsheets and doing math.

Some days I am looking for ways to pay off my debt as quickly as possible. Other days I am looking at the numbers to make sure my budget is practical and something I can live with for the foreseeable future.

I am fairly confident that I can pay the rent, keep the lights on and feed myself while paying on the debt each month. But the numbers are going to change going into fall. I know the utilities are going to start costing more. I have no air conditioning, so the summer bills are always the lowest of the year. But fewer hours of daylight and colder temperatures will require more electricity usage. That may mean there is less money to contribute to my debt snowball each month. But I think it can be done.

As I've mentioned here before, I've been using the Dave Ramsey baby steps as my guide to getting out of debt. But I have not fully followed all of his principles. For example, he tells people to quit putting money into retirement until they get out of debt and he also suggests using envelopes to keep track of funds for things like groceries, clothing, and other expenses that can tend to fluctuate, or where people can tend to overspend.

I have not adopted the envelope system. Nor have I stopped contributing to my 401(k) account. But I've been given both much more serious consideration. I think I may very well use envelopes to allocate my grocery and car and miscellaneous expenses. While I don't have much wiggle room in the budget each month, the few dollars I do have that are somewhat discretionary always seem to get spent, and that doesn't leave any money in the bank for things like oil changes or clothes, and those are things that will need to get addressed soon.

I have also been looking into whether it makes any sense to quit contributing to the retirement account where I work. I'm having trouble finding out just exactly home much more money I would take home each month. The best estimate I was given tells me it would not make enough of a difference to just reduce my contribution to the level at which my employer matches. I may be able to pay off my debt about 6 months faster if I stop contributing completely. But it will still probably take me 3 years to get out of debt without some extra income. So losing three years of retirement contributions and employer match scares me.

Right now, I'm not inclined to do that. But I've given it far more serious consideration than I ever thought I would. Maybe when I a few of my small debts paid and get making more progress it would make more sense to do that for a short period of time. But for now, I think I will wait. And keep on working my plan, even if it does not fit perfectly with Dave Ramsey's advice.

Wednesday, September 08, 2010

Johnny Cash was right about a spit-and-polish cure for the blues

The ol' wardrobe is threadbare. I was so relieved when summer started and I could start wearing short-sleeved shirts again, because I didn't have enough long-sleeved shirts to get me through the work week. The collars and cuffs of my shirts were worn out.

Now, with summer seemingly making a very rabid departure, I realize I will soon need to do something about replacing some of my work clothes. That realization left me hanging my head, which forced me to stare right at my scuffed shoes. It was looking like my shoes would not make it through autumn either.

I decided to try to cover up at least some of the scuffs with a little -- or a lot -- of shoe polish.

It was a great reminder that a little shoe polish can work wonders. While the old, scuffed shoes with the worn soles could not pass for new, but I was pleasantly surprised with the results. A little gloss on the tootsies brightened my mood. The shoes may hold out for a few months longer with a periodic shine, buffed by a brush.

Maybe the fall budget won't have to take as massive a hit as I feared.

Tuesday, September 07, 2010


I've had this craving for a while and I can't shake it. That's probably because I don't know what I'm craving.

I'm hungry, even when I'm full. I'm thirsty, even after drinking lots of water. It's as if my body -- my brain -- is missing something it absolutely must have. I just don't know what it is.

It's driving me crazy. It's making me restless.

I don't know how to handle this restlessness in my budget conscious state. Back in the debt-building time, it was this sort of restless rumbling that used to send me off on some sort of impulsive buying binge or would prompt me to hop in the car and head out on some road trip.

Now, I don't know what to do. I look in the fridge. I open the cabinets. I stare longingly at the computer screen waiting for inspiration on what I should be doing.

The insomnia is coming back. I need a change. I need a focus. I need a destination. What, the hell am I looking for?

But there are no answers.

I want something. Something else. I just don't know what it is or where to look for it.

Tuesday, August 31, 2010

Deliriously bored

For the record, being financially responsible is BORING!

I'm going more than a bit stir crazy. Summer is ending, and I have a profound urge to be out doing stuff, attending festivals and fairs and celebrating the wonderful weather that is left. Instead I sit around plugging numbers into budget spreadsheets that tell me I don't have any discretionary funds.

It sucks.

It will be good once the bills are gone, I'm sure. Won't it? But for no now, and for far too many months to come, this suck and will continue to suck. Will it ever end?

I really feel the pull to go out and do my part to stimulate the economy by spending money I don't have for the benefit of others. Isn't that the message we are supposed to be getting from all those credit card commercials that seem to be on TV every break?

I may be getting delirious.

Monday, August 23, 2010

Learning to believe what the numbers show

I'm beginning to notice a pattern. My mood falters and my confidence seems do wane at the end of the month. I start doubting my ability to stick to the plan I've laid out for getting out of debt.

Maybe it's because the money between paychecks has to stretch the longest at this time of the month.

I was actually ready to abandon my payoff plan in favor of a different payoff plan. Fortunately, in going through this process I have actually been learning to build a budget and crunch the financial numbers. So, I crunched some numbers on a new plan that would have had me attacking my highest interest rate debt. What I discovered was that although I would pay off the highest of those two balances a few months quicker than on the original debt snowball method, I would not pay off my total debt any faster. It would just change the order of which debts got paid first.

What I'm learning is that although the debt is owed to several creditors at varying interest rates, paying off the total debt amount is still the ultimate goal, and there is only a certain amount of money I can pay to tackle that goal. I've crunched the numbers several times and in several ways, but at my current income, I will only be able to pay this off so fast. I can't make it go away this year. I can't get rid of it all next year. It's going to take about 4 years, maybe a little more, depending on what life has in store between now and then. But, it's probably not going to be less. There just isn't much more I can cut out of my basic monthly living expenses. I think I can conquer the debt at my current income. Additional income would make it easier, and perhaps faster. Maybe I can improve that income at some point, but I'm not counting on that in the current economy.

It's not great. But it's good enough for now, and getting a little better all the time. I just can't afford to panic. I can't afford to lose faith in myself of the plan. Mostly, I can't afford to spend money that for the next several years needs to go toward paying off this debt that I spent 20-plus years accumulating.

Tuesday, August 17, 2010

Don't go away mad...

I guess I should have been listening to Dr. Laura. It might have been fun to hear her say the N-word 11 times on nationally syndicated radio and then try to apologize for it.

Maybe Dave Ramsey will be back on middays again on 1190 KEX AM, now that Dr. Laura says she won't renew her contract. (Read her blog post here and read her apology here.)

Monday, August 16, 2010

Now I can carry a financial adviser clipped to my belt

Portland, Ore., radio station KEX, 1190 AM, has been promoting a smart phone application for iheartradio lately, and they finally convinced me to use it more. I had downloaded the app for my phone, but had not really used it, until today.

It was not the commercials for the app itself that led me to use it. It was the fact that KEX moved its Dave Ramsey Show broadcasts from midday to the 7 p.m. time slot. The station recently swapped time slots for Ramsey's show and Dr. Laura's show, moving Dr. Laura to evenings and Ramsey to midday.

That's when I started listening to Ramsey's show. I could usually catch at least part of the show during my lunch break. It was good reinforcement to my efforts to get out of debt and helped me formulate the strategy I am going to use to do that.

But today KEX, switched the show lineups again, to put Dr. Laura on at noon and Ramsey back in the evening.

I don't listen to the radio in the evening, so I was not happy with the change. I don't want listen to Dr. Laura's show.

So while looking for a way to get my Ramsey fix today I started trying to find out if any other radio stations on broadcast his show live. It took a little searching, and trial and error, but I did find one. So, if you are looking for an iheartradio station that carries the Ramsey Show live, the one I found was WTKG 1230 AM, out of Grand Rapids, Mich. I've added that one to my favorites.

I also learned that KEX wasn't actually broadcasting Ramsey live, even it it's midday slot. The show airs live from 11 a.m. to 2 p.m. Pacific time, so KEX had to be delaying the broadcast an hour. Now, I can actually listen to it live, either from Ramsey's own website, or on my smart phone. I can still get my audio reinforcement when it works best for me.

So, KEX, I may still listen to you in the morning on my way to work, but you have likely lost me for the midday lunch hour and that will mean the car radio will be on another station when I hop in the car for the drive home.

Tuesday, August 10, 2010

Departure for debt freedom suffers a slight delay.

I had hoped to start my 48-month debt payoff plan this month. I'm going to wait, though, until I rebuild my savings account.

It looks like it will be at least next month, or perhaps the month after, before I get the savings account back where I want it and can start tackling the first account on my debt snowball.

I'm not thrilled about that, but it seems to make more sense to do that than trying to tackle the debt without much of a cushion for unplanned expenses.

It's a small set back to what I wanted to do, but I think it's a wiser, more responsible decision.

Or at least I hope it is.

Monday, August 09, 2010

Putting my wallet on a diet put me on one too

Me efforts to get out of debt have involved some lifestyle changes. The biggest one is that I rarely eat out anymore. For most people, that may not be much of an adjustment, but it was for me. I used to live on fast food and other restaurants.

At one point I was actually convinced that eating out was cheaper than eating at home. My logic was based on a couple of points. One was that fresh food, on the occasion I did buy it, tended to spoil before I could eat it all. I reasoned that buying food that went to waste was a waste of money.

What I didn't realize at the time was that a lot of that food spoiled because even when I did have food in the house I was still eating out a lot.

I did not know that one of the points that Dave Ramsey suggests for getting out of debt was to go on a rice-and-beans diet. He often tells his listeners that the only time they will see the inside of a restaurant is if they work there while trying to get out of debt.

My dining out approach was in part fostered by the fact that I could often scrape together $5 for a fast food meal, but it was much more difficult to scrape together $50 for groceries. So, I kept eating out. At the beginning of this lifestyle change, as I did start buying groceries, I was actually paying for that food with credit cards. That was not a bright idea, but it got my budget turned around so that I could begin to realized that by buying food at the grocery store and not eating out, I could eventually spend less on food.

The fast food restaurants themselves actually pushed me to make the change by raising their prices. First it was Carl's Jr., where my favorite meal used to cost less than $5. Then it cost a little more than $5. And then, it got to be closer to $6. So, I quit going to Carl's Jr.

The places I went as a replacement eventually raised their prices too.

Another factor that pushed me to change was that my work schedule pushed me to go to work early in the day, which required a need to start regularly eating breakfast for the first time in my adult life.

So, my food budget went from less than $70 a week, to about $95 a week. That was just out of control. Now, when the budget is lean, I can get a week's worth of groceries for about $35-$40 when I'm my most frugal. I can include more variety and more fresh food for about $70. For the same amount of money I used to spend I can actually get more than a week's worth of food.

It's been a big lifestyle change, but it was a key to making the change from drowning financially each month to gaining enough buoyancy so that at least my nose is above the water line. I can't take in great gulps of air yet, but I can catch a breath now and again.

It hasn't ended the cravings for those Western Bacon Cheeseburgers. But Carl's Jr. changed their french fries to a style I don't care for. So I can live without them. And my budget sure can too.

Tuesday, August 03, 2010

Sick and tired of being broke and tired

Pay day is too far away and I'm out of everything in the house. I need to figure out how to do a budget.

There just not enough money left after paying the credit cards and the regular monthly bills to pay for things like food, household supplies and car expenses. I get the stuff paid that I get sent bills for, and then there is nothing left, but still stuff I need.

I am tired of this roller coaster. I think I have my shit under control one week, and then the next week I feel overwhelmed.

Perhaps the only real way to deal with this is to get a part-time job. But doing what?

In addition to some more income, it might be good to have something to do with my evenings and weekends. It would have to be better than sitting around staring at the four walls and the TV, afraid to move or go anywhere or do anything that might take gas to get there or cost any money at all.

It's manic. It really is. I'm financially manic.

On a side note, I added Google ads to the site. I doubt they will every actually generate much, if any, revenue. This site just doesn't draw that much traffic. But I find it quite ironic that I am writing about my battle against credit in my most recent posts, and the ads being served up around the post are enticing people with credit offers. How is that for irony? I'll let Google do there thing and I'll just do my thing and see if it all works out in the end.

Wednesday, July 28, 2010

Thinking seriously about which oil company gets my business

It's day 100 since the Gulf of Mexico oil spill began and BP has become a constant fixture on the nightly newscasts and in the morning papers and vilified on website, blogs and social networking sites. I don't know about you, but I have certainly changed my fuel buying habits since this crisis began.

I've started buying my fuel again from ARCO gas stations. ARCO is owned by BP.

So perhaps I am bucking a societal trend.

The decision is based entirely on economics -- mine.

Yesterday, on my way to work I notices the fuel prices for regular unleaded gasoline on two gas stations I drove past. One, the ARCO station that I have recently started using as my primary fuel station, listed unleaded for $2.76 per gallon. The Shell station that I sometimes have used to my fuel purchases listed it's price at $3.00 per gallon.

For the record, I'm rounding up, as I refuse to play along with gas stations' deceptive marketing strategy of listing the price in big type, and the 9/10th figure is small type. So, the Shell sign actually read 2.99 and 9/10ths. We all know that's $3.

At a price difference of 24 cents per gallon, it would cost me more than $4 extra at the Shell station to fill the tank. I can buy a meal for that price at a fast-food join, or probably more than one at the grocery store.

To be fair, the price at the Shell station actually dropped today by 4 cents per gallon, but it would still cost me about $3.40 a tank more at the Shell station.

One of the reason I used to be a periodic Shell customer was that I have a Shell credit card. It was not my primary fuel stop, as Shell tends to be more expensive than either Chevron or Texaco, for which I also have a credit card (different names, same company, same card for Chevron and Texaco). I got used to using the cards when I lived in California. It was so convenient to use the gas cards at the pump of the self-serve stations there.

ARCO was more of a pain. They don't take credit cards. So it required cash (or later debt cards). It took more time to go into the store to pay, or use their pay island kiosks.

So I paid a little more for the convenience of speed. Usually, I paid off my bill every month so it was no big deal.

But now, with gas prices back near $3 per gallon, sometime I have carried a balance over on those cards. I'm still trying to pay off a balance on one of them, even though I've been paying cash for gas for at least a month now.

In my effort to get debt free, I think I will keep my business with stations that offer the best price for fuel and don't tempt me by making it too easy to use a credit card. In this part of the country, that's probably going to mean buying fuel most of the time at ARCO, from BP's subsidiary.

For my money, BP is no more evil than any other oil company out there. In fact, ARCO's no credit policy is more benevolent, than the others companies that rake in billions of dollars every quarter -- every 3 months -- by charging steep prices for their fuel and more than 25 percent interest (or more) on their credit cards.

BP reported a $17 billion loss Monday for the quarter with costs related to the oil spill. Royal Dutch Shell will report earnings Thursday. In the first quarter, the company reported nearly $5 billion in net income for the quarter ending in March. But that's nothing. Chevron will report earnings on Friday, and Thomson Reuters expects the company to report a 30 percent increase in profits, to $52.5 billion.

I can live, with a little more economic comfort, with my decision.

Monday, July 26, 2010

Putting a new financial tool in my toolbox

I added a few links to the blog, including a debt reduction calculator. That find is pretty exciting, because it showed me in concrete terms when I can expect to get out of this hole I dug myself into.

I've crunched the numbers a couple of times. If I can stick to the payment plan the calculator spells out, I could be completely out of debt in four years.

Four years.

It's exciting, and daunting, all at the same time. The daunting part is wondering if I can maintain the discipline to stick to the plan after I start getting some things paid off. The second year could be the toughest one. I should be able to pay off a couple of accounts in the first 7 months. But I wouldn't be able to polish off the next account on the list until 23 months from now. Year three will pass without clearing off any more accounts, but then in year 4 I would clear off 6 accounts, getting through a new one every couple of months. It would be a very exciting year, after two very slow progress years.

The debt reduction calculator also showed me that two of the accounts, which are charging me some of the lower interest and carry the lower monthly minimum payments would stretch out payments, at the amounts I have been paying the last couple of months, for about 10 years. I would end up paying about twice the amount in interest I now have as a balance on a couple of my accounts. It was very informative and gave me the impetus I need to destroy a couple more credit cards. I kept one bank card in the event of an emergency. I also still have two gas company cards, but if I can continue to keep paying cash for fuel, I will soon have the confidence to trash those too.

Small steps. I know I should be making these decisions faster, but a lifetime of habits are hard to break all at once. I'm starting to realize there really is light at then end of the long tunnel. But it's not going to be quick to get through that tunnel, and there will be lot of dark days before I can emerge into the daylight on the other side. But there is something reassuring about facing the next four years and that's the realization that the older I get the faster time seems to pass. The past four years, in which I've dealt with the worst parts of this oppressive debt aggravated by a national recession, have gone by pretty fast, in spite of the panic. Four more, without adding to the debt, should be something of a relief. Right?

Thursday, July 22, 2010

Sometimes I have to talk myself into doing the right thing

Writing this post is actually a delaying tactic. I'm stalling for time. I'm trying to work up the courage to do what I know I should do.

While I've got pretty good in recent months about not using credit cards for miscellaneous purchases, I have only actually cut up one card, and that's the Chase card that is charging me obscene interest. The others I quit carrying and locked them away in a box. However, I still have the key to that box.

The justification, in my mind, for not cutting up the cards is that perhaps some emergency may arise, like my car breaking down, and the only funding access I might have would be those credit accounts.

But my vehicle is getting old enough now, that if something major happens to it, it would be time to walk away from it. It's lasted 15 years, easily 5 beyond what I though I would get out of it. And she's still trudging along, leaking some oil and burning too much gas, but still getting me where I need to go. She could, potentially, carry me to the end of this credit crisis, with some luck.

So, tonight, I was planning to take the big plunge and chop up the next-highest interest rate card. Perhaps I should not have looked to see how far under the limit I am on that card. I learned I have about $1,200 of room to work with on that card, which is more than I have on any of the other cards left.

I know I should destroy them all. I certainly need to get rid of one charging me nearly 24 percent interest. So, why haven't I done it yet?

Tackling this debt demon is going so slow. I'm tired of the stress and the boredom already. Any new charges will only prolong the agony.

OK, I did it. Chopped another card to bits.

So here's the tally so far: Two accounts closed to new purchases. Two other credit cards destroyed. Six more to go.

Monday, July 19, 2010

Scared of the water, yet dying of thirst

I'm not sure I'm equipped to be in the dating pool in 2010.

In reality, I'm not anywhere near the pool. I'm sort of outside the fence, looking in at the water and daydreaming about floating on the waves, while still being scared shitless to get dunked under and drown.

I know I'm way past the bar scene, where I'd be more likely to come away with a hangover than a phone number. Friends have suggested I try an online dating service. I did finally create a profile on one of the sites, but I'm not getting much out of it. But then I'm not putting much into it either. It doesn't seem significantly better than the bar scene, with everything based on a first, visual impression and a few lines of small talk.

I don't know what all the factors are that create attraction, those tangible and intangible things that spark that chemical reaction. It just doesn't feel like I'm going to find it in an online profile.

As my daughter would say, I'm a serial monogamist. I also hate (fear) rejection. If I'm going to run the risk of being shot down, I only seem to be able to put myself out there if I have already developed interest in a woman. That doesn't mean I need to be in love, but I have to have a pretty strong and persistent crush, so the drive to spent time with the object of my desire overpowers the flight reflex.

One side effect of my financial plight has been that my world has gotten pretty small. I've become a homebody in an effort to keep my dollars in my wallet, but it's not very conducive to making friends and meeting new people. I'm not sure I have the money to spend on a relationship anyway. Not that every night has to be fancy dinners and extravagant dates. I learned the hard way a few years back that you can't buy love. But it sure doesn't hurt either.

Saturday, July 17, 2010

Playing with snowballs in July

One of the key reasons I decided to start blogging again, particularly about dealing with my finances, is that I regularly find myself having a crisis of confidence. Am I'm making the right choices on my quest to get out of debt?

I've been listening, when I can, to the Dave Ramsey radio show. That helps keep me focused. It also is a good reminder that I am not alone in dealing with problems of too much debt. It also helps me realize that I don't have it so bad. I'm not on the verge of losing my house. I rent. I don't think there will be any need to file for bankruptcy. I don't have creditors or debt collectors hounding me. I don't have a car payment.

Fortunately, I have been able to pay my bills. But some months that is harder than others. I have finally realized that I cannot use credit cards at all, to pay for anything. But I confess that I have not destroyed the cards, except for one -- a Chase credit card that is charging obscene interest. I think I could get a better rate from a loan shark. The only way my rate could be any worse if is I was regularly late, or not paying at all, and even that would only raise my interest rate by 2 percent.

They obviously expect me to default on that account. I am awfully tempted to prove them correct out of spite and pay the creditors that look at my good payment history. Chase obviously doesn't care about that and seems determined to help me default.

As I said, I've been listening to Ramsey. In his system, what he advises it to take on the smallest debt first, rather than the account with the highest interest. He calls it working on the debt snowball, starting on the small debt, and building on that success. I can see the reasoning behind Ramsey's advice in that it would feel good to just get some of those monthly bills eliminated. I would take any positive reinforcement I could get right now.

But there are days, like today, when it feels like the snowball is working me. It's several days until pay day, the checking account is almost empty, the vehicle's fuel tank is almost empty, and some household supplies are empty, or on the verge of empty. In the not-too-distant past, I would have just used a gas station credit card and filled up the truck without thinking twice about it. I've done that recently enough ago that one of the gas cards I have still has a balance of almost $300 due to some work-related and personal trips I took in late spring and early summer. I just eliminated the debt on another gas card. This would be the second step in my debt snowball.

But it seems like if I keep doing the debt snowball approach, I will be at this forever. So I may revert to the approach I was using a couple of month ago, which was to tackle my two highest interest rate accounts by paying an amount that, if I could maintain it, would eliminate those two debts in about 3 years. I have another account that was converted to a loan, which will be paid off in about four and a half years. Those three accounts make up nearly half of my debt. Along with continuing minimum payments on the other accounts, that would mean I would have eliminated more than half of debt in about 4 years or so.

Even that seems like a long time. I have to remind myself that it took me 20 years to get this deep in debt. So, maybe that's not so bad.

But it sure doesn't feel good. At least not today.

Thursday, July 15, 2010

Uncle Sam isn't doing my financial reform many favors

Congress passed a financial reform package today, and President Obama is expected to sign it, perhaps as early as next week.

I'm nervous about what this will mean. That's not because I'm some big-wig investor or mega-bankers. I'm just a schmuck swimming in credit card debt. And the reason I'm scared is because the last time Congress clamped down on banks for their abusive practices on their account holders, the banks retaliated by becoming more abusive, raising interest rates even more and lowering limits.

And people wonder why consumers haven't started spending again to buy the country out of this recession. The answer is simple. We can't afford it.

There was only one beneficial piece in the last consumer protection bill as far as I can see, and that's the provision that requires the credit card companies to print some very useful and important information on the credit card statements. That key information tells us some very important things about what our credit cards are really costing us. In that information we can find out how long it will take to pay off our balances -- and how much we will eventually pay -- if we don't charge any more and only make the minimum payments. We can also see how much we would have to pay if we quit charging on the card to pay it off in three years.

That's important information to know. Of course the other actions the bank took have made it harder for me to dream of paying off the cards I have in three years or less. Credit card issuers have raised interest rates, and lowered limits which increases the proportion of debt you have, which lowers your credit rating, which then puts you at risk of getting rates raised again, and limits lowered again, and further erode the credit rating. It's feeling like a vicious, and expensive, cycle.

For me, though, there has been something of a silver lining. It has helped me to realize that I need to get out of debt as soon as possible and never get back into it again. I am tired of paying in blood to these legal loan sharks.

It is that conviction that brought me back to Digital Fishwrap again, after an absence of more than a year and a half. I feel like I've turned a corner in my financial life. After rounding that bend, I can see clearly the long, steep climb I face to summit this mountain of debt. I think the Fishwrap site can help me on this journey, because sometimes I need a place to confess my fear and frustration. I need a venue to vent my anger at myself and the assholes that helped me create this huge mess.

Learning to live without using credit cards has been tougher than I imagined. It's not that I lead an extravagant lifestyle. My couch and recliner are the two pieces of furniture I bought after getting my first job after college, bought on credit of course, because I didn't have the cash to buy them outright. And that's been the pattern of my life, buying items, large and small, on credit when there just wasn't the cash available. Gas for the car, gifts for others, travel to visit family when I lived far away, dinners for family and friends, all paid for on plastic.

I wasn't making much money in that first job, and had a series of low-paying jobs, but I make what should be a decent wage now, and I am still always broke, because nearly two-thirds of my monthly income goes to pay on credit cards. About one-third goes to all the core household expenses, like rent and utilities. Which leaves very little for everything else, like food, clothing, fuel and insurance for the car, etc.

I don't pretend to be a financial expert. If you saw my monthly bills and the checking account balance you would see that for yourself. I'm just a guy on a journey to get my life back. I've come to face the reality that another big raise or promotion is not just around the corner in this economy. There is no lottery jackpot coming my way to rescue me from myself and the banking bogeymen. It's going to take time, determination and tons of patience. I'm not sure I have that much patience, but maybe if I take the time to write about what I'm finding and learning it will keep me from running one and spending money on a lark just to avoid staring at the four walls or eating yet another home-prepped bargain-basement meal. And maybe you, dear readers, can help keep me on track.

The End Debt Daily