Money And Me – A Love Story

All my life money has had issues with me. I’d work hard to make it, put it in the bank and watch it disappear.

Oh there were patches there where money and I would reconcile and stay together for long periods of time, but inevitably I’d find my money cheating on me with my bills and I’d realize  that money didn’t love me as much as I loved money.

It took me a half a century to figure out how to keep money happy and believe you me, that makes me happy too. I want to share what I’ve learned with you and if I can help just one person to improve their relationship with money – well that would be a good thing.

1.     Don’t spend other people’s money

Other people’s money, that means credit cards,credit union loans, bank loans, student loans and anything else that you will have to pay back with interest.

Other people’s money seems like a great idea when you’re in the line at Macy’s and the cashier says you can get 10% off of your purchase today if you sign up for a card RIGHT NOW. Trust me the one day sales and percent off coupons and those gratuitous credit limit increases will have you in debt up to your eyeballs in no time and that 10% off won’t offset the 16 to 30 percent interest you’ll be paying on your balance each month.

IF YOU CAN”T PAY FOR IT WITH CASH, YOU CAN PROBABLY LIVE WITHOUT IT. Remember your money will leave you when it discovers your affair with other people’s money.

 2.     Don’t spend money now that you think you’re going to earn later

You just got a new job, big promotion, your tax refund is going to be awesome this year- so you think to yourself “I’m going to earn that money later, so why not go ahead and  treat myself or the family to____”. I think this was one of my major shortcomings, always spending money I thought I was going to earn before it was actually in my pocket, I like to call that “euphoria spending”. Just think about it, if I’m spending as though I’m making more, when I’m not, then something is going a gangling as they say. Maybe it’s the electric bill, the gas bill, money for the commute to work next week, lunch money for the kids…whatever.  DON’T SPEND WHAT YOU DON’T ACTUALLY HAVE…YET.

3.     Pay your bills in full every month

Keeps the bill collectors at bay, makes you feel rich , and helps you to keep your sanity.  This is a hard one for some people, they tend to pay half of this and a quarter of that, steal from Peter to pay Paul and end up in this deep pit full of past due bills. I’ve never been one of those people, just wasn’t in my DNA, but I wasn’t always able to stay  on top of things and would suddenly  discover that the cell phone bill was 3 months past due because I  got busy and wasn’t keeping up. Continue reading and I’ll tell  you how I fixed that and how you can too.

4.     Open an ING account

I am sure that by now there are other online banks that allow you to open as many accounts as you’d like and manage your money in the way that I am about to explain. Back when I started ING was the one that I found and that’s the one that has worked for me

  1. Open an Electric Orange account and have your paycheck Direct Deposited there.
  2. Add a savings account and call it “Emergency Fund” because this is where you will stash a little money every month for unexpected things like a busted water heater or car repairs and the like
  3. Open one savings account for each one of your bills – this will keep you on track so that you don’t miss any of your monthly payments. I name my accounts after my bills: The Rent, Gas bill, electric Bill, Cell Phone,Car etc.

 

5.     Set up automatic transfers from your Orange account to each of the savings accounts

This will ensure that each month when that bill comes due – you have enough to pay it. Here is an example:

Bill and his wife earn $1000 per week. The table below shows their bills and the automatic transfers that should go into each account when they get paid every week,( the math may be off but I hope you get the idea):

Bill Amount Weekly Automatic Transfer
Mortgage $1000 $250
Electric $120 $30
Gas $30 $7.50
Cell Phone $200 $50
Cable $75 $18.75
Car $350 $87.5
Credit Card $100 $25
Gas and groceries $550 $137.5
Savings (external Account) $800 $200
Emergency Fund $300 $75
$3525 $881

As I hope you can see – by saving money from each check to pay their bills, Bill and his wife are able to live happily with their money.

6.     Open an external savings account

I need to have money that is hard to get to, so I have an account outside of ING where I transfer out 20% or so of my income each paycheck. That amount is based on how much I usually have left over after bills, groceries, gas, and other necessities.

Today, money and I have a healthy relationship based on mutual respect. I’m able to eat out, shop, shower my children with unexpected gifts, build up my savings – and pay my bills on time. We’re finally happy together – and you can take that to the bank.

Struggling? Here Are 10 Steps To A New Home or Just a New Mortgage Payment

NACA.com promotes home ownershipMany of us were hurt by the fallout from failed banks, failed mortgage companies, and failed financial strategies.  First home prices fell, then salaries fell – and shortly thereafter we realized that we were :

  1. In the best real estate buyers market ever with no way to take advantage of it – OR-
  2. Carrying a mortgage payment that we could no longer afford

Before we go any further let me make one thing clear – millions of people across America didn’t just wake up one day and each make the same bad financial decision to get into a mortgage they could not afford. I know that this is what some of you believe (and very strongly at that)  because it’s what the media tells you, it’s what your favorite talk radio guy tells you – but that don’t make it true people.

The fact of the matter is that you can have a low interest rate mortgage with a low monthly payment – but if you do not have  the same income that you did 3 years ago (or you have no income at all) no one and I mean absolutely nobody is going to help you when you’ve fallen 3 months behind, five months behind or even 6 months behind. The mortgage companies’ idea of  “a workout” is  often laughable; to you an dI it would make sense for them to look at your current income/debt and give you a payment that you could actually afford so that you and your neighbors can stay in their homes. But, nooooo, instead tey will attach the six months sans interest to your existing monthly payment and give you a payment that is basically double the amount that you couldn’t pay in the first place!

In some parallel universe this strategy makes total sense, unfortunately we do not live there, we are ere in tis universe where we end up losing tat home to foreclosure and then the bank sells your $100,000 home for $20,000. That’s right twenty thousand dollars! Now why couldn’t they just give you an affordable payment instead? If one of  you, my dear  readers , understands why this is please tell me so that I can explain it to my cousin who lost her home in just this way.

To add insult to injury, we also have companies who will take what little you have left in your savings account to assist you in getting a “loan modification” . I like to call this something for nothing, they take your money and promise you salvation, and you end up with the same deal that I mentioned earlier – that wonderful “workout” thing.

Well thank God for “The Neighborhood Assistance Corporation of America” and founder Bruce Marks who believe that neighborhood stabilization means getting people into home ownership and keeping existing homeowners in their homes.  NACA is a non-profit group that advocates for homeowners and would be homeowners. Their Home Save program can help you to get into an affordable mortgage situation if:

  1. You live in your home
  2. You only have one property in your name

To get help from NACA you must :

  • Visit NACA.com and find a Workshop near you
  • Fill out the forms on the NACA website and get an appointment with a counselor
  • I suggest filling out the forms after you have attended a workshop as the workshop will teach you how to fill the forms out correctly
  • Become a part of the solution. NACA is all about giving back, so don’t just take your new low mortgage payment and walk away. Volunteer to help out at workshops, help the advocacy effort by  advocating for economic justice to politicians at the  local , state, and national levels.

NACA is not a  government handout and no one gets something for nothing.  It is the kind of program this country desperately needs, so tell all of your friends and families – no one should lose their home when help is so close at hand.

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Your Reality Bites – How to Deal With Bill Collectors & Other Blood Suckers

dino debt collector
Image by niznoz via Flickr

Did you read my previous post  “Your Boss is Not Your Daddy” ? Read it again, I’ll wait. Well can I call it or what? You’ve been laid off and have no fall back position. To top things off, now that you are a payment or two behind on the car or the mortgage or a credit card – your phone rings constantly and it’s not recruiters with lucrative job offers. What can you do besides cower in a closet or turn the ringer off (i mean if you turn the ringer off you may just miss that lone recruiter with the lucrative job offer).

So what’s this all about? Well, I’ve been there more than once, I have walked through the fire for you and I am here to tell you that you have to face your fears or the calls will never stop. Now I’m not going to give you financial advice, there are smarter people than me for that; but I am going to give you some tips that I hope will help you to get out of that funky space that hiding from debt-collection calls puts you in.

  1. Answer the phone! If you don’t answer the phone they will continue to call and believe me you don’t want to prolong this experience. Florence Scovel Shinn says when we are prepared to face the lion in our path, he magically disappears.
  2. Be nice! Like your Mom probably told you countless times – you catch more flies with honey than vinegar.You attract what you are and if you answer the phone with a growl, the lion will roar. Remember that the person on the other end
    • is just like you
    • might even be deeper in debt than you
    • is probably reading from a script and will be critiqued at the end of the call by someone listening to that recording that is being done for quality assurance purposes
  3. Explain your situation calmly and let them know that you want to pay your bill as much as they want you to pay your bill. Often this will lead to them offering you a deal of some sort like eliminating the interest and late charges and letting you pay 50% or less of what you owe. Deals like that are nice if you have the wherewithal to pay, but even if you don’t there may be a hardship program that you qualify for.
  4. If they are nasty and ask personal questions or try to make you angry – hang up. Why make yourself sick and cloud your Karma by arguing with them? Just say nicely “Thanks for the call, I’m going to hang up now, have a great day OK?”
  5. Learn your rights under the Fair Debt Collection Practices Act; one of your rights  is that you can send a letter to the collection agency and the original debtor that says “for petes sake please stop calling me!” Here’s and example (remember to send it certified mail and get a receipt):
Tired of all these bills bills bills
Image by banoootah_qtr via Flickr

Dear Mr Bill Collector Sir,

I am exercising a right granted to me by the Fair Debt Collection Act. I am currently unemployed and cannot  pay the $240.00 per month required to keep this account current . I can pay $20 per month, but given my present circumstances that’s all I can afford .  I have no other property to use to pay this debt, and I cannot borrow anymore than i already have from family and friends.
Please cease all communication with me.
Sincerely,

Broke in Boise

Use this letter as an example only and make sure that you look into what your other rights under the THE FAIR DEBT COLLECTION PRACTICES ACT are.  Do you have some tips for dealing with bill collectors? Please share!

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Dear Mr Obama, How Long Before My Bailout Check Arrives?

Dear Mr President-Elect Obama,

I’ve been reading about all this “bailout” money that has been or will be given to some of the companies that find themselves in trouble because of … wait, why are they in trouble? Was there a fork in the road and everyone decided to go left and not right? Oh crap, which way did Bill Gates and Steve Jobs go? Will they need a bailout too? Is that going to impact my bailout amount?

Anyway, back to the other guys, why are they in so much trouble? I mean I know why I am in a little bit of trouble, but heck I’ve never made anything that ran over 5 figures and these guys were earning millions to make the right decisions, so what the heck were they doing up in those ivory towers and on their private Lear jets? Basking in the glow of power instead of being pro-active?

Lemme tell you something else while I have you on the line, a couple of months back I was having trouble with one of my properties and I approached my mortgage company and said “Look I really want to straighten this out but I can’t make these monthly payments, what can we do?” Well I guess I forgot to add a ‘wink, wink’ after that statement (like I see these guys doing in front of those congressional committees “I’ll work for a $1 since I’m already worth 50 billion ‘wink, wink'”) and the solution I was offered was to increase my payments by $300 over the next 4 or so months, which would get me caught up on the 2 payments that I was behind. So I was wondering if this is the kind of solution that these millionaires are coming up with across the board.; and could that be why they are all in trouble?

Well lemme not talk your ear off Mr President- Elect Sir, I’ll get to the point, I need to make sure that I’m included in that bailout plan, I don’t require much and I just need to know when I can get in front of Congress to beg .. I mean ask, for my cut. My husband and I will do the automakers one better and ride our bicycles there (thru the snow), camp out near the Lincoln Memorial and fast the entire time just to show you how serious we are about saving money and growing our business.

Thank You Mr President-Elect Obama Sir.
Country First & I Hope to hear from you soon.

Denise

P.S. Does my bailout include the IRS forgiving my past transgressions? Not a deal breaker, just wondering.