money for my life

When first you look upon the burden of the mounting credit card debt, it may (or may not) be a task that seems formidable at best.  Just as a beginning runner may look at the course of 26.22 miles for a marathon as un-doable, sometimes it is a matter of taking it one step at a time: perhaps you start by jogging to the end of your driveway, then to the end of the street, then to the end of the next block, and you build on your confidence of doing more and more until a five mile run seems like a walk in the park (pun intended).  Such is true with credit card debt.

 

You can “build your endurance” for eliminating credit card debt.  Perhaps, if you are in a deep dependence on a credit card, use the credit card with limits, or use it every other purchase…you just have to start somewhere.  My use curtailed gradually in the months before I ceased using them altogether (with the exception of one department store card that I use every three months or so, but only when I already have the cash to pay for the purchase, but I use the card to help my credit score), I began to use them less.  It wasn’t because I had developed a “master plan”, but as the limits on the cards were reached, I quit using them (not because I wanted to, but there was nothing left to use on the cad).  The constant late fees, high interest rates and the beginning cacophony on menacing phone calls all began to wear on the nerves.  I finally had to shout (to myself) ENOUGH!!  I then quit cold turkey and started using only my checking debit card.  If I didn’t have enough, I would do without.  It is amazing when I look back at how much I wasted. The truth of the matter is that if I can do it, so can you.  Read more at my website.

A Challenge.

 

As this journey has progressed, there have been times that I have asked myself “Can I Eliminate Credit Card Debt?”  From the time that I first had a credit card nearly 28 years ago, it was a question that I had to grapple with.  It started with a pair of dress shoes that I couldn’t really afford at the time (nothing too expensive, just a pair of dress shoes from JC Penney), but I needed for the concert that I was scheduled to perform in with the orchestra.  Of course, you had to wear a tuxedo and I managed to use my black suit and white shirt, but I didn’t have any black shoes.  Granted, I was in the percussion section and nobody in the audience would have noticed that my shoes were brown, but I would have never lived that down, especially since we were going on a weekend tour to different parts of the state.  I had just gotten a credit card from JC Penney and decided to get the shoes.  They were $50 and I was a poor, newly married college student, but I got them.  I was diligent and made the monthly payments on them, but the interest added to the total cost.  The cost was $5 a month and it took me nearly 15 months to pay it off.  But it never seemed to end.  So….to answer the question, “yes”.  You can eliminate credit card debt.  Is it easy? No. But you can.

 

I have now entered my second year of not using a credit card (although that isn’t entirely true, I have kept one department store credit card that I have used to help restore my credit rating, but I have used it for purchasing something that I had the money for, but charged it and immediately scheduled the payment online for my department store card so that it was really like paying cash for it, but it made me look good in the eyes of the credit reporting agencies.  I have slowly watched my credit score rise from dismal to poor (it is an improvement, but very slight). I was following the advice of one of the books that I have read.  The solution is not immediate, although some techniques have brought me some quick relief.

 

Sometimes we may feel like we have to be a maverick, we have to do things our own way, we have to forge our own path.  That’s all good and fine in some things, but when it comes to credit card debt, we may need some support.  Sure, it would be nice to have somebody else sweep in and erase our debt, but the probabilities of that happening are two: slim and none.  You got yourself into this debt (albeit not entirely your fault because the whole industry is geared to draw you deeper and deeper in debt and in less control of your financial life) and you will succeed in getting yourself out of debt.  Just as you don’t just wake up one day and find yourself deep in debt, you won’t wake up and find yourself out of debt.  It came on dollar by dollar, and that is the way it will come off as well.

 

As it was mentioned yesterday, you can always find help with books, or consumer credit counseling services, but sometimes just having a non-judgemental friend to air out your concerns with can do a great bit of good.  A good friend will listen to you, and offer support (although I never ask for them to pay my bills) and encouragement when you need it most.  My father was very supportive of me after the first divorce and he was kind enough to offer to put up some of his stock as collateral for me to take out a low-interest loan at our credit union so that I could pay off a large debt that I had (it was money that I owed the IRS, but that is a whole different story in itself).  Bottom line: I had support and that meant all of the difference in the world to me. 

 

You can read more at my website.  More later.

 

There is hope in getting help for your credit card debt elimination, you just have to do a bit of homework in finding the people/company/resources to get you to whee you want to be.  I know that I spent countless hours on the Internet, sometimes late at night, sometimes very early in the morning, but I know that it was more hours than I was used to spending.  If you want to meet with somebody in your community, you can use the consumer credit counseling service.  The first time in getting help with my debt challenge, I contacted my local chapter of the service.  They assisted me in analyzing my spending habits, looking for ways to save money, and developing a budget that was reasonable.  I would send them a monthly check for a certain amount, and they would apply it to my creditors.  I got a nice spreadsheet showing me how much each month was going to each credit card company that I owed money to.  When one was paid off, the money that was allocated to the now paid-off card was split evenly between the rest.  It took a while to see any results, but after several months, my lowest one was paid in full and I started seeing the remaining ones diminish at a faster rate. 

 

I guess that I didn’t learn my lesson well after the cards were all paid in full because a year after I was free from them, I found myself lured into the credit card lie again. (It didn’t help that I was also single again and attempting to furnish my new digs.  I had been given a beautiful piano/keyboard near the end of my second marriage, along with the payments on it).  I couldn’t make those payments despite working nearly seventy hours a week.  I had weekends off, so you do the math.  Needless to say, the credit company that had loaned us the money was eager for payment or repossession of the piano.  Working as much as I was, I finally go hold of them and they showed up to repossess the piano at two o’clock in the morning, just minutes after I got done working my second job.  It was a very humbling and eye-opening experience to say the least.  At that point, I was determined not to let that ever happen again.  I was ready to once-and-for all eliminated my credit card debt.

Getting Help

Even though I am confident that any person can learn to deal with the credit card debt that they have, sometimes you need a little help. A year ago when I sat down and actually figured out the amount of money I owed and my minimum payments at that current rate, I was shocked when I saw that the figure was over $72,000. You would think that I would have a fancy car to show for that, or some great clothes, or pictures of some fantastic world-wide trips that I took…no, I still drove a used car with over 90,000 miles on it (and I still do drive that same car), my clothes were, at best, clothes that came from a mid-tier department store. What I did have, was debt. I was overwhelmed, as I am sure many people are. The worse that my credit score got, the more depressed I became. Sure, I started to receive the tons of email about “We Can Eliminate Your Debt, Legally” and “Need Credit Card Debt Help? We Are There“. Like an drowning man grasping for things to help him stay afloat in an instant, I poured through those e-mails hoping to find the instant cure for my problems.

Something to Look Out For

I finally settled on a company I felt that I could trust. Their website was seemingly legitimate, so I began to do a little more in-depth investigation. First I looked at their accreditations. Check. Then I looked at the Better Business Bureau website for any complaints against this company. Check. I “Googled” their name. Check. Everything seemed in order. I contacted them. I used them for about four months, but the more that I read in books, the more I became uneasy. First, they told me not to answer my phones or to talk to the credit card companies at all. They were going to handle it. I was to continue to make one monthly payment to them and they would set up a separate account through a third party from which the payments would be sent. They would take half of their fee out of the first four months payments ($2,800) and then they would put half of my payment into the third party account and when there was enough in there, they would negotiate with the credit card company. That was all good and well, but I didn’t really appreciate the fact that after six months, I had paid $4,200, but my credit card debt reduction was not happening. By this time, I realized that they were going to be doing for me what I was perfectly capable of myself. Needless to say, that was an expensive lesson using money that I didn’t really have in the first place. This will be continued. To learn more, click here or here.

As you will recall, yesterday I began talking about credit card debt elimination.  We left off with the suggestion of calling the credit cad company in regards to asking for relief.  Oftentimes, that is all that it takes is to ask.  There really is nothing to fear for asking for a lower interest rate (I have seen my initial interest rate on a certain, unnamed credit card) creep from the “teaser” rate of 0.00% to an astronomical 29.99%.  One could have a $1,000 balance which going from paying nothing for the convenience of paying with plastic to paying $24.99 per month for the same privilege, but only with the 29.99% interest charge.  Spread that out over a year, and that equates to $299.90 each year.  If it takes 10 years to finally get that balance to zero, it could potentially end up costing nearly $3,000.  Would you let somebody  “loan” you $1,000, but they wanted $4,000 in return?  I cannot imagine that you would. 

 

Having some sort of financial freedom boils down to saving money on things.  It all adds up.  Little by little, bit by bit, it accumulates until it is a seemingly insurmountable burden. One of the things that I learned after a few months with mint.com was that I was spending a percentage of my money on sodas at the gas station.  Sure, $1.28 a pop didn’t seem like much, but there were also accompanying occasional candy bars or snacks, but when I looked at the monthly summary, it was over $50.  (Over a period of a year it was $600).  I couldn’t imagine that if someone were to offer to sell me a card that allowed me to get a soda and some candy every work day for a year for $600, I would go for that offer.  (It gets worse if you were charging it to a credit card.) 

 

For credit card debt elimination, begin by asking for a lower rate.  The way that the economy is affecting everybody, credit card companies will be willing to keep you as a customer with a lower rate, after all, oatmeal is better than no meal.

 

For more, please visit http://www.money-for-my-life.com/.

As one who was/is riddled with the burden of credit card debt, I have often dreamt of the day (which is now approaching) that I will be able to eliminate credit card debt once and for all. What a rejoiceful day that will be! As I have often heard that “Rome wasn’t built in a day”, I realize that my enslavement to credit card debt will not happen in one fell swoop of somebody’s pen or a knock on my door from the Publisher’s Clearinghouse Prize Patrol. Just as I did not accumulate this mountain of credit card debt in one night (but, oh, how times does fly), I will not achieve credit card debt reduction in one night either.

One of the first things to do in this situation is to take the time to write all of your balances and corresponding annual percentage rates down in one place that can be eailty referenced (and updated as you progress). It will be a good idea to jot down the customer service telephone numbers as well. You will have to make some phone calls. Keep a firm voice and project that you are in control (because you are) of the situation and ask if the customer service representative will lower your interest rate. Remember, the credit card companies want to keep you ensnared, even if they perceive that they are receiving less money, it is still money (as it is said, “oatmeal is better than “no meal”). Do not be overwhelmed (and yes, I have asked myself “Can I Go To Jail For Credit Card Debt?”). This is a process that will get easier with time.

To learn more, visit http://www.money-for-my-life.com/.  More to be added later.

The “Budget” can be a formidable task for the uninitiated, but it needn’t be.  I used to live paycheck to paycheck (and in some respects, I still do), but since I have started to use a budget, I feel a lot more in charge of my financial situation.  A lot of books on personal finance have been written, and I  have read quite a few of them.  Most of them advocate using a budget of some sort.

 

Now, don’t be intimidated and think that you have to learn Excel skills or take a class in accounting.  You can make it as simple or complex as you desire.  I happen to have created a few workbooks in Excel and they suffice for my situation.  I also stumbled across a great online source at mint.com and I have been very happy with that.  It takes a little bit of time to set up, but now I have my banking, investment, 401K, and other information available at the click of a button.  What they at mint.com do it once you have set up your accounts, it will be able to display in chart form what you spend, where you spend it, and ways for you to be able to save a little bit of money.  Believe me, the little bits add up over time.

One of the things that really kept me from succeeding financially was a lack of budget. It wasn’t like the “old days” in which people played “beat the bank” with deposits and check writing (this is where you write a check on an account that doesn’t have the money in it at the time, but you know that you will be able to deposit into your account before the check that you wrote will go through the clearinghouse), but it was similar. I used my checking account to pay the major bills like rent/mortgage, utilities, car payments, etc., but nowhere did I have a written plan to ensure that I wasn’t living beyond my means. This lifestyle gives credence to the adage that if you fail to plan, you are planning to fail.

During my first round with credit card debt, I sought the help of Consumer Credit Counseling, a not-for-profit organization that negotiated terms with your credit cards. They would schedule an appointment with you for you to go over what you spend each month, and let me tell you, they were extremely thorough in expenses. When I had completed my survey of what I usually spent my money on, they worked with me to set up a budget. Included in that budget was an amount that I sent them each month to pay down my debt for me…more information can be found in future blogs.