The First Cut is the Deepest

You'll probably hear me say this over and over in this blog.  You MUST face your financial truth.  I'm standing in front of my truth officially as of December.  I consulted a debt management company to help me dig out of the pit of financial hell that I've dug myself into. They are now working with my creditors to pay back my credit debt.  There is no more ducking and dodging the phone calls from bill collectors. No more avoiding opening the bills because of fear of what I already know is the truth - I owe too much damn money to companies.  Essentially, I work for them until it's all paid for.

When you enter into one of these repayment plans you have to document all of your expenses.  Sadly this was the first time, in all of my life of having my own money to spend, that I really accounted for what money came in and what money went out.  I was a little sick to my stomach. How on earth will I find the money to pay these people?

The company I went with to help me fix my mess was Money Management International.  They offer free credit counseling - and that's really the only thing that's free.  This is when you realize that anything of value has a value attached to it somewhere.  After being told is such a delightful way, that I would have these creditors paid off in 36 months, they informed me that there is a $75 application fee and a $40 a month maintenance fee for managing it all.  Honestly, once they got my interest rates lowered, it's still less that I would be paying if I did all of this myself. Add to the fact that I would probably still duck and dodge my creditors to try to seem as though I have money to buy frivolous things for myself such as Chipotle or cocktails.

After making all of these payments, this leaves me with approximately $ 320 per month for gas, groceries, medication, etc.  At first I thought, "How the hell am I going to do this?"  Now, I know how and budgeting has become a buzz word for me. Once you accept things as they are it becomes increasingly easy to live more simply.  If you need to create a budget on your own, there are many online versions available.  Mint.com has a great system that also syncs with your smart phone AND it's free!

While it was scary to take that step and commit to having over $300 a month taken out of my bank account automatically for credit debt (which is utterly ridiculous and I own that). That's not including my student loan payment that is now being repaid in the same manner, to the tune of $512 a month. Then there's the loan payment at $227. It's almost as overwhelming to think about now as it was when I was completing my budget spreadsheet in preparation for my appearance on the Suze Orman Show. ZOINKS!  Over $1000 a month in debt payments! It's painful. Thankfully my car is paid off or I'd be in an even bigger mess!

What steps have you taken to reduce your expenses?

Start a budget with Mint.

Trying to Pay Up

This is a shame.  I am trying to pay off my credit card and I can't log into Capital One!  Ain't that somethin'? hahaha When I can't pay it I can log in anytime.  I guess the good thing is that I am ready to pay it!

I actually paid off my laptop today, too.  How did I do this you ask?  I have taken in two renters in my townhouse.  This has been a great experience so far (much better than the previous experience - not that previous renter was awful - just not as pleasant as these current roommates).

Having roommates was a difficult decision to make but I am keeping my eyes on the prize and making the necessary adjustments to get out of debt quickly.

What sacrifices are you willing to make in order to pay off debt?

Missed Opportunities - Right Out of the Window

I have to say - It took a lot to turn down the opportunity I was presented with for replacement windows just before Christmas. The opportunity presented to me was to offer me 6 new energy efficient windows and a full sliding glass door just below cost. What was the reason for this phenomenal offer? They wanted to use my home as a model home and advertise my address in the area to show their work. After over 2 hours of seeing windows, discussing options and his efforts on convincing me that this opportunity is once in a lifetime, I became excited about windows. The only catch - I would have less than 24 hours to decide.

The company representative was not a sales agent. In fact, he is the Director of Marketing looking for a model home. The deal was amazing and I, of course, didn't want to miss out on a deal. I love a great deal. This comes from a guy who has been known to buy things off the clearance racks just because it's such a good deal - whether I needed it or not.

I quickly thought about the benefits of getting these windows.

1. Energy efficient.
2. Look great.
3. Easy to clean.
4. Added value to my home.

Then I thought, "How in the hell am I going to come up with $5000?" Oh, I know - I can apply for the line of credit the guy was offering.  I had to be honest with him and inform him of my financial truth - "I won't get approved", I told him. "My FICO Score is in the toilet" (520 the last I've checked). He promised that since they are a $35 million dollar company, I could get approved and convinced me that I would get approved because he recently got someone approved with a credit score as low as mine who makes less of a salary than me. Then I had another thought.

"Do I really need to enter into even MORE credit debt? Even if I'm approved, I can't afford to pay it right now. I'd have to do some financial acrobatics to pull this off!"

Of course I don't need more debt!!

Then I thought, "I do have a large amount of equity in my home. What about a HELOC?" A Home Equity Line of Credit.  See, I bought my home as a foreclosure in 2008 when the real estate bubble burst and banks were trying to unload these homes. So I got a great deal and have a good amount of equity in the house.

I was all about this idea.  I only needed $5000, right?  The guy was telling me the process of when the first payment would be needed, etc. and thought that a HELOC would be a good investment.

I've watched The Suze Orman Show enough to know that a HELOC is really not the road to take. Plus, I did make the call to my mortgage company and got educated.  A HELOC has a variable rate and I would have to take out $10,000; pass a credit check and even after all of that it takes 45 - 60 days to get the money. I could hear Suze's voice yelling at me now, "Dennnnnnnnnis - What the heck do you think you're doing, boyfriend?!"

I did snap out of the fantasy of having these windows. QUICKLY!   The bottom line is that I need to pay off what I currently owe and not take on additional debt - especially a wild card form of debt that comes with a variable interest rate that I can't afford anyway!

Once I made this decision I was getting myself prepared to make the call to the representative who came by my house. He beat me to the call and as my phone rang, I mentally prepared myself to stand my ground and say I can't take the deal - as much as I knew this would add considerable selling value to my house and that it was an outstanding deal. 

The moral of this story is to practice using sound judgement. Rarely are there times where an expedited decision is needed that doesn't involve life or death.  This situation was a challenge in doing what's right, financially speaking.

It's a missed opportunity for sure. One that is missed as a result of the poor management of my finances in the past. Had I had great credit and much less debt, I'd be getting my new triple-paned, energy star rated, custom windows. Living in your financial truth takes a lot of bravery and offers more confidence in yourself (in my opinion) as the result.

Educate. Empower. Economize.

What's in Your Wallet?

One of the things that I find helpful in preventing me from spending money I don't have comes from the idea that Dave Ramsey presents - spending money out of envelopes. He suggests that you set aside envelopes with cash in them to track how much you spend. Using the "Cash Only" method is a great way to track your spending. I sometimes will carry only $20 in cash on me for the week and try to make it last all week.

 Sometimes carrying cash isn't all that helpful when you have to use a credit card for a purchase. Usually those are online purchases that present great deals on things. I have been using a pre-paid debit/credit card for a year now. I have 10% of my paycheck automatically moved to this card through direct deposit. This is the money that I use for random purchases I really don't need but just want. For example, a new pair of jeans or Starbucks Coffee. Setting a finite amount of money causes you to think differently about the purchases you make and it leaves the bulk of your money safe for bill paying. If you don't use all of the money each pay period then it carries over.

The card I use is The Suze Orman Approved Card - It was easy to set up and well, I've been a Suze Orman fan for years.  I am not endorsed by her but I do like her card for several reasons. 

1. I like how it can notify you of your spending and gives you a running tally of what's left.  You can set it up to text you after each purchase. I did turn mine off after a few weeks because it got a little annoying.  I opted for the emails instead.
2. To be able to set up different funds on the website is great!  Whether it's a vacation fund or a Christmas fund, you can set it up. Maybe this is where your carry over money goes each pay period.  
3. You've heard people mention having an emergency fund.  You can set that up here as well.  My 52 Week Money Challenge will be going into this. 

There are some things to know about The Approved Card.

• Monthly fee is $3.
• If you don't use Direct Deposit you will experience a lot of other fees.

EVERYONE AND THEIR GRANDMOTHERS seem to be on this prepaid debit/credit card idea. There is something lucrative about these cards or else celebrities and banks wouldn't be in on it. With so many choices,   I encourage you to do your research and figure out what would work best for you.  Everyone's needs are just a bit different.

Here is a SHORT list of a few banks/companies that offer them:

BB&T
Paypal
Green Dot
Rush Card
*Western Union
*Target Red Card 
*Blue Bird

Of the cards listed, the only ones that seems to be the better options are Western Union, Target Red Card and Blue Bird. Again, I stress to you - DO YOUR RESEARCH!   What works for one person will not work for everyone.

Educate. Empower. Economize.

The Situation or the Fact

 Here's a quote I read yesterday.
 
Exerpted from Oneness with All Life by Eckhart Tolle. Published by arrangement with Dutton, a member of Penguin Group (USA), Inc. Copywright © 2008 by Eckhart Tolle

The primary cause of unhappiness is never the situation but your thoughts about it. Be aware of the thoughts you are thinking. Separate them from the situation, which is always neutral, which always is as it is. There is the situation or the fact, and here are my thoughts about it. Instead of making up stories, stay with the facts. For example, "I am ruined" is a story. It limits you and prevents you from taking effective action. "I have 50 cents left in my bank account" is a fact. Facing facts is always empowering.

Read more: http://www.oprah.com/own-supersoulsunday/blogs/10-Powerful-Insights-to-a-Happier-You?TW=tw_omag_tolle_10_insights&hootPostID=bdb5e7e1d7cbaeb2d10c2b12d31e4727#ixzz2HQspJpyG

At first look, I was like, "Okay.. yeah, I get that. My happiness is dependent on how I look at the situation."  Then I read the example about money.  BINGO! This is what this blog is all about!  Recognizing the story you tell yourself about your finances and how you manage them.  Living in your truth. My situation is that I can't afford to do or buy anything.  I don't really need to do or buy any of those things I wanted to buy because they aren't necessities. The fact is, I'm going to be out of debt in 3 years or less. And that's worth more and will feel much better than having a Smart TV or an iPad.

Over the last few days I have gotten messages and emails from people saying how brave I am for putting all of my business out there. Or how empowering it is. I appreciate it - but how empowering is it to you that I am doing this?  Have you faced the facts about your financial struggles?  Have you owned it and claimed it as your own to others?

I've tried to fix my finances on my own (quietly) and tell others everything was fine when it was really stressing me out. Time and time again I would fall right back into the same patterns. Paying credit cards off only to run them right back up so I can do things that my friends were doing.  Once I took the leap and just lived in the truth that I wasn't doing well financially - then I was able to face it with much more confidence and with the support of my family and friends. 

Don't get me wrong!  It took me going on television to be pushed into that mirror and truly see myself. 

Just a short reflection on something I read.

Educate. Empower. Economize.

Facing My Financial Truth

In 2012 I taped a little show by the name of The Suze Orman Show.   It was the start of something big.  The start of living honestly about my finances.

Going on the show was a whirlwind.  It happened seemingly overnight.  One day I was responding to a tweet from the Suze Orman show that asked for viewers to write in with their story. The next day I was sitting in a studio.  In my email to the show I said, "I'm in so much debt and I have no idea what to do. I bought a house, I have student loan debt and I'm behind on a lot of my bills.  I don't want to be like this when I'm 50!"

What in the hell is about to happen to me?

The producer asked about all of my personal finances. Which was embarrassing on many levels. Having watched Suze raise her voice many time over at people over some of the choices they would make,  I knew I was standing in line to get a Suze Smackdown.  Over the next week I had a few more conversations with the producer about my finances and my story and she informed me that we would be taping within a week! Oy!

This was the start of me living in my financial truth.

When I taped the show I was totally petrified - trying to really be present in the moment. What was TRULY happening to me in front of countless viewers?  You can see for yourself.

Clip of my appearance on The Suze Orman Show

Facing the truth is hard. Especially when someone presents you your truth and you don't recognize it immediately is huge!  When she said that I am almost 40 years old and don't have anything to show for it - that resonated with me like I was in the tower with the bells of Notre Dame!  It felt so totally awkward but on the other hand it felt like such a relief. Now that my truth is out there it's easier to continue living in my truth and be honest with others. When I can't do something I don't. When I want something I recognize it for what it is. A want.  I even have friends that will comment on things I may purchase by saying, "Would Suze approve?"

My truth was made available for the entire world to see. I'm now seeing it, too.  It's time to make a change so here I am.

Let's make 2013 the most financially smart year, ever!

Educate. Empower. Economize.

A 52 Week Financial Challenge

As I settle into the new year I find that I have new optimism.  What was so scary about paying my bills, student loans and cutting back on my expenses to achieve all of that?  Hell if I know - but I do know this much to be true.  I AM STILL HERE!

Print the Challenge by clicking on image.

I was browsing my Facebook Newsfeed and came across a challenge to save money. It looks VERY interesting.  I mean, each week you put away the amount of money that relates to the week of the year it is.  Week one = $1. Week two = $2. Week three = $3 and so on. Okay. Okay.  Sounds easily until you're in week 42 and you think, "What in the hell?  Where am I going to get $42? Honestly, you can make it work and I will take on this challenge. I am tired of only having $5 in my savings account.  If it weren't necessary to have at least $5 in a savings account to have a bank account - I wouldn't have that much saved.

So, this Friday I will begin the challenge. I am still here. I am still paying my bills. I am still sure I can meet this challenge and actually save money. Who doesn't want $1378?

If you're up for the challenge, I'd love to hear from you throughout the experience. I'll be sharing my progress periodically.

Join my adventures on Facebook, too!

Educate. Empower. Economize.