Starting to See the Light

Dark Tunnel by Russell Bradshaw

A year ago this month I was in a dark tunnel.  No end to this tunnel in sight. I was lost and unsure what to do and thought that financially, I was at the point of no return.  Okay, that was a bit dramatic because there is ALWAYS a way out but I wasn't sure which was that route began.  This is when I wrote into the Suze Orman show.

That was a whirlwind.  I found myself physically on the show, talking to Suze on camera. It was completely nerve wracking and one of the best things I've done.  That episode aired on December 1, 2012 and garnered much attention from family and friends. Many of them saying how brave I was to tell my story on the show.

While on the show, Suze talked about being honest with people about who you are and what you can afford and can't afford. She also gave me some advice that I took.

Some of the advice was to:

• Stick with a budget
• Pay my student loan payment regularly
• Learn to say no to friends and family when it comes to spending money
• Take in a roommate
• Refinance my home
• Quit bowling and going out on the town
• Enroll in a debt management program

I am happy to report that I have done all of these things since my appearance on the show with the exception of quitting the bowling league. The final piece of the puzzle was the refinancing of my home.

Having debt and a bad FICO score didn't make it easy for me to get the refinancing.  I tried the traditional methods of attaining a loan and was always turned down because of my credit score. Note to my readers, if you don't take that score seriously  YOU SHOULD!

The refinancing of my home came out of the blue. My loan company sent me a overnight letter stating that I might be eligible for a streamlined refinancing program where the company would pay all fees associated with the refinance. Of course, I thought this was a hoax so I called the company to verify that they did send me this information. They did indeed send it and after answering a few questions I was eligible! Woo! Hoo!  The big question was, "How?".  The mortgage consultant stated that since I had a strong payment history with them that they wouldn't use my credit score to determine if I'd get the loan or not.  It pays to pay on time and regularly.

After nearly 3 weeks of back and forth with paperwork, I was ready to go to closing.  This was such a simple process. I met with my closing agent at Starbucks and brought with me a check for $980 to cover escrow payments for two months.  The total savings on my monthly mortgage payment is $212! I lowered my interest rate 2% over the life of the loan. I pay far less for this house than I could have ever imagined.  Honestly, I would not be able to find a studio apartment in the area for the amount I pay for this mortgage!

In the past year of following Suze Orman's advice, I've been able to reduce my debt, pay my bills in full and on time each month and no longer rely on having a roommate (currently I am without a roommate).  It feels AMAZING to have made it to this point.  Now I must stay on my plan to completely pay off my debt - but in the meantime I am enjoying the light that I am seeing at the end of this long tunnel.

One year down. Two or less years to go.

Educate. Empower. Economize.

Being Financially Prepared.

This blog post is all about financial preparation.

I started the whole 52 Week Money Challenge at the beginning of the year. To date I have saved about $200. Not too shabby. I have been doing pretty good financially since being on The Suze Orman Show.  I had roommates. Paid off a bill. I'm planning to have another roommate in August and that will help even more. I was excited with the progress I've been making.

The progress of my bank account seemed to dwindle little by little in the month of May.  I think I got carefree and started old habits again.  Going out.  Drinking. Eating out. Not planning meals when I got to the grocery store.  Buying clothes that I don't need. I thought I had it all under control. However, I have dwindled my cushion of funds from $400 to $100. WHAT IN THE HECK???  In my head I thought I had about $200 in the bank.  Nope!  How did I find this out?  I bought a Groupon for duct cleaning in my home. They came by today to begin the process but checked out the furnace first.  The interior of the furnace was covered in mold! Mold that has been there for years according to the serviceman from the company. I've only lived here for 4 years.  How did the Home Inspector miss this?

The company told me what could happen if I didn't get it removed - and I was already well aware of that. I was also aware that it would probably cost a decent amount of money.  The look on my face surely showed concern because inside I was thinking, "Oh my God! How am I going to fix this?" Mind you, I already had planned a budget trip to New York City that I am leaving for tomorrow morning.  Needless to say - I had to figure something out quick, fast, and in a hurry! 

Had I not started this money challenge and the freelancing is picking up - otherwise I wouldn't have had the money.  Now that it's all of the mold cleanup is completed, I'm thinking, "Well, it's nice looking now and no mold. Thank goodness I have a three year warranty. But DAMN... $600???" After seeing the end result - it does look pretty awesome but I could have done that mess myself!

The lesson here?  Always save your coins! 

The other lesson?  Don't feel pressured by companies to do anything.  If it's not broke. Don't fix it right away.. .fix it eventually.

The moral of the story:  Make sure you think clearly and have a plan on how you would manage something that is unexpected.  June is going to be a tough month to get through. So it's time to hustle more freelancing opportunities and sell more items!  Need a graphic designer?  How about supporting me by buying a t-shirt?  Jewelry anyone?  It's time to get back to basics!

Until next time...

Educate. Empower. Economize.

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.