Posted on: September 23, 2008 by Matt
While commenting on another blog earlier today I started to think about how being in debt has effected me. When I started to pay down my debt I owed what seemed like an insurmountable amount of money to creditors. I was able to pay the minimum payments and rarely saw a balance go down by very much in the process. The total sum of the debt coupled with dealing with creditors and collection agents left me feeling depressed and unable to make progress.
Eventually I was able to make a couple of small steps forward that gave me a glimpse of future success and being able to finally find a way out of debt. By building success after success I was able to pay off many of the loans with smaller balances and stay motivated and positive through the process. However once these smaller balances were paid I fell back into a negative almost depressed state and began to wonder if I would ever get my finances cleaned up.
My next goal is to clean up all of my outstanding bad debt. The thought of paying off $22,000 of old student loans in collections seems nearly impossible. I find it hard to stay motivated and on track with reducing the debt and like it does not really matter because the debt will always be there no matter how hard I try. Thinking that there is no way out leaves me in a continual rut both emotionally and financially, making it very difficult to make headway on this debt.
In order to get out of my proverbial rut I always have to turn to a positive method of thinking and remind myself of everything that is going well. So here is a short list of some of the financial positive thoughts that help me motivate when the pressure of debt is getting me down:
- I am making the minimum payments on all accounts.
- I have control over my finances: Simple budgeting gives me some peace of mind. I went a long time and got into a lot of trouble ($22,000 in student loan collections) by not paying attention to my finances.
- I remember that I will pay off all my debt someday: If I keep working at it, sooner or later I will pay it off right?
- Set new milestones: In stead of setting a goal of paying it all off I set smaller more attainable goals for the large sums. I am currently working on saving for a principal only payment for the collection accounts.
Debt and finances in general are enough to bring anyone down when times are tough. Given the situation a lot of people end up feeling helpless and overwhelmed. By focusing on the positive actions we are taking we can improve our odds of success.
Posted on: September 22, 2008 by Matt
While reviewing the budget the other day I began looking for areas we can carve out some spending. There are a number of expenses that I could easily carve out but these expenses happen to be items the entire family enjoys having. The expenses that I have identified include:
- Netflix: I do not think that we use it enough to justify the subscription. The problem is that the kids and my girlfriend like having it. I used Netflix before I moved back to Vermont as a form of entertainment since I did not have cable. I would watch a couple of movies a week and get seasons of shows that I enjoyed. Now we generally go through a few discs a month.
- Sirius Radio: Another expense that I have a hard time justifying other than the family likes having it. I actually got the radio when I was with an ex-girlfriend, she encouraged me to get it as a ‘treat’. I enjoyed having it and did spend a substantial amount of time driving (over an hour a day). Now I drive much less.
- Cable TV: When I moved and was getting set up in my new place with my girlfriend I opted to have cable. Our living situation is kind of odd (we live together but have two addresses; two apartments with a wall taken out) so we each have a cable bill. My TV recently died and now my cable bill is only used by her son to watch TV in his room.
Since everyone else in the house enjoys having these luxuries I am at a loss for giving a solid justification for canceling the services. We are able to make ends meet and I am still able to pay more than the minimum on my debt while still putting a little in savings. We could accelerate debt repayment by about $100 per month if all these services were shut off but not everyone would be happy with this Spartan lifestyle.
The bottom line is that once somebody has something that it is really hard to take that away. Do you have any family luxuries that you could carve out but lack family backing? If so how did the situation play out?
Posted on: September 19, 2008 by Matt
So far my cash only for the next couple weeks has been working out fairly well for me but we have had some household money woes going on in the past day here. I have a white board in my office that I use for both work related items and personal items. After taking out cash to use for the next couple weeks I used one of the white boards to balance out my account. What my bank said my balance was minus outstanding checks compared to my check book register. All said and done I came to the conclusion that my account has a few hundred dollars left in it that I was hoping to apply toward debt.
My girlfriend stopped in and noted the board and asked a few questions about the numbers and I answered also noting that I had taken out cash to last until the end of the month. She then was a bit irritated but did not want to discuss the issue just yet. Later in the evening we discussed the issue and ended up coming to the following conclusions:
- I have substantially more disposable income: Well, I have more income in general and seeing the numbers leaves her feeling alienated as she scrimps and saves just to make basic ends meet.
- I viewed bills as yours and mine: This ties closely to not budgeting as a couple. When I moved in (we have a kind of unique living situation, I will explain more later) I figured she has been getting by with the bills she has now. I picked up some shared expenses like some groceries and such, we’re even right? Wrong – she anticipated life getting a little easier and her load lightening for shared expenses and I was insensitive (to put it lightly) or oblivious (a bit closer) to her situation.
- We have not been budgeting as a couple: We were both maintaining individual budgets but I was failing to include shared household expenses (like the phone and internet connection) that we both use. They were in her name and I just continued to view them as her bills.
- My perception of money differs from hers: There was a time in the not too distant past where I was struggling along to make ends meet and every dollar was like a little nugget of gold for me. Since then I have managed to work my way into a position where smaller amounts of money seemed more trivial to me.
- We were not communicating effectively about these disconnects: She was frustrated and I was off in my own little world. I focused intently on my money and did not stop to think about how my decisions effected her or where she was at. If we are trying to function as a couple in the same household we have to communicate and budget as such!
Through discussion and looking at the disconnects more closely we have taken the following actions:
- I will contribute more to shared resources: I had previously neglected this by forgetting about the phone bill and internet. I primarily use the internet and need it for work so I should be paying for it.
- Wrote a new budget: This time with both of our incomes and expenses listed out. By looking at the combined budget there is no room for argument that I was wrong. There is less room than I thought.
- Discussed our positions in depth: We talked out how money effects each of us and how the disparity in our incomes puts a strain on our relationship. I really want this strain to disappear and am going to work with my girlfriend as one household rather than the ‘yours vs. mine’ approach.
I want us to work as a couple to reach our common goals but I completely neglected that she is half of the equation. For us to move forward effectively we need to work together to overcome problems (financial and otherwise) and take steps toward our goals. Overall I think I need to focus better on implenting my belief that communication is key and clear communication about finances will make our lives easier. A lot of emotion gets tied up in money and to make our relationship work better we need to be open to discuss all aspects of our finances (emotional, fiscal, etc).
Posted on: September 18, 2008 by Matt
So I have decided that in an attempt to save a little bit of extra money that I would use cash only until the end of the month for all purchases except gas (I will still use my debit card at the pump for simplicity and to add to my Upromise account). I have all my bills mailed out for the month and only have one expected additional check to write between now and the 30th.
I have not opted to utilize an envelope system per Dave Ramsey’s method but instead have just taken out $300 from my checking to cover expenses. I am hoping that this will allow me to pay more attention to the areas I spend frivolously. I have also noticed that when paying cash for something I consciously count the cash out and hand it over. Something about watching the money trade hands really makes me pay attention to where the money goes. No more swiping the card and just looking at numbers in a checkbook, it is cold hard cash crossing hands.
To sum it all up I hope to:
- Identify areas where I tend to spend frivolously.
- Reduce these areas therefore saving money.
- Allow my bank account to settle down and all transactions and checks to post. I like to let my bank account settle from always using my bank card every few months as a form of verifying my checkbook reconciles. When transactions get crazy I take a break.
- Be a conscious member of the transaction (It is really hard for me to watch the cash go from my wallet into their drawer).
- Have a little left over in my checking account at the end of the month to pay down debt and / or move to savings.
I hope to have some good news to report with my cash only spending at the beginning of October!
Posted on: September 16, 2008 by Matt
So I read a post on FrugalDad yesterday about a girl selling her virginity to pay off her student loans at the Bunny Ranch in Las Vegas (huh, Howard Stern is involved too, go figure). FrugalDad also pointed out several other viable options including the dreaded “get a job” option for repaying her debt. However his post (and the news coverage I caught on either CNN or Headline News) has got me wondering what if a guy tried to pull this off?
Well that just sounds like a joke right? A quick search on Google for ‘man sells virginity’ only turned up results for Natalie Dylan and the joke post linked earlier. I suppose that society believes that most men are more than willing to give up their virginity to the first willing partner but let’s suppose that a good looking guy could make it through college without ever having sex. Would there be a market if he tried to sell himself?
I do not think that there are really any tests that could be performed to guarantee virginity for a man but maybe that would not effect the sale. Also with all the talk about cougars being on the prowl these days maybe there would be some response. Anyway all said and done – I was just thinking about the societal double standard and got a chuckle out of the thought.
What do you think? Will there be any men trying to cash in on the concept? If not do you suspect that there will be an increase in women turning to prostitution to pay off debts?
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