My husband keeps telling me to buy ‘just one pair’ as he sees me shivering in my knee length dresses heading to work. The other day, outside temps hit the 30′s and that night I came home and couldn’t seem to get warm. I could cave, buy a pair of pants from the little amount in the clothing budget and save myself from getting pneumonia OR I could hope the shivering would cause weight loss.

I looked at my pre-pregnancy pants hanging neatly in the closet, frustrated they’d been hanging there unused for WAY too long, and decided to try and squeeze myself into them. So, I pulled them up far more slowly than necessary (I’ve never been one of those folks who likes to rip off Band-Aids quickly), and waited for them to catch…

and they didn’t.

Guess who wore her wonderfully warm lined pre-pregnancy pants to work yesterday?

Sure, I look a little more J. Lo than J. Anniston, but the buttons close and that’s pretty much all I hoped for anyway. I think I heard my clothing budget cheering louder than me.

What he didn’t know? Transactions from Western Union automatically shut down our account for possible fraudulent activity – even though the charge was less than $100. No charges, no cash out, AND no online access. I didn’t know why the account was shut down and I couldn’t check the transactions online.

Being the naturally calm, level-headed person I am, I called my hubby to tell him our identities were stolen, we were destined for a life of poverty because of a thief, we wouldn’t be able to buy food for weeks, and we’ll die from slow starvation.

Accustomed to my overreacting downward spirals, he hung up on me, called the bank, and had the whole thing sorted out in less than 5 minutes. BUT, it would take them 24 hours to turn the cards back on and enable online access. Normally, this wouldn’t be a big deal but since this week is payday, our cash grocery fund has about 12 cents and the fridge is empty.

Dinner tonight? Pita bread and tomato soup. Breakfast tomorrow? Pita bread and tomato soup. Lunch tomorrow? Pita bread and tomato soup.

It’s going to be a long 24 hours.

Lesson learned? No more Western Union.

I’ve never had a bill with over the limit usage (I always check my usage online) but it might be nice for the folks who don’t suffer from OCD like I do. *wink*

Is the over the limit problem that bad? Have any of you had a whammy of a cell phone bill?

Bank of America’s stock dropped after this announcement.

Heck the 3 month overall shot of their stock looks pretty bad.

I’m not a B of A customer… but if I were, I wouldn’t be for long.

Read a good article about it here: http://www.marketwatch.com/investing/stock/bac

A few stores offering layaway this holiday season:

Sears, Kmart, TJ Maxx, Marshall’s, Best Buy, Toys ‘R’ Us and ELayaway

Check out this article and decide for yourself if layaway is right for you:

http://www.cbsnews.com/stories/2011/09/12/earlyshow/living/money/main20104801.shtml

I don’t have to worry about layaway this year since hubby and I won’t be purchasing gifts but have any of you done layaway? How’d you like it?

My reason for thinking this?

My sisters have made it look like a cake walk.

The problem?

I’m realizing, being married and childless while working a ton is WAY easier when it comes to finances. I didn’t have time to spend money. Don’t get me wrong. I am absolutely enjoying every single moment off work with my son but… I need to get out. And ‘getting out’, especially in the heat when I can’t go walk at a park, means walking in an enclosed shopping mall. Fortunately I’m still carrying 9 extra pounds (ugh) and I refuse to buy clothing at a size I don’t plan on staying, but I could see the whole ‘stay at home mom’ idea being very dangerous for my finances.

For those who have stay at home parenting down pat…

what on earth do you do when it’s too hot or too cold for free outdoor activities?

Really?

I was floored by the statement, ‘They think that economic success and political outcomes, and personal outcomes, have to do with individual behavior, a good work ethic.’

Call me crazy but… I agree. I don’t want to talk about politics or government but I do believe that individual behaviors (like frugality, a good moral compass, and a hard work ethic) have A LOT to do with personal and economic success.

But then again, I guess I’m an optimist.

Read the article. Agree? Or Not?

But what do you do when you don’t know your purse was stolen?

Huh?

My mother and sister left their purses in the car last week while they took a walk along the beach. They returned, the car was as it was when they left, and the purses were still sitting under the seats. At their next stop, my mother pulled out her wallet and noticed it was buttoned shut – something she never does. Finding the situation odd, she checked the rest of her wallet and noticed one credit card was gone. Confused, she asked my sister to carefully look through her wallet. As with my mother, everything was perfectly in its place – but one credit card was missing.

Had the wallet been left unbuttoned, she, nor my sister, would have noticed the missing credit cards and wouldn’t have known to report them stolen.

Welcome to the new trend in ID/credit theft.

Thieves steal ONE card and leave everything else. Rather than have minutes to hours before cardholders cancel the card, thieves have days, even up to WEEKS, to use the card without you noticing. In this case, the thief only had enough time to use one of the two stolen cards before my mother and sister cancelled them. Had he or she left the wallet unbuttoned, there would have been loads of time to use both.

So what can you do?

First, NEVER leave your purse or wallet in the car. Some of you are saying, ‘Duh!’ while rolling your eyes, but I know there are a good number of you who do this regularly – my husband and many of my friends included.

Second, try to never leave your purse or wallet unattended. Make sure it’s locked up at work and if you have guests over to your home, put purses and wallets in a secure location. It seems silly, but sadly, it’s something we have to do.

Third, don’t carry cards you don’t use. I know it’s tempting to carry all 17 credit cards ‘just in case’, but if you use credit cards, limit yourself to one or two and place them in a location you can see every time you open your wallet.

Fourth, pay attention. If something feels off, double check to make sure everything is there. Don’t shake off a feeling. I’m glad my mom didn’t.

To my fellow Californians…

Go out and buy something big before they change it again. *wink*

Have a good weekend!

To be honest, I had kinda hoped for a tiny shower held in a janitorial closet involving only the lovely ladies who had specifically asked. By day’s end however, the event, originally scheduled in the smallest conference room, had to be moved to the largest one. The e-mail invitation was forwarded around the office like a fast moving virus.

On top of that, one of my co-workers gave me some items his grandson had outgrown including a swing and a bouncy seat. ‘I wish I would have known earlier! I would have given them to you months ago!’ he said.

For those of us digging our way out of the debt mess we made, it’s easy to slap away the hands seeking to help. I keep thinking, ‘I’m the idiot who got myself into this mess, I need to learn my lesson and get myself out.’ But part of the lesson we need to learn is…

Humility.

Foolish pride has got to go.

My husband and I have made great strides in saving money but we still haven’t met our goal amount to get through my leave and pay the hospital bills. Spending a bunch on baby supplies isn’t an option. Accepting help is a great lesson in humility AND a great reminder that we have some wonderful, wonderful people in our lives.

Don’t slap those helping hands away. Smile…

and say ‘thank you’.

‘Hmm. Maybe I should consider refinancing this baby’ I thought as I tapped the steering wheel of my Mazda. ‘What am I paying now? 5.9%?’ I wondered.

I kept repeating the name of the credit union in my head over the next few miles until I remembered one fairly important fact…

We paid off my car two years ago when we decided to change our lives to become debt free.

I am so used to paying payments for everything in my life that not having a payment is still a foreign concept. I still smile when I remember… that payment is GONE!!! It was a nice ride home.

It’s time to fess up on my ‘dirty’ addiction. I’m hooked on TV shopping channels. When I’m home by myself – particularly on Saturday afternoons deep cleaning the house – I flip between HSN and QVC. There’s something therapeutic about hand scrubbing floors while listening to folks peddle million thread count Egyptian cotton sheets.

Sometimes, I even watch these shows when my husband is home but is in another room.

He’ll yell, “Turn that garbage off!” when he hears the telltale “and for just 2 easy payments of $49.99, you too can own this beautiful set” and I’ll whine, “But they’re selling green cookware!!”

My shameful habit started when my husband and I first married. We were broke and couldn’t afford cable. It was either watch HSN or ESPN47 when I was home alone. I’ll let you guess who won that battle.

Here we are, almost 7 years later, and I still ohh and aww over Susan Lucci’s skin care line and gym equipment.

Ready for the weird part? I never actually buy anything. OK, well, I did once. Six years ago, I was mad at my husband for forgetting to tell me he was coming home late and I ordered a pressure cooker just before midnight because he was still gone. It was a moment of newlywed weakness. Other than that, I’ve been six years purchase free.

So here’s the question:

Should I quit my guilty pleasure because it carries the risk of a breakdown and suddenly I’m the proud owner of a 72” plasma TV OR…

Do I chalk it up as just another bad tv viewing choice up there with ‘The Real Housewives of New Jersey’ and consider it harmless?

The last time this grocery union went on strike was in October 2003. No, I didn’t look up that fact, I remember it… CLEARLY.

If you type ‘southern california october 2003’ in Google, you won’t see anything about a grocery strike, you’ll see page after page about the horrific Cedar Fire that killed 15 people and destroyed over 2,200 homes.

In the middle of that October night, I got out of bed to see why there was a bright orange glow shining from my window and stared dumbfounded at the flames ripping up the mountainside. A short while later, the fire chief drove up the driveway and told us we had to leave – NOW.

We grabbed what we could, put the dogs in the car, and left.

We drove around for a while, stayed at friend’s homes… until they were evacuated too, and eventually ended up in a Ralph’s parking lot. Now, call me crazy, but the first thought that crossed my mind wasn’t, “Well, these folks are on strike. Maybe I should drive to Trader Joe’s.” Weirdly enough, it was more, “I’m thirsty, the dogs are thirsty, it’s hot, I’m going to get water and ice.”

I loaded the goods into my 4-Runner, gave the dogs a chance to walk around, and decided to drive to yet another friend’s house who hadn’t been evacuated. As I tried to leave the parking lot, the strikers (wearing masks to protect themselves from the huge chunks of ash falling from the orange sky) blocked the driveway to the street. I threw my arms up in frustration and one of the strikers faced me, flipped me the bird, and screamed obscenities as if somehow, I were the most vile human being in the world for shopping at a union grocery store.

That was the day the Southern California grocery store workers lost any hope of support from me then or ever.

Here we are, nearly eight years later, and I will be shopping at Ralphs – and ONLY Ralphs during the strike. If this union didn’t care about the community in its time of need, I simply can’t find the obligation or desire to care about them.

The moral of this story?

If you feel the need to strike for more money, benefits, etc., be cognizant of what is going on in your community – otherwise, you could lose any chance of support.

And trust me… people will remember for a very long time.

In fact, for a while, we will only be making minimums on student loans. At best, we can hope for a killer tax refund next year to pay off the remaining debt, otherwise… we’ll be in this minimum payment boat for a while and it’s hard not to feel overwhelmed at the sudden loss of momentum.

Since we both received nice pay increases this year, we will likely have to wait two years for further income boosts.

I worked myself into a nice emotional tizzy until I remembered that I need to be more optimistic so I sat down and wrote a list.

I’m grateful we don’t have car or credit card debt. Those payments would sink us.
I’m grateful my husband will graduate a few days before the baby is born. No more tuition payments!!!
I’m grateful we have a healthy emergency fund and savings account. I sleep a little better with them.
I’m grateful we have some household items to sell after helping someone move. We will likely be able to buy all the necessary baby furniture with that cash. Otherwise, I’m not sure how we’d pull it off.
And, I’m grateful for my family. If we can’t afford food, I know my mom and grandma always have something good cooking. We’ll never starve.

I’m with you. I get depressed and overwhelmed and my list made me feel slightly better but I’m certainly no Pollyanna.

I guess we’ll just have to work through it.

Sure, he’s a brilliant guy. He’s finishing his business degree where he specializes in management and finance yet…

He’s clueless about the nuts and bolts of our finances.

He participates in our ‘Family Finance’ meetings and he contributes ideas as to what our next steps should be but when it comes to the actual account numbers or even knowing where our accounts are, he has absolutely no idea.

This may come as a surprise (ha ha) but I LOVE managing our finances. I love obsessing about the tidiness of our bills. Ask, and I can probably quote any account number and any balance from memory. Heck, I can tell you the names of every teller at our bank and what ‘specials’ they are running this month.

Thanks to the time obligations required by school, my husband can’t possibly know everything about every account. Plus, he doesn’t really care anyway. That’s not his thing – and I’m OK with that. A big problem presents itself about this set up – if I should pass away unexpectedly, how would he manage?

Judging by the fact that he said, ‘Our second mortgage isn’t with B of A?’ last night, I’m guessing he’d struggle.

Dave Ramsey suggests we all assemble Legacy Drawers. Drawers that contain all the pertinent information including our wills, health insurance information, auto insurance information, etc. Yes, it’s a bit morbid, but we’re all going to die someday.

Help out your spouse (or ask your spouse to help YOU out) and create a Legacy Drawer.

Go to Dave Ramsey’s Legacy Drawer page for help on what to gather. Do it now!

This setup has served him for most of my lifetime. He owns businesses, runs them, and brings home a paycheck. It has never been a problem…

Until now.

There was no contingency plan in place should anything happen to my father… like a quadruple bypass.

Fortunately, my brothers know the construction business and my sister and I know his accounting system and had open schedules to jump in to help. There has been no hiccup in his business services, only a different face showing up at the jobsites. Who knew having 7 kids would pay off eventually?

For the most part, everything worked out for dad. He’s still struggling a little physically and relying on my youngest brother to get him through the day, but at least he is getting through the day.

Here’s the question for all you ‘invincible’ small business owners out there…

Do you have a contingency plan?

If not, you better figure one out!

I decided to share an article from WalletPop to make up for it. Aaron Crowe wrote about 10 offbeat ways to be frugal and *gasp*, I liked it. Some suggestions were actually helpful! I particularly liked the way he said, ‘frugal is still the new black.’

That’s right folks, he said we’re cool.

Check out the article here.

A month or so ago, we were given a great set of couches in exchange for some manual labor, yet…

I caught myself looking at furniture ads in this Sunday’s paper.

I love our couches. I don’t want new ones… so why am I looking at advertisements?

It has me thinking, how much of our shopping/spending patterns are habitual?

Am I just a crazy Type A personality with deeply ingrained habits? Or do find yourself doing the same thing?

1. Hold the mother of all garage sales.

The only thing left to sell in our garage is the actual garage… and I tried.

2. Quit smoking.

Easy. Well… only because I never started.

3. Tame your driving addiction.

Sure it triples my commute time, but I leave my car at home on a regular basis.

4. Buy used.

From clothes to books to cars, I haven’t been the first owner of much since we went on our debt diet.

5. Become a homebody. Consider the library for books, music and movies.

I can’t believe she shared the library tip!! That was MY secret!

6. Cut your housing expenses. Consider renting out a room.

We’ve had roommates for…ever.

7. Cut up your credit cards. Build an emergency fund first to handle most unexpected expenses.

Done. Well… again.

Radical? I don’t think so. Have you discovered a REAL radical way to save cash?

Other than recommending obsessively monitoring every online travel search engine (Bing, Travelzoo, Kayak) for months and doing a faux mystical rain dance to evoke the flight sale gods, I’m a bit short on good advice.

I always avoid summer travel since its peak rate season so I’m not much help.

Do any of you know the best way to buy a summer flight?

Curious, I took a second look and noticed the void was a representation of our new debt free way of living.

Yup, the ‘Lender Information’ section was bare for the first time since we’ve been married. Heck, for the first time EVER.

We paid off his truck in July and seeing that big empty space brought back the same feelings I experienced the day I mailed the final check. I received two reminders since then that my fight with debt is ending. The pink slip made me giggly and the registration nearly made me cry.

Debt has haunted me, but I’m finally starting to clear the ghosts out of the closet.

It’s a wonderful feeling.

Zac stands by state colleges instead of private colleges and supports the financial decisions of students who attend community college for their freshman and sophomore years as a way to save loads of cash.

I graduated from a private college and I loved it… but sometimes I wonder what life would be like if I hadn’t paid $26K a year. My degree would be the same… but I wouldn’t be carrying student loans.

Thanks to some awesome scholarship opportunities and grants, I graduated with ‘only’ $15K in debt. My friends did not fair nearly as well. Most have more than $100K in student loans.

If you have a child in high school, buy his book and read his articles at: http://www.dailyfinance.com/writers/zac-bissonnette/

You’ll need the help.

You can thank me later.

The first class was this week and the facilitator asked if anyone was a returning student. My husband and I raised our hands along with one other couple. After the video, we gathered into a small group and were immediately asked if the course had changed our lives. My husband and I said it had and that we lived below our means.

‘Are you debt free?’ a classmate asked.

‘Um. No. We have about 10 grand left.’ I said, ashamed two years has passed and I’m still carrying financial baggage.

‘At least you are working on it. And you’re here!’ she said smiling.

The rest of the group talked about their struggles and goals for about 20 minutes and then we all headed home. It was nice to hear others are fighting the same things as me.

It’s funny that I can openly and fearlessly share every little detail about my debt with you but I’m completely ashamed to share it with the small group – then again, I don’t have to shake your hand every Sunday morning.

If you haven’t been through FPU, you should consider it. The lessons are great but more than that, you have someone to look you in the eye every week who asks… how did you do this week?

Suddenly, spending feels different.

The collections record finally fell off my husband’s credit report in February of 2009 and I assumed we could move on.

Dave Ramsey says collections follow you for the rest of your life.

I didn’t believe him…

Until my husband received 8 phone calls from a collections agency this week.

I told them my husband’s address was correct as listed on his credit report and if they had anything to send us, to send it through the mail because I sure as Hades wasn’t going to give them any information or promises of payment over the phone. Not surprisingly, they didn’t appreciate my response.

This… is when I start banging my head against the wall.

At the end of each month, I analyze our spending and look for ways we are becoming ‘financially flabby’. I discovered this extra food spending was contributing to some of our annoying financial flat lining (fatty restaurant food doesn’t exactly add to the aesthetic qualities of our physical bodies either).

I know, I know, we had a good month this month – but it could have been better if I had worked a little harder.

So, I proposed a new rule to my husband. No dinners/drinks/food out for the next 60 days. Fortunately for me, he’s game.

This could get interesting.

My husband hasn’t paid a bill since 2004.

Don’t get me wrong. Up until recently, my husband was involved in the decision making. I was simply responsible for organizing how bills were paid. We have always worked our finances together – especially after deciding to pay off debt.

In January, my husband started taking more units in school while still working a full time job with side jobs. In June, he signed up for 5 hour night classes and when he isn’t studying, he’s working. Understandably, actively participating in finances isn’t possible anymore.

I didn’t think it would bother me. I’m a nerd. I live for Excel spreadsheets and I balance my checkbook almost hourly for fun. Take over everything? Sounds fantastic!

It’s been 7 months of sole money management and I’m beginning to get a clear understanding of why this is bad.

He doesn’t have a clue about our money and I’m constantly stressed about making the right decisions. I feel like I’m making mistakes and hurting us financially. It’s not that I can’t handle the finances on my own; I hate the sole responsibility. I’d be closer to a breaking point but I’m coasting through knowing he’ll be out of school by next week to offer a reprieve.

I have a countdown marked on my calendar.

I don’t know how people do it alone. Financial stress seems to permeate every part of your life and the feeling that you alone are responsible for the financial success of two people is, at the very least, hugely uncomfortable. We made some great progress on our finances this month (update tomorrow) but the pessimist in me only focuses on what I could have done better.

I miss my financial partner.

Are you a sole money manager? Or do you share the responsibility? What works best for you?

‘What is your total net worth?’

I calculated my mortgage debt, subtracted my tiny home value, added my student loan debt and my auto loan debt, and then subtracted my liquid cash. The total? An astonishingly huge negative number representing my net worth.

Not wanting to stop at the large, large, large negative number, I added the amount in our retirement accounts (though technically locked up for the next 27 years under mounds of government and ESOP paperwork).

I landed at a number closer to zero but still negative none the less.

I received the following question from my insurer:

PLEASE EXPLAIN WHY YOUR TOTAL NET WORTH IS A NEGATIVE NUMBER.

Yes, they wrote it in all caps. As if I needed a reminder that I’ve made some pretty large financial snafus. Little do they know that if my number landed anywhere close to zero, they’d find me dancing excitedly like a lunatic on top of the bus I take every day.

I sent a long explanatory e-mail to the agent and figured she’d understand. Instead, I received a disdainful, ‘Fine. I’ll alert your Case Manager.’

Certainly I can’t be the only one with an insanely underwater mortgage that throws off my net worth right? Let’s do a poll. Is your net worth a positive or negative number?

And if you see 14 comments after I post this that say ‘positive’ and you’re about to say ‘positive’ as well, say ‘negative’ just to make me feel better.

Have mercy.

I’m a nerd, therefore, I read the 7 million pages of information they send each time someone takes over.

One piece of information Chase customers couldn’t have possibly missed over the last month, even if they aren’t nerds and throw away 90% of the information, is the new set of overdraft rules. Unless customers are protected by the new ‘Chase Debit Card Overdraft Coverage’, everyday debit card purchases will not be approved if you don’t have sufficient available funds.

If you elect to add the Chase Debit Card Overdraft Coverage, you will be charged the standard $34 overdraft fee per transaction.

I haven’t had an overdraft charge in a very long time but I’m excited that I have the option to be declined rather than accidentally pay $35 for a Snickers bar. I decided to decline the Overdraft Coverage.

Trust me, I can handle the embarrassment of someone telling me I’m broke.

What do you think? Are you a “Decline me. I don’t care” sort of person or do you think there is a reason to keep the overdraft protection?

When my debt is reduced to only my mortgage payment, what will I do?!?

If you had asked me, when I first started this journey, what I would do when my debts were paid, I would have said, “I want to remodel my 50 year old kitchen” or “I want to restucco my home!”

The fantasy has changed.

My fantasy now consists of a paid off mortgage and growing mutual funds.

I can’t tell you how strange it was to sit down to deliberate over the next step. Obviously we are going to save a larger emergency fund and aggressively pay our second mortgage but my dreams of ‘big shiny things’ are fewer and farther between. OK, I’ll just spit it out…

I’m an addict.

I’m addicted to the good feeling I get when I see zero balances.

Have you thought about your life after debt? What are your plans (other than investments and mortgage payoffs)?

What??

I read the article and tried to give Mr. Karabell’s thoughts an open mind – then quickly dismissed his ideology as completely irrational.

My favorite quotes were:

“Even with the U.S. economy weak, the dollar remains one of the few truly safe havens, and that means interest rates could stay low for a very long time, which in turn means that our debts – however big – can be managed.”

And

“Obsessing about the debt is a distraction we can’t afford.”

And my personal favorite…

“The problem isn’t how much debt we’re carrying today; it’s whether the economy of tomorrow will be able to justify it.”

When I searched to link the article to this post, I found a follow up article by Mr. Karabell defending his position once more after a less than positive response from Time readers. He said, ‘People don’t see straight when discussing this issue.’

Based on the overwhelmingly disapproving response, it’s Mr. Karabell who may not ‘see straight when discussing this issue.’

I’d recommend reading the Time article… just for the reader comments at the end.

I’m a fan of daily fitness so I will be the first to tell you, if having a gym membership is the only way you will exercise, spend the money. The monthly gym fees will be far less expensive than poor health now and in the future.

We were able to temporarily cancel our monthly gym dues when my husband lost his job. Now that six months have passed without a trip to the gym, I’ve discovered something surprising…

I work out more now without a gym membership than I did with one.

I spend a quick 20 minutes running with the dogs or doing a workout video before making dinner each night. I do sit ups while watching TV or I jog in place. Before, if I didn’t have an hour to workout at the gym, I simply wouldn’t workout at all. Now, if I have 10 minutes, I use it!

I have always clung to my gym membership even in the leanest financial times. Looking at the impact of working out at home, I’m not sure why I held on so tight. We decided to make the temporary cancelation permanent. Rather than redirect all the money toward debt reduction, we’ve decided to keep part designated to fitness. The money can go toward new tennis shoes, marathon entrance fees, or exercise equipment. If we get desperate for a group class or a swim, we can sign up at the community center for $30 for a 3 month, two hour, twice weekly class.

Try working out at home this month. It may not work for you – but maybe you’ll be surprised at the results.

**If you do decide to cancel your membership, you may need to cancel several times. These companies (especially large gyms like 24Hour Fitness and LA Fitness ) can be very sneaky and ‘accidentally’ automatically deduct your dues for up to six months. You may need to consult with your bank to stop payments.**

Perfect.

She’s debt free other than her mortgage – and even then, she’s paying it aggressively. I’d love to tell you that her husband makes loads of money and that’s how she’s able to be a stay at home mom to four kids and remain debt free but…

He doesn’t.

My sister has found ways to live below her means and actively seeks new methods to spend less. She purchases clothing and toys for the kids at garage sales in nice neighborhoods then resells them when the kids outgrow them (sometimes, she actually MAKES money on this!), doesn’t waste money on cable TV or other ‘necessities’, drives an older yet reliable car, and she cooks fabulous inexpensive meals at home (my home cooked meals are inexpensive but they are far from fabulous).

She’s the annoyingly good at being frugal but not cheap.

Naturally, I spend this time around her basking in her infinite financial wisdom, asking questions, and learning from her example…

…and I am also the queen of England.

Sorry folks, sibling rivalry is alive and well.

So, I do the second best thing, I make my mom ask the questions and I pretend not to listen.

My advice, befriend someone frugal – even if it is your sister. I find that I don’t learn as much from the books or the internet as I do from those who may not have it all figured out, but they do a pretty darn good job.

My sister and I were discussing our choices in mortgage lenders last night and were both surprised at how pleased we were with Wells Fargo (Her first mortgage and my home equity line are with Wells Fargo). And yes, we talk about stuff like that. Today’s topic at lunch? The differences between revolving and installment accounts and their impact on credit scores – oh, and the wow factor of that good looking guy from New Moon.

Wells Fargo’s service over the last three years has far exceeded my expectations. As an example, I had a concern about my account a few months ago and wanted to talk to a Wells Fargo representative. The representative, John, resolved my concern kindly and quickly then gave me his phone extension if I ever needed to call again.

I’ve heard about movements to convince consumers to pull money out of big banks and move it to small local banks. It sounds like a good idea… but I’m not planning on removing my Vice Grip clasp from Wells Fargo anytime in the near future. If I could, I’d move my first mortgage to Wells Fargo because I feel a connection with them. I feel valued. Sometimes I pick up the phone to call John to invite him to a summer BBQ before I remember John doesn’t live in California and he’d probably be a little more than creeped out that the lady with the endless questions from San Diego wants to spend time together.

Maybe you love Bank of America. Maybe you hate Wells Fargo. Maybe you hate them both and love your local credit union. It’s not about big or small banking; it’s about where you feel at home.

Banking is about feeling valued. If you don’t feel valued, it’s time to move on.

1. When you pay off credit cards and car loans, banks turn into the very worst version of your mother. They write sappy love notes telling you how much you are missed and wouldn’t it be nice if you’d care to spend the holidays with them?

2. It’s never too early to start teaching children about the perils of debt – but constantly singing ‘If you’re happy and debt free clap your hands’ to your six month old nephew may annoy his mother.

3. It was somehow possible to lower my already sub-par vacationing standards. I went from ‘Motel 4 type establishments’ to ‘tents with 25 cent showers’ – and it wasn’t bad!

4. Marrying my best friend and celebrating five years of wedded bliss was the best decision I ever made – well…other than the decision to wear clean underwear in case of an emergency.

5. Blog readers are awesome, supportive, and helpful. Thanks for helping me grow.

6. I’ve had more than my fair share of laughter and joy. Regardless of the numbers on my bank statement, the interest rate of my mortgage, or drama of life, my family and friends are unchanging. I am a very lucky girl.

Please be safe tonight. Save money, stay home.

This change to policy will be helpful to borrowers who struggle to make payments on time and suffer rising interest rates. It also forces credit card companies to apply payments to the debt with the higher interest rate first rather than pay off the teaser rate. I am hoping this will finally give those who find themselves continually stuck in the cycle of debt, a real chance to get ahead.

One of the changes, my favorite of all, is the restriction on issuing cards to those under 21. My first card was peddled to me on my college campus at the ripe old age of 19. I got in the habit of spending more than I made and by 21, I was more than $2,500 in debt.

Of course there is still a down side to this – I read an interesting article about how the changes will affect those who are careful with payments and are ‘good’ borrowers. It doesn’t look good! Check out the article at: http://www.associatedcontent.com/article/1791592/us_credit_card_issuers_must_prepare_pg2.html?cat=3

Regardless, I think this change will be good for those seeking to become debt free.

When I call Bank of America, they never know where to transfer me and my call is often magically ‘dropped’. We never received paper statements and our online statements have been a nightmare. Other than a statement of monthly payments, no other information was made available. I had no idea if or when our property taxes or mortgage insurance where paid and I could never find our principal balance. I called to ask why our mortgage payment jumped $150 a month and the best answer they ever offered was ‘I don’t know. Taxes maybe?’

Bank of America finally listed my full account information online this month.

Holy. Cow.

First, we were not notified that the cost of our homeowners insurance jumped by 50%. Call me crazy, but that’s kinda something I’d like to know.

Second, the extra money we’ve been paying on our principal balance the past two and half years has been offset by a reduction of our monthly payment.

This is hard to explain, but it’s sneaky by Bank of America none the less. We pay $20 extra per month on our second mortgage through Wells Fargo. They apply the $20 toward our principal balance but keep our payment the same. Since our principle balance is reduced and our payments are the same, our $20 is stretched to around $50-$75. Our $20 a month to Wells Fargo has paid off around $3,000 of mortgage debt instead of $720.

Bank of America has taken the $20 we designated toward principal and reduced our balance by exactly $20. Then, since our principal balance is reduced, they reduce our monthly payment. Unlike our loan with Wells Fargo, Bank of America has made it so we aren’t shaving any time off the life of our loan and we’re saving no money. Very Sneaky.

Realistically, I should have pushed harder for the information from Bank of America and demanded an explanation of the $150 hike. I assumed it was all from the recent property tax hikes, and most of it was, but I could have saved money by knowing there were other reasons behind the higher monthly payment. And, I would have liked to transfer the $20 I’m spending for no benefit at Bank of America and switched it to our Wells Fargo account.

I assumed my mortgage was the one payment I didn’t have to monitor closely – but I was really, really wrong.

Thank you Bank of America for making me your babysitter.

I assumed this wouldn’t be a difficult task. It’s not like there’s a strong filter for reality tv. Come on. I’ve seen Jerry Springer and Tila Tequila.

California’s official nickname is ‘The Golden State’
San Diego calls itself ‘America’s Finest City’
Humility isn’t our strong point.

It only seems obvious that we would point a camera of reality tv at our Southern California city. I went to the HGTV site, Pie Town Productions, and the DIY network. Do you know how many home remodeling shows are based in ‘America’s Finest City’?

Zero.

But, there are two shows that film anywhere, anytime – Extreme Home Makeover and Deserving Design. For Extreme Home Makeover, we lack a compelling unique story. ‘My husband lost his job… just like everyone else’ isn’t nearly as impressive or distinctive as ‘Timmy is allergic to the sun’ or ‘Little Bonnie Sue doesn’t have sweat glands’.

And remarkably, Deserving Design didn’t call me back after I submitted my husband as ‘deserving’ because only once during the last five years of our marriage has he left the toilet seat up. It’s sweet but not as gripping as Jane Doe saving the world over the last 20 years rescuing one sweatshop child at a time.

Bummer. I really needed a new back patio before the toothpicks, dental floss, and tin foil holding it together collapse.

I didn’t know they even wrote partial checks.

My husband is diligently looking for work but it’s difficult to find a job in this economy, in the construction field, and even worse, over the holidays. We’re guessing he won’t get an interview until into the new year.

But we’re still hanging on. We’re optimistic. Err. Um. He’s optimistic. I’m hanging on to his coat tails of sanguinity.

Residents in our area are often sent letters asking to reduce water use. Thanks to ‘Navy showers’, reduction in roommates, and landscaping akin to the dust bowl, we personally cut our water usage by 50%. According to water company reports, our fellow residents cut their water usage by nearly 10%.

I received a letter titled ‘Water Rate Increase’ with my bill. The water company is raising rates in part because of… get this…

Lower water sales.

Um. Didn’t you ask me to stop using water? And now I have to pay more because I actually stopped using it?

Our 50% reduction in water usage resulted in… a bill that was 5.5% less than last month’s.

Striking oil in California won’t make you rich – but striking water just might.

It’s times like these that you just have to laugh.

The big question…

How long can we hold on without my husband’s job?

Our initial numbers (without unemployment benefits) put us at 8 weeks. Our reductions to debt paired with our cash in savings and unemployment benefits put us at…

9 months.

Had this happened before we had taken control… had this happened before we made the decision to live below our means and reduce debt… we would have made it through a month, maybe two tops.

But now, we’re looking at 9 safe months. 9 months to find a job before things get hairy. Sure we won’t make progress other than minimums and we certainly won’t eat anything other than Ramen noodles but, we can hold on.

I have four words to say –

Thank. You. Dave. Ramsey.

1 – If you are hoping for a huge change… this is not the answer. Not all changes are permanent and/or large. Some adjustments may last as little as 3 months.

2 – Loan modifications are not quick. If you can’t wait the standard 9 weeks for the review of your file and another 5-9 weeks for paperwork processing, you don’t have enough time and you may want to move forward with other options like a short sale or foreclosure.

3 – Give an accurate listing of all your expenses. Don’t exaggerate but don’t minimize either. Have a good understanding of exactly how much you are paying. Keep this information available for when you call the bank.

4 – You will be rejected if you have recently made large purchases or if your credit score is low. You shouldn’t be making large purchases anyway so I can’t say as if I blame the banks for this stipulation.

5 – If you have a second mortgage with another lender, they will likely require you to get approved for the Making Home Affordable Program on your first loan before they will consider a change to your second mortgage. If you are accepted for the program on your first loan, it’s easy to submit the same paperwork for your second mortgage.

6 – This should not be your only option. It’s worth a try, but don’t fool yourself into thinking this will solve your problems.

7 – If your home is not a Fannie Mae/Freddie Mac mortgage, this program does not apply to you… BUT some lenders are still willing to modify other types of loans.

8 – This is a voluntary program. No one HAS to help you. Sure it’s good business sense to lessen foreclosures on the banks part, but if you are a problem child, don’t expect any help. Banks don’t want to keep you as a customer anyway. Be kind, courteous, and polite even if you are frustrated.

According to the bank’s calculations, my husband and I qualify. We are now in the first 9 week waiting period while they review our files. We have stellar credit scores and we haven’t made large purchases in a long time. We are good candidates for an interest rate reduction from the over 7% it is currently, down to the market rates of 5-6%.

Do I really think it will really happen?

No. But it’s worth a try.

First, we cut our dental and vision insurance. This is something that can easily be re-instated but the $25 a month can help me now.

Second, I cancelled all my appointments health related or otherwise. None of my appointments were an emergency and I requested that my doctor renew my prescriptions without the annual check-up since the last 6 years have been clear of any problems. These appointments and tests run in the neighborhood of $500.

Third, I called my cable company to cancel our cable, reduce our internet speed, and reduce our phone service. I explained our situation and was surprised when they offered reduced internet costs, reduced phone costs, and added free services and free channels for a 12 month period. I would tell you how much I’m paying – but I’m afraid they’ll figure out they made a huge mistake and ‘correct’ the discount… or fire the guy who gave it to me. I would have cut out the internet and phone entirely but my husband needs internet for school purposes and job searching late at night when he gets home (free internet at the library is closed) and I’m uncomfortable without a home phone for emergencies.

Fourth, I contacted my student loan company for a deferment.

Fifth, my husband and I contacted friends and family and let them know we’d be available for odd jobs. Since unemployment doesn’t start for nearly a month after a job loss, my husband has done everything from pulling weeds to insulating walls. I have been helping a company with paperwork at night after work. We use this money for groceries and for the important bills like electric and water. At no time should you feel you are ‘too good’ for any type of job.

Sixth, we cut off all our subscriptions and memberships. If you’re like us, you may not even remember you have some of them since they are automatically billed to your credit card and you may not look at each item on your online statement. Some examples: gym memberships, club memberships, magazine and newspaper subscriptions (some automatically renew unless you cancel). Savings – $50 a month.

Seventh, we’ve been using more public transportation. It takes twice as long to get somewhere, it’s uncomfortable, and it’s far from fun, but it saves $50-$75 a month.

It’s not a lot, but each item buys us a little more time.

Sure, if I had no debt and had no plans or acquiring new debt, my credit score wouldn’t matter…

Or would it?

I was reading Parade magazine this week and was reminded of a very important reason to keep up those scores – employment. Employers are using credit scores as another way to narrow down candidates. In this rough job market, that’s the last thing you want to worry about.

My current employer ran a credit check on me prior to offering employment. I had been unemployed for 2 months but had managed to pay my bills. Had my credit score fallen, I likely would have been passed over.

Congress is considering blocking this practice but right now, it’s very legal.

Do you think credit checks are a fair way to judge potential employees?

You can read the article at Parade.com/creditscore

Thanks. Now I’ve got THAT to worry about.

In all my sitting at home time – most of which is spent in complete misery – I am able to squint open my eyes and read some of the daily news. I stumbled upon this headlining article at AOL…

http://autos.aol.com/article/cash-for-clunkers-greenwash

I found two quotes particularly eye opening…

‘Three revealing line items in a separate CNW survey noted that the drain on the family coffers would be offset by reducing the pay-down of credit card debt, deferring home improvement and removing money from non-targeted savings.’

and

‘Other critics groused that Cars for Clunkers took $2.8 billion from the general roster of 300 million citizens and handed it tax-free to a small group of 700,000 citizens.’

What are your thoughts?

Begin with an end in mind.

OK, so here’s the sad part, I don’t remember how exactly they applied that statement to management. BUT, that statement is HUGE for me personally.

Often times, I pick a task with no end. I want to get more fit or I want to eat a healthy diet or I want to live as a penny pincher and on and on and on. Here’s the problem: Unending goals like these will lead to burnout.

Head smackingly obvious right? Then why do I keep making these stupid never-ending goals?

I think that’s what I appreciated about the Dave Ramsey program and why it has worked for me. I was convinced to pay off one debt at a time. It’s a goal with an end followed by another goal with an end. I also think that’s why training for a marathon and a triathlon has kept me more motivated than working out without an end in mind. If I want to quit after I finish I can, but I have a feeling I’ll be signing up for another one as soon as I cross the finish line.

Rather than say, ‘I want to be debt free forever’, say ‘I want to pay off my car by next summer’.

Begin with an end in mind.

What is your end?

Ann, a brilliant reader, also pointed out that if I paid off my student loan first, I would lose my tax deduction.

As someone who gets WAY too much joy from writing off the student loan interest, I am grateful to Ann for reminding me of this fact.

I’m sure a lot of you have student loans and this should be a consideration in your debt payment plan.

Thanks Ann!

I left to housesit for a co-worker and came home to …

My husband explained that he had discovered mold under the floor and in the walls and decided to replace everything to be safe.

So why… why… why… did I assume that when we intended to insulate the separation closet wall in a 50 year old house, that we would simply be able to insulate the closet wall?

This is our spare bedroom as of today…

A few days ago, my husband asked if he could insulate all four walls. We both agreed that as long as we had one wall down, we should take down the remaining three walls, fix the electrical, and fix the phone line. Total tab so far? $142. I am so very thankful to be married to a talented construction man.

When making decisions like these, it’s hard not to want to put it off until later or take the easy way out. What we constantly have to consider is: Is this going to cost more later if avoided?

My nearly $200 electric bill tells me… I should have done this two years ago.

The good news? Energy improvements, including insulation, are tax deductable. Yes!

Want more info? Go to: energystar.gov/taxcredits

Dave Ramsey suggests paying the extra amount on your lowest debt (which would be the student loan) but the minimum payment on our truck is more 4 times higher than the student loan. Plus, the interest rate on the truck is twice as much.

Another good reason to pay more on the truck is to quickly rid ourselves of the hefty payment. In the event of job loss, a student loan can be deferred due to financial hardship – auto loans are not nearly as forgiving.

We’re hoping to have the truck paid off in 10 months or less.

Here we go!

But that’s not the big part of the story.

I was listening to the radio last week and the announcer spoke of the success of the fundraiser to not only pay the travel expenses of the team… but for their families as well. In this economy, where everyone is scraping nickels and pennies, residents were able to pool together well over $100,000 to be a part of a life changing event for those young boys.

The city actually STOPPED accepting money because they had MORE than they needed.

Congratulations to the Chula Vista Little League team but more importantly…

Congratulations to those who made the dreams of those boys and their families come true.

Total Starting Debt: $38,495.86
Total Paid: $16,727.33
Total Remaining: $21,768.53

Breakdown of Remaining Debt –
Truck: $11,934.57
Student Loan: $9,833.96

We’re nearly halfway there. I got an updated payoff date according to our Debt Snowball Calculator on DaveRamsey.com…

December 2010.

We shaved off 4 months so far. Can I get a Woo Hoo?