Speaking of money

Speaking of money

03/Sep/2005

#Rants and Raves

I’m not sure why we are so touchy about discussing our bills and finances. I was talking with Rbelle and Traci about this last week.  It’s nice when you can be open and honest about your financial situation. I’m sure in the big scheme of things, we are about as typical as you can get. We spend a little too much on stupid things like Internet, Web hosting, Cell phones, and Satellite TV. Yesterday I spoke with the bank about getting a home loan. We were pre-approved for 230K. Y’all, we can not afford 230K payments on a 30 year fixed mortgage. I don’t mind telling you that.

The truth is that if we could be honest about our financial places, I think we could all benefit from the “what worked for us” or “woah.. I think we spend too much on this.. you mean you do OK on ___ amount of coffee allowance a month?”  It hit me the other day, on my second trip to Starbucks in a morning, that I am still living like a single, working girl. We do ok, don’t get me wrong. But damnit if we don’t dip into the red at the end of every freakin’ month. With a new house on the horizon, and in another year or two, a new baby, we really need to re-evaluate how we spend our cash. I don’t mind telling you that I have a problem with this. I think I get it from my Mom. We like to live above our means. Mr. Flinger came from a family who never ever ever had debt. I wish I could live this way. I am trying, but I suck at it. You know how I know? I just opened our credit card bills. We have a total of 7K in fucking credit card debt. That makes me sick to my stomach. Sick.

Comments

  1. Christine, what cell phone do you have? I’m seriously thinking we need to switch to a “pay as you go” type. That’s one we’re looking at getting rid of.

    We have a “one year plan” which will get us out of all credit card debt and put savings in the bank. I have to work this year to make that happen. Hopefully, we’re learning from other people’s lives as well as our past to prevent us from making a big mistake ourselves. I’ve been bad before, I’d like to have a healthy financial future for our children. grin

    By Mrs. Flinger on 2005 09 03

  2. Oh! Oh! We are so alike. John comes from a family like Mr. Flinger. They had no debt, despite the fact that they were so damn poor. Me, I am soooo spendy. I am responsible for most of our debt. I am awesome at talking John into expensive purchases. But, because I am going to be quitting my job after Festus arrives, we had to bring the kibosh down. I am happy to say we have gone from 9k or debt as of the end of March to a measily $3500. How we did it was we got rid of cell phones, make our own coffe, stopped eating out, cut down our Dish package (no more HBO…sniff sniff), and just became more aware of where our money was going.
    Also we never pay intrest on our debt. We wait to get offers for 0% intrest for a year on a certain card, then transfer the balance to it.  We have passed our debt around for 2 1/2 years now and haven’t paid a single penny in intrest. It seems everyone has that as an introductory offer. After we are done with the card we cancel it (so that we can be offered the 0% intrest again in the future). We got this idea from my step mom who is an accountant. She does it all the time. So right now we have just one card with all of our debt on it. But at times we had them on 2 or 3.
    The other thing we did was bought a cheaper house. We were approved for up to 210k on a house when we were looking to buy one. But we first looked at houses that were cheaper, but still what we wanted. They may not have been as nice. But we eneded up with a great house and extra money every month by chosing something that was like 160 instead of 210.
    We do a-okay for ourselves right now. But I know once I quit all of our extra’s will go away :(.
    Good luck on the house hunting by the way.

    By Rachael on 2005 09 03

  3. Rachael is certainly right with the card switching.  That is excellent advice.  We have way too many expenses, but at the same time we are methodically getting rid of debt.  So, we could save more, but we don’t.  It is our goal though.  And we keep shifting more and more to our employers.  This is the last month we have to pay for cell phone as my worked picked up mine and Mr. Belle’s picked up his.  But you know, our real guide is Suze Orman, Her book “young, broke, and fabulous” is great and you can keep your starbucks every day!

    By RB on 2005 09 03

  4. I’m with you on this one.  We are currently in debt reduction mode so that we can afford to buy a house.  I used an online credit card payment calculator thing like http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp where you can enter all your credit cards, the interest rates, and minimum payments due.  Based on how much you want to pay each month or by what date you want to be debt-free, it tells you how much money you should put on each card.  This is only helpful if you have multiple credit cards.  Basically it tells you to focus on the card with the highest interest rate first and pay the minimum on the rest.  Based on that info, we figured out that we can be debt-free in less than two years.  (If we only pay the minimum due…it told us it would take 13 years!)  Pretty nifty little calculator.

    I used to always switch my balance to a low interest card and cancel my old cards, but then I read that it’s not necessarily a good idea.  First, every time you open a new card, it’s a ding on your credit report (which does matter if you’re like us…wanting to buy a first home and a good interest rate).  Second, you should never cancel your old credit cards.  Part of your credit score is based on how much of your available credit is being used.  If you only have one card, but it’s maxed out, it looks bad.  If you have 3 cards and only one is maxed out, it looks better.  Creditors assume that you are more responsible because you are not completely maxed out.  I think I remember hearing that you should have at least 50% available credit.  So now on cards I have with a 0 balance, I call the card company and have them put a hold on the account.  No one…including myself…can use the card unless I call and take off the hold.  But it still looks good on my credit report.

    I’m also becoming a HUGE fan of Quicken.  I actually just upgraded to Quicken Deluxe because it has great budget and savings tools.  It’s really helped to see exactly where our money is going.

    By Paige (CoraBelle) on 2005 09 04

  5. Paige is correct about not canceling old cards.  As much as I would like to cancel them, I just chop them up into teeny little pieces and toss them.  Debt reduction is slow and painful, but worth it in the end.  I always focused on three month chukcs of time to make it so that I could see myself reaching a goal.  IN three months I will only owe x, and then revamping my goal in three months.  We are fortunate that we dont have to move any time soon. but if you are planning to buy a house try to keep as much as savings as possible so that yu dont have to scramble at the end

    By Rbelle on 2005 09 04

  6. What Jen said. Some of that credit card/debt ratio info is conflicting… definitely ask an expert and find out what’s true/what works best for your situation.

    I don’t have much to add… just wanted to say good luck.You sound like you have a good plan!

    Rbelle and I also had quite an open talk about finances recently. I don’t understand why it’s so taboo!

    Yes, Tom makes a good living but we’re also careful… we only buy big purchases like furniture and home improvements when we can afford to pay cash for them. We have one credit card (a Disney visa that earns us Disney $$, of courase) and it’s paid off at the end of every month.  The portion of Tom’s bonus (a good chunk of his annual salary is this bonus) that isn’t used for our annual home improvement bonanza goes to a long-term investment account and to Benjamin’s college fund.

    While I have always been an on-time bill payer, it’s Tom’s influence that has gotten us where we are in our financial situation. He’s so careful and patient about every decision we make! Me? I’m all about immediate gratification. It’s a good thing he’s around, because I’d be in the po house. (with lots of cool gadgets and definitely a new laptop) wink

    By Erin on 2005 09 04

  7. I’m not suggesting that people who are debt free (or close to it) keep all of their 0-balance credit cards open.  I’m saying that for people who have a considerable amount of debt, it looks bad when all of your cards are maxed out.  According to the Equifax website, you should avoid carrying a balance that is more than 30% (I was off in my last post) of your credit limit because creditors may view it as excessive debt that you may not be able to stay current with.  Their suggestion is to keep your old cards open to stay under that 30%. Certainly if you are using less than 30% of your credit limit, this wouldn’t apply…and it might look bad to have too much available credit.

    This same website also says that the age of your credit accounts is also taken into account when applying for new credit.  So if you’re constantly cancelling older cards for newer ones, you don’t have that “established” credit that some lenders are looking for.  I’ve had one of my credit cards for 10+ years, and I won’t cancel it, simply for this reason.

    Just my two cents.  The three major credit bureaus actually have some good info on this subject of debt reduction, so you can check out Equifax, Experian and TransUnion for some good info…straight from the source.

    By Paige (CoraBelle) on 2005 09 04

  8. It’s actually okay to cancel cards as long as you don’t have a long standing credit history with them. We cancel ours all the time and someone told us we shouldn’t. So we read all we could and asked areound and it is only bad to cancel cards that you have long established credit history with. But if you only have a card for a year or less won’t make a dent. Which is true because our credit is awesome.

    By Rachael on 2005 09 04

  9. We live on under $28 K Canadian. It’ ain’t easy. The cost of living is a little lower here and we bought our house at the PERFECT time, it’s nearly doubled in value in the last 6 years. No weekend trips. No dinners out. No new clothes.Leased Toyota Echo. Big sweaters (and hats ) in the house in the winter. No Cell phone (I HATE them).Basic cable. We have credit card debit but we didn’t until two years ago.. Only because the freaking sewer line needed replacing and the insurance company made us replace our oil tank… then there’s that Dining table that i HAD to have (Our ONLY splurge).... We know (stomping feet) that this is as bad as it gets and we will pay off the debit some day.
    So I guess you really need to know if you can and want to give things up to get your house. Because not having nice things can make you question if it’s all worth it!

    Liesl

    By Mygirlsma on 2005 09 05

  10. Liesl, I think the last part of what you said is so important.  Because I have personally learned I can sacrificce, sacrifice, sacrifice, only to blow it all because I get tired of it and binge shop.  Yes, I binge shop.  I’m financially bulimic.

    By RB on 2005 09 05

  11. LOL! R.Belle! I qualify as a Binge shopper too! I justify my splurges with “I could die any time so I should have item NOW! LOL!
    Liesl

    By Mygirlsma on 2005 09 05

  12. karyn, if it was in the divorce decree that he was to pay them off, I would think you could get certified copies of that and send them to the big three and they can notate your account.  Just a thought!

    By Rbelle on 2005 09 05

  13. It’s always nice to have an Rbelle attorney around. wink

    But seriously.. financial bullimic? I haven’t laughed that hard in.. uh.. hours. ::lol::

    By Mrs. Flinger on 2005 09 05

  14. OH! Liesl, I almost forgot to say, I really like hearing what other people “make it” on. I think there’s so much perspective to be learned when you realize that people can, do, and are able to live on various amounts of income. Thanks for sharing the perspective. I always wanted to move to NS. See? Now I can tell Mr. Flinger we CAN! tongue laugh

    By Mrs. Flinger on 2005 09 05

  15. Oh there’s no “Making It” going on here…. I think that’s one of the things that leaves when the money does! LOL! Things are looking up though, I have a part time 3yo Day care girl starting this week. I was house hunting for you this week… You’d be stunned at what your American Dollars could buy here.(try www.  MLS . Ca)

    By Mygirlsma on 2005 09 05

  16. I am with you Mari, except Wal-Mart takes all of our money. Besides our mortgage the majority of our income goes to Wal-Mart. It would go to target if we lived closer to one.
    Ialso wanted to tell people our coffe solutions. We don’t live close to a Starbucks. So no money really goes to them unless we are in the area of one. We used to go to this place called “cool beans” and they took a huge chunk of our moo-lah. We started buying starbucks and brewing it. Not very good. Any we discovered Dean & DeLuca have a website that you can order coffee from. In my opinion it is better then starbucks and brews up so much better. So there is maybe a solution for all you Starbucks addict.

    By Rachael on 2005 09 05

  17. You mean there is a real life Dean and Deluca?! I only know that from Felicity. But DAMN, I had NO CLUE!

    I actually have found the joy of the Java Crew Sugar Free White Chocolate Soy Americano. A super duper is 2 bucks. MUCHO better than the 3.65 for one latte (16oz). Plus it way less calories.

    I’m trying to have coffee at home, but really, for me it’s a thing to do. You know, someplace to go. So if I can “go” for two bucks and call it entertainment, I’m hoping it gets on the other budget. grin

    P.S. Mari, oh yes, Costco is my bitch. She takes ALLLL thy cash. I mean, they have cool BOOKS and TENTS there! *sigh*

    By Mrs. Flinger on 2005 09 05

  18. Oh, the other reason I do gift cards is because they only work at that place…whereas cash can go anywhere, and I don’t trust myself with cash.  Really.  I’m a very naughty girl. 

    And Les, if Costco were any closer I would be ITS bitch.  Never get out of there under $300.  And we joined to save money.  How’s that work again?

    By Mari on 2005 09 05

  19. That’s why we gave up our Costco membership. Because we’d go once a month and spend 400 bucks on a bunch of crap we didn’t need. like a 50 count box of granola bars and 30 snickers bars. We are two people HELLO. So it saved us money by not rejoining in april. It’s been tough though.

    By Rachael on 2005 09 06

  20. I like this post, it would be much more helpful if we all could be open about it.  But I have a hard time talking #‘s with friends b/c we have some in all pay scales as most do so if we have a lot more than them I feel like I’m bragging and if we have a lot less then them I’m afraid they will feel uncomfortable!  I should just get over it!  Before we got married I had a lot of credit card debt.  By the time we got married (and bryan got my rings, which I did NOT expect him to spend that much on!) we had about the same amount of debt so we just combined it.  It was 20+k worth of credit card debt, now THAT makes me sick.  Plus I traded in a nice economical Civic for a 2x as much Xterra after we bought our house but Bryan had just paid off his car so we were sharing the car payment.  Next thing you know I get a call at work from Bryan at the Nissan dealer buying an Altima!!  I was pissed but we weren’t married yet but it was “his” money plus he called me after the deal was final.  He knew better.  That was almost $500/month we didn’t need to be spending. 

    We got all our credit card debt on 0% apr cards and didn’t use them anymore.  With our combined incomes we were able to make big monthly payments and we slowly chipped away.  We eliminated 7k and 1 card but then the baby was here so we couldn’t do that anymore knowing I was going to work PT.  Well in order for me to stay home FT we decided, after much concideration, to get a home equity line of credit and pay off all credit cards and cars.  So now we’re “debt free” (ha!) but we have our monthly home equity payment witch is about $150 month compared to a shitload more we were paying.  We’ll pay more towards it monthly though to pay it off quicker.  We got a decent rate too b/c I have really good credit and Bryan’s is pretty good.  I didn’t want to use our home equity for that, I wanted to pay it off the old fashioned way, with REAL money, not more debt but we just couldn’t and have me stay home.  We bought our house 3.5 years ago for $180k and it’s now worth almost $300k so we still have a good amount of home equity left, I just still hated having to do that.  So now we have 0 credit card debt but we keep 1 joint card open and each have a personal card so Bryan can pay for his porn memberships and I don’t have to see them (hehe).  We’ll pay it off each month from our “allowance” but we both do everything online so we usually need a credit card to pay for it which is why we have them.  But we’re not going to rack up anymore credit card debt for a loooooong time.  That’s a killer.

    We’re approved for a home up to 400k (which doesn’t buy you much around here) and we both want/need a bigger house and Bryan keeps looking in the 300k’s but I refuse to spend that much when we have 1 income now!  I didn’t make a shitload, 55k, but that’s 55k less we have to live off of now.  We came up with a strict budget and each get an allowance on Bryan’s paydays to spend as we please.  We take the cash out so we don’t overspend, when it’s gone it’s gone.  We also each get some $ to put in our personal savings accounts to use for things like Xmas.  Oh we have an ING savings account which I set up an auto-savings plan which takes $ out of our checking monthly so we don’t have to rely on us to move it there.  And ING has over 3% interest which is good for a savings account.  Last year we made over $100 in interest alone.  NOt much but every bit helps.

    But damn, almost $4/gallon gas, that’s gonna put us in the po’ house

    By Mama C-ta on 2005 09 08