Saturday, March 27, 2010

The ol' I-Have-No-Money blues

One thing that's struck me recently is that I used to post a lot. And I mean a lot. When I first started blogging sometimes I had to save posts so that I wouldn't look like a crazy person. Some of this is due to the fact that I was very bored at work and so would have the time to write up a post on anything that popped into my head. Some of this is due to being new to blogging, so that most of those thoughts were new ones and did indeed merit a post. But increasingly I realize that much of it was due to the fact that I was new to having a real salary and extra money, and so I had to for the first time think about what exactly I was going to DO with the extra money. Other than spend it. I had enough money to spare that I had the luxury of deciding what to do with my 403b that I had at the time, best ways to leverage it to make more, etc.

The difference now is that a year of my unemployment and a year of Boyfriend's unemployment and purchasing a house that needed work means I am in a lot of debt. Boyfriend was laid off from his last position after only four months because some contracts they'd been counting on didn't get signed. At this point we're looking to conserve cash and earn what extra we can. So any decisions about money are very straightforward - do I save this money or do I pay down the highest interest rate debt? We aren't in any danger of not eating or not making the mortgage payment or any of that, but there a) aren't a lot of extra dollars to have to worry about what to do with, and b) I don't really have any money that can be considered "extra" anymore.

Consequently, I don't spend a lot of time thinking about my finances these days. I spend most of it thinking about ways to earn more money, and I have been doing a ton of mystery shopping, to the point that I will get paid for 14 separate mystery shops in April, but all of that money is either going to go into savings or towards whatever is the most pressing cash need at the time (such as getting my front wheel bearing fixed on my car.) Other than that, I'm only contributing 1% into my 401(k), which at least is getting fully matched now, but I don't really do anything with my other investment accounts.

So I admire the bloggers who do manage to make something interesting out of having a mountain of debt and a small income. I'm just not sure what else to say about mine. In the future (and I will try to update this more regularly) I will post a State of the Debt note. I had previously not wanted to fully disclose how much debt I have, being rather embarrassed to have got into such a mess from being in a really good position a few years ago, but what do I have to gain from pretending that it doesn't exist?

Current State of the Debt, March 27th, 2010:

Chase #1: $10,388, at 6% interest
Chase #2: $9,450 at 2% interest
Bank of America: $11,384 at 5.5% interest
American Express: $4,496 at 15.24% interest
Discover: $4,719 at 14.49% interest
CareCredit: $764 at 0% interest (temporary)

I'm not going to bother including my student loans, because otherwise I'd be even more depressed than I regularly am when I look at these numbers. Mint helpfully totals them in for me - currently it tells me that I am $53,000 in debt. But the student loans are low priority and I deduct the interest anyway. So I'm not putting them in. Nyah.

Next month I will be getting paid for a bunch of mystery shops, plus starting a working at home project to grade standardized tests. So that will help out a lot, not least because anytime I am awake and fretting about how much I owe and how little money we have, I can log into the system and earn some more, which will at least make me feel like I'm doing something about it.

Also, the cards (other than CareCredit which is a veterinary expense card) that are at lower interest rates are there because I called up the companies and said, look, I really can't afford this, is there anything we can do to lower the payments or the interest rate? And Chase and Bank of America put me on repayment plans, which is great in that it lowered the interest rate significantly, but bad in that they closed the cards. I had not wanted to do this with all of my credit cards, since I wanted to preserve some measure of flexibility and still have some credit left when I get out of this. However, American Express and Discover keep cutting my lines of credit (before all this, I had at least $7k in credit line on each card) and raising the interest rates. So I think it's probably not worth an extra $100 a month in interest charges alone to preserve the existing lines of credit. Once I get better established and have lower debt-to-credit limit ratios, it shouldn't be otherwise difficult to get new credit since I've never missed a payment in my life. I've been trying to do balance transfers but no one will touch me, and even Prosper, et al, won't take me since I have so much debt (despite explicitly offering an option to list it as a debt consolidation loan.) I don't want to destroy my credit, but I also want to be out of debt someday without ending up paying thousands in interest. I'm still waffling about this though - I don't want yet more mistakes screwing up my future.

1 comment:

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