"Tick"ed Off and Other Changes...

Some may notice that my debt "ticker" has been removed. I chose to do this since this project has had a rocky start and I find that I am only making minute dollar changes - a waste of time and definitely disheartening. Yes I can hear the critics out there saying that this is a reminder of my harsh reality, but fact is, just posting reminds me (plus the lack of sleep!) I promise it will return when I have fallen under the $80,000 line that I just can't seem to crack. It just seems that there is no point in posting a ticker if it doesn't move.

I have also adjusted my blog roll. As some readers may already know "My Debt Blog" has been deleted by the publishers. (Moment of Silence please) I feel really bad for them as I feel that they were kinda pushed out by some not so nice commentary. I agree sometimes we need someone to give our head a shake, but criticism should always be constructive not hurtful. I wish them luck in their quest for debt freedom.

Speaking of blog roll - If anyone is interested in being on mine I would love the company (plus, it saves me from having to Google debt blog every time I want to read something online). Please provide a comment with your site and I'll check it out.

The Kids are Alright...

For anyone out there who has kids, is considering having kids, knows someone with kids, or is still a kid themselves (literally or figuratively) - I have a great resource for you.

I came across a website www.makeitcountonline.ca which is put out by the Manitoba Securities Commission. This website is designed to help parents to teach their youngsters how to handle money, make financial decisions, and generally have a better concept of money and finance then we did growing up.

You can even order a guidebook for free with great worksheets and information (all of these are also downloadable on the website).

So if you have five minutes today, check out the website and maybe make a difference in someone's life.

(Do posts like this count as community service?)

$100 Update...

So the 20th of the month has come and passed, and I have to note that I did not reach my $100 extra per month goal this time. (BOOOOOOO!!!! HISSSSSSSS!!)

I tried ebay, but really didn't make all that much this time around, so I have left the cash in paypal for another month, my initial scheme for the month was denied (but may resurface in February - I'll let you know), and things were crazy hectic with time slipping through my fingers a little too quickly. So yes, I have failed for January.

However, I would like to note that I did make some strides this month. I added an extra payment to credit card #2 (if you remember, this is from my own stupidity of paying too early, but I'll take it as a positive anyway), and I managed to reduce the interest rate of 1/4 of my debt to about half.

Ideas for February:
-more stuff on ebay
-selling my maternity clothes (that are sitting in my basement collecting dust) to a second run store
-investigate selling used books on Amazon


So my question is out to you (again):

What can I do to make a little extra scratch every month? Online gambling, prostitution, and black market organ sales are not options. (sorry if any of these have worked for you)

I Had a Dream Last Night...

No this is not one of those political entries spurned by the inaugaration - but I must admit I did like the speech (Pretty empowering stuff!) However, I did have a dream last night. It went like this...

I won a million dollars (I think we have all had some version of this dream). I divided up the money to what I owe and made a few purchase (new car, vacation, etc.), but at the end of the day I still had a few hundred thousand that the hubby and I were going to put away for a rainy day.

However, instead of putting it all away, I gave a proposal to my closest friends. I offer to pay off their debts, and in return they would pay me the going T-Bill rate times the total debt divided by 3 years (read: no compound interest). Prepayments were allowed and encouraged. In dreams some people are superheroes, I'm a banker apparently.

But then I woke up. Sorry friends, maybe another day.

I'm so nice when I'm unconscious!

What Was I Thinking...

Okay, so I read over my last post and realized that everything I said on Friday was BS, and frankly, a little whiny. How the heck am I supposed to get out of debt, or remain debt free for that matter, if I can't even muster up enough willpower to pay off the bloody credit cards in the first place.

Yes, I have had issues in the past, but they will never get better if I put my head in the sand and waste hundreds playing the safe, although stupid, debt repayment game.

I deeply apologize for wasting your time reading that post.

New Game Plan:

1.) Suck it up - I'm in debt and never getting out if I don't shape up.

2.) Transfer as much debt as I can from high interest card #2 to low interest card #1. I know this is just displacing my debt, but it will reduce the amount of interest I am paying. Plus, as I will be closer to zero on my higher interest card I will pay that balance off quicker, and I will be a lot more reluctant to add charges when the balance is nil.

3.) Annhilate my high interest credit card #2 will everything I possibly can. (I think I might even undertake the mythical debt snowball.)

4.) Once paid off, revisit plan and see what my next step/strategy will be.

There, now that is a post I can be a lot more proud of!

Smart vs. Stupid with a Purpose...

Okay, so I have an interesting dilemma. Since, I have managed to lower the interest rate on one of my credit cards it would be assumed that my repayment plan would take a bit of twist to account for the lower interest and reduced amount required to pay that balance off. Also, it would be reasonably assumed that this credit card would be shuffled to the bottom of the debt repayment deck. But due to emotional reasons, I'm really not sure....

First let recap my debt:

Credit Card #1 - My first priority. Balance started at about $20,000, and it is a card that is not normally used and has not had a charge since June of last year. A good place to start as nothing is being added, only paid off.

Credit Card #2 - Next in line. Balance started at about $20,000. Unfortunately, this is my "operating" card. I try not to charge anything, but if there are any slips or shortages in our home life this is where they end up.

Credit Card #3 - The business card. Balance started at about $40,000. This was made the last priority as any slips or shortages on the business side are charged here, and I actually don't have access to this card. As much as the hubby is reining in the spending, he's a little more prone to charging than me. (He is really trying, believe me.)

This payoff scheme was reasonable in the past as all interest rates were similar so where I started was really irrelevant. However, Credit Card #1 has just dropped rates by almost half. Obviously, the smart thing to do would be bump Credit Card #1 to the back of the line and focus on Card #2 and #3, let #1 sit charging much lower interest. I repeat this would be the SMART thing to do.

In the back of my head, however, is the problem that I always encounter, Cards #2 and #3 are never really frozen. It's kind of like that "I'll never drink again" thing that people always say, only weeks, days, or hours before they are double fisting pints of pilsner. Although we have actually come incredibly far in terms of not being dependent on credit, there is still the looming feeling that I will be trying to pay off Card #2 and #3 forever as when I finally get somewhere it'll get racked up again. At least I know that when Card #1 is annihilated, it'll stay that way as it is never really used much to begin with.

So what's a girl to do? Play it smart, with the risk that my debt repayment plans will be foiled when history repeats itself again? (I know it's pathetic, I think I'm stronger now, but I'm nervous - I think I need a 12 step plan) Or do I continue on the same journey, guaranteeing that at least $20,000 will be out the door for good, at the cost of hundreds in interest from my other cards?

I've been in this place before, and as much as I know it needs to stop, I can't help but think that I will never really see the end of my debt. So do I play it SMART or play it SAFE?

A Decreasing Interest in Credit...

Well it finally happened, I managed to drop my interest rate on one of my cards by 8% points. WOOOOOOOOOHOOOOOOO!!!

After Christmas I decided that I will give it another go with the credit card companies to try and reduce my interest rate on my cards (or at least the outstanding balances) as I am sure I am not the only one out there dwelling on their debt at this time of year. Plus, I actually had a balance transfer option in my hand that I had fibbed about having the last time I called in, so I thought that Karma might do me a favour for being honest this time around.

Well after calling a not so nice Customer Service Rep at one of these companies, she indicated that "their credit cards have a set rate, and my card is 19.5%, so I would have to just deal with that." Nice.

That got me to thinking though, well what other cards does this company offer that would have a lower rate. Turns out they have a card at 11.5%. I called back and spoke to a much nicer CSR, inquiring as to whether I could transfer my balance to the low rate card. Jackpot!!!

So here is the deal, they close my old card (which I lose my piddly rewards, that I wasn't receiving as I haven't been charging on this card) and set up my new one, but it isn't considered to be an account closure and new credit on my credit report, just a change in product. My credit history from my old card stays on my report (it's good and is for almost 10 years), and the balance on my current card is transferred to the lower rate.

The only downfall is that the new card carries a yearly fee, but it is nominal in comparison to the over $1500 in savings from interest this year alone. Besides, when I pay the card off, I can try to switch to different no-fee card, or because I will be debt free, cancel the card and start a bright new beginning.

Finally, something is going my way!!

Use the points, Luke...

In a follow up to my menu planning post from last week, I wanted to address a subject that is near and dear to my heart: supermarket credit card reward points!!

I'm sure everyone has encountered/or has a credit card that has points to be used for free groceries/merchandise at your local supermarket (which of course no longer just includes food, but electronics, home items, cosmetics, and sometimes clothes). I have one of these cards, and although I am trying to decrease my debt, I often funnel my grocery purchases onto this card and then transfer the money when I get home. (I can manage this for groceries, but no other purchases in my life - go figure)

So what is the best way to maximize the use said points? Through conversation with the flesh and blood people in my life, I have come up with the following methods:

More Santa, Less Scrooge: This concept is to save up your points all year and use them at Christmas time. You can use them to eliminate the extra cost of holiday baking, appetizers, and other food costs, as well as actually buy gifts (video games, DVD's, boxes of chocolates, etc.)

Use them or Lose them: Not the most strategic method, but many people simply use their points for groceries as soon as they get to a redemption point providing several little budget boosters throughout the year. I ask the question though, does the $10 savings actually get recognized somewhere else, or does it get lost in the shuffle?

Budget Overdraft: This is the method I use personally. I budget $250 bi-weekly for groceries, but sometimes this is just not enough. We have all had those weeks where you run out of shampoo, toilet paper, toothpaste, and detergent at the same time, or you were so diligent with incorporating the food in your freezer to your meal plan that you have to buy more meat- which can be costly. For the times that I go under budget I simply charge the groceries (and pay when I get home), for the day I go over budget I redeem points to bring me down to the my budgeted level of $250. This helps me from ever going over budget on groceries.

Whatever you choose, if you are paying for rewards on a credit card make sure you use them, and use them wisely!!

I plan, therefore I save...

Menu Planning. This has been a long time recommendation to save money at the grocery store, yet it can be quite time consuming and often frustrating when best laid plans don't quite work out. Well although I haven't quite got everything together, anytime I get my menu plans on track it has saved me time and money. Here are a few points:

• Remember to take inventory: One of my biggest past mistakes is not taking inventory of what I had in the fridge/freezer/pantry and just assuming I knew what was there. Many times I have returned home with a great menu, just to find that someone has eaten a main ingredient I thought I had on hand, or you buy something you already have (that is why I have three containers of parmesan cheese!) The key here, actually take the time to look and write it down. Use the list to help come up with your menu for the month, and stroke items off as they are incorporated into your schedule.

• Use a calendar format: Enter all your menu choices into the days of the week on a calendar. You don't have to stick withtuna casserole on Monday just because you wrote it in there (I usually don't serve my meals in the order I write them), but it helps to incorporate your plans and time constraints into your planning. Is Wednesday a busy night? - plan a quick meal for that day. More time on weekends? - plan something requiring more preparation. This will reduce the amount of tiem you will eat out as your menu options available at home don't fit in with your lifestyle. Also, in a calendar you can incorporate any dinners out so that you don't overbuy.

• Book in Non-Perishables: In my world an impromtu dinner invitation is the case more often than not. Unfortunately, this reeks havoc on my menu plan (and my budget) as I find that I tend to throw out a lot of rotten food as I do not get to my recipe in time, and often times have to rebuy ingredients. To avoid this, I always book in one completely Non-Perishable (and quick) item per week (read: frozen pizza). If an invitation arises I simply skip the pizza altogether and incorporate it into another week down the road. At first I tried just booking a tentative blank day, but I found that if we didn't have short notice dinner plans we would simply take that day to get take out or go to a restaurant, often on a credit card for a ridiculous amount.

• Keep a copy of your calendars: One of my biggest vices with menu planning is compiling the menu items. Sure, the standards are always at the top of my mind, but I always try to do at least one new recipe on a bi-weekly basis. Problem is: I find great recipes, use them once, then forget about them. Keeping your old calendars or a compiling a spreadsheet with what recipes worked will help with the planning time. On any winners, I also write the cookbook it came from to save time later.

Overall, menu planning is a great way to save time at the grocery store, decrease your stress during the week as you always know what could be for dinner and that you have what you need, and it decreases the chance that you will waste your food budget on incomplete or unneccessary food purchases.

Post holiday debt hangover...

So we did well by spending mostly cash this year but we are still in the "I'm never spending again" phase of January. Credit cards bills are coming in, and although the balances haven't really increased, we now have more time to reflect (read: dwell) on the havoc that is our debt.

Plus, January is always our lowest income month so the belt just gets tighter and tighter making this miserable month more so, trying to avoid a budget shortfall and not having a spare dime for anything other than food, housing and debt payments.

It's been incredibly cold here, so we have been hermiting in our house for the last week and that seems to be okay on the budget, but terrible on the psyche. I think I am going a little stir crazy. Granted I have a mile long list of projects to do around here the house, but I have acquired a general malaise, and housework (however satisfying in the long run) is not exactly on my mind.

Oh well! Once the year starts to pick up again I will definitely be in better spirits and hopefully hit the ground running on those goals I talked about last week.

Present Maximizer Tip...

While chatting with someone the other day they had indicated that they had recently pulled their annual Present trick to maximize what they had received for Christmas. The plot goes like this (works best on clothing):

- Take any presents that were received with a gift receipt. Find out if the item has recently gone on sale after Christmas.

- Return the gift.

- Repurchase it back at the new lower price and use the store credit you are issued to buy additional items at the same store.

Voila!!! Now you have your presents back and a bunch of new things too!

(Beware - I have heard that some stores are picky and will not put returns back on the shelf until the end of the day, meaning you will not be able to buy back your gift if it is not currently in stock)

Drought in the cash flow...

In an effort to be a good little debt destroyer I made my credit card payments just after the cut off for the month(on the 23rd) to a.) reduce my interest as it is calculated on a daily basis, and b.) get some of my payment out of the way before Christmas so I wouldn't be putting it off. Big Mistake!!!!

Apparently Credit Card #2 does not have a set cut off date and although none of my statements were cut off later than the 22nd of the month, they decided to make the cut off the 24th. This means that my monthly payment was applied to the prior month, thus requiring me to make another $500 payment, that I thought I had already paid!!! GRRRRRRRR!!

After throwing some things around my home office I called the company and explained my situation. The friendly CSR on the phone indicated there was nothing he could do. Although I did consider asking for a manager I figured an extra payment on my credit card (especially since this is my highest interest debt) would not be the end of the world. Problem is: I have to manage my finances to come up with the $500. Oh well I guess it wouldn't be a challenge if it were easy.