600 pounds of debt

I feel like I am always writing "update" posts. That was not my original vision for this blog. It's part craziness at work and part lack of discipline on my part. I think I need to set specific writing goals for myself. Idk. I'll figure it out.



Well to let you know what happened with my ridiculous gas bill, I called the company and apparently, the just picked a number out of the air because they have not been able to read the meter. Actually, as I write this, I think I might have told you guys this already. Oh well.



I am facing a lot more setbacks than I thought I would. After the minor crisis I had a few weeks back, I thought I was in good shape to continue my journey. I had loosened my budget and stepped up my contribution to my e-fund so I would be more prepared for emergencies. I guess fate really wanted to cement the fact that I should have been saving more all this time.

I went to the UK for a family engagement. I bought the ticket with a combination of cash and miles a couple months back and I was really proud that I had been able to pay cash for a plane ticket (2nd time ever!). I had some pounds I had been sitting on that I received from my dad last year and was planning on changing them to dollars and putting that amount to my debt when I returned. My dad also sent me 200 pounds extra because he wanted to make sure I had money when i travelled (he didn't know I still had the money he gave me last year). All in all, I was looking at close to 700-800 dollars if I didn't spend too much in one of the most expensive cities in the world.

Everything went well till the last day. I didn't spend much money and I had fun. On the day I was too leave, I packed very early in the morning and somehow managed to miss my late evening flight. I don't even want to go into how dumb that was of me. I think I just didn't budget enough time to get to the airport on time and all the Jack Bauer moves in the world couldn't change that. I had to be back in NY that day as I had another plane to catch to go to a job obligation. If I missed the work conference, I would get charged $5000.

The short version is that my airline that would have re booked me for free didn't have another flight till late the next morning and I ended up having to pay for a ticket on another airline. 580 POUNDS!
I was so upset I couldn't even make myself think about it. I mean, it was good that I had enough credit to cover that because if not I would have been even more screwed. However, I had just got that card to under 10K. I was looking forward to bringing that balance closer and closer to zero and there I was adding another $1k to the balance. I had no idea what exchange rate the CC was going to use and I knew I would be charged a forex fee. I had the pounds I wanted to convert to dollars and now instead of significantly reducing my balance, it would just go towards paying this off bringing me closer to where I started. 3 steps forward, 5 steps back. So frustrating.

Anyway, I made it back stateside. It's not as bad as it could be. Don't get me wrong, it's still a crappy situation but some things happened at the right time. The total cost to me was $897.89. Crazy. I used to pay $1k in rent in my last state. Anyway, I had just received a $50 check from my online surveys and redeemed $50 from my capital one rewards so I put the $100 to that bringing the balance to 797.89. Luckily today was payday and I paid $413.25 on that card so the balance sits at 384.64. I think converting my pounds to dollars gave me like $600 so when I get back to NY and deposit that cash the ticket will be paid off. I just won't have reduced my debt by as much as I could have without that ticket. Oh well, thankful for small mercies.

I'm gonna stop now because I find my posts get long since I don't post as often as I should. Tricia over at www.bloggingawaydebt.com has paid of ALL her credit cards after 3 years and I can't wait to be in her shoes. I think the lesson I take away from her is that I need to be patient. It took her 3 years, I've been at this 6 months and I have way more debt than she started with. That being said, debt free day came for her and it will for me as well!

When it rains...

you know the rest.
It's been a really interesting week financially. Last week seemed like I was repaying some mortal sin I had committed. It was that bad. After the news about capital one almost tripling mu APR. I got hit with a $600 bill. Due this week. Are you shocked? Because I was. It was from my gas company who has never billed me since I moved in (October 2008). I had called in November, December and January to let them know I hadn't received any bill. The first time they told me that their guy was not able to get access to my building and the second time they said a bill would be going out the next week. I called them of course because I was not about to be charge a late fee for not paying $600 with a weeks notice. The long and short of it is that they still have not read my meter. The last time it was read was in August (before I moved in). Nobodies meter in my building has been read actually. I guess another department saw the gas was being used and issued an estimated bill and closed the account. They put a hold on the bill and I have to call my landlord to find out what's going on. I'm not sure how they are supposed to gain access to the meter so that's on hold.
Then i got two parking tickets. Both for $115 dollars. Total $230. Looking at the second ticket I notice my plates expire at the end of this month. Which reminds me that my insurance is up in June/July. All these financial curve balls made me panicked and helpless. I hated the fact that I have all this debt. I hated the fact that I make a supposedly good salary (62k) and I can only afford to give myself $10 a week to spend. That despite that sacrifice, I still don't have enough. I was definitely in depression mode. I quickly went to my budget and revised what I could. I increased my credit card payments from $700 a month to $800. I reduced the amount in unplanned spending. Cut eating out to $15 a month (from $20). I found all these little spots I could shave $5 here $3 here and resigned myself to living a life of poverty even though I make double what I made in my very first job.

Time is wonderful. It shows why we shouldn't rush into decisions. After thinking more this weekend, I realized I was panicking for nothing. Yes my APR went to a ridiculous percentage and I would be charged ridiculous monthly interest effectively slowing my debt reduction. But that would only happen if I accepted the changes. Which I didn't. I opted out and the account will be closed in May. I get to keep my 7% interest rate. So nothing changed in terms of payments. These unexpected bills I have coming up will not get paid because I increased the amount I pay on my credit card. Matter of fact, putting all that extra money towards my credit cards will mean i can not pay for those expenses.

Looking back, I think I just really want to be rid of this debt TODAY. It's not possible. There's not magic about it. It takes time. I didn't get all that debt in one month and it's not going to take 3 months to get rid of it. I have to start thinking in terms of years and just be happy that the number keeps going down. I mean, I owe about what I make in a year. I pay about half my salary in rent. Which means that even If i only used my salary on rent and debt, it would take a year to get rid of all of it. Obviously, that's not a feasible situation. I have to eat. I have to pay for transportation and all. Basically, I think I am going to go back and play with my budget. I need to contribute more to my savings. That way when things like parking tickets come up, I can pay it off without thinking too much about it. This means my debt reduction rate will slow down but hopefully I'll be able to avoid these anxiety-ridden moments. I'll also be able to enjoy life a little more.
Trust me, I'm not about to input $80 a month for clothes. I'll definitely still be frugal and look for ways to cost cuts. I'm still going to ask myself if something is necessary. There is just no need for me to be a martyr. I think that if being a martyr meant I would pay by debt off in 3 months, I would do it. I don't think I want to live like that for 2-3 yrs. The key is not to add to my debt.

I'd really like to know what you guys think about this strategy and If you've had to make this decision yourself as well.

I am closing my Capital One

I just got off the phone with the rep. She claims there is nothing I can do to make them review this change. The rate is fixed(technically, it's a variable rate) and it has affected majority of their customers. My current rate is even lower than i thought. It is 7.6% and the want to increase it to 17.9%. Even typing it out it sounds ridiculous. 10% higher and I have done nothing wrong. Simply because of the economic times? Sounds like they are taking the piss to me.
This is the only option I have and I think I am going to take it. I have to think about it a little more (so any opinions are welcome) but I am leaning towards it. I can opt out of this increase by April 17 (thank God I read this letter today) and it will keep my current APR but the account will be closed on May 17. Then I just keep paying until the balance is paid off.
The pros and cons to this I can see are as follows:
Pros:

• I won't be able to spend on this card anymore therefore I will be forced to live more within my means.
• This account will only go down helping my budget reduction plan.

Cons:

• There will be less credit available for an emergency. However, my other cards do provide sufficient credit.
• I've had this card for a while so my credit will take a hit. My credit will also suffer b/c it has a large credit line (12,500). However, your credit score is not the end all be all and it bounces back pretty quickly. I am not trying to buy a house or anything soon so it doesn't play a big factor. The lady over at bouncing back from bankruptcy has a credit score close to mine and she filed for bankruptcy.
• I get miles on this card and that has been pretty sweet. No hassle miles were great. I guess I will just keep using my other credit cards to get miles although that is tied to specific airlines. I guess I'll redeem the balance for something else.
• It's just annoying to be put in this situation.

Although there are more cons than pros, I am still leaning to closing the card. That kind of interest rate on such a large balance is really not something I can deal with. It would be a true case of 3 steps forward 2 steps back.

Sigh

Read your Mail carefully

I brought a whole stack of old mail and papers to the office to try and purge. I saw this letter from capital one saying important information about your account. I almost tore it and threw it away because I get a lot of those and they are usually purchase checks. Thank God I didn't. Apparently due to "extraordinary changes in the economic environment" they are increasing my purchase rate to 17.9%. from 9.89%. This is effective April 17.
I am so annoyed, scared and hopeless. What is wrong with these people? In my entire life, I have never had a late payment or anything that indicates high risk? I just moved over a ton of money from the BOA line of credit because the APR was so much lower. They said that this rate will affect balances transferred at the purchase rate but not affect any special transfer rates. WTF? That means my whole $12,000 balance is going to be charges 17.9% Back at square one. This was the situation I was in with the line of credit in December and I aggressively paid down and moved that balance down! I don't even know what to do. I don't want to pay fees to move my money again but this APR is ridiculous. Come on, capital one has never been that high for me. When I got the card the APR was 14%.

If you have any suggestions let me know. I'm all out of 'em. :(

Half.com

Hmm,
Seems my readership has dropped off since my mini-hiatus. Well, hopefully people will be back soon. I took the plunge today and listed some books on half.com. I need to get aggressive about producing side income. I have been wary of ebay, amazon and half.com because I didn't want to spend money to make $2. I knew that ebay had listing fees and they also charged a percentage of sales but I wasn't quite sure how it worked out. Since I am not an established seller in any of those communities, I was afraid I would spend money listing things that never sold. You might laugh, but every penny seriously counts right now.

Half.com was the perfect avenue for me because they only charge you if you actually sell something. 25% if I remember right. I think your rating on half.com can transfer to ebay which is great because I have a couple of expensive purses I want to sell. The highest I have priced any book is $6 so I'm waiting to see how fast they go. I hope i have a good experience because I have loads of books I have accumulated over the years. I want to become an active seller for 2 reasons.
1. Side income
2. Purge my apartment of clutter.

My next project would be to clear out my closet. I just have no idea if used clothes sell well or if i should just donate them. What do you guys think? Anyone out there really good at making income on the side? Care to share?

Hope the weather changes soon. This rain is just not inspiring.

Updates

Hi all.
I'm very upset I haven't blogged for a while (a whole month!). It wasn't due to lack of trying believe me. When I moved to NY, I was under the impression that I had accepted an offer to work for a great firm. I was wrong. I apparently signed up for one of the last legal forms of indentured servitude. I have worked 80 hrs a wk for the last 4.5 wks for absolutely no extra pay. No, I don't earn 6 figures. Anyway, all that is going to be saved for my next post.

What's happened in the interim finance wise? There's great news and some bad news. Good news first. My mom came to visit from out of the country (couldn't see her btw since I was at work the whole time) and she came bearing gifts. I'm not sure if I've mentioned this before but my parents took on to pay my student loans. My dad gave her a check for 10k to wipe down most of the student loans. I used that to pay off my BOA credit card and used the balance to pay a combinations of loans and other cards. I updated the meters a while back so that should be reflected. This means I don't owe Bank of America any money!!! Yay.

Bad news. It's pretty bad folks.
I regressed in my not spending money I didn't have. This month made it clear to me that blogging had a direct inverse correlation with how much money I spend. The more I blog, the less I spend. It's that simple. I think it's because when I blog, I am more focused about debt reduction and it's easier to talk myself out of dumb purchases.
What did I do? I spent about $200 on a juicer and lots of fruits. I read a book "slim for life" by Jason Vale and it inspired me to overhaul my diet. I have gotten so unhealthy but that's also a topic for another day. I do think my health is important but I could have carved out a portion of money I pay each month on my credit card to save up for this. I shouldn't have put it all on my card. Buying that triggered some of my old habits. Buying things without any concern for cost and acting as though swiping a credit card is not really taking money from me (trust, i think a LOT before spending lots with my debit card.).

My friend was coming from out of the country to celebrate her birthday in NY. With all the weight i've gained, none of my clothes fit so of course I had to go shopping. While I was at it, I needed new work pants and oh, I went to a wedding and HAD to buy a gift for the bride. I'm being sarcastic for those who are wondering. All this led to me charging $166 on my macys card (to take advantage of the discount) and leave with a couple of bags from H&m and NY& CO. Phew, crazy huh?

That's not all.

I also bought a dress on ruelala from Nicole Miller. It was such a Great Deal, I had to have it even though it won't fit (i'm gonna lose the weight duh!). Yea silly. The only positive in all this, is that at some point I felt guilty and I ended up using my savings account to pay for some of this. The damage isn't horrible. Probably set me back a month. I am definitely going to try not to go this long without blogging.

I need a new job. Depression and debt should not be friends. I was excited about tackling my debt before. A job that depresses me makes me look for ways to feel better and since everyone is asleep by the time I get out of work and since they have taken away my saturday and Sundays, ruelala.com and zappos.com become my friend. Not a good look.

Numbers wise, this is what my finance charges look like for the month of February
Total $295.63. Great drop from back when it was $443.63. March looks like it's going to be under $200. Waiting on my capital one statement to generate then I can post that info too. I am so glad to be done with Bank of America and their 24% interest rate. The highest interest I pay now is 9.99%.

That's it for now. I should be more regular from now on. Expect the debt bars to change in the next couple of days. I just got paid and made some payments I want to go through before I make updates.