I'm slipping into that credit mentality

All it takes is one swipe.
I swear sometimes I feel like I am on a 12-step program. I can empathize with alcoholics and drug addicts. Not in the sense that I feel I am addicted to debt but moreso that I understand how just one _____ can send you sliding backwards so fast. Even after staying on the right path for so long.

What happened? I used my credit card. I used it and I had no idea or intention of paying back right away. It's not like this was for an emergency or anything. I was going to a friends birthday party and had nothing to wear (blame that on weight gain) and I wanted to look cute. So I bought a dress. Actually, backtrack, I almost forgot what set all this off.

It started with a flat tire. My car had one and I had to pay $80 for a new one. Which I put on my CC b/c I didn't have the money. Once I swiped that first time, it was like unlocking the door. Then I bought the dress and it was like opening the door. Once the door was open, it was like people running out of a burning house.

Okay, I exaggerate but still, I spent a lot. I don't even want to sit down an calculate it but i figure somewhere in the range of $350. I already returned some of what I could but it wasn't everything. The positive thing is that I made about $45 doing some freelance writing for people. I also am going to get a check from ehow this month. I know I would be happier if I just had the extra income without the extra expense.

I'm just going to call this one a mistake and learning experience.
Since misery loves company, what's the dumbest thing you've done while you were trying to get out of debt?

Do you elance?

This is just a quick check to find out if any of you use elance or guru.com. What was your experience? Is it worth it? If you haven't do you know someone that has?

I'm going to write a book

I was passing time at one of my favorite sites - stumbleupon - when I came across this gem. I might have mentioned that part of the reason I started this blog was to keep me writing. I would love to write a book one day.

cue music. Enter Nano Wrimo

Then I stumbled across this gem. National Novel Writing Month. The big idea is to challenge the entire world to write a book. In one month. I'm not joking, I swear. The organizers say that this is one time the writing is not about quality, it's all about quantity. You don't win anything but it's a challenge and all those who complete it get a badge :).

I think it's just what I need. A deadline with no pressure. It starts November 1st and ends November 31st. I'm sure some of you might be interested in entering this. If you are, let me know in the comments. I'd love to have some writing buddies.

How to lower your rent

If you guys remember, I pay a lot to rent my apartment ($1675). Blogging for the past couple of months and staring at my budget convinced me that I needed to move. I was apprehensive b/c I really like where I live, it's convenient and I hate moving. I decided to suck it up though when I received my renewal lease. Just looking at that number depressed me so I started checking out craigslist. I wanted to see what was available before I committed to moving.

I thought about asking my landlord to drop the rent by like 50-100 dollars but I never got around to it as I didn't think it would work especially after reading this. Anyway, I was looking daily on craigslist to see what was out there and I saw that they guy that sold my apartment was advertising apartments from 1475-1675 and I gave him a call. I asked if I could move from my apartment to the 1475 one and he asked which apartment I lived in. I told him and he basically told me that the 1475 was much smaller and not as nice as mine (i didn't mind) and that I should call up the management company and ask them to drop the rent to 1525. He changed his mind and said, ask for 1475 they'll probably settle ate 1525. I called them up and (stupid me) asked if I could pay 1525. He asked what apartment I was in, I told him and he said ok.

Just.Like.That

Obviously, I'm kicking myself for not asking for 1475 but $150 less a month is an extra $1800 that can go to paying off my debt so I'm happy! Like they say, ask and you can receive. Here are some tips on how to lower your rent.

• Call up your landlord and tell him/her that you can no longer afford the apartment and you want to know if you can pay less. With many people suffering salary cuts due to the economy this is something they will not find to hard to believe.
• If you pay for utilities, mention this. I know at least in New York, electric and gas delivery charges went up so many people play more for utilities. Ask your landlord if they would be willing to pay the utilities or subsidize the increased cost by lowering your rent.
• It pays to see how much building around your area are going for. Stalk craigslist and point out your findings to your landlord. If similar places are going for less, it might be hard for them to find a new tenant (in my case, i knew the apartment next to me sat empty for 6 months).
• Pay your rent on time. Landlords hate to see reliable tenants go.

Hope that helps

Privilege

I did a guest post over at Debt Kid's website. Nothing major, I was just introducing myself and sharing my story (you should head over there and read it. It's the most detailed I've been) but I noticed something. He's been blogging a lot longer than I have and so obviously has a lot more readers and therefore more commenters. In the comments section I got a vibe from some of the comments that were made and it ties into a theme I've noticed across the personal finance blogosphere.

There seems to be a school of thought that views money given to you by your parent as tainted. It's somehow something bad and a handout. The thinking is, you are supposed to work for every single cent you earn otherwise it doesn't count. Maybe it's an American thing (I didn't grow up here) but it baffles me.

In my experience (and maybe it doesn't apply to most people), parents generally support their kids through college. When they have kids, it's part of the cost the calculate just like buying clothes and what not. My dad actually was confused when I wanted to work at 15. His first statement was, "don't you have enough money?" I did. But I was excited about the idea of being paid. It sounded so grown up. In college, I was given an amount every semester to cover living expenses. My dad made me write a budget before hand of what I thought I needed and usually gave me that plus 200-300 dollars extra to cover fun things. It was enough to be ok but I still wanted to work. After he assured himself I was not working out of necessity and that working would not interfere with my school work (which to him was the whole point of going to school) he was actually satisfied that I had the drive to work.

I wouldn't say I was spoiled. I never lacked basic things and my parents were not tight with money. They didn't buy me everything I wanted but if they travelled they'd ask what I wanted and buy me stuff of the list.

However, the problem lay in the fact that I was not allowed to have pocket money. Ever. If anyone ever gave me money as a gift (relatives and others) they would take it away from me and say they were "keeping" it for me. The reason I call this a problem is that because of this, I never learnt to budget. I never learnt to save. I never said, "if I buy this, I won't be able to buy that." The end result was that when I finally got my hands on some "money" I went a little crazy. To this day, I keep having to remind myself that you are supposed to save up for things you can't afford. That just because you see something and it IS a good deal doesn't mean you can buy it. I posted a while back that I had to learn the phrase "I can't afford it" and that it just doesn't apply to unimportant things like electronics and clothes. That sometimes you really can't afford to go to your brothers graduation in another state or that you might not be able to afford to go out to eat with a friend that's in town for the first year in years.

I don't want to veer to off topic here so i'll leave it at that. I think my parents also made a mistake by not talking about money with me. I had no idea (and still really don't) what my parents made growing up. Money was just something that was in the background. I wouldn't be able to tell you what, if any financial difficulties they might have had and I think all this fed into the excessive spending I did a while back.

I just wanted to know what you guys feel about parent's giving money to their children. I hope to have some great discussion going on in the comments.

I've paid down almost 20k in less than a year

Yes. It's true. As much as I have regressed and spent money on things that I didn't need I have managed to pay down almost 20k since October of last year. To be precise, my total balance on October 6 2008 (when I started tracking my debt) was $75, 142.37 and the current balance is $55, 632.60 which i $19,509.77. Granted, I got some money from my parents but that's amazing. I only figured this out because I wrote a guest post at debtkid.com which should be posted soon and I had to add it all up. I am floored. This is the kind of motivation I need to keep going. Every penny towards debt counts. I have already exceeded my 2009 goals which was to have my CC debt at under 35k by the end of the year. Right now it stands at $27, 603.37. We're only in July.
This weekend I got $300 from my mom. I debated with myself about what to use it for. I have my car insurance that just started up again that I forgot to budget for at the beginning of the year. I had to insert it into my budget and play around with some numbers to make it work. Basically, I'm back at having only $10 a week as "mad money". I wanted to put the $300 towards my car insurance so that it would be paid of faster and I could have more wriggle room in my budget. In the end, I put it towards my ML card because it doesn't financially make sense to pay down something that's not being charged interest when I have so many debts I'm being charged interest on. It would have been a psychological boost to pay the car insurance because it would be eliminated a lot faster (like in 7 months) whereas it will take me about 3 years to get rid of the ML balance. Sometimes, you can't follow emotions and just have to look at things logically.

I need a new debt goal since I've already met my previous goal. I'm still aiming for 3k in savings but now I want my Credit card debt to be under 25k by December 31, 2009.

Remember, every penny counts. Keep snowflaking.

If you have student loans read this!

I just wanted to share this information with those of you that are trying to pay down you student loans. This is a must-read for you. Basically, federal loans are going to drop to about 2% if you consolidate after today. Not everyone is eligible (you can't have originated your loan after a certain date and private loans are not eligible) but it's definitely worth checking out.
For those of you that went to med school, law school or private school (and those that didn't) this could save you tons of money in the long run.
Just thought I'd share.

20k on Alcohol

I've been out of commission because I went away for the weekend. It was my friends birthday and they had a 3 day celebration to mark this year. I had a wonderful time (only spent money on food) but being there made me think.
In my conservative estimation, $15,000 was spent on drinks in one night. Over the course of the weekend, I'd say that around 30K was spent on alcohol. This made me pause. I don't know that even if I had 30k and no debt, I would spend it on something that's gone right away. My friend does well but is not Paris Hilton wealthy so it seems a bit excessive. I had fun though, it just made me think. Where do you draw the line between having fun and just being wasteful? I mean, at one point, the opened a bottle of champagne and poured it on the celebrant. There was a pool party one of the nights and champagne was being used in water guns instead of water (granted, they were shooting it into people's mouths but still).

What's your take on it? Is there a point where you are just too rich to care about money? Is that ok?