Vanquishing My Debt

I'm 29 and trying to get a handle on my finances so that, one day, I can buy a home of my own. I've been reading personal finance blogs recently and decided to start one chronicling my own struggles and success (hopefully). I am lucky, considering the amounts of debt and tales of tragedy I've read about... but I am making some positive changes and moving in the right direction.

My Photo
Location: Los Angeles, CA

Friday, June 23, 2006

Why did I rack up this debt?

I've been thinking about the behaviors, habits, and beliefs that get people into debt... so of course, I thought about the factors that influenced me in my spending.

My mom always raised me to be frugal, not as a life choice, but as a budgeting necessity. She was a single mom with a mediocre job, so that's just how it was. Library books instead of new books, grocery shopping with coupons, and cheap/reasonably priced clothing instead of designer duds. She never taught me to save or invest, but she did teach me not to spend out of my means.

All of these things I have done in my adult life... I love the challenge of lowering my grocery bill and finding great clothing in thrift stores. Every piece of furniture I own has a story about where I got it and how much it was on sale/promotional special/bought at a thrift store or garage sale. I truly love the chase of something great and unique and cheap.

Awhile ago, one of my best friends died suddenly at the age of 32. For the last few years of her life, she was involved with a boyfriend that controlled every aspect of her life - her new extreme diet, her new several-hours-a-day exercise regimen, her money, her ridiculously long commute to work, her community college class schedule, and the parenting of her daughter. Basically she was told to deny herself everything... all in the name of paying off debt, losing weight, and contributing to his household. (I'm not even going to go into the psychological ramifications of this situation.)

She always went along with him, although she talked about how she'd love to order a pizza for lunch at work, or go into our favourite clothing store and buy something... not extravagant purchases by any means, just things that she could afford and would enjoy. But she never did. I keep feeling guilty that I didn't encourage her more in pursuing these small satisfactions. I did urge her to indulge herself once in awhile, but my urging wasn't strong enough to empower her to stand up for herself and say, "I'm taking back control of my finances, my health and my life."

So when she died unexpectedly, after about 2 years of longing toget a manicure or have a piece of birthday cake at the office, I found it hard to deny myself these things. I kept thinking, "If I end up dying tomorrow, I should be making sure I enjoy today." Unfortunately, a part of that became shopping and bad food choices... both of which it's taking my willpower to conquer now. I basically gave myself permission to do whatever made me happy, not thinking of the consequences. I'm very lucky that the damage isn't worse than it is.

On the plus side, I have a renewed devotion to my family and spend more time with them than ever before. It's made me prioritize my life. I had been thinking of going back to school to pursue a degree in anthropology (not the most practical of degrees), but I've decided that I don't want to spend my time in a classroom. I can pursue my academic interests on my own time, in the manner that I like. It's almost too bad, because I had a kick-ass thesis idea, too. :) But I'm happy with my decision.

Now I'm realizing how badly I need to get my financial house in order... if my time is more limited than I think, I don't want my last years spent at a job that I hate. I eventually want to do the same work that I do now, but working for myself. I need to have a savings cushion built up to take a chance like that.

What are the factors that influenced you to accrue debt? What are your motivations now to get out of debt?

1 credit card down, 3 to go!

Last night I paid off my credit card with the smallest total. Yippee! Like I mentioned in a previous post, I'm applying the snowball effect to my credit cards. So now I'm concentrating on the next smallest balance card.

I'm going to forgo using neat little graphs and charts (mostly because I don't yet know how to creat them) to show where my debt comes from. Like I've said before, it's nothing awful, unlike some other blogs that I've read. I guess dropping out of college pays off sometimes - no student loans. :)

So here goes, my financial soul laid bare (as of August 1).

Credit Card #1 - Paid off last night! Huzzah!
Credit Card #2 - $507
Credit Card #3 - $2,060
Credit Card #4 - $3,156

Credit Card #4 is actually the card we used to start up R's small business. It is actually his obligation to pay this off, and he will probably take over the payments by the time I conquer the other 2 cards. If he doesn't, I'm prepared to tackle it myself.

I have not added my car to this list, because frankly, it's too discouraging. I am going to attack this list, then figure out the car situation. After tackling my debt, we'll begin tackling his in earnest... which is mostly delinquent student loans.

In light of some of the other blogs I've read talking about immense debt from college and medical emergencies and unemployment, I feel somewhat silly about posting my numbers. I feel like my frustration might be dismissed by some of you because it isn't *enough.* But I think frustration and worry counts no matter what the number behind it is. I am already feeling like a load is off my shoulders just from paying off one card last night!

Time to go shopping!

Just kidding! :)

Wednesday, June 21, 2006

Free movies

I am a film lover, but am hard-pressed to swallow paying $10 a ticket lately. Boy, do I have to want to see a movie badly!

A lot of free advance screenings are held by the studios to gauge audience opinion about a film. Sometimes, the films aren't finalized and they change elements according to what the audience wanted to see. We went to see a screening of "The Break-Up," and we've been told by friends that the released ending was different than what we saw. We've even seen some films where the special effects haven't been completed yet.

Other times, the studios will hold advance screening to get the ball rolling on word of mouth recommendations by the time the film opens. This really backfired when they had screenings of "The Man," with Eugene Levy and Samuel L. Jackson. Eugene, Sam... I love you both, but what were you thinking?

Screenings usually work this way: You print out your pass, which tells you what time the film starts. If you want to be admitted, always get to the theatre at least 1 hour earlier - a line forms at the theatre and admission is not guaranteed. Where you are in line determines if you'll get into the theatre or not. I've told some people about the free screenings, and they say that waiting in line isn't worth the free admission - I couldn't disagree more. Hanging out with your friends, talking for an hour, having a quick dinner in line while you wait for a free movie... what's so bad about that?

Some screenings will pass out questionnaires after the film... questions about your favourite/least favourite characters, what you thought about the music/costumes/story, etc. Just be truthful - no need to lie.

The only no-no about this whole process is that people associated with the film or television industry cannot be admitted to the screenings. They want a random sampling of random people. They will ask you if you're involved in the industry and you can answer how you wish.

These are some of my favourite sites to free screenings in Los Angeles (some have national listings, too).

1) Campus Circle - a newspaper for college students that has a neat website featuring a section for free local film screenings. I have seen many movies from Campus Circle over the last 2 years or so. Some passes must be picked up at their office, while other screenings are only for college students (with ID cards).

2) Movie Filler - You have to register to use this site, which is free. You will get an occasional email from them. We got passes to the "Mission Impossible 3" Los Angeles premiere through this site... I know, I know, but I love Phillip Seymour Hoffman! We didn't get in because there were hundreds of people that showed up before we did.

3) The "Free Movies" thread at Slickdeals - Just jump to the last few pages of the thread for the most current listings. There are listings for screenings all over the country here. I love Slickdeals!

4) The "Free Movie Screenings" thread at Fatwallet - This works the same as the Slickdeals link above - just jump to the last pages for the most current listings. Also national listings.

5) Craig's List - you can find indie screenings sometimes, depending on where you live. If you're an indie film lover, this is a great resource. There's almost always listings for student films, festivals, etc.

6) The AMC Summer Movie Camp - obviously, this is a seasonal one. At select AMC theares around the country, they're showing free family films this summer. Check the website for a full listing and more details.

Hope this helps some of you film buffs out there!

Tuesday, June 20, 2006

Just bear with me

I'm trying to figure out how to display images and links to other sites on this thing... just please tolerate my boring-looking blog until I can make it cooler. :)

Monday, June 19, 2006

A reason not to donate cash

It's funny - I had just posted a few days ago about how I prefer to donate goods instead of cash, just to make sure that the money isn't used in ways that I disagree with. And then I heard about this on the radio this morning - a great example of how a good cause can choose questionable methods of getting their message across... and use your money to do it.

Yep, I'm officially sticking with goods and services.

Friday, June 16, 2006

Old habits die heard

Ain't that the truth?

I haven't been buying things for myself recently... other than a great purse that was on clearance that I had budgeted for. The other day I went into one of my favourite clothing stores, Lane Bryant (yep, I'm big and beautiful), with my mom. She wanted to buy some pants.

Let me just clarify that Lane Bryant could easily be a financial downfall if I let it. When I discovered the store with a friend of mine, maybe 4 years ago, I thought I had died and gone to Heaven. Beautiful clothing, fit me perfectly, made me feel sexy and attractive and confident... and they also have wicked good sales sometimes. So I applied for a store credit card, just because. Even though I have only bought items on sale or clearance (truly, I think I bought 1 jacket at full price, but that's it), I was soon upgraded to a Platinum card. We all know that that means I was branded a sucker. And then they started mailing me coupons - the nerve! I was hooked. But as time went by I was weaning myself off... especially lately.

So my mom decides to go try some pants on... which left me to browse. 10 minutes later, I had bought a pair of sale pajama pants and a clearnace t-shirt... and charged the $29 to my store card. But a funny thing happened... before I even left the store... I felt badly that I had caved in to my impulse buys. New pajamas are always nice, but I didn't need them. And I kept thinking about having another $29 of debt to pay off. I didn't listen to my inner voice at the time, so I left the store with them. It seemed very odd to think of leaving my favourite store without a purchase.

And now they're sitting, still with tags and in the plastic bag with receipt, in my bedroom. I fully intend to return them.

I am rejoicing at this inner voice... while I've always been a practical shopper (i.e., sales and coupons), it's nice to know that I'm seeing shopping items in terms of adding to my debt... I think it signals a great change in the way I think... which signals peace of mind in the future.

Thursday, June 15, 2006

Rich Dad, Poor Dad

I just began reading Rich Dad, Poor Dad by Robert Kiyosaki and Shannon L. Lechter.... wow! Just reading the foreword by Lechter was like a punch in the gut - my mom always gave me the same advice about getting good grades, going to college, and finding a great job. My friends and I have often spoken about how this path didn't work for us... or anyone our age that we know, really. And whether it worked or not, we're saddled with debt from student loans from the get-go.

It's a feeling of vindication to read that, yes indeed, times have changed. Old advice is not necessarily good advice.

I am very excited to start reading this book!

My hero, my Chase credit card

I've been putting off the most immediate action upon trying to organize my finances - figuring what I owe and creating a budget accordingly. So you can imagine my surprise when I log on to view my Chase card account, which I estimate to about $130, and see that I owe over $1,500!

A quick look at "Activity since last statement" reveals that someone has charged international airline tickets to my card... several times! I call the customer service number right away and I am transferred to the fraud department. While my account must be closed, they are not holding me liable for the charges - thank goodness! They're sending me new cards and a paper that I have to sign and return to them, stating that I know nothing about the disputed charges. And of course, I'll be ordering credit
reports to make sure that no new accounts have been opened in my name.

For your free annual copy of a credit report from each bureau, go to Annual Credit Report.

While I am in no way praising the credit card companies, I was thrilled at how easy this was to clear my name. I am so relieved... although this still isn't over.

Wednesday, June 14, 2006

The Great Vons Triple Coupons Savings Experiment

One of my hobbies (yes, isn't that sad?) is saving money by combining coupons and sales - there's several websites devoted to helping people do this. A great paid subscription site is The Grocery Game, and the site I refer to (completely free) is The Coupon Mom.

One of the main thrusts of each site is that when you're able to get grocery items for pennies on the dollar, why not buy them and donate to a chairty, shelter, or food pantry? I seized on this idea the first time I read it and have made it a goal of mine to always buy something extra to donate.

I don't like donating money, because I believe that in spite of all the good intentioned people working in the organization, there is just too much uncertainty as to how the money will be spent. I also don't like the high percentages (in some organizations) of donations that pay for adminstration and expensive office space. I like donating tangible goods, like food, hygiene products, and clothing. This is the perfect way to donate quality items for cheap.

So when I heard that Vons was tripling coupons for 3 days this week, I went into overdrive. I think my fiance, R, was pretty stunned to see me in action!

These are the totals for what we spent, bought, and saved during the last 3 days when Vons was tripling coupons. We combined the Vons club card with sale items, and then found internet coupons that the stores tripled during this promotion. I didn't realize until I added up the receipts this morning, but Vons also had a promotion where you were given $10 off if you bought a certain number of General Mills products - which we did, in the form of Cheerios. So we automatically saved $20 this way (two different shopping trips at $10 each).

Total charged = $38.46
Total saved = $228.23
Total items = 112

Stuff we're keeping-
28 boxes of Stagg Chili (Dynamite Hot - my personal addiction!)
3 containers of Betty Crocker Frosting
18 boxes of Rice Dream rice milk (for R and his young niece)
1 head of iceberg lettuce
1 bottle of water
4 bottles of Simple Green cleaner

These are items that we'll be taking to a food pantry this weekend-
4 boxes of Betty Crocker Warm Delights
14 boxes of Hamburger Helper
1 box of Betty Crocker Muffin Mix
18 boxes of Cheerios (full size boxes!)
20 cans of Kerns Juice

We bought so many boxes of rice milk because I had bought coupons on Ebay about a month ago... like $1 for 15 coupons. While the rice milk wasn't on sale, with the triple coupons, it was still way cheap.

The chili was on sale 10 for $10... plus coupons... plus it's my secret addiction. :)

So it was a very successful 3 days... it inspires me to take this donation thing even more seriously.

Monday, June 05, 2006

Great free service from Paypal

Free Equifax Credit Alerts for Paypal users

Early warnings: Automatic notification through email in the event there’s an inquiry to your credit file or there’s a balance change.

Free for PayPal users: No charge to PayPal registered users in the U.S.

Toll-free hotline: Call if you believe you’re a victim of identity theft.

Thursday, June 01, 2006

A Salon Tip for the Ladies

I just read a great post about getting fabulous haircuts and color from students training at exclusive (i.e., expensive) salons around the country. You save money (lots in some cases), and the trade-off is spending extra time at the salon... I think the trade is well worth it. Sign me up for Federic Fekkai!

Salon training nights: look stylin’ while saving money

I really like the rest of the blog, too... definitely worth checking out.

Okay, the real introduction

Like I said in my profile, I've seized upon reading other people's personal finance blogs in my free time lately. I'll list some of my favourites so that you can visit them, too. I love the information that you can glean from them, all the things you'll read that make you think, "Wow, I could do that." I've been reading and thinking and doing more reading... and more thinking about my own habits and the changes I need to be making NOW.

While my debt isn't horrendous, some of my habits are when you think about the long-term implications. My own spending habits have been my undoing in the past... I blame nice handbags, household items (including cookware) and the generous-if-not-silly practice of overgifting my loved ones. The funny thing is, I'm a very careful shopper... I comparison shop online, look for coupon codes and sales, and surf Ebay. But all those great deals add up. It's gotten to the point where I actually hear a death knell every time I recieve coupons to my favourite clothing store in the mail. Hey, I have a coupon - I can't do something wasetful like not use it, can I?

I'm also caught in the cycle, like so many others, of not having savings to fall back on when an unanticipated expense crops up. So I whip out the ol' plastic standby to take care of it. That's what they're for, right? So I charge an eye exam (has a year passed already?), an order of contact lenses (I forgot they were so expensive), a baby crib for my almost sister-in-law (I had to buy it now because it was on sale - with free shipping!), concert tickets (is the Dave Matthews Band back in town already?), a great shirt (it was on sale and I had a coupon - it was practically free!)... wow, I owe how much?! That can't be right!

I am fortunate that I have a decent job with healthcare... I know how prized that is these days. But I don't know how stable this gig is, even though I've been here almost 8 years. Company loyalty and job performance don't seem to count for much around here since our new boos took over. And I have no back-up plan if I get laid off. I don't even have 1 month of rent in my savings... yet. My fiance is in the same boat - which is why I don't have an engagement ring yet.

I need an immediate savings account as well as long-term savings. I keep reading articles about how important retirement planning is, and you should start with your first job. Well, what can I say? I never knew that much about it until recently. My mother never really talked to me about money, although she did promote a sense of frugality. One of my goals is to start a Roth IRA by the end of this year, since we're not offered a 401K plan here.

So this blog is about the changes I'm going to be making to my finances, my habits, my life. I hope it'll encourage you like other blogs have encouraged me.

Once upon a time...

... there was a princess who lived in Los Angeles. She wanted to purchase her own castle more than anything, although real estate prices in her area were insanely high. She thought to herself, "Prices will have to drop in a few years, they can't stay this high. One day, house prices will be affordable. And I want to be ready when they are."

So she decided to face the fiery dragons guarding her financial future - the multi-headed credit card gargoyle, the devious twin dragons of car payments and car insurance, and the most evil of all dragons known to man - her own spending inclinations.

She grabbed the sword of financial planning and began swinging away.