The New Steps for July For Me and For Others

Step one, use some sort of money tracking software.

Here is the insane part. I did a very sketchy budget spending plan based on my income and you know what, I'm supposed to have an additional $200 left over each month AFTER I pay my monthly bills, put money into my E-fund, and I have given myself liberal amounts of money to cover things like food and hobby. AND this is on my reduced income. WHY don't and did I not I save more? Because as I've pointed out before, I'm not an aggressive saver at all. I'm barely a passive saver. I could have fully funded my E-fund on the money I spent on wants this past spring, but I've decided to stop beating myself up over this and move on.

I can hear you all saying, but Betty aren't PF blogger supposed to use things like Quicken,Mint, or some fabulous spreadsheet. The truth of the matter is there is a segment of us that don't. I fall into that segment.

Part of me just did not or could not face up to my spending. I had all my bills paid, had my needs taken care of, and was able to get some wants. It was the excessive wants that did me in this past May.

The Mess of May did disturb me. I took out my frustrations in my life by spending money and even by keeping all my receipts and looking at them, I still really did not have a true sense of where I spent my money. Actually, I did not want to admit to myself where and what I spent my money on. I was keeping my head in the sand, so to speak.

I need to take the next few giant steps in my bouncing back from bankruptcy stage. The next steps will make or break my progress.

I need to become more aggressive about saving money. It could be paying myself first, it could be curbing my spending and then taking the extra money and putting it into my Credit Union account.

I need to be better about a budget spending plan and sticking to it.

I need to stop rationalizing my choices and not just talking the talk, but walking the walk.

Maybe, just maybe, this will be one way to stop feeling so stuck and to continue to bounce back.

Tell All Tuesday on Sunday-Bankrupt Street-How I Got There Part III

Here is the part III of how I became Bankrupt and it's not pretty!  In previous posts, you read about my personal history and my relationship with money.  In this post I'll elaborate a bit what led me to finally filing the Bankruptcy.

I previously posted about the Universal Default clause that oh so many credit card companies have as part of their Consumer agreement.  I can truthfully say, that the Universal Default is the most consumer unfriendly fiscal invention ever created.  

One of my fiscal issues was my slowly depleting savings account.  Part of the joy of home ownership is being responsible for the repairs and maintenance on the home itself.  I knew my house had some issues, but my home inspection did not turn up any major projects that needed doing.  Enter my insurance company.  First they wanted me to get a new roof.  Why? The roof I had was fine, about 12 years old and fine.  The insurance company said their inspection deemed the roof old and past it's shelf life.  Five quotes and four roofing contractors telling me the roof had at least another 5 years left in it,  I had the roof redone.  Two years later, the insurance company wanted me to paint my house.  Yes, I did have some peeling paint, but it was not that bad, in fact, I had put new siding on one part of the house and was slowly planning on working my way around the house, new siding and new windows.  Painting seemed to me to be a waste of someones time and my money, but the same deal, if I did not paint, I would be cancelled. So I got the house painted.  (and got a new insurance company after the fact too). All that came out of my small savings account and I did not replenish that savings account. 

Being underemployed played a big part in my fiscal downfall. I had a reduced salary and reduced benefits. I had to pick up part of the cost of my medical insurance, which later came back to bite me.  I also agreed to a new salary structure (and did not get it in writing-BIG MISTAKE) which eventually did not pan out.

As I stated earlier, I stopped using my credit cards.  I had 5 credit cards. Yup 5.  I was close to being maxed out on two, had plenty of credit on 2 of them and one was an AmEx. I would use the Am Ex because I had to pay it off each month.  I could not give up the plastic entirely, but I was managing. I still spent money, I just used my debit card. I was paying my bills and still "having a life". 

In 2005 I hit a streak of really bad luck and as I say, even with good research and carefully sought out advice, I started having huge money issues and the Universal Default started to rear it's ugly head. In no particular order the following things happened. My job, job description and pay scale changed, I tried to start a new part time business with someone, I made some bad investments with part of my retirement account, I started going through some relationship issues, and I just made some bad, bad decisions with my money. This is where I really wish I had found the world of Personal Finance and PF bloggers.  At this point, I may have been able to salvage myself.  May have been.

The Universal Default started to kick in a couple months after one of my car payments went missing in the mail. I got a late notice from the loan company, checked my bank account, saw the check never cleared and sent off a new check. No ding yet. A few months later I just totally forgot to pay my car loan. Nobodies fault but my own.  Paid the current and past due and had the 30 day late charge.  A few months later I open my credit credit card and was stunned to see the minimum amount due was like double what it had been the month before.  My first thought was 'Damm the payment did not make it", but I looked on the statement and yes, the payment had made it with room to spare, but my interest rate had been increased.  Up until this point I never had a late payment to my credit cards. I paid on line so that the payment hit the day before the due date or mailed it so that it arrived before the due date. I was not using my credit cards-How could this happen to me?  I called the company and the slightly apologetic lady told me that one reason my interest rate went up was because of my late payments.  To which I replied-"What late payments?" I'm looking at the past 18 months of statements and not one late payment.  

This is when she told me that the company could and did, exercise it's option to raise my interest rate because of my payment history with another lender.  Universal Default.  Guess what, I had no recourse to this Universal Default clause either.

To say that things snowballed is to put it mildly.  If you are reading this, then you have lived my story.  One credit card after another started increasing not only the interest rate, but one bank also upped the minimum due.  It was a double whammy.  Where I was making slow and steady progress in paying down the debt , I now could barely keep up with the payments.  Instead of seeing my amount owed decrease each month, it stayed pretty constant, only dropping literally a few dollars like 2 or 3.  Calls to have the percentage rate dropped fell on deaf ears, and one card holder also then decreased the credit limit as well.  They did this since I was not using the card (duh-I'm paying it off!) and my repayment history with other lenders was not good. I was denied even the chance of playing the balance transfer game. 

So here I am, with a non existent savings account, credit card payments that were manageable now through the roof, a change in my job pay scale (which in hindsight was STUPID, STUPID, STUPID), a several bad fiscal decisions, topped off by me having personal issues that just totally crapped out my year. I felt like someone had put a hex on me for 2005,  I really did.  

2006 did not start of much better, in fact, it got worse.  I was relying on promised bonuses to help with the credit card crunch I was in.  Because of the new job description and a change in the company (ie my boss did not want to pay out the new bonuses when he realized how much was going to employees and not him), our bonus structure got changed and guess what? I did not get the bonus I had been anticipating.  Talk about being screwed.... but let's face it, I did not plan well and relied far to much on that supposed bonus. 

In mid 2006 I switched jobs to a new company (the one I work for now), better pay, closer to home, but my credit situation was not improving. In fact, it was still spiraling out of control. I started missing payments on my credit cards, I spent money  I should have put towards my credit cards, I honored some personal obligations that cost me more money, I just made bad decisions.  To stop the hemorrhaging I took money out of my 401K, early withdrawal penalty be dammed.  It helped somewhat but did not stop the problem.  I still could not get out of my own way to improve my situation. No matter what I did, things just got worse. 

At this point, I had paid off my car loan, had put my student loan in deferment (again), and was trying to see if I could reverse the damage done.  Quite simply, I could not. I was paying more in debt repayments that I was taking in income.  My part time business partnership went no where and cost me money, I was having health issues that I had to cover payments out of pocket because of my high deductible plan (about $3,500 worth of bills, my deductible was $5,000). I had some minor car repairs to my old car, but it all added up.  

I started to do even more stupid things. I was ignoring the phone calls and letters from the credit card companies that may have been able to put me on a more reasonable repayment plan.  I did not seek out help. I just got totally overwhelmed.  One credit card company did "catch up" with me and I did set up a repayment plan, reduced interest rate, I got to pick the payment date, etc.  

What stuck out in my mind was the comment from the representative setting up the repayment schedule.  "Ms. B, you have been a customer of this bank for 10 years and never a late payment. In fact, up until this past year, you have been a great customer"  what happened?  All I could respond was that Life took a bad turn and I just never got back on the right street."    

After this conversation, I got up the belated courage to try and contact the other companies to see if I could work out a similar repayment plan.  No such luck.  I was a "day late and more than a dollar short". 

What eventually drove me to the Bankruptcy was being slapped with a judgement by one of the credit card companies. I was being taken to court for my credit card debt.  I was already napping on my couch when the Marshall came to my door to hand me the summons, but that put me to bed at 6:30 PM not to get out of bed until 8:00 AM the next day. I felt totally shattered that day, just shattered, run over and out of ideas as to what to do. 

I called my attorney to ask about what they hell I was supposed to do with this summons. He referred me to his partner who specialized in debt collection and bankruptcies and strongly suggested I make an appointment to see his Partner.   With great reluctance I made the appointment and brought all my documents as requested by his paralegal.  He reviewed my documents and said I was a candidate for Chapter 7 Bankruptcy. I asked why not Chapter 13?  In my mind, I had collected these debts and I should repay them. If my creditors did not accept my plan for repayment, they would accept the courts and I could repay my debts. 

My attorney said the success rate of C13's was far less than C7's. In fact, C13's were harder to get than C7's, or so said he. We talked about me and my situation.  He gave me a bunch of paperwork to read and told me to think about it over the weekend and to call back on Monday.

I took the paperwork home and did not look at it for two days.  I was in denial about the whole surreal process, I really was.  Bankruptcy was a dirty word.  Only slimy people filed bankruptcy, the negative connotations were all swirling around in my head. People are going to read about me in the paper!  Me Bankrupt? I could just not fathom it all.   I spent a lot of time that weekend feeling  terrible and detached from myself.   I reread all the papers given to me and I did some internet research.  I went to bed one night still unsure of what to do.

I woke up the next morning and my decision was made, I would start the Bankruptcy process.  I was feeling beat up and I was tired. I called the law office and made a follow up appointment to start the paperwork. As they say, the rest is history, I became Bankrupt Betty that day.

Part IV- I'm Bankrupt Now What and how I'm getting off of Bankruptcy Street.

Bankrupt Street, How I Got There--Tell All Tuesday Revisited

Last month when I had a mini meltdown over an unkind comment on job number 3, one of my readers asked me to post how I became bankrupt. This week I will!. I have links to two posts done last year that explain a bit about me, my background, and my fiscal education. I'll post at the end of the week the third installment of how I ended up on Bankrupt Street. I've not edited them other than to increase the font size. I will warn you a head of time, I rambled on a bit.

Click here for Part I on my story.

Click here for Part II of my story.

Why I am putting out to my readers my story? Well, it's because I don't think my story and my fall into Bankruptcy is much different that what has happened and is happening to many folks. I did not plan to go bankrupt at any point in my life. Heck, at this point in my life, I expected to be at a totally different place than I am now, both personally and professionally. The fact of the matter is I'm not in that place. What has to happen is for me to put a lot of things behind me, move forward with my life and "bounce back". One reason I started this blog was to have a place to ramble on about my BK and the process (which I have done) and another reason is to let folks know that with time, effort and energy, you can bounce back from bankruptcy. I'm doing it and I want others to know it can be done!

Successful Weekend And Looking Ahead.

I had a decent weekend tackling my to do list. I did another clutter/possession purge, made a trip to the town dump, got the returnables back to the store, managed to get my laundry done, met up with some friends and got treated to lunch on Sunday, solved my couch cushion dilemma, and actually went to a movie. I went to the movies because it was too muggy and humid to do yard work (well that was my excuse) and I've not been to the movies in ages. I saw Burn After Reading and really liked it. I love the Cohen Brothers!

I do consider the weekend successful on a couple levels, not only did I get some long neglected chores done, but I've been working very hard on changing my mindset these past couple months. Look at the glass half full instead of half empty. Be more of a Pollyanna. Look on the Bright Side of Life. Ditch the Negative People.

My long and lengthy to do list is still pretty long, but I was able to finish some outstanding projects and I've made substantial headway in my two main goals of the month and we are just halfway through September. When I looked at the list last night, I did not think, wow, I've got soo much left to do, instead it was "Wow I got a lot done and I got to have some fun as well! " That is a big improvement for me, a big improvement.

What has this got to do with Personal Finance. It's about realizing how far you have come towards your goals. Weather it's debt reduction or savings, I see and read a lot of blogs where people are complaining I have soo much debt left, or I am so far away from my savings goal. I'm here to say, give yourselves a pat on the back and look at what you have achieved. I know I've made some less than sensible decisions on how to spend my money recently and I've griped about my E-fund at a standstill. BUT I have an E-Fund now, last year at this time I was going crazy with the Bankruptcy filing, saving any money was just something I did not and could think about.

Try to spend some time congratulating your selves on your financial successess. Congratulate your selves on finding ways to monitize your blogs, sell things on E-bay/Craig's List, that you are truly getting the concept of snowflaking, you've started an Emergency Fund. Congratulate yourself on taking those steps that need to be taken and take a few moments to enjoy the day. You deserve it!

Delaying the Inevitable....

I've been posting my fiscal history on this blog. I have the last section to post and I will admit that I have been putting it off for a couple of reasons.

The biggest reason is each time I open that file I see MY mistakes staring ME in the face. I see where I have failed, I see where I made some really stupid money decisions and just stupid decisions period. And I don't like seeing me as a fiscal failure.

As I was writing the post, I started to wonder how much of my upbringing and non fiscal education had a part to play in my fiscal meltdown. I'm sure part of it contributed to my "fiscal hell" as I call the period before the BK. But what I see that slaps me upside my head are my own bad decisions. I don't think any of us want to admit to failure and in some cases, utter stupidity on our own parts.

I see those errors and I just want to crawl into bed with a bottle of wine. I really do. That being said, I will post the next chapter of my fiscal life. I am trying to consider it an exercise in how not to repeat my past.

Tell All Tuesday~Who The Heck Am I-Part 2

A couple weeks ago, I gave you my dissertation on the first part of my life, how I grew up and what I did and did not learn about money. Here is the second part.

I graduated from college with a respectable gpa, a ton of student loans, a car, a dog, and still not a heck of a lot of common sense about real money management. I could balance my checkbook, I shopped for clothes on sale, I was sensible, but not terribly informed. My grandmother surprised me during my junior year and bought me a car. It was not an expensive or fancy car, but it was a car. This was my grandmother who never seemed to enjoy her money, but she turned around and bought me a car. I remember my mother being really angry. Angry because she was not the one who bought the car. Angry because my grandmother made it very clear the car was bought for me and needed to be in my name and my name only, angry because I took the car, and even angrier that I quickly agreed to pay for the insurance and all repair bills so I could have the car at school. She called it my multiple birthday, Christmas, graduation present. My mother muttered that she never had a new car, only used ones. To put it mildly, things were a bit tense at my house for a while.

What I was discovering as I grew up was that my mother was a money manipulator. As I stated before, she made a lot of promises to me about money that she never followed up on or changed her terms and conditions with money. I know now a lot of her anger about my car was due to the fact that my grandmother had taken part of her control over me away from her. In retrospect, I have to give my grandmother a lot of credit. She knew I was a responsible person and I would live up to the agreement of valid insurance, no friends driving the car, no drinking and driving, pay for my own gas, etc. I lived up to my end and my mother was very bitter about it. She liked and still likes failure in other people. She did not like losing her control over me.

After working for a year, I went graduate school. Based on my undergraduate experience, I was determined to put myself through graduate school all on my own, and I did. I went to the local State University and did it again on grants, loans and scholarships. My mother's offers of financial help were taken with a grain of salt. I did not count on them and when they came, she would have her usual terms and conditions attached to them. I was getting tired of having conditions attached to money. I stopped asking for it, even for birthdays and Christmas. In fact, one Christmas I asked for a vacuum cleaner. It was easier to ask for things than for money. The money I could have used for things like food and car insurance, but even gift money had conditions. The fact I was putting myself through grad school without any parental help seemed to really make her mad. I took any money I was given, but I just stopped asking for any help. It was easy this way. I did not have to deal with what ever condition was being given with the check. A good dose of guilt and manipulation with each check, I did not need it anymore.

Graduate school wasn't easy. I can remember being really poor in graduate school, eating oatmeal for breakfast and lunch and ramen noodles with frozen vegetables for dinner. My boyfriend would occasionally come up to visit with a bag of real food, I'd ask him to bring food with color, most of my meals were beige or white. My university had an Ag school and at the Ag School Diary Bar for $5 I could buy half gallon of milk, a block of cream cheese, a half gallon of ice cream, and a pound of butter and occasionally a dozen eggs if they were in stock. Twice a month I shopped at the Dairy store, I ate a lot of dairy and I drank milk, I don't even really like milk, but milk was cheaper than soda and OJ. I can remember coming home from classes one morning all excited to have my oatmeal for lunch. I opened the sugar bowl to put a spoonful of sugar on my oatmeal, only to find it full of ants. I dumped the sugar out and cried. That was my last cup of sugar until the weekend when I would get my small paycheck from my part time job. I spent the next three days eating plain oatmeal, tea with no sugar, and plain ramen noodles. The only upside to this all was I was really skinny, my hair was falling out because of poor nutrition, but I was skinny!

During this time I had and used credit cards. When I realized that I could not afford credit cards, I just stopped using them and slowly paid them off-I had a couple gas cards, a couple store cards, and a Master Card. Some months I paid the minimum, some months I was able to pay more, I did use my Master Card sometimes-like when I was desperate for a tank of gas to get to and from class and my job, but I did pretty much stop using credit while I was being a student. I just did not have the money, it was hard enough to make ends meet as it was. I also was an expert in getting the most out of a tank of gas. I am proud to say the only time I ran out of gas was when I literally was pulling into the gas station one day. I pushed the car the last few feet.

After Graduate School I started to applying for jobs in New England and just not getting a job, a bunch of job interviews, but no job offers. I packed up my life in a small U-Haul and moved to Northern Virginia with my boyfriend. He had moved down about 6 months earlier, I followed. Life was pretty good. We had a small, but OK apartment that took dogs (I supported myself and my dogs while in grad school). He had a job, I had a couple job interviews and somehow I managed to find a job on my second interview and in my field as well. I started to earn money and put money away. My boyfriend and I opened a joint checking account and we each had our own separate checking account as well. We used the joint account for household expenses and our separate account for our own fun expenses. Somehow it evolved that my boyfriend became the one who managed our money, he paid the bills, he gave us each an allowance, we both worked on the budget, it was pretty easy for me to allow him to just take control of the money. Plus I think his ego was a bit bruised. It ended up that I was the one in the relationship that earned a better salary and had better benefits. He kept saying it did not matter, but I think it did matter, nay, no later on it really mattered when I eventually moved up to a better job with more money and he did not. Since I never learned how to really manage my money, it was also easier for me to let him take care of our finances. He was actually very good at it. It was at this time that my mother started getting really weird about money. This in and of itself is a whole other serious of posts that can be lumped in with families and money.

We were doing well. I picked up a part time job that required some travel (and subsequently got me re-hooked on travel), I used the money from the part time job to pay for additional part time study for an advanced certification. I worked a full time job, a part time job and was studying for an advanced certificate. I got a new job and I learned a bunch of new skills, one of them was budgeting and money management for my department. I found out I was really good at budgeting and money management. I was able to increase income, decrease expenses and turn a profit. I got a couple credit cards. We used the cards for everything from gas for the car to school books, to family presents, to clothes shopping. We usually carried a balance, not a high one, eventually, I paid off the cards, but kept them. I liked having my plastic, I was able to shop without having to answer to my boyfriend for each debit on our debit card.

After a long time together and divergent interests, the long time boyfriend and I split up. We were having issues and part of the issues were money issues. That too is another set of posts, relationships and money. The issue was I was trying to take control of my money and it did not go over too well with my boyfriend. I had for a number of years (almost nine), let him handle our money, how it was budgeted, how it was spent, what it was spent on. Now I was taking control of my own fiscal life. I had a 401K, I wanted to donate to charities more than we were doing, I wanted us to buy property (we lived in a nice and inexpensive rental), he did not.

After I left my boyfriend, I lived happily in the WDC metro area for about 2 years until an internal transfer in my company came up and I had the desire and urge to move back to New England. After 11 years, it was time to go 'home". As Yogi Berra said, it was Déjà vu al over again. I packed up my life in a U-Haul and moved to NE. I bought a very small house and worked at my company for about another year. The company was changing and I did not like the direction the company was taking. My new boss was a very difficult person (and in hindsight, I should have realized something was wrong when she went through 12 managers in her division in less than one year), I was hating the commute from my house to work (about 40 minutes on a good day, the work did not have regular hours, a lot of long time employees at the main office were leaving and I wanted out.

I read the local paper and saw a job announcement for an office manager in a local business. I interview and took the job despite a cut in salary and benefits. It had regular 9-5 hours and I figured I'd be able to get a part time job. I had a couple part time seasonal jobs, I had money in the bank, I had no great demands on my time or life, or my bank account. I was slowly paying down my credit cards and enjoying the change of pace while I tried to figure out my life. I thought I would just have an epiphany and get a new life and go back to my slightly workaholic way of life. 'Twas not to be. 9-11 happened and as we all know, the world changed.

In retrospect, I made several mistakes. I changed jobs and took a salary and benefits cut. I made the mistake of not having a decent emergency fund. I made the mistake of not realizing until it was really too late that I was pretty much underemployed, but at least employed and did nothing to change my situation until it was too late. I still used my credit cards, but not as much as I had. I did not plan for or anticipate various house expenses-new roof, new exterior paint job, the various DIY projects that always crop up that occur with home ownership and life expenses. I had a semi serious long distance relationship that started to drain me not only monetary, but emotionally as well. I made a bunch of pretty stupid decisions, many of them financial. I made the decision at one point to stop using my credit cards and just starting paying them off. I literally just stopped using them, lived on cash and made the effort to pay of the cards. Even with good advice and careful research, I was having money issues. I needed a better paying job and I needed to get my act together.

But what really got me in trouble was my lack of understanding of the Universal Default. It was Universal Default that eventually pushed me over the edge. I will admit I made some bad choices with my money, I had one car payment go missing, I made a double payment the next month and a couple months later I missed a payment. This was all it took for the Universal Default to kick in and that was all I needed to go into fiscal hell.

The next installment

How the Universal Default kicked my butt, how my family still managed to make me crazy, how my very fragile fiscal life fell apart, how I ended up Bankrupt and how I am "Bouncing Back".

Stupid Purchases

Graceful Retirement put up a post about her blog and her lack of regular posting or worrying about posting about the mundane aspects of life . I don't mind reading about the mundane aspects of life, or the things we tried and did not succeed at. We try things and either we are successful or we are not. It shows we are all human! Plus I like to read about just us regular folks.

I totally admit, I sometimes I get annoyed when I read blogs and I hear about folks who got $100 worth or groceries for $50, or they are already over half way to their Roth IRA max for the year and this is only February, or they went under budget on groceries,or they made an unexpected killing on E-Bay or they resisted Starbucks for three months, or they are sooo upset that they went over their gas budget by $2 or what ever! It seems like we never hear about the over budget mishaps (unless it's a major thing like an unexpected car repair), or they blew their entertainment budget drinking Margarita's at happy hour. I'd like to reach through the Internet sometimes and give them a little bit (OK big) shake. Sometimes.

I'm human, I make mistakes, I will make mistakes. I'm admitting to two really stupid purchases these past couple months.

In October, my vacuum cleaner died. It was about 11 years old and died. I loved my Eureka Canister vac. It did it's job and did it well. Silly me went and replaced it with a small Shop Vac. The Shop Vac was on sale for $35 (give or take a few $$) and while it does suck up the animal hair and large dust balls around the house, it is not exactly cut out to be a carpet vacuum cleaner. Plus is spews out fine dust and that gets everywhere. What the hell was I thinking when I bought this sucker? Who remembers at this point? Point being, this was a wasted purchase and a waste of $35 and I still broom swept the carpets to get up pet hair.

To replace the Shop Vac, when I had my post Christmas shopping meltdown, I ended up at the K-Mart and bought this little bag less canister vacuum. It's very cute, it's yellow and I hate it. It does not do a great job sucking up the animal hair from the carpets (something I am a freak about, I have pets, but I don't need pet hair all over my floors) and it's little. I thought the little would be OK. I don't have a ton of storage space, but this little (did I say it was little) vac fills up after about 5 minutes of use. I do have to give it credit, it seems to do an excellent job sucking up dirt, the dirt canister gets full, it just does not really get all the animal hair out of the carpet.

This means I know have two fairly useless vacuums. My solution, save up some $$$ and buy a decent canister vacuum in a month or two (I don't like uprights). I will probably keep the Shop Vac but probably sell the little one on Craig's list. Until then, I'll use the little yellow vac, and borrow the neighbors "real" vacuum every so often to help de-hair the carpets.

Human, yes I am.