Erasing Our Debt

I recently switched my hosting account to a Linux based account from Windows based so I could use Wordpress and other applications that are available with Linux and not Windows.

So with that said I'll be moving my blog over to that. I don't expect much to change with the way you access or read my infrequent bloggings.

// posted by Ryan @ 5:05 PM 0 Comments Links to this post

Well in response to Bank of America almost tripling my interest rate, I have put up a listing on Prosper to try and get a lower interest rate. Let's hope it works!

One thing I was really wondering about is why it only allowed me to set my max interest rate at something around 8% when most of the loans with my amount request and credit rating were showing somewhere around 14%. Hmmm?

Anyone know anything about that?

Labels: Bank of America, debt, prosper

// posted by Ryan @ 11:44 AM 3 Comments Links to this post

It's now well into August and for me that means it's time to get my free annual credit report. I was just browsing through all the accounts I have/had opened over the past 7 years of my life. I came to one conclusion while doing this:

When I started using credit, I was smart about it.

I still remember what my very first loan was. It was for my truck. We did it as a regular loan instead of a vehicle loan. I had received about $2,000 in graduation money and went out to buy a truck. I found a $4,000 truck and went and got a loan for the rest. It was a one year loan with payments around $200 I think. I had that sucker paid off in 8 months. Of course that was back then when I was bringing home about $500 in sales bonuses every 2 weeks. But still I knew I had to pay it off.

A year later, I didn't qualify for financial aid to go to school so I went back to the bank to get a $1,000 loan to pay for the first half of my classes. I had that loan paid off in 2 months. How? I can't remember. I must have ended up receiving financial aid and went and paid it off. Either way, had I done that a couple years later, I would have blown the unexpected cash.

I like the old me.

// posted by Ryan @ 11:42 AM 0 Comments Links to this post

Well I decided to go ahead and opt out of the changes to my Capital One card.

Reasons being:

• I forgot I had a balance transfer on there at 0%. I don't believe it will last for the life of the card, but it still has a few more months on it. While I believed I had been paying about $9 in interest a month on that card, it comes out to just under $3. I didn't want the 0% going to 19.9% in just a month.
• After reading numerous stories over at Consumerist.com, I found out that Capital One is doing this to just about everyone. Even my wife got a notice in the mail similar to mine. Only difference is that they weren't raising her interest rate, just the late, over the limit fees. I guess an interest rate of 24.99% is high enough for someone with a credit score over 725. She doesn't use the card anyways. It's been cut up and thrown away for a long time now.
• Capital One is now going to be reporting credit limits. While overall for the big picture that is everyone it is good, it is actually going to hurt me. At one point in time I had a $4,500 limit on my Capital One card. Since they only reported your high limit, which was around $3,300 for me, I pretty much had a low credit utilization. But I called and asked them to lower my credit limit to $1,500 a long time ago. Now my credit utilization will shoot up. Oh well, right?

// posted by Ryan @ 11:45 AM 0 Comments Links to this post

Oh how I can't wait for 2008 to get here. Yes, we've still got some time to go to get there, but man am I ready.

Why, you ask?

More spare money to pay down debt.

How, you ask?

• I will be receiving a large check for tuition reimbursement from work. I expect this to be at least $2,000. They only pay 80% of your tuition to a max of $5,000 a year. I'm hoping to get all the paper work filed before 2008 so that it will count towards 2007 meaning I would still have the $5,000 to max out next year. While I debated about just putting that money directly back onto the student loans I had to use to go to school, I decided (through the help of some commentators on here) it would make more sense to pay off credit card debt that is at a higher interest rate. That pretty much makes it a balance transfer. I'll still be knocking out my debt as I normally do, this will only help. Once I get my credit card debt paid off, I'll have plenty of cash freed up to pay off the student loans.
• As of 01/12/2008, my wife's braces will be paid off. That will free up almost $200 every month. I'm debating on how to use that money. I want to put it towards her car payment and have her car paid off ASAP. But I also think it would serve a better purpose going towards our CC debt. I'm leaning towards the CC debt.
• With the new year comes renewal of benefits at work. I currently pay about $190 a month for a pretty good health insurance plan that covers the both of us. By pretty good, I mean that I've never received a letter from them saying they're denying me coverage for something as my previous health insurer did. I'm pretty sure the rates will go up, so I'm going to look into more plans this time. Last year, I just looked over this one and said sure I'll take it. I'll be looking into an HMO. I know, I know. Those are bad, right? But I do believe our current physician's are already used in the HMO. Should I go with the HMO plan, I could save about $100 a month on health insurance.
  I'll also be able to change our contribution to our Health Care Spending Account. Currently, I contribute about $270 a month. Of course part of this is for the braces, but we're still paying that out of pocket and waiting to get reimbursed everything at the end of the year. Believe me, it has come in handy this year with the pregnancy and then miscarriage. If we didn't have the HCSA, we wouldn't have had the money to pay for it. I'm planning on taking the contribution down to about $100-125ish a month.
  While our dental and vision insurance deductions might go up, they won't go up much. I currently pay about $35/month for the dental plan and $10 for the vision plan. That total of $45 may go up to $50. A $5 increase I can surely live with.
• Almost forgot! I will be submitting reimbursement papers for the braces payments at the end of the year. I suspect about $700-800 will be left in the HCSA, so that will be another big chunk of debt that will be out of our way!!

Of course, the drop in pre-tax deductions on my paycheck will mean more taxes to pay. But that's ok. It shouldn't be that much of an increase.

So here's the summary:

$200 payment from braces will be no more
$150ish reduction in our HCSA contribution
$100 reduction in health insurance deduction(should I choose a different plan)
$350-450 more to put towards debt each month

That will put us at about $1,000 each month going towards debt.

Then with the tuition and HCSA reimbursement money, we'll have another $2,800-$3,000 to knock off more debt.

With all this freed up money, I really need to run the numbers to see when we'll be (at least CC) debt free!!!

Labels: benefits, debt, extra income, HCSA, health, pre-tax deductions

// posted by Ryan @ 11:02 AM 0 Comments Links to this post

I had recently praised Capital One in their willingness to refinance my line of credit a few months ago. But everything nice I said about them is now null and void.

As I arrive home last night and sort through my mail, I notice I have received a nice little pamphlet from Capital One. As I pull it out of the envelope I see on the front: "important notice of a change in terms". No biggy. I've received plenty of mail from them letting me know that late payment fees and over-the-limit fees would be rising. Never bothered me because I've never been late or over my limit with them.

So I open it up and find out that they're jacking my interest rate up. Well more than jacking it up, they're more than doubling it. I currently have a 9.9% interest rate. When these changes go into effect after September 16, my rate will go to the Prime rate plus 11.65% which is currently equal to 19.9%!!!

I know they have the "right" to do this. But geez. I have never been late or over-the-limit with them. But that means they aren't making any money off of me.
Guess they took a gander at my credit report and probably saw some collections on there that haven't cleared yet or that my credit utilization was very, very high.

I have the option to decline these changes, but in doing so it will close my account. I really don't want to close my account because it will hurt my credit history. I've had a CapOne card for over 6 years now. The only older card I have, I got about 6 months before this one.

Luckily, my balance on this card is just over $900. I'm only accumulating about $9 in interest per month on this account.

Here's my plan:

1. Pay down as much as possible as quickly as possible
2. Consider a balance transfer after the interest rate goes up.
3. Write a letter to the address in the pamphlet to find out why my rates are going up
4. Write a nasty letter to someone in an exec position to let them know how ass-backwards they are with helping me on a personal loan and then raising my interest rates somewhere else.

// posted by Ryan @ 11:14 AM 2 Comments Links to this post

About a week ago I received a notice in the mail that my account for a magazine subscription was turned over for collections. My subscription to said magazine ended about 6 months ago. I had received numerous letters in the mail that I needed to renew my subscription. Never did I think that they send this off to a company that would try to make me thing I was in big trouble.

The letter is from the National Credit Audit Corporation. Sounds professional, doesn't it? It even looks like it is a true debt collection company that is trying to collect this "debt". They go as far as to say "As we have not heard from you, we assume you agree you DO owe $16.98 for a subscription you ordered and never paid for." Well I never ordered an extension on my subscription, you idiots. Even further, they use a scare tactic to get you to pay by putting the always there statement from a debt collector.

Notice: This communication is from a debt collector. This is an attempt to collect a debt and any information obtained will be used for that purpose.

I googled National Credit Audit Corporation and found an article about it on Consumerist.com. Found out it was a scam and all I had to do was call the number on the letter to get them to stop. That was simple. But still, it ticked me off.

Now I'm off to write a nasty letter to the magazine company that forwarded my information off to this piece of crap company.

Just another lesson in the world of collections: Always research it if you don't believe you owe that money or if you've never heard of the company.

Labels: collections

// posted by Ryan @ 11:50 AM 0 Comments Links to this post

About 4 months ago, I relayed the story about my line of credit becoming due in full. Four months ago, I owed approximately $3300 on the line. I am proud to say now I have gotten it down to just a little over $2000.
I'm a strong believer in the snowball debt reduction method. A lot of people throw around which debt you should get rid of first. Some say the highest interest rate and others say the lowest balance. I tend to agree for the lowest balance being on top due to listening to Dave Ramsey and the psychological impact it has when you pay off that first debt.
Using the lowest balance first method, this debt was #3 when I started. Without adding my wife's 2 new accounts(that will be paid off very soon), this debt is now #2.

Well, how am I doing it?

My direct deposit has the option to deposit into two separate accounts. I have a checking account with the bank that I have the line of credit with. I have my direct deposit set up to deposit $150 every paycheck ($300/month) into this checking account. When that money is deposited I do a payment of all the money in the checking account except 1 cent (to keep the checking acct open). I don't even miss the money actually. My normal payment is somewhere around $94 each month. But I'm paying $200+ on this account and getting it done quickly.

I used to just do $75 a paycheck, but that was when I was building my emergency fund back up.

The good thing about this is that I'm still working the debt snowball and able to throw a considerable amount of cash towards our lowest debts.

When they approved me for the re-finance, I told them I'd have this line of credit paid off by the end of the year. I hadn't done any math on it, I just said it to reassure them that I was intent on getting it paid off. After I said that, I realized I may not. Sure it was ok cause it was refinanced for another 2 years, but I wanted to stick the end of the year statement. Now it seems like this is a possibility.

// posted by Ryan @ 3:46 PM 3 Comments Links to this post

For those of you that actually come to the website instead of viewing through RSS, I've changed the title of the blog from "Erasing My Debt" to "Erasing Our Debt".

I guess I should have done this about 5 months ago when I got hitched but I just didn't. The wife is pretty good about understanding that we have to pay our debt down. I've got her debt down, except for the 0% we took advantage of to pay for the other half of our washer and dryer. We were only out about $500 after using funds from a wedding gift and eBay.

When I update the networthIQ next month, it will drop somewhat. I'll be adding her car loan.

I tease her that she is the reason I accumulated a little extra debt when we started dating almost 3 years ago. When I have a son(if I have a son), one of the things I will teach him is to not spend money you don't have to impress a girl. Especially if you think you're going to marry her, it will just be a little harder to start your lives out the right way.

I pretty much got us into this mess, but we're both in it together to get it out. And I like it that way.

Now I would like to leave everyone with some lyrics from one of my favorites songs... about how life was so grand when we were kids.

World Go 'Round by Mike McClure

Ask about my problems, I won't tell you no lies
Everyday I'm getting older and the more I compromise
I've got debt and doubt and worries piled up outside my door
Makes me wanna ride my old bicycle down to the grocery store

And buy me some baseball cards and stick 'em in my spokes
And ride around the old gym and sneak a couple of smokes
Then cruise around the car wash, till the sun goes down
That used to be enough to make my world go round

I recall when I was younger, how I couldn't wait
Until I got older, now it's getting too late
To go out and do all of those things that I did
I didn't know I had it made when I was a kid

And I'd go rolling down a hill, on a yellow slip and slide
My friends would count to 20, and I'd run and hide
And we'd toilet paper houses, play a little king of the mound
That used to be enough to make my world go round

Now you can leave a message at the sound of the tone
You can e mail or fax me, or try my mobile phone
But I’m turning 'em all off, I can't take it no more
I think I'm gonna ride my old bicycle down to the grocery store

// posted by Ryan @ 2:29 AM 1 Comments Links to this post

Just about a year and few days ago, I made the move to the city from the country to take on a new job. During the first week of living here, my life pretty much changed for the better.

During the first week of living here, all I had to do was pretty much unpack and watch TV. The feature that week on Oprah was "The Debt Diet". After watching that, I decided to get my rear in gear to eliminate my debt.

I've had my ups and downs over the past year. Sometimes I just regressed and ended up charging something on my credit card that I shouldn't really have. I'm finally starting to do better. I still have about $18,000 in debt but I feel great knowing that I'm well on my way to getting rid of it.

In other news, tomorrow I turn the big 25.

The other day I was awarded 11 shares of company stock. I won't be able to cash it in for another three years. That's about how long I plan on staying at this company. I'm grateful to have a good job that has a pretty flexible schedule. That flexible schedule is allowing me to return back to school at the end of August. Tuition reimbursement helps the decision as well.

Here's to another good year ahead!

// posted by Ryan @ 2:35 PM 1 Comments Links to this post

JW over at Need to be Debt Free left a comment wanting some tips for selling on eBay. There have probably been a million tips posted on other sites, but I will let everyone know what has worked for me.

First some of my recent success for selling on eBay comes from me making a money mistake. While when I made the money mistake, I did have the full intention of making my money back by selling some of it, I could have done without buying them. What is it, you ask? Texas Rangers season tickets. Yes I purchased season tickets to the worst team in the Major Leagues. Reason for buying my two seats was that it was buy one get one free. I am happy to say I have already made my money back by selling on eBay(thanks to the Yankees and Red Sox coming to town) and to friends.

Now on to why I've had some success...

1. Research what you want to sell
   If you want to sell widgets on eBay, then search eBay to make sure widgets are selling. If you put something up for sale and it doesn't sell then you still have to pay eBay seller's fees. That would be a waste of money. Use eBay's advanced search feature for auctions already ended.
2. That stuff WILL sell
   You may think you have a lot of junk just laying around your house that has no chance of being sold. But you never know. Search for it. It may just be something that someone is looking for. I used to umpire baseball games, but no longer have the time for it. I put most of my equipment up on eBay and it was getting bids within 10 hours.
3. Garage/Estate Sales
   One of my friends has always wanted to start his own eBay business. He's shown me websites that sale a lot of things(junk in my opinion) that you can buy wholesale. While I think this may be a ridiculous idea for someone looking to make a quick buck. However, he did tell me about something one of his friends was doing.
   He was coming down here to Plano, TX, where the great affluent people live. He was coming on Saturday and going to garage sales. He found a kayak for about $30 and sold it on eBay for about $200. So check local garage sales to turn a profit.
   Estate sales may be risky. I've never been to one, but you'll probably pay a higher price for something you'd find a garage sale.
4. If you build it, then sell it
   If you do something that you're good at, then sell it. If you make great birdhouses, then sell birdhouses. If you make jewelry, then sell them.
5. Lastly----Be Truthful and descriptive
   In your title be sure to put exactly what you're selling. USE CAPS for the main part. If someone is search for a blue baseball cap with flowers, then Title it something like "Blue BASEBALL CAP flowers tulips rose". Always put as much as you can that will direct someone to your auction instead of someone else's.
   Always be clear to your customer what they are bidding on. If that iPhone has a scratch on it's screen, you better put that in the description. Don't cheat people on the shipping costs. If it costs $5.50 to ship don't charge $10. $6 would suffice. That should cover costs for envelopes, boxes, etc.

I hope this has helped.

// posted by Ryan @ 12:13 PM 2 Comments Links to this post

The wife and I are in the market to finally purchase a washer and dryer. I've put this off as much as possible as I wanted to pay cash on it as much as possible. Well when we got married we were told by her grandparents that they would buy us one. That was in February. We finally received $500 yesterday.

I've deposited that into our savings until we get ready to go out and buy. But I decided I'm going to use that for a gift card from eBay instead. I've been watching auctions for gift cards for Lowe's. I've decided that I'm not going to buy a gift card for any less than 10% off including shipping costs. Anything less than 10% is just a waste of time.

I've actually seen auctions for the gift cards go for more than what they're worth. I guess that just proves that there are plenty of morons(is that too harsh?) out there. I was recently watching an auction for a $500 Wal-Mart gift card. Ending price: $512. Maybe someone was out there just jacking up the price but come on. That's not the only time I've ever seen something like that. A lot of times people don't consider the price of shipping into their final bid and end up paying more for the gift card than it's actual worth.  But hey, as I learned in a debt management seminar yesterday at work, American's spent $101 for every $100 earned. So I guess it only makes sense to do it on eBay too?

I've also purchased a 10% off coupon off eBay for Lowe's so I'll be saving some more cash. By my calculations, it looks like I'm going to be saving close to $100 if not more.

Next mission: find out if the Sears Appliance outlet accepts Sears gift cards and look on eBay for a Sears gift card at a discount.

Thoughts? Good or bad idea for doing this?

// posted by Ryan @ 1:17 PM 1 Comments Links to this post

We try not to eat out very much, but sometimes we're just too lazy to cook. So I try just about everything I can to save money when eating out.

Tip #1
When going to a restaurant, check their website for some type of email club. Usually when you sign up, they'll email you a coupon for a free appetizer. Eating an appetizer can lead to eating less, therefore leading to spend less on your meal. I've done this several times and sometimes I just use a different email address for the same restaurant.

Tip #2
When dining with your significant other, combine your combo meals into one. At this chicken joint down the road, they have a 4 piece strip meal for $6 that comes with fries, bread, and a drink. But then they have a 6 piece meal for $8 that comes with extra fries, bread, coleslaw, and drink. You can then add a strip for 59 cents. My wife and I get the 6 piece with add a strip and share everything else. We're married so I sure as heck don't mind drinking out of the same cup as she does. She usually only eats 3 strips and I eat 4. We end up saving about $3 each time we go there by using this method.

Tip #3
If something was wrong on your visit, be sure to let them know. Either tell the manager on duty or go on their website and email them. If you do it then, some or all of your meal may be paid for. If you go through their website, you will most likely get coupons in the mail for your next visit. Don't lie about your visit, just be honest. If it was a good experience, definitely take 5 minutes on their website to tell them how good a job they did. They may send you coupons anyways. One time I did this and paired the coupons with the free appetizer coupon tip and we ate for free! 

// posted by Ryan @ 1:10 PM 0 Comments Links to this post