Monday, August 30, 2010

G.O.O.D. Tip #2: Get angry — raise a little hell

When I was stuck in credit card debt, I was being buried alive by my 19.99% interest rate. In February I calculated that I had been charged more than $1,000 dollars in interest in a single year.


I can think of about a million better ways to spend $1,000, including throwing a thousand dollar bills into the air in a crowded bar just for the heck of it.

If I could do it all over again, that is what I would do with that $1,000. Maybe someday. Dream big!

Anyway, once I realized how much my interest rate was hindering my efforts to pay off the credit card, I know I had to call my credit card company and ask for a lower rate. Normally I wouldn't do this because I hate confrontations, but the $1,000 issue ignited a fury in me. Sure, it was my fault that I didn't pay closer attention to the mounting interest, but I still felt robbed.

If you need a little incentive to badger a customer service rep into lowering your interest rate, gather several of your old credit card statements and add up the interest. Get upset. Get your dialing finger ready.

I went into my phone call armed with several reasons why I deserved a lower rate:
  • I had been a good customer for four years.
  • I had never exceeded my credit limit.
  • I had always paid on time.
  • At this point, I had been paying well over the minimum amount due for several months.
I also decided against using a tactic that some online sources suggest: telling the rep that I had gotten some great credit offers with lower rates and I was ready to switch to another company. I didn't want to risk having the rep ask me what the offers were. I didn't want to give him a specific number in case he was prepared to offer a lower one.

I have a terrible poker face, but I know how to hold my cards close to my chest. Sometimes.

Instead, I chose to be honest. I said, "Hey, I'm trying to pay down this card and the interest rate is killing me. What can you do to help me?"

Of course, the rep gave me the runaround for 10 to 15 minutes. He kept saying that a lower rate was "not available at this time," as if there are a limited number of lower rates that they just give away until they run out. Oh, please.

That's when I busted out my polite threat. I told him that I would immediately close the card if he didn't give me a lower rate. He kept saying he couldn't. I then asked for a manager at least three times before he transferred me. I kid you not, his sigh of defeat was audible.

This manager must have known I was already upset because he immediately offered to slash my rate to 9.99% for six months. I was blown away because I never thought I would get 10 percentage points shaved off, so I accepted the offer without negotiation. I didn't want to screw it up somehow. Also, I knew I would be able to pay the card off in less than six months, so the limited time span didn't matter too much.

If you're an excellent negotiator and feel like twisting the knife a little, you can ask for an even lower rate or a permanent reduction instead of a "promotional" reduction. The awesome financial blog Get Rich Slowly has a great article about negotiating here.

I thanked the manager profusely, asked when the rate would go into effect (on my next statement), and wrote down his full name, job title and employee number. I was prepared to hunt this man down if I didn't see the rate reduction go into effect.

I was very serious about this, people.

And you know what? It completely worked. My interest rate was reduced as promised, and I paid off the card in less than six months. I bet the rate has now gone back to 19.99%, but luckily 19.99% of $0.00 is... $0.00.

If you have credit card debt, please ask for a lower interest rate immediately. Do some research, choose a tactic and be prepared with examples of why you're such a shining customer. Be polite. If that doesn't work, make a polite threat. If that doesn't work, ask for a manager. If that doesn't work, hang up, wait 15 minutes and call back to work on someone else.

And why stop with your credit card? You may be able to get a lower price for cable, a fee waived by your bank or a raise from your boss. Read this article, via Get Rich Slowly (I'm obsessed),  to see that all you have to do is ask. As the author writes, "Asking has no consequence worse than 'no'. And you'll be surprised how often the answer is 'yes'."

The next tip can help you curb your spending and stick to your budget. Be on the lookout for G.O.O.D. Tip #3: Get thee to an ATM — start paying with cash

Sunday, August 29, 2010

New company policy

I just wrote — and accidentally deleted — a really long post about G.O.O.D. Tip #2 and don't have the willpower to rewrite it right now. Sigh.

Instead I'll just throw up a quote I ran across while reading an article about negotiation (which I can't find for the life of me, but I remembered enough of the quote to find it through the power of The Google):

"It's a very funny thing about life; if you refuse to accept anything but the best, you very often get it."
—W. Somerset Maugham

Well played, Dubya. Life's too short to settle.

Thursday, August 26, 2010

G.O.O.D. Tip #1: Get organized — write everything down

The first tip in my amateur getting-outta-debt series is simple:

1. Get organized — write everything down

Find a piece of paper and a pen. Make a list of all of your debts: credit cards, student loans, bank loans, car loans, mortgages, money you owe friends or family members or dealers, etc. (Just kidding about the dealers, but no judgments here.) Once you have a complete list, do some digging and figure out exactly how much you owe on each debt.

If you're like me, you won't know this off the top of your head — I was too afraid to look at the big, scary numbers — so pull up your online records, rescue your crumpled statements from the back of a cluttered drawer, call your parents and ask how much you owe them (I guarantee you they know!), whatever it takes.

When I took this first step in January, my list looked something like this:
  • Credit card: $4,700
  • Student loan: $2,800
  • Mom: $1,200 (for those pesky minivan repairs)
Yikes. Looking back, I recall that once I had these figures, I did not add them up — and that's a good thing. These debts were overwhelming enough individually; having the grand total burned into my brain would have only made me feel more hopeless. For your own mental health, it's best to attack each debt one at a time.

Your plan of attack will start with a written budget. At first, I created a budget in Excel (which is how my mom manages hers), but I quickly grew tired of fiddling with cells and formulas. It didn't help that I use Excel all day at work; using it at home only made me feel like I was still at work. (Also, my laptop died around this time and I lost the budget template that I had created. Blast.)

It turns out that good ol' pen and paper worked just fine for my obsessive-compulsive mind. I like to be able to scribble my budget down quickly, cross things out, highlight things, staple receipts to the paper, etc. It works for me; you can do whatever the heck works for you.

First, list your monthly non-debt expenses. These should be essential, recurring expenses that are about the same every month. For example, mine were:
  • Cell phone
  • Car insurance
  • Gasoline
  • Medical (prescription)
  • "Rent" (my mom charges me $65/month to offset her food and utility bills. Yup.)
  • Groceries/toiletries (I buy some of my own food, too, just for kicks)
If you're not living with your parents, you'll also need to include:
  • Rent or mortgage payment
  • Utilities (water/sewer/garbage, electricity, gas, etc.)
  • Cable/Internet
  • Home phone (please cancel immediately — welcome to 2010)
And don't forget miscellaneous expenses:
  • Other insurance (if not automatically taken out of your paycheck)
  • Other transportation (bus pass, parking permit, etc.)
  • Anything else that I'm not thinking of!
Once you have your list of recurring monthly payments, add 'em all up. Subtract your total monthly payments from your monthly income. The amount of money you have left over is the amount you could be using to pay off your debt.

However, I had another category in my budget that was quite essential to my getting-outta-debt success:
  • Going out/having fun
We've all gone on diets. When you try to restrict yourself too much, you only end up binging on Reese's Peanut Butter Cups (my drug of choice) by the end of the third day. Then you feel like you've ruined your diet, and you give up completely. If you don't allow yourself to have some fun, you will probably fail.

I used this category as an "allowance" for myself. Each month, I gave myself a small amount of money to blow however I wanted. I was able to go to bars, go out to dinner, buy an inexpensive item of clothing here and there, whatever — but I only used the cash that I had allotted for that purpose, and once my cash was gone, I didn't spend any more.

You will probably be the designated driver for a while. Just sayin'.

This will also help eliminate mindless spending with your debit or credit card. That's what got me into such deep trouble in the first place — lots of little (and some big) purchases that added up over time.

Now we'll look at where you'll be throwing the difference between your income and your monthly expenses. Next to your list of debts, make note of the minimum monthly payments.

My foggy-memory version:
  • Credit card: $4,700 — min. payment: $150
  • Student loan: $2,800 — min. payment: $50
  • Mom: $1,200 — min. payment: $0 (a mother's love!)
Along with your monthly expenses, you'll continue paying these monthly payments. But, here's the fun part! Pick a debt that you want to pay off first. Dave Ramsey suggests that you pay off the smallest debt first; this will give you a relatively quick "win" and motivate you to keep going (imagine the equivalent of losing 5 lbs. in the first week of a diet — woo-hoo!).

I followed his advice and chose to pay my mom back first. Then, I would attack my high-interest credit card. Since the interest rate was so outrageously high compared to the rate on my student loan, I decided to whittle down the balance quickly, thus reducing the interest charges as well. Last but not least, my student loan would bite the dust.

Let's say for the sake of example that I came up with $500 a month to throw at debt (I was actually able to come up with more; yay for living at home!). I would pay $150 on the credit card, $50 on the student loan, and have $300 left to give my mom each month. I would do that every month until she was paid in full. Then I would continue to pay $50 on my student loan each month, while throwing $450 at the credit card until it was paid in full. Then I would throw the full $500 at the student loan until it was paid off. This is Dave Ramsey's debt snowball plan — click to read more.

Since I knew how much I could afford to throw at my debt each month, I was able to make a "debt payment schedule" — basically, I created a chart that helped me project when each debt would be paid off. This was another motivating feature of my plan (and another Dave Ramsey trick) — I caught a glimpse of freedom in the very near future! I highly suggest you make your own debt payment schedule.

My projections were almost dead-on, too (keep in mind I get paid twice a month; my projections were based on which payday would yield the final payoff):
  • Mom projection: March 15; Actual: March 15
  • Credit card projection: May 15; Actual: May 15 (read about it here)
  • Student loan projection: July 1; Actual: July 16 (read about it here)
These projections turned into solid, written goals. I was in a competition with myself to meet these deadlines, which motivated me to stick to my budget.

OK, that was a really long first tip. But once you have everything written down — your debts, an accurate budget and a debt payment schedule — you have a solid framework for starting to pay off your debt. It was so key for me; all I had to do was follow the plan once I had it in writing.

The next tip will be an exciting one! Be on the lookout for G.O.O.D. Tip #2: Get angry — raise a little hell

Disclaimer: I'm not a financial expert by any means, and the only proof I have that these tips work is the fact that they worked for me. I don't claim that these tips are new or original; I learned how to get out of debt from Dave Ramsey, and I will link to his Web site on several occasions, as well as other Web sites as needed. I simply add my personal experiences along with these tips in the hopes of motivating and/or helping others to get out of debt. Cheers!

Saturday, August 21, 2010

Getting the ball rolling

I'm no financial expert, but I successfully got myself out of debt — with help, of course. Not help in the form of money, but in the form of support and wisdom.

I have to thank my mom, who sat me down and set me straight. I have to thank Dave Ramsey, whose books and simple get-outta-debt plan guided me through the process. And how could I forget my dad? His college graduation gift to me was a check for a nice chunk of money, along with two of Dave Ramsey's books, Financial Peace and The Total Money Makeover. The accompanying "Con-GRAD-ulations!" card said, "Please read the books before you decide what to do with the money!"

I cashed the check. I did not read the books until seven months later. Pretty dumb for a recent college grad with a shiny, new degree, huh?

Without all this support, I don't know if I would have had the knowledge, motivation or strength to get rid of my debt so quickly. I needed people. I needed advice.

The information I've learned over the course of this experience is simple. There is no secret method of getting out of debt. While reading The Total Money Makeover, I thought, "You mean getting out of debt and taking control of your finances is really this simple? This is all you have to do? Why didn't anyone tell me this before?!?"

(I'll say here, as I have before, that simple does not mean easy. For example, turning down a freshly baked chocolate chip cookie is a simple act, but — at least for me — it is not easy!)

No matter how simple it is,  nobody taught me how to manage my finances before I actually started earning money. Once I had my own money, I got into a bad habit of spending frivolously without budgeting or saving.

Luckily, learning how to manage your money is a better-late-than-never kind of thing. If you're in financial trouble, the only thing preventing you from getting out of it is you.

Think about it: Every month, you decide where your money goes. If you keep track of it, you can make it go where you want it to go rather than later wonder where it went.

If you're in debt and you want to get out, your priority will be throwing as much money as possible at your debt. All you have to do is decide.

For anyone that may need them, I'll be posting some tips for getting out of debt in the coming weeks. I thought they needed a catchy name, so at first I thought of "Getting Outta Debt Tips" — or G.O.D. Tips. Since I usually try to avoid a smiting from above, I went with "Getting Out Of Debt Tips" — G.O.O.D. Tips.

Whether these G.O.O.D. Tips are actually GOOD or not is up to you. If they help you or someone you know, great! If you couldn't care less about personal finance, don't read 'em.

Again, I'm not a financial expert by any means, and the only proof I have that these tips work is the fact that they worked for me. But I know from experience that when you're sitting in a hole of debt — whether you're $500 deep with a retail credit card or $50,000 deep with a student loan — anything helps, and once you decide to turn things around, the only place you have to go is up.

Wednesday, August 18, 2010

I do... love going to weddings

I recently made fun of some guys who couldn't have been less interested in catching the garter at a wedding I attended. But the truth is... I kept myself completely out of the running for the bouquet toss.

I stood back from the whole affair. Far back. I didn't want that bouquet landing on, near or around me.

I'm not ready to get married anytime soon — I usually have a hard time committing to my food order at happy hour, if that tells you anything — but I love going to weddings.

I go to witness the romance, the chaos, the certainty, the uncertainty, the nervousness, the excitement and, most of all, the love — the love of parents as they simultaneously let go of one child and embrace another; the love of siblings as they watch their childhood playmates grow up; the love of friends, old and new, who gather to cheer and toast; and the love of the bride and groom for each other, which will hopefully last a lifetime.

I see all this love and think, yeah, I could do this. Maybe it'll happen for me someday. And, also, the calamari looks delicious.

Let's not lie: I also go to weddings for the drinking...

...the cake...

...the dancing...

...the entertainment...

...the entertainment...

...and did I mention the drinking?

Ahhh, weddings. What would summer be without them?

While perusing countless Facebook albums of engagement and wedding photos this summer, I stumbled across a former coworker's save-the-date video. But it's not just any video — gorgeous, romantic and stunning don't even describe it. And then I saw that same girl's "love story" video, put together by the same company for the couple to show at their rehearsal dinner. Gorgeous. Romantic. Stunning.

The company is Sandbox Love, a California-based startup that consists of some crazy-talented dudes. If you love weddings as much as I do and don't mind getting a little teary-eyed, watch some of the other videos on their Web site. The actual wedding videos are my favorite — check out a super fun, beautiful wedding here, and an insanely awesome and extravagant Persian-Iranian wedding here.

Ugh, save me. I'm obsessed!!

Monday, August 16, 2010


I dare you to find some guys who are less excited to catch a garter.

It should come as no surprise that the groom had to toss it three times before anyone caught it. Even then, I think the guy who "caught" it more or less just accepted the fact that it landed on his shoulder.

Mazel tov!


Friday, August 13, 2010

Life in cartoon motion

My dad and I got the same phone several weeks ago, a Samsung Vibrant (aka Galaxy S), from T-Mobile. We're both used to having horribly outdated phones, so when we got together for dinner recently, we spent nearly the entire meal showing each other the cool features we'd discovered.

The 5.0 megapixel camera shoots in several different modes, but, being extremely whimsical and childlike, I fixated on one that my dad showed me: cartoon mode.

It puts such a fun spin on life. The animation kind of reminds me of King of the Hill.
My dad took a picture of me on his phone... which I took a picture of with my phone. OK, so we're pretty lame. But it's a whole new world of AWESOME for us!

So I've been documenting random moments of my life in cartoons because, um, why not? Call it my homage to Gabriel Campanario's Seattle Sketcher column, minus the actual talent that's involved in his work. You can click each photo to view a larger, more detailed version. Enjoy!

And then back to reality...

...which ain't so bad itself.

(I stole the title of this post from Mika's 2007 debut album, Life in Cartoon Motion. I saw him perform at The Fillmore in San Francisco with my college roommate a few years back — awesome. What ever happened to him??)

Thursday, August 5, 2010

On wine and elevators

The scene: The elevator, 8 a.m. yesterday. I am looking sharp, as usual (jeans, v-neck tee, flip-flops), while two dudes in expensive suits chat it up.

Suit #1: You're running late, huh? Aren't you usually in around 5:30?

Me: [immediately cringe at this unholy concept]

Suit #2: Yeah, I got a slow start this morning. I stayed up too late out on the deck finishing a bottle of wine. Shouldn't have done it.

Me: Sir, that is FALSE. You should ALWAYS finish the bottle of wine. Always.

(OK, so I didn't actually say that, but I was thinking it VERY LOUDLY.)

After all, what is life if you can't finish the bottle of wine? And I mean that both literally and figuratively.

It's not something you should do every night, of course, but I imagine this guy has a pretty nice deck. I know for a fact that the night was still and beautiful. I can't guarantee that there were stars, but maybe he has some white lights wrapped around the bannister that twinkle just as brightly. Perhaps he and his wife were sipping quietly, holding hands and trying to remember the last time they were able to sit together like this (they couldn't). And they probably stumbled to bed a bit drunk that night, bellies warm and full of wine, heads light and buzzing with nostalgia and love and summer.

Maybe his night wasn't like that at all, but maybe it was.

I think you should always finish the bottle of wine.

Sunday, August 1, 2010

Before and after

Speaking of how quickly things change... this is a photo of downtown Seattle at 8 a.m. on Friday:

The city was in a cloud. I work near the top of my building, so the view outside was pretty freaky. I couldn't see a thing — just dense, white fog enveloping everything. It lasted a couple of hours, too.

By lunchtime the fog had cleared up, but it was still pretty cold out. As I walked over to the market to grab lunch, I zipped up my fleece all the way to my chin.

By the time I walked back to the office, the sun was out and I was sweating.

Welcome to Seattle.
I paid off the last of my student loan on Friday, July 16.

In mid-January, I was in an all-encompassing fog of debt. Now, six months later, the fog has dissipated and the sky is clear. I got rid of all of my credit card debt, my student loan debt and even an embarrassing debt care of the Seattle Public Library — a 60-cent fine.

It's a great feeling to transfer a big chunk of my paycheck into my savings account rather than send that chunk out to a credit card company or to the U.S. Department of Education. (I actually didn't mind sending money to the latter — it made it possible for me to go to UW and get a great education. Thanks!)

It's also strange to be completely in the clear. It's the same feeling I would get after turning in a huge paper or taking a difficult exam in college — I was done and should have been relieved, but instead felt lingering anxiety about the outcome. I had spent all that time working toward something, then didn't know quite what to do after I was done.

I've mentioned how important it is to have set goals; now I just need to focus on my new goal of saving up enough money to move into a place of my own. I'm aiming for, as Dave Ramsey suggests, enough money to cover 6 months of living expenses. That means 6 months' worth of income. That means this next part will take me a while.

My new goal is to move out in January. If I stick to the new plan, I'll have the right amount of money to feel secure on my own. I'll be able to be home with my family for the holidays, then start fresh in 2011. Also, it'll be about a year from when I started this Big Debt Payoff.

I'll look back on 2010 as the year I changed the course of my whole life. It was not always fun and not always easy, but certainly worth the relatively small amount of time it has taken to make my remaining years that much better.
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