My Debt Blog

One of my little hobbies that really isn’t necessarily productive or anything like that is gaming. I know some people cannot understand why someone would be willing to sit in front of a TV for hours at a time, drinking Mt. Dew, and trying to keep their fingers from not cramping up. Walking through Target the other day and there it was, the Halo 3 preorders are available to reserve a copy for the 9/25 release at midnight. I want this game very badly.

What could I do with $60 though? My Zales credit card could get paid off that much faster if I added $60 to the payment, and I would kill that account maybe a little bit quicker. I could save that $60 for Christmas and just hope a copy is available later. The last one that came out around the same timeframe was Halo 2 and my wife held it hostage from me because it was for Christmas. I can’t go through that again, it’s not a healthy or normal behavior and puts me in a really bad mood.

This sucks so much. My wife has no problem with me buying it since she has a tendency to buy things she is after. She knows better than to go and buy a car or something stupid like that, but I have come home to certain purchases that ran us a few hundred in the past. That is the past though and we have both bought stupid expensive things that I would like to actually pay for now. Not all expensive things are stupid. I’m referring to the Zales account. I still don’t own my wife’s engagement ring and we’ve been married for over a year and engaged a little more than a year prior to that. All the other rings and earrings and jewelry she wears are completely paid for, but not the engagement ring! It feels selfish to actually want something but know that money could be used for another goal.

I got the Xbox 360 system for Christmas last year. It was probably paid for with my wife’s credit card too, so we don’t really own the stupid thing. Sometimes I look at the things in my house and try to figure out whether or not we own it or if we’re still paying for it. All of our furniture is completely paid for which is really nice because it’s nice furniture and the couch feels comfortable to sit in. My basement so much crap in it I can’t completely know for certain what is and isn’t paid for yet. Either way that file box I have with the copies of the statements for the credit cards still have balances on them. Those balances were built up buying something.

This is really hard for me. I try to sacrifice so much and am now plagued by my own want. Now I don’t really know what to do.

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I didn’t have much to post last week after the crazy $300 weekend that spawned a ton of comments from my readers. This weekend wasn’t that bad except for Saturday. Our cat decided to jump on a table and chew on my wife’s iPod. Now my wife is extremely picky about wear and tear and needs everything new looking all the time, so this was not good. I got her this thing for Christmas like 2 years ago and now it is no good because the cat chewed a button on it?

We went down to the mall (HATE HATE MALLS!) to the Apple store to their GeniousBar (yeah, and they use Macs, right) to see what could be done. They told us it could be replaced for $99 but he suggested the little wear and tear to this unit, it might be better to eBay it and buy a new one. She likes hers because it’s original and looks to me for the answer regarding spending $99 to replace this thing. I was annoyed that the decision has to end up in my hands, but I told her that we really don’t have the money right now to do this and there is nothing functionally wrong with the device. Needless to say, she didn’t like my answer.

After she calmed down about not replacing the iPod, the tables turned to cell phones. Our current cell phone contract is up and we’re going to switch providers, and get new phones of course. She thinks it would be a good idea to get an iPhone so she can get a new phone and an iPod in one device. I didn’t even have to say anything to let her know my answer. The iPhone is a toy! It is a very expensive, media hyped, expensive, fancy looking, expensive, toy! Then she just told me she would get it with her credit card. I feel like things are spinning out of control. As I am working so hard to avoid credit, spending, etc. the efforts are being counterbalanced by my wife.

Not sure what to do here anymore. I feel like we’re going in our own directions here and not working together. The pressure of having to borrow money to sell our house bothers the crap out of me. Sure it makes sense to trade a larger loan for a smaller one, but I think this is the wrong time to do this. I would like her to get finished with student teaching, currently a few miles from where we live, so that we could move next year once she’s done. The market sucks, moving sucks, and borrowing money to move sucks.

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It has been yet another rough month with some unexpected expenses. All the bills at least got paid, including the dreaded car insurance bill. Some extra money had to come in from the EF and other sources (my birthday) to cover things this month. Part of the problem is things became due early in the month when the money is not available. I also hate playing the catch up game from the previous month. There was way too much month for the money to go around.

I also need to come clean on something. My wife and I celebrated our first wedding anniversary and we started out the month in the red. I ended up using my credit card to buy her gift and go to a fancy restaurant. The damage is about $400 and this month’s payment pretty much covers the finance charges but does not do much to the principle balance. She also used her credit card to buy my gift, something I needed, and another smaller one, something I did not. I at least convinced her that the other thing was not necessary, so it could be returned. Resorting to a credit card when we didn’t have the money is not something I’m proud of anymore. I feel guilty and embarrassed, but did not want to ruin our first anniversary because the money wasn’t available for that moment.

Last big chunk of news is my teeth are breaking down from a lack of responsibility in my early years. I never had much of a problem taking care of my teeth as a kid, but when I got braces it became complicated to try to keep everything clean. A lot of the problems could have been addressed if they were caught early. I also was not the best at going to the dentist during my college years to even have the opportunity. At my dentist appointment this past weekend, I need to have about 3-4 molars crowned at about 1k each out of pocket because I have maxed my insurance for the current year. There is not much of a time frame for how long my chompers will last before they start break down. So far I have had prep work done on 2 of them just to hold me over for now. The good news to all of this (yeah what good news) is I have no problems with the nerves or roots and won’t need any root canals done. The dentist offered me a payment plan system where I could borrow what would be needed to cover the cost, and then make monthly payments over a predefined term. I really don’t want to borrow money, but at the same time I don’t want to lose my teeth trying to avoid debt.

I’m not sure if this is the best time to be selling the house. There is no money on hand to do it right now, which my wife hates to hear. She has been drooling over apartments lately, some of which the rent is higher than our current mortgage payment. That is not a direction I will even let her pretend to justify to me. We’re going to lose money on the house in closing costs because the house is not going to sell for much more than we bought it. The market is soft and slow, there are 26 other houses in our area on the market, and only 1 has a contract. The realtor says we should jump in quickly and get on the market if we want to have a chance to sell. I’m not completely on board 100% about selling anymore which pisses off my wife to no end. We are not in a very good position right now to sell and at the same time get an apartment. She currently has a summer job, but I’m not sure what job she will do later this year if she delays student teaching. I would like her to finish her master’s degree and be officially done with school so she can focus next year on getting a job as an actual teacher. Part of me feels she is not happy about everything is that she has been in college for the past 6 years and is having trouble finding the end. I’m not sure what I’m going to do anymore. It feels like my foundation is coming apart beneath me.

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It was pretty rough this past week trying to get our bank account to survive until payday. I don’t like all the money going out so quickly either, but the time frame for some of these things put us in a bottleneck. With the money coming back in again it eases the pressure to get things done. I would just like us to have more long term goals beyond the end of this month. At least I am considering December already because car insurance and Christmas always feels like a one-two punch.

This weekend we’re going to have a garage sale to try to hopefully get rid of a bunch of stuff we have taking up space in storage. My wife thinks we should also sell our dining table and the 4 chairs out there with the stuff we wouldn’t miss. I asked her what the intentions are for the money from the garage sale, and sure as I already knew the answer, we would need to go out and buy us a new table and chairs to go with our furniture. The only real positive side to this is we would have the money to pay cash for this new purchase. On the flipside though, why replace the dining table and chairs if we don’t need to? I don’t get it.

My wife is excited for some reason to get rid of our house and go rent an apartment near the city. I’m not sure what timeframe she has in mind that we should move, but the realtor we bought our house with does not want to work with us to sell it. She says that because it has only been a year, the market is soft, and there is not a ton of equity involved, it might be difficult to sell and we wouldn’t make money off it, or even cost us money to sell it. We don’t have the money available at this time if it does cost us to sell. The answer of course is to find a realtor who is willing to sell our house, not considering the cost of course. The house is financed under me alone because I bought it just before we were married, so I could refinance the loans and possibly turn it into a rental that would pay for itself granted I find the right people.

So why is she excited about selling the house even if it costs us money to do it? She has been browsing these rental websites finding various apartments or condos for rent with really nice stuff. Stainless steel appliances, granite countertops, vaulted ceilings, nice view overlooking the Lake Michigan and/or Chicago, and of course these places are near stores, parks, bars, etc. Details of course that I look at are the cost per month, which is lower than what we pay now but only by a few hundred, is that even worth moving?. The other part is most of the time apartments require a security deposit of about one month’s rent. So we would need to have the amount of the rent available just so we can rent the apartment. The money does not have much of a plan so nothing is earmarked to be saved each month. I’m trying to explain to her that we need a budget so the money has a purpose and isn’t spent before we even have it (currently the biggest problem). It is taking time but nothing has clicked yet.

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Along with the accomplishments I have made in my life, graduating college, getting married, buying a house, one of them may have been a mistake. Last year we made the choice to get out of renting an apartment and buy a house. This decision was proposed by my wife at the time and I was reluctant to make such a major move because of the cost increase. I think a warning flag should have gone off here.

We went to the bank to get pre-qualified so we could figure out what we could afford. I knew nothing about mortgages or how the process worked and basically learned as much as I could so I knew what was going on. Somewhere I heard that you should buy the most house for the money, so we used the upper limit of what the bank said we could afford. Being first time home buyers, what we wanted and what was available did not always match. Eventually we found the right house, got a pre-approval for a loan, and went into contract on it.

From that point there were issues with getting all the details together and problems with the underwriting process. I had to make some moves, like paying down the loan of my car so the bank no longer considered it as a monthly payment. Eventually all the financing was cleared and we closed April last year.

We are debating selling the house because it is costing us around the 40-45% mark of our current monthly take home income. That is all the cost for our two mortgages, property taxes, and insurance. Everything is current and that is not the issue, but the payment is about twice what our rent used to be. The idea was this might be high right now but would balance out once she has an actual salary job starting her career once she’s done with school. A majority of the money is going to interest anyways because the mortgages are so fresh, so very little progress is being made to actually afford the house. This is where selling the house and renting in the downtown Chicago area comes in.

The other side of this question is my wife is not happy with where we live because she feels lonely, no social life or friends. Simply put, she refuses to live where we currently live because she is unhappy where we live. I think she feels that if we sold the house and moved into the city, she’ll be happy, have friends, and plenty of stuff to do. I’m very bittersweet about selling the house and moving downtown because it feels like we’re starting over. The benefits of being downtown though would be lower house payment (just rent and insurance) would save money to put towards debt, I could sell my car (which I love but would not be necessary) and we would save on insurance and gas cost, and that extra money could go towards debt.

I think we’re viewing the extra money that would come into play with selling the house and renting again in different directions. The way I see it is we could really make some progress in paying off our debt while my wife would feel the extra money is no longer dedicated to something and can improve our lifestyle. The house does not have much equity in it so after all the fees and such are said and done, I don’t think we would make anything off it which sucks. We have moved every single year since 2001 and I thought we were done moving for awhile. At the time we bought the house, I never intended to just turn around and sell it a year later, but it looks like it has come to that.

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I have wanted to watch this documentary for some time now. There was even a post about Debt Documentaries awhile back when I started this blog. Well I have seen it and this could be considered a review from my perspective.

This documentary is emotional because not only do you see what debt does to people, but that you see what it does to people. Blogs make it easy to hide behind a veil of being relatively anonymous on the internet. If we passed each other on the street you would not know who I am and I wouldn’t know anything about you. I think it is the people that make the documentary so powerful.

Part of this documentary focuses on people who buy up the bad debt people defaulted on. They operate out of a small office where their collectors are busy calling (harassing?) people through the phone to get money out of them. There is a whiteboard and they make the comparison that it is a game and it is all about making a touchdown or scoring. What bothers me more is they feel it is legit to call up neighbors and family members of the individual they are collecting on. There are laws out there called Fair Debt Collection Practices Act which their victims don’t seem to know much about.

One story with an older lady having a garage sale to come up with enough money to keep her house is very sad. I don’t know much about the background of her situation, but the reality is she needs to be selling her house and not trying to hold on to it. There are also stories of two other ladies and the financial happenings of their children which was very powerful.

Then there is the political side of this in that the government is making it more and more difficult for people. Credit card companies don’t have regulations in place to prevent giving a college student with no income a credit card. President Bush signed a new bankruptcy law into place but the bill was funded by MBNA. The debt that I have got myself into is my debt and I have nobody to blame but myself. I’m not going to pretend the government is going to fix my problems with credit card debt. Our own government is in so much debt and the problem is not going to correct itself over night, but one day it could blow up on us all.

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Today I have finally turned 25 and am glad I am at the point where I am with my life. I remember back when I was 15 what high school was going to be like, and then at 20 dealing with the challenges of college. Now at 25 it seems like what was once so complex is now much simpler than it used to seem. Sure I have made mistakes, made good choices and bad ones, got into some debt, but I’m finally working on moving towards a more positive direction.

So for the past few weeks I have been listening to The Dave Ramsey Show and am starting to understand why people become motivated by him to handle their debt and take control of their money. It isn’t completely him that makes this happen, it’s the callers who have real life situations probably much similar to some of our own, and people almost help other people through the show. At any rate my wife got me his Total Money Makeover book for me to read about his system. I also went on his website and found his software for only $10 along with another book I want to read, The Millionaire Next Door. I am cautious to consider his system because he does not believe in credit period.

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