Category Archives: Stories

When Youngsters Fly the Coop

Bird in NestRemember back to the time of your life when you were ready to fly out of the nest?  When you were living with mom and dad it was probably simple to get a fast little loan but once you move out on your own it’s not so easy.  Mom and dad might be willing to help you out, but that’s not the adult thing to do.  When you move out on your own, you no longer rely on your parents to the best of your ability.

When I got out on my own it wasn’t even a consideration to ask my parents for money as they were poorer than I was, plus I had not been in contact with my family for over five years.  I could not afford a car when I got out on my own, so I made sure my new digs were on a bus line which would take me to my job.  As it happens, one of my coworkers drove the same route so we carpooled, and I paid her some money for gasoline each week.   If she happened to be out sick, I would take the bus.  I also had a bicycle which was nice for taking small trips to the grocery store.  In the city I lived there was a transportation system available to everyone and all you had to do was call the number to be picked up.  That was very convenient.

When I first ventured out on my own it was not the best of situations; in fact, I made the decision one morning to not return and basically left with the clothes on my back.  I had been living with a foster family for several years, and was being manipulated into giving them all of my earnings, except for a few dollars which I managed to hold out which they didn’t know about; my employer cashed my check, and as I got miniscule raises I continued to give the foster family the same amount until I was actually able to keep $2.50 for myself each week!!

My boss and his wife were sympathetic to my situation and kind enough to allow me to stay with them for a couple of months until I was able to save enough money for first and last month’s rent to get my own place.  My father, who had abandoned my mother when I was five, had a pang of guilt and offered me a car.  But it would have cost me so much money to have it transported across several states that he decided to offer me $500 instead.  That is how I established a savings accounts.

One of the most important things you  can do to maintain your independence is to establish a savings account with at least $500 which you do not touch except for emergency situations.  And when I say emergency, I mean a true emergency – needing a new Wii game or a new pair of shoes is not an emergency.  You shouldn’t even consider being out of food an emergency because you should have at least a week’s worth of canned goods stocked up in case you should run out of money.

Another important factor is to create and stick to a budget, ideally your rent should not exceed 25% of your gross income.  This can be difficult in some cities so take your time and look around for a place you can afford.  When I was first on my own I was making $800 per month, and I found a small trailer and my rent was $194.  I had to pay my own electricity, gas and water.  I was careful with my usage and the more conservative I was, the more money I had left over.

If you can, get a part-time job.  I sold Avon two nights a week and this helped me to have a little bit of spending money.  Now with the Internet it’s a lot easier to make a little bit of income without a lot of effort if you have something interesting to talk about, start a blog. Who knows, you could become famous one day!

We all fly the coop eventually, and it can be a bittersweet time in our lives. Hopefully you are leaving under friendly terms, and the whole family probably has mixed feelings. Mom and Dad are experiencing the feeling of one of the youngsters leaving the nest, siblings will miss you, and you are going on your own to face the big world all alone.  It should be an exciting time, as it is the beginning of the rest of your life.  You can do it, just put one foot in front of the other and do what’s right and you’ll have some great memories of your first home all on your own.

This story contributed by Mrs. Accountability who writes at Out of Debt Again. If you would like to submit a story to the Carnival of Money Stories, please feel free to contact us.  Your story should be unique (not posted elsewhere) and should focus on money experiences.


How Not to Handle Paying Off Your Debt

Abandoned Home by Erix on FlickrSome time ago I encouraged my friend Susan (not her real name) to look into debt consolidation as a way to get out of debt and break the vicious cycle of using credit cards.

Susan is disabled, but works part time to supplement her disability income. In spite of having low income she managed to build a great credit rating buying items on a time plan from local businesses. When she applied for a credit card she was thrilled to learn she was approved. After the one, she applied for others.  Susan loved to lavish gifts on her many nieces and nephews, but the fact of the matter is it also helped to alleviate some of the guilt she felt that she owned the family home, free and clear.

Her siblings had never uttered a word of complaint, but still Susan felt uneasy that her parents had left the home to her. She secretly felt the home should have been sold and the money divided up between the siblings, but on the other hand her siblings were all well off and had nice homes and none of them begrudged Susan for one minute. Unfortunately, the old home was beginning to need repairs and attention, so this helped to increase the credit cards quite a bit.

After some time it got to be that she was making only the minimum payments and her credit cards were all maxed. As I said earlier, I mentioned she should look into debt consolidation but she chose a different route. She decided she would rather take out a mortgage on the family home. She applied for $15,000 and the person handling her loan talked her into taking $20,000. Susan only needed $15,000 to cover the credit card debt, but she had had her eye on a California King bedroom set, and a Tiered Roof Hexagon Gazebo the two of which cost right about $5,000 so she decided to take the $20,000.

The mortgage was for thirty years, so Susan’s payments were very affordable. I suggested she make double or triple payments since that was about what she was paying for the minimums on her credit cards. She wasn’t too excited about that idea, and worst of all she started using her credit cards again! The last I heard she was pushing $6000 in credit card debt and getting to the point where she was unable to make much more than the minimums.

Let this story be a lesson to you.  Don’t let yourself fall into the same trap.

Mrs. Accountability writes at Out of Debt Again.  If you are interested in submitting a personal finance story to the Carnival of Money Stories, please use the contact form.

My Debt Consolidation Story

Image courtesy of Alan Cleaver

Debt consolidation helped me get out of debt and it was a very positive experience. The first time I ever heard about credit card debt was as a teenager. The mother was determined to keep up with The Jones’ even though the family was living from paycheck to paycheck.  “The Jones'” were people at the mega church she attended. In order to keep up she applied for more and more credit cards. Things went from bad to worse and eventually bankruptcy was filed. Even back then I felt it was the wrong thing to do. It felt like stealing, to me. I decided I would do my best to never have to file bankruptcy.

About ten years later, I was a young divorcée with two small children, on welfare.  But since I’d been employed for years prior to losing my job, I had great credit.  And an old car.  That kept breaking down.  Again and again. And again.  And sometimes we’d run short on groceries, so I charged a few dollars here and there.  Or maybe one of my children needed a new (second hand) shirt or pair of shorts from Goodwill or Savers.  I have always been frugal, but after a few years of car repairs and this and that, here and there, my credit card debt had risen to $6000.  I felt in a panic because I was on such a tight budget being on welfare with food stamps, and I felt like I couldn’t stop myself from using the credit cards for “emergencies”.

I decided to check into debt consolidation.  More than a decade ago there were not too many places to choose from, and they were mostly non-profit organizations.

The debt consolidation company asked me to write down all my bills, and how much I spent on groceries, sundries, clothing, etc.  As it turned out, with a budget that was so tight it squeaked, I could manage $150 every month.  This company preferred repayment within four years, but since I couldn’t afford even a dollar more they extended my payment plan to 52 months.   As with most debt consolidation companies, there was a fee charged each month to process the various payments.  However, taking my budget into consideration they lowered their standard fee to $6 each month.

I was asked to cut up all my credit cards, and signed a contract stating I would not sign up for any more credit cards until my debt was paid in full.

It was difficult, especially after my car broke down yet again. The repair was going to cost close to $2000 and since I did not have credit cards to get it fixed we simply had to do without.  We lived in the city and used public transit and our bikes to get to the store for grocery shopping and anywhere we needed to go.  In fact, I look back at that time in my life with fond memories.  Life was slower then, and I had a lot more time.

After 52 months, my debt was finally paid in full.  It was an awesome feeling to be debt free.

Have you had an experience with debt consolidation?  I’d like to hear your story.

Mrs. Accountability writes at Out of Debt Again.  If you are interested in submitting a personal finance story to the Carnival of Money Stories, please use the contact form.

The Balance Transfer Saga

Most of us have played the balance transfer game at one time or another, with some of us being more skilled than others. I myself have only played the game once, and here is my story.

A couple of years ago I began researching making balance transfers and purchases card comparison with intent to replace two cards to one card with 0% interest. I had hoped to follow a plan to apply for the card, once the card arrives make a request to increase my limit to $10,000, then transfer the highest rate card at 9% and transfer the second card at 3%. I needed to pay off two cards which came to a total of $10,808.81. I was warned by one of my readers to read the fine print because I might be charged for back interest if I didn’t get the card paid off in full within one year. Thankfully that was not the case with this card but it sent shivers up my spine just thinking about the possibility of that happening.

I began the process of applying for the card on February 9th and it took until March 15th to complete the entire transaction. I was pleased as punch with myself.

Unfortunately with the very first payment to my new 0% interest card I forgot to make the payment! I had been gone all day long without Internet access and working with my husband. I finally remembered on the drive home and I logged in as soon as I got into the house. Actually, let me back up. I did get the payment made on the day it was due but since it had to be paid by 5pm Eastern time and I’m in Pacific time, I was too late. As you can imagine, I was very worried that this would cause the interest rate to be raised. In fact, I was sure that I would be punished so I decided to face the music and put in a call to the credit card company right away.

I was in a panic as I dialed the number. I took several deep breaths, willing myself to remain calm. After all you get more flies with honey than vinegar I told myself. The account representative that answered the phone explained that since I’d made the payment after 5pm Eastern time on Friday it would not hit the bank until Monday! I told her how worried I was about the rate being raised and she was so kind to me. She said, “I’d like to share a secret with you. We really want our customers to be happy and we work with our customers. If you find that they have raised your interest rate you just call back here and ask them to lower it. Furthermore, if they charge you a late fee, simply ask them to remove it.” I was so relieved. I got off the phone and explained what had happened to my husband. He’s so mellow he doesn’t let much affect him and he told me don’t stress, he said we’ll deal with it but let’s wait and see if it even happens.

Good advice.

As it turns out they did indeed charge a late fee, and I put in a call and they graciously removed it. At that time I was told they didn’t think my interest rate would increase but they advised me to call back in about a week.

I called a few days later and was assured that my interest rate would not be increased. Whew! Close call!!

I relaxed and didn’t give it another thought until I received my statement a month later when they informed me that my APR HAD been raised! Oh no! I remembered the advice of the very pleasant woman I’d spoken to initially and called the credit card company right away.

I explained my situation to the lady who answered the phone and she was not willing to budge an inch. She told me I was late on my payment and that is what happens. I began to feel sick to my stomach but I decided to go with a trick I’ve learned over the years. If at first you don’t succeed, try try again. This extends to customer service representatives as well! I hung and redialed the number immediately.

Again I explained my situation, crossing fingers and toes. The representative said to me, “Let me see what I can do to help you. The rate was zero, is that correct?” I nearly broke into tears but bit my lip to keep my composure. Within a minute she was back on the line and said she had taken care of it and she wished me a lovely day.

After all that excitement I wasn’t too keen on doing anymore balance transfers, so this is the only one that I’ve done.

Mrs. Accountability writes at Out of Debt Again.  If you are interested in submitting a personal finance story to the Carnival of Money Stories, please use the contact form.