Thursday, July 31, 2008

Eerie feelings

Last night as I was at the bank I felt such an eerie feeling. Here I was paying some debt on my cellphone card and yet I owed this bank a lot of money on my main card and my personal loan. I was thinking that at any minute the teller would get a warning on her screen to call up the supervisor to talk to me.
At least that's how it felt the last time when I wanted to cash in my points for money and the teller DID have to call the supervisor and he told me I was past due on something and the system wouldn't accept cashing my points because of that.
Eerie I tell you...very eerie for me. Being objective i'm sure these folks have gone thru this millions of times, telling people about stuff the system won't let them do because the are missing payments, or past due, overdrawn, overlimit, etc.
Then as I walked out from the banks area of the mall into the main Hall I could feel all the stores with their big posters of 50% discounts, 80% discounts (yeah right)...and all the stuff I really didn't need. I only went into one store (book store) and managed to hold of my temptation to buy something there. That led me to think about writing tips on saving money just as I experience them. One of those post will come up soon, I already have it drafted.
I also watched people with bags of purchases and wondered which of these people were going down my path and which were actually able to afford the things they were buying. Honestly I felt like I was the lone idiot that was nose-deep in debt and everyone else is paying cash or debit card. I know it's not like that, but thats how I felt at the time. Very, very, lonely.
Oh well, at least I payed all that had been charged on my cellphone card. Damn card, how come you had to be the one to be really good and be on the bank that I owe so much money to ?
Good night
Well at least this blog is free

Tuesday, July 29, 2008

Staying the course

Payday came and went, and the money came in and was out the door.
Not only do I have to pay the rent on my house, but this month is specially hard because I have to pay the taxes on my car. It's 3,600 lempiras or about $190. $190 that I could've used to pay some debt. Anyway taxes ARE debt owed to the government so I will pay that tomorrow (last day for that car).
Some updates are that I'm staying the course in paying $300 monthly on the first credit card I told you about. I'm less than $90 to go to pay it this month. This money should come from some more work i'm doing for my ex brother-in-law.
About each week I get around $180 from his company as a commission for goods purchased here and shipped to the US....hmmm I haven't told you about that. That's on top of the $200 he pays me monthly. That's pretty much all going to paying debts and stuff I owe. Unfortunately not all of it goes to debt because there's always something unexpected and my emergency fund is usually depleted.
Also the cellphone card i'm going right now to pay all the charges that have been applied to it this month. I got the bank statement with the minimum payment set at 2,300 lps so i'm setting that card to a $130 monthly payment AFTER paying whatever charges are applied to it from my cellphone company. So after paying today I have to come up with $130 for that card to stay the course to pay it. I'm set on paying this debt or as fast as I can because it's the lowest. Then I would just try to pay the cellphones BEFORE they are charged to the card.
I still have to come up with money to pay my personal loan and my main credit card. Plus I have to come up with about $600 to pay the 2 credit cards with which I already have a payment schedule arranged.
I hope to finish up some work for this lady that I told you in an earlier post. I have to put in hours of work to get to 10,000 lps $525 so I can bill her for that as soon as possible. I'm trying to get that work done but it's been difficult due to family stuff. I'm supposed to have mornings off but I keep running errands and them i'm racing off to work in the afternoon. I guess I'll work late tonight.
Well i'm off to the bank before they close. I'll write about my saving angels next time...if it wasn't for them I don't know how much worst I would be.

Saturday, July 26, 2008

Some Financial Oxygen

If I had a huge source of income, having all this debt wouldn't be a problem. It's not having all that income that causes problems for me. Thus I'm always looking for other sources of income.
Today I got somewhat good news.
I have been doing some freelance work for a company. This year I have been billing them almost monthly. When I presented my bill in May they gave a big run around saying that the general manager needed to talk to me.
July came and still no money. I finally got to talk with the general manager and she said that the board of directors was concern over how much money they were paying me and that they wanted to work something out with me to lower my billing to them.
I explained to her that I was willing to switch to a montly billing instead of a per hour billing. I would lower my equivalent per hour fee by about 33%. She would have a way to lower her bill and budget my cost and I would get a scheduled income as opposed to a every-now-and-then check.
She said she would take it into consideration and paid me that last bill. I quickly paid some of the monthly bills I had back then and did some purchases and bought some medications. I know I spent most of it on debt payments so I feel good about that. My wife wanted much more that what I ended up giving her. She still doesn't grasps how much I really do owe, or doesn't want to face it.
Today, the general manager calls to tell me that she hasn't made up her mind yet but that she needs me to do some work for the company and that I can bill her by the hour but if I could please lower my rate. I told her I would lower a bit it but not to the level I would if she payed on a monthly basis. She agreed and quickly sent me some work I had to do for next week.
So I hope I can do this work and be able to bill her soon enough to pay some of my debt specially my mom and the cellphone card so I can finish off those debts and focus on the other ones.
I also hope that she will eventually agree to pay me monthly instead of hourly. She and I go way back. I've been doing work for her for more than 10 years, but only since about 2003 have I been working as close and with such an importance to her company's daily operations.
She can't really hire me since she couldn't afford my full salary, but she is ok with the arrangement we have. My offer to her was to be even more close in contact with her company and onsite on her 3 locations (Tegucigalpa, San Pedro Sula, and La Ceiba). She said it was an interesting proposition since she was downsizing her company and need more part-time asistance rather than a full time person there.
What do you think about this ? Right now as I'm writing this my computer is churning up some of the work she asked me for next week. I will keep working this weekend. At the same time I'm monitoring another task i'm doing for a US company (more on that later). Well, the computer is done. Time for me to get back to work.
Well, at least this blog is free.

Wednesday, July 23, 2008

The worst, the bad, the good and the best

The worst: I have this big personal loan that I have to pay. I got it 20 months ago as a way to lower my main credit card bill because I had run it up trying to help my wife start up a clothing store in a street market in the city. I funded her business twice and eventually all I got from that was this big debt. I took a loan at 24% to pay this balance on my main credit card. Since then I failed to keep my main credit card in zero balance. Now I have this loan AND the credit card balance. I hate myself for having done this so many times now that it's so embarrasing to admit to making the same stupid mistake so many times.
The bad: I'm on payment 20 out of 48. Yet another debt to add to all the money I owe. Amount owned at the moment: $6458. Current monthly payment is $311. Will I be able to make this month's payment?..stay tuned cause I certainly don't know if I will get payed for some extra work that i've been doing or for some extra work that I quoted to do on a monthly basis.
The good: Ironically the good part is that I got a letter from that bank stating that they were going to rate my interest rate due to the new regulations including the monetary policy rate. The new rate will be 29% So my new monthly payments would be $325, a $15 increase. Not that much but it's an increase.
So how is this good? Well the letter included an opportunity for me to extend my loan term up to 60 months. So today, actually just a few minutes ago (i'm still aching from walking to the bank branch), I went there and ask for my loan term to be extended to 60 months. The customer service agent said that normally they would extend my loan to 60 months from the date it was originally created. So if the request goes thru normally I would start next month be now on payment 21 out of 60 (or 1 out of 40). New monthly payment would be $257. $54 less per month but obvioulsy I would end up paying more interests in the long run.
However right now I'm just trying to get all my payments within my budget and I would be hard pressed to get a lower rate loan that this one even at 29%. So I took this offer.
The best: I asked the agent if they could actually refinance my loan to 60 months starting from today, not from 20 months ago. He wrote that in my refinance request. If it does go thru this way, I would have just started with a new loan of 60 months to pay for the $6458 at 29%. Monthly payments would be $207. About $104 less per month.
Again I would obviously pay more in interests but in a year or two when I (hopefully) have payed other debts and have more money available I can ask them to shorten my loan term and I'm sure they would be happy to do so. Otherwise I could still get a shorter term in another bank or in the end save up the extra money in an account in their bank and when I reach the balance due, pay it all at once. That will be a very happy day for me.
On the income front, my wife went to job agency today and got letters to visit a bank and a drug company to see if they can hire her. She went to a retail department store about two weeks ago and she has called them every other day and they tell her they will schedule her for tests soon, but still nothing solid.
In the mean time, I have one credit card payment that is already late. I've payed part of it. I have this loan that it's payment was due yesterday, so I hope that even with the late payment they still approve at least the "good" part.
The real hits will come in about a week when I have to pay my main credit card and the minimum payment (lempiras + dollars) is about $650. By then I probably won't have that amount of money so the payment will be past due. I hope by then that this loan refinance will have gone thru (it's the same bank) positively. Either way I will then call or go in and ask them to cancel my credit card and set up a payment schedule for me.
To think that the operations manager of this bank is in the board of directors of my company gives me all kinds of thoughts. Would he help me with a better loan to cover what I owe to his bank? or would he stand by the banks procedures and not help me. Would he keep quiet about my situation or would he eventually talk about it with my boss (who is not only work related but also a friend of him)?
I know that he is a straight man and respect procedures. I know he also helps when he can. I worry that if I ask him for help and explain my situation he might just say that it's out of his hands since my problem is with the credit/loan department and not the operations department. I then would worry that with his inability to help me but knowledge of my problem and how it would affect his bank, that he would talk to my boss about it. I have heard them talk about people running up credit card debt so many times that I would probably pass out in his office if he started asking me questions about that. I have no clue what would they would want to do with/to me.
Pray for the "best" out of this loan. Pray for my wife getting a job SOON. Thank you!
Well, at least this blog is free. ...sounds like this could be my signature from now on.

Tuesday, July 22, 2008

The good card

The picture above is of a card. It's not a credit card it's actually a prepaid card.
They started showing up in a restaurant chain a few months ago. Back then I thought it was wise to put money on a card that you would have to use only on certain restaurants.
However one day as I was buying fried chicken the cashier explained something to me. She said that for every 100 lempiras you prepay they load up the card with 120 lempiras. That's like getting 20 lempiras (about 1 dollar) "free". So right there I was going to pay 360 lempiras for chicken, I got the card and payed just 300 (the card itself is free to get). So it's like getting a 20% discount
The other good thing is that this card works in several different restaurants. You can look at the picture and see the logos and names of each. I will sum it up for you here: One burger chain, 3 chicken chains, 1 pizza chain, 1 donut chain, 1 ice cream chain, and another restaurant that I can't categorize since i haven't gone to it yet.
In any case it's nice since there are options to choose for everyone in the family.
Personally, I don't really load it up that much, just 100 or 200 every time (rounding off whatever I have to pay). Eventually some meals are "free" or "on the card" and I don't have to take out any money from my pocket.
We eat out on weekends so as you can imagine I usually "suggest" that we eat in any of these restaurant chains so that the meals can be cheaper for me. Plus they all usually have "value meals" that are smaller size. This is also good for our waistline :-)
Ok, enough good things, i'm ready to continue telling about my 2 other big debts. Will post about them soon.

Friday, July 18, 2008

Wealth or Health ?

I was trying to come up with a subject to write about in between the pains of writing about my debts.
Well, life tends to be funny in some ways and sad in others.
Wednesday my boss went home early because he felt ill. Thursday he didn't show up for work as he had a fever running.
Today we got a call from his wife that he was in a local hospital after spending the night in the ER. Apparently his blood pressure medicine had a bad interaction with the medications for his cold/cough/fever.
Here I am worrying about my debts and how I'm going to pay for them. I am right in being concerned about it. I wish I hadn't made the mistakes I did. I really feel bad about it, bad to the point of crying about it sometimes. Really! I just can't do it in front of anyone.
However I should also be grateful I have relatively good health. My boss has money and lots of it. Right now i'm sure he would pay a lot to be as healthy as I am (and i'm not 100%). Besides even with our medical insurance he will probably pay a lot of money for all of his checkups and tests and labs and hospital room and ER and doctor bills.
I called him tonight and he sounded so tired and really depressed. He said they hadn't figured out what was wrong with him, and that he would go somewhere else to get checked again. SO, he'll probably spend more money on repeating tests and doc appointments, etc.
So, as everybody says, I rather have my health than being sick and have wealth.
Also I prefer my debt with health that sickness and NO wealth!
The ideal of course would be great health and wealth.
have a good night. Please pray for me, my family, our health and maybe not wealth but at least pray for me to stay healthy and find income to pay me debt. I will pray for ?
Good Night

Wednesday, July 16, 2008

My Wish List

Almost every commerce site on the web now has a wish list of stuff people can sign up for and other people can give it to them as a gift. It's cool. I like how that works.

After posting another really difficult post (still feeling it in pit of my stomach), I've thought of my financial wish list of things I would like to occur:

0) Have my wife find, get and keep a good job.
1) Profusely thank God for her job.
2) Get a big consolidating loan to cover all my debts (maybe not including the ones to my family).
3) Get a good rate on the loan, maybe 10% tops.
4) Get a a 4 to 5 year term.
5) Profusely thank God and whoever gives me such a loan.
6) Go to each credit card company and pay the balance in full. Take a written note requesting them to cancel that card. (except for the cellphone plan card). no deal sweetener will keep me from canceling the cards. If I can't pay for it in cash I probably shouldn't be buying it anyway.
7) Go to the credit card with the cellphone plan and cancel the balance, request they lower my credit limit to $400.
8) Not tell my family that I've payed everything (since I actually haven't !)
9) Work hard and get the $500 to $600 each month to pay the debt consolidating loan.
10) Tell and help others about the dangers of misusing credit cards and refinancing loans.
11) Help people out but don't allow myself to drown financially in the process.
12) Sleep better every night, stay regularly healthy as I've surprisingly been able to do so up to now.

What do you think of my list? do you feel I'm missing something I should include?

The utility card

Again, not a real utility card , but that's what I charged on this card.
I got this card way back when I was in better financial situation and thought I was financially "smart". They offered to auto debit my home landlines, electric and water bills from the credit card and give me points for them. I thought "great, I can pay them later".
Well, by now you probably can figure out the end of the story. I started paying the full balance. Then one month something happened and I couldn't come up with the full balance or the phone bill came up really high since my wife loves to talk and didn't care if cellphone calls were expensive or if international calls were expensive either.
So the balance started accumulating. I was in a roller coaster ride with that card. Sometimes being able to pay it in full but then taking out cash advances. Then the big one hit, the "extrafinancing". I thought i could pay the balance and keep paying the debt at a lower rate. Mostly that worked until I got a little more balance in the card. About $2000.
In most other cards it would've been sustainable. However on this card they started adding some weird charges to my card for insurances and service fees, and such. The balance grew for a while.
For a while then I had my mind set on cancelling the card and about 2 month ago decided it was time to make "the call". I got a letter from their collection department and called them and told them I was having trouble making payments to them. They were very nice and said that they could turn my balance and extrafinancing into a fixed rate loan at 32%  (instead of the 65% the card was charging).
So I went to their offices and surprisingly to me I actually had to wait in line to make a payment schedule with them. I did feel some embarrasment but not as much as I thought I would've without other people going thru the same process.
So now my balance with them is currently $6651 with a montly payment of $250 for 47 months now. Tomorrow is the due date for payment #2.
I have to tell you this was another post that was hard to do. It really drives home the situation i'm in and again I try to think how I let myself get into it and as much as there are some clear reasons there are some others that I just can't figure out. My suspicion is that a good part is real debt but that a big chunk of it is just interest that accumulated over time.
If I ever come out of this one healthy and debt free, I will have really learned my lesson. If I ever ever get a credit card again I will get one with a small limit and not fall for their trick of offering a higher limit every time I wanted to cancel it.
Well at least today I was able to buy my anxiety and blood pressure medication in cash. Oh yes, I also bought a lot of medicine with my credit cards. Those were real emergencies but constituted only a small part of all the debt I currently have. The word regret doesn't even begin to describe how I feel.
I'll put these numbers up on the right soon. I just can't write for a while now. Too painful to see how deep in debt I am (and I still have 2 to go).

The Cellphone Card

The cellphone Card


Well it's not really a cellphone card in the sense of a prepaid calling card.


I was going to write about the other 2 credit cards I have but writing about the last one was really hard, so I had to write about one that I felt good about to keep me from giving up exposing all my stupidity to you.


I got this last credit card when I was already in NO mode last year. NO mode as in "Would you like one of our credit cards?" , I would say "NO". They would counter with their pre-packed list of benefits and I would just keep saying NO until they would give up on me an try to get me to give them names of some other poor saps that they could bother with the cards.


I was going thru my third NO when the guy on the phone line said "When you get this card you can subscribe your phones to a corporate plan. It gives you free calls between all the numbers you register for automatic debit from the card". That really sounded interesting! I call my mom, dad and wife a lot so I started hearing the guy.


Here in Honduras the phone companies charge you for calls even within their own networks, on both prepaid and monthly individual plans. Cellphone calls are expensive and even so there are almost 4 million cellphones active in a country with a population of 7 million. The basic rate is about 20 US cents/minute.


The only way to get a really good rate is to get on a corporate plan. Those are usually arranged by the cellphone companies with big corporations here like banks or similar sized companies (having your company pay your phone would be the best but rarely happens). The bigger the plan the better the rates.


My company had a really small plan, we got charged just a few cents less than the base rate and no free calls to anybody. It really sucked.


I asked for all the rates I would have if I took the card, and with a little math I figured I could AT LEAST shave 50% off my cellphone bills. They even gave me 150 free text messages, when most plans only have 50. Even my brother, who has a great corporate plan was amazed at the rates I was going to get.


So I did sign up for it, I signed my cellphone, my wife's, my oldest daughter's, my mom's and my dad's. My daughter and my dad talk the least. My mom and I talk about the same. And my wife is the one who talks the most on the phone (too much free time I think).


Another great advantage of signing up with this card is that I get free calls not only to the phones I sign up with my card but to all other numbers of all other cardholders. My other brother got himself this card and signed in his and his wife's cellphone and now him and I talk for free.


I did make the mistake of letting the card pay the cellphones for several months and soon I had it max out. However I got some money recently and did a big payment on it and now the balance is only $1589. Well I say only because I compare it with the other cards.


I'm going to try to pay off this card first of all because it's the easiest or so it would seem.


I recently added my cousin and his wife's cellphones to my card and they  are really happy with the much lower bills. I just have to keep them paying me for when I get charged on the card. Then I have to get myself to go ahead and pay the ENTIRE sum to the credit card. I know that's where I usually fail. I hope recognizing that fact will help me not make the same mistake.


I haven't seen the latest statement so I can't give you the interest rates or what is going to be my monthly payment on it. But I will write it up on the summary on the right when I get them.


Since this card is from the same company as my main card, If I ask for a payment plan they will probably cancel this card too. It's ok, once changed over to the corporate plan they can't sign me out. I've payed the phones in cash before and after I got this card maxed and I was never told I would be signed out of the plan. The only thing stopping me right now from requesting a payment plan for my main card is that I have a uncle and aunt that I love so much (parents of my cousin that is already on the plan). I already requested them to be signed up to my card. As soon as they get signed up and get their first bill on the new plan I'll make my move.


Tonight, please say a little pray for me. Actually pray for my wife so that she finds gets, and keeps a job.Any job. Thank you


Monday, July 14, 2008

Not Greedy Enough

You know, I was writting the numbers on that last credit card and it was hard!
I felt a big weight in my heart and over my head. I got a chill down my spine and my mind was trying to answer myself how did I get into so much debt?!
I try to remember where did the money go. It went to several things and over and over again it did.
Eventually my boss called me to see some numbers on some stuff we are going to purchase for the company and I could see him going over the little details and trying to squeeze out every penny from the 3 companies quoting us.
Then I remember that he recently just payed about $5000 to his credit cards to clean them up for a trip he made. He gave his wife a limit to spend on the trip and he set himself a limit too.
He's also got some other businesses were he makes sure that every dollar gets a good return on the investment.
It suddenly hit me that I haven't been greedy enough. No, no, I don't mean being evil and stepping on people to get every coin. Rather in the sense of making sure that the money spent is spent well and on things or services for a purpose other than just for spending.
He has all this money and doesn't spend as much on some things as I do and he saves a lot. I understand that with so many incomes he has it's probably easier for him. He has houses, cars and other assets paid in full. But he must have gotten there somehow and i'm sure it wasn't spending money getting new cellphones every year or travelling to the US 3 times in a year (like I allowed my wife to do).
It's a really sad feeling to remember the vacations we took to the beach and that I charged on my credit cards. From the rental van to the hotel rooms to the meals.
I also helped a lot of people for a long time. Mostly on my wife's side. If I hadn't help I wonder what would've happened to them and I also wonder what would've happened to us and our finances. It's definitely a lot more expensive to sustain a house with 10 to 12 people in it that just 5 or 6.
I also remember the stupid gadgets I bought every now and then. I almost felt for the same thing just a couple of days ago. I saw this miniature remote control helicopter for $30 and I felt I had to have it.
Then my newly discovered greedy little man kicked me in the head. He said "Hey, let it go. You'll probably get frustated trying to fly it. And when are going to find time to fly it? What kind of an example are you going to set for your wife and kids about spending the money? and once you get it will it be something useful? No, it will be a time waster!"
Then I took another advice I read sometime ago. Whenever feeling to buy something, write it down and let it be for a week. If after a week you still want it then go ahead and do some research. Most things you will probably not want to buy after a week of just letting them sit in the little notepad. The "urge" to buy them will have passed and that will help you from buying stuff that you will later regret about.
Seems I know a lot about that, it's just that I learned about it too late. At the very least I have to consider at least 3 to 4 years of challenging every purchase we make, trying to figure the most efficient (not the cheapest) way of doing things to stretch my income the most and make those debt payments on time.
I figure that after a couple of years it will be an automatic reaction in my mind, unlike the active thinking that I have to do now to stop and think before giving my money away.
I hope to learn to be a little more greedy to keep my money for things that really do matter!

The Main Event

I've had this credit card for the longest of all the rest. I took it when I was just starting to work. At least there are no cosigners on it.
I would've waited for the statement to come in the mail but I decided to give you the numbers right now. Currently it has a balance of $7046.51
The thing that bothers me the most about this card is that just 10 months ago it had almost no balance. Well except for the dollar amounts. I used it to purchase airline tickets for my wife (who made 2 trips to the US in 2007) to start businesses here that just failed. I also used it to lend money to relatives on my wife's side who never payed me. I used it to buy company stuff, including some $2000 worth of software. Then I got refunded by the company and used only part of it to pay this card and the rest to pay other cards.
Remember I told you I had taken an extrafinancing to buy my car and my dad helped me with rest? well this is the card that gave me that extrafinancing. Right now that balance I wrote before probably includes several of the payments I should've made on my extrafinancing.
My last statement said they were charging my payment #25 out of 36. The monthly payment of that is $253, so with 11 payments to go that's $2783 to add to the balance stated earlier. At least this payment is fixed at at lower rate.
The way extrafinancing works with most credit cards here is they set up a loan for you at some reasonable rate. Mine was 25%, then each month they charge the credit card the amount of one payment. It's up to you to pay your credit card (preferably the whole balance). Most credit cards will set the minimum payment to something a bit more than the extrafinancing monthly payment, so if one could say where the money goes it should be going to pay the extrafinancing.
In reality you really don't know since they are just slowly transfering the loan from one rate to a higher one. It's up to the person to keep up and not let the credit card balance rise (as I so miserably did).
Credit cards in Honduras actually have two balances one in Lempiras and one in dollars. So my Lempira balance was well, but my dollar balance was going up high. I started paying the dollar balance but in reality I was taking money from the lempira balance to pay for the dollar balance and to pay other credit cards too! I was desperate to keep up. 
One positive thing is that the lempira balance is in the same currency as my paycheck so I know that I owe that specific amount. The dollar balance could become more difficult to pay if our currency slides against the dollar. Right now it's at 19.02 Lempiras for one dollar. But if it were to slide just a few cents I could mean that i would have to pay more lempiras to cover my dollar balance payments. Let's hope it's stays the way it has been for a couple of years now.
Deep in my gut I feel that I will have to go to them and request a payment plan. I've done it with 2 other cards that I will write about later. It's an awfull feeling of shame. However at least in the previous cases the people have been nice enough since they want to get payed someway. At least I don't have to worry about this card until August 1st. That will give me some thing to think about what to do. Right now, getting a payment plan (preferably a long one) would seem to be the way to go.

Saturday, July 12, 2008

The emergency fund

I've been reading all I can about managing debt and getting rid of debt. Not the "quick, magic, rid of debt" falseness that's out there, but real, logical advice.
One interesting advice I read was that no matter what your financial situation is, one should create or build an "emergency fund".
I thought "How can I create an emergency fund if i'm pouring all the money i can into my credit cards?". Well, the answer was on the next paragraph. They said, "that logic is the same logic that got you in debt in the first place". It's like they were talking directly to me.
It says that one should build an emergency fund to tap into it when, well there is an emergency. That way you don't tap into the credit cards and get deeper in debt.
it says that the emergency fund should be about 3 months' worth of salary. WHAT! i can't even get one third of my salary in the emergency fund.
Anyway, it said i should start small and grow the fund as I could. I've asked the person who does the payroll in my office to send part of my money (a very little part) to another account that i've denonimated my "emergency fund". Whenever I get some extra money from other odd jobs and gigs I send some 10% of that money into the "emergency fund".
Now the hard part is establishing what is an "emergency". Lately getting the cars to not run out of fuel is an emergency. With the fuel prices rising each week here by about 5 US cents I have to get $7 or $15 out of the fund to put some gas in those tanks. Sometimes I also take out money to get take-out food on the weekends. I've cut down on the number of times that we get take-out food, and I use a prepaid food card (more on that on a future post about ways I try to save money).
I have to say that even this way, the "emergency fund" has helped me keep my credit cards stored and not used them.
I get those advice from a christian site called crosswalk. I'm not at all religious. It just that when searching for debt advice they had some. Their emails are very useful and they never push for you about religious subjects so I feel comfortable reading it.
IF you sign up for debt advice go here:
Then look under the FAMILY section and select the one called "Debt Busters". It's a weekly email so it doesn't stuff your inbox.
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Thursday, July 10, 2008

Living in shadows

Today I went with my boss to a business lunch.
I work with a company that does data processing for financial institutions. So I know a little bit about interest rates and debit credit cards, atms, checks, loans, insurance..etc. Or at least I should.
Well, the topic with the other people in the table soon turned into the economy and how it affected people. They started talking precisely about people who just made it by doing the minimum payments on their credit cards and how ignorant they were to do that since they would never get out of debt.
They told about stories of people paying one debt by taking out cash advances on another card, efectively digging up a hole to cover another one.
All that time they were talking I felt I had a big arrow pointing towards me with a big sign saying "loser". I barely spoke a word while they talked long on that subject. I don't know if they could feel my face all warm and red as I felt it.
Fortunately they moved on to other economic problems like the rising cost of food and fuel.
One comforting thing to know was that I wasn't the only one with those problems. The bad part was how they felt people got themselves into that situation by ignorance and so I felt that they wouldn't be so kind to me if they knew I was in that same situation. They would probably say "you know better..!! how could you get yourself in that situation....".
So here is one of my big dilemmas. Working in the financial sector and having myself financial difficulties. I could only wish my boss and our customers could continue trusting me if they knew just how big my debt was and how hard it was for me to keep making those monthly payments.
Whenever I get a call from a bank I wonder if it's a work call asking me for information about a system or something or if it's going to be a call from their collection department. I wonder if some of the people in the banks that I work with know how much debt I have with their bank and how many times i've missed a payment.  Do you think they would help me to maybe get a payment plan or would they go ahead and tell my boss that I had money trouble and let him see how he would handle me? Or would they just play dumb and not tell anyone officially.
So far no one I know in the banks has let me know they are aware of my troubles. Even the IT guy at the credit bureau is someone I know and he would probably be the one to know the most about my problems. I haven't heard from him. I guess they don't run credit reports on friends just for hell of it.
Payday is coming soon. Not soon enough I think. I know that all of it already has an owner, and it's not me.
BTW, the picture is of a 1 lempira bill, the currency used in Honduras.

Wednesday, July 9, 2008

A little good in a lot of bad

Well I just told you about one of the big debts I have. On the same day I got at least a little bit of happiness by paying my dad one more month on his extra financing. It's another $75 that I just got that are gone out of my pocket in no time.
Some people feel happy when they buy. I feel happy when I pay debts! I feel happy subtracting numbers from my debts. My guts twist and turn when I have to hand over my credit card to pay for something. I haven't done that for at least 2 months now so I hope I can keep that record and increase it.
I feel good paying what I owe to my dad. I'm done with payment #23 out of 36. Just 13 more payments to go on that.
My mom just came by my office to pick up the $200 from my ex-brother in law plus another $50 that I still owed her from last month. She told me that my dad is back home sick. He has respiratory problems. He's had them all his life and at age 60+ they are just bound to get worse. No wonder he hasn't call to ask about my payment. I feel bad about him being ill, and I feel good that I at least am keeping up with payments to him.
Dad, I've never told you this because you and I never had a close relationship. It was more like a doctor - patient thing what you and I had. We would talk planes, computers, construction and cars but rarely would we talk about life. So I want to tell you that even though you got dealt a lousy hand in life I still think you did what you thought was best for us. I thank you for putting me thru bilingual school, I thank you for sending me to the best college in the country even when you thought you would have to pay for it all. Thank you for showing me just how much patience a man can have in the face of the worst things in the world. Thank you for showing me that you can have fear and still do things.
Dad, I wish I could've listened better when I felt you were butting into my finances by asking me why I owed so much in my credit cards. I wish I could be better financially when you pushed me into buying the car. I know you meant well and I probably needed the push to get it done and cut other stuff.
Dad, I know I've disappointed you with some decisions I've made in my life. I know my other younger brothers and my sisters probably make you prouder than I do. I hope that some day before you go I can make you as proud of me as you are of them.
Ok..I can't write anymore thru the tears. That's all for today folks.

The slavery of minimum payments

Today I got a Credit Card bill on my mail. Balance is $5485.
I took this credit card because it offered to transfer my balance from my "main" credit card and gave me 0% interest for 6 months. Well it's the 8th month now and they are now charging me 4.92% MONTHLY! That's 59.04% annually.
I should've used those 6 months to pay some of the capital that I owed. I did do that, I paid about $1588 for the first 6 months. But in the last month I was expecting a payment from some extra work that I had done and it didn't happen. So what did I do to pay the monthly bills? (including other credit cards) I took out cash advances on this credit card, which basically took it back to the original level I had when I got it, but now I'm paying interest on all that debt. And to really make me feel like crap I have to tell you that the card I was trying to pay off is now all the way up there again!
Looking at the statement closely it's interesting to see how they will keep me in the debt hole if I can't pay more than the minimum payment. Warning, there is a little bit of math ahead.
The interest this month is a total of $276. The minimum payment is $289. So $289 - $276 =  $13 . This means that if I paid the minimum payment only (thus keeping the collectors calls away) I would only lower my balance from $5485 to $5472. If I were to lower my balance by $13 each month, it would take me 420 months to pay that debt off! That's  35 years! And imagine if I were to actually charge more on it.
So, there are two ways I could go on with this card. Actually there are more (like not pay it), but focusing on trying to keep my creditors happy there are 2 ways. In both cases I will assume that I will not charge the card any more.
1) Pay off the mininum balance each month. And it will probably take those 35 years to pay it. Maybe it only takes half, that would be "only" 17 years and 6 months. The good side of that is that every month the payment that I would have to do would be less and less (a few cents probably), and most of it would be going to interest.
2) Set a number above the minimum payment of now and pay that amount each month, regardless of what the minimum payment turns out to be. I will try my best to do this. I'm setting my monthly payment to $300. I will pay them $300 each month. Every month a little more of those $300 will go to paying off the balance. It will be like a regular loan. The bad side of this is that I will have that $300 payment to do every month. The good side is that probably I would pay off this debt much faster than with option #1. Let's see
A little loan calculator I have here says that If I have a loan of $5485 that I have to pay off at a interest rate of 59.04% annually.... wait .. this calculator doesn't go that high! I guess the creator can't imagine someone paying more than 50% interest rate on any type of loan. Maybe the mob has better rates! Anyhow, I'll have to use the maximum value of 50%. Now I have to play with the loan term to get a payment of $300 or close so. I get a monthly paymentof $296 when I set the term to 3 years. Because i'm actually being charged a little more than what the calculator can reach I will probably have a longer term, like 4 years. But it sure beats 35 years !!
Do any of you have a loan calculator that can go up to 59.04% anually ? if you do try telling me the term for a loan of $5485 with a monthly payment of $300.
There are some other options I could use to handle this debt. I could pay the bare minimum while I try to finish of paying other debts and then start paying $300 monthly. I could pay $300 almost every month and less when times get tough(er). Unless I can offload this debt to some other lower rate loan I'll have to pay at least $289 soon and some number like that every month.

Tuesday, July 8, 2008

Money in , money out

Today I got paid by my ex brother in law for doing the paperwork related to his purchases of stuff here in Honduras for shipping to his store in TN. $200 that I really need, but that I have to pay to my mom. Plus I still owe her the other $150 from last month and she reminded me of that.
Well at least the debt from that is coming down. I just hope his business keeps going and i keep getting paid.

Monday, July 7, 2008

Honor Thy Father

My father has always been interested in me looking the social level I should. He felt that by now I should own a couple of cars and a house. About two years ago this month i finally caved in into his wishes of me getting a new(er) car.
I have a very old car. it's a 80's car and the only original parts on it are the chassis and the body I think. So I really did think back then that I should get a newer car. He even said he would help me with the loan. And I was about to finish paying an extrafinancing on my main credit card so I told him my limit of about $6000 for a car and he went off to search for one. He's retired so he has a lot of time every day.
During that month he showed me about 6 cars, he would tell me that this or that car was ok but not good enough. Finally he showed me one that I really liked, he liked, and my wife liked too.
So when it came to money I had no money available, I was going to use my extrafinancing credit line on my credit card to buy the car and pay it in 3 years. But it wasn't enough with my part so he "chipped" in. He got an extrafinancing on his card and just told me to pay it as I would pay mine. That was his help.
Don't get me wrong, I think it's fair but he had given me the impresion that he would give me part of the money. I was already liking the car and my family too. Plus it was "only" $75 a month extra on top of my other expenses and debts and payments. So I said yes.
I got the car, and soon enough my wife learned to drive it since it's an automatic. The old one is manual. Now I rarely get to use the newer car but it's the family car and it's in ok condition.
it's 2 years now and I'm having trouble paying my extrafinancing (that will be another post), and more importantly i'm having trouble paying my dad's extra financing!
Right now I should have made payment #24, and last week I just made payment #22. My dad payed one month several months ago and he reminded me this week that I still need to make another payment soon. I'm also paying any interests that run up when I miss a payment. It's a small thing usually but 2 months ago I payed $99 instead of $75 to clear it up.
So, right now I owe my dad (actually I owe my dad's credit card) 14 payments of $75 each. That's $1050 right there and we have just scratched the surface of my debts.
In hindsight, I still like having a new car. I just think that I should've been better with money BEFORE getting a new car to the point of having some money for a down payment rather than financing the whole car.
Aditionally the upkeep is not terrible but it all comes at the worst times. Like a ripped tire or an air conditioner that doesn't cool anymore. It's like if the car would hear when i'm money-less and decides to break then. I think it also has to do with the driver (wife).
I really don't want to leave my dad hanging with this debt. He's a retired man who got professionally and personally frustrated at the peak of his carrer. So I would really feel bad for him to see that his son is "failing" too. It's one of the debts that worries me on a different level than the others. I know my dad could pay it off, but I could never look at him in the face again if I let that happen, or I wonder if he would ever look at me again the same way.
Anyhow.. that's another little debt that I have to pay for 14 months. Let's tally it on the right side.

Credit Cards good and evil

Most of the money I owe is to credit card companies, which here are banks. I've had credit cards since I was 18 (an additional one from my parents). As I grew older I got my own card. First it was a regular card, then silver, then gold and now it's a platinum. I got into credit cards with the old saying that I would use it for emergencies only. Well, the term got a broader meaning than expected. Soon it was regular purchases that became "emergencies".
Along the years i've also accepted other cards for reasons that seemed logical at the time. One for grocery shopping that would give me discounts and points. Another one set to autopay my utility bills and get points for that too. In the end those were more excuses that I made myself than actual reasons to have them. The last one I got really did help me with my finances as it registered me for a group cellphone plan that cut my cellphone bills (mine, wife and oldest daughter) almost in half. Plus now we have free calling between us and most of my family members, since most of them have the same card.
In total I think I owe anywhere between $20,000 to $30,000 to credit card companies. Some i've already managed to cancel the cards and put the balance on payment plans. Still it's a lot of money to pay and I will be stuck paying it for at least 36 months on one and 48 months on the other one.
One thing you have to know by now is that in my country, Honduras, credit cards interest rates are HIGH. it's common for them to charge anywhere from 4% to 6% monthly! That's 48% to 72% yearly! so even if you pay the minimum balance, if you keep using your credit cards by the end of the year you will owe more and more and more and it will mostly be interests.
Before recent regulation, Credit card companies would calculate interest on the bulk of your balance, which already included interests from last about a good scam. It's not supposed to be that way and the calculations are supposed to be simpler now but I haven't checked them, I just want to get out of it!!
It would be easy for me to blame the credit cards for my current situation but in all honesty I was the one that signed the documents. I was the one that used the cards (well my wife a big part but that will be another post). So I can't really say that I was fooled. I think that I just slid so slowly into debt that when I figured out that I couldn't pay my credit cards and keep a low or no balance over to next month it was too late and I was already in a vicious cycle.
Most of this year i've had credit card collectors call me every month from every one of my cards, and it's such a bad feeling to get those calls. I will tell you later how i got some of them to stop.
I'm sending a picture of my credit cards and I hope it will post correctly. You'll notice some of them i carved out a V from the magnetic stripe. This is a last-ditch attempt of me to stop using them even if I had to so I wouldn't have a choice.
What do you think about credit cards? is it the cards that are evil or is it the credit card holder?

Friday, July 4, 2008

Owing money to ex-brother-in-law

It was about more than a year ago that I started doing some side business with my then brother-in-law. He has latino stores in Tennesse and wanted someone here to find and ship products for him. So I offered my services to him. He payed all expenses and I would get $200/month to pay everyone here and send him the bills etc. So I basically do the paperwork as I am someone he trusts.
It was around that time that I started feeling the squeeze from all these debts. With him sending me these sums of money that I would just pass on to his creditors I figured I could ask him for a small loan so I could pay some of my other debt. So I asked him for $3000 that I would pay back with my work so he wouldn't have to pay me for 15 months. He agreed and I got the money and it was soon out of my hands, mostly went to pay debt but it apparently didn't do much of a dent on it since it's a year now and i'm still paying him and I still owe lots more money.
An interesting twist is that he and my sister broke up after she gave birth to their girl. He didn't even recognized the girl as being his. So my work with him got a little uncomfortable as I am in good working relationship with him while he and my sister are about to go to court for child support.
Then his business became a family run thing, so he wasn't now the sole owner and the money that his business was paying me I would have to pay back to him directly. Pretty inconvenient because wiring money back and forth from the US to here and viceversa costs money (at least $10 for every $1000). So out of a verbal agreement with my sister and my mom, he told me to hand over the $200 to my sister and my mom as a way of paying for the uprising of my little niece (She is the cutest chubby girl).
My mom had been with my sister in TN when she gave birth and they both made a hard decision. My mom would bring the girl back to Honduras while my sister tried to make it there so she wouldn't have to worry about raising a newborn baby by herself. So the $200 that I get payed I hand over to my mom here and email my now ex-brother-in-law telling him about each payment and how much money I still owe him.
Right now I owe him $400 and I owe my mom $150 of last month because Iast month I was away on a trip and needed the money to make some online payments while I was away. SO you could say that I owe him $550 total.
This is one of the debts that is easiest to explain how I got into. I hope I can get rid of it in a couple of months or so. But now a question arises:
Should I ask him for another loan ? If I do then I get some quick cash up front and force him to keep supporting my niece since I would hand over the montly payments to my mom. Plus it's a 0% loan :-)
On the other hand, as I said before he and my sister are going to court right now and probably the court will hand the payments if she does get some child support from him. So if that happens I would have to wire money back to him adding to the cost of paying back the loan. However while they do figure all this out my little niece will be with no more money being sent for her support. He originally said on that verbal agreement that he would pay $500/month for the baby's support but all she gets is the $200/month that I'm paying him back giving it  to my mom.
Maybe you have some ideas and opinions. I have my mom calling me every end of month asking me for the $200 and i'm getting it and passing it on to her, with the exception of last month. But I know it will soon be over and it will be hard for my mom to raise that baby without that money. I hope the child support case is done before I finish paying back the loan.
I'll update the sidebar now.

Thursday, July 3, 2008

A blog? we don't need no stinking blog!

Well, the email-sent post did post well. Plus it didn't take too long.
Honestly i've read a lot of blogs but this is the first time i'm writing one so if you can give me some pointers on how to improve stuff around here I would certainly appreciate it.
How is it that a system's administrator doesn't have a blog? Well, first I didn't really "get" the idea behind blogs. It's like a diary but everyone reads it. Then I understood that it's stuff that you do want to share with other people..ahhh! Plus it's a hell of a lot easier than keeping your own website. I'm even emailing this post too!
Then I thought that I didn't have an interesting, uplifting subject to write about. Most of the time i'm thinking on how to pay the next bill and my long term goal of getting rid of my debt. But a fellow blogger encouraged me to write my own blog since I write so many comments on her blog.
Eventually I figured that even if no one reads my blog at least it will help me vent and be a diary for myself of how things go with this. I can't say i'm sorry about writing of my misery because I think that those who are in the same situation might feel some comfort in knowing they are not alone. I know that I did, I even got some good tips on how to improve things even if just temporarily.
So today I finally bit the bullet and created my blog.
And now I have to get back to work. There are some things that need to be handled.
I hope to hear from all of you...maybe I will when I post some more intersting stuff.

About me - The long version

I guess you would want to know more about me than just that i'm in debt up to my nostrils.
I live in Honduras, in Central America. Don't know where it is? It's south of Mexico, in the Heart of Central America.
My parents put me in a Bilingual school for 12 years and so I know how to read,write, listen, understand and speak english as well as spanish. I have less chance to speak it here but I can usually hold a conversation pretty well.
I graduated college in 1997 (wow, it's been that long!), Computer Science, or at least it's equivalent here in my country. I started programming since my 2nd year in college and liked it at first but then I hated how much time was wasted between bad designs and slow programming languages.
Due to a twist of fate I got transfered to the systems administration department. These are the guys that keep the computers and networks running. If we are doing our job well then everything is running fine and you don't notice us. If you say or hear "the system/network is down" they it's a big emergency for us.
After graduating I then moved on to a better (much) paying job in which I had to program again (and hated it) but also travelled for work (loved it). It was too good to be true and it only lasted a couple of years. The company folded in 2000.
I did a short time with the local offices of the company that folded, and then I landed on the job that is currently my "main" daytime job. I'm a system administrator again. This means that if I do my job well and get things organized and everyone is happy I have time for myself :-) weee! That's one of things I love about this type of job.
I married young (too young), and I have 2 girls who are the driving force in my life. I want to be able to at least give them the same type of education I got as I feel it's the best inheritance I will be able to pass along to them. That and have them learn from my many mistakes.
Well there's more but that's it for now. I like to try out new stuff so i'm posting this from email instead of going to the website and typing there. Let's see how this goes.

The first day

I've been under the burden of heavy debt for about 2 years now. I mean i've had debt ever since I got my first credit card about 15 years ago, but i've been able to pay it with some regularity before.

Now i'm having trouble covering monthly expenses and having enough money left to pay all my debts. So it has become a vicious cycle in which i've had use my credit card to pay for regular monthly stuff. Also some bad "investments" have help take money away from my pocket that I could've used to pay my debts.

Come and read as I will first try to explain each of my debts and all that I owe. Then I will keep you posted on what I'm doing to pay each of them by means that right now I'm not so sure I have available. At the least it will be an interesting ride. At the worst, I could end up in jail.