Wednesday, August 27, 2008

Two Slaps in the Face

I was the first to admit that all the money I owe is nothing but my fault by signing loans and credit cards that charged me ridiculous interest rates. I was not forced into any of those.
However, I was recently commenting with an online friend that the banks make it too easy for a person to fall into this hole because they are so willing to put a credit card in people with not so good credit history. Like me!
I had been careful until now about naming names but I got slapped twice in recent days so the gloves are off.
About three months ago, I went to Banco Ficohsa to ask for a personal loan to consolidate my debts. They asked me for my salary info, and all my debt info. They confirmed that at the credit bureau and denied me a loan because I had too much debt for the salary I earn. It's hard to listen to those words and to know that the person telling them now knows you are up to your neck in debt.
The slap came over about a month ago when a sales rep from Banco Ficohsa called me to tell me the "good news" that I was approved.... for a credit card! I told them that they were probably wrong since I had been denied a loan and I found it reasonable that they denied it since I had so much debt. The sales rep said that I should accept the offer anyway. Just to test them I said "sure go ahead and run a credit check on me".
Some days passed and I thought I had been turned down. But to my amazement a couple of weeks ago a man came over to my office to deliver my brand new credit card with a $7000 limit! What a nerve! I received it and the next day went over to the bank to have it cancelled. The customer service lady was in all ways trying to have me keep the card but I told her I wanted a loan and not a card because of the interest rates. She eventually accepted my card back and destroyed it. That means I'm no good for a 28% loan but i'm good for a %60 loan, huh?
The second slap came with Banco Promerica. That's the card that I haven't yet put up in numbers. I haven't because after missing several payments I got into a payment schedule with them with the assumption that my card was canceled and I was just paying the balance. I even read the agreement in which it states that one missed payment will allow them to get me to pay by legal means.
Well I was working last week and I got a call on my cell from a happy sales rep telling my that due to my Super Premia card I was being offered a Premia card with a similar $6000 limit. Unfortunately I was in a room with other people and couldn't ask the sales rep how they had the nerve to offer me a credit card when I was summoned by them to get a payment schedule arranged for my credit card debt. This offer I turned down right over the phone and when asked for a reason for turning down "this unique and exceptional opportunity" I just said "yes thank you but no".
I wonder if they either keep poor records of their customers credit behaviour or if sales rep are so eager to dish out card that they don't care who they offer them to.
No wonder the sub-prime crisis hit people. If I had been so much in debt and with the experience I now have I probably would have started using both cards the next day they would have arrived and had been deeper in debt once the fees and interest charge would have started rolling in.
Well, at least this blog is free.

Thursday, August 21, 2008

Gazing into the Abyss

It is so hard to write about my problems. It is much easier to write when I get some income and pay some debt.
I've had two setbacks these past days.
The first one has been that the business with my ex-brother-in-law has stopped. Not due to him or me not wanting to continue but our provider has had problem deliver then goods and shipping them to the US. So with no goods to send there is no money to pay the provider and thus no actions I have to do and no money for me to collect for doing that. They say they will be able to resume shipping in a couple of weeks. That will make it a whole month without that income. That's about $920 that I will not receive this month. It has happened before but I'm more affected by this situation now. I'm looking for other suppliers but their prices are much higher and so the search is on.
The other one that really made my heart sink was going to my main credit card and asking for a payment arrangement. For starters they wouldn't use my extrafinancing line to put my credit card debt in it because they see in my records that I've been dragging a balance. Ok, fair enough. So I asked for my card to be cancelled and get a payment schedule. I went to the office for that and since I have a loan with them and my "cellphone card" too they want to close all that up and tie it into one big loan at a rate that is lower than my credit card but higher than the loan and the extrafinancing.
I wouldn't mind even it meant a $500 monthly payment. However they closed up with saying that for them to arrange all this for me they would need for me to get a 2 cosigners. Not one , but two. And they have to earn more than 30,000 lempiras per month. It's close to impossible for me to get one, so I can forget about getting two. I was so shocked and disappointed that I didn't even ask what could they do for me without cosigners. I guess they wouldn't help me without them.
So it has come to start asking friends and family for loans. My best friend is in town this week. That's one reason I haven't written that much because we keep going out a lot (he pays for almost everything to my embarrassment but he is ok with it). I will ask him for help with this card before he leaves on Saturday. He helps me a lot by getting me gigs with US companies that pay me to do work for them from here, so he is already helping me by vouching for me. I will have to drop the shame and ask him for a loan.
I have some more stuff to write that is more upbeat but it's difficult to start when more than one negative thing hits me at the same time. I don't really feel like writing at times. However, like now, after writing about my problems I can look at them a bit more objectively and try to solve them rather than just take pity on myself which does nothing to help me.
Lately I've felt that my wife and kids understand my situation a bit more after some soft and hard discussions we've had. Still I don't think it sticks completely in their mind but maybe with repetition it will.
Well, at least this blog is free.

Sunday, August 17, 2008

Another paycheck!

I worked my butt off this week and got calls for support for this company I did some software for them. They always want some changes and improvements and I welcome all that. Plus in a downsizing move they fired their IT guy and so they call me now to fix simple stuff like corrupted files or installing upgrades.
So I got a check for 10,560 lempiras (it was 12,000 minus tax since i'm and independent consultant). I promptly paid 8020 to the credit card that I have a payment arrangement with. I haven't put it the figure in the right column because ever since I got a payment arrangement with them they stopped sending me a monthly statement. I have to call them to figure out how much I still owe them them.
I am going to make a payment arrangement with my main credit card. They offered me to use my extrafinancing to allow me to keep the credit card since I have a good record. However since I have about 6000 lempiras of minimum payment this month they say they needed some payment to get this started. Otherwise I would have to get a payment arrangement and they would cancel the credit card. The extrafinancing would give me a longer term and a lower interest rate than the payment arrangement. So I set aside 1000 lempiras from the last paycheck to have something to give these guys and see if I can get this card on a payment schedule using my extrafinancing (alert to self...DO NOT USE THIS CARD AGAIN JUST BECAUSE ITS BALANCE WILL BE ZERO).
The other 1000 I gave them to my wife to have her pay some of her small debts with friends. The other 560 went into my emergency fund.
I was worried for a while that I wouldn't get this 8020 lempira payment done in time. Now I have to make a payment of 4200 next week. I hope my business with my ex-brother-in-law picks up. This last two weeks it was down due to problems with our provide. That meant $180 NOT comming into my pocket.
Please pray that my provider can supply us with our goods to ship to the US. I need that money bad.
Next week I have to register my girls in school, fortunately I have that money almost all of it ready. It's a lot of money but a bilingual education is my investment in their better future as adults in Honduras. I hope to have enough money left for school supplies.
Well, at least this blog is free.

Tuesday, August 12, 2008

Where did the oxygen go?

I was able to spend about $800 of the $1000 on debt payments. I sent $75 to my emergency fund, that I partially used for the medical emergencies in the previous post. I used $50 to pay for some really urgent car repairs to avoid having to pay much more money later.
I used the final $75 to invest in a tiny business that my oldest daughter can manage while she is at home. She will be selling electronic recharges to prepaid cellphones from home and getting 7% profit of every lempira she sells.
I hope this helps her learn about managing money, budgeting, etc. So far she needed a few reminders but she is doing well.
I'm really glad I spend most of the money paying debt and the other part paying urgent things and almost nothing on "desires".
Well at least this blog is free

Supersaverman vrs Murphy

Last week and weekend I had not one but two medical emergencies in the house. They had the change to really ruin my efforts to get rid of debt but supersaver-man gave Mr. Murphy (the evil behind these emergencies) a run for his , or well my, money.
First, last week my wife felt ill with blood pressure problems. Her BP had risen over normal levels and she had a strong headache.
Fortunately in our office we have private medical insurance on top of the government-provided medical service. The added benefit of the private medical insurance is that we have an emergency clinic and ambulance service that we can use for free.
So I took my wife to the clinic and after a short wait they treated her and lowered her BP. They gave mer some medication to buy. The next day I bought the meds and now i'm filing a claim to recover 80% of the money I spent on the meds (my copay is 20%).
Friday night I did something stupid. I was scratching my ear with the tip of my eyeglasses and the plastic part broke. It ended up jammed inside my ear. I did not feel any pain but I had a foreign object in my ear.
So I went again to the clinic and this time they told me that the object was there but they couldn't get it out. I had to go to a consult with an ear specialist. I felt sooo stupid for getting me in this situation. They did gave me a shot for pain (which I didn't need) and antibiotics to fight off a potential infection. They said it was not something dangerous at the moment so I could look for help next day.
The next day I went to military hospital (it is military but does service civilians too and is much cheaper than other private hospitals). I went to the ER and in no time I had a doctor basically telling me the same thing as the clinic. They didn't have an ear specialist there and they could call one but it would probably cost me over thousands of lempiras for the doctor comming over there. So I told them no thanks and since they didn't do anything to me they didn't charge me a cent, although I did have to ask for that and had to remind that to the hospital cashier. I only spent 11 lempiras on a coffee cup that my daughters were nagging me to get.
By then I was frustated and worried. I had a bit of blood around the object in my ear and even though I had no pain I had been to a clinic and a hospital and they couldn't help me.
So finally I used the FREE goverment medical service for the first time in my working life (in my whole life actually). It took about an hour to get attention but the place was ordered although very busy. The surgeon took one minute to get the thing out of my ear with forceps. The surgeon prescribed some ear drops and ibuprofen. I was hoping to get those there for free at the hospital's pharmacy. I sat in line for about 2 hours but could only get the ibuprofen. I had to buy the ear drops myself. I would try to claim that from my medical insurance but since the drops cost 150 lempiras, they are not covered by the insurance (it kicks in when expenses go over 300 lempiras).
So, after two medical emergencies and 4 visits to ER rooms, I spent zero money for medical assistance and immediate medications. I did spent 350 lempiras on my wife's meds (hopefully I will get some 80% of that back in a couple of weeks) and 150 on my ear drops. Total was about 500 lempiras
It was much better than I expected in terms of money spent. It took some patience and evaluating if the conditions allowed me to search for cheaper options. Since my wife's situation was treated right at the ER clinic I was relieved since all her meds given to her there were free. In my case my situation was not as urgent so I was able to "shop" around.
Supersaverman saved the week and my wallet got a few hits but survived.
Well at least this blog is free

Thursday, August 7, 2008

The Housing Crunch

I recently moved to another house. I was renting my previous house and i'm renting this one. I want to share with you some the financials of this.
In the previous house I paid about 3400 lempiras. I'm not going to convert to dolars but the exchange rate is roughtly 19 lempiras per dollar. In the house I live now I pay 5000 lempiras. That is an increase in my rent of about 1600 lempiras.
In the previous house there was no garage to park my cars, so I had to pay parking for my cars. That was 300 lempiras for both cars total. In this house I have parking for 3 cars so I can fit my two cars and could even rent parking for one car for someone that could live close.
With the parking included the difference is about 1300 lempiras. Not the most wise financial decision when trying to get out of debt. However there are some intangibles.
First one is security. In the previous house my daughters had to cross a busy street to get to their school bus stop and back. Nothing ever happened to them but it was always scary when they showed up at the house and the maid hadn't go to pick the up. My wife got her cellphone stolen twice walking to our house from the parking area. I personally was never a victim of crime but at least two people were assasinated within one block from my house. Comming home from work at night was always a concern to my family. My mom and dad always worried that something would happen to me there.
In the new house I live two blocks from my mom and dad's house and I lived in that neighborhood all my childhood and young adult life. I know it is safer. There have been cars stolen or vandalized there but it's not the norm. There is no busy streets and the neighboors do check on my house and either call me or the landlord if something is wrong and there is no one there. Like when the water tank was overflowing. What is that security worth ? For me it is hard to define.
I've been there only one month but there are some things that i've noticed already that sort of help my finances while living there.
My electric bill on the previous house was usually around 800 lempiras. We moved the same appliances to the new house and the same number of people and my electric bill in this house came yesterday. It was around 300 lempiras. I attribute this to this house having better electric wiring and better natural lighting.
There is less electricity wasted by the cables and less lights turned on during the day. Another point is that all the lights here are flourescent. In the previous house I tried to change the incadescent lights to fluorecent but for some reason they didn't all work. I think again it was the cabling and the lousy service we got back there.
So even if the bill increases to 400 lempiras I still would pay 400 less in this house. That would make the difference just 900.
The other reason for the move was comfort. I'm not talking US comforts. I'm talking basic comforts. The old house had been flooded by hurricane Mitch and some things never got repaired. Doors didn't work well and the sewer water would flow out well. Let's just say that sometimes that house didn't smell good at all. We also didn't have a water storage tank. Since tap water was available every other day that mean I had to keep 55 gallon drums in the house and use it to take baths, service the toilets and wash clothes. It worked but it was always something that made lifer harder. We also had to use the stove a lot more since on the non-water days we would heat water on it to take baths. Maybe that's the reason for some of the electric savings. The new house has a reasonably working sewer system. Inside and outside doors work well and the landlord installed a huge water tank right before I moved in. What is the price of that basic comfort and more sanitary conditions ?
Honestly i'm not trying to justify my move to this house to you, I just stating the things I notice that improve my quality of life, my safety, and my comfort.
Even some strange things have happened. The previous house was close to several malls and other places to buy stuff, but it was a little distant from supermarkets. Both cars were used in many short trips every day to go to places "relatively close". This house is more distant from my place of work but the road to it is less congested. Also we have a discount supermarket about half a mile away. My wife now shops there and there is some savings in our monthly groceries that are not eaten up by a long car trip to the supermarket. Since we now life our far, we plan our trips more carefully and I think that helps on the fuel savings too. I haven't measured scientifically but I know we put more brains into going out more now than before.
By the way, the old house is now being rented and the new renters pay 5000 lempiras, exactly what I pay in this safer, healthier, roomier house.
What do you think of my move? was it unwise ? was it wise ? do you need more info to have an opinion ?
I appreciate your comments, and super-saverman does too. I'm drafting up an article on fuel saving tips, honduran-style ;-)
Well, at least this blog is free (cause the housing sure isn't!)

Monday, August 4, 2008

Super saver man to the rescue, the genesis

I've started walking to and from the nearby mall as a cheap (free) way to exercise and to go pay my bills rather than taking my car to go to a drive-thru teller. To me that seemed as a money saving tip and a way to exercise combined.
Today I got a good 30 minute walk out of it. Didn't pay any bills today as I was going to but office supplies but the walk was good.
As I was there I felt that I have been changing over these months, from oogling over the stuff I wanted for me and my family, to feeling regret after buying something we couldn't afford. From feeling sad about being unable to pay my debts, to accepting the fact that I have to make some big, wait, BIG changes in my lifestyle if I want to get out of my debt, to comming to terms with realizing that I can't buy all that I want and even some things I "think" I need. Now i'm trying to turn myself into Super-saverman, LOL. It's this regular guy that keeps looking for ways to save himself some or all of his money by altering the way he does things every day.
So these are the first "actions" this super-saverman is taking, mainly at the mall right now but more comming from everyday places.
- I used to buy cold coffee drinks with some frequency, not a fanatic about it but when needing a refreshment while at the mall I would go to Expresso Americano (like Starbucks) and get a cold coffe drink there. if the weather was cold I would get a Chai Capuchino. Well not anymore, I just tought it out and wait to get to the office to drink some water, or soda (it's a community thing), or get hot coffee from the coffe pot. I save money and don't use disposable cups and napkins, etc. Basically I try not to buy any snacks or drinks at the mall, there is a superkmarket at the mall and I can buy fruit and water there if I really needed some but generally there is plenty back at the office or at home.
- I like planes, and I like to read a magazine called Airways. Each issue is about $8 and it's been a long time since i've bought them back to back every month. Today I walked into the bookstore and saw the latest edition of it. I was really tempted to buy it but recalled the price (150 lempiras) and took the opportunity to just browse it, read the interesting articles and put it back in the display. The store is ok with people reading their magazines and books there, unlike most other places here in Tegucigalpa. So if I wasn't hurting the store and I was able to get my Airways fix without having to buy the magazine I was ok. Sure I miss having the paper in my hands and being able to reread the articles a year from now but I got most of the news I wanted from that reading and I can be at peace with myself knowing I kept that money in my pocket. I even found out that they have some articles online at !! I'm sure going to check on those.
- I used to empty the coins from my pockets into my night stand at home and it would just dissapear overnight or the next day. Sometimes my daughter would ask for it and sometimes I'm sure someone else took it. Now I take it back with me the next day and use it when paying for things at the supermarket or pulperia. Keeps me from breaking a higher denomination bill. It's silly but I feel good about that.
- The mall is not the cheapest place to buy stuff, however there are a couple of stores there sell the basics that one would need, like underwear and socks, etc. Now that I go to the mall with almost no money on myself I can relax and check out if they have any big sales like 50 or 80%. I can then tell my friend at work about it and if they can use that then fine. As for me I don't even say a pep at home because I know my wife and daughters would try to get new stuff even when they have tons of it at home already. I might be exagerating as they have been slowly changing their ways in these last few days. I'll probably have to write about them and their behaviors towards money and spending.
Well, at least this blog and these tips are free :-)

Friday, August 1, 2008

Recovery tips

I was reading an article from the Debt Busters site. The one I told you about before and it says that we that are struggling to get out of a bad financial situation should do what great athletes do when they are down on their luck.
We should think about "making a comeback". Most people that follow sports can remember when a football, baseball, hockey or golf player was lagging behind and made an amazing comeback and won. Those events are talked about for years later. We should make our own comeback too.
So, the article mentions some key things to remember:
1. Let go of the past. Sure, analize what you did wrong, but don't sink yourself into it. I declare myself guilt of doing this. I can't let go of the stupid decisions I made in the past. I have to make my peace with my mistakes. I guess it's hard when my mistakes are hidden from most of the people I interact with. Good athletes are able to "shake it off" when they make a bad play, even faster than the sports commentators in the bleachers.
2. Play the next play. The past is done, now focus on moving forward. Read or become more intelligent with the use of your money. Good athletes focus on the game at hand and how to best play it, they don't wish the game was going they way they wanted it to go before it started. I guess this also refers to play the hand you are dealt, not the one you wish.
3. Follow training. In our case it means to follow your new anti-debt training. Don't try to find easy ways out of debt without first studying them carefully. For athletes in means than when they are down on their luck it is NOT the time to improvise, but rather to do things the way they have trained to do them for years. I guess for us it also means to get some smart advice about getting out of debt with long-time proven methods rather than trying those quick and easy gimmicks that are everywhere these days. Be smart with the money now.
4. Persevere. It's pretty much self explaining but in our case I guess we have to change our attitude of immediate compensation, immediate pleasure. Understand that getting out of debt will take a long time , probably much longer than it took to get into debt. There will be setbacks too but "staying the course" will be the way to go. I guess it's like going on a financial diet, so don't feel sad when you don't lose those first few debt pounds, and don't devour all your money when you your debt weight starts to go down. Stick to the plan until your attitude, your habits have changed. Only then will you be debt free for the rest of your life instead of only for a few days.
Well at least that advice and this blog is free

Getting Paid!

Today I got some good news.
I'm doing some DBA (database administrator) work for a company in the US. It had been a mystery to me how they would actually send me the money and how would they react to my bill for the work done.
My work consisted on improving the performance of their system. You know when you press the OK button and it takes a while for the computer to display new stuff, my job was to make that go faster.
So I spent many nights reading online documents and forums and logging into their system and tweaking things. After every tweak I would email my contact at the company and ask "can you hear me now?"...actually I would ask "how does it feel now?".
Last weekend I did some big changes in their system and expected to see some really big improvements. Unfortunately monday I got a call from them saying that the system was broken. I quickly undid all my work and still it was broken. I found out more stuff that I had done and undid that and the system was back to work again. BIG SCARE. If there's one thing I hate to do is mess up other people's work. It's an system administrator thing. I want my mark in my job life to be that people don't think of me because the systems are always running ok.
So after that scare they decided some things would be on hold while they looked over my proposed changes and how that affected their system.
By then It had been about a month already and I was wondering if I was going to get paid and the end of the gig or this month , or what. With the Monday mess I was ashamed to come up and ask them when was I going to expect payment (I had already ask before but gotten no answer).
So today, out of the blue my contact at the company tells me they have done a wire transfer for me for the money THEY owe ME :-) for all my work in June and July. It's not much, it's about $1000 but it certainly would give me some much needed financial oxygen.
The transfer should take a couple of days and being Friday I don't expect it until Tuesday at least.
I'm already thinking of what to pay. I have some stuff already paid for the month. I have to put money for my girls school supplies but that was considered to come out of somewhere else. I have some minor repairs that I should do to my cars. The house needs some improvements that I would be refunded for but I have to get them done first. Wife wants some plants, I would love a new external hard drive. So all that is dancing in my head.
However, I really think this is a test. I'm being tested on my determination to get out of debt. While the emotional side of me would like to put some of the money I'm about to receive into debt and some of the money into buying "stuff", my newly anti-debt side is saying that I should put some money into debt and put the rest into my "emergency fund", keeping a tight fist around that hard earned money rather than spending part of it.
What do you think ? Should I just put all towards debt and emergency fund or should I set some of it for spending ? what percent would you spend , save and pay debt ?
Well at least this blog is free