Monday, March 22, 2010

Reader Comments

Well I was away on vacation and I thought I would have more time but somehow it's like money not saved, it goes away unnoticed. I ended up hardly having time to check my email or write on my blog. It's strange that today, my first day back on my day job i'm able to write again.
I'm going to take this time to write back about some comments left by you. Thank you all for writing.
rain said:
Yea! really huge..anywyz, its good to have those numbers written. let it be a constant reminder that you have to go least there was improvement...but you can work on decreasing those numbers some more...maybe wifey could help too. I am wondering, does she read your blog?
I say:
Wife can't read my post because she only speaks spanish. If she knew I had this blog she would be upset because I was venting out my financial problems in public and showing how much it's both our faults that we are where we are.
I've tried and continue trying to get wife a job. She wants to work too. She's studying a master's degree and has some sort of promise for a teaching position once she finishes it, which should be sometime this year. Her problem is that she is in her early 40's and has no work experience related to her Business Administration degree except for a couple of months here and there. Most jobs I find required either someone young with no experience or someone older with several years experience.
La Gringa wrote back about my post "July or August, write it down". She has asked for comparison data between payments to my Promerica card, which is under an arranged payment schedule  (at lps 8020 a month) and the loan I would take out of the company coop to pay the credit card in full.
This is her answer to my comparison data:
That's huge difference in the interest rate so yes, I agree that making that co-op loan to pay off the much higher rates is a good thing to do. Just make sure that every centavo of the new loan funds goes to pay down your debt and not anything else.

Can you pay your credit card payments online? Also, be sure to keep the due dates on a calendar so you don't overlook them. If you don't already use something fancier, try google calendar. You can set up recurring events and have it send reminders to email and pop up messages. Now that you've used the emergency funds for a couple of them, I hope that gets you back on schedule so you don't run short when the payments are due.

I'm glad to hear that you're working on a budget. Do you also total it up and talk with your family about it? It's good to group the various types of expenses, such as household (rent, utilites), phone, groceries, eating out, etc. Has it revealed any excesses that need to be cut back on?

Regarding the extra financing: I thought that they took the balance that you owed on the credit card as of a certain date and turned it into a fixed term loan -- equal monthly payments over 3 years, which means that each of those payments includes interest.

So lets say you have 12 months to go and pay L.10,000 per month. Are you saying that if you pay it off early, you'll only have to pay, say L.100,000 and not the total of the payments (L.120,000)? If that's so, then, you're right, there's nothing to negotiate. Unless, of course, the bank would negotiate on your principle amount. Some banks do that in the US, too, but probably not here.

For some reason, I didn't receive your comment on this or I would have responded sooner. I was worried that you might be mad at me. I wouldn't blame you, but I'm glad that you aren't!
I say:
Yes I pay my Credomatic cards (2 and a loan) online. The other's I have to go to a branch to pay.  I have seen that most of the money in my budget goes to unexpected stuff, a book, fuel for a trip, presents for birthdays, etc. I try to keep a fund for that but it's hard to fill it faster that it's being used. With the maid we have now, who is very efficient, we don't buy so much takeout food on weekends. I used to buy lunch and dinner for saturday and sunday. Now it's usually only sunday and sometimes only sunday lunch.
The extra financing works just like you say it does, except they don't tell you what to do with the money. It's my decision to put it back as a payment on my card. Extrafinancing is just a fixed term loan, each payment including interest. Maybe I wrote too much or too little information. I have a loan calculator program that tells me how much of the money I pay on a loan is interest and how much is capital.
You are correct in your example, but to help others when she says I would only pay back 100,000 we are assuming that the interests for the rest of the payment plan are 20,000. That's a very rough number and so you don't start wondering if it means they take out the last two payments or something, no, it's not related to the monthly payment, we are just using very broad figures.
Loans or extrafinancing here can be paid back early by paying the capital balance in full. No penalties or additional interests have to be paid. As you state I doubt that they would negotiate the principle amount. I doubt it because when I called they mentioned that i've been paying on schedule every month and so i'm in sort of a good standing about that. Problem is that if i'm on schedule then they won't negotiate, I would have to get behind on my payments, have them send me threathening messages or calls, and then I might be able to negotiate terms or rate. Negotiating on the principal is done with lawyers usually.
And no, I appreciate the comments, sometimes it's tough love, sometimes it's support, etc. I haven't read a single comment that made me feel bad about having written something. Actually I wished I had more time (or be more organized) in order to write my numbers more frequently. I can't change the truth that mine is not the ideal case where everyone in the family rallies behind the goal of being debt free. I haven't read of another person going thru this. all those I read about have a wife or a husband that is supporting them and pitches in with ideas on saving money.
On the other hand I can't say wife or the girls are totally against less spending. They sometimes help and come up with ideas. What I suffer most is that they think that it's a temporary thing, that one saving tip here or there for the month is all it takes. They just haven't change the mentality on a permanent basis. So even though sometimes I feel their help, most of the times I feel alone in my quest.
La Gringa also wrote back when I posted my current numbers on how much I owe. She said:
You've made some pretty good progress on two of them...and not so much on others. Didn't you also pay off a loan to your dad?

I was surprised that the highest balances were the ones you made the most progress on. Are those the ones with extrafinancing and/or lower rates?

So you've paid off about $11,000. An interesting exercise might be to total all of your payments in that 17 months and compare that total to the $11,000. This might also be something to go over with your wife.

I know that you know that paying minimum payments doesn't give you much progress on the balances, but maybe your wife doesn't get it. If she was to get a job, even if only for a couple of years, you could get most of those balances paid off. I just don't know how long you can go on working 12-15 hours a day.

I know you've tried to cut costs in several areas, but it's really going to take something big (like another paycheck) to make an impact. I know that you don't want to live this way for another 5-10 years! I hate to see you living with so much stress.
I say:
Yes I paid off a loan to my dad and some other smaller loans. I wrote only about the active loans. The ones with the highest balances were the ones with extrafinancing too, so once the extrafinancing was paid, I was able to pay more towards the credit card balance.
I appreciate your concerns about me working two jobs for several years. I'm actually more concerned about keeping them. I know the day job is probably safe as long as I perform it well. However the job with the US company is always a toss up for me. I keep wondering when they will stop requiring my services and either hire someone on site full time or decide that someone already on staff should take over. The positive things going for me is that my hourly rate is very low for them and that so for my boss there says i've done a better job than the previous guy who was there on site full time.
About wife and a job. She is frustated about staying at home. She has lowered her job expectations. However she still can't find a job. She even went to an interview for a candy company located in a very bad part of the city, she was afraid to take the car and took a cab and stood outside while they let people in for interviews. No luck with that.  I don't scour all over the place for jobs for her but I'm suscribed to a couple of places and it's always the problem of age vrs experience that makes it difficult for her to have the qualifications required, even for jobs below what she had expected.
Well, that's all I have for now. Holy week is comming and there is another spending concern for me. However this time I think we might have already come to a compromise between me and the family.
Have a nice day.

Thursday, March 4, 2010

As of 3/4/2010 Part 1

Ok I finally took the plunge and wrote down on the right side of my blog the amounts I owe as of today on each of my credit cards and the personal loan.
I'm shocked, and confused, and now embarrased but facing my problems.
First of all I know the balances I wrote now are right. I had all the documents to check them. So i'm surprised to see that Citibank and Promerica are so similar as to what they were in October 2008. So I went back to check my Promerica payment plan and it seems I was still having trouble disclosing all that I owed back then.
Now i'm better at it but probably still have to go. So to force myself. I'm going to write down what I had wrote down in 2008 and what my records say that I really owed in 2008.
This is what I had written
As of 10/05/2008
Credit Card One $6651
Credit Card Pro $6000
Credit Card Cr1 $9829
Credit Card Cr2 $1589
Credit Card HS $5485 ($300/mo)
Personal Loan $6458
This is more accurate of october 2008:
Credit Card One $6460 (about $200 less, maybe I was using the previous month's numbers)
Credit Card Pro $8890 ($2890 MORE than what I wrote before. I either just guess it or tried to fool myself and you).
Credit Card Cr1 $9829 (checks out, balance plus extrafinancing)
Credit Card Cr2 $1589 (checks out, just balance)
Credit Card HS $6930(About $1500 higher than post previously and I really don't know why I wrote that number before, it's just strange because it had no basis.)
Personal Loan $6777 (About $300 MORE, maybe I was using the previous month's numbers.
I've corrected the numbers on the right side of the blog, but I left the previous numbers here as a reminder of what I had wrote before. I was going to write about how I felt about each debt and how it had evolved but I had confirm the 2008 numbers first. I see that most of them were about right but the Promerica debt was much much higher and I really don't know why I wrote less. I either used bad numbers to start, bad math when converting to dollars or bad judgement in trying to look like I owed less than I did. Right now I can't remember now I felt back then about disclosing my finances.
I apologize if I have hidden some of the facts of my situation. I've corrected that and I hope from now on to give you the right numbers for all this.
This really hasn't been a good week for me financially yet this disclosure has helped. Thanks to all those who write in with their comments and their tough love for me. I really appreciate it.

Wednesday, March 3, 2010

July or August, write it down.

I went to pay my HSBC card today. lps 7,1000 . About 5000 went to interest. I hate that and it's all money that I will never see again but I keep telling myself this is just more and more of a reminder to me about not going so deep in debt in the future with nothing to show for.
With HSBC there is no negotiating, they want me to pay their credit card rates or pay the full amount. I can't do the second right now so I'm just paying the minimum until I can hit it with more.
So as I was driving back I was thinking about which cards I will cancel when I can. I have two cards with BacBamer, one with HSBC, one with Promerica, one with Citibank and the latest one with Ficohsa.
The BacBamer ones are the oldest ones and the ones with the most benefit to me, although lately the've become a bit tougher but I can understand given my recent payment history. I would probably keep those in my desk drawer for travel or for medical emergencies.
Ficohsa card is one i'm using for business transactions and it has an extrafinancing on it that is basically paying itself from the selling of Honduran goods to relatives in the US. So I would probably keep that in the short term but would let it go or keep paying the full balance when I get down to 0.
HSBC is going to go. I don't want to have to deal with them ever again. They aren't bad, they just don't care about me as a customer. Even a replacement card took two months and I just took it to cash my points with them.
Promerica and Citibank are the cards on arranged payment schedule. Meaning that i've talked with them and told them that I want a payment plan and then I would want to turn in the cards.
Promerica was very quick with that and I don't even get a CC statement, it's totally turned into a loan now. However the last time I was trying to see if I could extend my payment term to them they pulled a different number than I had, about 4000lps higher. I think I will come into their office with my receipts and settle the number before it's too late. This card will go too. They've been nice with customer service and everything but for some gut reason I hate them. It must be the 8000lps I have to come up with every month to pay because they gave only 36 months to pay back instead of 48 like Citibank.
Citibank cut me the same deal, however they keep sending me CC statement and actually turn my payment plan into an extrafinancing. So they seem to want to keep me as a customer. However that was probably back when it was Banco Uno. Lately I've seen them become more like HSBC. They want their money and little room for negotiation, period. I can understand that but I don't like it so they are going to go too.
So the reason for the title is that I was checking my balance on my company coop loan and the expected balances on my "loans" from Promerica and Citibank. It seems that on either July or August I can request a new loan for about 120,000lps, which wouldn't affect the take home pay amount I have right now (previous loan was 118,000). WIth that money I could pay the balance on the previous coop loan, which is a requirement, and I would have almost the exact amount to pay either Citibank or Promerica, for some reason they will both have balances of about 75 to 80k lps at about that time.
Going the completely opposite way of how I was going about two posts ago. I'm thinking I want to pay Promerica. even if they say I owe them a couple thousand lempiras more in late fees or so, I could still pull that from my emergency fund and be done with them. That would free up 8,000lps a month to:
1- Get back on schedule with Citibank (currently one month behind every month), this would take about a month and a half
2- Pay more towards HSBC and get rid of them ASAP.
3- Save more in my emergency fund and freedom accounts
I could pay Citibank back instead of being tied to them for another two years but that would only lower my outgoing cash flow by 5,000.00 , and i'm always a bit concerned as to how long I will be able to keep the morning job. Not that I'm bad at it, but since i'm on contract it would be easy for them to let me go.
I sure appreciate your comments and they definitely don't fall on deaf ears.

Monday, March 1, 2010

Bad Good news and I need help with a decision

Your prayers were answered.
Remember that credit card that I was offered that gave me 10% discount on fuel and restaurants? Most of your comments were against me having taking it and were warning me to pay it in full every month.
Well worry no more! I was turned down by the credit card company, wohoo!!! Really i'm happy about this. I called customer service today because I hadn't heard from that card anymore. They told me my application was rejected. I wasn't even sad, well a little but mostly I was relieved of the temptation of having it.
So I request to be transfered to the collections department. I recently made payment #19 out of 36, meaning that I had paid more than half of the debt. It was originally 181,685.27 and according to the payment schedule I owe them now 107,673.92. As with most leveled payment types of repayment the first part of the schedule is very interest heavy so most of the payment goes down to pay just interest. It's my "punishment" for having gotten into the situation i'm trying to get out of.
Anyway, I asked the collections guy if I could refinance my payment schedule to increase the term. He checked and said that he dealt with people that were behind in their payments and I wasn't showing up on his screen, so I was probably on schedule. However he had me wait on the phone and went to talk to the ones that deal with people on schedule that want to reorganize their debt, I figure not too many. He came back a few minutes later and told me that I could in fact do that since I was more than halfway done with my current payment plan. I could probably add another 12 months to it, I just had to go to the same office when I went to do the first payment schedule and request the extension. He said I would probably need to make another payment of the current schedule as a down payment on the new one.
So, my question to you is? should I try to keep paying with my current payment schedule which is a monthly payment of L 8,020.00 (about $400) or should I try to reduce it by extending the term, thus being in debt for a longer period but improving my monthly cash flow ?
In my current state I still have 17 payments to go at L 8,020.00 to go from 107,673.93 to zero with a interest rate of 33%
If I were to refinance and if the interest rate were to stay the same I would have 28 payments to go (17 of the current plan minus one taken as down payment on the new one plus 12 months on the new one) at 33% to pay about 100,000.00. WIth my loan calculator this comes one to a monthly payment of L. 5,404.01
Honestly I have thought about this and have considered toughing it out until I really couldn't pay anymore at the current values. Mostly because right now i'm on the side of the payment that would put more money towards capital than to interest and would end this debt it about a year and a half. While if I refinance I would obviously pay more interest because I would keep paying for another two years and a half, almost back to where I started although at a lower debt amount.
The reasons i'm considering a refinance now are the hope of a lower interst rate, less pressure on me to work enough hours each month to make the payments, and more opportunities to save money now that i've learned to do that.
Right now i'm usually able to cover this payment at the current value, although sometimes it's straining because I don't have enough money in my emergency funds to comfortably cover one of those payments if my paychecks are late.
I did learn one thing, they do refinance payment schedule for people that are behind on their payment, so I could wait until I'm really behind and request a refinance until then, hopefully it won't get to that but that's one ace up my sleeve if it's still available in the future.
On other news, my Citibank card (also on a repayment plan) charged me the yearly membership of their credit card, about $70. I tried as last year to have them reverse that but this time I got a negative. They said I should pay up the full amount I owe them and then they could reverse the charges. Sure I can come up with Lps 90,047.00 by the end of this month (no not really, unless I did something very drastic!!). So with them I plan to reach a good point on my coop loan when I can take some 100,000.00 lps out and just blast my Citibank debt and close that account. They have nothing i'm interested in and they have been very tricky ever since I remember.
My HSBC debt would've been the one I would've prefered to pay first because it's at a higher interest rate but I have to take one or the other. It is one of my goals for this year to be able to pay one of those high debts. I think that would really make a different in my snowball repayment plan.
I hope to hear what you have to say about this.