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.

1 comment:

La Gringa said...

That La Gringa person sure is bossy! ;-/
Yes, the L.100,000 was just a wild example pulled out of the air to try to understand how this works.

Hey, those small debts that you paid off are ACCOMPLISHMENTS. You should definitely include the amounts in your before and after figures. Celebrate your achievements. It may give you encouragement. Leaving them out is like a dieter saying, "Well, I lost 10 pounds last month" but not mentioning that they lost 75 pounds last year. ;-)

About your family not grasping the long-term nature of the debt problem, maybe consider totaling those debt balances every month and going over them with the family.

Best of luck on the second job. As long as they are happy with your work and you have the competitive price advantage, you probably don't need to worry. It is the US custom to give raises every year. Any chance that is in the future?