Feeling the Crunch!

The road to debt free living is filled with so many set backs and detours. It is a hard course to stick to. Sometimes it is just plain frustrating, and sometimes it feels as if we will never get to our destination. I'm at that place now.

It began in the spring when one of our renters (in the house we can't sell) moved out. That was a big blow to our budget. Paying extra on debt was put aside. The belts were tightened. Then with summer our income took its normal hit that comes with Tim's job. We did have money put aside for that. Now we find ourselves half way through the summer, the rental is still vacant, the cushion money is almost gone, and our income has taken another small hit. The blog is not making what it used to.

Combine all these income side hits and the rising expenses that have come from high fuel prices and we are feeling the crunch. Getting out of debt is no longer seems to be the destination. We are back to focusing on making the ends meet, to paying all the bills on time. I hate being in this place.

I get angry because we've worked so hard, with so little to show. I get frustrated because I don't know how to increase the income or where else to cut the expenses. Things are pretty basic here. Don't get me wrong, there certainly are things we have and do that are not true needs, but high priority wants. Those would be painful cuts.

I want to kick and scream, "IT IS NOT FAIR!"

I guess on the road to debt free living I'm stuck in a traffic jam.

The Curse of Good Credit

Good credit is a good thing isn't it? I'm not so sure.

We've never made a lot of money, yet we have been offered a lot of credit. Foolishly we have taken advantage of many of those offers. Somehow we've managed to keep up with payments through the ups and downs of our income. Now here we are with a modest income, loads of debt, and somehow, an excellent credit rating.

We should be happy about that, shouldn't we?

Our good credit feels more like a curse.

What good has our good credit done us? It allowed us to buy a house which seemed like a good investment at the time, without a down payment. It did serve us well while we lived there, but our situation, not to mention the housing market, has changed. That good investment is a burden on our finances and time.

With our good credit we have purchased cars, fixed cars, taken vacations, purchased groceries in tight times, paid for unexpected expenses, gone out to eat way too often, and overall lived well beyond our means for the majority of the last thirteen years. Now we pay $100's of dollars in interest to our creditors every month. Money I'd much rather see go to our savings account Yeah, good credit is a wonderful thing.

Though we are neck high in debt, though our income qualifies us for some social services, though I have no desire to borrow any money, creditors are still trying to woo us. Credit offers come almost daily in the mail. Credit limit increases, initiated by the credit card company are a normal thing. The latest credit card limit increase put our credit limit at 70% of our annual income; on one credit card! I'm scared to add up all the available credit we have. It must be triple our annual income. Something isn't right here.

I have no intention of taking advantage of their temptations. Though at this point I really don't care much about my credit rating, I have no intention of losing that rating either. We will continue to pay our bills on time, and therefore continue to have a good credit rating.

In the past we have fallen to the lure of instant gratification. We are paying a pretty price for it now, and have learned our lesson. The curse of our good credit, the temptation to use that credit is no longer there. It is just ridiculous that a family in our situation can be offered such an excessive amount of credit. I thought the nation was in a credit crunch?

That Was Worth the Phone Call!

I messed up. I missed a credit card payment. It is a rare occurrence. I'm not sure what happened, but when I pulled out the file to pay bills there on top was a late, very late, credit card bill. I paid it immediately, with a little extra, knowing the damage was done, and wondering how bad it would be.

It didn't take long to find out. I got the statement the next day. A whopping $39 late charge! Watch your back racking up the charges happens fast! Thankfully, that fee was waived. This particular company waives late charges if you use the card in the next billing statement. We rarely use any credit cards, but Tim does use this one when paying eBay fees. Thankfully he used it once this billing cycle!

Late fees aren't the only punishment for missing a payment. Any promotional rates are gone, and the interest rate goes through the roof! My rates were about five times higher after the missed payment. That rate was not acceptable.

My first thought was that I would have to transfer the balance to another card to get an acceptable rate again. That isn't free though. There are transfer fees involved in that option.

I decided to call the credit card company. What could it hurt? I had to laugh when the automated system informed me that do to my good credit history they had increased my credit limit to an absurdly high amount. Hello? I'm calling because I missed a payment. That credit limit? Well, they must be nuts! That is a subject for another time though.

I finally got to a human being who was very friendly and helpful. My payment hadn't posted yet, so he wasn't sure he be able to change the interest rate back. After putting me on hold for a few minutes, he returned to inform me that everything was back to normal. There would be no late fee, and the interest rates were back to the original rates. At least that good credit history got me something I really needed.

Often times we forget that credit card companies want to work with us. They are willing to negotiate. I messed up, and the terms of the agreement kicked in. That doesn't mean that there was nothing I could do. A simple phone call and about five minutes of my time put everything back the way it was. It was a phone call worth making.

Image credit: wes_rand

Mystery Shopping

I've shared before a little of our mystery shopping experiences. We have been enjoying the mystery shopping. We've had free dinners, free shopping, and earned a little money too. It isn't all fun and games though. Some shops are very easy, and others require a lot of detail. It all depends on what the company is looking for.

Companies hire a mystery shopping company to find out exactly how their customers are being treated. It is easy to put on a good show when the district manager is coming, but what is the experience of your average everyday customer? That is where mystery shoppers come in. When I worked in a restaurant I remember our manager telling us that it is estimated that over 90% of unhappy customers do not complain to the restaurant manager. Instead they simply do not return, and they tell their friends about their bad experience. How do you fix a problem you don't know exists? Using mystery shoppers can help.

We enjoy doing mystery shops, but know that the company is expecting results in return. It is a win win situation.

One Down!

A Quick Online Earnings Update

It has been awhile, quite awhile, since I last updated about earning money online. I've been averaging about $200 a month from online sources. So instead of giving you all the details since then, I will just highlight a few things. There have been a few eBay sales, but most of the earnings have come from other sources.

Obo Pay - A Free $10 just for signing up. Easiest $10 I've ever made.

Blogsvertise - $28 in the last thirty days.

Fusion Cash - Received $47 from them for participating in trial offers. (Don't forget to cancel them before the trial period end!)


Almost $100 earned in the last thirty days from PayPerPost. Right now they are offering new affiliates $20 for their first post. With this company you can pick the paid posts you do.

$5 at a time. Earning about $25 a week at Pay U 2 Blog. With this company you are paid to incorporate links and keywords into your posts. You must do all you are assigned, but can set profile preferences to help get assignments that fit you and your blog.

I know advertising on your blog is a bit controversial to some, but earning money to pay off debt is one the reasons I started this blog. If you are looking to earn a little extra money, I am happy to share what is working for me, and happy to have you share what works for you too!

Summer Debt Disappointment

In my grand plan of paying off our debts with money earned online, I forgot to figure the dip our income takes in the summer. My husband works mostly with band teachers, so school being out means less hours and less commission. Combine that with increased summer expenses of travel and visiting, and the money earned since Over $300 Earned Online, has not gone to debt, or even to our savings. It has gone to keep our monthly bills caught up.

Since that last post, we have earned over $200 online. Here is a rough breakdown:

Freelancing - $15
Direct advertising $125
PayPerPost - $55
Ebay - $20
Payu2blog - $20

is a new one. I just started blogging for them a few weeks ago. Click on the graphic for more details, but in a nutshell you are assigned a keyword and a link. You must use them once in a post. There is a sixty word minimum, but you can use the keyword in just about any context you'd like. You must take all assignments, but you can pick some preferences to help get things that are a better fit for you and your blog. Most I have been able to work into things I would normally post about. A couple, like poker tables, have pushed my creativity. That isn't necessarily a bad thing though.

Each post is worth $5. You are paid every other week via Pay Pal. The work is steady with this company. I started at the end of the last pay period. I've only been paid $20 so far, but have earned $70 in the current pay period already with posts here and on Tim's blog.

It is a little frustrating and disappointing to steadily be earning extra income, but be unable to use it for its intended purpose. I love reporting that we are making strides in our debt reduction, but I'm keeping it real here. I can say though, that I'm thankful to have that extra income and though progress on the debt has slowed, we have not moved backwards. We have not added to it, and sometimes that is about as much as you can do to become debt free.


online income, personal finance

Over $300 Earned Online

Since my last post about the money we've earned online, we've earned about $360. I wish I could say it was going straight toward debt, but it has been a lean month. We've dipped into our savings for expenses, including purchasing animals and fixing vehicles. The online income is going to the savings account.

Some may argue the logic of keeping a small savings when there are debts to be paid. It may not make sense on paper, perhaps it is just physiological, but it feels better to have a little savings to draw on when times are tight, things are needed or unexpected expenses occur, rather than to fall back on credit credit cards. We've spent too many years trying to pay off debt while using credit cards as our emergency fund. It didn't work! This also helps to train us to live on what we have and save for things we need. Must break the debt cycle!

$113 was earned from Pay Per Post. The rest of the money came from items sold on eBay!. Tim still has a few things listed, and I need to clean out a few closets and get some more things for him to list!

After the savings account gets back to par, we will be able once again apply online earnings to our debt. Until then we will keep plugging away at the debt on the normal budget.

online income, personal finance

$200 Toward Debt

Paying down debt is such a slow process! It can be frustrating at times. Today, though, is not one of the frustrating days. We put another chunk toward becoming debt free.

As I've mentioned before, in addition to our normally budgeted amount, we use money earned from extra sources, like this blog, or ebay to pay down debt. The money to accumulates in Pay Pal, and then we pay an extra payment to debt when the amount reaches $200. Today, was that day.

Where did that money come from? About 1/2 of it came from Pay Per Post. The rest came from a paid survey site called Panda Research. If you are not familiar with these types of sites, they term "survey" is a bit deceptive, in my opinion. You actually get paid to accept offers, mostly to try products. Often you have to pay shipping or another small fee, but you do come out well ahead after you are paid. Through this site, I made money to try Netflix, Blockbuster, Hydroderm, and a few other things.

It was fun to get paid to try things we normally wouldn't buy, but making money on these "paid survey" sites requires a bit of time and organization on your part. The offers are almost all for a trial period. After that period is over, you are charged full price. When I completed an offer, I'd immediately write the cancellation date on my planner. Then a day or two before that date, I'd call or get online to cancel the service.

If you are interested in this kind of thing, I'd recommend Fusion Cash over Panda Research, just for the simple fact that Fusion Cash lets you cash out at $25. Panda Research makes you wait until $100. Fusion Cash also has a lot more selection.

It feels great to be able to make an extra payment toward debt. It is a slow process, but we are making progress. A little saving here, a little earning there, and one day we will be debt free!

Technorati Tags:paid surveys, debt

Getting Out of Debt - TT# 8

Debt reduction is high on our priority list. Getting out of debt involves avoiding debt by learning to live with in our means, and finding ways to stretch our means to pay off the debt we already have. Here are some things we have done and are doing to tackle the mountain of debt we have accumulated over the years.

1. All But Stopped Using Our Credit Cards.
I'd like to say we never use them, but that would be a lie. I can say we rarely use them. Tim just used one yesterday because the government office he was at only took cash (he didn't have enough with him), bank check, or Discover card. We were unaware of this policy, now we know.

We've tried the "using credit cards the smart way" (earning the reward and paying them off every month,) but have found we are just too undisciplined for that. When you are in the habit of using the cards, it is too easy to lose track and rack up more than you can pay off.

2. Using Cash Envelopes
This is one we used to do, and keep saying we need to do. On vacation, we used nothing but cash. It was so much easier to keep track of what we really were spending, and I thought more before making a purchase. This convinced me that we must go back to this system. We are doing it this month.

3. Keeping a Savings Account
We keep an account with $2000 in it. Whether to keep a small emergency fund is a controversial issue in the debt reduction circles. This post talks a bit about why I think it is a good idea.

4. Using our Tax Return for Debt Reduction
More in this post.

5. Simplifying
Less running around, less stuff.

6. Selling Things We No Longer Use
We de-cluttered a lot before moving two years ago. I haven't missed a single thing. We have less storage here and have to continually de-clutter. Much of it we sell using Ebay (nothing currently listed though), consignment sales, and classifieds.

7. Being Patient
When we need or really want something we wait. Sometimes we find it used, it is given to us, or we decide it really wasn't that important.

8. D-I-Y
We've saved a ton of money by doing our own repairs, growing our food, and basically trying to do things ourselves. There is a trade off of time here, remember #7.

9. Settling for Good Enough
A good example of this is my husband's phone. He really wanted a Treo. Though not a true need, it is a very useful tool for his job. Instead of the latest and greatest he got the outdated version. They were clearing out that model and he saved about $350, and got a phone that did what he wanted even though it wasn't the very best one out there.

A few months later, he took a job with a new company, who bought him the latest model on the market. See #7.

10. Budget Based on Salary Only
Any money earned by selling things (#6) or through online opportunities (Some are listed on the side bar. ) is put toward debt. Many of those things are paid to a PayPal account. When the account reaches $200 we make an extra payment to a credit card.

11. Pay the Smallest Debt First
There is also a lot of debate on whether you should do this, work on the debt with the highest interest rate first or a number of other strategies. We like paying off the smallest first because it seems like a doable goal. It is physiological. Also, the rates on most of our debt are fairly close.

12. The Snowball Effect
This is concept is pretty simple. Figure out how much extra money (beyond minimum payments) you can put toward debt every month. Pick which debt you want to pay off first. Pay minimum payments on all the debt, and the determined extra amount to the debt you're working on first. When it is paid off, take what you were paying on the first debt, add it to what the minimum payment is on the next debt you want to pay off. Soon you'll be seeing huge chunks coming off your debt. Continue until all the debt is gone.

13. Accountability
To stick to this plan it is helpful to be accountable. We are accountable to each other by reviewing the expenditures and progress every now and then. This blog is also a way to keep us accountable. I am thinking about adding a couple of things here that will help keep us more accountable by tracking our progress publicly.

It was so easy to get into debt, but it is proving to be a long, slow road getting out of it. It is a journey worth taking, and one I'm glad we are on.

Thursday Thirteen


Technorati Tags: money, budget, personal finance

Compound Interest

Interest friend or foe? Depends on which side of it you are on. Compound interest is a powerful thing. Need a quick refresher? This article oncompound interest and its implications in investments gives a basic and easy to understand explanation. It also gives some practical advice on how to use compounding to your advantage.

As my Aunt Nancy pointed out in the comments on this post, making extra payments helps ease the effect of compound interest when you find yourself on the wrong side of its power! As the article points out we most easily see the power of compound interest in credit cards, and loans. Hopefully we are on the right track to stop seeing compound interest work that way and start seeing it work in savings.

This is a sponsored post.

I Was Wrong

You don't hear me say it often, just ask my husband, but I was wrong. In this post, I stated that even though I knew we should use our tax money to pay off debt, I didn't think I would enjoy it as much as purchasing a few practical things that we were considering.

The money so far has been used to top off our savings account, for the vacation we are taking next week, for the dentist (that one was not expected!), to buy some parts for the car we will soon be selling, and to pay a big chunk on a credit card! I was surprised at how satisfying it was to schedule that large payment to the credit card. It was a leap toward our goal, instead of the baby steps we've been taking.

The car is almost ready to sell. I am looking forward to using most of that toward debt. Yes, I was wrong, and I am sure my husband will not let me forget it!


Technorati Tags: debt-reduction, tax return