Doing Some Very Grown-Up Things

So as I mentioned yesterday, I’ve been trying to do some very grown-up things. Among those things are:

  • getting through to the Amazingly Awesome Boyfriend that his debts can hold us back in getting the things we want in life.
  • taking a serious look at my own debts (which I admit, I let get way out of hand)
  • talking to someone about my debts who is in a position to help me (debt counsellor , bank loan officer), instead of just my mother and AAB
  • look at what I can do in my current job to help advance myself AND add to my resume
  • learn to use the new iPad AAB got me for Christmas for something other than Mario Run (which I refuse to pay for more than the basic starter levels right now) and Pokemon Go.

So, since the first of the month, I’ve been doing some Very Grown-Up Things. I laid out to AAB how his debt and credit score affects our future. If I’m working towards fixing my credit, and he’s not, then it makes no financial sense for us to ever become common-law or think of getting married. I know that sounds horrible, and it really does tear me up inside to say it. But I’m taking steps towards someday owning a house, or a condo, and want to at the very least get out of this house in the very near future. If I get my credit score up to a level that will get me a mortgage, or a good loan, then we can’t really do anything that would link us together financially. Doing that would mesh our credit together, and his score would affect mine. I think he’s finally starting to see that.

Also, just this week I had an appointment at my bank. Even though I am in a less-than-ideal position for a bank to lend me money, I have handled my debts well enough that there is a very good chance I may be able to get a consolidation loan to help take care of my credit card debts. I’ll have some tips on how to handle your credit like I did later. For now, I’m just focusing on getting my paperwork together to work on this loan, and get my other paperwork together to send off to the student loan people for my Repayment Assistance Plan (otherwise they just take $700 out of my account each month, which I really can never afford).

Well wouldn’t you know, right after my bank appointment I dropped into work to eat and study my new Wine Folly book before my shift, and my former manager was there to do our appraisals! It seems I’m a bit of an overachiever when it comes to the online training. He showed me how much training someone with my seniority would normally have if they only did what they had to. Then he showed me mine. It’s like twice as long! So what did I do when I got home? I signed up for more training. I’m going to do my shift leader training, some extra customer service training, a whole lot of extra product knowledge training, and some mentorship training. Then, the next time the District Manager is in our store, I want to ask him if there is any sort of mentorship programs in place with the company. Even if I have to be the mentee of the Weird BowTie Guy from our flagship store, or Cute Asshole who used to work at my store, it would totally be worth it for the opportunity.

In all of this busy-ness though, I haven’t picked up the iPad once! Hopefully once AAB’s birthday present is all set up (got a nice TV package for him), we will be chilling in the office a bit more, and I will have more of an excuse to pull it out and use it.

So there’s my current foray into the Grown-Up World I’ve failed at so far, Sunshine. I have a lot of big plans coming up, which will hopefully bring some big lessons and experiences you all can learn from (so you don’t have to screw up as bad as I did).

Student Loans: Don’t Let Them Ruin You

So it’s no secret that I’ve financially screwed myself over in the last few years. I’m sitting here watching people all around me pay off their debts, or even graduate with hardly any debt at all, while I feel like I’m sitting in the corner with a huge dunce cap covered in dollar signs.

What infuriates me, though, is when these same people talk to me about how they did that. So many of them were there with me when I was screwing myself royally, and not a single one offered any useful advice! Now they’re all like, “Well I mean I OBVIOUSLY paid the interest off every semester. Doesn’t everyone?”

No! We don’t! Because we didn’t know that was a thing that we should be doing! Those of us who are in the financial sinking ship I’m trapped in had no idea how bad things would be. I mean, I knew the basics about spending and saving and such. I read The Wealthy Barber in college, and got my obligatory copy of The Debt Free Graduate at orientation. I had the knowledge. I just had no clue how bad things could get after school was done.

Like so many others, I had the “I’ll have a degree and that will get me a job” fallacy stuck in my head. I thought that once I was working, I’d make enough money to get a dinky little apartment and start paying off my loans pretty quickly. I didn’t think that I’d be making $100K right out of the gate or anything, but I at least thought that I’d have a full-time job in something related to my degree that paid me enough to live AND treat myself sometimes AND pay off my debts.

**queue laughter**

I know, I know: I was so naive!! Looking back, I should’ve done so much more research into my finances, my financial options, and financial obligations. Obviously I didn’t, and instead relied on the horrible advice I was so prone to taking from well-meaning friends. So what were some of the things I didn’t know back in the day?

1) YOU CAN MAKE PAYMENTS ON YOUR OSAP (STUDENT LOANS) BEFORE YOU’RE DONE SCHOOL

I blissfully collected my student loans (OSAP, where I’m from) for 5 whole years. When I had a bit of money left over at the end of the semester, I’d think, “Gee, isn’t this great!  A few hundred bucks I didn’t manage to blow on energy drinks and 7-11 hotdogs! I’d better spend it now before the next loans come out.”

Dumbest. Idea. Ever.

It doesn’t matter how big or how small the payment you can make: if you have ANY money you can put towards your loans before you absolutely have to pay them back, put it towards your loans! It doesn’t matter if it’s a government loan, line of credit, or private loan. If, for whatever reason, you know you absolutely CANNOT put money towards your loan a bit early (penalties, contract terms, etc), put what you COULD put towards it into a savings account. Then, that very first payment you can make will be a bigger one with all of that extra money put towards this.

Why does this help? I mean, what’s the point of paying back money if they’re just going to give you more money anyways, right? Well, because of INTEREST, my darlings. If you get a $1,000 loan, and can pay $150 towards it right away, that leave only $850 collecting interest. Interest which you will have to pay back later. Every little bit counts when you’re trying to pay things back.

2) JUST BECAUSE YOU HAVE MONEY DOESN’T MEAN YOU HAVE TO SPEND IT ALL.

Ok, so this goes back to the first point a little. I didn’t need my splurges. Yes, everyone needs to treat themselves sometimes. And I honestly thought I was doing very good with the budgeting. Every semester I would divide up my money, and only give myself access to what I had budgeted each month. I’d have enough for rent, phone, credit card bills (mostly), and other little things like groceries and transportation. I thought managing my money like this made me a Real Grown-Up.

Now, I had some friends who blew through their money fast on big ticket items. They bought crappy used cars that barely ran, a brand new mattress (when they had a perfectly good one already), state-of-the-art computers, and Texas Mickeys (those comically large  bottle of booze at the liquor store that come with a pump because they’re too big to pour from, for those who don’t know). Compared to them, I was a flippin financial genius.

But just because I seemed financially savvy compared to them didn’t mean I actually WAS. I blew money on the stupidest things sometimes. I mean, just the amount I blew on energy drinks, over-priced take-out food, over-priced lattes, and bottles of wine that were outside of my price-range……. well, I think I might just cry right now thinking about that. And all of that money still needs to be paid back!

I used to tell myself, “Well, the money is there. I’ll be able to pay it back later. I may as well enjoy myself now before I end up some corporate shrill who forgets what fun is.” Yeah, that doesn’t happen. On graduation day, you are still the same person you always were, with the same ideas of fun, but now you have that debt hanging over your head. Would I still like to splurge on a nice bottle of Ravenswood Zinfandel and a pair of Doc Martens’? Oh hell yes! Can I afford that now, after racking up all that debt which was partially made up of things like that? Not a freakin chance!

3) A DEGREE DOES NOT EQUAL A JOB. AND A JOB DOES NOT MEAN YOU CAN PAY BACK YOUR LOANS RIGHT AWAY.

I was one of the many who lived under the delusion that having my BA(H) would mean companies would be falling all over themselves to hire me. I mean, I have a degree! An honours degree! I should be making the big bucks here!

Yeah, I’m a Customer Service Representative at a government -owned specialty store. And I’m not the only one with a degree working here! I lost track of the number of other CSR’s I’ve met just in my city who are educated people, with degrees (PLURAL, EACH!!!!!) who are still working behind a cash register. Not that it’s a horrible job or anything…….. but we were under the assumption that we would be a bit higher up the food chain once we shelled out all that money for a degree. At least, that’s what we were constantly told anyway.

At my current job, I make under the provincially mandated minimum annual wage to be forced into making payments on my loan. This means I make so little money, the government basically says, “Here, you need this more than we do. Keep your change for now.” I have been out of school 3 1/2 years and have not yet had to make a payment (not that I haven’t, but that’s a whole other post).  I keep a roof over my head, food in my belly, and nip on my cat’s scratching post. But not much more than that.

Even with two degrees, a college certificate, and advanced Microsoft training, the competition is so fierce for jobs that I can’t find a better paying job at the moment. I know that will change. I know that someday (soon, hopefully) I will be making enough to not only be FORCED to make payments on my loan, but to AFFORD to make them. But it’s going on 4 years now of job hunting. I know people who are 5 and 6 years in, still working retail or call centers. It sucks, especially after shelling out all the (borrowed) money. But it’s reality, Sunshine.

 

Well, it’s getting late. Amazingly Awesome Boyfriend is passed out in bed (he has to be up in 6 hours for yet another 10 hour day at work), and my baby Bowser kitten is right by his side. I’d better finish up this post, and this glass of Cab Sauv, and curl up with them while there’s still some bed left to sleep on. I know this post seems a little depressing, but it’s meant as a warning. Don’t make the same mistakes I did: let me be the terrible warning for you! You just do your thing, keep on keeping on, and try to do life the very best you can. Until next time, keep on smiling Sunshine.

The Goal Setting Challenge

Amazingly Awesome Boyfriend has quite a bit of debt. Not as much as me (thanks Student Loans!!), but still quite a bit. When he moved in with me the beginning of the month, we agreed that I would handle all of the finances. Because you know, Criminology majors are known for their fancial prowress??

Considering how much debt I have (but how much effort I’ve put into making all my bill payments and paying some things off in the last few years), this is pretty much like the extremely near sighted leading the blind.  So, I’ve started to do what any responsible failed grown up would do: I’m marathoning Princess and anything else Gail Vaz Oxlade has put out on TV. I’ve got my little pad of paper here, taking notes on things she recommends to help people realize how much debt they’re in, and how they can get out of it.

A lot of it is simple: make a budget, get your credit report, have a resume. I’m good at these things. I’ve been working on a budget with AAB, and am pulling out old resume templates to show him the info I need to put a resume together for him. I even found where we can get our credit reports and scores, and am working on that for both of us.

The one challenge that always  stumps me, though, is the Goal Setting Challenge. The challenge itself is quite simple. Gail has the girls look at their life, and what they are doing to earn money. Quite a few of them have started and dropped out of a few different college programs, some are working the bare minimum amount of hours they can, and others just have absolutely no direction in their lives. So Gail has them sit down and look at what they want for a career, and how to set goals to achieve this. Some of them get to try out a career, others get a kick in the butt to go out and get a new job, and a few have gone on to get the requirements needed to advance in their current jobs.

That is where I get completely lost.

You see, since my goals and dreams fell apart years ago (THAT’S a long story for another day!) I’ve had one hell of a time trying to figure out what the hell I’m doing with my life. That’s pretty much step one of setting a goal for this challenge: knowing what the hell your goal is!

I’ve been putting myself out there with resumes, but as time goes by since graduation it seems like I’m getting fewer and fewer responses. I have no clue what it is I want to do with my life if I could have a dream job. And even if I could figure that out, I have no clue how I could afford to go out and get qualified for anything. The career I’m in at the moment has absolutely no way for me to work harder towards advancement, because about 95% of all upward mobility is based on seniority (and I’m near the bottom of the bunch for that).

So what the hell do I do?

This is something I’ve been looking at for myself a lot lately, Sunshine. Basically, I’m a Lost Girl. As fun as that title makes it sound, it’s not all rooster crows and Bangarang here. I’m looking at having no career, no direction, and no purpose in life. It’s damn scary!

So, you’ll see a bit more from me about this whole goal setting thing while I try ot figure out how to make it work for me. And maybe soon, I’ll tell you about that whole “I had a career in mind and worked towards it, only for it to completely fall out from under me, leaving me kinda dangling here wondering what the hell I’m going to do with my life” story.

Maybe.

A Quick Word

I’m sitting here, waiting for my hair dye to do its think, checking Pinterest on my phone. While looking up pins on budgeting, organizing, and getting out of debt, I found a common theme to a good 80% of pins, and it is really starting to piss me off.

Now, let me start by saying that these people who write these articles and make these pins really do mean well. They’re passing on things what really worked well for them, and hoping they’ll work for the rest of us.

That being said, holy tap dancing squirrel turds, these posts are hurting my brain!

“If you want to save money every month, just cut back on your cable bill! Why  pay all that extra for premium packages, when you can just spend a bit more for a good Internet package and stream everything!”

(Well, I already do that. If my current place didn’t have basic cable included in the price, I wouldn’t have it. Haven’t had cable for myself in years.)

“Who needs fancy take-out coffee every day when  you can buy a Keurig! You can make your own coffee and drink it at home instead of spending $5 on a cup of coffee at a coffee shop every afternoon!”

(First off, who the hell is spending at least $25 on coffee each week and wondering why they have no money? I’ve been brewing my own damn coffee for years. Having coffee from a coffee shop is something for first dates and the odd especially crazy day at work. And even then, $5? Hell no! My medium one milk two sweetener is $1.50 at most!”)

“Do you really need a newer vehicle? There are plenty of good, reliable used cars out there! Why not trade yours in, and sink that extra money into your loans?”

(Probably because I can’t afford a used car, let alone a new one to trade in for a used one. I walk, and when I can afford it, I take the bus.  I know that car payments, insurance, gas, and maintenance are expensive, so I don’t have any of those!)

“Set a plan and go big! Sure $100 a month towards your debt seems like a great idea. But what about $1,000? Or $2,000? Or even $5,000? Sounds crazy, but going all in like this is the only way to tackle bigger debts sometimes!”

(Some months, I don’t even make $1,000. How the hell am I going to make $900, but pay $2,000 on one debt? And if I was making enough money that I had an extra $5,000 to throw down on my student loans, I don’t think that loan would be as huge of a problem to me as it is now!)

Are you seeing the trend I’m seeing here?

All of these articles that I’m finding online about paying down your debts seem to think that we are all actually making enough money to do it their way!

Now, I’ll be straight up and honest with all ya’ll. I did 5 years of university, going full year instead of just two semesters, all with student loans. Then when I got out of school, I had a hell of a time finding a job. I lived off my credit cards for a while. Now that I have a job, it doesn’t pay enough to pay all of my bills AND leave me money for things like groceries and bus fair. So I still find myself putting things like groceries and cat food on a credit card. I have so much debt that it feels like I will never get out of it.

That being said, I’ve already made most of the changes these articles are talking about, much like many of you out there have too. We don’t go out buying new cars, and expensive cable packages, and designer clothes. The whole reason we’re reading these articles is to figure out how to do more than we already are doing. We’re already scrimping and saving and living on the bare minimum. We want to know what else to do.

These articles make it all seem so easy too. They have titles like “How I Paid of $60,000 in Debt in A Year” or “I Paid Off $27,000 in 6 Months”. I don’t even make that much in a year, and you’re telling me how easy it is to pay out that much extra in a matter of months?

In the end, I still keep reading these damn articles. If you read them close enough, reading between all of the crap you’re probably already doing, you can still find random little nuggets of hope that you too can work off your debts. Like me, though, you just need to keep in mind that not every suggestion will work for everyone. I couldn’t move back in with my parents, no matter how many times they offer that as a solution to my rent problems, because I’m a 34 year old stubborn woman who just wants to be able to afford her own place. While my current situation is less than ideal, it is still more independent and “grown up” than moving back in to my old bedroom at their house. For someone who lives in an area with horrible internet provider options, or no cable hookups, a satellite may  be your only option for at-home entertainment. And video game systems, while a pretty big expense for we broke-as-hell folk, the hours upon hours upon hours of entertainment some video games and Netflix can provide may be worth the expense.

What I’m trying to say, Sunshine, is you know what I’ve said before: you know what works best for you. While I need my crappy little room in a student rental and a big collection of booze and cheap wine to get me through this crazy little thing we call life and adulthood, your needs may be different. Just be sure your needs are within your means, and you can do this. No buying $40 bottles of wine when you can only afford a $5 bottle; no buying designer threads when you’re on a Goodwill budget. You figure out your best path to a debt-free life, and you work it the best you can.

And whatever you do, NEVER compare yourself to the people who paid off $60,000 in a year. Unless you have that much disposable income to throw down on your debt already, you are in a much different boat than them. And just because their boat is bigger DOESN’T mean they’re better off. Remember: it was the people in those little life boats that survived the sinking of the Titanic, not the people who were still on that massive ship. The size of your ship doesn’t prove your worth.

So keep your heads up, Sunshine! We can all get through this together!

Time to Buy Your Textbooks!

Beginning of every semester, the dreaded textbook list comes out. No matter how interesting the class, how interesting the textbook, how interesting the knowledge is, no one wants to shell out hundreds of dollars on books they will barely ever use. I love books. I collect books. I have a big collection of Stephen King and William Gibson books taking up a whole shelf on one of my bookcases. And I have bought textbooks that cost more than what I spent on that entire shelf.

You don’t have to spend hundreds (or into the thousands, for some people) on textbooks every semester. I didn’t know most of this until my final semester of University, but there are a tonne of ways to save money! Here’s some to help you out.

Check Your Library

At my school, the professor always had one copy of the textbook saved at the library. We weren’t allowed to check it out and take it home, but we could use it in the library. I saved so much money once I figured that out! There will always be those textbooks marked “recommended” on the syllabus that you really don’t want to buy, but often times do. I just went to the library, spent a few hours reading and taking notes, and saved myself $180 on two books we barely used. Check with your professors to see if they do this to. From what I’ve been told, many schools do this.

Thrift Books 

I found this site while looking for a cheap place to buy novels online. I found this place to be usually cheaper than Amazon, and they have a tonne of textbooks! While helping a friend look for a cheaper alternative to her $200 Forensics textbook, I found it on here for $35. That’s a savings of $165!

Textbook Revolution

Now this site is doesn’t have a whole tonne of books on it. But the textbooks on there are free, somewhat. Each textbook link takes you to an outside site to download from. Some are free. Some you have to pay a fee for. While I didn’t find any textbooks that I have used in the past, I did just find a bunch of books on presentations, statistics, and conflict resolution that all linked to the same site. That site has a 30 day free trial if you link to them through this site, which means you can just download everything you need without paying the $3.99 monthly subscription fee.

WikiBooks

Be careful with what you find on here. WikiBooks, while a great resource, is just like Wikipedia: anyone can create an account and edit its content. There also isn’t a whole tonne of content on here. That being said, this is a great site for those times you don’t understand a concept, and just need extra clarification

BookBoon

This site is almost completely lacking in Arts & Social Science books, but they still have a tonne of great textbooks. Everything in their “Textbook” section is free, thanks to their sponsors. And everything in their “Business” section has a small cost. From what I saw while poking around, they have a monthly fee you can pay to get all the business books you need for less than $5. That might be worth it for some people out there.

Free Book Spot

Now, I’m addicted to this site even though I’m not in school any more. The amount of textbooks they have on topics I had wanted to study in school but couldn’t find a class for is just huge! Just clicking on the “Sociology” section brought up three or four books on serial crimes (a major topic of research for) that I couldn’t find in the libraries in my city! This site is fantastic, and is definitely worth looking through if you want to find textbooks online.

Project Gutenberg

Project Gutenberg has an online catalogue of more than 50,000 books. Most of them are not textbooks, but this is still a fantastic resource. I used this my final semester when looking for literature in a few English classes. Just bare careful, this site tends to be a huge time suck, trapping you in its clutches for hours while you look through lists of related books. Browse at your own risk!

eBookee

I find this site bizarre and can’t seem to close the tab it’s in right now. It has a real old-school look and feel to it. I haven’t found any useful textbooks on it yet, but I did find a whole bunch of books that I’ve heard of and possibly wanted to read at some point. This site may take a while to get used to before I can figure out just how useful it is.

Renting Your Textbooks

Now this is one thing I could never bring myself to do. I tended to be quite hard on my textbooks sometimes, and some sites have strict policies on damages and penalties. This is great is you don’t transport your books to class much, can keep them safe, and don’t mind not being able to write or highlight in your books.

  • Textbook Rentals has a huge selection, and categories that make it easier to find what you’re looking for. This is the first site I’ve seen with an easy to find Criminology section, which also had textbooks that I actually used.
  • Cheapest Textbooks is very easy to navigate if you have the book list in front of you. It also has options to buy or sell your books, and FAQ pages to help you figure out if renting or buying is the best option for you.
  • Book Renter seems to have a pretty big selection too, and has the same navigation options as Cheapest Textbooks, letting you search for books my name, author, or ISBN. The browsable categories at the bottom were really weird to move through, and didn’t have all the options I needed.

Second Hand/Used Textbooks

If you don’t want to give out credit card information online, or don’t have a credit card to purchase or rent your books with, then there are other ways you can still buy second hand textbooks.

  • Many schools have a used book store, or certain days when they have used book sales. Just make sure you are getting an edition of your textbook that you can use. Many people get rid of old textbooks after the professor has announced they are switching to a newer edition.
  • Facebook groups are awesome once you find the ones you’re looking for. I found three groups for people looking to buy and sell their textbooks. A lot of times, they even threw in their old notes, or had advice about the class or professor.
  • Online buy and sell sites like Kijiji often have people on them looking to sell their books. For some reason, I’ve always found that the books on there are more expensive than the other Used Textbook options.
  • Check with friends and classmates to see if they’re willing to part with their old books. Again, if they took the class before you, they may have some advice on how to get through it best. And it helps to know who you can go to when you need help understanding something, too.

Well, that’s all I can think of for now. Does anyone else have a great resource for saving money on textbooks? I love hearing from you all, sunshine!

A Crash Course in Credit

I once knew a woman, a very smart woman, who got a credit card her first month of University. The credit card people were set up with with a booth in the student centre during all the welcome week activities, during clubs week, and randomly throughout that first entire semester. They had a cute little spiel ready for students, telling them that now that they’re adults they need to learn how to spend like adults. They didn’t ask these students if they had a credit card already, or if they knew how to use credit. They didn’t explain interest rates, or cash back fees, or penalty fees. And they apparently didn’t explain how payments work, either.

Later that year, while hanging out with this woman in the library, her phone rang and she ignored it. She seemed to be ignoring calls quite regularly, actually, so I asked her about it.

“Oh, it’s just the collection agency again. I told them I don’t owe them anything, so they should stop calling, but they don’t.”

After asking her a few dozen times over the next week, she finally told me why they were calling, and why she claimed she didn’t owe them anything.

“I had a credit card, and it got maxed out. But I don’t have the card any more, so I don’t have to pay it. They said that when I got it. It’s not my responsibility, and they can’t keep harassing me.”

Was it stolen? Lost? No, it seems that when she had maxed the card out, she then cut it up and destroyed it. Now, when she had signed up for the card, they had told her that if any charges were made and she didn’t have the card, then she wouldn’t be responsible for any charges made. Of course, they meant that if the card was stolen, and someone else used it, she wouldn’t have to pay for what they bought. That’s not the way she understood it, though, and she never read her paperwork for clarification. She honestly thought that she didn’t owe any money to the credit card people (or the people at collections) because she cut up the card. And no amount of trying to explain that credit card companies do not make money by giving away free money would convince her otherwise.

So here she was, just a year into her post-secondary education, with student loans already mounting, and her credit already being ruined because of this one credit card.

So, how do you avoid this? Well, I may be both the first AND the last person you would ever want financial advice from. I didn’t read my paperwork when I got my student loans, I don’t make enough at my job to pay my rent AND buy groceries, so groceries have been going on a credit card that is almost maxed out. I have multiple cards, with balances, AND a line of credit to help me pay them all off. Basically, I’m financially screwed right now. I also know exactly what I did wrong, and when, and can point out every single mistake I made so that others can avoid them.

So, with that in mind…..

Know Your Interest Rates

There are no interest-free cards out there. Every card has an interest rate, and most start out around 19.99%. That means that, for every purchase you make on your card that you do not pay in full at the end of your billing cycle, you will wind up paying an extra 20% on that purchase. So those jeans you just had to have because they were 30% off? If you don’t pay them off in full at the end of the month, they were only 10% off. And if you don’t pay them off by the end of the NEXT month, you paid an extra 10% on them.

For every purchase you make, you wind up paying interest if you don’t pay off your card in full at the end of your billing cycle. And if you keep carrying a balance, you keep gaining interest. That initial $100 purchase gained $20 after the first month, bringing it up to $120. Now the 19.99% interest is being charged on the $120. So now you’re paying $23.99 in interest that month, making your bill $143.99.  The next month the interest goes up to $28.78, brining your total owed up to $172.77. See how the amount goes up every month? Every time you don’t pay your credit card bill in full, the amount you owe goes up. And then the interest is paid on the total amount you OWE, not the total amount you SPENT. You may have only spent $100, but three months later you’re owing more than $170 because of interest charges.

Fees, Charges, and Penalties

Some cards have an annual fee attached to them. At the moment, I have a card with an unusually high credit limit, which I carry a pretty high balance on. I pay an annual fee of $25 in order to get a lower interest rate (11.99%, as opposed to the 21.99% the card had before). This annual fee means I save roughly $100 a month in interest fees per $1000 in balance on the card. Since this card carries a high balance, which I cannot pay off very quickly, the annual fee makes sense. If I were to be carrying no balance on the card, or a balance so small that the saved interest did not matter, then paying a fee wouldn’t make any sense. So check to see if any card you’re looking into has any sort of annual fee.

Some cards have fees or charges that differ depending on how you use them. A card might have an interest rate of 19.99% for any credit card purchases, but 23.99% for any cash advances. I didn’t know there was a different interest rate just for cash advances in my first year of university, and took out quite a few one semester when my cash flow ran dry. Looking back, that was a completely stupid idea.

There can also be penalties your credit card company will hand down for things like late payments, short payments, or no payments at all. Want a little more incentive to pay your bills on time every month, other than the threat of financial penalties? How about lower interest rates, better loan prospects, high credit ratings, and a much more understanding bank? I was able to get my card switched to a lower rate with an annual fee because, even when money is ridiculously tight, I make sure I make my payments on time every single month. Banks and credit card companies like to reward things like that.

You NEED Good Credit!!!

Credit cards count as “bad credit” when you have your finances assessed. If you carry a lot of credit card debt, don’t make payments, or have things wind up in collections (your credit card company sells your debt to another company, they harass you until you pay everything off, and you get massive black marks on your credit report for years), your entire credit score is effected. Now, I don’t know much about how to read or assess credit scores. I had it explained to me once, but right now I’m too scared to get my credit report. Between the credit cards, line of credit, student loans, and my extremely low income, it can’t be too wonderful. I know it won’t be too awful either, though. My student loan is read as a different type of credit as my cards, and I’ve always been on time with my payments, which are all good things. But right now, with my debt, I can never buy a home, or get an auto loan, or a small business loan.

Every little bit of credit you get affects your credit score, which affects how much money banks will be willing to lend you. With a good score, you can buy a house with a decent interest rate, maybe buy a nice car too. With my credit, I might be able to buy a house in a few years, but my interest rate on the mortgage will be pretty high. And for my friend who just cut up her card, she let things get so bad that she can’t even get a mortgage at all now!

Rewards Cards

I got an American Express just because I can collect Airmiles with it. I only use it places where I can already collect Airmiles with my Airmiles card, so I wind up getting double the Airmiles. I’m a very active points collector, though. I save up Airmiles to spend on their website on things I really want, like an expensive straightening iron or a big fancy mixer for the kitchen. I collect Optimum points from Shoppers Drug Mart in an almost obsessive manner. I have almost 3 times the maximum points level right now, and just keep saving. I know that in January, my hours at work will be cut drastically, so I use the points then to buy things I need but can’t afford. I also have a credit cards that collects Optimum points as well.

If you know you will be paying off the card, then go ahead an get a rewards card. Just make sure it’s for something you will actually use. Why collect flight miles if you don’t fly?

 

So that’s just a bit of what I’ve learned over the years, from screwing up my own financial situation so badly. I hope it helps you out, so you don’t wind up like me, sunshine.

Budgeting Part 2: Student Loan Edition

When you have a steady income (or any income at all), it’s a little easier to make a budget. Basically, you make sure that “money going out” is never more than “money coming in”, and that all your bills are paid. But what about when you get paid only once?

For many students, the lump-sum student loan is their only real source of income for an entire semester. Somehow, these students need to make sure that this money last them for months at a time, while still paying for essentials like rent and food. While it’s difficult to do, it’s entirely possible (just damn near impossible) to do this.

1) Pay off ALL the school things

That money is for your education. Before you drop a dime on anything else, make sure your education is paid up. That means paying your tuition, buying (or renting) your textbooks, paying for any incidental fees (meal plan, residence fees for on-campus living, health plans, etc)…… ANYTHING that would impact your ability to go to classes and then stay in school until your degree/diploma is done. Some schools won’t let you register for the next semester until all your fees are paid up.

And, before you ask, yes you will need textbooks. You can’t (for the most part) just copy down notes from class and learn from there. Depending on your school, you could have a lot of options. Some schools have a used bookstore, or let you rent books. Others keep a copy of every textbook in the library.  Make sure you know all of your options and make a real, possible to follow, plan of action for your semester (ie., don’t just think you can photocopy other people’s books).

2) Now for monthly expenses

Make sure you have money for all those bills you need to pay off every month. Add up your monthly bills, then multiply that number by the number of months your loan has to last you. THAT number is how much you need to set aside, at the very least, to get you paid off each and every month.

3) Divide up what’s left 

Any and all money you have left after taking out the monthly expenses….. THAT is what you have to work with for the rest of the semester.  This is your groceries, your coffees, your shopping, your emergency money, your going out money. So how do you manage this?

With math!

Take the money, and just divide it. You could divide it by the number of months it has to last, or the number of weeks. Hell, divide it by the number of days you need it to last, if you really want to go that far. No matter how you work it, just divide it up and stick with that number. So you get $350 a month? Then that’s it, that’s all you get for each entire month.

Now, divide that number up however you want. Do you want just a set number you can spend each week? Then divide by the number of weeks in the month, and there you go! Another great idea is to divide your money up by what you need it for. Figure out what you’ll need/want to spend money on (food, clothing, going out, emergency fund, etc). Then, figure out how much you need for each of these things. You can always reassess your needs each month and adjust things if you need to (say, you realize you need more than $15 a week for groceries, or you can’t spend $0 on entertainment and not feel like you’re going crazy).

4) DON’T GO OVER BUDGET!!!!

Every time you go over budget this month, that’s less money you have every month for the rest of the term! If you have no other source of income, then you have to steal from your future self to pay off your present self. Want to overspend on this month’s clothing budget? Then it comes out of your clothing budget for next month. Same goes for groceries, entertainment, and every other little thing you spend money on.

Remember, it’s always better to under spend than over spend. If you have extra money left over at the end of the month, you don’t have to run out and spend it right away. Add it to next month’s budget. Stick it in your piggy bank (you’re never too old for a piggy bank). Save it for the end of the semester, to use to blow off some steam after exams. It’s always better to have that little extra left to save for later, than to be scrambling to get by on $75 for your whole last month because you kept over spending.