we now continue our previously scheduled splah.

of course, i wound up quitting that job. entailed with the job switch was a switch from driving to using cta rapid transit to get to work, a $75/month pass (bought eventually, after i got over my hangup about the CIA being able to track my daily movements; at first, i paid for transit cards with cash in order to thwart the man. and also because it took effort to sign up for a Chicago Card) instead of several $30+ fillups/month + $30/mo parking to drive. sadly, my employer doesn’t offer transit checks, so this is not a pre-tax deduction (yes, i ask about it semi-regularly! niqui want transit benefits!). also, there was a not-insubstantial pay change, though that didn’t take effect until 2007. in 2006, my effective pay remained the same from the university to the new gig. in 2007, however, someone decided to give me a Very Large Hat, and apparently that pays pretty well. i took advantage of that to send more money to the credit cards, and it’s true that that’s not a very helpful hint to give anyone who needs to get out of debt: hey, go get a higher-paying job! preferably one that doesn’t give you medical problems related to stress and anxiety, like clinical depression, because the workplace is so completely fucked up! (thanks for that, by the way, NSIT.) that said, if it’s an option, maybe you should look into it.

i also took advantage of my changed personal situation — once i was in better working circumstances, suddenly pretty much everything was better, regardless of whether or not it actually had to do with work — to spend a lot more time focusing on my credit card debt elimination goals. so this is sort of a little rundown of what worked for me.

The List

Part the First: easy changes.

• first, i am a dedicated Quicken user. i’ve used it for years to manage my money, although in the beginning not for anything much more complicated than downloading my transactions from my checking and credit card accounts. however, i download transactions daily, and i am now religious about checking it on a regular basis, among the other features i use. generally speaking, every morning, at least 6 days a week, i spend at least ten to fifteen minutes in quicken, before i do anything else (except make the coffee. coffee’s important). i always know where i am, and what is coming up in the immediate future. for this reason, i have not bounced a check since 2004. (which is good, because i learned about two weeks ago, when i accidentally selected the wrong checking account in a card payment web page, and sent a $650 payment through the account with a $50 balance, the Chase account i’m going to be getting rid of soon, zinged me with a $50 overdraft fee — damn. i don’t count it because that was just my failure to operate a web form, not really a bounce because of clerical error. (and it was probably because i didn’t make the coffee before checking my quicken!))
• for that same reason, i know when my credit card payments are due, and i do not miss due dates. period. 1, they zing you with a fee if you do, and 2, they increase your APR. thanks to Universal Default, if you miss a payment anywhere, everyone else can raise your APR too. in 2003, i was charged $404 with 12 late fees; in 2004, $179 with 5 fees; and in 2005, $273 with 7 fees. since then, i haven’t missed a single payment. i am a massive procrastinator, and the best way for me to make sure i do not miss anything is to check every day. i know my personal quirks, and i’ve developed workarounds to help avoid invoking them. the best thing i can say there is know thyself, for only then can you hack yourself.
• I make lots of payments to my credit cards. Not one per month. Maybe this is less applicable if you don’t have as much time to spend focusing on this as I, but — just this month, I’ve made 7 payments so far, on 3 cards. When I charge something new, I immediately go to the card website and pay for it as soon as it posts. Now that the cards are paid off, I do it for the psychological reassurance of the 0.00 balance on my Quicken Insights page (I just paid off a $6 Visa charge for a book I got on Amazon the other day), but even before they were paid off, I did it (when I could) so that new purchases would not accrue interest — when you revolve a balance, even new purchases are subject immediately to the standard APR, you don’t get the grace period. So I still used my cards even though they had a balance, but later on I learned to pay off my new charges so at least I wasn’t digging any deeper (much).
• i used to forget utility bills sometimes, but then i entered them into Quicken as Recurring Bills, and now i haven’t missed one since 2004. Quicken seriously can help save you from yourself, if you let it. (and if you are spending 10 minutes a day in the program anyways, you find the time to do these things, as bills come in and you just deal with it the next morning — even if you don’t pay it right then, enter the bill and its due date, and quicken will remind you when it’s time to pay it.)
• dudes, if you get nothing else from this list: QUICKEN QUICKEN QUICKEN. or MS Money, or (*shiver*) GNUcash, or Excel, or whatever, but seriously. the computers are good at math. let them do the math for you. trust me on this.
• Quit buying coffee. It costs them $0.05 for a cup, $0.05 for the beverage; you pay $1.75. Screw that. If you want to drink coffee on your way to work, brew it at home and put it in a go-cup, which can be had for $$cheap at a thrift store (hey, wacky logos for companies you’ve never heard of are trendy now, dontcha know). Don’t put Dunkin Donuts through retirement for something you could make at home or at work. p.s. For the cost of 4 large Dunkin Donuts coffees, you can get a bag of their beans, if you like their stuff better than Folgers. It’s still cheaper. Also, you will always put in exactly the right amount of cream and/or sugar, if applicable (I swear my local DD puts in like a quarter cup of sugar. It’s coffee syrup, man.).
• Get a notebook, and keep a journal. Any time you ever call anyone, for any reason, relating to anything financial, date the page and take notes. Write down phone numbers so you don’t have to look them up anymore. Jot down notes about what your APRs are, what your balances are. Write down what your goals are. Write down what you think you can accomplish. Keep copious notes, and refer to them when you forget something. You don’t have to write about your feelings, so it’s not a diary so much as it is your phone log, unless you really want to write things like “I WANT MY GODDAMN TAX REFUND NOW GODDAMMIT” (I did!). You’ll be surprised how convenient it is having something you can just grab and look at whenever you want to call your bank and argue about some dumbass maneuver they did, or jot down ideas for things you can reevaluate to save money. The notebook is your friend! (p.s. If your handwriting is bad, make sure you can actually read your notes once you’re off the phone, before you close the notebook. Just sayin’.)
• Take the credit cards out of your wallet. I pinned mine up to the bulletin board in my office, where they were more or less inaccessible in most circumstances that I would have used one. I had one which I paid off first, with a $0.00 balance, which I carried around with me in case of emergency and also to charge my medical bills to (so that I’d have an easier time accounting for them come tax-time, if they were all on one bill; I always paid those off immediately, I just used the card so the medical charges wouldn’t get all jumbled up with everything else in my checking account.). Everything else stayed at home where it couldn’t get used. This had a huge impact on my not building up the balances further, since psychologically it became harder to spend money when I had to stop and make sure there was money in my checking account (and that it was in my budget) for a given purchase.
• I used 43 Things to keep me on track. It’s just a simple to-do list sort of site, with a little community around each individual goal, but it turns out there are lots of people out there who want to pay off their credit card debts, and the “cheer” function made me happy, both every time someone cheered me on making a credit card payment, and every time someone else did and I was able to cheer them. Plus, it lets you set deadlines for your top goal, so I set my top goal to paying off my credit card debt by my birthday, and so every time I checked 43Things it was right there at the top of my page, reminding me how many days I had to go. It was surprisingly very useful.

note: for every time i say i use Quicken to tell me when to do things, you can substitute “calendar.” if you don’t have money management software, take down your wall calendar and for the next month, whenever you get a bill, go through the rest of the months of the year and write down “XX BILL DUE” on that day for each month for the rest of the year — better yet, write it down on the day 5 days before it’s due.

Part the Second: annoying changes.

• I gamed the balance transfers. I think that gaming the balance transfers can be great, but you have to be cautious about it because if you have even one late payment, they’ll revert it to the standard APR, perhaps retroactively. I always made sure to make my minimum payment in the middle of my billing cycle, so I wouldn’t forget it, and then I threw extra money at it on my paydays. I probably saved about $800 in total interest charges (even after the transfer fees) by doing this, but I only started doing it after I got much more efficient with my accounting, so I knew I wasn’t going to blow it by forgetting a payment. If you start doing stuff like this, the notebook is key.
• Quit your cable company. The customer service sucks, the company is a bunch of bastards, the service goes out semi-regularly, and they’re always raising your bill. Screw them. Buy Spongebob on DVD and watch more public television. Fuck Comcast and all their equally evil-slash-incompetent little friends.
• Rent fewer movies. I used to have the 3-discs-at-a-time Netflix plan, until I realized I hardly ever watched that many movies. In fact, usually, I’d hang on to the discs for 6 weeks or something. I switched to the $5.99 one at a time/two a month plan, and now I spend much less money for the privilege of having a little red envelope sit patiently on top of my DVD player. (OTOH, if you quit Comcast, you might want a higher turnaround Netflix plan. $30/mo is still cheaper than $80. So, again, know thyself to hack thyself.)
• Quit buying things from Amazon. They make it too easy to spend money. Just don’t even open up the site. If you must, and you find something you like, add it to your wish list. You won’t forget it, that way, and if you really want it, you can buy it later on.
• Switch to Peapod or an online grocery service like it, if you can. (a), they hand out so many coupons you can often get free delivery anyways. (b), comparing prices, buying sale items, and sticking to a list abruptly becomes completely trivial. Also, you don’t spend time roaming up and down aisles finding things that you suddenly think you want, while being assaulted by offensively bland Muzak. (Plus, if you’re me, you no longer have to schlep 12 packs of La Croix up to the third floor. Win-win.) In between big Peapod “trips,” supplement your groceries as necessary with quick trips to the local produce store or trips around the perimeter of the supermarket for only fresh items. Your goal is 10 minutes or less; you don’t have time to stare longingly at the impulse buy section, because you are on a mission. Oh, and at least have an idea of what you’re going to make before you buy your groceries. Don’t just pile junk in there because you might suddenly want to learn to cook Indian.
• (Learn to cook Indian. It’s really good. Fresh hot naan kicks ass.)
• I don’t buy prepackaged food, for the most part. I cook a lot, and I usually do it from scratch. It’s cheaper too, and it’ll give you the sense of moral superiority you need to get out of the gravy mix aisle without putting $20 of flavored rice side dishes in your cart.
• Find the cheaper version of what you want. I like making chili, and I would usually buy canned kidney beans to do so. Turns out, a $0.65 bag of dried kidney beans is about the same amount of beans as 4 $0.90 cans. When you buy canned kidney beans, half of what you buy is water you dump down the drain and rinse off. Hell with that. I can pick and soak beans just fine, takes me ten minutes. Plus, see above re: badass self-confidence in the kitchen for cooking from scratch. (Don’t know how to cook from scratch? Who cares. There’s a whole Internet of people around you who are good at it, and if you can read this, you can follow a recipe.)
• Go over your utility bills when you get them, and look for things you can change. You can’t change how much a therm or a kilowatt-hour costs, but can you change how much you use? I hate being cold — I really hate it. My hands get so cold I can’t type. My ideal indoor temperature is 72°F. That said, it’s 66°F in my house now, and it turns out I’m relatively comfortable if I put on a sweater over my t-shirt, and slippers over my socks. If my hands get cold, I go get a cup of coffee. Overnights, I turn it down to about 62°F — I’m under the comforter, the cats have fur coats, what do I care if the temperature isn’t balmy? It hasn’t killed me yet, and neither has turning out the lights when I leave a room. If you don’t like leaving rooms totally dark while you’re still up, go to K-Mart and get $6 or $8 worth of clearance pillar candles in the dippy colors nobody wants, they’ll last you all winter.
• Give up Call Waiting, Caller ID, and all the other overpriced crap your phone company wants to sell you. I gave up my $3/mo unlisted number and turn the ringer off, which thwarts telemarketers just as well. Screw Ma Bell.

Part the Third: Hard stuff.

• Learn to do without. My cordless (landline) phone died, and I wasn’t that sad, actually, because it was of the frequency range that knocked my wireless base station off the network when I used it. But I didn’t want to spend $100 to replace it on a shiny new one, even if it was a fine excuse to get one that was in a different frequency range. So I didn’t. I eventually wound up, about 8 months later, finding an open-box clearance model at K-Mart, for $30 marked down from $95, and I felt 1000% badass for having waited and scored a bargain.
• Set a value for things — not what it’s worth to Target, but what it’s worth to you. It’s really hard to deny yourself things but you have to do it because otherwise, you’re just spending money again. I used to buy DVDs, because I love various TV series and I wanted to have them. I kept telling myself that I would only buy the ones I really really wanted. This failed, because, as it turns out, I really really want everything. Eventually I picked a price — $35 — and said I would only buy DVD sets that were under $35. (The price point was picked, by the way, because that was what a season box set of M*A*S*H cost at the time, and I love M*A*S*H.) Turns out, they sell a lot of box sets for $40. Problem solved. Year to year, I immediately started saving over $200/year on DVDs.
• (That also had an effect on my buying movies on DVD, because the price point of $18 or $20 for a new release movie is proportionately enough of my $35/month budget that I didn’t want to spend it when I could save up for something that was a whole season of a TV show. I now have lots of movies I got used or heavily discounted for $10 or less, but if I still really want something new, $20 is still in the budget.)
• Don’t settle, and don’t buy crap. Recently I had a total craving for a hamburger — I hardly ever get hamburgers — and the closest thing at hand was a McDonalds. So I got a Big Mac Extra Value Meal for lunch one day at work. It was a complete disappointment — the Big Mac was a disappointment, and I still wanted a hamburger — and therefore a waste of $5. On the other hand, in 1998, I spent $100 on a pair of Sony headphones, that are still in great condition and work just fine at 10 years old, which beats $200 buying a new set of earbuds every year after the old ones die. Don’t buy crap. If you don’t have the money for the good one, still don’t buy the crappy one. If you develop a sense of consumer snobbery, I guarantee you you’ll save money just because you will sniff at the crap and pass it up, leaving money in your pocket to pay off your debt. Snobbery rules! (Just, you know, don’t be a dick about it.)
• Budget. Budget budget budget budget budget budget. It’s a pain in the ass and it’s hard and annoying and you’ll screw up consistently for the first eight months because you don’t know what you’re doing yet. (“How much do I spend on buying coffee per month???”) Do it anyways. Paying off significant credit card debt isn’t instantaneous, so you’ve got time to work on it. You’ll get better, and you’ll get smarter to your own habits, good and bad. Also, you will feel consistently badass for every line item you come in under, even if it’s only by $0.25.
• Quicken has a budgeting tool that’s pretty easy to use. It will even help you out by going over the past and estimating your future spending based on what you’ve done previously. (This is great if you’re looking to shock yourself about where the hell your money goes.) And then there’s a little Monitoring widget that has tiny bar graphs for each category you want to monitor, and they’re either Green, Yellow, or Red. Can’t get much easier than that.
• When you set up your budget, first set it up with what you think things should be. You want to spend no more than $200/mo at restaurants? Great, put that in for Dining. Think your phone bill is $50? Put that in. Put in the minimum payments for your credit cards. The first time you do it, accuracy is not really the point. The point is having some vague idea of what you’re spending. Add it up, and compare it to your salary. Is it more than what you bring in? Less? If you have less there than you are bringing in, then go add more to your credit card payments. If you have more, figure out where you have budgeted more than you can afford, and cut it back. Correct the amounts over time — as you get your utility bills, etc. Cut back on fun things, like DVD rentals or hobby expenses, and add that to your credit card payments.
• Pick a monthly budgeted amount for your credit cards, and STICK TO IT. If your gas bill is higher one month, eat ramen noodles to cut the groceries. Ramen for a week won’t kill you. 29% APR for the rest of your adult life will. Don’t bargain with yourself over your credit card payments. You will NEVER, EVER make it up next month. Think of your credit card payments like a mortgage payment — if you miss it, they will take your birthday away. Find wiggle room in other areas.
• Balance your retirement goals with your credit card debt repayment goals. I personally am pretty paranoid about retirement savings, and whether or not I’ll have enough money saved when I retired, because I missed so many key years in my early 20s (and what I didn’t miss, I later cashed out, at a 10% + taxes penalty). So, last year, I could have not contributed to my 401(k) and kept that cash to send to my credit cards. But I compromised. I didn’t put as much in my 401(k) as I wanted; I put in $400/mo. Had I kept the cash, I would only have had probably $250/mo (after taxes). The lost $150 wasn’t worth it to me, even though I could have had $3000 of debt eliminated through that cash by the end of the year. You have to figure out your comfort level, do the math on your taxes (if you save $200/mo, does that put you in a higher tax bracket than if you saved $300/mo?), figure out what the relative costs are for the options, and pick the one that makes you happier.
• Don’t fear asking the people you owe money for favors. If you get charged for something stupid, ask them to reverse it. What’s the worst that can happen, they say ‘no’? One time AT&T changed the text messaging terms on my phone and I didn’t notice, so I wound up getting billed for $40 over my base text messaging plan for excessive texts, I called and asked nicely for a credit. They gave it to me. I saved $40. Yay saving $40. OTOH, I called Chase a couple months ago and asked nicely for them to lower my APR, which is 28.24%. They said no. Whatever, I’m no worse off, at least.

Part the Fourth: things I would do differently if I had it to do over.

• Obviously. Stop using the fucking cards to buy stupid shit. I bought lots of stupid shit. I don’t mean the times I bought groceries or car repairs, I mean candle holders and junk. A lot of it I wound up giving away. I could have used the money more than I could the tax deduction for the donation. I should have thrift-shopped a lot of the stuff I got when starting out in my new apartment, but it really didn’t even occur to me. New new new!
• When you budget your credit card payment, do not make yourself miserable with it. For every pay period I spent every penny I could, and left myself with $20 to get through the next 14 days — because I was literally getting my paycheck direct deposited one evening and the next morning when I woke up, I’d send it to the cards — I chewed my nails and was obsessively worried about if I had forgotten something and what if I bounced a payment and what if I needed groceries.
1. Leave yourself a hundred bucks in checking. It’s comforting just to have it there. You’ll be happier. Trust me.
2. If you do end up buying groceries in this situation, you will be putting them on plastic. NOT HELPING!
• Do what all the personal finance weenies say: Before you start making more than the minimum payments, build yourself a cushion. They usually suggest $1000. This would have come in handy when I had to charge a $1200 brake repair job, or when I had to pay $1000 in vet bills because my cat got sick. I actually just did the math (with Excel. I’m not nuts.) and, had I had to charge only $200 to a card with a $10,000 balance and a 28.24% APR (both my worst case scenarios), then pay the minimum for 5 months more before resuming a $500/mo payment schedule (to pay back $200/mo into my cushion fund), I would have paid about $150 less in interest over the life of the loan than if I just constantly made $500/mo payments to it after charging $1200. Good to learn that now. Nice work, there, Brainiac.
• Call my cards more often to say “Hi, can you lower my APR, please?” Today, I spent about 40 minutes calling all 4 of my cards (one of them twice). Chase first, to ask for them to lower my APR from its current, ugly 28.24%; they said no, just like last time. Then I called Barclays, who said sure thing and dropped me from 22.74% to 19.99%. It’s still not fantastic, but I’m not going to complain. (Especially since I’ve had the card less than a year, at this point.) Citibank was next, but I was a dumbass and should have looked at my statement first: I was already at their lowest offered APR, 13.24%. (Citi had the nicest phone agent. It was literally a pleasure to speak with her.) Last on the list was Discover (who also had very nice phone agents, but Rick was no Betty), who also lowered my rate — from 22.99% to 18.99%. Then I called Chase back again, just for the hell of it. (They still said no. Luckily, I already think Chase sucks, and mostly stopped using that card at all for anything, so this isn’t exactly a heartbreaker.) Still, it’s not bad for a day’s work. I should have done this in 2003. And then in 2004. And then in 2005…

anyways. there’s lots of stuff i could say about the process. it was very hard to do, and frustrating because i felt like i was trying, at the time, even though i wasn’t getting anywhere. it was like i couldn’t make the connection between my new charges and the bottom line. it was pretty much impossible to draw a distinction between getting to go see a baseball game and the end price of the tickets after they’d appreciated a year’s worth of interest. and frankly, now that it’s done with i’m still somewhat anxious about it (see above, re: paying off charges the day after they post), and don’t really know what to do about it.

that said, i have a vacation coming up — this coming weekend, i’m going to las vegas with friends — and i’m going to take care of a little of that extra cash i have on hand now that i’m not sending $1600/mo to citibank. :)