Thursday, October 9

May you live in interesting times

Things certainly have been difficult around here.

The Lexapro is kicking in to a certain extent. I am feeling less overwhelmed and more inclined to leave the house. But I am still kind of emotionally fragile.

Meanwhile, we're still sorting through Magic cards. We finally sorted the cards so that each set is in only one spot in the three boxes. But we have to check the boxes at some point to make sure everything was accounted for.

Also, if you'll recall our 0% offer ran out. So I went ahead and applied for a card offer in the mail that would give us 0% for 1 year. The good news: We got approved. The bad news: For $500.

Finally, we had some unexpected expenses -- doctors visits, a few of Tim's shoes wore out, and a few other odds and ends -- which means we actually went up a bit on the credit cards. Part of the problem is that I only just got around to invoicing for my contract work with MSN. Once that money comes in, we can pay down a big chunk on one of the cards.

But seeing the credit card go up was a good wake up call. I had a minor panic attack and then sat down and consulted with Tim about what we could do. Here's what we came up with:

The biggest thing is that we're going to slowly start paying for more things in cash. This will help in two ways. The first, most obvious way, is that we won't be charging up the balance while simultaneously trying to pay it down.

The second way has to do with double-cycle billing. Double-cycle billing is another sneaky credit card company trick. When you can't pay your balance in total, your finance charge is based on the daily average for two billing cycles -- aka months.

If that's a little abstract, think of this way: My card has an average balance of $10,000 for two straight months. On the 61st day, I make a payment of $5,000, bringing my card balance down by half. But my finance charge? It would be figured as follows: $10,000*59 days + $5,000 for one day, then divide all that by 60 days for an average daily balance of $9916.66. In fact, after a month of having a $5,000 daily balance, the card company would still be charging for an average balance of $7,500.

You can see the problem.

I know that, to some of you, it may seem ludicrous that we were charging everything -- and shocking that we haven't made this step sooner. But between my depression and Tim's ADD, we have a long history of getting overwhelmed by finances and overdrafting. So we talked about it and made the choice to take the less-than-ideal route of credit cards.

That worked for a bit, but this recent credit card statement confirmed my fear: We're not able to keep as close of track of spending. We have to switch to cash. Still, both of dispositions mean that we could do great at finances for a couple weeks, then crash and burn. So we are still determined to make the transition to cash gradually. The first step is paying only debit or cash for groceries.

The second major move is that we are going to a nearby food bank. There are three days we can go (written on the white board, since neither of us currently have a short-term memory) and it will help supplement our food budget.

While food rates are slowly lowering, just getting a few fruits, veggies and bread products will really take the pressure off our budget. I'm hoping we can save $50-100 a month this way.

This week, we got some taco shells (last Saturday we had some very tasty ground-turky tacos), some potatoes (eggs are on sale this week, so Tim will make his very tasty "hobo hash"), an onion, some rolls and a couple cans of beans. Next week, we'll have a better idea of what's there and what kind of meals we can make around the ingredients.

We will also be making Grocery Outlet our default store. We were able to get Tim's cereal-of-the-month (he is a cyclical eater), Fruit Loops, for $2 a box. So we got 6 boxes, because I've been snacking on the stuff myself lately. We also got some red and orange peppers for 60 cents each -- whereas in normal stores I've seen them for $1.50 to $2. Things of that nature.

And once again, I'm cutting back on my snacking. It'll be good for my health -- and for our budget. This should save us $6-10 a week. I, like Tim, am a cyclical eater and the depression has added to my snacking urges. This has hurt the grocery bill, significantly. Even on sale, a bag of candy is $2 and I often split it with Tim so it lasts no more than two days.

Finally, we're debating giving up our weekly training session. It's certainly a luxury in some regards, seeing a personal trainer. But our friend Elston is not your average personal trainer. He got a four-year degree in sports medicine and (I think) kinesiology. He then got a secondary degree at Ashmead, studying nutrition, physiology, etc. And he's about the only person I trust to not overwork me, because he specializes in people with chronic conditions.

With him, Tim and I do weight-bearing exercises once a week, and Tim has been reaping the benefits as well, since he has big joint problems with his knees. He has excess fluid on the knees, plus both have been broken two times. One of those was being run over by a car. His knees and back have definitely been better since we have been seeing Elston. And Elston gives us a special friends rate. Still, it would be $180 more each month toward debt. It's something I'm going to ponder over the next few days.

As for the small credit card limit, our options are limited. Just getting the new card probably hurt my credit score a few points. So it would look really bad if I opened yet another account.

I think the best bet is to call the card company and explain our position. The company pointed to our extensive use of credit. Understandable. But I will call and ask to speak with a manager. I will explain that we would be closing out the current United card, which we opened to get miles for our honeymoon trip. Perhaps this will help convince the manager to extend more credit. Unlikely, but then I can ask how long it might be before our account could be reviewed and extended.

If that doesn't yield great results, I will call up Citi and pull the "loyal customer" card. I've had the card for over 12 years. I will explain the situation and see if they can offer any kind of balance transfer offer of a lower-interest rate. Failing that, I'll ask for a lower interest rate in general, since I've been a good customer (and it would guarantee them that I'd carry a balance on my card, equalling interest income for Citi).

If that doesn't work, I'll have to evaluate whether it's worth investigating yet another 0% offer, which would further hurt our credit, or simply suck it up and pay the interest.

A lot will depend on the next few weeks, since Tim was officially accepted for services at the Department of Vocational Rehabilitation. (Yay!) There, they'll help him figure out career possibilities. Depending on whether he'll need schooling, we can make some choices.

And, on another positive note, I officially invoiced today for the first time for my contract work with MSN. That will give us the ability to make a big payment on the cards.

So things continue to be bumpy but overall we are moving forward. I am hoping to start testing out some new, cleaner-looking templates as soon as this weekend. Thanks to everyone who has filled out the poll at the bottom of the page. The feedback is really useful.

Currently, I am compiling an Amazon store based on my own readings and recommendations of people I trust. Once I get it up and running, I'll let everyone know which books I actually read and which were recommendations.



Blogger a.b. said...

Hey Abby,

Hope things continue to get less overwhelming. Just recently hubbin and I went over our expenses too, and we came up with the following:
While all our billpay will still be done online, we are going to a cash system for any entertainment expenses, and gave ourselves each a (very small) personal allowance. Our hope is that this will mitigate our overspending. Two months ago we spent twice our food budget via entertainment and that really can't happen.

A couple hacks I use, I found the local bakery outlet to help with bread costs. Sometimes these are even attached to a the baking warehouse and the smell of fresh bread just makes me feel better. And our 99cents store just started selling produce. I got a bag of fresh ginger root, which I use for tea for upset tummy. Normally this costs easily triple.

And another thought, especially since he's a friend, did you think about asking your trainer if you could temporarily, for maybe six months, drop to every other week sessions with homework to do the next week? It would save you a total of $450 across the six months, but I really think with your combined health situations the trainer might not truly be a "luxury." It is an expense that could be cut, but at what long-term cost to you guys?

October 10, 2008 at 11:00 AM

Anonymous Anonymous said...

You will never regret going away from the credit. It's the best thing we ever did. I would never go back now. I actually enjoy living within my means for a change.

October 10, 2008 at 5:35 PM

Blogger Shtinkykat said...

You're living proof that the credit crunch is affecting all of us. I am not shocked at all that you were charging things. I've certainly used my credit cards in the past to make ends meet. It's not ideal but we do what we have to do, right?

I think it's a great idea that you're going on a cash basis lifestyle since you'll be able to reduce or eliminate new charges.

Thanks for explaining the double billing cycle. I never quite understood what it was or meant to me. I suspect my cc does that since the interest I get charged is always higher than I calculate.

Finally, thanks for letting me know that average, middle-class people are using the food banks as well. I'm thinking about donating money to my local food bank. In difficult times, we need to put aside our fears and selfishness to look out for our fellow brothers and sisters.

October 11, 2008 at 4:01 AM


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