Archives for posts with tag: Debt

Too Many

I have a great desire to simplify and consolidate my life. The easiest place (of all places) to apply this is my finances. I have 1 checking, 3 savings, 2 ROTH IRA’s, 1 brokerage, and 1 401K account split between 3 institutions. In the past few days I have rid myself of 2 savings accounts and thereby 1 of the institutions, and consolidated the ROTH IRA’s. I have 4 credit cards that I’d like to get down to just 2, once I pay everything off.

My debt is feeling overwhelming at the moment, which I interpret as the driving force behind my general desire to simplify and control. I am actually doing an awesome job with my debt and I should be feeling more in control of my financial destiny than I have in years. I have paid off 30% of my credit card debt since the beginning of the year and I’ve also started rounding up my car payment and giving an extra $45 every month. It makes me feel better even though it’s barely a drop in the ocean of the loan.

I track every dollar I spend, still contribute a modest amount to retirement and savings, and my net worth – while still negative to the tune of $9K – has improved massively over the last 8 months.

My goals from now through the end of 2013 are to pay off 3 credit cards (approx. $12K) have $30K in savings/retirement and generally simplify every aspect of my life. I am making phenomenal progress on these goals, but I’m finding it’s a hard to week to keep the faith.

AMEX

My second wake-up “your finances suck” call came last September, when AMEX politely informed me they were cancelling the extended payment option on my account. Thankfully they were still allowing my $31K balance to be paid over time, however, all future charges would have to be paid in full. Also thankfully, they informed me of this before I’d had a chance to charge another $5K of outfits in that particular billing cycle.

This is why I have such a love/hate relationship with AMEX.

AMEX was the spark that ignited my explosive spending. It’s always been my card of choice. I had a Platinum one, because that’s the story I wanted to tell. My credit card said SO much about my fabulousness and my status in life (It did! It told everyone I was shallow, irresponsible and in debt!!!). I should have dropped the Platinum the first time I woke up and paid it off, but despite the $450 fee, I wanted to keep that warm and special feeling.

NOTE: My AMEX has since been downgraded to Green and despite it being the oldest account on my credit report, I will be cancelling it when it’s paid off later this year. I prefer the story my Green Card tells. It’s in a drawer still wearing it’s “Activate Me” sticker and it’s cut into two pieces. I also got a new card number so I don’t have it memorized if I ever wander onto shopbop.com or similar.

But when all is said and done, I do love AMEX very much, because they have also been the catalyst for my wake up calls. They have twice cut me off before I’ve gotten so far adrift I can’t save myself. For that reason alone, AMEX will always have a special place in my heart.

I started a blog last year and failed just like my first attempt to sort out my finances. In the absence of Anderson Cooper, I stated I was doing it to “keep me honest”. Bull$hit as it turned out. I stopped blogging as soon as I had some bad behavior to admit.

I don’t have a particularly exciting financial story. I charged up my 15.2% APR AMEX with a bunch of fancy shit I don’t need to impress Jones’ I don’t even know. I cashed out $15K from my old 401(k), took the big tax hit, paid $12K off the card and went Joan Crawford on that debt, paying off another $10K in 4 months. Then I did the smartest thing ever… transferred the remaining $18.5K to a brand new 6.9% MasterCard. Not so smart as it turned out. I HATED that AMEX debt with a fiery passion. I didn’t hate it when it became a balance transfer because there was no more emotion associated with those dollars. So what happened? I got complacent. And then I charged the shit out of that AMEX again. [LESSON LEARNED: CUT UP THE CARDS!]

It started with a pair of sunglasses. Actually, it started with weakness for a handsome colleague. Again, that’s a whole other story and I’m only pledging full transparency in all matters financial at this time. 😉

Where was I? Oh yes, a lunch date with a beautiful British man and a throwaway comment about my sunglasses. Followed by a night all alone in a hotel room and a thought that it couldn’t hurt just to check out sunglasses online. What do you know, I’d done so well paying off so much debt, I deserved a little treat. Those sunglasses turned into new jeans, turned into new outfits for every meeting I attended with this man, to complimentary shoes and accessories for those outfits, to… Ugh, the picture is clear. I’ve created a whole life story that isn’t mine.

Unfortunately, my story is actually $15,675 on my 15.2% AMEX. $17,200 on 6.9% MasterCard #1. $3,685 on MasterCard #2, which is 0% if paid by 12/31/2013. $2,640 on Retail Card that is 0% if paid by 10/16/2013. All adding up to a grand total of $39,200 in toxic debt. Did I mention the $39,846.27 outstanding car loan? I sure drive a nice car.

I’ve never missed a payment, and my “I LOVE DEBT” score is 756.

The one thing I did do somewhat right last year is contribute to my retirement savings again and build an emergency fund. It’s a pitiful amount for someone in their mid-30’s but this isn’t about beating myself up, it’s about celebrating a success in a crap-load of failures. I have roughly* $14,357.82 in savings and retirement accounts. *I say roughly because the markets suck and I’m sure my 401(k) took another dive today.

The cards are cut up, the budget is solid, the net worth is wildly negative but has been increasing steadily since August.

And that’s all the news that fit to print. At least for today. X