How are your Finances, Bond Grrl?

One of my big heroes is Suze Orman. Her website is www.SuzeOrman.com -- but I first discovered her by going to my local library, and taking out some of her tapes. This way, when I would go out walking, or had a long drive, or even was doing housework/folding laundry, I just popped the tape in my player, and could listen to her...for FREE. (The library is a wonderful, wonderful thing...)

She now has a book called "Young, Fabulous and Broke" or something along those lines -- and I think that some of the things that she is espousing are not that great -- I happen to like Jon Hanson more on this area (you can see an article on him at http://www.send2press.com/newswire/2005-04-0425-001.shtml or his website, GoodDebt.com) He came up with a brand that I adore -- it's "Debtabetes."

What Suze says in her new book is that Young People These Days work in a new economic paradigm -- and I disagree with some of what she says. I think her previous books are spot on, and I really like them and recommend them. I also recommend Hanson.

In general, the deal here is that we don't USUALLY get into debt trouble because of a huge crisis (though that certainly happens!) Why we get into crisis is doing things like getting our nails done, going out for lattes, and such like -- and putting them on credit and then not paying it off.

Also, not understanding that even if we pay our minimums, usually that payment doesn't keep up with the amount that's really due -- and so you can never pay down ANYTHING if you just pay the minimum on the card.

Let me give you an example of what happened to me -- and how I've pulled out of it. I want to use myself as an example (smile), rather anyone else.

In one of the Suze Orman tapes, she talks about the idea of "balance." She basically says that if you look back on one of THE worst times in your life (has to be at least 5 years previously), that if you really look at it, that something equally GREAT came out of that period of time. In other words, that Universe really works a balancing act -- that if the pendulum swings way far one direction, it will come back the other, tick....tock....

I remember listening to that in the tape set (I even remember where I was driving, and this was a long time ago!) I thought about the worst period of my life, which had at that time been 5 years previously. My goodness, it was a bad time. Basically, I had loaned a friend a big hunk of money that I had gotten because my company had been bought by another company, and we got "stock payout" from that purchase. We're talking like 5 figures here...because he was WAY back and behind on his mortgage and second mortgage, and was getting kicked out of his house. He said he now had a steady job and could keep up the payments, but couldn't catch up. So, I gave him the entire amount of money I had gotten in the payout. Before you figure that Mama raised a fool, I DID make him change the title on his house -- basically so I "owned" that house if he stopped making payments to me and/or the present mortgage payments. In exchange for giving him an "interest free" ability to pay down that back debt, I would get the mortgage deduction for the property on my taxes. (Since he had the second mortgage at an outrageous interest rate -- something like 15% -- he was never able to even touch the principal payment with his payments, he was only paying interest and never getting ahead...and in fact he wasn't paying ALL the interest either with those minimums so he was then getting stuck with interest ON the interest...that's the problem I mentioned above with credit cards, too.)

Anyway -- to make a long story even longer -- I wound up finding out that my live-in-James of the time was cheating on me (sigh) and I needed to move. I had been the one to pay the rent on the house that we lived in, but he wouldn't move! He also had about 20 tons of crap behind the house and on the property (he was a contractor) and I realized that if I were to leave, I could leave all that behind. So I did the math -- and realized that I should buy a house, since the payment I would make on a mortgage (after I got the tax deduction for it) would be about what I'd paid in rent.

Then, just not to prolong this story any longer, the following happened:
* I found a house I could afford, got into contract, and in trying to qualify for the loan, found out the "friend" had been lying to me -- he hadn't made any payments on the mortgage, which was in MY name. When I questioned him about it, he was very sorry, but that meant I had to make all the "catch up" payments and beg the mortgage company not to put it on my credit.
* The landlord for the house I had been in with my James found out I was moving, came to visit, saw all the crap, and sued us both. Since he had no assets, I was the one stuck with it, and he ate my entire security deposit and then went for more blood.
* My company that I was working for at the time was breaking into two pieces -- one piece wanted me to go with them. The other (bigger) "piece" found out, and said they would fire me if I worked for the other break-away company in its trying to break away -- so I was faced with potentially losing my salary before being able to "jump ship."
* My James took my horses, "stashed" them with a friend because I didn't have time with all this whirling down on my ears, and wouldn't give them back until I promised to give him 2 of them. I had been willing to give him 1 of them -- but the other one I had found an AWESOME home for, and I knew he just wanted them to "say he owned horses" -- he is a nice, kind guy, but he doesn't actually ever RIDE the horses, etc., they are kinda "lawn art." So this was a huge blow because in giving up that horse I was basically not going to give her the best life she could lead.
* I wound up having to -- get this -- EVICT the guy who owed me that 5-figure sum, who of course now considered me the Witch of the Universe. Then I had to sell his house.
* I sold the house, and the profit didn't cover the amount of money that he owed me -- but worse, since I sold the house without owning it for 2 years, I had to pay income tax on the "profit" I made. So, I wound up losing a huge HUGE chunk of dough and THEN having to pay taxes on it -- which I didn't have $ for.
* I also had to pay out on that landlord thing.

I'm sure there was other stuff going on -- but that gives you some idea. In the end, I was about $30,000 in debt. (This does not include the 5 figure $$ I had loaned out -- that was just gone. This was true debt that I owed. So in reality, I was "out" nearly double that amount.) And, I lost the contract on the house I was in escrow on, and they were really wicked about it -- that's a whole other story.

SO, what happened out of this to "balance that out"?
* I found a WAY better house. It didn't need any work, etc. -- move in condition. It's in fact the house that I own now, and am trying to find a wonderful renter for, because I'm moving in with my James.
* I did go with the new company -- and met my current James (and fiance) there.

These may not seem to be enough "balance" -- but they are.

So what happened with the $30,000? I actually got a financial program (Quicken) and started logging in every PENNY I spent -- yes, even the lattes, nails, tolls, parking, ATM money, etc. Every cent. I did it for a month just logging, then ran a report on where the "money went" -- and when I saw what was where, I started making changes. Because I needed to put where it was "really going" for a whole month down and examine it, before I could make changes. I think this is really important.

Things I got rid of included subscriptions to magazines I could read at the library -- stuff that you just don't think of. Those magazines would pile up without being read on my coffee table -- and I could use that $20/year. There are little things you don't think of, that you NEED to think of, and re-direct that cash to a better use.

I did pay that $30k off -- amazingly. I remember when I made that last payment -- who-hoo!!! It took YEARS...I paid it off actually last December. But it really taught me something. You CAN "do without" all that crap that you think you "have to have." For example for Xmas, I became the biggest 're-gifter' that there is. I looked around my house, and found stuff that people had commented on that they really liked -- and I gave it to them. Or I found hardcovered books and such that I had read but were still in good shape, or jewelry I wasn't wearing, sometimes even clothes and such -- and gave them all away. This got stuff out of my life I didn't really NEED -- and allowed me to do birthdays, Xmas, etc. without going further into debt.

Hey, my cousin, who recently got "downsized" in a job shift, starting going around HER house, and putting things on Ebay. It's been amazing -- she had a signed copy of Harry Potter that she just got over $900 for! That is going to pay her expenses for a LONG time. She also writes up really funny descriptions for them -- she has sold things like 2/3 of a tube of the hair color that she uses -- for MORE than you could buy a new tube for at the store! Sure, she has to package everything up and get it out -- but the point is, she's actually downsizing and "streamlining" her life....and living off it.

So, as a Bond grrl, where do you stand financially? Do you have a ton of $ on credit cards? Well, time to come up with a plan to get rid of them. Are you spending money because you hate your job, or because you're stressed out, or trying to keep up with your best friend? Time to knock that off.

I learned a lot by reading the book Ask And It Is Given by the Abraham Hicks people (www.abraham-hicks.com). Suze Orman in her new book talks about following your passion even if it doesn't pay that much, because if you love what you do, you're less likely to spend to "feel better" -- I totally agree with that. But one of the things I learned through Abraham Hicks is that you can "attract to you" the right stuff only if you are in a positive space about it -- you need to be sure that you do this before jumping to what you think is your "passion" or else that "passion" can burn you! As Barbara Sher (another favorite author) also points out, if your passion is something like painting, don't just say "I'm quitting my job and becoming a painter" -- you'll starve, and it will drive you CRAZY to do your "passion" for 8 hours/day like that. Start small -- join groups -- get it "in" your life and then go for expanding it. As Abraham Hicks says -- don't jump out of an airplane and THEN look for the parachute....or don't put a smiley-face sticker over an empty gas guage and say "it's all JUST FINE." You're going to hit the ground in a big resounding SMACK that way. Just think a little and do a little planning....

Once again, I'm rambling -- but the important part is this. Wherever you are financially -- you can be better. If your cards are paid off, time to put away as much as you can towards retirement, AND to have a little "stash" savings account for a Bond grrl trip. If you take the $ you spend on "Habits" (like lattes, nails, etc.) and save it instead toward a trip to Paris, you will really GO....without running up credit cards to do it.

It's time to eliminate worry from your life as much as possible -- and one of the biggest darned worries there is is money. So, take a deep breath, and start logging where your $ goes for a while month. I don't care if you do it on paper with a pencil. But just do it. Don't change a thing -- just log log log. Then, next month, start the change....and pay off your highest interest rate debts first. Get them gone -- then move to the next, and the next. It took me YEARS to get out of that $30k hole. But I am OUT NOW. AND I am putting away money towards retirement, etc. Because I was "Downsized" about 3 years ago (I now run my own business), I am making now about 1/3 of what I made then -- maybe even a little less. BUT, I am paying a lot more attention -- and so am keeping debt to a minimum and saving for the prize - saving into an account for a Bond Grrl trip and also for my retirement.

In fact, my James and I are going to Hawaii for two weeks -- and the plane tickets I paid for through WorldPoints on my Mastercard (which has no annual fee and a very low interest rate). I ~do~ put everything (EVERYTHING) that I purchase -- even $4 at the grocery -- on that card -- but I also log it, so that I write the check at the end of the month and pay it off before it has any interest accrue on it. (It's important to be sure that your credit card doesn't accrue interest the day you CHARGE on it -- if it does then you need to change to one with a "grace period.") So, my groceries, gas, and the like are buying those plane tickets, and the credit card is at $0 because I know I can pay it every month. How great is THAT?? Having one card to do that with and putting everything on it funnels those benefits to me -- I cancelled my gas card, etc. etc. when I figured that one out. (The key to that though is that you have to LOG IN all those purchases so that you know that you have the money when the bill comes in to pay them! It can't be a surprise!)

How are YOUR finances?