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the debt crisis has me seeing green
by carrie deahl
8.8.11
general

Greed. Corruption. Fear. The American economy and the government policies that drive it reek of these three words. Following the coverage of the Debt Crisis the past few years has not only become redundant, it's nauseating! But I will say this, it's forced me to change the way I think about money.

I, like many Americans, applied for and was given my first credit card at the ripe age of 18. Fresh into college and "adulthood," I thought having a credit card would earn me respect, spending power, and help me establish credit. This naiveté combined with parents whose spending habits ranged from buying the best quality products (regardless of cost) to living from paycheck to paycheck could only amount to trouble. I didn't recognize my debt problems until years later when I graduated from college with huge credit card balances, high interest rates, and school loans to pay for on a first-year teacher's salary.

After college, my denial about my own mismanagement of money along with my lack of knowledge about how credit really works led me into further debt. Eventually, I wound up in a debt management program because I thought it was the right thing to do, and I would learn to manage my money better. After 5 years in the program, I paid off one credit card and celebrated by spending more of that faux money with other credit cards.

Blinded by 0% interest rates for 12 months, I thought balance transfers would help. And for some time, it did. I narrowed down my credit cards to 3 cards. I paid one of these off. Capped the limit to $500 on another. And have been working on paying the one with the largest balance off for the last 4 years.

Then, I bought my first house with no money down, an ARM, and a mortgage payment that seemed possible. After 18 months, I received an escrow check for over $1,000, deposited it into my checking account, and spent it on??? Shortly after, the ARM kicked in and my house payment increased. Okay, I maybe I shouldn't have spent that escrow check, but I can still manage...

A year later, my mortgage went up again, and the economy took a turn for the worst. After consulting with a lawyer and an investment broker, I quit making my mortgage payments. I'd heard about loan modifications and attended a seminar with thousands of other people who were also trying to save their homes. I learned about debt to income ratio, how to plan a weekly budget, and how the loan modification process is "supposed" to work. I, like so many other Americans, held hope that I'd save my first home. But when the bank approved my modification, the non-profit group I'd been working with failed to inform me that I'd been approved. After 6 weeks, the bank reneged, and I had to start the loan mod process all over again.

After 18 months of battling with the non-profit group; one of the"Top 3"; and countless hours of phone calls, tantrums and tears; I gave up on the loan mod process. Earlier this year, a friend convinced me to short sale my house through the Home Affordable Foreclosure Alternative (HAFA) program. It's taken 5 months of paperwork, phone calls, emails, but I'm finally in. I have my doubts about HAFA, though.

So, what have I learned through all of this? Well, I've learned to start paying more attention to things like debit card fees that are tacked on at gas stations, restaurants, and retailers. I look for those signs that are posted in awkward places that speak of such "fees." I've figured out that if I pay with cash, I can purchase gas at a lower price, and I won't get charged a .45-cent fee each time I use my debit card. If I pay with cash at my favorite taco shop, I won't get a .60-cent fee there, either. Sometimes paying with cash forces me to dip into my savings, but in the long run, I keep reminding myself that I'm saving money by not using my credit cards.

I read the fine print on my credit card statements carefully, and watch the interest rates and credit card limits carefully as well. Once a year, I try to negotiate with my creditors to keep my interest rates low. As often as possible, I try to pay with cash over credit. When I do have to pay with credit, I set a deadline for when to pay the balance off, and I pay over the minimum payment. I've kept a zero-balance on one card for over a year now.

Frugality is now a word in my regular lexicon. I cut coupons. I try to buy things that are on sale or discounted. Currently, I'm trying to eat at home more often, or only eat at places I have coupons for. I haven't completely fallen into the coupon craze , but I'm paying more attention to those annoying stacks that fill my mailbox each week.

I've also fallen into a habit my grandparents taught me: roll those coins! I used to take them to the coin machines until I realized most of them take an 8-10% fee! I know 8-10 cents out of every dollar doesn't seem like much, but when I have $106 in combined change lying in the ashtray of my truck, the jars around the house, and in the laundry room that 8-10% adds up. Who knew rolling coins could be therapeutic!

Being honest about my spending habits, tracking where my money goes, and paying more attention to ways I can save money have allowed me to have some intriguing conversations with friends, family, and my students. I'm not sure I have my spending habits, the American economy, or the Debt Crisis completely figured out. But lately, I spend more time thinking and strategizing about where my hard-earned dollars go. And that has me seeing green...






ABOUT CARRIE DEAHL

Writer. Reader. Teacher. Consultant. Activist. Takes life and herself a little too seriously. Relishes moments of humility. Believes peace is possible through education. Believes writing is the way to freedom. Unleashes the written word daily.

more about carrie deahl

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