Spring Forward 2013: Beginnings of Debt Free life

Wipe our Debt
Wipe our Debt (Photo credit: Images_of_Money)

So this is the spring of 2013. Yet when I go outside, it still feels like Winter of 2013. The temperature is still hovering in the mid 30’s and I’m cold.

To me this spring is always the start of something new. This year, it’s the end of a burden and the start of a fresh start for something that I’ve written about in many of my postings. This topic of course is the ugly head of debt.

For the first time in over 20 years, I can truly say that I have zero credit card debt. Unfortunately, I was able to achieve this success not due to my ability to save money and pay off debts but due to the passing of my elderly father and his ability to save money for his children, so they can have the fruits of his love. The art of being frugal and saving.

I tell you, to have this burden of debt lifted off my shoulders is like having this huge elephant (that has been following me around for so many years), disappear. Now the task that remains for me is to make sure that I NEVER EVER get into this situation.

Here are some of the things my dad taught me that I didn’t learn till after he left us:

  • Live below your means. This doesn’t mean you have to live like a miser, but if you have things that work, why discard them for the latest greatest thing? For so many years, he lived with a 25-year-old 19 inch tube TV which was not even cable ready. Not until, did the picture fade, did he allow me to get him a new television. Once I got him the new flat screen, he did realize what he was missing, but he still said, “I could have lived with the old TV”. This may sound crazy to most but it makes sense to me now: This is how he lived. He didn’t need the latest greatest gadgets. He lived in a very modest apartment and to him, he had everything he needed. A sofa, recliner and his TV. He was happy with this so he could watch his beloved Yankees. Till the day he passed on, he didn’t even own a cell phone!
  • Don’t incur debts you can’t pay off – My dad, lived debt free for all his life. He never, ever had a credit card debt. As a matter of fact, he didn’t even use an ATM. If he spent $1 on credit card, he immediately wrote a check for $1 to the credit card company. I remember when he got me my first credit card when I graduated from college. He said to me: “If you can’t pay off what you buy, don’t buy it”. Now I get it.
  • Live to save for tomorrow, for tomorrow you may not have anything to save: Savings and self-preservation were the two of the mantra’s my dad lived with every day of life. He felt he would lose everything and would not be able to live independent. He didn’t want to be a burden on his kids, so he saved, saved and saved every day. I was always on his case to live a little, but he would just shake his head and say “one day you will understand”.. Well Baba, I get it now.. Thank you. 
  • Live Frugally: My dad, was so frugal that he didn’t need to buy new clothes. Ask yourself, how often do you buy new clothes, when your clothes in your closet will do just fine? Every aspect of his life defined frugality. He owned a car that was over 10 years old, everything in his home was things he had acquired from people who left stuff behind when they left the complex he lived in. He lived with the bare necessities and didn’t need much more. 
  • Vacations – Are a luxury not a necessity. When we were growing up in NYC, my dad took us on vacations, yet he only took us to places that he could afford. It was not a democracy. He worked for the airlines and we traveled by air for free and stayed in budget motels. No 3 or 4 stars for us. To me, I love vacations, but vacations always added to my debt.. I was taking vacations that I could not afford! So basically my taking 2 vacations per year put me in a deeper and deeper hole.. 

Living in debt was part of my every day life and I was (am still) obsessive/compulsive about it. I wanted to defeat it.. on my own terms.. I failed miserably. To me debt was always a moving target that no matter what strategy I tried, I could not defeat.

Today, as I look forward, living debt free is not just my goal, it is my passion. The lessons I didn’t learn over the past 20+ years will be etched in my memories. I never ever want to go backwards into that hole of despair.

I guess that’s what spring time is for, as the seasons change, so must I and grow.

Direct Buy – Are you a member?

A few weeks ago, I received a nondescript bulk mail saying this was my last chance to get a free “Microsoft computer or touchpad”. I was in jeopardy of losing out on this great deal! So instinctively I called the phone number on this mailer as I did not want to lose out on the deal of a lifetime. Everyone that knows my mantra, “If it’s free, it’s for me“.

This mailer was of course for a DirectBuy sales pitch presentation in Edison NJ.. Here’s my review of my visit..Of course your mileage may vary and all that legalese.

Today my wife and I went to a Direct Buy Showroom in Edison NJ. We were drawn in by the promise of a “voucher” for a laptop/netbook or touchpad. Of course to get this you have to endure an hour and 45 minute presentation and the gratuitous heavy sales pitch. Even after knowing of this up front, I convinced my wife to go with you to check it out. Hey  my wife and I had some time to kill on a Friday night and how bad could it be? BTW, those are famous last words that have haunted me in many situations in my life..

Of course even before the date of the presentation, you speak to a really nice agent, who assures you that you are not going to be pressured to buy anything.. They just want to provide a presentation.. yeah right..

Direct Buy is a catalog shopping/ordering showroom where a sales rep from DirectBuy helps you order everything for your home (Except Computers) at wholesale or “manufacturer’s prices”.  Sounds good right? Here’s the catch.. The Membership fee is outrageous. The membership fee is almost $6,000 for a period of 5 years and $190 for each year for years 6 – 10.

Why is the membership fee is so high?

How do you get the best value for this $6K membership?

First you get your “guide” who tells you how much you can save for about half hour and then you get the other “Peter” who  spends over an hour talking about DirectBuy and how much you have to be a member of this buying service by showing videos of some low-level TV starts to show how great DirectBuy is for your home purchases. During the presentation, me being the skeptic was googling on my smart phone, reviews of the DirectBuy experience.  I personally felt some level of brain washing going on during these videos which automatically turned me off. Many say DirectBuy is a scam, but I don’t think it is. That is if you can afford this expense in your life!

In my opinion, this is a great deal if you have major renovations in your home (Kitchen, floors, windows, furniture) over a short period of time, you can recover your 6K membership fee in the savings you get from the wholesale prices. If you are not planning on this.. you are in for sticker shock at the membership price! Membership is truly a case of “use it or lose it” with your finances.

In my opinion:

DirectBuy is  simply mathematics and economics. If you USE the Direct Busy service for major home purchase for a repeated period of time (5 years)  you will save money. If you don’t, you will lose money!

Of course the heavy sales tactics is in play once you finish your “presentation time”.  As soon as we said “NO” to our guide (“The Other Peter”).. he promptly got up without even a word and  opened the entrance to the showroom door for us to leave the premises.. No “have a nice day”, just opened the door and was escorting us out of the presentation.. I felt cheated and angered at the same time. Needless to say, I won’t be part of this happy place as a paying member anytime soon. We had to remind “Peter” that we were here with the Gift and he acted like he knew nothing of this.. hmm. He stormed behind the desk and reluctantly gave us the voucher for the laptop or the TouchPad..and gave us a nod and looked the other way as we left the showroom..

Now onto the process to get the “freebie”:

Even the procedure to get this freebie using the voucher is beyond belief.

Go online with your “authorization number” on a non-Secure site and activate your voucher! The site you go to is nondescript and you are not in a secure HTTPS environment!

Follow these steps exactly or you don’t get the gift and nothing is refundable:

Print out an “activation claim Form and within 5 days send it to “Electronic Claim Center”.

  • Send in the form with the voucher, proof of ID in a certified self-addressed envelope within 5 days of printing out the activation
  • Then you will get back a “certificate”  with which you pay an activation” fee and plus pay shipping and handling via Money Order (Right Money Order Only!)and within 2 to 4 weeks you may or may not get your laptop or your tablet.

Somehow the whole process above sounds fishy to me.. I don’t think I’ll bite on this bait… What is to prevent this company from my using to perpetuate credit fraud since now they have my license!

I gotta admit that this whole experience left me annoyed to say the least. Why would I do all of the above when I could go on-line and get a tablet for less than $100? Thanks but no thanks.. Not gonna do this..

If I ever need to have a bare home and need furnish every room and want to save hundreds of dollars on thing I absolutely need, DirectBuy will easily cover the heavy 3 or 5 year membership fee. Otherwise.. I’ll take a pass on this offer!

Oh by the way.. don’t forget the secretive nature of DirectBuy.. They constantly tell during the presentation that you are part of the secret society that knows bargains and you should not tell any retailer that you are a member of DirectBuy.. This is actually the line that was said during the video presentation and by the presenter!

What’s your experience with DirectBuy?

What I learned is that If I want an affordable discount I can still rely on my $50 membership to Costco to give me the best value bang for my buck!

  • I don’t need to increase my debt to savings ratio by going into instant debt by the membership fee nor the instant billing that occurs when you buy from this membership only club.
  • I don’t want to pay thousands of dollars in upfront membership fees if I don’t plan on having large home purchases..
  • I like to touch and feel my purchases, and not buy from a catalogue.
  • I don’t want to be a member of a secret society of shoppers that pay for the price of secrecy..

I could go on and on… but I think you get my point.

Debt, Debt, Debt Everywhere

As many of my readers know, Dad is always behind the eight ball when it comes to Credit Card Debt. Many families break apart due to debt and for me, I’ve finally reached this breaking point.

I realize that unless my family goes into a total “lock down” mode with our credit card situation, we will drown (literally and figuratively) with our credit card debt.

I consider myself to be a pretty astute financial person, but  I’m resigned to the fact that I am not wining  the battle with the bad debt of plastic (Not to be mistaken with the battle of the bulge which is a topic for another day). Regardless of which strategy I employ, every time I zero out my credit cards, within a few months, my credit card balances balloon to unmanageable proportions.

The funny thing is that as a family we don’t live beyond our means. We don’t go out and buy diamond rings, new cars, new toys, new clothes.. Nor do we go out for eat out on a regular basis.. We just lead a middle class existance.. With this existence we are constantly fighting the demon of plastic debt.

I make a decent living for a large Telecom company and my wife works for a local bank (part-time).  Yet living on one income in NJ is almost an impossible task.. Unless of course you live in a cave and don’t own a home,  have children or don’t leave your house EVER.

Yes, New Jersey’s standard of living is high with it’s outrageous property taxes and taxes in general.

I’ve tried all of the techniques that I’ve read about on Oprah, Wisebread, Lifehacker, Get Rich Slowly and other excellent sites for managing and beating the credit card monster.

Here are some of my mistakes:

  • Transferring Balances to zero % (and paying the 3% (Now 4%) balance transfer fees) and low interest cards. Doing this will impact your credit worthiness when you have way too much credit available.
  • Using my Home Equity Line of Credit (HELOC) to pay credit card bills. Now you are substituting good debt for bad debt, but if your HELOC is a variable rate, your monthly payments will quickly balloon.
  • Paying non-discretionary expenses by Credit card (Gas, Groceries).  My mistake here is that I didn’t pay off the balances and they continue to mushroom even as I try to pay off the balances.
  • Selling stocks to try to reduce or address growing balances.  Only thing this does is to have a slight dent in the debt. As soon as you pay off the debt, another card’s balances are growing.
  • Paying off Highest interest rate cards first, making minimum payments on all others. FYI this is the strategy that EVERYONE recommends!

There are only few answers to beat credit card debt and I finally realized this just a few days ago..

  1. STOP USING PLASTIC – Refer back to my “Lock Down” remark. Until you pay off the debt, the revolving cycle of credit card will not cease, nor will you be able to pay off your debts
  2. When you use Credit Card, Pay off purchases the same day of the purchase. For every $1 that you leave outstanding, this debt will mushroom to $100 very quickly
  3. Use Debit Card (with caution to avoid overdraft) to pay.  Unless you have overdraft protection (another form of credit),  I would not recommend this strategy. Fortunately, I’m like a hawk when it comes to my bank balances.
  4. Use Cash – This I think is the most right of all the solutions.  When all else fails, stow away all your credit cards except one emergency card and pay everything with Cash.

One of my tasks over the next few weeks is to do a line item balance sheet of income/expense analysis to determine where my income to debt ration is out of  proportion. Obviously, I’m doing something wrong..

I’m sure that the desperation in my writing will be apparent to many of my readers.  Let’s see how how I get out of this one..

Stay tuned as I try different strategies to dig out from this mess.. Hopefully, my readers will find the next few postings useful if they have struggles like I do with the “plastic demon”.

On an optimistic note.. I’m determined to find a lasting solution which will get me out of this plastic purgatory.. I hope.

Feel free to send me your suggestions.. Of course if I will not any posts which are SPAM from credit monitoring agencies of  “get out of debt” shysters…

Capital One – Terms Fraud by Company

A few weeks ago,  my wife and were trying to consolidate our credit card debt and we saw a mailing from Capital One for  12 months interest free for balance transfers with no balance transfer fees.  We both read the terms and this looked like a great deal. As you may remember I wrote about credit card debt on ne of my previous posts about credit card debt.

We called up Capital one and went through their process of applying using the “Code” they gave us and after a few weeks we were approved. So we called back and re-confirmed the terms of the balance transfer deal and asked to transfer a substantial amount of money to the new Capital one Account. We were assured that we had 12 months of 0% interest on the transferrred balances,  as well as Zero % on purchases for 12 months!

A few days ago we get a bill from Capital one which includes interest at 14.90 %.  Naturally, we called up customer service and asked for clarification on why were we being charge the 14.90% rate when we signed up for the 12 months of interest free financing. Based on Capital One’s records WE NEVER SIGNED UP for the Zero Percent financing. Of course this sent both of us over the edge and we escalated to the next level to the finance manager.  Same result.

Would you believe that Capital One asked us to provide proof of the offer. Of course we had already discarded the orignal offer mailing (our mistake obviously in trusting the transaction).  Additionally, Capital One does not give any emails confirming this type of transaction.  Again obviously our mistake for not asking an email confirmation when we made the transfer.

Now here’s the kicker. the first finance manager we spoke to was down right hostile and during our conversation, hung up on us, as we probe deeper into this policy of rate changes.  I guess, us being upset with our rate change and our raised volume contributed to him hanging up on us..

In the end, we were finally able to get another finance manager to “forgive” the interest charges, but we were told, that we would have to move our balane AGAIN to ANOTHER card, otherwise, we would be charged the 14.90% on an ongoing basis.

After this, I decided to report Capital One to the NJ State Consumer Affairs and the Better Business Bureau. This is after all the only recourse I have as  my “friends” at Capital One insist that I was the one that did not understand the terms of the balance transfer.

The silver lining from all of this is that I have learned some valuable lessons:

  1. Keep all written offers until AFTER you get the first invoice. Capital One asked me for written proof of the offer and of course I could not provide it, as I had discarded the original snail mail that I had received from Capital One.
  2. I learned that the Web is  a valuable resource in protecting the consumer from this type of  “Bait and Switch” tactics.
  3. eHow is the best site I found for a step by step method to submit complaints against credit card company fraud

Has this kind of thing happened to you?  If  so what did you do?

Right now I’m scrambling to move my balance to another card under terms that I can live with…

Identity Theft

Protecting your Identity On-line

As  a follow up on my last post about YOUR credit report, I found another site that is tremendously useful in protecting your identity.  I was reading Clark Howard’s site when I came across this site about identity theft.

Karen Lodrick had her identity stolen and she fought back. Her site has been featured on  many media sites and television shows

On her site, you will see pages dedicated to educating yourself and protecting yourself against identy theft.

To round out Karen’s site, I recommend you read her blog it’s truly a must read!

I will be using the one site that I need right now: Opting out of those pesky credit card offers which state how pre-qualified I am.  Sometimes, I’ll get 2 or 3 of them from the same company on the same day.

In these tough times, your credit and name need to be protected!

Thanks to Karen for writing such an excellent tutorial and sharing her experience!

Delta Skymiles – Your Credit Report for Free

I was reading my latest copy of Bottom Line Secrets and came across this gem that wanted to share with the millions and millions of AmEx Delta Sky Miles Members:

  • Until April 30th 2009, you can get your current credit score for free by just asking for it.

Keep in mind this is for Delta Sky Miles Members.

I checked mine out and was pleasently surprised.  Remember in this tight credit market, in order to get any credit,  you should know your numerical Credit score (330 – 830) as well as your FICO score (a combined score from the 3 credit reporting companies.

Of course, as any company does, they try to sell you an ongoing “credit monitoring” service which you can purchase (approx $12/mo).  I of course declined at this time.

Of course if you don’t have the Delta Skymiles card you can get your free annual  credit report for free from each of the credit reporting companies (Experian, Equifax, Transunion):

If you don’t do anything in 2009, make sure you know what your credit score is. Good Luck!

AFTER you know what your credit score is, you have the advantage when you negotiate (yes you can, if you try), with your credit card company revised rates. Credit card companies “rank” you based on your credit score, so if you know your score, you can get the best rates.

I’ve mentioned Suze Orman in the past, but I recommend to everyone to look at her site on how you can take charge of your credit!

Scambusters

Today with the way technology is proceeding at a breakneck speed, we are all inundated with offers either via email, telephone or by on-line malware. This post talks about some tips to avoid being scammed. In today’s of technology overload, you are your own last line of defense against spam, phishing, malware, virus’s, and any web born aggrevation.

Hmm, do I sound like someone who has gone down this path?

To battle the scourge of being scammed or having your identity stolen, here are a couple of really good sites which help you follow up on this ageless motto:

“If it sounds too good to be true, it absolutely is”.

  1. Scambusters – Check out questionable offers
  2. Scam – On-line community forums

Some tips to avoid being scammed or having your identity stolen (my list of on-line NO-NO’s):

  • Don’t open ANY emails that look suspicious (No you have not won $5M in the European Union’s lottery that you never entered)
  • Don’t confirm any personal information via email – NO valid financial institution will ask you for your pin code to “confirm” your identity.
  • Never ever give your credit card number to anyone on the phone, if you have any doubt of  who the caller is. I encountered this when I kept on getting “restricted” calls from the Policemen’s fund raiser on my home phone. As soon as you ask for proof of identity or email confirmation, the phone line mysteriously goes dead….
  • Make sure your Antivirus, hardware/software firewall, spyware blocker, anti-phishing (browser) addons for Firefox or IE are updated. If this sounds like I’m over-protected, I’m not. Even with all of the above, I’ve seen many of these villans attack my machines at home. So in order to protect yourself, you need to have a combinations. I’ve used both McAfee and Norton. These days I lean towards McAfee, only because, it’s provided free by most web providers (Comcast, Optimum, etc…). I’v also stopped using IE all together and only use Firefox on all my machines.
  • Make sure you disable Pop-Ups (this is how how I caught the dreaded “Your machine has a virus, you need to purchase ….”  virus). You can always enable or override with simple keystrokes.
  • Do not accept any invitation/messages  from anyone that you do not know on social networking sites.  Yes that means me, a noted Facebook and LinkedIn fanatic.
  • Do not accept an invitation : When you get an invite from someone that you have no clue to be your “friend” on your instant messager client (cindyfunxx38  is not your friend)

Overall, I can safely say: “If you encounter stangers bearing gifts, you can almost be assured that you will be given a gift that will last for a lifetime”.

If you know of any additional scambuster sites, leave me a comment.

Thrifty Fun – Fun, advice and blogs

This entry comes as a courtesy of my Sis-In-Law (RM). Good work RM. Bet you never thought you’d be published at Dad’s Taxi! 🙂

Thrifty Fun is a pretty cool site which has some really nice featured articles and newsletters which you can subscribe to. The site is family oriented, so it seems to be a pretty good place for information and tips! Most of the focus of this site is related to the home and tips on how to solve household problems. Found that to be pretty useful.

It’s here that I found another link to an interesting My Frugal Life Blog site.The site offers some excellent advice, free newsletters, tips and so much more.  You can browse the various topics and much more.

What I liked best  was the disclaimer for the site. Now I gotta figure out how to do the same for Dad’s Taxi.

Take a look along the bottom of the page and you’ll find some interesting sites for budgeting, savings advice, couponing, ezines (newsletters), etc..

Overall, the site is really nice and deserves a detailed look.. enjoy..

PS. Thanks RM.

CELL PHONE DO NOT CALL REGISTRY

Mea Culpa. After I posted this entry, I realized that I had fallen into one of the olders email hoaxes that has been on the Internet.

A good friend of mine directed me to the Urban Legends site which discusses the below.

There is no deadline. Below is the excerpt which makes this entry moot. Again I don’t normally post this kind of information without verifying, but in this case, I did.

Comments: Yes, you can add your cell phone number(s) to the National Do Not Call Registry.

But no, you won’t suddenly be at the mercy of 10,000 telemarketers if you don’t.

While it’s true that several of the major wireless phone providers announced a plan some years ago to establish a 411 directory of customers’ cell phone numbers, it is not true that the plan involved publishing said directory for any and all to read. Participating companies said the numbers would be made available only via telephone, only to users who dialed directory assistance and paid a fee, and only with customer consent.

In any case, the point has been moot since 2006, when the plan to create a 411 directory for cell phone numbers was indefinitely postponed.

******************************************************************

Notice: Cell Phone Numbers Go Public next month.

Starting February 2009, Cell phone numbers will go public.

If you want to avoid telemarketing or sales calls, follow the process below, and it should put your cell phone on the DO NOT CALL LIST put into place by the Federal Trade Commission.

This is the National Do Not Call Registry sponsored by the Federal Trade Commission.  You may also register your home phone number on this number too but it is essential to register your cell phone because all cell phone numbers are being released to telemarketing companies and you will start to receive sales calls.

…. YOU WILL BE CHARGED FOR THESE CALLS MADE TO YOUR CELL PHONE.

To prevent this, call the following number from your cell phone:    888-382-1222.

Important thing here is that you MUST call from the number you are registering. According to the site:

Your registration will not expire. Telephone numbers placed on the National Do Not Call Registry will remain on it permanently due to the Do-Not-Call Improvement Act of 2007, which became law in February 2008. Read more about it at http://www.ftc.gov/opa/2008/04/dncfyi.shtm.

It is the National DO NOT CALL list. It will only take a minute of your time. It blocks your number for five (5) years. You must call from the cell phone number you want to have blocked. You cannot call from a different phone number.

HELP OTHERS BY PASSING THIS ON TO ALL YOUR FRIENDS.

If after you do this and you continue to get those annoying sales calls on your cell, you can always call to the National Do Not Call Registry to initiate a complaint against the cell phone spammer!

The National Do Not Call Registry Serves multiple purposes:

  1. Register multiple phone numbers to be put on the DO NOT CALL List with the FTC
  2. Verify that your number is on the DO NOT CALL list (via email)
  3. Initiate complaints against the organizations that continue to call you when you are on the DO NOT CALL List.

Thanks to my tennis buddy Drew for enlightening me with this tidbit..

Of course if you like sales calls interrupting your privacy, you can ignore… 🙂

Clark Howard Highlights – Tips for your Financia Life

A few weeks ago I talked about Clark Howard. He’s the guy who has is an a excellent advocate for consumers. His tips and tricks give you excellent ideas on saving money in your every day financial transactions.

Today, I came across the CNN site with videos by Clark on his weekly TV Show.

As I’ve said before, what I like about Clark Howard’s information is that it’s very useful in everyday life. Take a look.