Financial Freak Show

Last night I received phone call from Military Wife about her Citibank credit card interest rate being raised from 13% to 29% interest. Actually if I remember correctly her exact words were…

the %!<&\# at Citi just jacked my interest rate right after I made the stupid payment

Her call sent Vinny Financio into action and prompted me to snoop around the inter-web a bit. Little did I know I would find out that Citigroup has also started charging annual fees to card holders who don’t put more than a specific amount on their cards, typically $2,400 per year. So let me get this straight…If I use a card you charge me, (I get that) If I don’t use my card you charge me (thats the part I don’t get!).

Okay that’s not really true, I do get it they are charging customers more fees. That’s what they do, that’s what their consumer business model is based on. The part I don’t get is why do they still have customers? You know the saying though…

you can lead an idiot to water but you can’t make him drown himself

It amazes me what people are willing to put up with. Luckily though Military Wife, due to her recent financial progress, was able to close the account and I doubt she was able to contain her ex-Marine Corp potty mouth when she told them what she thought about their new programs. I guess at this point for those that are willing to accept this treatment more power to them. Somebody has to get bent over the bar to keep those bank stocks in my mutual funds afloat for another 30 years. Personally I’ll take my own road on this one.

While cruising around twitter I came across a guy cruising around Detriot delivering pizzas in an attempt to cruise his way out of $101,000 in debt. To keep himself sane while he’s working deliverawaydebt updates his loyal followers on how his pizza delivery world.

With tweets like his “stiffy alerts” (when folks don’t tip him) and various other customer updates I had to learn more about Jeff and his leased Hummer H3 drivin’pizza delivery story. Actual tweets from deliverawaydebt:

4/14-Delivered to the local Moose Club. I deliver to their cook every friday night. I walk in and shout JIMMY! He shouts JEFF! back. Nice

0/21 STIFFED stupid lazy lady wouldn’t get off her big butt to sign the credit card slip. Had her kid walk it 2 feet to her- LAZY!!

3/18-1/31 Thanks for the buck! I loved climbing the 75 stairs to get to you door. Hope you don’t get any bbq sauce on you, 20 wings

STIFFY ALERT!! 0/13 Guy looked like a drug dealer. Had on a watch that looked worth $10 grand plus. Prob rhinestones from the be-dazzler kit

First the Lions win today and then my first run is a 5 dollar tip. What a day!

STIFFY ALERT-lady was singing the song from Dora the Explorer. I even finished the song for her and she still stiffed me. Guess I need vocal lessons

2/13- dude was in a smoking jacket. Must’a been expecting a playboy bunny. Sorry man no dice.

$62 on 13. Made more on Sunday than Friday again. Time to go home and go to bed 5am is just around the corner

4/16-0/12.96 STIFFY ALERT yeah she counted out the 96 cents for me. Thanks lady I guess it’s back to the Coinstar machine later.

This guy is killing it for all the right reasons! – enjoy this post written by the legend himself…

Everyone who’s working on paying down their debt has a specific moment they decide to start the long and painfully journey.  For my wife and me it was a couple of months after returning from an overseas assignment in China.

In February 2007 we had taken an excellent promotion which would fast track my career and put the money we needed into our pockets so we could pay off our debt.  At this point we still had not combined our money; we’d been married about 6 months.  She was working and paying for her car, credit card, and her other bills.  I was paying all of my bills, the house, and entertainment for us.  We were two people with proportional amounts of debt given our separate incomes.  We never sat down and talked about money, we never took the time to see the totals of our debt.  I was making good money and all the bills were being paid, so there must not have been a problem.  Budget, not us we didn’t need one.  Budgets are for poor people who don’t make as much money as we do.  The new job was going to take care of the debt anyway, right?  Our thought was once the normal bills were paid everything left over would be applied directly to our debt. 

We returned to the US in March 2008.  I decided I didn’t like the job and was not the right person for the position.  Add on the fact that we really didn’t like the location.  We were 2 of 20 foreigners living among 3.8 million Chinese.  I took a demotion and returned to my old job.  Now remember the new job was going to pay off the debt we had.  Upon our return we had made zero progress on paying down the debt, wasting a whole year of opportunity.   The next major problem was that we loss of the $1,950 per month by working outside the USA.  Upon returning all overtime was eliminated, the $2,000 a month I received before the trip was now gone.  We had a deficit of almost $2,000 per month to figure out how to cover. 

My wife worked in Media Planning (marketing) before our move to China.  She could go back to work to make up our money shortage, but we also found out we were pregnant for the second time.  Day care for a young toddler and a newborn would cost us $1800 per month, wiping out any money my wife could have made.  Back to the drawing board we went.  I’d been listening to Dave Ramsey for a couple of weeks when I heard him say that delivering pizzas was a great way to make extra income.  After talking it over with my wife, we decided that I would make the sacrifice and take on a second job.  I applied and was accepted to a new pizza joint down the street.  I started delivering in May 2008. 

In January 2009, I drafted our first budget.  Following Ramsey’s advice and after reading a ton on the subject of budgeting, I was able to put everything on paper and see how the money moved in and out of our hands.  We did this for a few months and felt that we were in control but the debt wasn’t going down.  There had to be a better way.  In April 2009, my wife politely suggested we seek out some professional help (she’d been asking to do this for quite awhile, but I was the roadblock to making it happen.)  Yep, I am definitely one of those people who never ask for help.  It’s a good thing my wife knows this and stepped in to straighten me out. 

I looked for a Financial Coach on the Dave Ramsey’s website under the Endorsed Local Providers section (ELP), and found one that was in my area.  With one call to the ELP we had an appointment set up for the next week.  After our initial counseling session my wife and I were excited to get started.  We drafted a better budget and started to use it.  Two weeks later we meet with our Financial Coach and were able to fine tune it and put his system into practice.

We had a total of 3 coaching sessions and after a little over 4 months after starting our plan we had paid off over $13,000 on our debt.  Wow, looking back this was the single most valuable step we’ve taken in our quest to eliminate debt.  Now 100% of the money generated through delivering pizza is applied to our debt.  We’ve paid off both vehicles and use that extra $700 per month to eliminate the debt.  We’ve also been able to pay off another credit card giving us another $100 per month.  That totals to around $2,000 per month including the pizza money that we put toward the debt. 

My wife and started with $101,000 to eliminate.  That’s including our second mortgage and all personal, credit card, and student loan debt.  We finally feel like we are making headway, our debt free date is Oct 2011.  This will be a long in difficult road, but having a plan and working it is the only way we will get there.  Being away from my family at night is one of most difficult things I’ve had to do.  When I look into my kids eyes though, I know it will be worth it.  They will have completely funded college accounts, they will have parents who don’t argue about money, and they will learn about money at an early age and will have their Father around to play with and love them.  It’s tough, but nothing in life that really matters is easy. 

If you’re interested in reading about the day in the life of a pizza delivery driver, follow me on Twitter at @deliverawaydebt.  I tweet about the crazy things that happen during my shifts. I’ve also started a blog to write about all the fun my family is having paying off debt.  http://deliverawaydebt.com/

Thanks to FinancialFreakShow for allowing me to share my story with you

 Jeff Kosola

-post written by Jeff Kosola - Thanks Jeff, your an inspiration!

I was out at a night spot sometime ago with some friends and some friends of friends, some I knew quite well and ac couple I had only met that night. Myself and a couple others bellied up to the bar to order the first round. As we grabbed our drinks one of the guys I just met said “I got this one” and waved us of. So being a gentleman and a budget minded FinancialFreak I decided to allow him the pleasure of paying for the drinks. He then reached in his pocket and pulled a roll of cash with a rubber band around it and proceeded to flip off a couple bills so fast he looked like Al Capone paying off the cops. Now I already knew this guy had some really nice shoes on but I never guessed him to have several grand rolled up in his front pocket!

Now, I always have some cash in my pocket, especially since I refuse to use credit cards anymore, but I sure as heck don’t have $3000 in my pocket very often. Since the thought of having my very own fist full of $100’s sounded so exhilerating I figured I’d give this big shot technique a try and see how it worked for me. This sounded like a logical experiment so shortly after meeting Fist-full-of-100’s Guy I withdrew my entire starter emergency fund of just over $1500.00 rolled it up and stuffed it in my front pocket. After leaving the ATM I headed over to Starbucks to meet up with a friend.  I was excited just thinking about the moment I’d get to whip that wad out of my pocket and say “I got this one.” Just like Fist-full-of-100’s Guy had done a few nights before.  So without hesitation as soon as he placed his order BAMM! The fat wad was out of my pocket and a smile was on my face. The only problem was I looked like a complete idiot bustin’ out $1500 to buy two cups of coffee. 

And sure enough the barista saw right through me. With a smirk on her face and a smart little attitude she said “Is that all you have?” Ouch! I was busted by a 17 year old coffee pusher! 

So I did my best to play it off all FinancialFreak cool and said “Why, how much do the other guys usually tip?”

All in all it was a lame experiment to roll like a big-shot but in the end I came out looking more like Al Bundy than Al Capone

How much cash do you usually carry in your pockets?

Who cares if your coworker doesn’t like your car? Who cares if they laugh at your hatchback with the bald and flat spare tire. Who cares if you iPod doesn’t have the bitchin’ touch screen? Who cares if you’re still trying to rock last year’s sunglasses? Do you really care what they think about your possessions? Who really cares about your money? Everybody always says they don’t but seriously do you? These feelings are real though and they do have an effect on how we often live our lives. Many people destroy their financial plans (if they actually have one) by making buying decisions based on the judgments of others instead of what’s best for themselves and their family. Don’t get me wrong here I’m all for buying tons of stuff, even stuff you don’t really need, that’s how I made a mess of my finances in the first place.

I got rid of a lot of stuff when I decided to adjust my financial circumstances. A funny thing happened though when I began to do that. I really didn’t care at that point what people thought about the stuff I had anymore. It was good for me in many ways. Now I sort of wear the fact that I haven’t overspent my means as a badge of honor. I love telling people I sold my BMW and bought a Chevy and why we decided to go the National Park instead of Mexico for vacation. Now that we’ve made so much progress in our financial lives the people that are actually important to us and care for us brag about what we’ve done and to that I say “Who really cares about my money anyway?”

So go ahead and mock me (or more likely just think it…wimp) then shut up and get back to work so you make some more money to hopefully cover that ridiculous car payment again next month. I love it when broke people tell I’m wrong about money – thanks for more motivation!

Enjoy this article I wrote at Hobostudent.com:

3 jobs that will keep you paid and cool

and no…that’s not me in the maid’s outfit

Another financial blog caught my attention recently (the name’s withheld because its a pretty good blog with a only a few questionable posts) The post I’m writing about was regarding the purchase of a new “quality” BBQ vs. buying a less expensive model. As a FinancialFreak that thinks long term this makes obvious sense to me as quality is often worth the extra price if you plan to use the item to its fullest. Buying quality may not be a responsible option though if you’re not in the proper financial situation to pay for it. 

 The blogger posts about how he wanted to buy the Weber E-310 BBQ which sells for close to $800 – a pretty sweet BBQ which he’d been saving for. He then goes on to say he made a better purchase and settled for a Char-Broil BBQ for a little less than $400 – again good job, you did some homework and saved some cash.

Here is what made me say what you were thinking…

The next post on the blog was titled “Housing Update: Short Sale, Foreclosure, etc.” I assumed this was a post about his opinions about the complicated housing market. Turns out this blogger has been trying to sell his house for more than 16 months and is currently on the verge of a foreclosure. Here’s a quote from his post:

Our savings is gone, our emergency fund is nil and I have cashed in about half of what little retirement we had put away. I am earning as much side income as I have time for and my wife babysits anywhere from one to five children (beside our own) everyday in order to make ends meet. At the moment, our credit is good and God has provided for our needs, but we are at the point where we are starting to incur major debt on behalf of this house.

So let me summarize here. He’s earning as much side income as he can, his wife is babysitting extra kids for money, he used his emergency and retirement funds to help weather the storm. If I were counseling this couple on their finances my advice to them would unquestionably be to spend the money they saved and invest in a new $400 BBQ. This is really the only option they have left to help prevent their family from being foreclosed on. If we were on the verge of foreclosure and I came home with a new $400 BBQ it would not be a pleasant conversation over freshly grilled steaks with my wife – who knows it might even be the last convesation we have as a couple!

My thoughts do go out to this family as nobody wants to go through a foreclosure….then my FinancialFreak mind kicked in and my thoughts quickly changed to “I wonder what sort of deal this guy will give me next month on his almost brand new $400 BBQ?” I better go back and bookmark that post!

I now this has little to do with personal finance but it caught my attention and reminded me that we all can make mistakes. This story reminded me that no matter how bad you screw up somebody else has already 1-uped you.

 Thank you James Earl Ray for keeping the dream alive

This was the quote engraved on a plaque to be presented to actor James Earl Jones honoring famous black Americans and was to be presented to the actor at a ceremony held on Martin Luther King Junior Day in 2002.

 FYI…James Earl Ray was accused of the 1968 assassination Dr. Martin Luther King, Jr.

 Think anybody lost their job over that? Can you top that one?