Finance Gets Personal

This is my mattress, and I can’t take it any more.

My husband got it seven years ago when some co-workers donated used furniture to his post-divorce “bachelor pad.” While we’ve I’ve gotten rid of most of his hand-me-downs, we are still sleeping on this thing, which has to be pushing 20 years (my stepson is sleeping on the full-sized mattress I purchased in college).

Besides the fact that sleeping on someone else’s used mattress is gross, it’s stained, it sags and it’s uncomfortable. We’ve been talking about replacing it for six years, but there’s always been something else that seemed more financially pressing (lately, getting out of debt).

Our get-out-of-debt schedule, $1000 IRS payment and house painting expenses don’t leave any money in the budget for it any time soon. I guess we could buy one for ourselves for Christmas, but I don’t know if I can wait that long (and what a bummer gift)!

I’m not sure if I’m being a spoiled brat, but I just can’t help thinking, “We’re making over $100,000 a year, and I’m sleeping on THIS!?!”

But, I think I have an idea that won’t interfere with our other plans…Garage Sale!

Now, I’m not expecting Sleep Number-type proceeds, but anything we make can go to the mattress fund. I’ve never had a garage sale, so I’m not sure what to expect. But I think we have enough stuff to make at least a couple hundred bucks.

Anyone want to buy a used mattress?

After I’d hit rock bottom emotionally and financially, I knew we had to get out of credit card debt if we had any chance of living our dreams without blowing up our whole lives in the process.

I made a plan for paying off our $13,500 of credit card debt, but was unsure of what the next step would be. Would one of us be able to take a lower-paying job just by paying off the cards? Which one of us? What if the new career continued to be low-paying after several years? Would the other person be stuck with their job?

Then, the miraculous, mathematical epiphany (courtesy of the debt pay down advisor at Bankrate.com): We could have all our debt, including the house, paid off in 5-6 years if we stayed at our current jobs.

It was so unbelievable, I ran the calculator three different times with slightly different variables. I even worked it out by hand to see if I came up with similar numbers.

Just imagine what life would be like with no debt…I could be a copywriter, open a photography studio with my sister, become the next Diablo Cody…My husband could live out his Indiana Jones fantasy by going back to school for an archeology degree…Sure, we’d still have taxes, insurance and utility bills, but just imagine! We’d only need an income of about $30,000 to live our current lifestyle and still save for retirement.

Around the same time, I started listening to that crazy Dave Ramsey bastard on my iPod, and I really started to believe it was possible.

Though I tend to only write in my journal when I’m depressed, I went through a brief Oprah-recommended phase where I kept a happiness journal:

From Finance Girl’s Journal
10/9/07

[Finance Girl's husband] and I had a talk about keeping focused on paying off our debt. He is so on fire about it, even thinking we’ll be done in less than 5 years (3 years!?!)

When I tell people about our plan, they laugh.

But it is quite possibly the best idea I’ve ever had.

From Finance Girl’s Journal
2/12/06

Where am I at in my life right now?

“The Desperate Housewives Period”

At this point in my life, I feel kind of like a sellout. I’m not an artist, a musician, a photographer, not even in advertising or a designer. Those things aren’t even my hobbies anymore.

Instead, I’m this boring, go to work every day, do the grind for the paycheck person, just like so many parents are (mine and [Finance Girl's husband's] included).

I wish my life had more meaning, I guess.

People who live this kind of life live for their family and friends, but it’s like my family isn’t a “real” one and my friendships hardly exist anymore.

We’re swimming in debt while we have a six-figure income now and the end is nowhere in sight.

I want to be interesting too - hobbies, travel the world, have parties and close friends.

And then there’s this pressure about kids - I’m afraid I’ll just become even more isolated, put my career on hold, damage my kid cuz I’m never with it and who knows when we can afford that anyway.

I really need to get a life.

My life.

Ray Roman at Money Intellect was kind enough to interview me for this week’s Friday Blogger Spotlight. So, please stop by and learn more about me!

In other Finance Gets Personal news, my posts were included in three carnivals this week:

• Money Hackers Carnival includes my post Snowflaking: 100 Ways to Come Up With More Money for Your Debt Snowball as a “Best of Carnival” pick
• Carnival of Money Stories includes my post Are Children’s Birthday Parties Getting Out of Control?
• Carnival of Personal Finance includes my post 10 Signs You Have Financial OCD

MSN Money’s Smart Spending blog is featuring my post, 10 Signs You Have Financial OCD, in Are You Obsessive-Compulsive About Money?

Thank you, Karen Datko, and welcome new readers.

Well, it’s finally spring, and you know what that means.  That’s right - bridal showers, baby showers and weddings! (Please, contain your enthusiasm.)

I just got a bridal shower invitation in the mail yesterday.  I was pleasantly surprised to see that my friend and her fiance have requested a charity shower.  Guests have been asked to contribute any amount they’d like to the National Multiple Sclerosis Society through the couple’s charity registry at JustGive.org.  I think this is awesome, especially since her matron of honor (and host of the shower) has MS.

So, if there are no presents, what are we going to do at the shower?  It’s at a tea room, so I suppose we will drink tea and eat crumpets or something.  Plus chit-chat and maybe play a few games.

For those who actually enjoy the gift-opening part, there are still charitable options.  For instance, my former boss had shower guests for her fifth wedding bring wrapped toys for children living at a battered women’s shelter.  My boss still got to open presents, everyone got to ooh and ah, and we all got to help out a charity. 

So, if you’re a bride- or mom-to-be and already have the things you need, why not celebrate with a charity shower?

But if you don’t have the things you need and aren’t Nicole Richie, don’t feel guilty about having a traditional shower.  There are always other things you can do.

For example, you know the tacky dollar dance that people have at wedding receptions?  One of my friends made it into a beautiful gesture when she announced that the “dollars” would be going to the American Heart Association in honor of her mother, who died of a heart attack.  It was a relatively small wedding, but guests donated over $500. 

I think most guests enjoy it when people weave charitable giving into life’s celebrations.  Just don’t go make a donation to The Human Fund in lieu of wedding favors or anything. 

Tonight we’re going to Buffalo Wild Wings to celebrate paying off my car.  

The loan officially bites the dust on Friday, but we’re having an early celebration so my stepson can be there (side note: my husband bought a Powerball ticket on Saturday and we were taking turns saying what we would do with the money if we won.  My 9-year-old stepson said the first thing he would do is pay off all our debt - what a genius!)

The last time my husband and I had paid-for cars, they were both over 10 years old with close to 200,000 miles on them.  Now, we own a used car that we bought in July with 75,000 miles on it, and my ‘06 that we purchased new two years ago. 

The first thing I plan to do after work on Friday is take my car for a wash and vacuum/clean the interior.  I own this car now, so I want it to look good!

The timing on paying off the car couldn’t have been better - I just reached 50,000 miles earlier this week, which means my warranty has expired (I have a long commute).  I’ll feel a lot better paying a repair bill for a car that I’m not still making payments on!

Now it’s on to my credit card.  Citibank, I’m talkin’ to you!  Just because you have a fixed 2.99% interest rate doesn’t mean you’ll be hanging on for another nine years (that’s right, nine!).

If you’ve listened to the Dave Ramsey Show for any amount of time, you know he is constantly recommending Identity Theft Protection from Zander Insurance. Every time the subject of identity theft comes up, he gives a little spiel about how he’s purchased it for everyone on his team. But why would he recommend this product?

Obviously, Zander Insurance is a paid advertiser of the Dave Ramsey Show. That’s clear from his website (though not always clear on the show). But Dave says he only endorses products he truly believes in, so we’ll assume that he actually feels this product is beneficial to his listeners.

Zander Insurance’s website says the company provides the following services to its Identity Theft Protection Customers:

Protection

• A personalized protection test to see how vulnerable you are to identity theft (Sample question: “Do you use a crosscut paper shredder on credit card bills/offers, bank checks/statements, and other documents with personal information (e.g., Social Security, credit card, and driver’s license numbers) before throwing them away?”)
• Monthly newsletters and scam alerts
• Links to the Opt-Out/Pre-Screen and Do Not Call Registries, and information about how to place a fraud alert (visit AnnualCreditReport.com and click on “Fraud Alert”) or credit freeze (send a written request with a copy of your ID to each of the three credit reporting agencies: Equifax Security Freeze, P.O. Box 105788, Atlanta, Georgia 30348; Experian, P.O. Box 9554, Allen, Texas 75013; TransUnion, Fraud Victim Assistance Department, P.O. Box 6790 Fullerton, CA 92834)

Recovery

• If your identity is stolen, a Personal Recovery Advocate to develop a damage assessment and recovery plan, handle any creditor dispute resolutions, continue to monitor credit bureau activity, work to remove any criminal or civil judgments, and provide information to the FTC and other government agencies

Reimbursement

• Reimbursement for lost income and expenses associated with an identity theft (i.e., legal expenses, long distance fees, overnight charges, etc.), up to $20,000

Here is the statistic Dave uses to justify purchasing a policy: According to the Identity Theft Resource Center’s (ITRC) “Identity Theft: The Aftermath 2006″ study, victims spend an average of 600 hours recovering from this crime.

Wow, how horrible. But I looked up the ITRC’s study, and here’s what the press release about it says:

In The Aftermath 2006, victims spent an average of 97 hours repairing the damage done by identity theft to an existing account used or taken over by the thief.

In cases where a new account was created, respondents in the 2006 study reported an average of 231 hours to clean up the mess. In some cases, respondents used such expressions “eight years and still working on it,” “too many to count” or “endless.”

Hmm, not exactly 600 hours, is it?

Why would Dave tell people trying to get out of debt to make their own meals, fix their own roof, mow their own lawn, etc., but then turn around and tell them to pay a company $72 per year to clean up a mess that hasn’t occurred yet?

Frankly, it’s beyond me.

If you’d like more information about why buying identity theft insurance is a dumb idea, please read Single Ma’s post, Is Identity Theft Insurance Worth the Cost?, at Fabulous Financials.

Now if you’d excuse me, I’ve got to go shred some papers (don’t you just love the way it smells when you grind up eight sheets at a time?).

*I mean, “Protection”
This is not an insurance product.
This is an administrative services contract, with restoration and ancillary reimbursement benefits, issued by Identity Safeguards, Inc. and in connection with Zander Insurance Group providing enrollment and preventative database management services.

Debt is a symptom of a problem in your life.

It could be that you want desperately to be liked, and are trying to keep up with the Joneses. Maybe you are unable to set boundaries with your children and give in to their every whim. Perhaps, like me, having the “perfect” outfit or the “right” place settings eases your anxiety about interactions with others. Or, maybe you have an addiction to shopping, alcohol, drugs, gambling…or sex.

Back in Halle Berry-Eric Benet days, I thought that sexual addiction was just another excuse people used to explain away wrongdoing. Kind of like how celebrities are always being hospitalized for “exhaustion.”

But now, I’m starting to get it. Why else would powerful, successful men (and occasionally women) risk their marriages, careers and reputations on sex with prostitutes, propositioning sex in airport bathrooms and other risky sexual behaviors? Just because they can? I don’t think it’s that simple. According to the New York Times, EliotSpitzer’s call girl habit likely goes back 10 years and has cost him over $80,000. That doesn’t sound like just a power trip to me.

My dad’s best friend was fired from his government job after porn was found on his office computer…twice. His wife divorced him, he frequented strip clubs and bankrolled expenses for his stripper girlfriends’ “companionship.” Within a year, he was dead - supposedly from a heart attack, although some suspect drugs were involved (his father was a doctor and quickly had the body cremated). While he wasn’t extremely powerful or successful, he did have one thing in common with Spitzer - an addiction to sex.

So what happens when sexual addiction afflicts those who can’t afford it? Debt.

A friend of mine recently came over for dinner after a fight with her husband. While she was calling around for mortgage rates that afternoon, the broker mentioned a credit card she didn’t know existed. She and her husband had been working extremely hard to pay off their debt, but he had apparently been running up credit cards on the side. “On what?,” I asked. She said he has a computer addiction - to porn. “Isn’t porn free?,” I asked, dumbfounded. “Not for the good stuff,” she said.

A report featured in The Guardian this January says that one in four people in the UK who contacted the UK Insolvency Helpline last year admitted that some of their financial problems were caused by spending money on sex (including pornography, strip clubs, telephone sex lines and prostitutes). The helpline says that sex industry spending is now the third most common reason people get in debt, after alcohol/drugs and shopping.

Sexual addiction is real, and has a damaging effect on finances (among other things). Remember that the debt is a symptom of the addiction, and the addiction needs to be tackled before the debt.

Lynnae of Being Frugal is hosting the Carnival of Finance #144, which includes my post 10 Signs You Have Financial OCD.

It’s my first carnival, and I’m excited to be included! Be sure to check out all the other great posts.

Happy St. Patrick’s Day!