Confession: I Hate the Term “I Fell On Hard Times”

I have sat on this information for quite a while — since 2005 or 2006 actually. Before I get into this post, I’ll share that I have disabled the comments (don’t need any extra shit and lot of y’all aren’t as nice as you think you are).

Since March 2013, I’ve been debating on something really heavily – filing bankruptcy. Since January 14, 2014 at 7:44pm (CST), I’ve been crying my face off while telling myself that jumping from the Crescent City Connection won’t end my problems (because knowing my luck, I would somehow survive even though it’s so high up and I can’t swim).

Why would something make me cry this hard and contemplate ending my life though? Like many other people, I fell on hard times (but I hate this and I’ll explain why).

As of January 14, 2014 at 7:44pm (CST), I am the Co-Signer of two student loans that have since gone into default. I could buyout my portion and some of my freedom back for a mere $8,000 (the collections agency’s words, not mine…certainly not mine) if I act fast and do it before Friday.

Except it is the middle of the week and:

  • I am sleeping on a Cousin’s couch after having been put out of the place I was staying because I wasn’t bringing any money in. Honestly, I feel that my time here has run short and since I’m not a “Priority Group” within the Homeless Population, I don’t have a bed in anyone’s shelter.
  • I have applied and applied and applied to all kinds of jobs that I can think of. Here’s the latest sting in my life – I did a tiny experiment to see if people would hire me if they thought I had a record. Do you know I got two call backs? Apparently, companies get tax credits (or breaks) for hiring a percentage of this population and even if you’re overqualified, they’ll consider you if you’ve been to jail. Those two organizations have since put me on a “Do Not Hire” list…not that they were going to hire me to begin with.
  • In addition to the TWO student loans that have defaulted, I have my own loans to worry about. I’ve been making good faith payments to my companies of like $10, $20, or $40 when the money comes my way. Yet, even though they know I’m homeless, with a struggling business and no part-time job money, they insist on telling me how stupid I am for having gone to school, got two degrees and then unfortunately, have been unable to find a job in a market where jobs tend to go to people hiring folks know and not necessarily who can do the best job.
  • I am questioning if I actually made the right decision to leave a job that physically, mentally and emotionally made me sick because there was a steady paycheck even though my hair was falling out because everyone else has said that it was quite dumb.

With all that being said, I just want to say quickly that I hate the term “I fell on hard times.” Why? Because no one falls on that and if a person says that to you in a conversation, it means that you are actually an insensitive person who comes across as incapable of showing empathy because you would “never” find yourself in that situation.

Hindsight is ALWAYS 20/20 and that’s what people don’t want to admit. But you know what else people don’t want to talk about?

The emotional toll it takes on you. It’s emotionally taxing to keep the secret because you are embarrassed. You aren’t freed by sharing this because people judge you and tell you that “you should have just used a budget” and “well that wasn’t very smart and instead of helping you and not criticizing you, I’m going to tear you down more.” You don’t feel better when you admit it to yourself either. In my case, whenever I’m adult enough to answer my phone and not send my bill collectors to voicemail, I have arm and leg pain AND a migraine and chest pains for at least 24 hours. Seriously.

As I shared in another post, had I known back in 2004 that I would be facing this mountain of bullshit in January of 2014, I’d have dropped out and…well…I don’t know what I would have done. But I’d rather live a mediocre existence barely making ends meet THAN have to deal with other people pointing out how my own personal decision-making skills and not a flawed system is the reason I’m in this.

I didn’t fall on hard times. Like everyone else, this shit hit me like a f***ing ton of bricks.

NOTE: I disabled comments because I don’t want to read other strangers who have made questionable ass decisions in present day foolishness say how “stupid” that was of me. Sallie Mae has that on lock.

Steps to Student Loan Freedom – Join the Challenge

Earlier this year, I celebrated something that I wasn’t quite sure I would be able to accomplish — I paid off my smallest student loan.

Full disclosure here: I still owe a significant amount. It’s to the tune of my future firstborn’s college fund $103,678. The amount of the loan when I started paying it off was right under $2,000 and I paid it off in six months. This was while I was clearing another delinquent account (I’ll share this story in the new year) that came to $1,711.

However, I did it and I learned so much in that process, especially restraint. Three key things that I took from it were:

  1. No question is too dumb to ask. Ask everything you think of. I remember asking one account representative what would happen if I made more than one payment a month. Her response was comical (“Nothing I think but we don’t really see that.”) but I felt better once I got it out. So ask everything that comes to your mind when dealing with a representative.
  2. Talk to the same representative. When you say that you want to take care of an account, they perk up. I wouldn’t be surprised if there was some end-of-the-year bonus they received when their accounts stayed in the green. But it cuts down on your confusion when you speak to the same person. So ask if you can talk to them whenever you have a question about your account (p.s. – they have email). They will probably acquiesce.
  3. Automate the payment. If you take nothing else from me, take this – make that payment come out on the same day of the month every month. If you can get it on your actual pay date, great (tip: call your loan holder and tell them you want to change your due date to your payday if this helps)! After a while, I got used to living on close to $400 less a month once I had the payments taken out of my account on payday.

So that’s it….well, not exactly!

Starting in January, I’ll be holding a 4-week webinar series on the tactics I used to pay off my student loan. I got this idea after so many people asked me how did I do it to begin with (pick one and focus on it is one strategy) and I figured that in addition to the webinar series, I’d invite others to a yearlong challenge of paying student loans down and/or off!

If you are interested, join here!

Do you have any tips to help you pay off your student loans?

Rule 3: Realistically Examine Your Habits (#31WriteNow)

Realistically examine your habits.

Rule three is perhaps the second hardest rule in the “Building Blocks for Building Wealth”™ series. This rule requires that you take a fine tooth comb and go through your financial history. While doing this exercise, you’ll want to ask yourself:

  1. Over the past year, how much money did I make? Look at sources of income such as paychecks from your job, cash gifts, money from consulting work, etc.
  2. Over the past year, how much money did I invest into myself? This can be answered by looking at your savings accounts and other investment accounts (Retirement Accounts, CDs, Stocks, Mutual Funds, etc.).
  3. Over the past year, how much money did I spend? If you have a bank account, this is very easy to do (just look at the numbers in your debit column).

Special Note: Of the money you spent, you’ll want to break them down into major categories. The categories that I had were:

  • A. Housing (Rent/Mortgage)
  • B. Utilities
  • C. Student Loans
  • D. Medical Bills
  • E. Self-Care
  • F: Groceries
  • G. Fast Food
  • H. Shopping
  • I. Bank & ATM Fees
  • J. Other Loans
  • K. Miscellaneous

If you are anything like me, what you see will be absolutely scary. After going through my bank account, student loan statements and credit card statements, I quickly saw a pattern emerge. I had a hunch that I spent money in a reactionary way. By the time I was midway through examining my “fiscal year,” I KNEW that I was right.

I’m not a bad spender and on its face, I don’t even have bad spending habits. Like many people in my position, an enormous amount of student loan debt ($91k to be exact) and mounting medical bills (roughly $20k), I would say that I was doing pretty good on my sole income (after take home pay for the year, $23,600 — my tax return made me cry). Like much of the working poor, I was able to stay ahead of my bills and I paid them on time. I even had everything automated so that it would come directly out of my account and I wouldn’t have to worry about late fees.

Then something crazy happened – I had surgery.

I knew before I went in for my surgery that I didn’t have enough money saved up to carry me through the time off of work and I made the decision to cancel my auto-pay. If you want to know what happened, check out my Miss Celie Moment post. This was also around the time I began to shut down mentally. I’d been running in circles about leaving a job that reminded me of an abusive relationship; and when I looked at my finances, there were key moments that stuck out to me. In November 2012, I spent roughly $200 on a whim after a bad review from my Executive Director. In December 2012, I went to the movies and dinner and shopping as a way to cheer myself up. It was at this time that I found out I had a fibroid the size of a softball and needed surgery. In February 2013, after a clash with Senior Management, I spent roughly $300 on food, books and clothes (I should also mention that in February I was sleeping on an air mattress in my Cousin’s apartment).

But what also stuck out to me is that I would juggle between paying the bare minimum of a bill and paying a much larger sum on a bill based on my fear of adverse reactions. That same November, I paid almost $400 extra dollars on a student loan because I was afraid I was going to lose my job (my thinking – “better to pay a large amount at once in case I fall behind” – which is foolish). In December, I paid up and over on all of the utilities (don’t do this ever). In February, I transferred all of the money I had in my savings into my checking and again paid up and over on some student loans.

In each scenario, I was scared — terrified — that I wouldn’t have a job. Or that my health prognosis wasn’t favorable. Or that…

Well, it doesn’t matter what I was afraid of (looking back I can say that). What matters is that I now understand that realistically, I made decisions based on fear; and fear and finances are not good bedfellows. Now that I realistically know what my habits are, I can move into developing new ones.

Stay tuned for Rule 4: Build New Habits.

Have you examined your habits lately? What have you learned about yourself? 

My Financial “Miss Celie” Moment (#31WriteNow)

I find something very interesting happening as I write the “Building Blocks for Building Wealth”™ series. Well, not interesting because the more I think about it, the more I expect that to happen. What I mean is that I don’t post about a rule until I feel comfortable posting about it.

And I don’t feel comfortable until I DO it.

With that being said, one the next steps is to “Realistically Examine Your Habits.” By that I mean, take a sobering look at the things you do financially. I’ve written before about habits with money, especially bad ones, stem from something emotional. If you are like me, you’ve had lots of time to practice HIDING those emotions and so you probably don’t know the root cause of your money beliefs.

Today I decided to come face-to-face with one of mine — I don’t open my mail.

Largely, I get reminders of bills and their due dates. When something majorly traumatic happens in my life, those reminders escalate into notices of “Hey! Girl you know you forgot to pay your bill???” and if something absolutely crazy happens, then those turn into shut off notices. Now what does this have to do with a Miss Celie Moment.

If you’ve ever seen The Color Purple*, then you know that there is a pivotal moment for the main character Celie Harris Johnson. During the holidays, Miss Celie is preparing a meal for a large group and Shug (one of my absolute favorite characters ever) happens upon a letter from Celie’s sister, Nettie. Now, Nettie is in Africa and has been for some time after being forced to leave the Mr’s house because of “personal differences**”. As Celie prepares the meal, Shug tells her that she has something to show her and they find an empty room in the house where Celie finally sees the letter. Shug realizes that there have to be more letters because Nettie and Celie were absolutely close…and lo-and-behold, after searching through Mr’s personal belongings, they find them. Shug tells Celie, “Put them in order by date” so she can read them. It is in this moment that Celie faces a truth that she must have either felt foolish for holding in her heart OR it dashes whatever craziness she made up about why her sister (Nettie) never wrote her.

So what does this have to do with me? Remember I said I don’t open my mail?

Well….yesterday I was cleaning up and came across a huge stack of mail. I mean, some things go as far back as April when I had my surgery. The other thing that happened was that I had to face the realization that I worked over 40 hours a week at a job and couldn’t even take care of myself during an extended absence from work. Craziness. Bananas. Downright wrong.

Since April, I’ve been on a silent campaign of not opening jack squat and yesterday it really bit me in the ass (excuse my language). When I took my extended leave from work, I removed all of the auto-payments for loans and utilities from my bank account. I needed to control the payments that hit the account so it wouldn’t overdraft. And I did. But I never remembered to actually pay the bills. The end result:

  • 3 months behind on electricity
  • 2 months behind on phone bill
  • 3 months behind on 4 of 5 of my student loan groups

I’d put numbers to those things…but I don’t want to cry.

The thing I realized while putting my mail in order is that I had a habit of “out of sight, out of mind.” Financially, that’s a dangerous habit and it’s scary to face that part of myself. Fiscally irresponsible isn’t something I’d ever call myself, but that stack of mail tells me that’s exactly what I am. What’s even more stressful is that I’m like many other Black women (well, women of color in particular) in that my income doesn’t just support Me. To me, I realize that I’ve been unfair to others who rely on me which makes me selfish in the wrong way.

So during yesterday’s Miss Celie Moment, I learned a lot about myself. Now I think I can move forward somewhat on getting cracking on these financial goals.

Have you ever experienced a Financial Miss Celie Moment? If so, what was it? Don’t be shy, just share it below.

*It is a great cinematic piece. You should see it. No really. See it if you haven’t already.

**I don’t want to go into why she left. But see the movie…if you haven’t already.

Check Your Financial Health

Are your finances on Life Support? Do you think you have a good idea of what you need to do to get them under control?

Well, if you found this blog, I’d bet my last dollar (not really) that your finances are in a bit of trouble AND that you actually need help getting them under control. Not to worry! This quiz will give you an idea of what you need to start working on. These questions will point out areas that you need to work on yourself. I’ve included a quick write-up at the end of where I stand because I want you all to really know you’re not alone. I’ve also included a link to the original survey because I’ve modified a few of the questions (all modifications are italicized). Here are my answers!

  1. Is more than 15 percent of your income going to pay any kind of debt? The MAJORITY of my income actually goes toward Student Loan and Medical Bills. I look at my income in two different ways: “Before Taxes” and “Take Home” to get an idea of where my money actually goes. I’ll write a post about why this is useful and give you tips/tricks on how to simply calculate where your money goes. (+1)
  2. Are you borrowing money or using credit cards to pay for items you used to pay for with cash? While I don’t borrow money or use credit cards to pay for items I used to pay for with cash, I have developed a nasty habit of using my credit card (which was originally for emergencies) to get me through half of the month. At the time of this post going live, I’m in the midst of developing a personal Credit Card challenge (to clear that balance for good). I also have a few store credit cards with balances near the limits. (+1)
  3. Are you dipping into your savings or any other money stash to pay current bills? In order to dip into a savings account, there must be something in there for you to dip into. Since I’ll readily admit that my savings account looks empty, I have to go ahead and give myself a point for this question. (+1)
  4. Are you paying bills with money intended for something else? Thankfully…no! All of my bills are actually set up on a Kwik-Pay or Automatic Debit System! Additionally, I set them up on days where my Direct Deposit hits my account. It’s almost as though I don’t miss the money because it’s gone before I really have the chance to notice it. I got something right. 🙂
  5. If you or your spouse lost your job, do you have less than three months’ take-home pay in a savings account? Unfortunately no. This point hit home for me when I had to take time off of work to heal from a surgery. Here’s another point for all of the wrong things. (+1)
  6. Can you usually only make the minimum payment on your credit cards or any other credit account? No. I’ve set up automatic payments to take out more than the minimum payment. While this is great, I’ll admit here that the payment amount isn’t enough to put a real dent into the balance on the card.
  7. Are you extending repayment schedules – paying in 60 or 90 days bills you once paid in 30 days? No. This makes me feel a little bit better (this quiz is slowly making me think about all of the things I need to work on). However you should also consider ask yourself this question another way — do you have to ask for extensions on bills because you don’t have enough to cover the small balance for that month? If I ask the question that way, the answer (thankfully) is still no.
  8. Are you near, at, or over the spending limit on your credit cards or spending accounts? Yes. (+1)
  9. Do you take out a new loan before the old one is paid off or take out a new one to pay off an existing loan? No. Thank goodness. The only loans I have are Student Loans.
  10. Are you unsure of how much you owe (within $50)? No. I’m aware of how much I owe. My problem has been getting a handle on being able to put a real dent into it.
  11. Do you habitually pay your bills late? No. Look at answer number 4 for the explanation as to why.
  12. Do you charge more each month than you make in payments? No. I use my credit cards in waves. There may be a period, say of 3 months, where I don’t use them at all AND then, I’ll get all emotional and go on a shopping spree. However, I’ll answer yes to this because the difference in what I buy and what I pay still plays out in much the same way. (+1)
  13. Do you use a cash advance on one credit card to make payments on other credit cards? No. Pretty impossible to do this with one credit card.
  14. Has a collection agency called recently about an overdue bill? Yes. As of the date of this blog post going live, I’ve actually been receiving pretty consistent calls from two companies. *deep sigh* I’m too young for this. (+1)
  15. Are you threatened with repossession of your car, cancellation of your credit cards, or other legal action? No. It hasn’t gotten there yet…and the point of this blog is so that it doesn’t get that far.

I scored a 7. If you’ve answered “Yes” to three or more of these questions, you’re at risk of increasing financial distress and if you gave four or more “yes” answers on the financial health quiz, you’re at risk of slipping into the financial danger zone. My seven means that I DEFINITELY have some areas I need to work on.

But as with all things, it gives a nice snapshot but not really the whole picture. Because this only offered a snapshot, I included the links to two other quizzes below:

How Healthy Are Your Finances? Source: CNN Money. This is an interactive assessment. You start by putting in your age and your gross annual income and go from there. There are some pros and cons to this. The biggest plus is that it is easy to use and gives you a neat little picture of your financial health. It asks you to input how much you put toward (1) Retirement Savings; (2) Housing Payments; (3) Debt; (4) Emergency Savings; (5) Diversification of Stock; (6) Company Stock; and (7) Life Insurance. The major drawback is that  it assumes you work for a company that offers things like company stocks or that you’re investing in the market. I’ve included my neat little picture below (so you can see that I also need work):

As you can see, I got a "C" as a grade on the CNN Money Financial Health survey. It tells me the areas that I need to work on and the areas that I'm doing okay with.

As you can see, I got a “C” as a grade on the CNN Money Financial Health survey. It tells me the areas that I need to work on and the areas that I’m doing okay with.

Quiz: How’s Your Financial Health? by Better Homes & Garden. This one definitely works if you need to consider the spending habits of another person (say, your significant other). For me, there were a few questions that I couldn’t really figure out how to answer because I’m single. However, it’s simple to follow (as it’s a click-through quiz). My only annoyance was the pop up ads of to the side. I didn’t get to see my result because page 3 continued to reload whenever I pressed forward.

I hope that these questions get you start thinking about your Financial Health in a different way and on the road to where you wish to be.