Show Me The Money 2

Good evening, Dear Reader. And it is…a good evening, right? You slept in a bed under a roof. You could have had breakfast, or maybe you actually did. You put on clean clothes – maybe. You picked up your phone or logged into some device to read this. In other words, you had choices, and that’s my point. If you have a job that pays (in the U.S.A.) $17+ an hour, you are making a living wage. If you have a running vehicle, a place to live, and food in your belly, you have more than 80% of the 7+Billion people on the planet. Stop being such a sourpuss.

We are continuing our Things To Let Go Of series, kicking off the new year with Bad Money Habits. If you want to go back to the beginning, click here. We started off with hitting on debt reduction and honestly, to recap, reducing debt (in theory) is simple. Reduce expenses, increase revenue. Don’t accumulate any more debt until you comfortably can pay for it. I say it is simple in theory because it really is nothing more than basic math. But, most of us got into debt or can’t save effectively because of our thoughts, feelings, and experiences surrounding money in the first place. I don’t have time to address that today – the entire first part of my blogging back in 2011-2015 was about getting out of the consumer mindset. You can go back to those, or really…watch this documentary and start reading my favorite blogger, Joshua Becker from start to present. I, literally, can not thank this man enough for getting me on my road to rational minimalism.

Managing money is easy. Managing our emotions about money is…well…a bit more complicated.

But. As promised…I’m moving into my ‘how to’ guide for raising your credit score. Grab a drink and settle in. I’m going to tell you how I raised mine from 480 to 720 in a little over 2 years.

  1. Get your reports. You are entitled to one free credit report from all three agencies one time a year. To monitor for identity theft or weird things on my credit, I don’t get all three of mine at once. I order TransUnion in January, Experian in April, and Equifax in November. That way, if something odd happens to appear, I’m not waiting an entire year to find out. I also subscribe to Credit Karma (and I look at that thing once a day, sometimes two because I’m a bit retentive.) Go on…put it on your calendar with a yearly reminder. Then mosey on over to this site and get your free report. Once you have your report, you’ll be able to list all your debt and decide what debt storm to use as I mentioned here to pay it off. You will also look for things that do not belong to you. I found a collection from Go Daddy on mine and I was able to dispute it (you can easily do this yourself, do not pay someone to do it for you) and start working with your creditors to move payment dates or to lower your interest. I recommend checking out this site for more detailed information.
  2. On-time, every time. I mentioned this in my last post, but I can not stress this enough. Late payments are a detriment to your score. A late payment on your mortgage can put a ding there that leaves quite a scar for a bit. If your payments fall in odd places (like three payments due on the 13th, but you don’t get paid until the 15th), then call your creditors and ask them if they will move your payment to another day (like the 16th, in this example). Some of them will. If they won’t, then sell a bunch of crap you no longer need or get a second job and put a month’s worth of living expenses into your account so, essentially, you are ‘ahead’ in the math game.
  3. Join a credit union with a ‘credit builder’ program. If you are local to SW Missouri (417-Land) I recommend this one or this one. Why a credit union (CU)? CUs are nonprofit organizations and many of them have financial literacy (financial wellness) programs to help people restore their credit. If yours does, then get on a first-name basis with the person in charge of that program. Use every resource and every piece of advice they give you. I mean, I like Dave Ramsey – I’ve seen him live and I agree with a lot of his methods – but I don’t idolize him. And I don’t follow 80% of his advice. So, if you drink his kool-aid…then you’re not gonna like the rest of what I’m going to tell you. 
  4. Get a ‘Secured Credit Card’ (SCC). Remember my ’emergency fund’ I mentioned last time? I took my emergency fund and applied for an SCC with it. An SCC is just that…secured. This means you have to give them YOUR money to ‘secure’ that card. I don’t have space to explain it, but you can read about it here. So. I got my SCC with my $1500 and it DOES function as my emergency fund 99.9% of the time. The other part of the time? I use it wisely to play a game. I use it to buy gas and pay for anything I buy online. NOW…I don’t buy things I don’t already have the money for – I just use the SCC because it is more secure for online purchases than using a debit card. Anything I would normally buy anyway (Netflix, gas, Spotify, toilet paper, dishsoap) is set up to be ‘charged’ on my card. Then I…
  5. Play the game. I pay for some of the expenses that hit every week. So, if my Netflix ($12) and Spotify ($10) hit my SCC on Tuesday, and I buy TP and Dawn at Walmart.com, I pay those charges on Friday so a payment is hitting my card every single week (Newsflash: You can pay your credit card bills more than once a month). Now…here’s where the game comes into play. Find out when your actual payment is due (Let’s say it’s due on the 20th), figure out what 30% of your credit limit is (Let’s say it is $300), and find out when the Credit Union is going to report to the credit agencies (Let’s say they report on the 24th). Armed with this information…make the MINIMUM payment due on or right before the due date (In our scenario – the 20th). Make sure you have JUST UNDER the 30% left on the day they report to the credit agency (I’ll usually pay my Verizon bill on the 21st and get gas so that I’m right under BUT NOT OVER that 30% of credit limit threshold). Then, on the first of the month, I pay the balance in full and start the clock for the next month. That seems complicated now that I type it out, so I recommend the video on this page.
  6. Diversify your debt. You’re about to see why I go off the rails when it comes to Dave Ramsey’s advice. I use debt and credit to my advantage and I use it wisely. I do not subscribe to the ‘have no debt’ and we may not agree here. You do you. But, back to my point on diversified debt. You’ll need an installment loan (i.e. Car loan, student loans, etc.), a revolving credit line (I have my SCC, a store card, and a credit card for a home improvement store – which comes in handy when remodeling), and finally, a mortgage loan THAT YOU CAN AFFORD. I know my credit score will most likely not increase much more than where it is now until I add a mortgage to my list of creditors. I am okay with this. A note if you are renting: See if you can talk your rental agency/landlord into using a service that reports to the credit bureaus. (Word of caution: Now you’ll be on the hook to pay rent on time so DO THAT!). Lastly, Experian will do a ‘boost’ a few times a year and bring in things like your cell phone company and some utility agencies. I share a home with a relative. The mortgage loan is in her name, but my name is on all the other expenses (Cable, utilities, etc.). I use the Experian boost (It’s free!) once a year. This is only effective if you pay those bills on time. You don’t want bad stuff hitting your credit reports.

    So yeah. That’s it really. I think I mentioned that I am working on getting my student loan debt down to 50% of what is owed over the next ten years. Why just 50%? Because I’ve worked with my loan company to get on a specific repayment plan that allows for student loan forgiveness after on-time payments over so many years. To be transparent, I wouldn’t be mad if Biden and his administration got their shit together to forgive student loan debt BUT I do understand that I made the decision to go to school and I made the decision to take on debt related to that endeavor. I own all of that responsibility. But, since most of what would be left would be interest anyway so I can sleep at night knowing I paid what I borrowed. In other words…I don’t feel guilty about using the tools at my disposal when it comes to paying down that debt.

    Notice we still haven’t talked about budgets. We’ll do that next time. Want a head start? Okay, then. Stop buying shit you don’t need and start paying for the shit you already bought. That doesn’t seem too hard to understand, but then again, I’m an INTJ so I can be a bit abbrasive. You want someone nicer to hold your hand through all of that? Then go on down to that Credit Union. They’ll even give you a lolipop. Ain’t that sweet?


    That’s all I’ve got today. I don’t even have a really good song that ties into this post at all, so how about I just leave you with this one: Wind & SkyBrandon Moore is a local singer/songwriter in my hometown and just a f*cking good human. You can’t help but smile in his presence. Wind & Sky is one of my absolute favorite songs on the planet. I want it played on loop at my funeral, I like it that much. You’re welcome.

Show Me The Money

You remember that quote, right? Please, for the love of all things good and holy do not tell me I’m so old that you don’t remember that quote, Dear Reader. I’ve been searching YouTube for ideas to share with you on this snowy day and I have to admit…I’m a bit overwhelmed. There is SO MUCH to tell you that I’m SO HAPPY this is a ‘series’ because this post would be a million words long if I tried to cram it into one piece. It reminds me, though, of my journalism days – researching theories and stories, finding sources to back up my words. All that jazz. The cool thing is though…this isn’t a journalism story so I can be as biased and opinionated as I want. And you know that rings my bell – Amiright?

Anyway, we are kicking 2022 off with the list I mentioned here, starting with Bad Money Habits. I beg your pardon? I remember specifically telling you that we would not cover the list in any particular order, so that’s where we are going to start. My blog. My rules.

I must begin by being super transparent, though. First, even as a rational minimalist, I would never call myself ‘cheap’. I like nice things just like anyone else, but since I embraced this lifestyle about ten years ago, I would describe myself as more of a quality over quantity kind of gal. In fact, embarrassingly, I spend a huge chunk of my “entertainment budget” on massage therapy and expensive facial products. I recently spent more money on a bottle of perfume than I’ve spent on perfume entirely in the last decade. I traded my Buick for a Subaru. I mean, I have upgraded considerably, but I don’t feel like I overspend or waste money. Every expense comes out of a line item on the budget. No money? No buying.

Secondly, just two short years ago my credit score was 480. Yup. I kinda take responsibility for that. I mean, you have to work really hard to NOT pay your bills to sink that low. However, let me also put this out there: I trusted someone else to pay the bills. In other words, I was the paycheck, he was the ‘money manager’ – and well, he sucked at it. It was until the “money manager” walked out on me did I realize just what a mess he’d made. I was broke. I was jobless. I was fucked. But I take full responsibility for my part of this problem.

Lastly, I’m well-educated and I have white privilege going for me. I do not take this for granted and never have at any point in my life. As long as you keep that in mind, we will be better able to understand one another. The best thing that ever happened to me was having the opportunity to take a position with a local nonprofit where my fancy title was “Director of Financial Stability”. In this role, I taught people about managing money and working with a personal budget. Funny thing, though? The salary wasn’t even a living wage. I was, literally, employed and teaching other people about managing money while my child was enrolled in the free lunch program at school and we were getting all his clothes free from the PTA clothing bank. Ironic how the Universe works, huh? With all the grit and gratitude I could muster, I decided that was bullshit. I got up, dusted off, and moved on – making significant changes as I did it.

So, together, we are letting go of many things this year as I wrote about here. We are starting with my financial story and how I got myself out of a big mess. This transparency and advice will hopefully enable you to let go of Bad Money Habits. Don’t worry. This topic is a big animal. And how do you eat an elephant? One bite at a time. Keep that in mind.

We are going to start with the basics today. So. Grab a drink. Settle in. Let me share with you my fuck ups and my comebacks in hopes you can use my example to let go of your bad habits.

  1. Mind your money. That image above really says it all. Right now you may feel out of control because of where you are financially. But minding your money involves several steps, and the most important of all of them is Do. Not. Let. Anyone. Else. Have. Complete. Control. Over. Your. Finances. In other words, Your money, your responsibilty. Since the majority of you, Dear Readers, are women, I recommend a book by Suze Orman (love her or hate her, doesn’t matter) called “Women & Money”. Find it used. Buy it new. Get it from the library. Listen to the audiobook. I have no attachment to how you get ahold of it – just get it. Men, same goes for you. You can’t bitch about the fact that your wife spends spends spends if you don’t know where the money is going. I also recommend watching videos or reading books about money every day (I’ll post some of my favorites at the end of this series). As Stephen Covey said “Begin with the end in mind”. By reading or watching videos about managing money and debt, it keeps your thoughts in the end zone.
  2. Set up an emergency fund. After you decide to take control of your finances, this is THE first step. I don’t care what anyone else says to you…this is your first step. According to Forbes, the U.S. poverty rate nationally is 13.4%. This means that 13.4% of the national population lives below the poverty line. Over 70% of Americans would be financially devasted if faced with a $400 or more emergency (Like, um, a refrigerator dropping dead or having to buy two new tires for the only car used to get you to and from work). Ideally, your emergency fund should equal $1,000 for the first person in your home and an additional $500 for any others. So, for me and my son that would be $1,500. I saved $2,000 first and squirrelled it away in our emergency fund (Sorta…more to come on that). Again, emergencies are new tires, new car batteries, a new refrigerator when the other one breaks down, etc. etc. Emergencies are not that trip to Disneyland, kayaks or skis, roller skates, a down payment on a boat, etc. You get that, right? To be brutual…not having an emergency fund makes you prime prey for predatory lenders. Let’s not feed them anymore. (I love this organization. Check it out.)
  3. Choose your storm and attack your debt. List out all of your debts (include those in collections). List them by columns: Creditor name, total owed, monthly payment, and interest rate. Choose a Debt Reduction Storm: Either the Snowball method or the Avalanche method attack the debt. Compare them. (Here’s a new one for you: The Debt Tornado. Hmmm.) I personally used the Snowball method because I needed instant satisfaction and enpowering feelings of crossing the debt off the list, but in hindsight, I personally think the Avalanche method is more effective and smarter. With that method you spend less on interest even though it takes longer to cross the debt off the list as paid. (Those purple words lead you to links to explain those methods in depth.) In terms of those accounts in collections…well…we will touch on those in another post. If that makes you nervous, maybe this will help: Those accounts have already fucked with your credit score. They can’t hurt you anymore now so we will worry about them later. (One elephant. Tiny bites. Got it?) *Side note…I’m using the Avalanche method now with my student loans – which is the only debt I really have.
  4. Pay on time, every time. Remember, we are on a journey that includes reducing debt AND raising your credit score (not one then the other…). With your debts listed and a pay-down storm-of-choice method chosen, I can’t stress paying your bills on time, every time enough. This is the number one way to get that credit score moving in the positive direction and even though it will take some time to move the needle, it’s the ONLY way to move the needle at the moment. Credit cards are the most damaging to your budget and to your credit score, so make sure you pay them first, then your vehicles, then your cell phone (right?? who knew) then your mortgage/rent. This is a game and the game is won by the first person who beats everyone else to the finish line. In this case, credit card companies are used to people like you and so are cell phone companies (Fuck you, Verizon. Really). They are used to people not paying so they have incredibly high late payment fees and interest. They also report to credit bureaus faster than any other creditors. They know how to win by taking your money and charging you more for the priviledge of paying late, so beat them at their own game. Pay the minimum payments on all your debt FOR NOW until you build up your emergency fund…but pay that ON TIME. Mortgage and vehicles come next. Rent…well…it takes three months for them to evict you and even though there is a late payment fee most likely…it’s low AND eviction is costly for the rental company. In fact, most of rental agencies do not report to the credit bureaus unless you go into collection. My advice? Communicate and negotiate with all your creditors. Play by their rules – afterall, you agreed to them – but get better at the game. Again, always pay credit cards first. Period. Also…about those cards…do not close them (we will get to that later) but also, do not use them anymore for now. (We will discuss responsible use of credit much later in the series). When it comes to paying your bills on time, I don’t recommend automation (auto bill pay) unless you are just forgetful as hell. I think you need to LOOK at your finances every month (I look at mine Every. Single. Day – sometimes more than once. Yes, OCD. So? That’s how I caught two charges for Wal-Mart around Christmas that I didn’t make, so there). If the payments all fall around the same time each month, and it is difficult for you financially, try asking the creditor if they’ll move the payment. For example, I get paid on the 15th and the 30th of the month. I have half my bills due on the 1st and the other half on the 16th. That way I’m not hit with a huge group of expenses all at once and it helps with my forcasting (see…no words on budgeting just yet…). This video explains the game. Watch it.
  5. Make more, spend less. You notice I STILL haven’t even mentioned a budget yet, right? That’s because budgets don’t work if your expenses are more than your income. My favorite Dave Ramsey quote is “You can’t outearn foolishness.” Your days of spending more than you earn are over. Remember that rather expensive MBA degree I have? It comes in handy sometimes. In business when things are tight, the first things companies do: Decrease overhead (fire people, sell assets, etc) or they increase revenue (get more clients, sell more to people). Successful companies do both at the same time. I worked for a nationally recognized nonprofit when COVID first hit. Sadly, in July of 2020, 23 of my favorite people lost their jobs due to a ‘reduction in force’ AND the organization sold its main headquarter’s building going to a ‘Virtual First Workforce’ plan (which is just a fancy way of saying everyone is working from home now). BUT, they also dumped a ton of money into digital marketing which grossed 48 MILLION that year – the best year ever in fundraising revenue and it was during a global pandemic. Smart. Very smart. You need to do the same thing. Decrease expenses AND increase revenue. So, yeah. You’ll need another job – I recommend a side hustle. I was fortunate that I had been a licensed massage therapist before I got my MBA. So, I relicensed and went to work a few evenings and weekends a month making about $30 (pay+gratuities) an hour. Also…here’s where I piss you off…you can only make it so far with canceling cable and cutting out lattes. Your biggest expenses are: Housing (2800+ square foot homes for three people? Hmmm), Big Person toys (campers, beach front condos or timeshares, boats, four wheelers, etc.) and Vehicles ($50,000 Suburbans? You know there are people in who under bridges, right?). That said, I didn’t go without wine or streaming services during the leanest of times. Yeah, I may have purchased cheaper wine…and only had one streaming service, but come on. If HBOMax is your only source of entertainment (because you aren’t going to the movies right now…) then don’t cut it. I also don’t mess around with people’s cigarette/drinking habits or tithing – because I know it’s not an argument I’m going to win. My point is: No one wants you to be a grouchy asshole because you have nothing pleasureable in your life. But that boat? You aren’t going to have time to use it or maintain it because of your second job – so sell it. Buy one later if you can afford it, but for now…nope. FB Marketplace the shit out of it and any thing else you no longer need. There will always be another day to rent a kayak. My favorite minimalist quote is “You don’t have to organize the things you don’t own.”

I have so much more to tell you and to recommend to you, but it will all come with time. Remember, we’ve got a game plan, and this month’s plan is to help you let go of BAD MONEY HABITS. These first few tips will get you started.

In closing, I want to emphasize this: Money can be scary for some of you. The scarcity mentality is a real thing and shame around money doesn’t lend itself (puns are fun!) to getting you into a mindset of success. Face that fear. Everyone on the planet has made a mistake they are ashamed of (poor financial decisions, marriages, that last donut…) so get up, dust off, move on. Remember our 2022 motto?

Chin up, tits out. You got this.

Oh! I almost forgot your song. But I didn’t. I can almost visualize the pole dancers every time I hear this song. And I’m doing this for you, Dear Reader, because I can’t tell you how much I loathe Pink Floyd. You’re welcome.