Blunders


I usually don’t answer phone calls with “Unavailable” on the caller ID or numbers I don’t recognize.  I am on the Do-Not-Call list, but somehow some telemarketers still get through and I prefer to just ignore them.  Last week the phone rang with a number I didn’t recognize, but it was a number with my area code.  Thinking it may be a friend who had a new cell phone or parent from my child’s class I answered:

Me: “Hello?”

Caller(in an urgent voice): “Is this the “sahmCFO family” that lives on “Saving Money Lane?””

Me (concerned and nervous – did something happen to someone I know and love?): “Yes, yes it is.”

Caller: “Do you know a “Mr. Debtor” who lives on your street?”

Me (relieved and suspicious that this isn’t a call about somebody’s welfare but a fishing for info call): “Umm, No I don’t think so.”

Caller: “Well, I was just speaking with him regarding something extremely important but we got disconnected and I really need to speak with him.  Do you know him?”

At this point in the call I am seething mad.  My 3-year-old and 4-year-old were at preschool at the time of this call and my heart had skipped many beats in the first few seconds of that call, thinking something had happened at school, and that this was a legitimate call – not a fishing expedition.

Me: “WHO IS THIS!”

Caller:  “My name is “Jerk-Face” calling from “Scumbag Collections” and we are trying to reach your neighbor regarding an important business matter.”

Me: “I don’t know him, please don’t call again.”

In 2006, when my husband and I made the transition from 2 incomes to 1 income we had a rough six months, we endured endless but legitimate calls from our credit card companies.  We paid our bills late sometimes, and the phone calls would start at 8am and go on until 8pm.  I was home with an 11 month old and a newborn and it was one of the most stressful times of my life.  We have not paid a bill late in 4 years and I cannot tell you how nice it is to be able to answer the phone again with no fear.

Until now.

It’s called a “Block Party”.

What Is A Block Party?

The collection agency or debt collector will call three or four or five of your neighbors and tell each of them that an urgent message must be given to you. “Can you please go over to his house and see if he is home?” or “Is he OK-he hasn’t called me back.” or “Can you leave a note on her door?” or “When you see him in the yard go over and tell him to call me immediately” or some similar statement. Usually the debt collector will refuse to tell the neighbor the reason for the call – “Sir, I’m not allowed to say as this involves an urgent private issue”. This only arouses the suspicion and curiosity of your neighbors.

The result is you begin to get calls and visits from your neighbors. They tell you that you need to call “Mr. Jones” or whoever the collector is and, of course, they want to know what is this about. When this happens, the effect on you is exactly what the debt collector wanted – fear and embarrassment.

Back to my disturbing phone call…

I DO know my neighbor.  He is the best neighbor I’ve ever had.  He is a 75 years old gracious man, with a wife in ill-health who he takes loving care of, who teaches me how to fix and maintain my tractor.  He invites my kids over to feed his fish in his KOI pond.  He is always willing to lend me any tool for any job I need.   He helped my brother remove a dead-deer carcass from the undercarriage of his car (don’t ask:)).  He is one of the “good ones” and there is no way I’m ratting him out or embarrassing him.

I know for a fact he owns his house free and clear.  We sometimes get his mail by mistake and I have seen MANY elite credit card offers in there.   He lives a very simple life, so this may just be a bill that slipped through the cracks.

It doesn’t matter why the collection company is calling, it is NONE OF MY BUSINESS! I am not a secretary for collection companies and I refuse to endanger the good relationship I have with him over this sleazy call.

To top it off, this was not the ONLY call from a collection company I received last week.  There were two other calls from debt collectors both looking for someone with the same last name as us.  Calling here in hopes we know the debtor.  And Yes, we also know this debtor they are looking for –  it is a family member. But again, I am not a secretary and I know the financial situation of this particular family member.  It is not good.  They have fallen on hard times and are trying to keep food on the table.  I’m not ratting them out either.

I am VERY ANNOYED THOUGH!  We pay our bills on time but still must endure numerous collection calls. This is ridiculous, but apparently NOT illegal. The collection companies also seem to be “caller ID spoofing“, so you assume the call is local and are more likely to answer.

Be aware.  Even if you pay ALL your bills on time you still may get “Collection Calls!”  Tell them to not call again.  But “Block Parties” and “Family Fishing” expeditions are the new thing.

You should be in the clear though if every person you are related to, has the same last name as you, lives in your vicinity or works with you pays every bill on time….

Otherwise you may be invited to the “PARTY”.

(If you are being harassed by collection companies you may want to read the Fair Debt Collection Practices Act (via FTC.gov) and know your rights.)

UPDATE:

This is the phone number who called me about me neighbors debt:

(954)538-7533

UNITED COLLECTION BUREAU, INC

I did a little research to get their “real number” – Apparently I’m not the only one getting these types of calls…

I do plan on calling the FTC (filed online – reference number: 25959253) and my AG’s office to file a complaint.

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This is a story of the troubles that ensue when you live paycheck to paycheck and your paycheck is late.

My husband has been at the same job for 15 years and has without fail, been paid on time via direct deposit.  Paid on time and in full every 15th and last day of the month for the past 15 YEARS!   And even-though, with all my technophobia (my budget is still on paper), I have had such faith in the timely paycheck deposits that I automated ALL of our payments, bills, investments.  The mortgage is automated for the 1st and most of the rest of the bills (car insurance, car, electric, phone, credit cards…) are all set up to be paid on the 15th.

This was all going along swimmingly, until this Monday, March the 15th.

I had a feeling something was amiss on Saturday when the paycheck wasn’t listed in “pending”  on the banks website.  If payday falls on a Monday it ALWAYS has been deposited after midnight on Friday night, although it won’t actually “clear” until Monday.  I really felt uncomfortable on Sunday morning when it still wasn’t there.  I stayed up Sunday night into the wee hours of Monday morning because the knot in my stomach was getting larger by the minute and was hoping against hope it was going to go in there.

I had 16 scheduled payments automated to come out of that checking account on Monday the 15th.

I freaked, it wasn’t there Monday morning by 7am.  I scrambled to every website where a payment was scheduled to be made, canceling the payment, hoping it would cancel this late in the game.   Trying to remember 16 logins and passwords and clumsily navigating websites I hadn’t visited in months.  One website was “Experiencing Technical Difficulties” – “Try Back Later”, *sigh*.  I was picturing an endless, disgusting cascade of bounced checks. 16 Bounced checks would = $576 in NSF Fees!!! I eventually figured out how to, and did cancel all the payments.

I called the bank.  “No, we see no incoming deposits”.  CRAP, the Ides of March got us.

As a SAHM, I say all the time, “I work, I just don’t get paid.”  Apparently now, my husband does too.

He gets to work Monday morning, with the office all abuzz and comes to find, “a glitch with the payroll company and the problem will be resolved and deposits will be made by end of business.”  And it was, at around 3pm the deposit went in the bank.  Magically, it bypassed “pending deposits” and went straight to “available balance.”  He was paid in full and on time (it was the 15th).

Now I had to login back in to 16 different websites and redo the payments.

The bills and payments were in no danger of being late, but I liked paying them early and the money left over on the 16th was “uncommitted money”.  Our milk money, if you will.   I never doubted it would be more than 2 days or so that he would get paid, but the drama of having A LOT of money set to come out of an account where there was NO MONEY was too much stress to bear.

I’ve UN-automated all our payments.  No more “scheduling payments” or “automated bill pay”.  We’re going old school.  Well, I’m not going to write actual paper checks or anything that crazy, but I will pay each bill individually after I make sure the paycheck is in the bank.

We can’t afford to take the chance…

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I thought I was a goner.

Maybe they had read my gloating and decided we were up to no good.  Or maybe they had gotten wind of my plan to deny them a free loan next year and had decided to take their revenge…

Was it the dreaded AUDIT?

NOPE!  I had made a mistake on my taxes.  They were writing to inform us that they OWED US more money.   After I filed my taxes I had noticed I made a mistake when claiming the “Making Work Pay Credit”.

One of the questions via Turbo Tax was something to the effect, “Did you already receive the Making Work Pay Credit?”.  I checked YES because my husband did receive a small bump in his paycheck last March.  But the question pertained to those who had received an actual $250 check from the government (ie Social Security recipients, Veterans Benefits, Railroad Retirement…) called the “Economic Recovery Payment”.   It looked to me like we would be “double dipping” on this credit if I did not indicate we HAD in fact received something.  I was wrong.  See Tax Girl’s great explanation of why this isn’t the case.

After I realized this I figured I would just wait for my refund and file and amended return to get back the $250 I had mistakenly said we already received.  Turn’s out the government took care of it for me.  With a very nice letter indicating when my refund comes it will include the additional $250.

Here is something I may never say again, “THANK YOU IRS!”

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Today our credit card debt alone totals over $11,000, but for the first time in a long time I fall asleep at night with hope rather than despair.   I’ve tried for over 2 years to get out debt but truth is we never made a dent in it.  It seems so obvious to me now why I’ve failed at getting our family debt.

One of the big reasons – I was unprepared and underfunded for the yearly bill/irregular bills when they came.   The fact that I never properly budgeted for the sewer bill or the car registration/inspection meant using credit cards or spending any “emergency savings” we had built up.   Basically back to square one.

Then I had an awesome idea that would revolutionize the personal finance world!    I would take all the irregular yearly bills, add them up, divide by 24 (my husband is paid bi-monthly) and make that part of my monthly budget.  I would call it our “Personal Escrow Account.”  GENIUS!

Of course this idea is old news.   In fact Charlotte, the subject of  an article at “Get Rich Slowly”, even calls her method a “Personal Escrow Account.”

While I won’t win any points for originality, this method has saved my budget and my sanity.  Breaking down big irregular bills into smaller semi-monthly payments not only makes me feel prepared but provides breathing room in the budget.

EXPENSES         YEARLY BILL         NEED TO SAVE per PAYCHECK

Sewer bill                        $204                                       $8.50

PreSchool                        $2430                                    $101.25

Cars(approx)                  $400                                      $16.70

Propane                            $1400                                    $58.35

These “mini-escrows”(I’m patenting that) have helped alleviate the pressure that would come any time a non-recurring bill would come due.  I round up the numbers to the nearest $5 and put them in designated ING accounts.  To build up the proper amounts I needed to borrow from the “Emergency Fund”.   I know, I know, YOU NEVER TOUCH the emergency fund but I would have had to either used the emergency fund to pay these bills or a credit card so what’s the difference?

I also add bi-monthly in sub ING accounts to the “Emergency Fund”, a “Christmas Fund” and a “Whatever Fund”.

When you NEED credit cards to pay bills you know you are in trouble.  That is where we were.  Hopefully, no more!  Over $11,000 in credit card debt is no joke, and while the amount we owe is still there I feel the crutch they provided may be gone.

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When you finally make a plan to get out of debt it is easy to succumb to irrational exuberance and put yourself right back where you started. 

This is my third attempt in two years to pay off our debt and this time I think I have it right.

Failure #1 –  A Sloppy Budget:

I never fully took control of expenses.  I basically just added up the bills and thought “OK – I’m done – There is my budget”.  But I underestimated costs of necessary reoccurring expenses.  For example – I’d budget $200 grocery shopping and spend $200 on groceries.  That’s all well and good but we’d run out of milk, bread or whatever and my budget never accounted for those in-between trips.   I also did not get rid of obvious money-suckers (IE premium cable).  Nor did I take the time to call my creditors/insurance companies/cable co. and request interest rate/premium reductions.

FIX – Why I hope the budget will not fail now:

I took a lot of time and many weeks carefully combing through the bank statements to find the true amount we really spend so we have an accurate picture for the budget.   I feel confident I’m not just blindly coming up with budget categories and sticking some number, any number in there. We cut a lot of unnecessary expenses.  We called every place we get a bill from and tried to get the payments or interest rates lowered.  And in MOST cases it worked, lower expenses = more money.

Failure #2 – Tried to do Too much too fast.

When the credit card bills rolled in I’d throw an $100-$200 at the payment.  I was so excited to be making a dent in amount we owe!  But days before payday when we ran out money (because of my sloppy budget) we would have to put diapers or a doctor visit or birthday gift (or all of the above) on the credit card.  We would be back to square one and sometimes in a even worse situation.

FIX  – Slow and Steady.

I am resigned to fact that it did not take a couple weeks to get in debt and it will be a marathon not a sprint to get out.  With careful and realistic planning being debt-free will happen.  Just not overnight.  If there is extra left over in the checking when payday comes THEN we can put that towards the cards.

Failure #3  – Not Expecting the Unexpected.

With no buffer in the budget or small emergency fund, unplanned expenses would HAVE to be put on a credit card.  These small setbacks were so deflating that this when I would often give up on the get-out-of-debt plan.

FIX – “Broken Window Fund”

Now that the budget is realistic and I am committed (but not irrationally over-eager to pay off the credit cards) we set up a small fund for all the little setbacks that happen in real life.

Plan Weaknesses – The “Emergency Fund”

It’s going to take a long time for us to save up the recommended 3-6 month living expenses most people say it smart.   I just have to cross my fingers here and hope for the best.   I put away what we can put away.  It’s the best we can do right now.  I think saving 1 month is worthy goal for now and if the “new plan” pans out I can revisit this later.

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In keeping with my last post I want to write about the reality of the money situation as well.  Here’s a little nugget of honesty,  when it’s three days before payday and the checking account has $2.06 in it and the dogs run out of dog food, I feed them cat food.  I give the kids a mixture a half-juice and half-water and tell them it’s healthier that way.   At dinner when we sit down to eat and the napkins/paper towels are used up – we use baby bibs as our “wiping rags”.  We’re so green.

That’s what happens when you stop using credit cards to bridge the paycheck  gap.  None of it is hurting anyone but it sucks.  We live in a snotty high income area and I often wonder how all these other people are making it.   Are they surviving on credit or have they just managed their money so much better than we have?  I told you before our net worth is $112,000 and that is true.  (We have 401k savings, we have 529 college funds for the kids and we put $100,000 down on our house (got really lucky and sold our old house at the height of the housing boom) but we can only put $8 of gas in the car!?!)

How come I’m eating Oodles of Noodles like I’m living in a dorm the day before payday?

Crappy choices.  Spending more a month than we take in month and using credit cards for the difference.   Cutting up the credit cards was tough, they were such a crutch but it was necessary if we are going to ever get out the paycheck to paycheck cycle.  So yeah, sometimes the dogs will have to eat cat food.

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I asked my husband to read and review my new foray into blogging.

I don’t need to tell him to be honest with me.  If I spend two hours getting ready to go out and finally sashay down the steps  to show off the circus clown breathtakingly gorgeous diva I’ve made of myself , I can expect to hear him say one of two things:  “that looks good” or “dear god woman I’m not going anywhere with you.”  Embellished but true enough, and it’s what I want to hear anyway.

So his review.  Two stars.  And he’s right.  I am sometimes an angry bitch and it’s not the way I’ve been writing/coming across on this blog.  It’s supposed to be an outlet right?  Like an ass, I’ve censored myself  for what? not alienate readers?  LOL.  Yes, I want to write about being a mom, about ways to save money and get the financial house in order but I posted – “What the HECK Verizon….”?!   The real internal dialog leading to that post was this:

ME:  “Those scumbags at Verizon are f’n with me, I’ve had it with their shit.”

AHHHHH!  I feel much better now.  I think I’m going to like blogging.

PS – How to you change you blog safety rating to “R”?

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