Gettin’ Outta Debt pt 8- My Turbocharged Debt Snowball

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Hi everyone! I’m back  after a bit of a hiatus to re-post an old post from my “How I Got Out of Debt” series from 2009 and to celebrate (albeit 3 weeks late) 6 years of Debt Freedom. YAY!!!  I still sometimes can’t believe it.

Wipe our Debt

Wipe our Debt (Photo credit: Images_of_Money)

In the last post, I showed how to get out of debt years faster, without having to get a second job but using the  same money that you are already paying out. In this post I will show you how I was able to save even more money by turbocharging my debt repayment plan.

In a lot of ways I’m a very patient person, but in this case the Aries archetypal (which I have a fair amount of in my chart) impatience came out in full force.  Now I can’t show the actual payment amount since that varied as I mentioned before, because my paycheck was not the same each time. So, what I will be showing is the balance, the payoff date, and the savings vs following the status quo payment plan. Then at the end, I’ll show the savings from my turbocharged debt snowball vs the debt snowball I showed in part 7. Remember, the start date was July 2001 and I was in the process of building the emergency fund while starting the debt snowball. My payoff order shown is how the debts are listed in part 7 and the numbers are going to be slightly off because of the payoff dates but not by much.

I’m gonna warn you now that there will be a lot of repeating of certain phrases and it’s a long post.  But that’s how we learn right? By repetition.  🙂

Let’s begin.

I started with Visa:

  • Balance-$2,371.53 @ 12% APR. Paid this debt off on 1/23/02, total amount paid: $2,461.29.  If you recall from the previous post, under the status quo payment plan the financial industry was hoping that I would follow because the monthly payment is soooo low, I would have paid a total of $3,250. By turbo-debt snowballing  I did not have to pay them $788.71. Now I consider myself a generous person, but not that generous, especially to some banker who’s making more than what I’m making.  $789 dollars would have paid my homeowners insurance for this year (2012).

Next in line was Household Finance:

  • Balance-$1,000 @ 9.9% APR. Paid off this debt on 3/15/02, with the total amount paid of : $1,035.38. Under the status quo plan I would have paid: $1,333.  By turbo charging my debt snowball, I did not have to pay them $297.62.  That’s a bit more than what I paid for my Blackberry Playbook Tablet and a case for it which I’ll be doing a review on later.

The next debt I mowed down was the Car Loan:

  • Balance-$3,571.39 @ 7.9% APR.  Paid off this debt on 8/1/02, with the total amount paid of: $3,726.36.  Under the status quo financial industry plan I would have paid $3,920. By doing this I did not have to shell out an extra $193.64.  That’s almost all my utilities for a month at this time.

Next and done with glee, Capital One and definitely taken out of my wallet:

  • Balance-$984.43 @ 9.9% APR. Paid off this debt on 11/8/02, with the total amount paid of: $1,055.92. Under the status quo financial industry plan I would have paid $1,292. By turbo-debt snowballing I did not have to pay them $236.08.  That’s another month’s utilities or groceries etc.

Next, with the excitement level increasing, Bank of America:

  • Balance-$4,588 @ 9.52% APR.  Paid off this debt on 4/11/03, with the total amount paid of :$5,007.69.  Under the status quo financial industry plan I would have paid $5,253.  By turbo-debt snowballing I did not have to pay them $ 245. Don’t know about y’all but I can sure think of plenty of other things to do with $245 than to give it to some bank unless it’s a deposit into my savings account. 😉

Next on the chopping block, the Perkins Loan:

  • Balance-$2,027.15 @ 5% APR. Paid off this debt on 5/21/03 with the total amount paid of: $2,128.95. Under the status quo financial industry plan I would have paid $2,320. By turbo-debt snowballing I did not have to pay them $191.05.  Starting to add up isn’t it?

Next, Direct Student Loans and where it started to become fun:

  • Balance-$5,786.44 @ 4.22 % APR. Paid off this sucker on 8/29/03 with the total amount paid of: $6,064.23. Under the status quo financial industry plan I would have paid $7,352.80. By turbo-debt snowballing, I did not have to pay them $1,288.57. That’s $1,288.57 that I did not have to earn to put in someone else’s pocket!

Last but not least the mortgage, where I was laughing like Renfro with each payment:

  • Balance-$48,175 @ 6.25% APR. Paid off this monstrosity on 6/2/06 with the total amount  paid of $54,436.34.  Under the loan shark, oops I mean status quo financial industry plan I would have paid $74,763.86.  By really turbo-debt snowballing this one, I did not have to pay them $20,327.52.   This is just a bit below what my yearly take home pay was during my journey to debt freedom.

My total savings or what I like to refer to as money I did not have to come up with by following the loan shark’s (oops I did it again) status quo financial industry plan, $23,568.19!!  Now that ain’t chump change and if it is to you, you can drop me a line so I can send you my PayPal info for a gift in that amount. I promise you I’ll put it to good use. 🙂

Recall from part 7  by utilizing just the normal debt snowball, the savings was $16,235 which is not chump change either.  However by focusing and redirecting a huge portion of any extra funds I had to juice up the debt snowball, I saved another $7,333. Nothing to sneeze at there either. Not to mention the fact that you have to earn way more that $7,333  for the privilege of paying that. 

Well by now, I hope that I have clearly laid out the case for you see just how costly it is to you and how insanely profitable for the finance industry to remain in debt. That’s why I kept repeating “By debt snowballing, I did not have to pay…”  Sorry, but you can never remain above water by continually paying out interest. Where we tend to fail is that we are more concerned about what the payment per month is, instead of focusing on how much in total it is going to cost.  Another crucial point we forget is the fact that you are going to have to come up with that payment(S) each and every month for a very long time. Also the hours you have to work to make the money to just make the payments. I can say this because that was me before I got the message from that cosmic 2 by 4  upside my head for the umpteenth time.

Unless you are paying cash or the bill off in full at the end of the statement period, the total price paid is always going to more than the original price using credit. That’s compound interest working against you as loans today are not simple interest loans anymore. What that basically means to you is that they are getting their interest money upfront. That’s why you will make hundreds and in the case of a mortgage or large student loans (thousands) of dollars in payments but your payoff balance is damn near the same as when you first took out the loan. If you have to borrow, and only if you have to, the key is to pay that crap off as fast as you can. The faster you do it, the less it costs you and the more money you have for other things later. Better yet, you can decide on how your money is gonna work instead of your bills deciding what you work you have to do.

I was in already in debt when I bought my home in 2000 so it took me 6 long years with many life happens things happening that cost big dollars and set me back. You know, the 1 step forward, 5 steps back life happens kind of stuff. Finally on June 2, 2006, I was debt free. If your debts are larger and your income is not that big, it is naturally gonna take longer. Remember what I said at the beginning of the this series, that getting out of debt is a lot like locking your hair, going natural or even dieting. It take loads of hard work, patience, determination and thick skin. You gotta get to the point where you are sick and tired of being sick and tired of paying out all this money for stuff you don’t even remember what you spent it on and many times have nothing to show for it. However the result is so, so worth it. And it never goes out of style.

We all want nice stuff and to look good but when life happens in your household, those designers, car makers, fill in the blank aren’t going to give a rats behind about your situation. And please stop worrying about what BayBay & ’em are going to say or think. I’ve learned that folks are gonna talk about you no matter what you do. These same folks ain’t gonna have a dime to help you out when you really need it and they are still gonna talk about you. Most of the time they are worse off than you and want to keep you in that crab barrel along with them because you woke up to the fact that we’ve been played and have been for a very long time. On some level they realize it too, hence the put down remarks.

So there you have it. The debt snowball, get the heck out of debt, don’t have to pay nobody any money to do and a real person who’s done it, who’s showed ya how to do it, plan. I know everyone’s circumstances are different but if you have the income, it can be done and it may take years as I’ve shown.

Stay tuned for part 9 of this series where I will talk about the death pledge aka “The Mortgage”.

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How I Use (Coconut) Oil on My Locs

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Hey guys! I hope this post finds everyone well.

Violeta over at Oceangrins did an update post on her “itchy” situation. 😉 There, a question was asked by Naturalocs on the use of coconut oil and water on locs. She said that coconut oil was softening her skin but not her locs and she asked was there a certain way to use it. I thought that this might help others so I decided to answer here in a post.

I’ll start by saying I have fine/thin hair. Now I’ve been using coconut oil on my then loose natural hair for a little bit before locking. I liked it but it was not softening my hair in the way I would have liked. I started locking about year after this point  so I stopped using coconut oil and all oils for that matter until my locs were further along into the locking process. A year or so later I decided to revisit coconut oil on my locs.

Coconut Oil squircle

Coconut Oil squircle (Photo credit: Ennor)

To be honest, I’m not sure what made me start applying coconut oil to wet hair.  I liked it but still not exactly what I was looking for. When I was using it on my loose hair, I applied it onto dry hair. That worked OK but that was it…just OK.

Then after I locked, either by design or by accident (probably the latter) I applied it on my damp locs. I know this might sound crazy but what I mean by damp hair is …just washed hair. I wait until my locs have stopped dripping water but before they are slightly damp. Kinda like when you wash jeans and take them out of the washer right after it’s stopped. They are not dripping but they are wetter than a lightweight t-shirt would be that was washed in the same load. I don’t towel dry my locs or dry with anything. Applying a nice amount, I go through my locs, making sure I get the top and bottom of the locs.   That’s the only time I apply coconut oil until wash day rolls around a week later. During the week, if my locs are feeling a bit dry, I’ll spritz with water only. This softens my locs right back up.

This is I was looking for! Now, why have I gone thru all that description? Because I did not get quite the same result when I started with dry locs dampened by spritzing with water. Looking at the post noted below, I see why I’ve changed how I was using coconut oil on my locs and remember this routine was before I came up with my herbal coconut oil concoction.  I’ll do a post later sharing my concoction.

So try using coconut oil on your hair/locs on wash day, and don’t wait until your hair is completely dry. If that does not work, it might be that you hair does not like coconut oil.  My hair does not like olive oil.

Hope that helps. 🙂

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I’ve Been Tagged by Naturallybeautifulbelle!!

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I’ve been tagged by MStokes2008 over at Naturallybeautifulbelle.  Girl, I’m so sorry that it has taken me soooo long to respond to this tag as I looked at the date of the post. It was over a month ago. 😦   But it was on my birthday! 🙂  OK I have delayed long enough so on to the questions.

1. What is your favorite color and why?

  • As I grow in my understanding of nature I’ve come to love almost all colors but  purple, more specifically purples that are more red than blue are my favorite. I don’t really know why but this color makes me feel good. Orange runs a very close second and as weird as this may sound I really like combining those two colors.  I tend to like colors that are  “warm” and saturated.

2. What is your zodiac sign and do you think it describes you?

  • I’m an Aries Sun and yep that point alone describes me to a degree but it’s not the whole picture. It’s only after getting to know
    Aries in Fire

    Aries in Fire (Photo credit: Rainbow Gryphon)

    me a bit will you get a hint that I might be an Aries. Since I’m an astrology student so I know that we are more than our Sun sign. It’s been fun to observe and listen to people talk including myself because we act and speak our birth chart.

3. What is your favorite thing to cook or bake?

  • Interesting that this question is right after the “what is your zodiac sign and do you think it describes you?”  Aries is the warrior, the athlete, the pioneer etc. I think you see where I’m going with this. So the answer is: Nothing!  Don’t get it twisted  because I know how to cook and I do cook. It just not something I like to do. If it were not so expensive and unhealthy to eat out, I’d be eating out everyday and I’d be like “what’s a stove for?” 😉
4. If you could do one thing to change the world for the better, what would you choose?
  • Not sure if this would be considered one thing but that would be to BE ME. Please don’t misunderstand and think that I’m being conceited and think I’m all that. I say this because I believe that every person has been given a set of gifts that are to used for the  betterment of the world.  Because of greed we are brainwashed and forced into being someone who we are not. This behavior serves to stifle our talents and abilities…the very gifts that are to help us and others live better lives.

5. What is your favorite movie of all time?

  • The Matrix

6. If you had a million dollars, what would you do with it?

  • I’d first make my home super energy efficient including adding things to take advantage of passive solar heating and cooling, solar panels etc. I’d then finish the vision I have for the garden, including a serious water storage tank. The rest will go in the bank(s) for my future.

7. What is a scent that brings back happy memories to you? And what memory does it bring to you?

  • Hmm, I guess it would be the smell of a lake/stream or river. I reminds me of  times as a child and adult riding my bike.

8. If you could study anything in college and get a job that guaranteed you’d love in your field, what would you study?

  • I honestly can’t answer that question because I’m still on the journey of self discovery and I have sooo many interests I have not found what I’m truly passionate about.
9. Paper or plastic and why? (cash or card)
  • Plastic right now only because I get cash back on my card…all for money that I’m spending anyway. When they decide to stop the cash back, it’ll be back to cash for me.
10. What is your one guiltiest pleasure?
  • Sweets and it’s definitely more than one! 🙂
11. If you could pick any vacation, all expenses paid for a week, where would you go and what would you do?
  • I’d go to visit a dear friend in Sweden. We’d probably get no sleep whatever because of seeing all the historical sites ( I’m a history buff and love old architecture) and from non-stop talking.
Now I don’t have 11 folks to tag but I will tag the following:
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Gettin’ Outta Debt pt 7- Light At The End of The Tunnel

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This is a repost of a series I did when this blog was on Blogger back in 2009.

Ready to see a debt snowball in action? Using my real debt numbers I’m going to show how a debt snowball works and how you can pay off your debt using the money that you are already paying to service your debt.  Using this method, you’ll get  out of debt months/years earlier than you’d ever thought you could.

Recapping my debt balances and the pay off if I were to follow the conventional plan:

DEBT, AMT, PAYMENT, APR, PAYOFF TIME, TOTAL AMT PD

Visa: $2,371.53, $50 per mo, 12%, 65 months, $3,250.00
H.F: $1,000.00, $19 per mo, 9.9%, 70 months, $1,333.00
Car: $3,571.69, $245 per mo, 7.9%, 16 months, $3,920.00
Capital One: $984.43, $19 per mo, 9.9%, 68 months, $1,292.00
BoA: $4,588.00, $51 per mo, 9.52%, 103 months, $5,253.00
Perkins: $2,027.15, $40 per mo, 5.00%, 58 months, $2,320.00
Direct SL: $5,786.44, $52.52 per mo, 4.22%, 140 months, $7,352.80
Mortgage: $48,175.00, $413.06 per mo, 6.25%, 181 months, $74,763.86

Remember we are using the same $889.58 I was already paying out.

Since the car loan has the shortest payoff term but the largest payment out of all the non mortgage debt, there won’t be any interest savings or reduction in payoff time. When the car was paid off in 16 months, the very next month as if I still had to make that payment, I took that $245 added it with the $50 I was sending to Visa until pay off, approx 7 months later.  Visa’s payoff  looked approximately like this:

  • $1972 approx balance. Paying $295 per month instead of just 50 @ 12% interest, the total payoff time was reduced to 23 months, with a total amount paid of : $2,455. Note above the “normal” way of paying it,  a payoff time of 65 months @ $3,250. That’s a $795 savings just by redirecting the car payment once it was paid off to this debt instead of using it to increase my lifestyle or incurring more debt.  Let’s move on.

Now that I’ve paid off the car loan & Visa, the very next month I set my target on either Household Finance or Capital One since they have the same interest rate and balances. I decided to knock out of my wallet, Capital One.  I took  the car loan payment @ $245, the Visa payment @ $50 and added that to the Capital One payment of $19 for a total payment of $314. The TKO of Capital One looked approx like this:

  • $733 approx balance. Paying $314 per mo@ 9.9 % interest, the total payoff time is reduced to 26 months from 68 months with the total amount paid: $1,142. That’s a savings of $150. Though that does not seem like much but that $150 will make a big difference going towards the larger debts. Let’s move on to the next one in line to be taken out, Household Finance.

OK, as it goes the very next month after I’ve sent the last payment to Capital One, I’ll take that $314 and add it to Household Finance’s payment of $19 for a total of $333. The numbers for Household Finance look like this:

  • $725 approx balance. Now paying $333 per mo, 9.9 %, the total payoff time is reduced to 28 months from 70 months and the total amount paid: $1,173. Savings $160.

Moving right along to the next target, Bank of America. After paying off Household Finance, we are now sending BoA, that $333 + BoA’s $51 for a total payment of $384. Here’s where is starts to get juicy:

  • $4175 approx balance, now paying $384 per mo, the total payoff time is reduced to 39 months from 103 months and the total amount paid: $5,668. Savings, $2441!  I don’t know about y’all but I can think of a whole lot more fun things to do with $2441 than giving it to the bank.

Next victim is the Perkins loan. I’m now sending them $384 + their $40 payment for a total payment of $424. The numbers:

  • $761 approx balance, now paying $424 per mo, the total payoff time is reduced to 41 months from 58 months and the total amount paid: $2,284. Savings, $36. Not much there but every penny counts as you will see with largest debt.

Next target, the Direct Student Loan. I’m sending them $424 + their payment of $52.52 for a total of $476.52. Let the whacking begin:

  • $4436 approx balance, now paying $476.52, the total payoff time is reduced to 50 months from 140 months and the total amount paid: $6,609.78. Savings, $743.

Last but certainly not least, is the “death pledge” otherwise know as the mortgage. At this point, a ways down the road, I’ve paid of all other debt and will start sending the mortgage company $476.52 + the mortgage payment of $413.06 for a total monthly payment of $889.58. I know that it was a while ago but that number sounds familiar right? Hang in here with me.

  • $38,836 approx balance, now paying $ 889.58, the total payoff time is reduced to 96 months from 181 months and the total amount paid: $62,854. Savings, $11,910.

Just by redirecting the money that’s already being paid out and not letting it be absorbed into your spending or worse incurring new debt, I can get out of debt in this case in 8 years instead of 15 years!! I’ve also saved or should be more aptly put, did not have to pay out $16,235!! That’s more than 1 years take home pay for my family at this point in time.

Being the type person that I am, I was compelled to see if I could reduce the time to less than 8 years. Also my 40th birthday was around the corner and I wanted debt free status as a birthday present. If I didn’t mention it before, I had turned 34 a couple of months before I bought my house.  Come back and I’ll show you those numbers next.

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An Herbal Apple Cider Vinegar(ACV) Cleanse for My Oily, Flakey, Sore Scalp

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Hey everyone! I hope this post finds you well.

 

Scalp Treatment

Scalp Treatment (Photo credit: Wikipedia)

I thought I’d share what I use to cleanse my scalp.  Though I never been medically diagnosed but based on my research, I think I’ve got a mild case of Seborrheic dermatitis. This has been a problem for as long as I can remember and it gets worse when the weather changes. If  I don’t keep the oily build up off my scalp, I produce enough flakes to supply a mini ski slope.  Also my scalp gets quite sore and not just from scratching either. Ironically the soreness would go away when I scratched my scalp with a comb.

Now I had already tried dandruff shampoos, rosemary, tea tree, lavender, peppermint, sage and cedarwood essential oils, oiling my scalp with natural oils and aloe vera juice/gels.  All of these made my scalp flare up more. In the summer of 2010 while in the 3rd day of retightening and right after washing my braidlocks, I noticed that I still had greasy flakes. The kicker was I had not oiled my scalp in 5 days…from the last wash.  And I had not oiled my scalp then either! :-0   Silly me, I thought I had been suffering from a dry scalp all these years! :-0

So I decided to again search for a more natural, cheaper way to help with the oil build up.  Quotidianlight on Youtube had done a video on Seborrheic dermatitis and in it she mentioned salicylic acid. The light bulb went off in my head because I had found out a few months prior that salicylic acid is white willow bark. It’s basically nature’s aspirin.  Well I’ll be!  Momma Nature knows best and has been at it waaay longer than man has. I decided to  revise (many times lol ) what I had concocted before, combine it with straight Apple Cider Vinegar which I had used at the beginning of my loc journey.  This is what I came up with:

  • ACV (Apple Cider Vinegar) Any kind will do. I use the Walmart brand.

    Apple Cider Vinegar

    Apple Cider Vinegar (Photo credit: AndyRobertsPhotos)

  • Sage Tea (This is just sage leaves steeped in heated water then cooled) I use it to cut the ACV instead of just plain water.
  • And the following dried herbs:  Burdock Root, Comfrey Root and Leaves, Horsetail aka Shavegrass, German Chamomile, Nettle, Hibiscus Flower, Sage ( in addition to the tea) , Slippery Elm (I heard it keeps the Comfrey from going rancid), Peppermint and White Willow Bark
  • Aloe Powder
  • Neem Powder,  if  I remember to put it in the mix. lol
  • Lavender or Cedarwood essential oils for preservative (because of the sage tea being made w/water) and for the soothing properties too.
  • Peppermint essential oil ( for extra tingle)
I don’t really measure anything but I use approx 2 teaspoons of everything adding one or two more of what I feel I need.

First heat the ACV in a pot. Low heat is preferred and even better if you have a glass pot.  Add the herbs, put a top on the pot and let them simmer on very low heat for at least an hour. I try to let mine go for 2 hours or more. Then place the mix in a glass jar. I don’t like having to do this all the time so I generally will  use 3-4 cups of Apple Cider Vinegar.  Make sure the ACV is covering the herbs completely in the jar.  Vinegar is a preservative and by making sure the herbs are covered, they won’t go rancid. After letting this mixture set for a few days though I’ll let mine steep a lot longer, strain the herbs out. Place in the container of your choice. I like to use a mesh strainer first for the big stuff, then strain a second time with knee-high stocking for the small stuff.

When I first started using this particular combo which has gone through some additions and subtraction of herbs (mainly for cost

Vinegar is commonly infused with spices or her...

Vinegar is commonly infused with spices or herbs—as here, with oregano (Photo credit: Wikipedia)

reasons), I was using the ACV mix straight, no chaser. That was to get my scalp under control which took about 6 weeks. Then I started cutting it with plain water resulting in a  50-50, 40-60 mix. Later I decided to use sage tea since sage has been used for conditioning for eons and is supposed to be quite good for dandruff.

I’ve been using this for about 1 1/2 years now and my scalp really likes it. What I do is apply the mixture on my scalp with a spray bottle making sure that I get all areas of the scalp and message in well. Then, I let the mixture set on my scalp for at least 30 minutes. Sometimes I’ll put on a conditioning cap. The other herbs and the sage tea cut the vinegar smell down a little bit, however it does not bother me and rinses out easily so no vinegar smell is left in my locs.

The result for me has been a better feeling scalp that’s not still sore after washing it and I can cancel the contract to supply flakes for the ski slope in my area that does not get snow. lol  As long as I keep up with washing my scalp at least weekly, I’m fine. Otherwise my scalp threatens me with early termination warnings for cancelling that ski slope contract.  🙂  Also note, I don’t put anything else on my scalp. No shampoo, soap, oil or anything else for that matter besides water of course.

I also use this as a facial cleanser/toner.

Hopefully this will spark some ideas for you to try if you are suffering with this issue.  Share your concoctions!

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Getting Outta Debt pt 6- Airing Dirty Laundry…Debt

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This is a republishing of a post that’s part of a series on “How I Got Outta Debt” written back in 2009 when this blog was on Blogger. I know I keep saying it but this is just as relevant today as it was yesterday. If you are in the position to do so I hope that it inspires you to take control of your finances and your life.

 

Laundry is hung to dry above an Italian street.

Laundry is hung to dry above an Italian street. (Photo credit: Wikipedia)

I’m back with the calculations on all my debt listed in part 5 of this series. I’m going to show my debts, the amount of time it would have taken me to pay off the debt based on the payment amount and the total amount I would have paid doing it the way most folks do/the way the creditors want you to.

What was/is their plan? To pay the minimum payment for the maximum amount of time. This results in you paying the maximum amount of money on the money you borrowed. Translation…it’s more money that you have to work for to make these payments…forever. (it will feel like that) Here is the lowdown and remember APR is the interest rate:

 

         DEBT/ AMT/ PAYMENT/ APR/ PAYOFF TIME/ TOTAL AMT PD
  • Visa: $2371.53, $50 per mo, 12%, 65 months, $3250.00
  • H.F: $1000.00, $19 per mo, 9.9%, 70 months, $1330.00
  • Car: $3571.69, $245 per mo, 7.9%, 16 months, $3920.00
  • Capital One: $984.43, $19 per mo, 9.9%, 68 months, $1292.00
  • BoA: $4588.00, $51 per mo, 9.52%, 159 months, $8109.00
  • Perkins: $2027.15, $40 per mo, 5.00%, 58 months, $2320.00
  • Direct SL: $5786.44, $52.52 per mo, 4.22%, 140 months, $7352.80
  • Mortgage: $48175.00, $413.06 per mo, 6.25%, 181 months, $74,763.86

The total amount paid when everything is paid off according to the normal way of doing things…$102,339.86!!!

 

That $102,339.86 figure does not even include what I already paid when I had my head up my butt! Remember I mentioned that I quit playing around and got serious with this July of 2001? Well of course based on the payoff time, I would have paid almost all of these off by now (November 2009).  However, I’d still be paying on the Direct SL (Student Loan), Bank of America and the mortgage. That’s $518 on top of utilities, food, gas and whatever else for everyday living. That might not seem like much but when your income has been slashed by 50+ %,  which it had been at the time I first wrote this post, that’s a heck of a lot of extra money to have to come up with.

Also when I was writing this post, I had heard on YouTube,  a news clip from MSNBC that credit card companies are trying to jack up rates ahead of legislation going into effect to stop these practices. Well, credit card companies have always had this power and all they’ve had to do was give you a 15 day notice which is one of the reasons why I chose to get rid of them first.

In the next posts, you’ll see the RDRP- Rapid Debt Repayment plan, better known as the debt snowball plan in action.  I used that same $889.58 to not only pay off all debt except for the mortgage but to pay off all debt including the mortgage. Yes folks, it is possible to pay off all of your debt and not take the rest of your life doing so.  And you’ll see how you save not only money but your sanity as well.  But you’re gonna have to check back in to this series to see how I did it.

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Gettin’ Outta Debt pt 5-My Debt Numbers

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This is  republish of a blog post that’s part of a series “How I Got Out of Debt” when this blog was on Blogger back in Oct 2009. It is still relevant, if not more so given today’s economic environment.

 
I’m back from part 4 of this series so here’s the post showing where I started on my get the hell out of debt as fast as I can plan. You may recall from a that post in between the debt elimination, I was also saving up for an emergency fund of 1 years worth of expenses. Once that level was achieved, everything extra went towards debt payoff.

Around July 2001 is when I got super duper serious and ready to do just about whatever it took to get the heck out of debt. Now my numbers are slightly off since credit minimum payments are not the same and back then, the minimums were really low percentage wise of the balance owed. Keep in mind the creditors are not trying do you any favors because their mission is to keep you perpetually in debt, thereby making lots of money off you in interest. Though they still do that but it’s my understanding that they have raised the minimum payments which allows you to pay off your debt a microbit quicker. You will see later just how costly it is to remain in debt using myself as an example. Here are the numbers:

Visa – $2371.53, APR 12% approx, $50 per mo.
Household Finance – $1000, APR 9.9%, $19 per mo.
Car Loan – $3571.69, APR 7.9%, $245 per mo.
Capital One – $984.43, APR 9.9%, $19 per mo.
Bank of America – $4588, APR 9.52%, $51 per mo.
Perkins Student Loan – $2027.15, APR 5%, $40 per mo.
Direct Student Loan – $5786.44, APR 4.22%, $52.52 mo.
Mortgage – $48,175, APR 6.25%, $413.06 per mo.

Adding up all the payments, I was paying $889.58 per month just for debt service. $889.58 before I have put any food in my cabinets so I can eat, gas in the car so I can get to work to make the money to pay these bills, insurance for the car I need to drive to get to work to make the money to pay these bills, utilities like water to drink so that I can live to drive to work to make money to pay these bills, etc!! It’s a vicious cycle! 😦

OK, I know y’all are probably wondering how I had such a small mortgage balance. I live in an area of town where the price range for housing goes from $10,000 to $150,000 at the time I bought this house in 2000, which was right about the time prices started really ticking upward. I’ve mentioned before that my home is small, a shoe box by today’s standards but I made a deliberate decision to purchase small and to live in an area of the country where housing prices were reasonable. Of course that means incomes are lower here as well. Also my Direct Student Loan rate started out at 8.25% APR. Later there was a rate reduction some time in 2002 I think, to the 4.22% I have listed.

Alrighty, the order that I have everything listed is the way I paid everything off pretty much after the Direct Student Loan rate reduction. Before, I had it listed right behind Bank of America. Now I bet you are also probably wondering why I have the car loan in front of Capital One which is no longer in my wallet.  My reasoning for putting the car loan in front of Capital One even though it has a lower interest rate was because at the time business at the job was going really well. I got paid a base salary and a commission for additional business sold whether that be new business or products. I handled all the paperwork etc for all these transactions whether I sold them or someone else did.
I figured even though the balance is much higher but if I could hurry up and pay it off, I would be applying $245, any extra monies, plus the $20 I was already paying Capital One instead of the other way around.

In addition, the mortgage did not start out at 6.25% APR or $48,175 for that matter. Noooo, I had been dumb and stupid in the years before buying my house. A lot was due to things that were on my credit record from my 1st marriage, but the period after that was all my fault. As a result my credit score was not to good so yeah, I was one of those “sub-prime” borrowers starting out with a 10% APR on a $32,500 1st/12.5% APR $10,000 2nd mortgage with a pre-payment penalty. After about 1 1/2 years of hard work and paying down some of the debt listed above, I was able to refinance in June 2002 to the rate you see above and it was to a 15 year mortgage with only a $6 increase in my payment amount. YAY! The payment was $407 to the previous mortgage holder with the increase in the mortgage balance due to that *#%@ prepayment penalty and outrageous fees. However with the interest rate basically cut in half, a whole lot more of my payment would be going towards principal. I looked at it as another “stupid tax” and hella motivation for me to continue bulldozing this albatross. Nothing motivates me more when I figure out the game. At first I get mad, then get I figure out a way to even.

Next, I’m gonna show you using the numbers presented above and a debt calculator I found online, how much in total I would be paying/paid not using any kind of accelerated plan. Meaning once something was paid off that money was not redirected to debt payoff. This is gonna blow your mind so stay tuned for part 6 of this series.

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How to Latch/Interlock Your Braidlocks/Locs using a Homemade NappyLock Tool

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Here’s a video I did for my YouTube channel showing how I latch/interlock my new growth using my homemade NappyLock tool.  It’s a metal yarn needle that I have modified to make it easier to use on my braidlocks.

I hope this demonstration is helpful to you and empowers you to maintain your locs on your own.

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Gettin’ Outta Debt pt 4-The Contingency aka Emergency Fund

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This is a repost that is part of a series that I did back on August 19, 2009 when this blog was on Blogger.

Expenses

Expenses (Photo credit: Phillie Casablanca)

In continuation from part 3, of this series on “How I Got Out of Debt” and use of the book “Debt Proof Living” by Mary Hunt, today’s topic will be on the ever so glamorous tool called “the Contingency Fund”, aka emergency fund aka old-fashioned savings. This is in addition to the “Freedom Accounts” mentioned in part 2. It’s primary function is for large erratically occurring things like the furnace going out in the middle of winter, or even more prevalent in today’s environment, a job loss.

Now I went ahead and talked about the debt elimination methods before I talked about savings. That was assuming that your income producing situation is pretty stable, however IMHO, everyone should have some form savings that can sustain you for a while regardless. It keeps you from having to use the credit cards and paying interest because you did not have the money the pay bills before the due date. In my state it takes at least 3 weeks for unemployment to kick in. I know that the interest being paid on savings accounts is really sad to the point of being criminal, but unless you’ve been hiding under a rock for the last few years, the environment for the average person that loses a job due to no fault of their own, is less than ideal in terms of being supportive. If you are like me, moving back home is not an option, so basically you are on your own.

This fund if being used to sustain in the event of a job loss, is for expenses like rent/mortgage, food, utilities and other basic needs. The lower your expenses are, the longer your fund can sustain you if it has to be used as such. That’s why it’s great to be either debt-free or close to it.

OK, I did a hybrid of what many of the financial gurus including Mary Hunt, the author of this book we are currently discussing was recommending at the time. My reasons for doing that were 1) I was single  and as I mentioned earlier, moving back home was not an option if my job suddenly disappeared and 2) I had a rude awakening when my father passed away in October 1998.  I took off a week from work to help my mother. The job I was working at the time was the type where if you are not there, you don’t get paid and I had only been there 7 months so there was no vacation time that could be tapped into. Now I totally understand that so I’m not complaining, just giving background as to where I’m coming from. I had no savings at the time and was not offered any assistance from my mother. If it was not for a dear friend who had only known me for 7 months prior to this and my boyfriend of 9 months prior, now husband, who gave, not loaned, but gave me some money to at least pay the rent…I don’t know what I would have done. That y’all was a very low point for me, but at the same time a blessing from the universe that still makes me emotional to think about to this day, 11 years later. I vowed not to abuse that blessing by being stupid, continuing to live paycheck to paycheck when I knew better. Lesson learned.

So instead of the recommended at that time (2001) of 1-3 months of savings or pay off non-mortgage debt first before putting money in a lowly savings account, I got a bit of savings up equal to 1 months expenses, hurried up and paid off a couple of credit cards so I’d have that money and at the same time cut my everyday expenses back so I’d have a bit more to build up my savings to 3 months worth of expenses. Back then the job was pretty secure as I moved up. Then I eliminated all non-mortgage debt while at the same time putting at least 10% of my earnings into the Contingency Fund. That got me to about 6 months worth of expenses. Once I eliminated the non-mortgage debt, those payments went toward saving up 18 months worth of expenses. During this time I had a few major house repairs, like fixing a leaky utility room roof leak, replacing the 20-year-old central heat/AC unit, the A/C compressor, and a few other things that took that extra 6 month cushion. I stopped there letting any additions to the account be in the form of the earned interest. Once I paid off the mortgage I continued to build this fund as I could even though I’m no longer working as of December ’06 and my husband out of job since November ’08. This is not a plug for sympathy, just telling it like it is. If I had listened to what most people were telling me including my family, a few friends and DH, that I was crazy for putting all that money towards debt and savings, we’d be up the creek without a paddle in a boat with gaping holes at the bottom right now.

For you astrology students like myself, Saturn is transiting my 1st house right now, just as was 29 years ago. Of course, I was 13 back then but the basic context of my current situation was going on back then as well, just different characters being my parents. This is when my Dad had his fatal/near fatal heart attack. What I mean by that is he was dead for approx 2 minutes b4 he was revived, so this was a massive heart attack. As a result, Dad was not able to work at all for about 18 months and did not have a full-time job for 4-5 years after that, mainly due to employers being afraid to hire him because of this prior health issue. Along with that, Mom did not get a job until a few years after I left home at 19 years of age. Though it was not discussed with me at that time, I now know that this was only possible due to Mom’s material security consciousness and Dad’s good financial sense. I’ve mentioned it in previous posts… Mom’s a Leo, he was a Taurus. Now they were not debt-free but there were decisions made years earlier that looked at the long-term consequences of one choice over another. Many of those choices Dad made, even though Mom was angry about it at the time, made a whole lotta sense in the immediate days/years following the heart attack. Hmm, I hope that I’m learning the lesson Saturn is presenting right now.

I’m not a financial adviser or anything like that, just offering my personal story and opinion for you to learn from. Having said that, my advice would be to of course look at your situation because everyone’s is different. However “job security” is an illusion so if you have $0 in savings, pay the minimum payments on your debts right now, cut back on your lifestyle and get at least 1 month’s expenses aside. Then work your way up to whatever level of savings is comfortable for you. Once you get there, start getting rid of that debt like a mad person while continuing to build your savings.

One more note, this is not to be considered an investment account. It is money that is to be liquid and that you can get to in a reasonable amount of time. So it should be in a safe bank, credit union or something like that. I was teasing at the beginning when I called it glamorous but in my reality, it really is just that and I’m exceedingly grateful for it.

Stay tuned for part 5.

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Gettin’ Outta Debt pt3- The Debt Snowball

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This is a repost that’s part of a series I did back in August 2009 when this blog was on Blogger.  I feel the info is just as relevant today as it was back then.

20 Dollars art3

via Wikipedia

OK, I’m back from pt 2 of this series to continue my talk on the way I used “Debt Proof Living” by Mary Hunt.  Another one of her “tools” that I liked and used is what she calls the “RDRP-Rapid Debt Repayment Plan”. Other financial gurus call this “snowballing debt” or “debt snowball”. Debt snowballing is not anything new. Now, financial software such as Quicken and MS Money have this as part of their mid-range and/or deluxe offerings of the software. If you are trying to get out of debt this is well worth the extra $15-20 over the basic version if you are going to use this type of software for your finances. I think you can do this on spreadsheet programs too. This is a plan for you to get out of debt with the money that you are currently paying all your creditors but in a much faster way than following the traditional method of paying down debt. And best of all, you can DIY.  No, it’s not “voodoo economics” to borrow the term coined by George Bush Sr, nor is it “creative financing” or magic, but a plan that actually works. However, there is a catch. I’ll go into that later because it’s key to this plan working.

Basically you start off by listing all of your debts by name, APR (aka the interest rate, which is the additional money that you pay for the “privilege” of using their card/loan, or whatever for any one who does not know what that means), your payment amount and the balance owed. There are a 2 ways to do this plan. One gets you out of debt a little faster because you are paying less interest. The other is a tad slower but may provide you with an kick start to get your behind in gear because you’re seeing some immediate results. If that sounds confusing, hang in there with me and you’ll see what I mean.

Method 1) List all debts starting with the highest interest rate( APR), the next highest, all the way down to the lowest interest rate debt.

Method 2) List all debts starting with the debt that has the lowest payoff/balance, next lowest and on up to the highest balance.

You can find the APR listed in the printed material that is on your credit card bill or on the loan paperwork that you signed. Now there are debt calculators all over the internet if you don’t have financial software. I highly suggest you look these up and plug your numbers in. I’ll warn you though, when you see how much you’ll end up paying back if you pay back the way your creditors want you too… you may want to fix a really stiff cocktail.

Anyway, the higher the interest rate and the longer you take to pay it off, the more you’re gonna end up paying. That’s why Method #1 results in a faster payoff because you are paying off the highest interest rate loans first.

Method #2 is good if you need a little bit of encouragement, like that 1st 5 pounds that you lose when you’re on a diet. You’re so excited that you begin to think twice about that nice looking piece of chocolate cake. Alright, let me stop talkin’ about food before I have to go and find somethin’ to snack on, that I know I should not be eatin’. lol A lot of the time the smallest debt you have is one of the lower interest rate debts, though not always. Remember I said earlier, on the higher the interest rate loan, the longer you take to pay it off the more you end up paying.  It still results in years earlier payoff and big interest savings in that you will not have to pay it, just not as much as if you follow Method #1. Now I followed Method #1, including my mortgage at the bottom of the list as the last debt to be paid because I was determined not to pay the bankers one extra dime.

OK, now for the catch I mentioned earlier. You’ve got to follow these 3 rules very strict and to the letter unless it’s a dire emergency and I mean dire emergency. These are from the book and paraphrased leaving out one step as it’s already been done. That’s the listing of your debts.

1)NO NEW DEBT!!! Yes, I’m shouting but I want to make sure you hear me. You can’t get out of the hole you’ve dug for yourself if you keep making the hole deeper and at the same time you are shoveling more dirt on top.

2)Pay the same monthly payment regardless if the loan/credit card issuer says your minimum payment is less than it was the month before. Don’t fall for those “payment holidays” either. You know, right around Black Friday shopping day where they say “oh don’t worry about making that payment. Go Christmas, Easter( insert holiday of the month) shopping with that and you can start back paying next month”. Ignore them by saying thanks but no thanks. Keep making that payment. You can always pay over the amount but not less.

And last, but just as important as #1, & 2.

3) As each debt is paid in full, take that money and apply it to the next debt in line.

Example: Lets say you had JC Penny as your 1st debt @ $50 per month, Macy’s as your 2nd debt @$100 per month, Home Depot next @$150 per month and GMAC (your car note) last at $300. Doesn’t matter which method you are using in case you’re wondering. Make all the minimum required payments each month as listed. When you’ve paid off JC Penny’s debt you take that payment (the $50) and add it to the Macy’s payment of $100. So now instead of sending Macy’s $100 like you were before, you are now sending them $150 every month until it’s paid off. Then when you’ve paid off Macy’s (which you will have done at a much faster rate than you were before because you were sending $150 instead off $100), you add that $150 payment to the Home Depot payment. You are now sending Home Depot $300 per month. Before you know it you’ve paid off Home Depot.  Next, you take that $300 payment and add it to your car note so now you are sending GMAC $600. Before you know it, you’ve paid off your last debt. Just by diligently following those steps you’ll pay off your debts way ahead of schedule saving you lots of interest. If you get REAL SERIOUS by cutting your lifestyle to find extra $ in your current budget, you can make this happen even faster thereby saving you money that you would otherwise be paying out in interest. You can’t get ahead while filling out a check with somebody’s name on that line. That’s what you are doing by paying out interest.

Stay tuned for part 4...

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