Tag Archives: debt

Dear Arnold…

Dear Gov. Arnold,Saint Arnold's Brewery

I have a business proposition for you. You see, it’s come to my attention that California is 24 billion dollars in debt and suffering badly. I have debt on my ledger too, and I know how painful it is to be short of money, especially for needed services. It also came to my attention that you are planning on handing out IOUs to your suppliers and vendors, students, and some needy individuals and social service programs.  I feel really bad, you know, because I was born in California and I want to help you guys out.  At any rate, I think it’s a brilliant plan and you are on the right track, especially as banks in the state are on board to take those IOUs as payment, like real dollars from what I hear. I just think you haven’t taken this idea far enough. That’s why this business proposition occurred to me. We can help each other. You see you’ve solved the problem that’s been plaguing me since this recession started. I can’t pay off my debts in full and now some of my debt, in credit cards, is at 30% even though I wasn’t late when they hiked the rates. But, that’s neither here nor there. The point is, we both have a golden opportunity now to get America back on track.

Here is what I propose:

Instead of cutting back on purchases, you go whole hog on buying up everyone’s debt around the country that has exorbitant interest rates tacked onto it that in any other day and age would be called “malicious usury.” I mean, really, what’s a few more billions when you’re already 24 billion in the hole, right? That’s right, anyone and everyone who has a predatory lender on their tail – you promise to buy their debt. In exchange, for that service, we will pay you instead of the bank at the maximum rate that you have set for your IOUS: 5%. Then, you turn around and buy out the debt contract from the bank using IOUs, transferring their monthly income to your balance sheet, with no appreciable cost to implement. It’s a win-win-win. You get instant income of millions (maybe even billions) of dollars EVERY MONTH for many months – from outside the state, all over the United States, in fact! You’ll be inundated with grateful debtors and might even be canonized as Saint Arnold by the Catholic Church (okay, maybe not!).  We get a simple interest rate that allows us to pay back our debts while still making a living wage. The banks get their money in IOUs and balance their ledgers, and there are no extra expenses on your balance sheet until October! America is saved!

Please let me know if this is a reasonable proposition and at what time we can go ahead and get this show on the road!



Health Insurance, Bankruptcy, And The Power Of Community

HCAN Rapid Response Columbus 7/22/08Everyone thinks that health insurance is there to keep them solvent should they get sick, but it doesn’t work that way. I’ve talked to far too many people who got seriously sick and could no longer work and when they lost their jobs, they lost their insurance. My friend with the brain tumor is starting to figure this out: The system is stacked against people who get sick, especially if they have health insurance through an employer.

The Statistics

It’s pretty sad, but statistics in a Harvard study published in Health Affairs, pointed to half of all bankruptcies in 2001 coming from medical debt. Of those that went bankrupt due to medical bills, three quarters were for people who at one time had health insurance. If that’s not enough to make you sit up and take notice, nothing will. Health insurance is really no insurance that 1) You will be able to pay all your bills, if you get seriously ill, and 2) That they will cover all the medicines and treatments that you need.

Opt For Community Support To Help Meet the Shortfall

That’s where local community based programs in your area and getting informed on any financial programs for your particular disease become highly important. We’ve decided to work with a program called Project Compassion, here in NC, to establish a support team of volunteers for my friend. Along with that, we are beginning to look over some of the financial assistance available for people with brain tumors. I found a comprehensive list here: Financial Assistance List from The American Brain Tumor Association . I’m sure there are other such lists for different diseases, depending on what you have.

Your Neighborly Experts

And, a network of people who have gone through the system helps too. Right now, we have one person who has gone through the process of collecting disability with the Social Security office for a member of her family who also had a brain tumor. Her understanding of the system will be invaluable. The way I found out about Project Compassion was through another friend who had to set up a support team for a friend of hers who had a stroke and had some cognitive deficits and needed round-the-clock care. He was uninsured when he had the stroke, yet they managed to take care of him and he is doing quite well in the community now. We can’t rely on the government programs, the health insurance system, or any other profit-oriented system to help in these types of cases. It really requires community support, since the United States refuses to put a national health care system into place that will make these types of cases the exception, and not the norm.

Contact Professionals, If You Need To

Yet another friend told me that when he got into a car accident and his wife became ill, he applied for disability and it took over four years to get it. They amassed over $200,000 in medical debt, in the meantime. He eventually hired a lawyer to submit all the proper paperwork, in exchange for some of the back pay on the benefits they were refusing to give him. He said he was later told that 99% of all Social Security disability claims are automatically rejected UNLESS there is an attorney who submits them. Then, they go into a different pile where they are given the attention they deserve. Is that true? I don’t know that we can doubt it at this point, seeing how incredibly callous our governmental policies and health insurance companies tend to be. I think that where something demands compassion, the care should never be organized nor implemented by profit-driven companies or agencies. It’s absolutely nuts.

Build Community Now, Don’t Wait Until It’s Too Late

So, build your network of friends, a loving community, now, because when times get tough, you know that’s what it takes to get you by. And, if you can’t be bothered to participate to help someone else when they are in dire straits, that sort of thing eventually changes when you’re the one in dire need. It’s a good thing to cultivate compassion now, while we can be thankful for all the good things in our lives – like perfect health.

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Will 2008 Never End?!

I don’t know what is in my energy that is producing the type of dumb money ideas that force me into large money commitments on a monthly basis in 2008. My income hasn’t gone up, but my expenses are exorbitant this year, all because I have too many high-cost projects ahead. The year started out with a bang, and puff puff, when my car apparently had a blown head gasket. Another $4,000 later from various “problems” with the car, and I am now in June averaging an extra – get this – $1500 in expenses per month this year. My budget and my finances are completely blown. This came about also because I had the bright idea to sell my house while I’m finishing up my Master’s degree. Another several thousand later in house fixes and another $3,000 in tuition fees and I can tell you I have no idea how I’m managing to stay afloat. This year has been a WHOPPER, financially, and I wish there were some magic alarm clock that would allow me to hit the snooze button until 2009.

Decisions, Decisions…

So, I’ve been entertaining the idea of quitting the Master’s with only two classes left to go. I just can’t seem to do it, even though I think spending money on a Master’s is a waste of money and would not recommend it to anyone. I’m too close to the end now to quit, but it may be the thing that puts me on the edge of bankruptcy, when all is said and done. Ask me after I’m finished whether I think it is a waste, and I might have a different answer. Right now, I think monetarily it’s one of my poorest decisions ever. I just don’t see it returning the value that it cost me to get any time soon. Not to mention the monetary stress of having to juggle this while the rest of my life falls apart. Yeah, some financial advisors call school debt “good debt” but I think there are some things that will never pay you back for the aggravation you went through.

So, today I am thinking that I was too ambitious trying to sell the house while finishing the Master’s and trying to make up the debt my car put me in. Now, I am in an even worse position of trying to figure out how to finish the fixes on the house, while paying my tuition, and my normal bills – and losing time on work because I have to be in Colorado at Naropa University for a week for this summer intensive. I kept thinking I should save the tuition, bail out on the intensive, and finish the fixes on the house to sell it FAST. But, I won’t be able to take this required course for another year and I will have to get a special dispensation to take it that late. So, I have to take the course now and screw up the rest of my finances for good. So, what did I learn?

Only Chew Off What You Can Handle

I think the thing I learned is that I should have only had ONE major goal at one time and when I was done with that attempt another. Putting two at the same time causes conflicts. I should not have put the house up for sale while I was attempting to finish this Master’s, it was a recipe for disaster. I don’t know why I didn’t see it before. But, it’s too late now, and I totally screwed myself. No one to blame for this predicament but me and I can only hope that I get smarter later because I’ve shown a propensity for financial stupidity as of lately. For now, the rest of the house fixes are on hold until I can figure out how to handle the tuition payment. I was trying to do them both, but it’s not going to work. The carpets can wait, the tuition cannot wait.

Image courtesy of Flikr Creative Commons by Kenner

Valentine’s, Debt, and Romance

single red roseI’ve been reading Debt Kid’s blog and I see that he fears that he can’t date until he gets his financial house in order. Apparently he’s over $300,000 in debt and fears to have to reveal that to anyone he is dating. There is a lot of justification for these beliefs in our culture where our status in life is dependent on how much we make, meaning that being severely in debt and facing bankruptcy could disqualify you from the dating game. Well, maybe yes and maybe no. Does debt kill romance? I don’t really think it has to unless you are the one judging yourself. I don’t think debt is a good reason to give up dating. I think that being unable to connect with someone you like is a better reason. And, who knows, maybe if Debt Kid is willing to date someone during his financial upheaval, he will start to find some of the values that speak towards cultivating spiritual values and an internal sense of self-esteem instead of one based on his income or debt. Dating is one thing, marrying is completely something else. Marrying, you should have your financial house in order so it doesn’t affect your loved one. Ironically, many people would suggest that marriage kills romance, heh heh. So, take your pick.

Okay, so now let’s talk about the idea that Valentine’s Day might kill romance because “it fosters the notion that romance is something for special occasions” as J.D. at http://www.GetRichSlowly.org put it. While I like the way that J.D. is offering some frugal tips for lovers, I tend to disagree that it’s purely commercial. Christmas – sure! It’s pure commercialism, but Valentine’s Day can be anything you want to make of it. And besides, exactly how expensive is a box of chocolates? It’s not the Christmas spendathon that retailers want us to engage in around Christmas. That is really not a way to build personal nor spiritual wealth. I take the stance that Valentine’s is about relationships, your relationship wealth. So, you can use frugal tips like the ones at http://www.getrichslowly.org or you can do it up and splurge. It really doesn’t prove you love someone more or less, just that you were thinking about them – and that’s the point.

I will give you an example of romance and Valentine’s Day that is thinking outside the box. I am a single mother and one year I heard the door bell ring on Valentine’s Day. I opened it and there was a single red rose tied to my door. It was from a “secret admirer.” Ha, ha. Secret admirer…Okay, it doesn’t matter who it was from because I knew, but the point was he never admitted it until much later. The idea is that he didn’t want to admit it because it was meant to be romantic not pompous. It wasn’t a half dozen roses and it wasn’t a diamond ring. It was a single red rose and it came with no strings attached: Very romantic. I think it was the “no strings attached” that made this gift romantic and the appeal of a little mystery and sensitivity. That year I felt special and that was the intent. See, I did not have a live-in spouse and wasn’t expecting a gift. How nice it is to receive a beautiful, heartfelt, token of someone’s affection with no strings attached. Do I want Valentine’s Day banned for commercialism? No. Maybe it would be different if I were married and had taken my loved one for granted and didn’t think they required any “special day” to show my love and affection. That’s really being blessed in tremendous relationship wealth, but I think the rest of us would like to be noticed at least one day of the year, especially if we’re not married. It doesn’t have to be about spouses or lovers, it can just be about friends. It’s celebrating our relationships, not our bank accounts.

Romance is definitely one of those intangibles worth cultivating -whether you are rich or poor, married or single, dating or not. It has to do with making someone else feel special just because they are a human being and you’ve noticed them. It’s very life-affirming in a very intimate and personal way. I don’t care if it comes with a box of chocolates too, all the better!

*Image courtesy of Flickr Creative commons license by Zest-pk

Buy Time And Pay Off Debt

Many of us are hearing about a tax rebate package the Federal government is mulling over. Or, maybe you are looking forward to a fat refund check on your taxes. Either way, here is a strategy I have been contemplating for this year. The idea is simple: the problem with debt isn’t paying it back, it’s paying it back on time. Yeah, we don’t want to keep big balances around, but what really kicks most people in the butt is when they make a late payment and end up with late fees and a large interest rate. So, why not learn to build in time into your accounts? That’s what I’ve decided to do with this year’s tax refund.

Mostly, what I’ve done in the past is pay off debt that I’ve accumulated in the past year in one fell swoop. However, I was thinking that I’ve become disciplined enough to employ a new strategy in order to buy something that we never seem to have enough of: time. I am going to take the same amount and put it in an interest bearing account. Then, since I only carry a low-interest credit card, I will continue to make my monthly payments with an additional lump taken from this account. What this does is it will buy me time, in the event that I have some other emergency down the line.

Here’s the strategy I’ve devised. Say I have an extra $2000 and I want to put it all towards debt. Instead of paying the debt off at once, I will divide this amount into say five payments of $400 each.  Then, I will continue to make my regularly scheduled payment PLUS $400. I will devote it to one debt in particular and that way, I should be able to not only knock-off a large amount of debt, but I also buy time ON MY OTHER BILLS. See, knowing that I have this extra cushion around will keep me from feeling like I am living paycheck-to-paycheck, a huge psychological advantage for the cost of my credit card interest rate (which is really low). If I even put the money in an interest-bearing account, the interest on the account might pay off the interest on the card, and it’s a complete wash.  The only thing that will change is my perception of how much money I have as a backup cushion, should something go wrong. This builds up trust and confidence, even though I have not changed the actual amount of money I am playing with or have.