Archive for the ‘stupid tax’ Category

Stupid Tax: Overdraft Fees Redux

Sunday, April 6th, 2008

I am about to pay some more stupid tax.  It was less than two months ago I paid overdraft fees, and swore I would do better.  So much for good intentions - my account went negative Friday afternoon.

It took me a while to figure out how this happened this time around.  I finally worked the math with a calculator and discovered my balance and what I thought was my balance are almost exactly $100 off each other, so this means I made a simple math error in the hundreds column.  Yes, I typically do the math in my head from habit and the desire to keep what few brain cells I have left well exercised.

This is downright embarassing.  I’ve been doing simple math in my head for a couple decades at least, and for some reason when I make a bank-related math error it always shows up in the hundreds column.  Why couldn’t I make a mistake on the RIGHT side of the decimal place?  Maybe I am getting old and need to start using a calculator.

Since it has only been two months since my last “oopsie” I don’t think I will be able to beg for mercy at the bank again.  There is also the pride factor, and my pride is now officially damaged with this latest mistake.

There is a very good reason this kind of mistake is called “stupid tax.”  I truly feel stupid and incompetent here.  I’m a grown woman, in college even, and have just overdrawn my account for the second time this year.  UGH!  It hurts even more to know I went from a balance of over $1400 to a negative $90 in one day.

Hubby hasn’t been nearly as hard on me as I am being on myself.  He simply suggested waiting for the dust to settle in the beginning of the month before I start moving money around.  Just about all the bills for this account come out in the first week of the month, so he thinks I should just sit back and let the deductions go through before doing anything else.  I think hubby has a very wise suggestion here … along with his comment that I am still human and still doing a “good job” managing the household money.

I still feel incredibly stupid right now.

I also am not sure just how much this will cost me.  The account went negative Friday afternoon, after they were done posting deposits, not that it would have saved me since I didn’t discover it until yesterday afternoon as hubby and I sat down to go over the monthly budget and money and goals.  I dropped off my hourly check in the night deposit box, but it’s common practice for banks to run the deductions before running deposits … and Friday I filled the Pizza Taxi before work then yesterday we had the oil changed in both vehicles since I honestly thought I still had enough in the account to cover that.  This could get ugly … but I won’t know until tomorrow.

Saving Money on Pet Food

Wednesday, April 2nd, 2008

When I wrote my post on common sacrifices in budgeting to get out of debt, I forgot to include one major area we saved money: pet food.  I used to buy high quality pet food for my dog and cats.  When I say “high quality” I am talking $28-33 per 40 pound bag for the dog and $20-23 per 20 pound bag for the cats.

Warning: what follows might be TMI for some of y’all. (TMI=Too Much Information)

Last year, after much deliberation, I switched the dog to the Kroger brand of dog food, which is now up to only $10 for a 40 pound bag.  However, there is a non-monetary price for that decision considering I turned in my Army-issue gas mask when I left the service in 2005.  The cheap dog food gives my Rottweiler gas!

To make matters worse, hubby has hidden his Army-issue gas mask to keep me from putting my eyeglass inserts into it and using it at night or while he is at work (my eyeglasses are thick enough “to see into the future” as the joke goes).  He knows I can sleep in a mask if need be, having learned that little trick in Kuwait and Iraq.  So I am stuck with suffering noisily or chasing the dog with a can of air freshner and lighting a large amount of incense and scented candles.  It might not be so bad if she wasn’t a house dog who only goes outside to leave yard mines and puddles.  Maybe it wouldn’t be as bad if she were a smaller dog (she is about 130 pounds of spoiled wanna-be lap dog).

As for the cats, they simply refused to eat the Kroger brand of cat food.  There was much meowing and pitiful crying the one time I bought a bag of it.  They don’t seem to mind the Wal-Mart brand of cat food, which is $12 for a 20 pound bag.  Of course, there are olifactory consequences to that decision as well.  They might not get gas (that I can tell) but they do stink bomb the litterboxes now.  Did I mention there are three of them?

Days like today make me seriously reconsider my decision to switch to the cheaper pet food brands.  Right now I am really suffering.  Perhaps I should refigure my cost analysis to include the extra expense of air freshner, incense, and scented candles into the equation.  Or maybe do another sweep-and-search for hubby’s gas mask…

Biggest Money Mistake - Credit Cards

Monday, March 24th, 2008

Millionaire Money Habits has just started up a new contest on his blog called “What’s your biggest money mistake?” and y’all probably know where I am going with this one … CREDIT CARDS!  I know I am in good company with this hideous money misstep.  Credit card companies are expert marketers and have managed to snare so many people …

I’ve blogged about this before, for those of y’all who were reading back at the beginning of the year for my great credit card debate.  For me, the big money mistake started when I was a naive 18 year old college freshman with only a minimum wage part time job at Taco (H)Bell on the weekends.  Citibank, that notorious campus predator, snared me young.  With a 21% interest rate, I ended up working more than just the weekends, since I had very poor money handlng skills … well let’s be honest, I was simply clueless and easy prey.  And it only took one missed payment for my interest rate to get jacked up to 29.9%.

You might think I learned my lesson with my Citibank experience, but I had dug in and fortified my position in the Land of Stupid by getting another credit card, and with this second one “only” having an 18% interest rate I actually thought it was a “good deal.”  Of course, that was the credit card that my ex and I used to buy a horse (no, I am not kidding!) and of course we didn’t read the fine print that said cash advances on the credit card had a 26% interest rate.

Let’s not forget the Bealls card for my 19th birthday, the JC Penney card, and of course the Sears card that I never had the opportunity to use since it always had tires or tools charged to it.  Those store credit cards all start at 21% interest, and it just gets uglier from there if you miss a payment, which we did due to disorganization and inattention (and not having a budget!).

The ironic thing about all this is my grades and IQ tests all claim I am highly intelligent.  When it came to money, I was completely uneducated and DUMB DUMB DUMB!  I was lost in the Land of Stupid and making just about every money mistake in the book.  I didn’t like what was happening with the credit cards, but I had no idea how to fix it.  I finally stopped using those insidious little pieces of plastic, but the bills lingered for another EIGHT YEARS because I was still quite ignorant about how to handle money.

Once the old credit card bills were paid off, I still wandered through life clueless about how to suceed with money.  I didn’t get any new credit cards, but six years later I did something TRULY STUPID: I urged hubby to get a couple credit cards to “build his credit score.”  I wince just typing that.  I didn’t want the things myself, but thought it was a good idea for hubby …  I’m sure I could write a whole ‘nother post on that alone.  But, that was how we got back into credit card debt hell.  It was my idea (and yes I am ashamed of myself, even though I hadn’t found a better way by that time).

Then about ten months into doing another stupid money mistake, I found out about Dave Ramsey.  THIS was what I had been looking for!  This was what I had been needing for fifteen years as I wandered through life making money mistake after dumb money mistake.  I got busy, got myself on a budget, and paid the three credit cards we had off in pretty good time.

I’m never going back into that particular Land of Stupid.  I am never again paying stupid tax in the form of credit card interest or fees.  And just in case anyone hasn’t figured it out yet, I will use this blog to try to prevent others from making the colossal money mistake of using credit cards!

Confessions of a Former Payday Loan Employee

Wednesday, March 12th, 2008

This is a guest post from someone who wishes to remain annonymous.  I think you’ll understand why when you read it. 

There is a reason that payday loan places have you fill out those nice little forms with all kinds of contact information and references. Go late on your loan, and you’ll wish you didn’t.

They will call you EVERY DAY. They will call your references EVERY DAY. They will call your place of work EVERY DAY. The only way to get them to stop calling your job and/or your references is to CONTACT THEM IN WRITING, CERTIFIED, RETURN RECEIPT REQUESTED and tell them to quit calling anywhere except your home.

They will border on giving out your information to other people. In this day and age of caller ID, anyone you use as a reference will know your personal business. By LAW in (state edited), if a caller asks what company you represent, YOU HAVE to tell them. So you can say, “I’ve been trying to reach Joe Smith and have been unable to contact them. It’s VERY IMPORTANT that you have them contact Sally Sue” and give a number. If they ask where you are calling from, we were required to say “XYZ123 Company”. I had several people ask me if Joe went late on his loan. I told them that I legally could not discuss that information with them. Guess what? Doesn’t take a rocket scientist to figure out that if Joe wasn’t late on his loan that I wouldn’t be calling you!

Many places offer their employees a ridiculously low base pay with BONUS. Guess what the bonus is tied into? You guessed it! How many accounts we had delinquent! So think COLLECTION AGENCY when dealing with them! I saw managers that would make HUNDREDS of dollars a WEEK in bonuses ALONE! (Which is why they will get so nasty if you do not pay on time!)

We had to call the banks EVERY DAY. When the funds were there, we would either deposit the check or ACH the account. Joe’s mortgage payment would bounce, his utility payments would bounce. No VERBAL agreement preserves your rights. Read your contracts. Goodbye paychecks. Goodbye tax returns. If you had a joint account and your spouse got paid, kiss that money GOODBYE, too. Many banks would CASH the checks for us…take Joe’s check, cash it out of his account, and convert it into an official check made payable to the company! Don’t forget: Banks get FEE income from official checks and NSFs! I’ve seen companies redeposit checks several times just to spite the customer for not paying off the loans.

We were TRAINED COLLECTORS. We were trained to get you to pay your debt. PERIOD. If you cried, we didn’t care. We would tell you that we cared, but we didn’t. We would remind you that when you paid your debt that you could “readvance…and well, how many of your bill collectors will let you have the money back after you paid them? Would your utilities? Your landlord? The finance company for your car…or would they just laugh in your face?” We could shoot down just about any and all excuses. Lose your job? “Borrow the money from a family member and we can readvance.” You pay the loan back and then attempt to readvance, “Sorry, Joe. We cannot advance a loan without income. We cannot advance you until you have a new job and then you’ll need to come in with a new paycheck from them. We’ll see at that time what you qualify for.” We were trained collectors AND LIARS. We’d tell you ANYTHING to get you to repay a loan!

Payday advance companies typically judge what you can take out based on 50-65% of your net pay. Does Dave (Ramsey) recommend that you take out ANYTHING, including a HOUSE on 50-65% of your pay? NOPE. Repeat customers keep payday advance companies in business. The easiest way to keep repeat business is to keep you ENTRENCHED in loans. Some companies will see your net income, subtract out the loans you have with others (we had software to find that out), and figure your loan based on the difference. Others will not. They will see that you bring home $1800 a pay period * 50%= $900. You have a loan out with a competitor? If they didn’t subtract out that loan, do you see where you are out WAY MORE than 50% of what you net? So if you owe Competition Loan $500 and I advance you $500, you now owe MORE than what you make. You are now juggling one loan to pay the other. Some states have a limit on how many loans you can have out at one time. Most don’t. Most people get around this by doing internet loans. If you live in AZ, you can only have one loan out there. So you go down the street and take out a loan. Then you go online and get a loan from CO. You TECHNICALLY don’t have two loans out in AZ. You have one out in each state.

Back to what you list on an application:
a. I showed up at folks’ doorsteps to ask when they would pay the loan.
b. I showed up on folks’ jobs to ask when they would pay the loan. I called parents, co-workers, friends, other family members. One guy wouldn’t pay his loan and dodged me. After knocking on his door (which he would not answer), I saw his neighbor, asked her to give him the message that “I haven’t been able to reach Tony and I am VERY worried about him. Have you seen him? Is he Okay?” “How do you know Tony?” “I’m a friend of the family.” I then proceeded to flier all the surrounding houses to his, INCLUDING his own. He came in and paid the loan the following day. I told another guy’s boss that I was interested in buying a car. I told him that “Joe the car salesman” had talked to me before and that I would prefer to conduct my “sale” with him. Joe came in and paid because he was afraid that I would give info to his boss.
c. The worst one I ever pulled (and I prayed and asked forgiveness for this one because it was the WORST Christian witness) was this:
Sam was late on his loan. Sam had been living with Mom and moved out. Sam had changed his cell phone number. I found out that Sam’s Mom was a Pastor of a church and the references that he had on his sheet were a few of his fellow church members….most specifically, church leadership. I did a reverse lookup and found Sam’s Mom’s listing and also asked his references, “Hey, what church do you go to?” I left messages for Sam’s mom at work and at home.
Sam’s mom called me. I told her that I LEGALLY could not get into the legalities of Sam’s business, but told her that Sam was giving a really BAD Christian witness. Not only had he listed 3 names of her parishioners as references, he was now dodging us. Also, I informed her that my manager was a non-Christian (which was true) and that he was giving a BAD WITNESS TO HER. She now saw Christians as “Bible thumpers who would preach the Bible to her when it was convenient to them, but bail on their loans when it was convenient for them. If Christians are like this, then I don’t NEED what they offer.”
Guess what? Sam’s Mom came in to PAY OFF his loan when she got her SOCIAL SECURITY CHECK. I closed Sam’s account.

We were never allowed to close accounts at the branch level. Only the corporate office could do that (and they would NEVER approve it, unless someone got violent with us). So I would just put 9s where their phone numbers belonged and put “MOVED, NO FORWARDING ADDRESS” in the address field on my screen. I would then tell them that their accounts had been closed due to too many delinquencies. Of course, I would do this after I got the $ and when I knew they would be back in to readvance the next day. No more $ from me!

Payday loan companies hate this time of year because people who are getting tax returns aren’t coming in for loans. They will mail you out all kind of teasers and promos to get you to take out more loans. DON’T DO IT! Cut your budget, pay off the loan with the tax return, and GET THEM OUT OF YOUR LIFE! Follow Dave’s plan PLEASE! They are counting on the fact that you will blow your tax return and be back in the same trap in a matter of weeks!

I finally grew a conscience. I couldn’t take any more. I could not stay a Christian and continue with this type of treatment of others. When I would see delinquent customers coming in, I would tell the manager that I was taking a break and go outside. I’d pull the customers off to the side and tell them, “If you can’t get out of this right now, start by advancing $50 less per pay period. Take the difference of what you were paying us in fees and start paying it into an emergency fund. Grab a job delivering pizzas, babysitting, whatever, and pay it into an emergency fund. Borrow less and less from us. Use the EF for actual emergencies. Once you are out of this, don’t get back into it.”

Most companies will not keep delinquent loans in house for more than 30 days. Let it go to collections. There they can make payment arrangements. Pay $30/month and get free of it.

If the payday loan company is a member of the CFSA, the CFSA standards say that you can split a payment, 1/2 and then 1/2. Most payday loan companies will tell you that they cannot do this. This is not at all true. Get a copy of CFSA standards. Companies that are members of CFSA will normally have an emblem posted somewhere. Again, get out of this!

Overseas internet payday advance companies do not function by the same rules. They will ACH your account daily and put you into overdraft to the tune of THOUSANDS of dollars if you do not pay them back.

You are playing with sharks and WILL get bit! So much for them “offering an emergency service” and caring for the customer!

All I could say when I first read this on a Dave Ramsey board was “Wow, people need to hear the inside story!”  All names have been changed to generic ones to protect the innocent or guilty.  And as someone who made the mistake of getting a payday loan years ago, I can vouch for a few of these collection tactics described.  Anyone else?

Stupid Tax: The Dumbest Thing I EVER Bought

Tuesday, March 11th, 2008

You’ve probably been seeing a lot of posts about “The Dumbest Thing I Ever Bought” mainly because DebtKid is giving his dumbest purchase away.  I’m not even sure what the thing is that he’s offering up as a prize, but it’s always a fun post (for y’all) and hubby the Catholic claims confession is good for the soul.

I won’t be giving mine away.  For one thing, I bought it twenty years ago when I was just fifteen.  Second thing, no one should buy this!  The dumbest thing I ever bought in my entire life was the very first pack of cigarettes.

The initial purchase wasn’t much at all, $1.29 plus tax I think … maybe less.  It lasted for over a week and a half since I had to sneak out of the house to smoke them.  But the kicker is, it ain’t a one time purchase.

I don’t really know how much I’ve spent over the last twenty years on cigarettes.  Probably as much as I spent on alcoholic bevarages during my drinking years.  Between the two vices, I probably spent enough to fully fund my retirement … and hubby’s too for that matter.

I’ve managed to give up the drinking, but am still smoking after four attempts last year to quit.  Hubby wants me to quit.  Son wants me to quit.  My parents want me to quit.  And although there are days *I* want to quit … there are days I don’t want to quit.  I’m not sure why.  I have heard one person say it was easier to quit cocaine than cigarettes (how’s that for encouragement?) and that dude quit both along with a few other vices.

I know all about the adverse health effects of smoking.  I know how bad it makes my clothes and breath smell.  Even if I didn’t know these things, my son tells me at least once a month about how bad it is for me.  It may be cliche, but the truth is this: it is far far easier (and cheaper) to not start than it is to stop smoking.

That one pack of cigarettes twenty years ago was truly the dumbest thing I ever bought in my life.  Too bad I was a naive rebellious fifteen year old who wouldn’t listen to all the public service announcements.

Money and Valentine’s Day

Thursday, February 14th, 2008

OK, so hubby called me to tell me two things: One is he is working late tonight, so that they don’t have to go in on what is supposed to be a long weekend.  Two, he said “Maybe you shouldn’t look behind the cereal in the pantry…” which means I immediately looked!  LOL  He had hidden two heart-shaped boxes of Valentine’s Day chocolates behind the cereal, knowing I am too short to see them back there on the top shelf.

What brought this up is right before he mentioned his hiding spot, I had been on one of my little rants about how Valentine’s Day is an artificial construct that seems to have been fabricated by the greeting card, flowers, and chocolate industries for the sole purpose of separating well-intending men from their money.  Yes, I am VERY opinionated LOL

So I have two Valentine’s boxes of assorted chocolates, and hubby more than likely paid full retail price for them.  Of course, tomorrow he could get them for half price or less.  So …. am I just being cheap and cynical here?  I know it’s supposed to be our first actual Valentine’s Day together as a married couple since he spent a year stationed in South Korea.  Perhaps I should rephrase: am I being TOO cheap and cynical here?  It’s pretty much a given that I am definitely cynical when it comes to Valentine’s Day and I also inherited the “cheap gene” from my mom’s side of the family.

I’m just glad we didn’t make dinner plans or worse yet a dinner reservation LOL.  I spent six years in the Army myself, so I knew better.  Plus, all the nice restaurants would be too crowded for my tastes.  I prefer to monopolize my server’s time (and do tip accordingly) so I would much rather go on an otherwise “dead” night in terms of business volume.

Of course, the upside to his revealing the candy hiding place is I won’t get back out of the house until tomorrow…when all the Valentine’s Day stuff will be at least half price.  OK, I guess I really am officially cheap here!  When it comes to grocery shopping and budgeting, hubby really likes that about me.  The big question will be if he still appreciates it when he finally gets home tonight.

Stupid Tax: Overdraft Fees

Saturday, February 9th, 2008

I am embarassed.  After celebrating how far we’ve come on paying off our last debt, the truck note, I logged into my local account online yesterday and saw OVERDRAFT FEES!  That’s right, I bounced two autodraft payments. 

It’s my own fault.  I just wasn’t paying attention this week because of an organic chemistry test yesterday and local politics (which I still haven’t blogged about here).  I wasn’t keeping track of exactly when my autodrafts for my son’s school tuition, my central heat maintenance plan, or my tiny puny Roth IRA deduction were coming out.

This lack of attention originally cost me $62.  Not the most I’ve ever paid in stupid tax, but after scheming on how I could pay off the truck note as quick as possible, that suddenly seems huge.  And it’s just downright embarassing!  For the record, “stupid tax” is a Dave Ramsey-ism that describes when you do something stupid that costs you money.  Yup, this one fits the bill.

Once upon a time I used to bounce checks and payments regularly.  Almost a year ago I swore I would never incur another overdraft fee again.  So much for good intentions!

I sheepishly went into my banker’s office and asked if I could get the fees waived.  I told her it was purely my fault for not paying attention, it was stupid, I had no intention of ever doing it again, and that I had promised over six months ago I would never do it anymore.  She checked my account history and said they could waive one of the overdraft fees as a courtesy, but it could not become a habit.  I thanked her for that, because honestly I didn’t expect them to waive either fee.

So, I have paid $31 dollars this week in Stupid Tax.  Just this morning, I came clean and confessed it to hubby.  I figured if I could work up the nerve to admit my failure here to him … well then it was good enough to blog about here.  I goofed.  I’m embarassed.  I played my account balance too close.  The most embarassing part is I have had over $300 in small checks sitting around the house this week, waiting to be deposited … but I thought I had enough “cushion” to not need a trip to the bank until I passed it yesterday on my way to work.

I guess there are three morals to this little story: One, don’t play your account balances TOO close to the edge when you are scraping up every last dollar towards the goal of killing off debt.  Two, don’t wait around to deposit money when you have it and it belongs in the bank.  Three, it never hurts to ask your banker if they can waive a fee when you do goof up on rare occasions.

It Blew Up in My Face

Tuesday, January 22nd, 2008

I had chemistry lab today, and managed to have my experiment (which was distilling quite nicely so far) suddenly go into a mild explosion which left me cleaning stinky dark green slime off the sides of the fume hood.  Sitting here at home still trying to get the stench out of my memory, I couldn’t help but think how much my finances used to be like my ill-fated chemistry experiment.

I used to cruise through life thinking everything would be just fine, happily ignoring any and all warning signs if they were present, until BOOM!  Some financial situation would blow up in my face…and it usually stank just as bad as my chemistry slime.  (Did I mention it was really rank under the fume hood and my arms aren’t long enough to clean it from outside the hood?)

Tuition?  Car repairs?  The water heater breaking?  The roof leaking?  I didn’t plan for those things before!  What was an emergency fund?  I had never heard of it before a little over a year ago, much less the phrase “sinking fund” which is used for planned and expected expenses.  Retirement?  I didn’t think I would live that long!

One would have thought after cleaning up two stinking divorces along with the things mentioned above…maybe I should have gotten a clue.  But just like I had no idea my distillation was about to “bump” as the professor called it, previously I had no idea things would go bad and cost me thousands over the years.  I lived crisis-by-crisis and enjoyed the times in between the crises without any forethought for the next situation.

Oh, people DID try to warn me.  The professor today warned us about “bumping” and listed the warning signs.  But sometimes things will blow up without any warning.  My experiment didn’t change colors, didn’t give a small warning “bump,” the distillation drip didn’t change speed…it was going along beautifully then BOOM! I had that stinky smelly dark green slime everywhere, including in my product…so I had to do it over.  Just like I have been “doing over” my finances for a little over a year now

The second time I distilled my experiment, it went perfectly…except I had lost quite a bit of my product down the drain and on the walls.  This time as I redo my finances, it is going great…except I have lost 17 years of saving for retirement.  I can’t get either back, but I can write up the product loss in my lab notebook…and I write about my financial loss here.

And for the handful of fellow chemistry geeks reading this: it’s the conversion of cyclohexanol to cyclohexene in organic chemistry using concentrated sulfuric acid and 85% phosphoric acid.  Good thing for fume hoods and goggles!  Yes I had plenty of boiling stones, and had already turned down the rheostat.  It still bumped big time, about 3 minutes before the gal two hoods down had the same problem.