Sunday, March 27, 2011

Report Card

Political Attack Ads always tell the truth

Today I did something that I have been dreading for a while; I got my credit report! Getting my credit report was actually the first thing I did today (well next to the getting out of bed). It was just like Christmas morning when you’re a kid and you leap out of bed in your pajamas and open your stocking; only in this case I leapt to my computer (in true total nerd fashion) and instead of pajamas I was wearing my tiny underwear and an open bathrobe, much to the delight of my neighbours across the street.  I wasn’t really sure where I was supposed to go to get my report and I was certainly weary of entering all my personal information into some credit site. If it were a scam I would be completely effed and my credit rating would nosedive into a steaming pile of $hit. I had heard about Equifax on the tee-vee machine so I figured if it’s on television, it’s got to be legitimate – much like a political attack ad - right?

So here I am, a sunny Sunday morning, sitting at the Equifax website and entering in all my personal information and after a few clicks of the mouse and several strokes (on the keyboard that is), I came to a screen where they gave me a number to call to speak to someone at Equifax. 9:30 am, waiting for someone to answer the phone and 20 minutes later, my phone battery is almost dead so I’m attached to the phone charger waiting for these Equifackers to answer their gosh darn telephone.  You’d think that most people wouldn’t be checking their credit history at 9:30 a.m. on a Sunday (apparently no one goes to church anymore), but alas, I wait and wait. Finally, someone answers and the line is so fuzzy that I can hardly hear what the guy is saying. Whoever he is, he has an accent, but that’s not the issue, I can totally understand what he’s saying, but I have to keep asking him to repeat himself. I could hear the frustration in his voice and I’m sure he thought that I was some racist making him repeat himself because he wasn’t speaking proper “American” but the reality was the awful static on the phone line. Our conversation went something like this:

Equifacker: Thank you for calling Equifax, how can I keeerssssssssssshhhhhhhh
Me: Yes, hi. I’m calling to verify my account so I can see my credit report.
EF: Certainly, no probkerrsssh. Can I get your kkkkkkkkkkerrrrrrrrrrrressssssssssssh?
Me: My what?
EF: Your neeeessssssssssshhhhhhhhhhh
Me: Sorry what?
EF: Name, your namssssssssssssshhhhhhhhh
Me: Oh, my name is John.
EF: Thank you. Can you please tell me you current shhhhhhhhhhhhhhhhhrrrrrrrsshhh
Me: This is going to be a long conversation.

This went on for a good 10 minutes, and that my friends, is why it took 20 minutes to get through to an operator at Equifax. In the end, he had an incredibly difficult time entering my address in the computer since I live at a “half” address which no computer anywhere seems to understand and the conversation always involves the poor operator running to ask their supervisor how to enter my address. Anyway, now my account is all set up, so I logged in to receive the news that I have been avoiding to hear for the past forever.

Equifax has a rating scale of poor, fair, good, very good, and excellent. Apparently 47% of people have an excellent credit rating according to them. I on the other hand have a better credit rating than 10% of the population. Yes, I am not good, I’m not poor, but I’m “fair”. I don’t know how out of all those options they were able to determine my skin tone, but I can’t say I am overly happy with my “fair” rating. Being told you have a “fair” rating is like being told you’re not quite the smelliest fart, but most people would still have to leave the room if you broke wind.

So what does this mean? Double Rainbow? Fair? Equifax tells me that my rating means that most lenders would consider me to be a high risk; that I may have difficulty qualifying for conventional loans and credit cards - and when I do qualify for credit, I may be charged high interest rates. Well no $hit Sherlock. I must say that it is comforting to know that most banks are not going to approve me for a credit card so that if I get into some money emergency, I can’t run to the bank and get some credit to bail me out. What I didn’t know is that because of my rating, banks may force me to pay higher interest rates. This makes sense to me though since the banks know that they can make a truckload of moolah from my interest since (until 6 months ago) I carried really high balances. The rest of my credit report didn’t surprise me with any other information that I didn’t already know about myself. I knew who was looking into my credit, and I knew where I had screwed up (like that stupid Ikea card for example). I was happy to see that my damaged credit is only going to be on there for 6 years (not the 7 that I thought it would be) so my history with Ikea will be gone soon. I was surprised to see that MasterCard was checking up on me to see my credit history which coincided with all the telemarketing calls and balance increases that I have been getting from them and Rogers and TD were just as guilty. It’s no wonder that I am all of a sudden getting all the special offers from these companies.

I recommend that you get a credit score to find out where you’re at with your credit. It is a useful tool when you’re embarking on a debt repayment journey to show you the whole picture as to why you’re in the position you’re in but don’t take it too seriously. You might be surprised to see that you are one of those 47% with an excellent rating. If you’re in the “poor” category or even in the “fair” category like I am, don’t panic. Your credit score is not the only tool that lenders use to determine if you are a high risk for a loan. Depending on the lender or the type of loan you are looking for, other factors come into play such as your income, marital status, and so on. Now, Gail hates the credit score system, but she does recommend that you check your credit score at least once a year, so in her blog and in her awesome book “Debt Free Forever” she has her own scoring system to help you understand other factors that can affect your rating. The more “points” that you get, the better you’ll fare with the banks. Some of this information may come as a surprise to you so get a pen and paper and let’s do your score à la Gail (with a twist of John humour).

One of the first rules is not to lie about anything. If you’re lenders catch a whiff of your bull$hit, they’re probably not going to believe anything else you tell them either. If you’re under 21, you don’t get any points – and why should you? You can’t even rent a car or drink in AMERICA! If you’re between the ages of 24-64, you get a point because odds are; you’re working at a real job (unlike those under 21s who are probably all drug dealers and prostitutes – so untrustworthy). If you’re over 65, you don’t get any points either because you’re old and probably going to spend the entire bank’s money on prune juice and Matlock VHS tapes.

If you’re single, you don’t get a point. If no one else will marry you, so why would the bank, right? If you’re married, you get a point. Apparently you know how to commit to something – congratulations. Divorced? Who cares? Not the bank anyway – zero points.

You don’t have any kids – well then you don’t get any points. As Gail mentions, you’re probably some party animal who spends their nights out drinking and dancing at the clubs instead of being responsible and taking care of the baby. You also don’t have any ties to bind you to your home so you’re considered a flight risk since NO ONE would leave a baby behind – riiiiiight. If you have 1 to 3 mouths to feed, then you get a point. You’re a responsible, baby making citizen and you’re making future debt holders. If you have more than 3 dependents, you don’t get a point. Can’t you keep it in your pants? How ever will you stay out of debt with all those people depending on you to survive?

Where do you live? Are you still mooching off your parents? Are you living in some tornado-ridden trailer park? If this is case, no points for you! Are you one of those incredibly sexy individuals renting an apartment – you get a point! Own your own home with a gi-normous mortgage – you get 3 points! Woohoo! Own your house, but don’t have a mortgage? We need to talk about how you got there and give yourself 4 points for being so freaking perfect! Where did you live before and how long were you there for? If you only lived at you current address for less than 5 years, you don’t get a point. Your life is clearly too exciting for a lender to trust you to stay put. Have you been in the same spot for more than 5 years? Well lucky you, you can add on another point to the tally.

How long have you been stuck with pleasantly content with your employer? According to Gail, the longer, the better; and I thought you ladies said that size doesn’t matter?! Less than a year with your current employer gets you a big, fat zero! One to three years will snag you another point; four to six nabs you another 2 points, seven years or more, you’re probably ready to throw your computer out the window, but don’t fret, you get 3 more points – and you thought all those years of service were for nothing!

Not so surprisingly, banks do keep track of the loans that you pay off with them. If you have paid off a loan in full with your bank, you get five more points! Wowsa! If you have a good record with your other lenders, you might just grab yourself another 2 to 3 points! The more money you make, the more credit you get. If you have a checking or savings account with a balance over $500 then you get 2 more points.

Here’s where I was surprised, having a landline in your home actually will earn you 2 extra points. This is because when the banks call you and you answer, they know exactly where you’re hiding. Looks like my iPhone was a wasted investment!

So there you have it. The higher your score, the better you’re going to do when asking for money from the bank. Remember that these factors blend with your credit score when lenders are considering you for credit. If you need to get a loan to pay for school or something else that actually makes sense to take money out for and you can’t get a loan, you can get a cosigner. You have to make sure you’re paying this off though otherwise you’re not just effing up your credit history, you’re effing up the other person’s credit too. Checking your credit report is a good way to see what’s been happening with your credit and who’s checking up on you and it lets you know what you need to do to get your rating out of poor and into excellent! Right now my credit rating is 636 out of 900. A year from now I’ll check it again and I hope that I’ll be at least in the 800s!

Thanks for reading this super long blog entry. I now know that length does matter. Thank you, Gail. 

Tuesday, March 22, 2011

Kindness and Sausage

Mary loves getting her hands on a huge sausage!

Monday was the first day of my permanent job! I am so happy to know that if I choose to, I can stay working for Club Fed as long as I want and never have to worry about money again! To celebrate my entry into permanency, I took a trip to Toronto for a much-needed escape from the daily grind. The journey to Toronto gave me a great opportunity to think about where I started on my debt repayment journey 6 months ago, and where it has taken me so far. The rate that I need to pay off my debt is approximately $1,000 (and change) per month in order to get my debt banished into the fires of hell once and for all. This doesn’t mean that just because I pay $1,000 toward my debt each month that it is getting paid at the right rate, no, it means that I need to pay $1,000 just toward the principle of my debt. Every month, I am still paying hundreds of dollars in interest alone – and let me tell you, it pi$$e$ me off to see how much of my money is wasted on my crummy creditors.

The happy news is that my desire to lower how much I pay in interest seems to motivate me to stay right on track. Currently I have paid off $5,396.50 and I still have 2 more paychecks coming in this month to add to the massive debt on my credit card that I intend to pay off. I’m also really amazed to see how quickly this process is moving along! It has finally gotten to the point where it is a habit for me to automatically put money from my paychecks into my savings account, and to instantly pay off my bills so that I eliminate access to my money for uses other than the necessities. When I was in Toronto, I was super pumped to see that this spirit of saving continued and even inspired my friends who don’t even live near me to take control of their debt. This is where the kindness part comes in. I am so impressed by how much the kindness of friends (and strangers in some cases) has helped me a great deal this past half year.

Aren't bedbugs adorable?!!
While I was staying in Toronto, I got to stay with friends for free! I know that most of us would gladly open our doors to our friends if asked, but we don’t always think about how much money it saves their guests sometimes. If you factor in how much money I would have had to spend on some bedbug-infested hotel in Toronto, I would have had to pay a minimum of $200 for 2 nights to stay downtown. To add to that, I would have most likely had to eat all my meals in a restaurant which we all know is completely out of whack with what I’m doing for my budget. And speaking of meals, my friends Gillian and Stephanie extended their generosity to me and paid for my dinner one night. They were so smart with their money that they even used a Groupon to cover the costs! Smart ideas like that enable you to still go out and enjoy the things you love like a delicious dinner! The restaurant even had a duck comfit poutine – ooh lala!

Forget Beiber Fever, I have the Black Plague!
Dinner wasn’t the only extension of kindness either. Gillian thought of cheap and easy ways for me to enjoy my time with her. We took a nice walk through High Park and got to check out the zoo and apparently Gillian saw some alleged peacock which I didn’t so she may have been full of $hit, but I just went along with it. It was such a nice thing to do and it really showed me that people are taking my debt repayment seriously! The kindness went further with my friends Alex and Hailey. They took us to a cheap and delicious brunch on Friday where I ate sausage, they shared delicious drinks with me, and we played games on Saturday night and I ate more sausage, opting out of an expensive night out at the bar. For me, those moments are far better and much more memorable than the bar. Seriously, how often do you get to see your classically trained harpist friend play Romeo and Juliet on the harp drunk? When we played a game called pop 5 I learned that I follow waaaay to much pop culture and that Rebecca Black is the latest internet phenom to let me know that Thursday comes before Friday and after that comes Saturday – how profound! The keeping-it-cheap mentality continued into Sunday when Brynn and Hera picked a cheap (and delicious) place to meet for brunch on Sunday and guess what, I ate sausage again! Yes, I realize I’m setting myself up for a plethora of sausage/sex jokes. 

Kindness seems to surprise me at the most random times when I least expect it. We drove out to Toronto in a rental car, but I had to park the car in a parkade overnight. I didn’t realize this until about 2:00 am so I when I went to pay I didn’t have any change on me and I had left my effing credit card back at the house so I had moved the car for no reason. There I was standing at the machine like an idiot and someone randomly drove up to me and gave me his overnight parking pass to use. Talk about random and generous! That definitely made my night so much better and I saved seven bucks! So my loyal admirers, the message here is simple, thank you for all the kindness. When we go out of our way to stop being selfish (which is evident that I was at that point with the amount of debt I had) and putting others needs ahead of our own, we can really make a positive change for the better. Paying off debt is more of a group effort than I had ever imagined…

Sunday, March 13, 2011

Sick Day

"So this will make my boobs bigger Mr Pharmacist?"
"No, this is for your chlamydia..."
Loyal readers, today I am battling a $hitty cold off and have been spending most of my day lying around in my room so I’ve decided to drag my sorry a$$ out of bed and do something a little productive like write a blog instead of watching the entire series of hoarders. Some of those people are messed up. I’m sure glad my life hasn’t brought me to the point where I am piling bags of my own feces 4 feet high in my bathroom and then having said pile of feces fall over and land on me, leaving me without the use of my legs. Luckily for me, all I have is a cold and a garbage bag full of snotty tissues, so it looks like all my exercising has helped to build up my sexy immune system. Now you’re thinking; “poor baby, using his financial blog to turn this into some personal blog where the writer just pauses and reflects on how terrible their day is going and hopes that someone out there will show they care by virtually wiping my nose” - right? Well you’re wrong! Getting sick is one of the best ways that you can save (and lose) money! This blog is about all the pros and cons of getting sick on a budget.

Ok, let me start off with some really good news. I have a permanent job now! That means I’m going to be getting sick pay (starting on the 21st of March), holiday pay, vacation pay, pension, health coverage, the whole kit and caboodle! So isn’t it ironic that I would get sick a week before I get sick pay.  This is nothing new for me though. I have been going without any paid sick time in about 7 years and I think that’s something that many of us can relate too. We can’t plan when we get sick, but we can plan ahead for the days when we will be sick. Usually colds and flus arrive around the same time you see ads on TV for cold and flu medication (hmm). For me, my cold was starting to form last Wednesday, but I decided to have some drinks to celebrate the end of working contracted work the next 20 years which seems to have opened the floodgates for Mr. Mucus to come waltzing in. Let me tell you, if you feel a cold coming on, the last thing you should be spending money on is alcohol and start spending on cold medication. Both will get you feeling pretty buzzed, but cough meds will actually help to alleviate cold symptoms, whereas the alcomaboozeahol seems to enhance them.  Or maybe it’s just me and hot toddys are your cure for everything.  

I’ve been told about all kinds of remedies for a cold, but the only thing that really seems to work is called sleep. Sleep is completely free and it feels wonderful. Here’s what you do, take your bed, put some sheets, blankets, and pillows on it, and then close your eyes and doze off into cold-killing mode. It works wonders. When you can’t sleep because your throat is so sore and your nose so plugged with boogers that it hurts to breathe, that’s when you turn to medicine. Now listen, I know that some people think when it comes to medicine that “the more the merrier” is the best policy and that only “name brand” medications will do the trick; well I’m here to tell you that those ways of thinking are all bull$hit.

Ask your pharmacist for the store-brand
The real way to find out what will work is to start with a trip to the pharmacy. Talk to that really good looking pharmacist (who unfortunately only gets to see you when you look like total garbage) and describe your symptoms. 9.5 times out of 10, they will know just what you need to take to get better faster. Once they show you which medicine to take, ask them what the equivalent knock-off brand is and save yourself some money. Trust me, I have tried name brand vs store brand versions off drugs and it really makes no difference. When I talk to my pharmacist, they tell me that it’s the key ingredients that matter and not the sugar and other crap that they put into the medicine. This also works for prescription medication that your doctor prescribes you. Did you know that you can ask your pharmacist to give you the knock-off brand on your prescriptions as well? This is true for inhalers, antibiotics, and heart medications (all things that I have had to take).

So we lose money by taking sick days, so how the h-e-double hockey sticks do we save money? That’s simple; you have to cancel most if not all money spending obligations. You can’t drink, you can’t go out to eat (what’s the point if everything tastes like Styrofoam) so you lie around in your housecoat and underpants unshaven for the past 4 days and write a blog entry; easy as pie. If you’re really good at getting sick, you’ll get sick for the entire weekend (like me) and you’ll have no choice but to save!

Does this lollipop taste like mercury to you too?
Sometimes you can actually make money being sick. Friends stop by with homemade soups, ginger ale, orange juice, movies, and a plethora of other wonderful things to make your $hitty day not so $hitty. It’s also a great time to call up friends and family and chat for hours on end. It’s not like you’re going anywhere, so why not listen to Grandma’s story about the guy hitting on her on the bus, or Grandpa’s story about those damn teenagers who keep skateboarding on the sidewalk? Before you know it, you’ll be feeling great and able to go back to work. On second thought, does anyone with chicken pox want to come over and cuddle?

Thanks for reading this one. I’m writing it while drinking store-brand NeoCitron so I don’t promise that any of this entry will make sense whatsoever.

XO (cough, cough)


Monday, March 7, 2011

Ravishing Rewards

I was at a comedy club last night and laughed my bum bum off with my new yogi friends; what a blast! I guess this is a good time to mention that I did end up getting that volunteer position at a yoga studio which gives me unlimited free yoga! Did you hear that? Free! An unlimited yoga pass can cost as much as $160 per month at this studio so this is a big deal for me. I’ve been going nearly every day and only having to dedicate 4 hours of my time per week to my volunteering. Now let me tell you, I’m starting to look and feel good again. There’s nothing like looking in the mirror knowing that you’re working hard at something and all that effort is producing the reward that is a hot yoga body! Now I know that you all want me to post pictures of my hot yoga body, but I don’t know if a camera lens can capture such a big, um, ego. This takes me to this week’s topic of rewards.

Listen, I know as well as you know that you are working hard, achieving your goals, taking names, and you’ve already bought and mailed the postcard of accomplishment to all your bee eff effs. However, the key ingredient to any success story is that you acknowledge all the hard work you do along the way. In my egotistical story about yoga and my hot body I take the time to note my successes and feel proud of all the work that I put in. The same thing applies to when I’m paying off my debt. In the past 5 months I have made a lot of sacrifices for the sake of becoming debt free. I’ve cut out eating out at restaurants to the bare minimum, I haven’t bought myself any clothing in a long time, and I avoid home décor stores as if they were a Nicolas Cage movie. Seriously, does anyone really enjoy his acting? Does anyone else find his annoying “Ross from Friends” type of whiny voice to be a source of frustration?

Check out those implants! And look at her shoulders!!
Anyway, back to the rewards. For me, since I am depriving myself of the things I formerly had no problem dumping cash on to; I’ve made myself a little rewards list. Nothing crazy like a diamond grill or Lady Gaga inspired shoulder implants, but rather, more simple things that cost under $100. If you want to reach a difficult end goal and you have little restraint when it comes to paying off debt, then you need to focus on more here-and-now types of mini achievement. Frankly, I’m finding it to be quite the challenge to get this debt paid down to a reasonable rate. Currently I have only paid 11.6% of my debt in 5 months which would mean that it will take me far more that 3 years to get this $hit banished into the hellfire from whence it came; and that’s certainly disheartening. I’ve decided that my rewards are kicking in for every $5000 of debt that I have paid off on my credit card. Right now I have only paid off $2,236.34 on the MasterCard which would be higher if I hadn’t booked my flight to Vegas for over $500! But you know, life happens and sometimes we have to bend over and let the credit card companies have their way with us to get what we need.

I love Catan!
So what qualifies for a good reward? That really depends on the person. Maybe for you, a nice massage would be the bee’s knees. For someone else, it might be a Rita MacNeil sex tape. Either one would tickle my fancy (in completely different ways if you’re picking up what I’m laying down) but the important part is that you find that something that works best for you. Since I am a HUGE nerd, I’ve decided to reward myself with the wooden version of Settlers of Catan. Those of you who are unfamiliar with Catan should stop reading this immediately. Seriously though, why do you not know about Catan? It is quite possible that I have spent more hours playing Catan that most people spend breathing which is all-the-effing-time!  I really love to play board games and they provide some of the cheapest entertainment around. Not only is it cheap to play board games, it provides you with time to spend with your friends on any day of the week. Anywho, when you’re thinking about rewards, make yourself a list of what you want to purchase and then line them up with each goal you have. For example:

When I:                                                               Then I get:
Pay off $5000 on the MasterCard                  Wooden Catan
Pay off $10,000 on the MasterCard               New Record Player!
Pay off the MasterCard                                    A huge party!

Once you have this list, figure out how much it’s going to cost you to acquire these wonderful items. There’s no point in rewarding yourself when you have to pay for the bloody rewards using your credit card. If wooden Catan is going to cost me $150, then I need to put away $25 per check just for this game (and I think it’s worth it) for a total of 6 checks. This is the right way to buy big ticket items too, such as a TV or a couch, or a trip to Easter Island.

My message to you in this post is simple – don’t forget to take care of yourself every now and then with some good old positive reinforcement. If you’re not paying off debt but working toward another goal, like going to the gym 3 times a week for a month, when you meet that goal, celebrate that success with a pedicure or better yet, a day off lying on the couch and watching some of your favourite movies – you deserve it!