Face Your Debt!

It’s a pretty crappy economic environment out there right now.  No one is doing AMAZING, but we’re all managing to survive somehow (even if it is rolling pennies – yup!)

As I continue to grow up, though I don’t think I’ll ever be fully formed adult, I am beginning to deal with “adult” problems and see my friends do the same.  Mainly, it’s facing our debt.  Most of us have credits cards and some sort of varying balance with some sort of horrible APR.  Mine is relatively under control, but it wasn’t always that way.  I recently checked my American Express which I had been paying on time since I was in college – and they raised the APR to 29.9%!  I was baffled!  I tried my usual begging, crying, pleading on the phone (which, I have to say, usually works), but they wouldn’t budge.  So, now that credit cards are quickly opening up their foul credit lines to us folks again – I got a new card with 0% APR for the first 9 months and 11% APR thereafter.  Thanks a lot AMEX – for nothing.  I’m hoping I’ll be able to pay it off by the end of the 9 months.  Or at least do some serious debt shrinking damage.

SO!  Here’s the thing about debt.  As much as I would like to believe that a bag of money will fall from the sky, I’ll book a job that’ll “pay for everything”, or a fat wallet benefactor will tell me to “live your dreams Kimmy!  Go and make movies and live in a 2 bedroom condo – and leave the lights on all the time!” – it probably won’t.  In fact, I can say for certain that it won’t (well, 2 out of 3 – I still look up in the sky every morning). The best thing you can do is deal with it realistically.  And if any miracle job or cash prize from a game show comes your way, you’ll know how to invest it properly.

1.  Here is my magical tool for calculating debt.

http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp

I love this thing.  It’ll tell you exactly when you will get out of debt and exactly how much you need to pay.  It’s not going to CHANGE your debt, but it will give you perspective.  Did you know if you pay $10 more than your minimum you will reduce your interest paid significantly.  No she didn’t…YES SHE DID!

2.  Check your APR – DO IT!  Call your company and make sure they aren’t screwing you.  Sure, new laws say they have to send you a letter and you can agree or disagree – but the new law says that if you agree, you can use your credit card. If you disagree, you can’t use your credit card, but can opt to pay the rest of the amount on the APR you have.  Bull-oney.

3.  Consider switching to another company.  If you can find a creditor who will give you a 0% APR for a while – do it – just make sure that the APR is lower than what you are paying.

4.  Do a free credit check.  Double check your score and see where you are.  And then, when you start making headway, you can do it again and give yourself a gold star when it gets better.

5.  Cut yourself off.  Consider cutting yourself off from your credit card for a week.  Then maybe a month.  Then maybe a couple of months.  Maybe it’s time to get a new job or cut your spending.  I know for an artist, like myself, when things are good, you get accustomed to living a certain way.  And when things are bad, you continue to live that way until you’re in debt again.  Start thinking differently about how that beer (NOOOOOOOOOOOOOOOOOOOOOOOO) could pay the extra $6-10 on your credit card bill.  I know.  I KNOW!  It’s the worst.

OK.  We did it.  Don’t panic.  The credit beast is way scarier when you let it fester in the Interest building cave than when you yank it out and see it’s just a slimey flimsy bastard that you can tackle.  Be persistent and be ok with it.  Move on and I’ll see you in the parking lot drinking whiskey from a flask.

By the way, I’m not an expert – so if you’re in serious debt, consider contacting a debt relief agency.  They can help you figure out the best solution.

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2 Comments

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2 responses to “Face Your Debt!

  1. Marc B

    Kimmy, dunno if you’ve mentioned this on the cheapblog yet, but http://www.mint.com is the best thing since sliced bread. Now that they have a nice “Budgets” feature, they can actually text you when you’re spending a leetle too much on the “Booze” catgeory. It’s awesome.

  2. Dude! That is awesome. I will be testing it out and will give a full report!

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