Debt Reduction

St. Valentine’s Day Financial Massacre

by bigcajunman on February 14, 2012

Today can effectively be for some of us effectively a recreation of the St. Valentine’s Day Massacre, in terms of our Credit Cards.

This one is an interested twisted tail to follow, so I’ll try to not wander down too many dark alleys, but it is this simple, right about now (February 14th) the Credit Card bills are arriving for the stuff you bought after Christmas (or stuff that didn’t make it into your Christmas bill, which would have shown up in January).

How bad could that be? Who spends lots of money after Christmas? You do!!

Valentine's Day Sentiments to Live By

Remember that big screen TV that you got for 40% off at the Boxing Day Sale? How about all that stuff that was on sale for Boxing Week/Month/Quarter? There is a tremendous amount of money spent after Christmas, and you might have planned for your Christmas spending splurge, but did you plan for your January spending binge? My guess is no (and if you didn’t have a post-Christmas spending binge, good on you (but are you sure?)).

In my house my daughter’s tuition appears on my Credit Card (we still have money to pay that off so that is good), but it is a HUGE number to appear for St. Valentine’s day, isn’t it?

Oh and all those, “live now, pay later” deals you got from the Furniture Mega-Store or the Electronics Mega-Store all have to start getting paid off now too. Future Shop’s new “don’t pay for 3 months” has a new catch, yes, you don’t have to pay it all in 3 months, but now you have to pay at least 1/3 every month leading up to the payment.

Are you now feeling the effects of a Saint Valentine’s Day financial Massacre?

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Let’s All Sell Out

by bigcajunman on January 19, 2012

As I have said previously I am a big fan of Suze Orman and her no-nonsense attitude about debt and such, however she did something recently that puts her in a different light for me.

Last week Ms. Orman announced a Debit Card approved by her which sounds innocuous until you started to read the fine print, and this is what is causing me to rethink my opinion of her. While I have no problem with someone hustling to make a buck (heck I do it myself as you have seen with my Quicken Review and other things I have talked about) but this new venture has me scratching my financial head.

For those about to hit the Comment button and want to leave some comment about The pot calling the kettle black or something like that, feel free, but my opinion is someone who has thrust themselves into the Public Eye making statements about getting rid of debt and such, and then they endorse something that seems to fly in the face of some of their own advice. Now I am not putting her in the same grouping as Garth Turner, but it still concerns me.

Some of the highlights being mentioned by other financial bloggers (nothing like financial bloggers to stir the pot (evidently Suze has made some very derogatory remarks about we Fin Bloggers as a species)):

This is a DEBIT Card (not a credit card) yet you must pay a yearly fee of $32 for it? Yes, banks charge me for the same thing, but why do I pay someone other than my bank to access my money? It’s only $3 a month, but I don’t pay anything to PC Financial.
The card will share your spending information with TransUnion and hopefully they will take this into consideration for your credit score (I am badly paraphrasing what she says, you can read the transcript of an NPR interview where she explains further)
She has promised the fees will not go up.

The major problem seems to be that Credit Rating Clearing Houses (like TransUnion) do not now take into consideration your bank or cash spending patterns, they look at Credit Card transactions (hence the name Credit Rating I guess), but Ms. Orman is promising that she is going to try to get the Credit Bureaus to use the information from her card to help repair your credit scores, and this is where many Fin Bloggers have been piling on.

I have no doubt that Ms. Orman may think this is a noble quixotic quest, however, whether she can change how the system works remains to be seen, and my issue is with her lending herself to a product in the industry that she analyzes. Am I being naive to have these doubts, maybe, but this what is next? The Suze Orman set of Mutual Funds (with a 4.0% MER?) or something like that? It makes it harder to believe an analyst once they are part of the industry they are analyzing (if I am not being too obtuse).

Will Ms. Orman lose any prestige? I doubt it, my guess is the only folks she has irked, are we Narrow Minded Financial Blogging Bigots, and frankly she wasn’t making much money from us, anyhow. If she succeeds and helps repair some Credit Ratings, good on her too!

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Make Your Hobby Pay

by bigcajunman on January 11, 2012

One of the main ways to get yourself out of debt quickly is find another income flow, and use that income to help pay down your debt level. These days, simply lowering your spending is really for chumps and losers, all you need to get out of debt is mo’ money. All of us have hobbies and ideas that we can easily turn into a money-making enterprise, all we need do is apply ourselves, and the money will start rolling in.

The next time you hear some loser financial geek talking about lowering your spending, just smile knowingly that all you really need to do is increase your income, because you have got the talent to make mo’ money. Why should you change your lifestyle just so that you have lower debt? You deserve to live the high life all you need is some more ca$h to help support it.

With that in mind here is a list of some helpful skills that you might have that you can easily turn into cold hard cash, quickly:

Everyone can write, so become a financial blogger, because there is tons of money writing this kind of stuff! I’m working for slave wages, but I am sure there are folks who make a mint doing this.
If you can dig a hole and irrigate, you can become a farmer, there is money to be made running a farm and it doesn’t take much of your time either, just ask a Farmer how easy their life is.
If you can sew, why not start making clothing at home and compete against companies that use sweat shops in Viet Nam to make their apparel. A good seamstress can make up to $5 a day doing that
Selling soap and those kind of products can make you a pretty penny, and all you have to do is alienate your friends and trick folks into coming to “parties” and then rope them into buying some soap (maybe even some soap on a rope).

Come to think of it, maybe just spending less might be a little easier? Living within your means isn’t that bad an idea after all.

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Dickens and Finance Revisited

by bigcajunman on December 15, 2011

No don’t worry, I won’t be doing a Canadian Personal Finance version of a Christmas Carol or Scrooge, but I will look back on a very short post I did when I first started writing this tome, and I am still astounded by the clarity of the statement by Dickens:

“Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pound ought and six, result misery.”
Charles Dickens, David Copperfield, 1849

An astoundingly clear observation even in Victorian times, spend less than you make and you are doing fine, why is that message so hard to understand?

Oh, you’d like a quote from a Christmas Carol?

“Darkness is cheap, and Scrooge liked it.”

There is your money quote, and then you can have a more festive quote:

” . . . every idiot who goes about with ‘Merry Christmas’ on his lips, should be boiled with his own pudding, and buried with a stake of holly through his heart.” to the man who “knew how to keep Christmas well”

A festive thought for this season too.

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Financial Services You Can Do Yourself

by bigcajunman on November 15, 2011

One of the exploding growth industries in North America (aside from the cheque cashing industry) is the Debt Counseling industry. There are many (many) of these service companies out there, that are looking for folks that are in over their head (in terms of their finances). These companies portray themselves as wanting to help us all get back on the straight and narrow, and living within our own means (or at least out of debt).

The advertising on radio, TV, and even on the web is quite slick and very alluring, but what you must ask yourself when dealing with any service company is, what is in it for them? How do these companies make money? Unless this is an organization that is run as a non-profit, out-reach program, they are making money doing something while helping you out too.

I have included a video I found on-line of one of these sites (please read the caveat before hand). If you watch it, you might think these people are out to help me get out of debt, but ask yourself while watching this video:

How are these folks making money, and staying in business (and are able to pay for slick advertising like this)?
Can’t I do this all myself?

Caveat:inclusion of this video is not an endorsement, nor am I receiving any payment for including this video in my post.

Where might they make money? This is all speculation on my part, but my guess would be:

They have a deal with a lot of creditors, where they get a finder’s fee, or the like for getting dead beat debtors to pay off (not very likely).
The structured settlement put in place by them, they get a cut on? That seems more likely to me.

If they charge you a fee up front for all of this, I might be more inclined to believe these folks aren’t taking a bite out of you, as part of your debt pay out plan, but even then, maybe they are taking two bites at the same apple?

I am willing to listen to anyone in the industry who can explain where these companies make their money, so if you are part of this industry, drop me a line and I am willing to listen.

For my readers, remember, I think you can do all of this yourself (even calling creditors to create a settlement or pay down plan), so remember that before using these services.

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