I’m Judgmental (And So Are You)

Posted on October 12, 2011 by

 

Over the weekend, I had some interesting conversations with friends and family regarding what people choose to do with their money. Each conversation followed the same pattern:

  1. Story of being judged, reprimanded, or chastised for a particular purchase.
  2. Defense of said purchase.
  3. Judgment of something the other person buys (as proof that they had no right to say anything).
  4. Statement: “I’m not judging. I don’t care what people buy as long as they don’t talk about me.”

Get out your robe and gavel.

Last Friday I preordered the iPhone 4S. To replace the iPhone 4 that I bought six months ago. There, I said it.

What went through your mind just now? Did you think about something to do with wasteful spending, gadget addiction, the “Apple tax”, or the fact that I’m still in debt? Or maybe you thought, I would never spend money on such an expensive phone, especially if I already had a perfectly good one! You may be picturing me in a whole different way right now, and not necessarily a good one.

That’s okay. I understand why people would have those thoughts; in fact I had them myself before I made the purchase. But I decided that the benefits outweighed the cost. For me. I could spend some time explaining WHY I bought a new iPhone, but it really doesn’t matter. You’ve already made a decision about the worthiness of the purchase, and only a made-up story about saving puppies or curing disease would change your mind.

We ALL make judgments about how people spend money.

I’m not going to lie - I judge people all the time based on the things they buy. When I see someone carrying a Coach bag, for example, I shake my head at all that money thrown down the toilet for a purse. It just cracks me up. Same thing when I walk into a friend’s house and see the massive TV overcrowding her tiny living room. Yet I’ll drop hundreds of dollars for the ability to communicate and surf the web from my pocket.

Some people get bent out of shape if someone thinks they’re wasting money. They wear themselves out defending what they bought and trying to convince everyone that the purchase made sense.

Personally, I don’t get too excited about that kind of thing. As long as my friends aren’t borrowing MY money to spend on craziness, does it really matter what they buy? Sure, I may have my opinions about their choices, but that doesn’t mean I have to share those thoughts with my friends.

When judgment is warranted.

There is one time when I feel it’s appropriate to call someone out on their spending - when it prevents them from paying their bills or reaching important financial goals.

If someone tells me they can’t afford their mortgage payment, yet they’re carrying a $500 handbag and talking on an expensive phone AND I know the items weren’t gifts (or purchased during better financial times), you better believe I’m going to get ALL KINDS of judge-y. To the person’s face. Don’t complain to me about your problems when you’re exacerbating them with stupid spending.

But if you’re on top of your finances and you’re not using credit to pay for your stuff? I’ll just privately think you’re silly and be on my way.

What do you value?

I value technology. I love devices that make my life easier and less frantic. I hate saying, “I’ll check that out when I get home,” or “I’ll email that to you when I get a chance.” Because five minutes later I’ve already forgotten.

I DO NOT value high-end clothing, jewelry, or handbags. I don’t need a huge house or luxury car. I don’t have to spend holidays in another country to feel satisfied with my life. But it’s no skin off my back if other people do.

Do you judge people based on what they buy? What do you spend on that earns judgment from others?

Posted in budget, debt, spending | 39 Comments

Financial Advice from a Bill Collector

Posted on October 11, 2011 by

This is a guest post from Rachel, a reader with experience as a collections agent. She graciously agreed to post some tips for dealing with your creditors when you’re having trouble paying your bills. Please treat her with kindness and respect, and check out her brand new blog, Whimsical Melange.

My experience is with auto collections, but most of my tips and information will apply to any simple interest loan.

Answer the Phone

You don’t want to talk to us. We aren’t surprised. The calls are not some sort of torture device (most of the time).

This is why you should answer the phone: We can’t call you back. Once you answer the phone and identify yourself as the account holder, we cannot call you back the same day according to the Fair Debt Collection Practices Act. If we do, please save the evidence. Sue the pants off the company. Easy way to get rid of debt!

Also, if you stay in contact with us, we won’t have to start tracing you. We start this immediately once we are unable to make contact. We have caller ID, so we’ll call you back on whatever number you called us from. We’ll call the references you listed on your application and try to reach you at your employer. If we still can’t reach you, we’ll call relatives you didn’t list and possibly even your neighbors to see if they know you. If you talk to us when we call, we have no reason to do this.

If you just can’t stand the collection calls, write a letter stating that you don’t want to be contacted by phone regarding your account, ever. Send it certified and keep the records. If you get another phone call, sue. Once you’ve sent a letter, though, the communications ball is in your court. We will not contact you for payment or to offer options to help you bring the account current. You’ll have to contact us, and when you do, we tend to be less flexible. After all, we haven’t heard from you - what do you expect?

Don’t Lie

You don’t have to give us all the gory details about why you can’t make your payment. I will ask you why you’re late because I have to meet certain guidelines on every call - keep your answer short and sweet. Hearing why you can’t make your payment isn’t my idea of a good time; if I need more information, I’ll ask. If you give me some long, complicated excuse, I may not believe you, but I’m likely to give you the benefit of the doubt. Don’t test my credibility. Anytime I catch you in a lie, I’ll make a note of it.

When you set up a payment arrangement, don’t break it. There will be a record on your account. If the notes on your account indicate dishonesty, we are more likely to take action early in your delinquency. If you’re upfront the whole time, it benefits you in the long run.

Know Your Fees

Most people buying a car will only face late fees if they can’t pay - make sure you know when this fee is assessed and how it is calculated. Some states require a flat fee; others allow a percentage. This information is readily available in the contract you signed when you took out the loan (in the fine print that you may or may not have read). Most of the people who get to me (more than 30 days past due) have never looked at their contracts.

If you’re leasing a vehicle, be prepared for a whole new world of fees. Sometimes the property taxes are assessed to the company providing financing, since they technically own the car. You have to pay it back. Also, if you get a parking ticket and don’t pay it, the finance company will have to pay that as well. They will pass it back to you along with additional fees for their trouble. Same thing with impound fees, which can go on your credit report as a repossession even if you’re not behind on your payments. You can argue about these types of fees until you’re blue in the face, but it will do you no good. They’re all in the lease agreement.

ANY Late Payment Costs You Money

If you make a late payment at the beginning of a loan, it really hurts you and you’ll pay more interest over the life of the loan. On the bright side, if you pay extra on your first few payments, you will greatly reduce the total amount of interest you pay. Make sure that any extra money you send will be applied to principle.

If you can’t make your payment, you may be able to get an extension. This extends the term of your loan by one month and allows you to “skip” a payment during the loan term. Instead of a 60-month loan, for example, you would now have a 61-month loan with only 60 payments required. This is a great way to catch up as long as you use it wisely. If you pay the interest owed on the date of the extension, you’ll be able to pay off your loan on time with minimal added interest.

DO NOT use an extension during the first 12 months of your loan. If you don’t pay the interest on the loan for 2 months, it could easily add up to the amount of your regular payment. Ouch! This is especially true for loans with high interest rates.

We Don’t Want Your Car Back (Most of the Time)

We would rather work with you to bring your payments current than take the car back, unless you’ve irritated us by lying to us. Your car is likely worth several thousand dollars more than you owe on it. Plus repossessions cost your finance company an average of $10k-$12k each. Obviously this is a bad business decision!

When you pay late, we make a ton of money. All we want to do is limit our risk. If you don’t irritate the collector assigned to your account, you’ll likely be able to keep your vehicle even with late payments.

If you know you absolutely can’t pay for your car, call us. Make arrangements to surrender the car voluntarily. It doesn’t look any better on your credit report, but it can save you about $500. Hiding the car is dumb. We’ll likely find it. If we can’t, a judge will order you to produce it. More of your money down the drain. All our court costs are passed to you, along with any fines imposed by the judge.

The Bottom Line

Keep in mind, you’re dealing with a person who has a job to do, which is to collect your money. Collection agents need to pay our bills just like you do. We have to follow policy even if they don’t agree with it. Be polite. Be honest. Don’t try to outsmart us. It will come back to haunt you.

Ask for the help you need. All we can do is say no. Don’t take it personally. We do not enjoy causing you pain or messing up your life.

Andrea’s note: I have not had pleasant experiences with bill collectors in the past. However, reading this post helps me understand their perspective a little better. Rachel has given us some ways to avoid being harassed by collection agents, as well some great tips on what to do if you’re having trouble making your loan payments. Did you learn anything new? Anything you still have questions about? Let us know!

Posted in collections, confessions, credit, debt, guest post, saving | 10 Comments

Can’t Pay All Your Bills? Now What?

Posted on October 10, 2011 by

 

Ever had that feeling of dread when payday comes and you have more bills than money in the bank?

Some of you won’t know what I’m talking about because you’ve never been there. And that’s wonderful! But others may know all too well what I mean. You get out your stack of bills, add them up, and try to figure out how in the world you’re going to cover everything. Or you have enough money to make all your payments, but not enough for food and gas until you get paid again. It’s a miserable, depressing feeling.

When I was still in spending mode, I wasn’t just a member of the Utility of the Month Club - I was the president. We never actually had any of our utilities cut off, but that’s only because I knew exactly how long I could wait. And because I frequently used credit cards to buy groceries. And because I had a friend at the electric company who would conveniently “miss” my house when he pulled meters for nonpayment.

Most finance sites would tell you a lot of practical ways to prevent bill overload from happening. Spend less. Cut out unnecessary items like cable. Use coupons at the grocery store. Sell your furniture and sleep in a tent.

And I will say that all of those can be great moves (except the tent thing). But what do you do when there’s no time for all that stuff? What happens if you are reading this RIGHT NOW and don’t have enough money to make it until payday?

Continue reading →

Posted in budget, debt, single mom budget, spending | 18 Comments

FINCON11: 3 More Stories

Posted on October 8, 2011 by

The Rosebud in Schaumburg

 

I’m sure some of you are probably tired of hearing about the Financial Blogger Conference, so I’ll try to make this my last post. At least for awhile. :)

I feel like I could tell stories about the conference every day for a year. Still, I promised 5 stories and I’ve only told two of them. The last three will be told as succinctly as possible, with the inclusion of some low-quality video.

Continue reading →

Posted in blogging, confessions, fincon11, random | 11 Comments