Obviously, I've been away from this blog for awhile. I apologize to anyone who was previously reading on a regular basis. So far, I haven't come up with the right formula for reducing my sleep needs, so the press of other work keeps me from updating this site as regularly as I'd planned.
I know there are others out there in the legal profession and other professions who are interested in helping ordinary people who are in debt. If you're someone in such a profession and you keep up with what's happening in the fight against predatory credit practices, or what's happening in our education system to help students avoid crippling debt, or what's going on in legislation that impacts the credit industry, and you're a good writer interested in writing on such topics, I'd love to hear from you. There is no money attached to this mission, and no soliciting of clients, just the satisfaction of voicing your point of view and helping those in need of information.
I hope to hear from qualified writers with no ulterior motives. Meanwhile, I will try to update this site as often as I can.
I spent last weekend at a conference with over 150 other bankruptcy lawyers (yawn). Also in attendance were bankruptcy judges (they look smaller up close when they're not behind that big wooden bench) and people from the Department of Justice. There was alot of discussion about credit card fraud. Someone told a story about a woman who charged up credit cards in the name of her infant -- who had died. Another individual applied for and received credit cards in the names of her two dogs. These are the kinds of stories that bankruptcy lawyers and others in professions related to consumer debt like to tell. They're sensationalistic, but you have to forgive them for telling these outrageous stories because, let's face it, the job's generally not that interesting. Hopefully, everyone understands that these are aberrations. There are nuts in every area of life.
It doesn't surprise me, though, that banks are issuing credit cards to dogs and infants. My daughter has been getting pre-approved credit card offers since she was four. What database of information are these companies looking at when they do this?
According to Seth Godin, if you're reading this blog, or any blog for that matter, you're very smart because only 10% of people on the internet read blogs. Not only smart, but young too -- he makes the observation that even otherwise sophisticated seniors may not know what a blog is. I believe that's true (about seniors), at least in this little corner of the blogosphere. There's been alot of press about older folks going into debt in record numbers. Debt is a touchy topic, which is why anonymous participation in discussion boards like creditboards.com is an ideal way for people to learn how to navigate their way through financial crises. But I believe that members of creditboards are generally fairly young. There's Debtors Anonymous, but I don't know anyone who belongs to that organization, and am not familar with its purpose.
Thanks to Chi, a very talented designer who lives in New York, my blog has a new look and lots of nifty features that I still need to learn how to use. The discussion boards are not up yet, but will be coming soon (right now, if you click there, the comments page comes up instead of the discussion boards). Additional information pages on credit reporting and other topics will also be up soon. I'm still getting used to this new system. That last entry about bankruptcy was written by me, even though it says it's written by "maxedo." We're one and the same person. I just went in with the wrong user name and now I don't know how to change it.
Comments about the new site, and any suggestions on forum topics and information you'd like to see would be appreciated. I hope my friends at creditboards.com check in from time to time.
Thanks a million, Chi.
How exactly did it come about that in the last couple of years, it suddenly became appropriate to tip everyone we come in contact with? Of course, I'm used to tipping waiters, hairstylists, cab drivers and porters, but now it seems like there's a tipping jar everywhere I go: the carwash, the coffee shop, the ice cream store. Even my bill for the newspaper every month has a blank space for including a tip amount. I'm in favor of decent wages and would rather pay a little extra for these services over being pressured to drop an undetermined amount of money into a bucket after I've already paid for the service, especially as I have no assurance that the tip will go to the person who handed me the ice cream cone. Increasingly, I find that I'm reluctant to deal with human beings in the real world because it's so much simpler and cleaner to transact business over the internet, and this tipping phenomenon makes it even harder for me to get over this antisocial tendency. When I travel to other countries, I don't enjoy going into markets where the price of everything is negotiable. I feel ill at ease when there are no price tags. When I see a tipping jar, I know that the price of what I'm buying is just a starting point for what I'll pay. Sure, I could just ignore the jar, but who wants to leave a place of business feeling like a dirt bag who doesn't want to help the poor kid behind the counter pay for college?
Alas, I am an ignoramus when it comes to technology and am wholly dependent on the generosity of others. I'm a part of the over-40 crowd -- we just got the hang of using emails not long ago, and most of us don't even know what a blog is. My (much younger) sister, who has a graduate degree from NYU in interactive telecommunications (or something like that) is helping me to expand this site to include information pages and links and message boards. Through her, I've hired a designer to design my logo and webpages, and he's given me some sample designs that look very nice. Now, I have to do the hard work of getting the content together. How do other people do this sort of thing while holding onto their day jobs?
Being somewhat risk-aversive when it comes to health, when I became self-employed, I bought an expensive health insurance policy. But then I read somewhere that if you're healthy and relatively young, and money is an issue, you should get a high deductible, low premium policy. As I go through the information on ehealthinsurance.com and insure.com, I see that there are short-term policies, and I'm wondering who gets those types of policies? They're cheaper than long-term, but do they really protect you in the event of serious illness? What I've heard people say is that if you get sick during that short policy term, the insurer won't renew your policy. Your illness is then a pre-existing condition so I'm guessing that no one else will insure you either. So, how is that any better than having no health insurance? The only situation in which it might work, as I see it, is if you break your leg or something like that -- a short term health problem that will resolve itself during the policy term. Can somebody explain this to me, please? I know I'm missing something here.
Now and then, I stupidly long for the simple days just after college graduation -- before I took on a heavy debt load going to law school, before I got married, before I entered a crazy, hours-pushing profession, before I bought this house which eats up most of my money. I got rid of the marriage, but I'm still stuck with alot of its paraphernalia.
Back in those days, I worked as a paralegal in a small branch of a New York law firm (this was supposed to be a temporary detour from my plans to go to art school for my masters degree). I made a whopping $13,500 annually. I seem to recall bringing home about $800 per month after tax. My rent for a large, newly renovated studio apartment in a nice rent-controlled building in a great neighborhood downtown, which was a 5-minute walk to work, was $260, including utilities. My only other bill was a $60 monthly student loan payment. So, I had $540 for everything else, like food and clothing. I guess I didn't eat much because I always had money for fun, my idea of fun at the time consisting of going to museums, really cheap restaurants, free concerts, and the occasional bookstore. I had one credit card that I used for travel and emergencies, and it never occurred to me that I could pay less than the entire balance each month. What happened? Now, $800 pays for my monthly health insurance premium and my gas and electricity, that's it.
A couple of years ago, it seemed that all of my friends were on this simplicity kick - everyone was giving me books on the subject, and the books suggested methods and materials that I should initiate and purchase to make my life simple. After awhile, I couldn't ignore the irony of a shelf full of books on how to live simply that I didn't have the time to read (one of the suggestions was to get rid of books I wasn't reading), and the other stuff I'd accumulated to aid in my journey towards simplicity (color-coded boxes to store all the garbage I could't bring myself to get rid of, note cards to remind me of where I'd stored the color-coded boxes -- but how would I remember where I'd stored the note cards?). The whole project ended up being one more thing on my to-do list that made my life complicated. In my opinion, the only useful tools for reaching simplicity are scissors and trash bags. I need the scissors to cut up my credit cards and the 85 discount/frequent buyer cards dispensed by friendly retailers in my neighborhood (who has a wallet that big and who can keep track?), and the trash bags to throw out everything I haven't laid eyes on in the last year, including all those self-help books on simplicity.
Maybe, instead of feeling stressed about how busy and unsimple my life is, I should just resolve to embrace complexity. The beauty of that approach is that I already have all the methods and materials I need to get there.
Since it's Friday, I want to lighten it up a bit with a recommendation to another blog that deals with money, only this one has to do with both real money and play money. The blogger is Julian Dibbell, and his blog, called play money, is described as a "Diary of one man's attempt to get rich selling imaginary tchotchkes to online game junkies only slightly more pathetic than himself." The idea arose out of his experience playing Ultima Online, a multi-player role-playing game where players purchase imaginery assets like castles, weapons, armor and I don't know what else on eBay. In that game -- which I've never played -- apparently, you deal in "Britannian gold pieces," the imaginery currency of that virtual world. I never played Dungeons & Dragons either, so I can't really relate to people who actually play this game, but I enjoy reading the blog because it's funny. He periodically reports sales figures as if he's the owner of a corporation, providing the exchange rate (if I understand it correctly, it's $14.58 to one million Britannian gold pieces), his total holdings both in dollars and gold pieces, and his net profits. I wonder if it provides similar thrills to day-trading, only without the enormous risks. Anyway, the blog is hilarious even if you know nothing about the underlying game.
There are definite advantages to shopping on the internet if you're trying to avoid compulsive purchasing. First of all, you're not as likely to get distracted by all the merchandise that surrounds you in real stores. When you go to a mall, it's difficult not to come out with more than you went in for. Secondly, alot of these sites now have wish lists you can create to save the items you might want to buy later. When I put an item into my wish list, I sort of feel like I already bought it, so I get some gratification with none of the guilt associated with over-spending. But the real eye-opener is that often, when I go back to the wish list, I realize I don't really want what I put in there and even wonder what I was thinking in the first place. Now, if only I could employ the wish list approach to other areas of my life where I've experienced that awful cycle of compulsion and regret -- for instance, with food I shouldn't eat or men I shouldn't date. Then, I wouldn't have to be careful what I wished for because most of the time, the simple act of wishing for it would extinguish my desire to have it.
I am, frankly, tired of hearing personal finance gurus pick on Starbucks. I don't know how many times I've heard them calculate the amount of money people like me spend on lattes per month, and what that money would do for me if I, instead, put it towards my retirement. The fact of the matter is, you can do this kind of analysis with everything you do: how much money would I save over ten years if I never turned on the heat, if I ate my food raw instead of cooking it, if I cut my own hair, if I never went to a movie, etc. But, for some reason, Starbucks is a common target. I don't know why. Maybe I'm just wrong, but I never tell a client who's struggling to make ends meet and to keep his spirits up that he should forego his morning cappuccino, which may be his only pleasure of the day. We are social animals, afterall, and we can't hide in our caves all day. If not for coffee shops like Starbucks, more people would be going to bars to get a break from their troubles. You can't get drunk and dangerous on a caramel macchiato, and it's cheaper than therapy. Besides, if you're self-employed, it doubles as your corporate conference room and satellite office. Where else can you get all that for 3 or 4 bucks a day? For my part, I'd rather cut my own hair than give up this innocent (and cheap) diversion. And this does not mean I'm in favor of rampant spending on "entertainment" if you're trying to live on a budget. I'm just suggesting that it's not an evil thing to have in your budget. Give up beer instead.
Someone has turned the urge to open up the dirty topic of credit card debt into dramatic art. Abundance, "a community arts performance project about money as told through the stories of people in the United States" is written and directed by Marty Pottenger and produced by The Working Theater. It's been playing in a number of cities in the U.S., primarily in the northeast. The project began with interviews with millionaires and minimum wage earners, and explores our culture of consumption from the perspective of six individuals in financial crisis. I missed the play when it came to Washington, D.C. in the fall, so I'm looking forward to the documentary film that's still in the works. For more information, go to www.abundanceproject.net.
I wish more people would acknowledge that luck plays an enormous part in our financial well-being. Those of us who went to college on student loans remember classmates who came to school in brand new cars (one of my classmates had a license plate that read "THXDAD"), went to Europe on spring break, and had no idea what "work-study" meant. A job paying $45,000 a year looks alot better to someone who has no loans to pay off, and is still on the family payroll, than to someone whose monthly student loan payment exceeds the monthly rent on an apartment. (I'll admit that there is perhaps one advantage to starting with nothing: it's less likely you'll suffer from second generation apathy.)
Some of us started out on the right foot, but then were thrown into crisis by divorce, unemployment or illness. I've talked to many divorced women who took time off from their careers to raise children and who, for one reason or another, are not receiving adequate (or in some cases any) support payments from their ex-husbands. Along with a lower standard of living, they're often forced to accept that their earning potential has drastically diminished during their years of child-rearing. Like divorce, unemployment can deplete your life's savings in the blink of an eye. Who knew that the same tech employers who were offering attractive signing bonuses, stock options, and moving expenses just a few years ago wouldn't be able to pay you even as a part-time contractor today?
I'm not arguing that we shouldn't take responsibility for our lives however we start out or end up. I merely suggest that if you've been hit by misfortune, you should give yourself a break for not being as well off as some of your colleagues or neighbors who have the same education or earn the same amount of money. We live in an overly judgmental society that equates financial security with moral uprightness. It's no wonder that people are more willing to talk about sexually transmitted diseases than about debt.