Tag Archives: No More Harvard Debt

A Mountain or a Molehill?

14 Feb

It does not please me to inform you that today my debt has jumped from -$8,709 to -$13,248…that’s a 52% increase. This amount seems…well, gross to me. Both in the financial and non-aesthetically pleasing sense. I feel ashamed, less than, like a failure. I should have seen this day coming. Honestly, I knew it was always looming but I didn’t think my debtor would be calling it in so soon and I was happy to avoid the conversation.

Three Quick Lessons

#1: Never, EVER borrow money from friends/family/significant others unless for cash only purchases that you can and will pay back with one quick visit to the ATM.
#2: If you must, and only if you absolutely MUST, borrow money from these people get it from someone that wont resent you if you honestly, for whatever reason, simply can’t pay it back, even if you sincerely have every intention of doing so; like a grandma or a rich uncle…it lessens the strain on the relationship.
#3: Always, ALWAYS map out terms BEFORE the money is exchanged and plan for those terms to endure, regardless of external circumstances (make sure that you can [and will want] to pay it back regardless of whatever happens, i.e. breakups, etc.) until it is paid off.

Now don’t get me wrong. I loath being in debt and more so when it is to a person and more so when it is to a friend. But the thoughts that ran through my mind when that email came through. I couldn’t help myself. I was upset, angry, overall just very torn up by it. Not because of the money really, nor at the person. I saw it coming as this person’s money situation has changed recently. But all the subtext: the cheery introduction and close (total ‘criticism sandwich’ style and what made it worse is I knew it was sincere and not a ploy), the conversations that would need to be had as a result, and the embarrasment of feeling like I wasn’t in a postion to pay it back right now. For a moment I considered “what would it be like to put that friendship on hold, at least until I paid it off?” I didn’t know if I could do both. I was that upset. But my higher self said “be cool, step into their map of the world and you DO owe them money, so…stop bitchin! Respond. Now. Not tomorrow. Itemize everything so you can agree on the amount, propose a starting monthly amount that you think you could make up in odd tasks or gimmicks on the 3rd St. Promenade. Just get it over with. The sooner the better.”

There are now 2 personal debts that I must pay back and this latest one won’t be avoidable. Not like I would try that on purpose but my last one hasn’t really been asked for and I haven’t really had the money to pay it back so I’ve been letting it sit, thankfully, without accruing interest. Which is the only good aspect. So starting at the end of this month I will be auto transferring via BofA $100 every 30 days. That’s not much, I know. But it is certainly something when your monthly budget for all necessities is below $1500 on a good month and all that this budget can withstand at the moment. My phone was stolen in January and I have a $200 cell phone bill sitting in my inbox as a result of my replacement deductible + regular monthly bill. Otherwise I would be looking at something in the $1400 range. I had my Evo (without the 2 year plan it’s about a $270 investment even now after 2+ years on the market) for 10 1/2 months with a $7/mo insurance plan. $7 x 11 = $77 + $100 deductible for an Evo 3D, closest I could get to the original, so $177 over a year instead of another $250-300 for a brand new phone or $270-350 to terminate my contract. Phone insurance = worth it. One of the only types of (American) insurance I actually believe in having…but that’s a blog for another time, and it WILL be addressed, don’t you worry.

Anyway, I was so disgusted with my new scarlet digit I went into my Mint account settings and turned my car asset status from ‘hide’ to ‘show’ resulting in a jump back into the black for a cold hard $3,751. Phew that was a close one. Totally artificial but it makes my total money owed much less intimidating. I suppose it feels nice to know that if I ever get into dire straights I can always sell my car instead of moving back home (i.e. mom’s house, dad’s house, this grandparent, that grandparent…turns out my aunt is pretty cool…there are many options but none in LA and none could I handle for more than a couple weeks before firmly pulling all my hair out and acquiring a new habit to something far more harsh than the occasional 6 pack).

Don’t get me wrong. I am not trying to overcome a MOUNTAIN of debt like some. Perhaps a large foothill? Although, a mountain is what it feels like. No More Harvard Debt Guy is well on his way with his formerly $90k debt. He’s paid off over $60k in 5 months. To be fair he had $24k lying around, a corporate job somewhere in the $60-70k range and 2 expensive cars and a motorcycle that he eventually did liquidate. I haven’t done the math as to how much was liquid, how much was cutting costs and how much was increased revenue but I’m looking forward to knowing the answer to that. And to think all I have to sell is my Jeep Patriot and maybe my very small guitar collection. With all the film equipment, office furniture and friend’s apartment contents I’ve carted around in the last 2 years including that resulting from my own change of address this vehicle was a damn good investment and still has gas milage equivalent to a decent traditional 4 door sedan.

On the bright side 97% of that $4,540 went towards education and personal enrichment. I had a lot of personal growth as a result and perhaps a useful certification that can pay for itself in a few months once my paperwork is processed. So I suppose I can’t be that upset. Besides almost all of my friends either spent half a mortgage on graduate school and will be paying for it for the rest of their lives or they figured a BA was enough but will be working in corporate for…as long as they can stand it I guess. By choice? I’m not sure. Honestly, I don’t think they’ve considered if there is in fact an alternative or if they’d even want it. I also suppose their reality is just as probable an alternative for me as my reality is for them…Until then I’ll be paying it off with my creative juices, my great work ethic and my dashing good looks (and tomorrow, probably the pursuit of a second job).

-Half-price

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Hello, my name is Half-price, and I’m in debt.

7 Oct

I started this blog 3 weeks ago. My first and only entry strayed from what I had intended: speak honestly about debt, explore ways to live a healthy lifestyle without losing my shirt while working towards financial freedom and really just keep myself accountable. My first entry did all those things but was also coming from a place of negativity and complaint. Can we start over?

Hello, my name is Half-price, and I’m in debt.

I am currently $9,042.59 in debt according to Mint.com, my favorite online personal finance application. Much better than the national average: $47,568[1] of debt per capita…holy ****! So with that fact, the current state of the economy (which is actually good for some), the current unemployment rate, especially in California AND the fact that I’m only 25? I don’t feel that badly. At least much better than this guy. He is attempting to cut 100% of his $90,316 debt in ten months. But then again at least he spent it on something useful…a law degree from Harvard. Unlike mr. harvard I have no college debt. I got a full scholarship to a great 4-year University and didn’t see the need for an advanced degree for what I wanted to do. So what does my $9k of debt consist of? Three “investments” that have yet to yield much return in any sense of the word.

I’m attempting not to be bitter. After all it did gain me a great health product that will last me 15 years, contact with the producer of a major blockbuster film who calls me by cell phone and my first lesson in entrepreneurship…starting (and closing) my first business.

I’ve began cutting back on my already simple lifestyle. I have cut back on alcohol almost entirely (10% because of money, 90% because for some reason I all of a sudden have a tendency to get hangovers). Is it me or have my bank account and my liver conspired against me? My friends did warn me about the year 26 alcohol intolerance syndrome. I started shopping at the dollar store for basic toiletries. What would have cost me $35 at the grocery store was only $8 at the 99cent store. The only name brand item I bought was Colgate toothpaste (I’m typically a Crest person but I wasn’t going to be picky). The 99cent liquid detergent, foaming hand soap and body wash haven’t made me feel any less clean than normal…not once.

What is the stigma around debt? Where does it come from? Chances are we are ALL in it. A couple weeks ago I attended a talk given by Charles Eisenstein, author of Sacred Economics. He kept coming back to the story of how money began in this small village however long ago where instead of the traditional gift society model the mayor decided to introduce a currency made of round pieces of animal hide. He distributed 10 pieces to each family at the beginning of the year and said “at the end of the year each family will owe me 11 pieces”. Now this makes sense when compared to modern day money. We borrow $500k to buy a house and by the time we pay it back we’ve probably paid back double the amount that we initially borrowed, at least. This is very interesting, by the end of the year ten families would have to go bankrupt. Why? because where would that 11th piece for each family come from? So in actuality debt has been in existence almost exactly as long as currency itself.

It used to be that families would have a trade or a crop and they would produce way too much for themselves to consume so they gave away what was left…which was actually a lot. And if everyone in the town was producing and giving away a portion of what they had then everyone would get enough of what they needed: food, clothes, basic services, everything.

If you think about it some of the “poorest” people in America are not in fact the poorest. Why? because they have no debt! They live paycheck to paycheck? Yes. Get help from the government? Maybe. Are homeless and/or jobless? Some of them. But there are doctors, lawyers even Fortune 500 CEOs that are up to their ears in debt. THESE are in fact the poorest people in our society. So then “poor” is not a measurement of how much money you have in the bank (or under the mattress, or in the coffee can in the cupboard or in the safe behind the family portrait) but “poor” is a measurement of assets, relationships, borrowing power and class. Interesting.

I wasn’t exactly expecting to come to that conclusion…in fact I’ve never even seen the word “poor” from that angle. I’m thankful for the change in perspective.

Buy what you need, create what you want.
-Half-price

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[1] When the news is scaring US citizens with “$47k of debt per capita” they fail to mention to the public that this number actually refers to public debt. That’s what the government owes per capita. Personal, private or “consumer” debt, how much actual individuals, not companies, or any level of government owes is actually between $7-20k depending on your sources.