Poorer Than You » Debt

Can you be sued for credit card debts?

Guest Author — Wed, 11 Nov 2009 19:48:44 +0000

Stephanie is sick! Don’t worry, she’s drinking plenty of fluids and getting lots of rest, and will be back to writing next week. In the mean time, here’s a guest post to hold you over!
Michelle Taylor is a financial writer and specializes in debt related problems. She has guided many people to pay off debt. Some of the topics she writes about are debt consolidation, debt settlement, credit card consolidation and debt-free.

You may have come across troubled debtors asking “Can you be sued for credit card debts?” The answer is yes, but only under certain conditions. Creditors tend to sue you if you are behind on payments for more than 60 days and if there is a court order against you. However, they usually try to avoid filing lawsuit and instead adopt ways that will make you pay up. Instead of suing you, creditors will find out if you have a co-signer who can pay the dues if you fail to do so.

If the creditor finds that you are employed, it means that you are having a steady flow of income. As such you are in a position to pay up. However, this may not be true for debtors that are older. Under such circumstances, creditors think that the debtor may not have a steady flow of income and his hopes of recovering the debt diminishes.

In fact, the reasons that caused creditors to extend a loan to you may be the same reasons why a creditor will come after you for his money. If you receive a notice from the creditor, first find out how genuine their demand is. You can do so by checking the “SOL” or Statute of Limitation. If you find that your account has passed the SOL, you can use it as a defense. If not, it is better to pay off the debt if the demands made by the creditor are valid. This is because if a judgment is passed against you, it stays in your credit report for a period of 7 years. And this will hurt your credit rating miserably. So, keeping your best interest in mind, it is better for you to negotiate with the creditor so that you can work out a way after talking to your creditor.

If you are facing financial hardship or you anticipate a financial crisis in near future, it is best to convey the reason of your non-payment well in advance. By doing so, you can work out an alternative payment plan with the creditor so that you don’t fall behind on payments and the creditor doesn’t file a lawsuit against you.

How To Pay Off More Than One Debt

Stephanie — Wed, 28 Oct 2009 14:00:00 +0000

If you’ve only got one debt hanging over your head, paying it off isn’t rocket science: you pay as much as you can every month until the sucker is gone. But if you’ve got more than one debt to worry on, how do you prioritize them?

No New Debt

Before you even think about how to pull yourself out of a debt hole, you’ve got to stop digging the hole! Stop acquiring debt. Don’t use your credit cards if you’re carrying a balance on them from month to month. Use a debit card instead. If you’ve got some fancy home equity line of credit, don’t draw anymore from it. If you can’t stop acquiring new debt, you won’t be debt free. If you’re having trouble making ends meet without using debt, you need to drastically change something in your life.

What can you drastically change to stop acquiring debt? That’s something you have to figure out for yourself, but I can tell you what I did: I had to drop out of college for nine months and vow not to buy anything unless it was used (except food). Hopefully you won’t need to take as drastic of measures, but I’ll tell you something: it worked! I’m debt free now, except for my low-interest student loans.

Write Down Your Debts

No matter what theory of debt pay-off works for you (see below), each of them starts off the same way: making a list of all of your debts, including the total balance of each debt, the interest rate, the minimum payment, and a little something I like to call the “annoyance factor” of each debt. The annoyance factor should be a number, and it doesn’t matter on what scale (1-5, 1-10, 1-100, whatever!). Just as long as a bigger annoyance factor means the debt is more “annoying” to you than a debt with a lower annoyance factor.

There’s a spreadsheet below for entering all of this information into. First, here’s a quick explanation of the debt repayment theories.

The Three Theories of Debt Repayment

Lowest Balance theory: Pay off your debts in order from lowest balance to highest. This is best if you have a very emotional relationship with money, and you want to see progress quickly. If you would get frustrated and give up if it took you too long to pay off the first debt, this is the theory for you.

Highest Interest Rate theory: Pay off your debts in order from the highest interest rate to the lowest. This makes the most mathematically sense, and works well for number-oriented people. If you want the most dollar-for-dollar efficient method, this is the theory for you.

Annoyance theory: Pay off your debts based on how annoying they are to you, or how pressing it is to pay them off. If you have a debt from a company you really hate, or personal debts to family you want off your back before you deal with any other debts, this is the theory for you.

Free Debt Snowball Worksheet

Open the spreadsheet in Google Docs (it’s free and totally awesome, don’t worry)

Click File, then chose “Make a Copy” (this is very important – if you do not do this, you will not be able to edit the spreadsheet)

In your copy, you can now edit the spreadsheet and put your own debts in. Don’t forget to replace the “Example” with a debt of your own!

Now comes the fun magic of Google Docs. If you hover your mouse over the gray bar underneath any of the headings (Balance, Interest Rate, or Annoyance Factor), you’ll see that it turns orange and says “Sort.”

For the Lowest Balance theory of debt payoff, click the arrow on “Sort” under “Balance” and choose “Sort A > Z”
For the Highest Interest Rate theory, click the arrow on “Sort” under “Interest Rate” and choose “Sort Z > A”
For the Annoyance theory, click the arrow on “Sort” under “Annoyance Factor” and choose “Sort Z > A”

And now your debts are cleverly sorted for you, based on the payoff theory you’ve chosen. So all you have to do now is throw as much money as you can manage at the debt that’s sorted onto the top, and make the minimum payments on all the debts listed below it.

When your first debt is paid off in a few months (or, in some cases, years), you just have to open the spreadsheet again, delete the paid-off debt, and start throwing as much money as you can at the new top-dog debt!

The great thing about this is you don’t have to stick to any one of the theories if it isn’t working for you. You can start out with Lowest Balance, and if you decide to change to Annoyance later, you can just re-sort the spreadsheet and adjust your payments. See – who said change isn’t easy?

Subscriber Swap Saturday with No Debt Plan

Stephanie — Sat, 11 Apr 2009 11:58:00 +0000

No Debt Plan is about getting and staying out of debt with a plan. Kevin, the author, is passionate about budgeting, saving for the future, and using goals to reach financial freedom. You can subscribe to his blog by RSS or email.

This interview is part of a new feature he’s developed called Subscriber Swap Saturday. The basic idea is to get the subscribers of one blog to subscribe to the other blog for at least a week, just to try it out. After a week if you don’t find that blogger’s content enticing, drop it. The hope is that over time you will find several writers that you weren’t familiar with who provide meaningful content to you. You can read more about Subscriber Swap Saturday at his get out of debt blog, as well as his interview with me.

And now, Kevin answers some questions I shot at him about his life, his finances, and his site:

You just hit the quarter-century mark this week. Any words of wisdom you’d care to share with us youngins?

Kevin: Ah, nothing like feeling old. Just the same old same old — spend less than you earn, do something you love, and live on a budget. Contribute to your 401(K) and, if your 401(K) investment options have high expenses (or are not varied) open up a Roth IRA instead.

Were you good about your money and finances in college, or was that something that you developed after you graduated?

Kevin: I handled money great in college. I’m not so sure about when I learned it, I suppose it was over time. My first few years I lived on campus and didn’t go off campus a lot so there wasn’t a lot of ways for me to spend money anyways. But handling money in college is (or should be!) something on a small scale… I had a small part-time, on-campus job. There wasn’t a lot of money to spend in the first place. The major finance issues pop up once you suddenly have a real income coming in every month.

I’ve been following your blog (in its various forms) pretty much since I started my own blog! How have things changed for you since you started blogging?

Kevin: I was going to mention that as well! I first started out blogging on a domain associated with my name. But that didn’t rank very well for search engine terms associated with my content. That’s when I decided to switch to nodebtplan.net and use that domain to rank better in search engines.

I also made the switch from posting whenever I felt like it to deciding on a schedule (posting once daily) and sticking to it. When I first started I had a lot of topics to cover. When you write an article every day for a year and then some, you have to really start to dig in on some topics. That’s been pretty difficult.

Your blog focuses on something called the “No Debt Plan.” What is that, and how can 20-somethings make the No Debt Plan work for them?

Kevin: The No Debt Plan is essentially a summary of the advice I find myself giving to friends and co-workers time and time again. It’s similar to Dave Ramsey’s plan — you walk through the steps and it will show you how to setup a budget, how to stop living paycheck-to-paycheck, and how to pay off your debt effectively.

To make it work, just read it. I tried to write it so that it didn’t come across convoluted and too complex to understand. I think personal finance writers often make the mistake of getting too far into the nitty gritty of the numbers. Those are good, but for a series of posts like that I tried to back off the numbers a bit. (Although it did sneak in there every once and a while.) Let me also say that the plan isn’t complete… I’ve still got a few more posts up my sleeve.

How about some quick-fire, often-debated personal finance topics:

Credit cards for college student, yay or nay?
If they have an income and can manage it responsibly, yay. Otherwise, nay.

Emergency fund or aggressive debt payoff first?
It depends. If your debt is credit card debt then technically if you had an emergency you could rely on that to pay for living expenses. I prefer for folks to have an emergency fund that works for them (whether $500 or $2,000) and then focus on the highest-interest rate debt first.

Should parents foot the bill for college for their kids?
Not at the expense of retirement savings. I am fine with parents paying for education (my parents and scholarships paid for mine). I think kids really need to try and get as many grants and scholarships as possible — there is a lot of money out there to apply for.

Even though I know your answer to this, it’s the most-hotly-debated: Debt snowball by remaining balance or by interest rate?
Interest rate. Interest rate. Interest rate. The math is clear cut. I do buy the part psychology argument of Dave Ramsey’s plan. But when you run the math and you could save thousands in interest… hey… get your motivation from somewhere else.

And finally, what do you see in the future for Kevin and No Debt Plan? (Tell us all of your secret plans!)

Kevin: Ah if I could only see into the future. I plan to continue blogging and would love to get to the point that I could blog full time. I have a few new blog ideas (as in new, separate blogs), but I just don’t have the extra time to develop them. I’ll finish my MBA in August and I am considering getting my Certified Financial Planner certification.

All that and keeping the dog worn out.

It was a really exciting opportunity for me to exchange these interviews with Kevin. As I said in this interview, the two of us have been tracking each other’s sites pretty much the whole time so far! I consider Kevin one of my “old friends” of blogging, and I would definitely appreciate it if you gave his site a chance. Subscribe to his site by RSS or email. And don’t forget to check out my answers to his interview questions!

Is It OK to Bridge the Gap With Credit Cards?

Stephanie — Wed, 28 Jan 2009 19:30:28 +0000

Last week I wrote about how my student loans will be too big of a burden to bear, at least at first. So, all whining aside, what am I going to do about that?

Well, obviously Objective 1 is to get a job and to make money. Those loans are going to come due, and quick! One of them doesn’t even have a grace period – the first bill will be due one month after I’m no longer taking classes, so probably in late March or early April. The next loan has a six month grace period, so I can expect bills for that starting in late August/early September. And the final cherry on my loan pie will start come due starting around the new year.

Joy.

But, as I said, work may not be enough. I make enough from my little "side hustles" that I can cover Loan #1 when it starts billing. And I’m really hoping I’ll have a job that can cover Loan #2 by August. But with rent and gas and other bills, it’s Loan #3 that will start to give me a hardship.

Is it ok to… start relying on my credit cards at that point?

Whoa, whoa, whoa, calm down and stop screaming! I know, that sounds bad. I was in credit card debt once before, and the prospect of getting back into it doesn’t really excite me. But it might be necessary, if I don’t make much (a huge possibility) and my Getting Established fund and Emergency Fund run out.

Suze’s Rules

Suze Orman actually gave me the idea for using my credit cards, in The Money Book for the Young, Fabulous, & Broke. She has some rules, though, concerning this action:

A credit card can be used to help you make ends meet, but you’ve got to cut everything down to bare bones, first. It’s not for "blowout vacations, a closetful of expensive clothes, and going out four times a week."
Keep monthly charges at or below 1% of your annual gross income. For example, if you make $30,000, charge no more than $300 per month.
She doesn’t say it, but she says it elsewhere in the book: keep paying the minimums, don’t fall behind!
Reexamine your situation every six months or so – decide if you can continue to charge for another six months, or if it’s time to rethink your career path.

My Rules

I have a few restrictions I have to impose as well, if I get to this point. I’m still not sure it will happen, but it’s helpful for me to make rules now.

Keep the debt at a reasonable ratio compared to total credit lines. Between my two cards, I current have $7,500 in credit. When the balance between them equals $2,250, it will start to adversely affect my credit. $3750, or half of my available credit, is the upper limit.
Use the lower-rate card. This seems like a no-brainer, but I might be tempted to put things on my Amazon card, which gives me points toward Amazon.com gift certificates. That’s a big no-no: the higher APR on that card (12.24% vs. 9.24% on my Bank of America card) cancels out the rewards I would earn. Unless my rates drastically change, the Amazon card is only for purchases that I pay off every month.
Pay twice the minimum payment. If I can’t afford to do that, it’s a big signal that I’ve charged too much.

The idea of this whole thing is simply to bridge the gap before my income rises – to make ends meet while I do internships or entry-level jobs. I’m hoping it never gets to this… but I feel better going into it with a set of guidelines, first.

I Will Not Be Able to Afford My Student Loans

Stephanie — Wed, 21 Jan 2009 15:46:06 +0000

I’m taking a personal financial management class – half because I want to see what new concepts I can pick up and half because it’s my last term of school and I have some major senioritis (symptoms may include late papers, easy classes, oversleeping, and some job search anxiety). For one of my class projects, I had to pick a house and walk through the steps of financing and buying the property. That was fun and interesting (if you’re a nerd like me), but part of searching was figuring out how to pay for it.

The calculators for "how much house can you afford" ask about your other debt payments. With my credit card paid off, I’m only looking at student loans. But, I hit a bit of a snafu when I looked up what they will cost me in monthly payments.

Federal student loans offer a variety of repayment plans, but the standard plan is the best because it results in the least interest paid, and it’s only a 10-year term, which means you won’t still be paying off your loans when your kids apply for loans of their own. The downside is that the standard repayment plan comes with the largest monthly payment.

Between all of my loans, my monthly payment on the standard plan comes out to $470. Not really an amount I’ll be able to pay during my first year out of school.

I wanted to put myself on the standard repayment plan right off the bat, and tackle this debt head-on. I wanted to consolidate my loans into one low rate while rates are dropping. But it looks like just to be able to make the minimums, I’ll have to stay on the graduated repayment plan (where the bills start small and get bigger every year) – with payments of $319 (at first).

Trust me, I’m really disappointed by this. I don’t know why I didn’t run the numbers until now, other than the fact that it’s easier to run them now that I’m done taking out new loans. It’s startling to be this close to repayment and suddenly realize that I will have trouble paying the bills.

My employment is uncertain. I’m going to do the best I can with job applications and internship applications over the next few weeks… but I’ve come to realize that I’ll have to do a lot more than that. I can’t afford anything outside of Ramen to eat and car maintenance, since I’ll be needing that to get to a job. I’ll have to start Compacting again.

I’d thought I was out of the woods, but I’m really, really not. Somewhere deep inside my brain, my current Self is kicking my 17-year-old Self in the pants for getting us into this mess!

You’re Terminated, F*%#^@!

Stephanie — Tue, 05 Aug 2008 20:31:42 +0000

The two sides of my brain were fighting just now. If you could sneak a microphone into my ear, you would have heard this:

“Oh… oh… my fingers itch! I want to do this so bad!”
“No! Wait until you get your paycheck on Friday!”
“But… but… but… I just got some PayPal payments and there’s enough money in the account!”
“Wait! It’s only a few days! Slow down!”
“Psssh… forget you! It’s just moving money between my checking and savings accounts… I can always move it back.”

*click*

And with that, I made the last payment into my Credit Card Payoff savings account.

My friends, that debt is gone.

Gone-ish. The cash is going to sit in the saving account until October, because my 0% APR lasts until the end of my November statement. I’m going to just collect the interest on the savings account, and make the minimum payments out of it, and then pay off the whole balance a month before the intro rate ends.

Booyah.

Tomorrow we’ll talk about what’s next. I’m gonna bask in the glow for just one day.

Guest Entry: The Financial Battlefield

Stephanie — Mon, 05 Nov 2007 14:41:30 +0000

The following is a guest entry, written by one of PTY’s readers, Matt. If you have a personal finance story to share like Matt’s, please feel free to email it to me.
- Stephanie

Hi, my name’s Matt. I was briefly venting to Stephanie (your regular author) that I was about to take my first plunge into the stock market game tonight, and she invited me to write a guest entry, so here I am.

First, a little bit about myself. I’m a service member currently deployed to Iraq. I’ve got my wife who, like Stephanie, is a full-time student, and my young daughter at home waiting for me. Perhaps the best deal about being in Iraq is that my pay is increased by effectively 33% due to my tax-free status in addition to my “special incentive” pay that I receive while over here.

We just finished paying off our debt snowball in June, and have been studiously dumping money into high-yield savings accounts: first EmigrantDirect, then E*Trade after ED lowered their APY to 4.75%. It’s a proud time for me. For the first time in a very long time our checking account is looking pretty thin because we’re saving every last penny we can.

To get where we are today, my wife and I have adapted a few of Dave Ramsey’s rules to fit our military family mind-set.

Establish your strategic reserve ? Sun Tzu said something like, “Keeping a force in reserve to support the main effort can be the decisive factor in winning a battle.” As a military family who rents our home, our chances of encountering catastrophic expenses due to medical bills are statistically insignificant. Often the only “surprise attack” we’ll get is having to take one of the cars to the auto shop. However, I know the debilitating effect even a small doctor’s visit can have on the uninsured. For this reason, having a “react force” that can pay the hundreds of dollars for an office visit or a trip to the mechanic means you won’t have to wear out that plastic and build up your principal again.
Attack your debt ? You’ve got to hate your debt. Yeah, it has some nice things to teach you, but if you’ve gotten to the point where you want to get it out of your life, you’ve already learned the painful lessons. Gear up with the weapons of personal finance war: a budget, a disciplined mind-set, and a strong will to win. You’ve got to relentlessly slice expenditures out of your life. We had to cut cable, and skip vacations and buying nice things. Our tax return last year went to paying off one of our cars. We could’ve used a new dining room table, but we made do in order to get out from under our lenders.
Defend your budget ? This one can be tough, especially if your significant other or child(ren) want new things. On one hand, you want to keep your family happy and not become an overbearing miser who can’t let a penny go. On the other, you know what your financial objectives are, and every dollar you can keep out of the gas pump, restaurant or mall is a dollar that can go toward debt reduction. In my experience, it’s best to adopt a flexible, “bend but don’t break” philosophy. If you have a controlled splurge once a month, buying a new outfit or eating out at a nice restaurant for no reason, you can maintain domestic tranquility without wrecking your budget.
Don’t be afraid to call in supporting fire ? In the Marine Corps, we have our big guns: artillery and tanks. In the world of my personal finance, I’ve had to start calling in my family for backup. When I make my trip home, I don’t let pride stop me from letting my family pay for dinner or driving us to a far-off location (gas costs money!). On the same token, however, don’t get carried away. A loan is a loan is a loan. Borrowing money from family carries its own set of dangers you have to be on the lookout for. Also in this category, talk to the experts! Dave Ramsey turned our financial life around. I also subscribe to numerous personal finance blogs, like PTY, Consumerist, Get Rich Slowly, and My Money Blog.

There’s probably nothing new here for most of the PTY readers. The bottom line is still spend less than you earn. No matter how much you make, minimum wage or a six-figure salary, anyone can spend themselves into debt. There are so many personal finance generals out there, like Dave Ramsey (I love that guy, can you tell?), who have fought this battle and won decisively. Listen to your generals. Whether it’s Dave, your grandparents living well because of decisions they made about retirement 40 years ago, or even our girl Stephanie (who honestly I suppose might be a major, if we’re going to stretch this metaphor), listen to people who have turned their lives around! And focus! Victory is within reach!

Reader Question: Debt Consolidation Loan?

Stephanie — Wed, 17 Oct 2007 21:20:43 +0000

A reader left a question in the comments (edited for length and spelling):

I just wanted to ask?
What Is A Debt Consolidation Loan? Is there anyone else here in a similar position as me with mountain of debt they are struggling to pay? I am seriously considering [a debt consolidation loan] to help my family.
Like a lot of people we started slipping into debt when I lost my job and couldn’t meet the monthly bills. I have heard a lot about debt consolidation loans but I don’t know what’s right or wrong?
Any feedback from anyone would be appreciated.
Deepest Thanks
Danni

Wikipedia defines debt consolidation as “taking out one loan to pay off many others. This is often done to secure a lower interest rate, secure a fixed interest rate or for the convenience of servicing only one loan.”

A debt consolidation loan can be a good idea if you need it, but there are several pitfalls to be aware of. Bankrate’s article “Debt consolidation: cure or continued credit problems?” does an excellent job of describing this pitfalls.

First of all, a debt consolidation loan is a lot like cold medicine – it treats the symptoms, but isn’t a cure. A lot of people who take out debt consolidation loans end up back in the same trouble again later. There has to be a shift in behavior and a commitment to stay out of debt in order to make a difference in the long run.

The Bankrate article offers some additional concerns and tips:

Before you sign on the dotted line, be sure that the costs of the new, bundled loan will truly be less than what you’re already paying various creditors. For many consolidation-loan candidates, their current credit woes mean they won’t get the lowest-available interest rate. Plus, when there is nothing to secure the loan (such as your home), expect the lender to bump up the rate.
Calculate interest and fees on all your existing accounts to determine the total of the payments you now make. Then compare those amounts with the consolidation loan numbers to make sure it truly is a better choice.
And, as with any product, shop around. The bank down the street may offer an attractive loan rate, but a check of your local credit union could turn up better terms, says Deborah McNaughton, author of “The Get Out of Debt Kit.”

Another problem with debt consolidation loans is that although they may offer lower annual interest rates, they usually come with a longer repayment term. This is how they why they offer a low monthly payment: because you’ll be paying on it for a very, very long time. And a long repayment period means paying more interest overall.

In general, working to manage your debt yourself before turning to another loan is usually better. Strategies like the Debt Snowball can help you plan out your own debt repayment plan – if you can manage to pay off your debts without the help of another loan, you’ll be better off in the long run.

My Very Insane Credit Card Spreadsheet

Stephanie — Tue, 18 Sep 2007 14:39:58 +0000

I did something that probably falls under the category of “insane.” I pulled up all of my credit card statements for the past two years (thank goodness for online statements!), and I opened a new Excel spreadsheet. And I started entering all of the purchases I’d made on my credit card since the last time I had a $0 balance (March 4th, 2006).

The point of this exercise was not just to look at what exactly the purchases were that got me into credit card debt, although that was certainly something that I was able to do. But my real goal was to see which of these purchases were the ones still sitting on the credit card. What was is it that I’m paying off exactly, when I make a payment to the credit card?

So after putting in all of the purchases, I put all of the finances charges I’ve accrued. I’ve decided that in my mental account of what’s on my credit card, the interest goes last. I don’t even begin paying off the interest until I’ve paid off all the purchases. This makes figuring out what I’m paying off a lot easier.

After listing all of the purchases and finance charges, I started subtracting all of the payments I’ve made to the credit card since I started carrying a balance. After a purchase was “paid off,” I would put a strike through it. As I began doing this, I decided to estimate where I would end up. What am I paying off right now?

My guess was that if I were to make another payment to my credit card today, it would go toward something I bought in my big spender month of July, 2006. And when I finished moving down the list and subtracting payments and crossing off the paid off purchases… I ended up at a purchase from July 23rd, 2006.

Some pretty good estimation skills I’ve got there, huh?

So it turns out that when I make my next payment to my credit card, it will work to pay off my digital camera. The one I’ve had for over a year. The one I bought impulsively to make myself feel better when I dropped and broke my camcorder.

I also found that I have racked up $362.77 in interest so far. Ew.

I can’t wait until the day I cross off the last purchase on this list. Actually, the day I cross off the last finance charge on the list and can say “There. I’ve got a zero balance again!” It will be so nice to not have the purchases of last July still hanging over my head.

In the mean time, I’m going to try and find some credit cards with 0% balance transfer offers. Because these finance charges? Just not cool.

Debt Increase: Bought a Laptop

Stephanie — Wed, 20 Jun 2007 17:10:08 +0000

Oh man, you don’t even know how excited I have. First of all, I’ve never bought my own computer before. Every computer I’ve ever had before has been a hand-me-down from my mom. Not that I’m complaining – since my mom is an avid online-gamer, her hand-me-down computers usually came with top-of-the-line graphics cards and as much RAM as she could shove in there.

But now I’ve got a computer that’s mine! And unlike my previous computers, it’s not chained to a desk. I am free to roam the world with my sexy new Toshiba. (And when I say “new,” I mean “new to me.”)

Yeah, I know, you’ve got questions.

“Um, Stephanie, can you afford this?”
Er… yes, and no. Technically, I should be throwing every penny I have at either my credit card or my savings. But by taking a small chunk out of both of those, yes, I can afford it. Also, I kinda need it.

“‘Kinda need it?’”
I am, as I’ve mentioned, going back to school in the fall. And I’ll be commuting from home, instead of living on campus. To help me bridge the gap between my living space and college, I wanted a laptop, so that I could work between classes. Ok, yes, I could go to one of the school’s numerous computer labs, but that would require lugging my external hard drive around, which literally weighs as much as this laptop.

Also, having my own computer when I’m in California this summer will help me get more done, and hopefully, earn more money. Yes, I’m hoping this laptop will actually pay for itself!

“Ok, so, wait. How much did you pay for this?”
$20. Seriously! Ok, I’m paying monthly. A friend of mine sold it to me for $280, and I’m paying him what I can each month (which will probably be right around $20 until the fall, when I’m hoping to pay more.

“Yeah… I thought you said loans between friends and family were bad.”
They are, so you’ve got to do it right. I’m hoping that I’ve done it right this time – I’m using an online tool called Buxfer to help. Basically, Buxfer tracks how much friends owe each other, if they split a dinner tab, or if roommates split a grocery bill, or if, say… someone sells someone else a $280 laptop, but that someone else can’t pay all at once.

“Wait! Doesn’t this break that ‘no buying stuff’ promise that you made?”
You mean the Compact? Nope. Compacting means you don’t buy anything new – I bought a used laptop! (Like I’d have the money for a new laptop, anyway.)

“Ok, fine. But you’re still crazy.”
I’m well aware of that. You’ll probably think I’m even more crazy when I get around to naming my laptop. I have a rather odd habit of giving my computers male names, and then referring to them as “she.” (Previous computers: Bob, Fonzie, and Fred – all female.)