It's Been a While.

As they say, the more things change ...

First the awful truth: I currently owe $10,711 in credit card debt. How could this be? What happened? Well, for one thing, I refinanced my condo a few months back. You remember that. (And if not, just scroll down ...) Doing so wiped out a lot of my savings, since I had to pay closing costs. Then came some repairs, including a new A/C unit for one of the bedrooms. I then saw that many of the water lines needed to have some repair work. As they were, in an emergency I wouldn't be able to turn the water off. So I replaced all the valves in each bathroom and under the kitchen sink. And then I had to replace the vanities in the bathroom since some moron had installed some that ran the length of the wall over the bathroom toilet. Basically, if there was a toilet emergency, you wouldn't have been able to get into the tank. And then there were the new toilets.

To fix all these things? Credit cards. Sigh. At the height, I owed almost $17,000. I am still in awe that I got back to that point after all my hard work at getting to zero. Oh well. No use in crying over it.

Now for the good: I have almost $15,000 saved, with the goal of $20,000 by year-end. I could pay off the debt, sure, but I need the cushion. I hate having that debt over my head, but it's reassuring to know that I can pay it off.

Weirdly enough, I seemed to get into more debt after I hired that financial planner. His high fees did not help, either. There was really no reason for me to have continued using him after that initial visit. I don't have the kind of complicated financial picture that warranted his services, and I'm still more than a little annoyed that (1) I wasn't firmer during my initial reluctance to renew, and (2) that he was so aggressive in getting me to renew. I fee like if I had told him about some other financial planner charging me what he himself was charging, he would have advised that I run for the hills. (Complicating things is that he's a friend, and also very good friends with some other friends.)

Anyway, I'm back on track and it feels good. Adding to all the good feelings is the state of my personal life: I got married last year! He is beyond wonderful -- beyond anything I could've dreamed up for myself. I'm renting out my condo and living with him (duh) in a lovely town house in a neighborhood that I feel like an impostor in. How I have received such good fortune is beyond me, and I'm so thankful and happy that my cheeks hurt from smiling all the time.

It feels weird to be back here confessing my financial sins, but also liberating too. That is, I've been here before and I know what it takes to get it done.

See you next month!

A Word About the Financial Planner Dude

I know I've mentioned him here before and how I've known him for a long time though I only recently started using him professionally. You might be asking, "What are you doing spending what little money you have on this dude?" Well, I questioned that myself a time or two. That is, until I actually started meeting with him.

It goes beyond him giving me such "advice" as "Don't spend. Save." Sure, that's part of it, but it's only a small part. He's helping me consider my psychological and emotional relationship with money. Why I panic when it comes time to spend money. The other thing is accountability. Much like this blog was when I was $20K+ in debt, having him gives me someone to answer to.

Mind you, he's also been helpful. He helped me redistribute my retirement fund through work, which has saved me a fair amount of money given the swings in the market. I've now also got a Roth IRA. And he's helping me see the bigger picture (and relax about it) instead of obsessing about the short term.

Despite all that, though, I debated about paying for another year. Now that I've got things in place, I wondered if I needed it. But since I have literally no one else in my life who knows a thing about money, I figured I'd at least do his minimum service -- basically I pay half his full rate and have fewer visits during the year. But given the low complexity of my financial situation, that shouldn't be a problem.

So when I went in yesterday, I had prepared myself for him to persuade me to do at least another year at the full rate. But no. In fact, he didn't even discuss that issue until the very end, and when it did come up, he reminded me that I was absolutely under no obligation. I told him that I understood that. And then I told him that given how simple my situation is, and considering the amount of money I'm dealing with (very little, I'm sure, compared with what he's used to working with), that maybe the minimum service would be better.

Which, he said, was exactly what he was going to recommend, and for those same reasons. It made me feel good knowing that he wasn't trying to take advantage of me and it just confirmed that he has my best financial interests in mind. And it feels good having someone with his knowledge on my side, especially as I get older and my needs change.

Be the Turtle

I met with my financial adviser yesterday. I hadn't talked to him since summer, before I received my home buyer credit. Back then I had this notion that by October, I'd have a good $10,000 in the bank -- after buying my couch. So it was humbling when I went in yesterday with my paltry $5,500.

I'm still not sure what happened. Sure, there was the couch. And I paid off the mattresses. There were the unexpected car repairs, from both the accident and the battery problem (which was confused for a starter problem, causing me to spend $$ for two repairs). And I've bought a little of this, a little of that for the condo: good-quality covers for the balcony furniture, a trunk to hold my gardening stuff (and the materials to help weatherproof it), funded my HSA to pay my copays, and so on and so on.

So. Yeah. Not $10,000. $5,500.

But I'm still debt free. And that's a big thing. Mind you, I have used my credit cards, but I pay them off every month.

My planner, Ted, is awesome, though. He didn't balk at the amount or reprimand me for not having what I had thought I'd have. Rather, he reminded me of my accomplishments: I've remained debt free, I opened a Roth IRA and started funding it this year,  and I've maintained my savings. He thinks I'm in good shape.

In fact, he said, he wants me to loosen up and stop freaking out every time I have to spend a significant amount. He's concerned about my psychological and emotional relationship with money, the anxiety I feel when it comes to letting the money go. For example, my computer is old and needs to be replaced: the disk drive doesn't work, I can't use it without the power cord because the battery is so old, and it picks and chooses when I can use the "P" key. Likewise, my cellphone is about 8 years old. Parts are actually starting to fall off of it, and it no longer allows me to make calls when I go visit my parents. But I keep delaying these purchases.

We talked about that at some length, and he was very patient. His worry is that by my putting off a few occasional purchases out of fear of spending the money, I will be hit down the road with having to spend a much greater amount of money when I have to replace a lot of things. Go ahead and take care of these things incrementally, when I can and not when I have to. Take care of the computer and cellphone now, he said, and next fall I can focus on getting more furniture for my place. When I grimaced at his advice to get the computer now, he laughed. "Most people would be thrilled for their financial adviser to tell them to go buy a new computer." He told me I can afford it, and it's also about my quality of life.

"You're in a good position to do it," he said. I told him that I didn't feel like I was, that the market was doing crazy things and that it didn't seem like anything was changing, no matter what I did or how much I saved. He basically told me to chill. The way we've structured my investments benefits from volatility, so when things start to level off -- be it 18 months from now or three years from now -- the balances are going to take off. "You'll be amazed. We're going to look back and you're going to say, 'Remember when I was complaining about my balances!'"

In the end, he said, I'm in good shape. I need to relax. I need to stop rushing things. "It's like the story of the tortoise and the hare. Slow and steady wins the race."

What a Difference a Year Makes

Last year this time I still owed almost $6,000 on my credit cards. This year? Zip. Zilch. Zero. Happy New Year!

I don't want to sound like I'm gloating, and I hope it doesn't come across that way. But it is a great feeling and a great way to start off a new year. If you're still struggling with your debt, please, by all means, keep at it. The sacrifices are so worth it.

The other great thing about not having debt? Being able to splurge occasionally without (too much) guilt. The other day I bought a sweater that, though 50 percent off, was still pricey -- at least in my world. But I desperately could use new clothes, and the sweater was right up my alley.

That said, I still have work to do on finding a balance between spending and being a miser. For example, I bought that sweater without giving it a second thought. But just thinking about buying furniture makes me so anxious I can hardly stand it. Today, for example, I walked into a furniture store, stood there a few feet inside the door, looked around, and walked out. I just couldn't deal with it.

So see? I've got a lot of work to do as far as my relationship with money is concerned.

I am trying an experiment this month: I am going to try to use my credit card with a high cash-back reward for my grocery purchases throughout January and pay it off at the end of the month. I will check in on my progress. The goal remains for me to not have any revolving debt, except the occasional small amount to keep the account active (and the bank fairly happy).

I meet with the financial planner in a couple of weeks. We're going to discuss opening an IRA and any tax concerns or considerations coming up. As for the tax refund -- including the home buyer credit -- it's going directly into my savings account. I will use some for a new couch this year, but I may put off any other furniture purchases until next spring. Well, that is, unless I find something I absolutely love.

For now, though, I want to concentrate on how wonderful it feels to be debt free. Here's to a prosperous 2011.

10-10-10

Today was to have been my big debt-free day. I worried earlier this year that I wouldn't make it, what with the condo purchase. Amazingly -- blessedly -- I paid it off almost two months early.

I had wanted to have $10,000 in savings in addition to being debt free. I didn't manage to do that -- what would've gone into savings actually went toward the purchase of the condo. But I do have savings, and that's a good thing.

I am happy to report that I remain debt free. I have used the credit card for various purchases (like my outrageously expensive new progressive eyeglass lenses), but I paid them off immediately. I am afraid to have even the smallest amount revolve. Debt always starts with that first purchase.

I have made one costly mistake. So vain was I about getting progressive lenses in my glasses that I had a distance-only prescription put in instead. I lasted all of a month before throwing in the towel and having the optometrist send me the prescription for progressives. And I splurged on the latest technology -- something called individual progressives. They were not cheap. Oh, no, they were not.

Of course, this mistake means I spent an extra couple hundred dollars on lenses that ended up being worthless. I'm calling it my Stupidity Surcharge. Or Vanity Fee.

Tomorrow I meet with the financial planner. I think our meeting will last a couple of hours. I'm eager to hear what he suggests and to get things started. I can't see using him beyond one year -- unless I benefit from some unexpected financial windfall. But as I've said, it will be good to get a foundation in place.

In other news, my wardrobe is pitiful. I am going to try to buy something at least once a month, but we'll see how that goes. It depends on the budget. That I hate shopping isn't going to help.

Next month is a three-paycheck month, so I'll have some wiggle room. I plan to put most of that "extra" check in savings. Also coming is a freelance check for work completed in September, and a check for work that I will start in November. That money will also go into savings.

And so that's where I am on this day, 10-10-10. How are you doing with your debt?

What the Financial Planner Said

The meeting with the financial planner went well. It was more a discussion of the process and what we would work on together, so no actual advice was given. Still, it was good meet with him and lay the groundwork.

He typically visits with clients three times a year: during tax season to go over deductions and whatnot and discuss what to do differently in the coming year; during the summer to discuss how to achieve long- and short-term goals; and during the fall, to discuss employee benefits. But during the first year, we'll meet four or five times to get a foundation in place.

And, of course, he's available via e-mail and telephone if something comes up that I want his advice on.

His fee is more than I expected, though. My friend who uses him pays a lower fee because he started seeing him a several years ago. And once you hire him at a rate, it stays that rate. So if I hire him at this higher rate, it will stay the same even when his rates increase again. Also, the planner's confident that he'll be able to recoup my money for his fee and save me even more. (And to that I say: He'd better. Otherwise, what would be the point?)

I'm going to do it at least a year. I didn't have to do much thinking the last few years, since my financial "planning" was simply to pay off my credit card. Period. Now that that's done, though, I don't know what to do. It will good to have someone who does know take the reins and help me get some kind of structure in place.

Our first meeting is in October. I've already started completing my profile. So many questions! I'm encouraged; this will be good.