From Mike.com

The Attorney General of Arkansas has issued an ultimatum to the payday loan industry to pack up and head out, or face the wrath of the AGoA. Two thumbs up for the State stepping in.

If you’ve never had the pleasure of conducting a payday loan transaction yourself, let me tell you, the websites that discuss them don’t seem to do them justice. I mean, it’s one thing to hear “300%” interest, but that’s at an annualized rate. The “hard dollar” rate is much less, but still very painful… Kinda like the difference between being offed by a sharp machete and a rusty ice pick.

So here’s my recount of my one, and only, time that I dealt with these people. Mind you, I fully accept that my own stupidity got me into it, and if they weren’t there, I would have probably found another way to get the money, but alas, these people made it so easy for me to hang myself, why shop anywhere else?

It all started just like the rest of “poor” decisions start. I found myself in need of money. “Found myself”, because I wasn’t prepared, and in “need” of money, because I’m a guy, she was hot, and she was in dire financial need of assistance… So, as anyone else without a brain would do, in rides the financial white knight to bail her out…our poor, poor, sucker hero…

Not to delve into her problems, but she needed $500. She didn’t have a job, but that didn’t matter. She was hot. So, without cash myself, I headed on down to the local payday loan joint. Now, I’m not your average idiot. I DID shop around, because some offered the ability to not only hang myself today, but to easily hang myself in the future, by extending my loan… some didn’t offer such convenience. I finally found a place that would allow me to extend my loan, and started the process.

It was a somewhat easy signup process. They took the basic financial information from me, then started calling and verifying the information. I had my check stubs, my checking account statement, and because of my above average salary, I was offered something like $3000. Wow… that was easy. But I only needed $500, so that’s all I took.

Here’s how it works:

I wrote them checks… 6 checks. 5 for $100, one for $100+change.

Why “change”? Because the actual “loan” part of the transaction was a simple loan from some out of state bank for some real simple interest, like 8%.

Why the extra $100? Because the “fee” for taking the “loan” from the payday center was $20 per hundred borrowed (remember that ice pick?).

Why 6 checks? Because if you don’t pay it back, they have a better chance of getting some of the checks to go through than getting one, big, $600 check to go through. And if you can’t pay, you better shut down the account, cuz each bounced check makes your situation hurt more…

And unlike other loans with fixed periods for borrowing, this one was due on my next payday. 2 weeks away? Then your due date is two weeks away. However, I was getting paid in 3 days, so my due date was 3 days away.

So that hurt.

But anyways, I had $500. Off to save the lady in need…

Fast forward 3 days…

Now I needed $600 and some change to go pay back this $500 loan. I didn’t have it. I had about $200, but because of my oh-so-savvy upfront planning in selecting my executioner, I’ll be able to carry the loan over. So I go down and pay down $200 on my $600 loan. Carry on…

Nope.

I have to take out a new loan to pay off my old loan! That’s how it works around them parts.

So I give them $200 cash, and write them 5 checks. 4 for $100, 1 for $80+change. That’s right, new loan, new $20 per $100 borrowed. But hey! I got my original 6 checks back, and two more weeks to worry about it.

Have you been keeping track of the totals? So far, I’m in $180+change, on a $500 loan, for 3 days.

I think this continued one more time, netting me another $40 in “fees”, and then I finally paid it off.

As you can see, it’s quite a bit different than just saying “300% interest”…

So I was only out $220+change, on a loan of $500, to rescue a little hottie, who eventually sucked the life out of me…

A smarter man would have opted for the machete.

Edited for formatting because post by email sucks for me…

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I got my notice of appraised value from the county tax appraisal office this week, and my “appraised” home value went up about 7.7%, while the dollar amount of my taxes went up about 10%.

This is my first house, and having lived here less than a year, this is the first time I’ve seen my taxes increase, and even with all this “first-timerness” of my situation, this just seems wrong.

We’re heading into a recession, housing prices are going down in the face of record foreclosures, this neighborhood that I once thought was great is slowly slipping into not-so-great-just-good status as I find out more and more houses on my, and surrounding, blocks are really rentals and they just happened to have good renters for the last few months.  I know this because of all the “for rent” signs and the changing of occupants from good to bad.

All this drives down the value of an area, not up, so why is the basis (the home value) of the taxes going up?  I can understand if the county needs more money, they can raise their taxes, but raise their taxes, and raise the value of which they’re taxing?  Seems like double taxation to me.

I have a friend of the family who does the whole buying of foreclosures, fix ‘em up, and rent out em out gig, and he gets these notices about 30+ times per year (one per rental unit) and he challenges most, if not all of them with the county appraiser.  This year he’s been using the fact that foreclosures in the area are up, and with all the homes for sale, theres no way that the house is valued at what they’re claiming.

I 100% agree with his argument, and the appraisers apparently do too, since his appraised value increases are usually reduced.

If house prices, and therefore house values, are driven by the market, and the current market of foreclosures, for-sales, and rentals in your area is one of high-supply and low-demand, then how is the value of your home going up?  Buyers own the market right now, there’s just no way my home increased 7.7% in value.

I gotta go gather some information around the neighborhood, then let’s see where disputing this increase gets me.

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One of the more challenging parts of staying within my budget is keeping the kids entertained. We used to do so much, such as going to amusement and water parks, the indoor inflatable places, Chuck E. Cheese, the arcade, etc. But on a budget, and after having reaching the bleak realization of your over-consumerist ways, these places no longer seem worth the price that they once did. So I’ve created a small list of things that we do to entertain ourselves without blowing out the budget.

Personally, my girls are 7 and (almost) 5. So the things that entertain them might not entertain your older kids. However, no matter what their ages, entertaining children can be done cheaply or free.

Outdoor fun at home – With the weather warming up, my kids really need to be outside having a good time, not sitting inside playing with dolls and such. In the recent past, we’ve picked up some cheap outdoor games that the girls absolutely love. Some suggestions include a cheap (or free) soccer ball, which we play soccer and more recently kickball. A cricket set, which we have never fully setup, but rather just the two stakes and a couple of the things the balls go through, then whack balls around the yard. And of course, the trampoline, which we got last year as a “family” present from Santa. This only cost about $250 total with trampoline and net (on sale at K-Mart or Wal-Mart). Amazon has trampolines with enclosures for just over $200 + shipping. The trampoline has earned back it’s purchase price many times over, and that’s just since this spring.

Indoor fun with arts and crafts – When the weather’s not right for outdoor play, we find things to do in the house. Generally, I move everything off the kitchen table and we go to town. Some things we’ve done recently include arts and crafts, which the majority of items can be picked up VERY inexpensively from Staples or Office Depot. No kidding here, we pick up markers, crayons, paper, etc., from these stores for a penny a pack in some cases, depending on the time of the year and the clearances their running. We stock up on what we know we’ll use. Walgreens, Wal-Mart, and the other major stores usually have these items on clearance as well.

Games are fun too. We have an old $10-$15 30-in-1 game set that we play with, that comes with everything from cards, to dice, to several game boards, pieces, etc to play all the games you remember as a kid. We got this game set as a gift, and I know the person who bought it didn’t pay full price, but I would have gladly coughed up full retail for this set, as I know the number of hours of fun and learning the girls have received from it.

Traveling fun – This is normal “outdoor” fun, but we’re not at home, so it’s a little different. If the kids have bikes, get one for yourself. Or more fun that that, if they have scooters, get one for yourself. Riding around the neighborhood is great fun, great exercise, and great entertainment for kids.

Outdoor fun away from home – Parks are always a favorite. Between the town that I work in and the town that I live in, there are about 4 or 5 good outdoor parks that are safe for kids (as opposed to the run-down wrecks in some areas). The girls love this, and can run around and play for hours. I don’t play on the equipment much with them, so I get in some reading time or surf the web on my iPhone.  We also went fishing down at the local creek this past weekend.  It was a small up-front investment, but brought several hours of fun family togetherness and will be much cheaper the second time around.

Video games – Yes, yes, I know what you’re thinking… what a way to rot the mind… but not these video games. Another one of the great entertainment investments I’ve made is to jump on the home karaoke bandwagon when games like Karaoke Revolution and Singstar started coming out for Playstation. Now we have about 6 titles, from American Idol and CMT Country to 80s Pop and Classic Rock, and the girls absolutely love to sing to these. It also levels the playing field in family competition, because I couldn’t carry a tune in a bucket, and they sound like angels ;) If you don’t already have a Playstation, they can be had used for cheap off craigslist and ebay, or your local pawn shop, and the games are pretty well established, so you can find them cheap as well. You could reasonably get started for under $100.

And finally, the always popular fall-back boob-tube – That’s right, even with all the above to go do, sometimes after bath-time and before bed, you just want to sit back with a bucket of pop-corn and watch the latest kids movie (Bee Movie, Ratatouille, and Alvin and the Chipmunks are all highly recommended). Of course, we get these from our local RedBox for free, using RedBox codes from insideredbox.com.

It’s a little easier to go gung-ho debt-reduction when you don’t suffer withdrawal from activities.  Having fun and cheap/free activities to do in place of the old “pay for play” activities is a must.  If you have any suggestions for cheap/free fun alternatives, I’d love to hear about them in the comments.

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According to my last post date, it’s only been a few days since I’ve been here and jotted some notes. However, it honestly feels like forever. Last week’s crunch at work, followed quickly by grabbing the girls over the last 5 days has kept me quite busy, although it feels like I’ve managed to get nothing done. However, here’s what I’ve been up to as of late

I finally got traction on my budget again. Being at work all those hours, and not having time to really prepare my own meals, I started eating quick meals at McDonald’s and Subway. This, unfortunately carried into this pay period this past weekend by having a couple more outings for breakfasts and dinners, and a small shopping trip to Wal-Mart to buy supplies so the girls and I could go fishing.

I was kicking myself again Sunday night, having already spent somewhere around 60% of my pay period budget, and being only 2 days into the period. However, Monday, Tuesday, today… it all turned around. I’ve been back on track, and while I only have about $25 left in my account to last until the 18th, I have stocked shelves of food, a full gas tank, and am heading into a 5 day stretch without the kids. I can do it. Overall damage to my February 2010 plan was minimal.

It all just reinforces the fact that sticking to this budget is not unlike quitting smoking. It’s something that you have to think about often. Not having it on your mind throughout the day can lead to slippage, so I guess it’s not really a habit yet.

I read The Richest Man In Babylon. Having a little time at work while waiting for others to complete certain parts before I could move forward, I was able to finish my read through this awesome book. I got this a couple weeks ago from PaperBackSwap, but it probably won’t go back up there for a while. Author George S. Clason did a great job teaching the basic financial principles in an interesting storybook manner, and I look forward sharing a bit more about this book later.

Anyway, I’m back to the regular grind, and I will be back here more often.  Thanks for stopping by and reading!

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…falling is easy
It’s getting back up that becomes the problem
Becomes the problem
If you don’t believe you can find a way out
You’ve become the problem
Become the problem
–Staind, Falling

Staind could not have said it better… Falling is easy, and getting back up is the problem.

I’m happy to say that the crunch at work is over. In the last three days I’ve put in almost 60 hours. It’s been Go to work -> Go home to bed -> Go to work.. And today we finally delivered the product to the customer. Thank god.

However, the budget couldn’t handle the strain, I blew it out last pay period, and I’ve already started a bumpy ride this period, and the new period just started today. The girls and I were right with going to the park for some free entertainment, and washing the Charger at the house, which is almost free. Then we went to dinner at the chinese buffet and picked up a DVD from the standard movie rental place and not my free redbox vending machine. Total overage just today alone was $36 for those two things, and out of a $200, that’s an 18% cut.

I can balance it out and make it work, the grandma brought over some food that she bought on the cheap and didn’t want, so I took it. And I think I can make that work for a couple weeks, with what I already had purchased for last period.

I went to pay the court costs on the ticket today, and that was a joke. Even though they advertise accepting credit card by phone, credit card by website, and two big Visa/MC/Discover stickers at their counter, they refused to take a credit card to pay (what they call) a partial fine. Partial, because if I don’t do the class, they’ll charge me the rest. I was dumbfounded. So I told em to extend it… I already paid all the bills for the period, and had no cash left over for it, so I couldn’t pay it. In hindsight, I could have taken cash out of the budget and put the period’s expenses on the credit card, but eh… so I have two more weeks to pay it.

And a completely unrelated convo with Oldest:

Me: Let’s go have tacos…
Oldest: I don’t like tacos!
Me: Why not? You like beef and cheese, right?
Oldest: Yeah, and I like that round bread…
Me: Tortillas?
Oldest: Yeah…
Me: So you like beef, cheese, and tortillas?
Oldest: Yeah…
Me: And you don’t like tacos?
Oldest: No!

Some peoples kids…

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Lately it’s been work, work, work. 16-hour days aren’t natural, but unfortunately happen during release periods at most software development houses. During these times in previous years, the girls usually go with their mom more, allowing me to fulfill my bread-winning duties and show more face time at work, but this year has been quite a bit different.

The ex-wife had a baby (not mine) a few weeks ago and the ex-in-laws all came down. So I let the girls stay with her longer over the past few weeks to allow them to see her family more, since they don’t get to so much. Now they’re all gone, and she’s (ex-wife) is having to cope with the new baby and the two girls by herself, added to the fact that I haven’t seen my girls much over the last couple weeks, makes me want to take them now. But can’t do that when work expects me to put in some hours supporting the pending release. Even when I have had them over the last couple weeks, I’m expected to put in extra hours from the house. I at least get to see them, but don’t get to do much with them.

But it should all be over this weekend, and I’m taking them, and we should be able to do something together.

The hectic work schedule has also been the cause of a “budget blowout” for me.  I’m at about 200% over-budget for the pay-period, and I’m not happy about it.  Some causes:

• The hellacious work schedule has caused me to forego cooking, and visit McDonalds and Subway more.  I didn’t even get to try the spaghetti sauce I was going to try this week.
• Girls needed clothes.  I knew these things would crush my budget, causing my snowball to eat up the expenses, just didn’t expect it to happen so soon.
• The damn speeding ticket.

I needed to just stop, backup, and regroup over the budget, but everything else seemed to take priority.  Fortunately, this Friday work should have slowed, and it’s a new pay period.  I’m still showing progress over last month as far as the debt reduction, but I am a little bit behind the curve of where I wanted to be.

Anyone else get caught by April Fool’s? I did.  First, walking into work, I overhear boss talking about how several of our key developers have quit and moved to the competition.  Since I obviously wasn’t one of them, it means I was staying, and if they “key” people were leaving, that means my job was at serious risk.  All this went through my head in the matter of about a minute, and then I realized the day.  Not too bad on that one.

As the day progressed, I forgot completely about it being April 1st.  We had a meeting with the president that didn’t go well, and the project manager had met with us to tell us our schedule was about to get more hectic for the rest of the week.  All this was on my mind… then the ex-gf starts txt’ing me.

She informs me that she took the “P” test, and tested positive…

Schreeeeeeeeeeeeeeeech!  What the…..!?

My world ended!  It’s not that I’m against kids, I’m just against the thought of me having more kids.  I’ve done the whole infancy stage, three times (my two, ex-gf’s one) and I’m not ashamed to admit I don’t like it.   Besides, it’s not in the budget for another kid.

Anyway, I was visibly shaken.  When she dropped that bomb on me, everyone was over by my cube eating pizza.  My co-workers were asking me if I was alright, saying I was red and visibly shaking.  I just kept saying I was cold.  I didn’t want to say anything.

Then after her and I txt a little more (because I wasn’t going to discuss this at work), I’m sweating bullets, she starts calling me.  I ignore the calls because, if you haven’t heard already, I wasn’t going to discuss this at work.  But finally, after about 8 attempts on her part, I take the call…

 Me: uh Hello?

ex-gf: APRIL FOOLS!

I couldn’t do anything but break out in hysterical laughter.

You know the kind… HAHAHAHAHHAAHAHHA… hahahahha… hahah.. hah… ha… eh… hmm….

In 30 years, I cannot ever remember being “got” by someone more than the silly little “look over there, ha! April fools!” type jokes.  This was my first, and man, was it a ride.

Anyways, I was able to break for a few minutes to hammer these thoughts out, but now it’s back to work.

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I used to be a huge advocate of the “Keep The Change” plan offered by Bank of America. For the last couple years, I’ve touted the “coolness” of rounding up every debit purchase and putting the extra change into an attached savings account. Now, I’m not so sure…

Here’s my top 5 reasons why the “Keep The Change” setup from BoA is not really worth it, and could possibly hurt your personal finance efforts..

• The interest rate on this account is lousy! - 0.20% APY as of this writing. If you keep any kind of savings, even your emergency fund, in this account, you’re losing money. If you’re enrolled in this program, transfer out your savings monthly to somewhere where it will do you some good.
• Personal finance software issues – Some PF software doesn’t handle these regular transfers well, and most budgeting packages don’t handle them at all. Budgeting is about dictating your money beforehand, not afterwards, so it’s no surprise why programs like mvelopes don’t handle “Keep The Change” transactions well.
• The match – Really, after the first match, it isn’t anything to write home about. If your budgeting, and using your debit card wisely, you probably have at most 8-10 transactions a month for groceries, gas, etc. Even at $0.99 rounded into the savings account that’s less than $10 a month. And 5% of that is $0.50.
• BoA’s a crappy bank – Okay, okay, I only had four reasons to not use “Keep The Change”, so I had to throw this one in. I admit, in full disclosure, that I currently bank with them, their web-bank is definitely the best I’ve ever seen, but the bank is too big to be flexible to anyone’s individual needs. They sell the banking equivalent of the “Model A” of Ford’s early years… You can have it any color you want, as long as it’s black. And while I do bank with them for their web-bank, my money is never kept there, outside of the now $200/pp budget I keep.

And finally, probably the biggest reason why BoA’s “Keep The Change” is really not worth it…

• It promotes PASSIVE “budgeting”! - At the beginning of the month you should have already assigned every dollar a job, every bill should already be defined as well as it could be, and excess should go to debt repayment or investment. The money you’re spending out of your checking account now is already budgeted to be spent on something, not saved. If you’re finding even $5-$10 a month extra in this “keep the change” account, you should probably re-evaluate your budget. This is not the same as hitting a great “everything in the stores 75% off and we’re taking triple-coupons” sale at the grocery store, that money is a savings above and beyond.

If I ever find a bank that offers a web-bank comparable to what BoA offers, I’m gone.  Until then, they’re just a catalyst for my money… quickly in, quickly out.

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