Frugal U-Some Money Basics

TOP 10 THINGS I’VE LEARNED ABOUT HANDLING MONEY

Currently I’m in the process of registering going to school full time.  A VERY expensive school.  I don’t know how I’m going to pay for it, I don’t know how long I’ll be able to keep my day job, and I don’t know how much income I’ll be able to earn while I’m in school, if any.  Most financial advisers would say that this is a really dumb move.  I agree.  But I feel called by God to do it, so I am going to do it.  I will be doing something I always wanted to do, but never did, so I know God will find a way for it to happen.

In making preparations for living a “poorer” lifestyle, I learned a few small lessons along the way that I thought I would pass on.

1.  Good credit – and our good name – are important.  I have a high credit score, and this is coming in very handy.  This means I have good credit, I pay my bills on time.  It also means that I have a lot of credit available to me if I need it (not that I want to use it, that’s the whole point).  This is freedom.  **(Credit scores are measured by how much credit you have available, so the less credit you use, the higher your score).  

2.  Everything is negotiable – even more so with good credit.  When I took a lower paying job, which I was free to do because I don’t have much debt (mortgage only), I called my cable company, my phone company and my internet provider and was honest. I said look, I’m going to be really broke, so I need all of the help I can get.  And they all lowered my rates!  But here is the key point – I was happy with the rates they gave me 2 years ago, but when I called them again recently, they lowered them even more!  Which brings me to my next point:

3.  If you pay your bills on time, people want to do business with you.  When I explained that I just needed to lower my bills, my alarm company, the cable company, my phone and internet companies all worked with me to get my bills as low as possible. They wanted to keep me as a customer because I pay my bills on time.  A company would rather receive a lower amount per month from a loyal payer than charge a higher rate to someone who can’t or won’t pay.

4.  When you pay your bills on time, people make exceptions for you.  It rarely happens, but lately I’ve been more forgetful than usual, and I paid a couple of bills late.  I called the credit card company and got the late fees waived.  This also happened with my gas company when my credit card company decided to issue me a new card.  Hence, the old card got rejected for my monthly payment.  The gas company said I was forbidden to pay with a credit card.  I called them and explained the situation, and because of my good payment record, they listened and removed the late fee and allowed me to keep using my credit card (I pay my credit card off every month but use the points to earn cash back).  

5.  Interest and late fees add up. We hear this all of the time, but some people still continue ignoring it.  I use a credit card to earn points, but I pay it off every month.  If I couldn’t pay it off every month, I wouldn’t use it.  I had a recent issue with my mom’s credit cards, her bills weren’t being paid on time. She was being charged late fees and interest, and that interest also accrues on late fees.  Her balance grew larger and larger, by hundreds of dollars before we caught it.   This matters.  Can you think of something else you’d rather do with hundreds of dollars? I can.

6.  Having money in savings is empowering.  Recently I accidentally overdrew an online bank account because I used the wrong account to pay a bill.  They charged a fee and I called and asked them to waive it.  They tried to say no, and I said fine, I’ll just take my savings balance and transfer it to another online bank, it’ll take 5 seconds for me and you will no longer have my $________ savings with your bank.  I won’t tell you how much it was; it wasn’t as much as you would think, but any amount is enough for them to lose.  He came right back and said “sorry ma’am, we have credited the late charge.”

7.  Do your research.  Recently I head a commercial for burglar alarm monitoring for a monthly fee of $15. This is very low, the lowest I ever got my alarm company to go in the past few years was $23 per month.  When the sales person came to my home, we were chatting and I told him I was trying to get my bills lowered because I am going back to school. He said well you came to the right place. He then proceeded to provide me with a sales pitch for a grand savings of paying them $45 per month.  In the past, when someone did that, I would not have questioned him, because somehow some sales pitches make us feel as though we aren’t up on all of the facts.  But because I knew my alarm company would still offer me a better price than that, I dared to ask – who exactly gets the $15 rate?  He said, oh, that’s for land lines (which I have), and we’re trying to get away from those. I said but you advertise for $15, and he actually said “yes, I agree that is misleading.” So I told him that even if they did come down on their price, I would not do business with them.  I continued my research and found a cheaper rate; once I had a number in mind, I called my current company and they matched it, plus agreed to repair my alarm system for free.  

8.  Pennies count.  I remember someone telling me once that the money she spent on coffee every day wouldn’t but a dent in her debt anyway, so why bother.  But it does put a dent.  If you take the $3 or more per day that you spend on coffee, eating out, or a pack of cigarettes and use it to pay down debt, it will go down – and it will go down fast. It’s fun to be creative about how to save more pennies.  I don’t buy trash bags, I use grocery bags.  I don’t use napkins, I use kitchen towels whenever I can. They are reusable!  I use Mardi Gras cups instead of paper cups.

9.  Be kind.  I was also on the other side of this feeling of freedom, and I may be again.  Going back to school is a huge risk, or I could get sick.  Another Katrina could happen (heaven forbid).  Many things can cause us to lose our savings any time.  When I was younger, I bought whatever I wanted, charged it, and I often didn’t have the money to pay my bills. In fact, in those days it took checks a few days to clear, so I played fast and loose with cashing checks 2-3 days before payday so I could make it to payday.  I had collection agencies after me, and they were not nice.  If I would threaten someone with withdrawing my business, they would say “fine, bye bye.”  People weren’t as nice to me when I didn’t have good credit or savings, when I didn’t know my rights or when I didn’t have the power to exercise them.  If we run across people who are in this situation, it could be all of us someday, so be kind and understanding to people who are “on the outs.”

10.  Your situation is temporary and fixable.  If you are “on the outs,” you can fix it.  Start paying off your debts.  Start saving, even if it’s $5 per week or less. It’s empowering to know that you have money set aside.  Once you have that feeling, you feel as though you can conquer anything.  And you can!  And it doesn’t matter how much money you make – just live on less.  There are ways to do that.  Be creative.