Tag: mistakes
There are 5 entries that are tagged mistakes. Now displaying reults 1 - 5.
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Stupid Mistake: Missed Travel Insurance Deadline
Posted on January 14, 2008 by Her
I just discovered we made a stupid mistake. We missed the deadline to apply for travel insurance. WE are planning to spend a few days of our honeymoon in Turkey, a country that has seen a recent surge in terrorist threats and activity. We're keeping our fingers crossed that we won't be affected, but we had planned on purchasing an upgrade to our travel insurance policy that would allow us to cancel that part of our trip in case we feel that the terrorism has become too dangerous. We booked our honeymoon through a travel agent, and she dutifully sent us the paperwork for the travel insurance, along with a nice hand-written note reminding us to fill it out and promptly fax it back to her.
We didn't.
For a month, the paperwork sat untouched on the desk and we kept saying, "We really should send that in soon" but neither of us even bothered to read it. Finally, I decided to start this task. I researched travel insurance and found out that the one our agent had recommended is highly rated and considered the best policy for where we're going. You can even apply online. Hooray!
So I start the application, and one of the first questions is, "When did you first pay a deposit for any part of your vacation?" I answer it truthfully, and instantly many of the insurance upgrade options are grayed out. A tiny message informs me that these options are only available in the first 15 days after the first deposit is made on any part of our trip. Oh nos!
We can still purchase the basic coverage, but not the upgrade that would let us cancel due to terrorism. Now we just have to hope that everything settles down in time for our trip. We did learn a valuable lesson though: book your travel insurance as soon as you put down that first travel deposit!
Warning: Danger Ahead
Posted on October 18, 2006 by Her
A lot of our readers want to know how I got so deep in debt. Didn't I see the warning signs? Couldn't I see there was a problem before we had a net worth of nearly negative $100,000? Unfortunately, it's easy to be blind to what you don't want to see. To help others who might be heading down that same road, I've come up with a list of "warning signs" that I should have paid attention to long before the debt got so out of control.
1. You treat yourself to something nice on payday because you know you won't be able to afford it later in the week.
2. You don't know the total amount of debt you owe.
3. You don't know the exact interest rate on every balance you're carrying.
4. You need credit cards to get by.
5. You know that credit cards should only be used for emergencies...but lately there's been an emergency almost every day.
6. You feel anxious or worried about paying your bills.
7. The financial image you project to friends and family is different than your real financial status.
8. You hide purchases from others.
9. You don't know your net worth.
10. You're upset by the amount of interest that accrues each month.
11. You're ashamed to ask for help from family or friends.
12. You would rather not look at the bills.
13. You need to juggle payment dates and paydays to be able to pay the bills.
14. You are losing sleep over financial worries.
15. You can't imagine life without debt.
16. You spend a lot of time opening mail and paying bills because you have a lot of accounts.
17. You can't afford to save for retirement or plan for big purchases.
18. You sometimes consider cash advances or loans to be income.
If these sound familiar to you, check out our "Debt Diet" plan. It worked for us, and it can work for you too. It is very difficult at the beginning but it gets easier, we promise!
I Un-Heart Merrill Lynch Direct
Posted on March 28, 2006 by Her
A few years ago, I opened a Roth IRA with Merrill Lynch. While this was a bad idea at the time (I used borrowed money to finance the account), over the years the account hasn't continued to financially hurt me. Until now.
I did pretty well with my taxes this year - pretty much came out even with Uncle Sam. But I expect to owe some money next year, and have recently been considering opening an IRA to help reduce my future tax burden. So I was wandering around Merrill Lynch's website looking for information on an IRA when I came across their fee schedule for IRA's and Roth IRA's. Having never paid an annual fee, I was shocked to see a $50 annual fee for balances under $20,000. So I called to find out what that meant. The man told me that yes, they have started charging an annual fee of $50, and that it has already been charged to my account. I asked him why I was never notified about the fee. He said they sent out e-mails a long time ago and it was also posted on their website. I never got that e-mail, and told him so. I also argued that it took me 7 clicks to view the fee schedule and didn't feel it was fair to bury the notice under 7 clicks and then claim it was "posted" on their website. He checked my account and found that the notice had been sent to an inactive e-mail address (which I specifically recall updating last year). Simple enough, I thought: they will see my point of view and refund the fee. I asked him to void the fee. He checked with his supervisor, who said no. I told him I was very upset with their service and would be closing the account if he did not refund the fee. He put me on hold and went to ask his supervisor again. While I was on hold, I was browsing the fee schedule and I saw another $50 fee, called an "Account Termination Fee". The guy finally came back on the line and said his supervisor would not approve the refund. I asked him about the account termination fee and he said that when I closed the account they would indeed charge me another $50.
To restate: They take $50 out of my account without notifying me, provide crappy customer service, and then help themselves to another $50 when they drive me away. Is this a freaking JOKE?
I said as much to the rep and he agreed that this was unfair. He put me on hold again and a while later told me they will have to charge me the termination fee, but that he will refund it later. He gave me his name, city, and extension. I started filling out the paperwork to move the account to Vanguard as soon as I hung up. I have wanted to move my account to Vanguard for a while anyway (I was already unhappy with ML's customer service and commissions before their final assault). I am going to deposit some extra cash into my ML account before the transfer goes through so they won't liquidate my holdings (at the cost of another $180 charge) to cover my fees.
I think I'll try calling again and argue the same fight with a different rep. Maybe I can get them to refund both fees. In any case, I am pretty confident that it is going to take a LOT more work before I see any refunds!
Veni's Debt Diet
Posted on March 04, 2006 by Her
Yesterday we got a desperate request within a comment on our blog. It was posted by a 46-year-old woman named Veni, who feels trapped by her spiraling cycle of increasing debt. She has watched Oprah's Debt Diet on TV and wishes someone could help her get her finances under control. We were both struck by her plea...Well, Veni, this debt diet is for you!
Step 1: Recognize that there is a problem.
Veni's has done some soul-searching and she admits that her problems include:
-Trying to keep pace with friends who earn higher incomes.
-Losing track of small expenses
-Losing track of her checking account balances and incurring fees
-Using credit cards for everyday expenses rather than as an emergency backup
-Poor credit score
Chin up, Veni! We were in your shoes just 18 months ago. We got educated, made a plan, stuck to the plan, and now we feel great! Remember, every day you stick to the plan you will improve your finances a little. So every day from now on will be the new best day of your financial life! And we think your whole life will start feeling better once you have your finances under control.
Step 2: Stop hemorrhaging cash
This step will cut your monthly expenses so you can free up some cash for debt repayment.
First, cut your monthly fixed expenses. Call your service providers (cable, phone, internet, etc) and try to negotiate a better deal. Tell them if you've seen a cheaper deal with another company, they may match it. If your contract is up and they won't budge, switch to a cheaper company or plan. Then call your credit card companies. Ask them to lower your interest rates and eliminate your annual fee.
Step 3: Find cash around the house.
If you are subscribed to magazines you don't read, call and cancel the subscription. They'll usually issue you a check for a portion of your annual charge. If you have the receipts for recently purchased items, return them to the store. If you don't have receipts, start saving them (every one) so you can audit your receipts and make returns later. If there are unused items around the house, sell them on eBay. Buy a newspaper, clip all the coupons, and sell the ones you don't want on eBay.
Step 4: Stop spending.
From now on, before you purchase anything ask yourself these questions:
1. Is it absolutely necessary for me to buy this?
2. Can I rent it or borrow it instead?
3. Is it on sale? Can I get it for less?
5. Is this worth ruining my credit for?
This means no new clothes, shoes, household items, you name it. Approved purchases include food, gas, utilities, and other minimum necessities only.
Step 5: Increase your income.
Consider working overtime (if your job allows it), asking for a raise, or getting a second job. If a formal job won't fit in your schedule, see what you can do to earn money part-time. Can you baby-sit for neighbors, sell crafts on eBay, or do other small chores for cash? Also, check your mail for special offers that give you a cash bonus for opening checking or savings accounts. If you spare the cash for the deposit required, you can reap the bonus cash then close the account.
Step 6: Get Organized.
Create a spreadsheet or buy some budgeting software. Enter all your information then update it at least weekly. At a minimum, you need to know: The total amount of debt you owe, to whom, and at what interest rate; the total cost of your monthly fixed and variable expenses; your monthly income. Start saving every financial statement you receive. Buy a file cabinet and folders. Create a folder for each expense and sort your statements. A great book that explains very well how to do this is Smart Couples Finish Rich by David Bach
Step 7: Set Realistic Goals
Some of Veni's goals include having enough money to buy a car and a one bedroom condo within 2 years.
First, determine if these are realistic goals. It seems like a long reach to stop getting into more debt, reverse your actions, and save up enough for a down payment within two years. We've been following our plan for 18 months and have paid off over $6,000 of debt and improved our credit scores significantly. Still, we haven't even begun saving up for these kind of large purchases. Maybe you'll need to give yourself a few extra years to reach your goals. These should be your long-term goals, but set some short-term goals too. Some good short-term goals could be: Cut spending by 50%, Pay off $3,000 of debt this year, or Improve your credit score by 10 points this year.
Step 8: Get educated
As soon as you have taken these emergency measures to immediately fix your finances, begin getting educated about personal finance. This doesn't have to be boring or expensive. You could watch Suzi Orman's television show about personal finance, read blogs like this one, or borrow some books from the library.
Step 9: Stay Motivated
Instead of surrounding yourself with the Jones's (and their shiny new cars and houses), surround yourself with people who respect your financial goals and help you achieve them. The personal finance blog community is full of people like this. Your real-life friends will probably be supportive if you tell them what your goals are, too. You can also use Excel to create charts showing your progress in paying off your debts and saving for your goals. These charts can help keep you motivated as you see your progress increase over time.
Well, Veni, there's a fresh start for you! Congratulations on taking the first step and asking for help. We're not financial experts, but these are the same steps we've been following for the last 18 months. We can assure you that taking these steps can only help you! We wish you well on your new financial journey. It won't be easy or feel very good at first, but in the end you and your FICO score will be feeling HOT. We'd love for you to let us all know how things go for you, so be sure to stick around the blogging community!
Mistakes We've made
Posted on February 13, 2006 by Her
We recently heard about the Mistakes Carnival, and we got inspired to have a good laugh at some of our dumber financial moments. Please, don't try these at home!
He took out a payday loan at like 200% interest...then locked his keys in his car in the parking lot and had to call her collect to come rescue him. Yes kids, it's true: She got a collect call from Check Into Cash.
She bought $500 Manolo Blahnik shoes because Sarah Jessica Parker said they were cool on Sex and the City.
She took out a student loan freshman year of college, right when she was learning about personal finance. She read somewhere that it's important to start investing young, so she invested $1,000 of her student loan money in a Roth IRA. Her rate of return over the last 6 years: around 1%. The interest rate on that student loan: around 9%, with a term of 30 years. We refuse to calculate the cost of this mistake!
She bought a $300 Hermes silk scarf on ebay as an "investment." As such, it's un-wearable.
He got a debt consolidation loan then maxed out his credit cards within 3 months.
He bought a surround sound stereo system for $250 -- then decided it wasn't cool enough. He sold it to an acquaintance for $100, and then bought another home-theatre-in-a-box system for $700. And spent another $200 for an additional subwoofer.
We're lucky we're not bankrupt.
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