My financial situation has been stressing me out since I quit my last job three years ago. So a few weeks ago I decided I needed to get some help.
Let's catch up for those that haven't been with me since the beginning. I had moved to Minnesota to work for a big company that paid me a lot, but after a couple years I decided I hated that job. So I took a severance package and I quit. I traveled the country for about five months, then I moved back to Michigan. Sat in my parents' house unemployed for a year. Racked up a ridiculous amount of credit card debt. Got desperate and moved back to Minnesota, taking a job with my current employer that paid me about 60% of what I was making before. Which leads me to the current situation. Much less pay with much more debt. Paycheck to paycheck, choosing each month who's not going to get paid, etc. A series of bad decisions on my part. Totally my own fault.
I knew I needed to take this step, but I was afraid because I was viewing it as a last resort and if it didn't work out, then what would I do? Initially, I made appointments with Tara (a financial counselor) and with Family Means. Family Means would have put me straight into a debt managment program (a "DMP"), and it would have been free. Tara would charge me $50 an hour and she'd actually do budget analysis and some other stuff.
Thank the lord I met with Tara first. The idea of paying her $50 an hour when I don't really have extra money to spend was completely unappealing, but I figured I'd just go and see what she had to say and if I didn't like it I just wouldn't go back. Well, she went through all the numbers with me, which took about 20 minutes. That same day, she immediately got on the phone with my credit card companies and started taking care of business. She didn't think I needed a DMP, as long as my credit cards would agree to a plan so I could self-manage the problem.
Here's how fucked up credit card companies are: As long as your payments are current, they won't do a damn thing to help you. It's not until you're a good two months behind that they'll even consider cutting you a deal. I had previously made calls to my credit card companies which were completely unproductive. Silly me had busted my ass to bring them current before I called. So between meetings with Tara, I just didn't pay anything, so I'd have better leverage to make a deal with.
I canceled the appointment with Family Means. As of today I've spent two and a half hours of my life with Tara and have things as squared away as they possibly could be at the moment (save a $30,000 windfall).
I've never calculated my budget without including credit card payments. It kind of amazes me how much extra cash flow I could actually have. It amazes me how much extra cash flow I have right now that I have plans set up to pay off my cards. I mean, it ain't a whole lot. The fact that I'm ecstatic over an extra $100 or $150 a month says a great deal about the state of my finances.
All the while, Tara was telling me that my situation could be a lot worse. I could have bill collectors knocking on my door. I could have my house foreclosed on and my car repossessed. That was reassuring for about five minutes. But as Fly Girl astutely reminded me, it doesn't matter that it could be worse. The fact is that my current situation stresses the hell out of me and I need to fix it. Which Tara did help me with. She's not there to be my therapist, she's there to run my numbers.
So I'll work with the current state of cash flow for a few months. I have two credit cards that are in "agreements" and one that I'm keeping current. Not paid off and close to maxed out, but not behind on payments. According to my Client Action Plan, my job is to stick to my budget, keep making the agreed payments with the two cards, make accelerated payments on the one card, and save a little bit each month. Then I should go see Tara again when I need to re-budget.
That, ladies and germs, is a load off.