And the dentist determined (follow-up)

In a previous post I mentioned that at a dental appointment the dentist found that a back tooth was cracked.  He asked me to schedule a follow-up appointment.  He would need to examine me to determine if I needed a new filling or a new crown.

I scheduled the appointment for July 19th and saw the dentist that day.  To my financial delight, I needed a new filling.  Thank goodness!  I was told that a filling would cost about $500 but a crown would cost about $1,500.  I lucked  out – just a filling.  Total cost = $465.  

 I had $500 set aside in an additional savings account (family member who borrowed $500 had repaid that money to me).  So, I didn’t have to charge this unexpected expense.   Another reason to smile 🙂


You’re NOT getting my vote, Kwame Brown

Kwame Brown is an at-large council member of the District of Columbia Council.  The current council chair, Vincent Gray, is challenging Mayor Fenty.  Kwame Brown is running to become the next council chair.

I haven’t followed Council Member Brown that closely.  The few times I’ve observed him at hearings, he’s okay but I’m not especially impressed.  However, an article in the Sunday, July 18, 2010 edition of The Washington Post has definitely persuaded me not to vote for Kwame Brown.

The article, written by Mike DeBonis, is entitled Kwame Brown’s debt turns into ammo: Council member’s opponent in primary cites credit-card issues.

The 2nd through 5th paragraphs of this article state,

Since December, three credit-card issuers have sued Brown (D-At Large) in D.C. Superior Court, alleging nonpayment of bills and interest exceeding $55,000, court records indicate.  Brown settled one of the cases in April, agreeing to pay $500 a month toward a bill of nearly $24,000; the other cases remain active.  The debt is compounded by Brown’s repeated borrowing against his home and the purchase of the boat, a 1994 Chris-Craft Continental express cruiser, on credit.  Brown estimates that his personal debt exceeds $700,000.

The situation clashes with what Brown is saying on the campaign trail, where he often presents his financial bona fides and emphasizes fiscal responsibility in his effort to win a job that gives him great control over $10 billion in annual city spending.  “I am a bean counter,” Brown told some Ward 3 residents last month.  As council chairman, he added, “you need to get in the weeds.”

Brown’s opponent in the Democratic primary, former Ward 5 council member Vincent B. Orange, Sr., has started to make Brown’s credit-card debt a campaign issue by directly linking it to the city’s fiscal health – the District is perilously close to a 12 percent debt ceiling Brown voted to adhere to.

“It’s poor judgment for him to not have cleaned that situation up,” Orange said Thursday on WRC-TV.  “Is this the person you want to send to Wall Street?  Is this the person you want to send to the Congress?”

Brown, who leads the council’s economic development committee and describes his professional record as “stellar,” has sought to portray his debts as everyday household expenses, the “new spending that you take on as a growing family.”  But a review of public records and interviews with Brown indicate that he is emblematic of a time when ballooning real estate values and easy credit were taken as license to finance personal luxuries.

Page C1, C4.

The issue raised by Brown’s opponent resonates with me.  Even if Brown is an excellent “bean counter,” he doesn’t practice what he preaches.  One’s personal finances should be easier to “bean count” than a huge city budget.  And frankly we as residents of the District of Columbia would have never KNOWN of his financial distress but for the fact that THREE credit-card issuers have SUED HIM.  Your “bean counter” skills are definitely out-of-whack when you can’t make monthly payments on a total of $55K in credit card debt.

Council Member Brown doesn’t see any connection between his personal finances and overseeing $10 billion in annual spending as council chair.  I see a connection.

I also am concerned, with his financial distress, will he be more susceptible to certain lobbyists who may pitch certain policies or procedures and reward Brown with some side benefit like a reduced interest rate on his mortgages?

Further, if Brown is ultimately the next council chair, and he has the opportunity to question candidates for positions with significant fiscal responsibility, and let’s say one of the candidates has a checkered personal finance history as Brown, I hope Brown will recuse himself rather than be a hypocrite and criticize the candidate.

Apparently Brown is well liked but we shouldn’t elect politicians merely on likability.  At this moment in history, with the ongoing Great Recession, with a high unemployment rate in the District of Columbia, with the District of Columbia’s debt edging closer to 12 percent, and with talk about the possibility of a Financial Control Board being re-instituted to run the city’s finances (since the city’s elected officials cannot), now is not the time to vote for Kwame Brown.

Financial Lessons from Great Aunt Mary

My Aunt Mary was an AMAZING woman.  Faith and family were the pillars of her life.

She married young and later divorced.  In the early 1960s this divorced woman (no children) purchased a home.  Her earnest money deposit was $500.  Years later she told my mother how the settlement agent commented she would lose that $500.  But that settlement agent didn’t know my Aunt Mary.

She worked two jobs.  Growing up during the Great Depression, she never forgot the harsh circumstances of the 1930s and 1940s.

** She lived within her means.

** She packed her lunch daily.

** She noticed colleagues buying coffee at the job site but realized the coffee wasn’t so fresh because it was brewed once every one to two weeks.  Aunt Mary prepared her own coffee at home and carried her home-brewed coffee to work.

**Aunt Mary was entrepreneurial.  She cooked and baked and sold dinners and desserts at her night job.  Aunt Mary would pack her dinners/desserts and carried them on the bus to sell to work colleagues.

** My mother recalls, on one occasion, Aunt Mary got 40 slices out of a Bundt style pound cake which she sold to her work colleagues.

**On the occasions when she would eat out [years later], Aunt Mary carried tin foil, mayonnaise jars and plastic margarine containers in her purse to pack her leftovers.

**She purchased five burial  plots in the 1970s.  Because of her foresight there were final resting places for her mother, two sisters and a sister-in-law.

** Aunt Mary not only looked out for her family, she got her financial house in order so as not to be a burden on others.  Not only did she pay for her burial plot in advance, she also paid for her casket, her marker and the  opening and closing of her grave (in other words, all funeral expenses were prepaid).

**She retired early from a government job (only 12 years of service) to take care of her ailing mother.

**Despite retiring early, without life insurance or health insurance [because she couldn’t afford them], Aunt Mary budgeted tightly and paid off her house.

Aunt Mary exemplified frugal living all her life.  She never forgot the tough times of the Great Depression.  Now, most Americans are  forced to rediscover frugality.  I learned these lessons years ago from Great Aunt Mary.

The Money Heifer is BACK!

Hello.  I’m back.

I’ve been silent for a couple of weeks for two reasons.   1st – I attended a one week conference the week of July 12th (it was an intense one week conference).  2nd Sadly there was a death in the family – my 98-year-old great aunt (her funeral was yesterday).

Independence Day

A week ago we celebrated this nation’s independence from British rule.  The Declaration of Independence embodies this nation’s goals and aspirations.

What about you?  Are you independent or dependent financially?

The focus of my question is not if you are a stay at home parent and your spouse is the breadwinner or if you are a child dependent upon your parent or parents for financial support.   Instead my focus is on debt.  Do you presently have a balance on your credit card?  Do you own your car outright or are you still making monthly payments?   Do you own your home outright or is it encumbered by a mortgage or mortgages?

Strive to be independent.  Eliminate credit card debt, ASAP.  Pay off those student loans and auto loans with lightening speed.  Then work to pay off that mortgage, definitely before age 60, even better if between 50 – 55.

What would it be like to be truly debt free? Talk about a weight lifted off your shoulders.  You owe no one.  You can use the money you earn in whatever way you like.  If you hate your present job, you could quit it and take another position that you truly enjoy (even if it pays less).  Being debt free must be comparable to the feeling the colonists felt when they won the Revolutionary War.  Good ridden, King George III.  Hey, good ridden, any and all debt.

In Debt We Trust

Have you heard of the documentary In Debt We Trust: America Before the Bubble Bursts? If you have not, I’m not surprised.  This 2006 documentary by Danny Schechter never received the backing of a distributor.  This documentary never made it on the movie circuit, how so unfortunate.

In contrast the documentary, Maxed Out, at least received some publicity and was distributed for viewing at independent theaters like the Landmark chain.

I’ve seen both movies [and presently own both] and I think In Debt We Trust is much more comprehensive than Maxed Out.   In Debt We Trust spends time on credit cards, but also pay day loans, the new (back then) bankruptcy law making it tougher for Americans to discharge their debts, predatory lending (particularly with mortgages), the big banks, the credit reporting agencies (and how they have more data than the CIA), etc.

The movie begins and ends with a Baptist Church in Norfolk, Virginia where the pastor implemented a “Debt Liquidation Vision” program to help his congregation get out of debt [individual  members’ cards were paid off – not car loans or mortgages].  The pastor mentioned how we as Americans should be serving the Master and not Master Card.  And the pastor warned his congregation about a coming economic crisis.

The pastor was interviewed in late 2005 (based on the poinsettia around the altar).  I bet the members of that church are happy their pastor had the vision to focus on debt elimination.  Maybe they are weathering the Great Recession better than some others.

If you haven’t seen the movie, In Debt We Trust, I highly recommend that you do.  It may all seem uncomfortably familiar now but the scary part is it was made in 2005/2006.  Do you think the individuals profiled in the documentary correctly foresaw are present economic catastrophe?

I highly recommend listening carefully to all the songs played during the documentary.  These songs say a lot.  Go to the website,

and listen to selected tracks from the soundtrack.

I wish Danny Schechter would make a sequel of In Debt We Trust, re-interviewing some of the individual consumers and experts  profiled in the documentary.

Too bad In Debt We Trust was not widely distributed and shown back in 2006.  Of course, such a movie is not everyone’s cup of tea.  But maybe more Americans would have been prepared for our present economic catastrophe.

What’s funny – in August 2006, as a I sat on plane in Sacramento waiting to return to Washington DC  [via connecting flight in Dallas], I had my epiphany.

I had purchased my house in January 2005 and finally got my condo rented in May 2005.  I purchased things for the house such as new washer and dryer [previous owner had a washing machine but no dryer.  I consider the dryer an essential item].  Looking back I really didn’t need the china cabinet but felt I did at the time [and Dave Ramsey discusses how his wife Sharon “needed a china cabinet”].

I visited South Carolina in the summer of 2005.  I rescued my dog from a shelter in 2005.  I was spending money for a variety of things [I never did purchase cable or satellite tv – subject of a future post].  I stopped contributing to my Roth IRA because my mortgage payments (1st & 2nd Trusts) for the house were much larger than the condo.  And I wasn’t saving as I had been with regular monthly contributions to my Vanguard Money Market Fund.

Anyway, on the tarmac at the Sacramento airport (had just completed my first visit to California – Sacramento, Lake Tahoe, Napa & Sonoma & San Francisco), I realized I wasn’t saving.  And that I had allowed myself to accumulate credit card debt.  While on the plane I devised a plan to start saving each pay period and a plan to get rid of my credit card debt.  Upon returning to Washington, DC, I implemented my plan.  Long story short, by the time the Great Recession hit, I had no credit card debt, and had started to pay off a home equity loan on my condo.

And, let me say, before purchasing my house, I was at Baby Step 6.

Please, please, please watch In Debt We Trust.

You’re Pre-Approved

Received an e-mail today informing me that I’m pre-approved.  This e-mail encouraged me to accept a home equity line of credit today.

The e-mail, from USAA, states in pertinent part

You’re pre-approved for a Home Equity Line of Credit (HELOC) with USAA Bank.  Your HELOC lets you use the equity in your home to take care of things you need:

* Make home improvements. Making repairs and improvements to your home may help maintain its value.

* Pay college tuition. Use your home equity to invest in your children’s education.

Benefits of a HELOC

There are many reasons why people consider a HELOC.   For instance, it offers lower rates than credit cards.  It also allows you to control when you use the funds, and the interest can be tax deductible.*  And when you need to access funds, simply use checks or online transfers.

Call USAA today and our service representatives will fully explain what a HELOC is, and the terms and payments, so you can determine if one is right for you.  Your offer expires August 13, 2010.

I’ll let the offer expire.

Hmm, I remember, just a couple of years ago, banks were limiting  or rescinding individuals’ HELOCs.

In the February 23, 2008 issue of The Washington Post Dina ElBoghdady wrote an article entitled “Homeowners Losing Equity Lines:  As House Values Falls, Some Banks Withdraw Credit.”

The first paragraph of the article states,

In one brief phone call, Nancy Corazzi’s lender yanked away what was left of the $95,000 home equity line of credit that she and her husband took out five months ago.

Who was that lender?  The lender’s identity is revealed in the ninth paragraph.

USAA Federal Savings Bank froze or reduced credit lines for 15,000 of its customers, including Corazzi, and will not reconsider its decision until “real estate values improve substantially,” the company said in a statement.

And USAA has told me I’ve been pre-approved for a HELOC.

I’m a USAA member.  In early 2008, just before the above Washington Post article was written, I called USAA about obtaining a HELOC.  I had received periodic pre-approval HELOC announcements from USAA.  When I called about obtaining a HELOC for my rental property, USAA told me it had stopped offering HELOC for rental properties in 2007.  Boy, was I bummed.

Luckily, my local credit union was willing to give me a HELOC for my rental property.  (Thankfully, I had e-mailed the loan officer who I had dealt with on two previous occasion inquiring about a HELOC for my rental property.   Before receiving his response,  I contacted my credit union and was told such loans are  not offered for rental properties.   When the loan officer responded to my inquiry and I told him I understand that HELOC’s are not offered for rental properties, he responded, who told you that?  He told me HELOCs are given for rental properties; the property owner however is charged a higher interest rate.)

Because my credit union offered me that HELOC, I was able to have my condo’s bathroom completely renovated and some cosmetic upgrades made to the kitchen.  I borrowed $25,000 at 8.99%.  I paid off that loan in one year, one month and one day.

When I receive pre-approved offers by e-mail or snail mail, I just chuckle.  I remember how I could not obtain a HELOC when I needed one from USAA.  , I’m in the mode of paying off debt, not acquiring more debt. Plus, a double dip recession may be around the corner and I need to live within my means.

Pre-approved HELOCs and credit cards just say NO THANK YOU.