Money Stories

A quick debt service to income ratio check would have flashed red immediately....And to think that the auto loan companies lobbied themselves out of CFPB jurisdiction!

I'm dreading the maintenance fees, the minimum balance requirements (that I already can't fulfill), and no longer having my transfer fees waived. These big banks need to understand that for broke grad students money is less than finite, having money is a hope and dream. I'm lucky if I can find a spare $5 to pull out of my pocket at this point.   

We had been customers of 5/3 bank for many, many years.  We never really had any major problems w them for the majority of our time there.  The last year or so we had noticed that their customer service had gotten pretty substandard.   The downtown branch had a fantastic change counting machine.  My son was small at the time and loved the sound of it and watching the numbers on the machine add up quickly.  This machine, however, was "down" almost as much as it functioned.  The tellers just threw up their hands in frustration.  Finally said machine was removed.  We were told we had to count our own change.  For us not such a big deal, but saw many others who came in w literally buckets of change.  Wait staff or owners of coin car washes, etc.  The bank did not even bother to repaint the wall where the machine was.  Just a big outline of the machine on the wall.  True story.   We seldom go into the branch.  We do most things online or through ATM machines.  These machines, at least at the branch nearest us, were also quite problematic.  One of the two seemed to be on the fritz whenever we wanted to use it.  It had a nice feature where we did not even have to put checks into an envelope.  That service, however, was also frequently non functional!  Once again, when I went in to alert them, later, they just smirked, did the shoulder thing, etc.   The tellers downtown, main branch, were usually not friendly at all.  We joked that the bank sent those with the lousiest attitudes there.  One made it pretty well clear that she did not like children!  My son would fill out his own deposit slips when the coin machine worked.  If it wasn't quite right she would made snide remarks.  True!  They, tellers, were also quite slow and did not seem to care a bit. We have now gone to Lake Michigan Credit Union.  Kiplinger's cites them when listing best checking accounts in USA.  We get 3% interest on our checking account up to $15k, which we are blessed to have.  Service is also a whole lot better.  ATMs seem to be more functional, too.  A real no brainer to switch.  I would tell 5/3, but I get the feeling they do not really care.  I did buy their stock, as I know they are profitable.  Others must not mind being abused as customers?   My story & I am sticking to it!  

Some statistics on my student loans: Original loan amount: $7,500 Interest rate: 6.550% Years spent paying off: 8 Money spent: $5,211 Balance due: $5,839 Now it’s true, compared to many, if not most student loans in this country, mine was not that bad. I know people who have tens of thousands, some even hundreds of thousands of dollars in student loan debt. They’ve become doctors and lawyers, program directors and teachers, artists and actors. They all struggle under the weight of their loans, big and small. It’s an inconvenient truth that many of us have learned to deal with: we’ll be paying off our loans until we are old. One friend says he’ll be paying it off until he’s dead, another way of saying he will never be able to pay it off, even with his fancy lawyers’ salary. He’s counting on debt forgiveness one day. For the sake of his children, I hope it happens. For the most part, I’ve been able to ignore my debt, even forgetting about it for long stretches of time. I picked a number I could live with, and enrolled in automatic debit. Every month, a set amount of money bleeds from my bank account into the ever-deepening hole of my debt. I receive an email notification, which I hastily open, just to close again so that it no longer shows bold in my inbox, and forget about it. I know I’m not paying enough to really make a dent – the interest makes sure of that – but it’s been all I could afford or felt comfortable with for a long time. Recently, I’ve been able to save some money. Living with family and not paying rent will do that for you. I highly recommend it if you can stand your family at all. Lucky for me, mine is amazing, generous, and actually fun to be with. So I’ve been stockpiling money like Scrooge McDuck, my swimming pool brimming with gold coin, and bank rolls inflating my future with possibilities. The trips I’m going to take, the dream home that is quickly filling my Pinterest with boards containing soaking bathtubs, screened porches, and mudrooms are looming ever closer with each passing day. But the more I think about the future and the things I’d like to do, the causes I’d like to be involved with, the trips I’d like to take, and the homes I’d like to buy and decorate like the cover of a Better Homes and Gardens magazine, the harder it becomes to ignore that nagging little voice in my head that says, “You’re saving all of this money, just to let it slip down the slimy, dead dream-coated drain of debt.” I would like my money to be mine, not just sitting in my bank account until the government menses deprives me of the lifeblood of my dreams. So, today, I finally listened to that voice. I sat down and looked at the stats. How long have I been paying into this money pit? How much have I spent? How much of that is actually part of my principal loan, and how much of that has been interest, the government stealing my hard-earned cash, just to punish me for not having it in the first place? I was appalled. I had made a small dent in the original loan, but the amount of money I had paid should have almost paid it off entirely. I did the math. Ok, math is not my strong suit so I just looked at the scheduled payments. 8 years put into it, and 5 more to go. A couple thousand more in interest. All told, I would have spent 13 years, and a little over 11 thousand dollars paying off a $7,500 loan. (Again, I realize this is not that bad compared to many, but bear with me here. ) It made me angry. Angry at the government for putting so much pressure and weight on the young people in this country, who are just trying to make it in an economic environment our parents couldn’t have dreamed of (or had nightmares about, more like), for making it impossible to get a decent paying job without a degree, then making it impossible for so many to get a decent education because of the exorbitant costs of tuition, and THEN making it impossible for us to get out from under their thumb, after we’ve been forced to undertake loans that cripple us financially and keep us in poverty and unable to amass any real wealth or property. I was angry at myself, for allowing me to be a cog in the system for so long, for not taking responsibility for my financial freedom, and for ignoring the clear facts and even sound advice that was laid out right in front of me. I allowed myself a few moments to feel that anger, really feel it and try to understand it, and then I took action. That big cash pile I’ve been sitting on? The waves of coin lapping against the side of my money pool? Now it’s more like a puddle. Today I paid off my student loan. I bit the bullet, took my lumps, made my bed and snuggled right down into it. It was the hardest easy decision I’ve made recently, and I know it was the right one. It might make my dreams of wraparound porches, granite counter tops, and poolside cocktails a little bit farther off, but they’re out there, waiting for me, and I’ll get there eventually. For now, I know that I’m free, my money is my own, and the government can suck it. Originally post is on https://thoughtsbynora.wordpress.com/

Only, the bank clerk had located his account BY NAME, NOT BY NUMBER.  So the funds went into the wrong account, namely my son's account.  Now just imagine, what if I had not been diligent.  The bank's customer would likely have written one or more large checks on his account which was supposed to have $25,000.  The bank would eventually have discovered their error, but how much of his time and aggravation would it have taken.  And what if you or I had made an error of this sort.  (I have saved the deposit slip and a printout of the account balance as it stood that day.)

Since I pay off my credit card on time every month, I will use myself as an example.  The banks are making about 2% from the vendors on every charge I make.  The billing cycle is 30 days, so, assuming that I make my purchases evenly over the 30 day period, the bank has to finance my full bill for the equivalent of 15 days.  My bill is due 25 days after the close of the billing period.  So it takes the equivalent of 40 days (15 + 25) for the bank to fully realize the 2% that they have charged the vendors.  There are nine 40 day cycles in a year (360/40).  So the bank can work this magic 9 times a year.  1.02 to the 9th power = 1.195.  Thus, the bank is making the equivalent of 19.5% annual return on my charge account activity.  That is much better than the 14.49% they would make if I did not pay my bill in full each month.

My partner and I had the great privilege to be given a significant financial gift from his parents last year to enable us to purchase a home. After some time searching, we found a great condo at a very reasonable price in Union City, New Jersey. Though we had already received mortgage loan pre-approval from Chase and Bank of America, those lenders would not provide financing for the condo building where we planned to purchase. The building was not yet over 50% owned by condo owners (the building had been converted from apartments to condos several years prior and there were still many renters in the building) so there was a short list of mortgage companies with whom we could work.   We chose the building's preferred lender, Prospect Mortgage. The experience with the broker was not ideal; he did not offer a rate as competitive as the ones we had been given by Chase and Bank of America, and we had to repeatedly argue about extra and unnecessary fees that seemed to pop up at every stage of the mortgage approval and closing process. At last we closed on our condo, only to discover within a few weeks of purchase that our mortgage loan had been resold to another company, Cenlar. Though we had no say in the matter, we began to research the company. We were troubled to learn that nearly all of the consumer reviews and comments we could find online detailed how poor the company's customer service was, and worse, many consumers reported that the company was notorious for misallocating mortgage payments to the loan principal, interest, and escrow accounts. Consumers who allowed for automatic withdrawal for payments reported that the company repeatedly withdrew payments for the same month twice, and refused to reimburse consumers for the second withdrawal, instead holding the funds for the next month's payment. Me and my partner decided we would just have to be vigilant about seeing that our mortgage payments were correctly apportioned. The first signal that the company was just as bad as consumer reports indicated is when the mortgage company missed the first tax payment on our property to the city. This process should have been managed by the company, as our tax payments are made to our escrow account. After many attempts to contact the company by email and phone (calls went to voicemails or errant offices, emails went unanswered for days) we finally reached someone at Cenlar, who informed us that we should fax Cenlar copies of the city's tax bills that we received in the mail each time they came, as we could not be assured that Cenlar would do its job and make the payments. Our overall experience of home buying was alright, but it continues to be a source of anxiety that our mortgage loan is now being serviced by a company that seems very ill-equipped to service loans, and extremely unmotivated by customer satisfaction. We have no clue what will happen to our mortgage loan in the course of its 30 year life, but we are not optimistic. 

I had an experience with US Bank a few years ago.  I overdrafted on my debit card by about $30 (shouldn't that stop this from happening?) and by the time my statement came in the mail approximately 3-4 weeks later, that sum had ballooned into a $300 fee.  I closed my account not long after that.

I've always been pretty determined to go into some type of work where I could feel like I was making a difference. I knew that this would mean I wouldn't be making a lot of money, but it's important for me to feel like my work is making the world a better place every day. Almost 10 years ago now I was feeling lost and frustrated, not really sure where I wanted to work and what I wanted to do. I went to graduate school at The New School, and I can't deny that it changed my course for the better. I loved every moment, and it gave me direction. Most people I spoke to said that the debt wasn't a big deal. It's just part of being an adult. I remember midway through the program one of my classmates transferred to another school because he felt incurring so much debt was counter to The New School's mission, and not a good life choice for him. I remember shaking my head, thinking he just needed to get with the program and stop being so "radical." When I remember that moment now, I shake my head at myself for being the one to go along with the status quo without analyzing it critically enough. At the time I thought I was making smart decisions about my future and knew what I was getting into. But with each passing year as I enter my mid-30s I try to fight feelings of regret as I look at my soaring student loan debt and my 33k per year income. I am considering law school now and have been studying for the admissions test. But the thought of incurring yet more debt to continue making very little money makes me sick with anxiety. I lose sleep trying to figure out what the best course of action is. The other day when my dad found out the entry pay for a legal aid lawyer, he asked, furiously "Why are you so obsessed with being poor?" Despite my former resolve, I've begun to wonder what is "wrong" with me that I make so little money and I feel trapped. I constantly compare myself to others who seem to make good money. I try to keep in mind that I have no trouble paying for everything I need and then some. I am lucky in that I have opportunities that so many don't have. Keeping these thoughts at the forefront is difficult though, given we live in a culture that equates money with success above all else. I also feel like I'm navigating a minefield, and a wrong move can jeopardize everything.

It is especially frustrating when some of these institutions in the non profit field can afford to offer paid internships and simply do not. It is not many people who can afford to live in a city like New York and work without receiving a salary. A person shouldn’t have to choose between paying rent and getting useful experience. 

I had been told that if you are a federal work study you qualify for SNAP benefits. Moving to NYC to go to school is obviously very expensive and there is a max amount of loans you can get. And of course there is a max amount of federal work study you can actually earn (which is the same across the country so a student in small town Missouri makes the same as a student in Manhattan). I applied and the process was lengthy and bureaucratic but was actually approved! I wouldn't have considered it if I hadn't heard about it from someone else. The SNAP money was so helpful and I really don’t know how I would have been able to feed myself without it.   

My goal for every year is to be better with money but his year i'm actually going to work on it. I've downloaded a money management app to help me monitor my spending and I'm tracking my credit score to know when it improves. 

My money story is positive. The only debt I have is my 140k student loan. I have 2 credit cards, but pay both off every month. I just need them to build credit. I invest in stocks with capital one investing. I have both an IRA (capital one) and a 401k (my job). I also generate wealth with the peer to peer platform, Prosper. Lastly, I have a savings account with American Express Bank. I am constantly searching for other ways to generate wealth. I have a full time job, but am beginning to explore my entrepreneurial side. I grew up poor and am setting myself up to never experience that way of life again.

That's more than my rent, and I definitely couldn't afford it. Income based repayment plans are there for a reason! Apply for them and use them. While we could also talk about over-borrowing, I won't get into the reasons my payments are so high (and that I can't afford it) here, that would be a post for another day...but educate yourself on your budget, your plans for the future, and find a repayment plan that works for you BEFORE you need to start paying. 

So, every month I would call and regain that ten dollars, however after only six months with the bank, I had had enough and closed out my account.

I have a very small network and finding a job that will allow me to continue living in New York is really daunting. It continuously makes me wonder how I'm supposed to save for retirement, live and have some money leftover to enjoy myself. What about health insurance?  Will I ever be able to afford to buy an apartment in New York? Should I even bother trying to find a job in New York after I finish my degree? Would it be better to find something in another state? I'm sure these are questions that pass through everyones minds but it's seriously daunting.

In terms of a light at the end of the tunnel, I've signed up and qualified for the public service student loan forgiveness program, so within 9-10 years my $140K+ student load debt should be forgiven. I just wish I didn't have to jump through so many hoops financially, though at least I make my own money, pay my own bills, and therefore have personal freedom in that sense.