This post is an example of what happens when companies put customer service last and the customer realizes there are other choices after all. Everyone who engages with customers (which pretty much means everyone) should be reading Seth Godin’s blog. That really is the sidebar to this post, but I think it’s so important I’m putting it right at the top.

I am consistently amazed by businesses that seem to go out of their way to make things more difficult for their clients. Not just slow, awkward or boring but down right more difficult.

The folks at Intuit, makers of finance software Quicken, seemed to do just that this Spring.
“We see you’ve been a longtime customer, but don’t upgrade to every new version we release; that just won’t do!”

A couple of months ago we got a notice from Quicken, the software we keep track of our finances with, that Quicken 2007 would no longer be supported. They release a new version every year or so with a $50 price tag, but we rarely see the need for new features. The version we are using works great.

In addition Quicken directly connects with our bank, Wells Fargo (we pay Wells AND Intuit a small monthly fee for this ability). Accounts are magically updated, transactions downloaded, and checks can be cut right from the software. It all works quite well and I am quite entrenched in that method of paying bills and balancing accounts.

Until now. The notice from Intuit says that although we will still be able to manually enter transactions, all online activity will be disabled until we buy Quicken 2010. There is probably a good reason, like they have undated a security encryption protocol and Quicken 2007 can’t read it, but the end result is the same: “If you want to keep the functionality you originally paid for you are going to have to pay us again.”

That was just the push we needed to bail on our big bank and its big bank fees.

So we made the plunge; one I had been putting off because it seemed too much hassle. We closed all accounts at our mega bank and opened a checking and savings account at our local credit union.

You know, it was easier than I thought.

It’s now been two pay-periods since making the switch and I love it. The credit union’s website is not as flashy and polished as the mega bank’s, but with their free bill pay service we can do everything we were able to out of Quicken.

We still have all the functionality, but none of the fees or advertisements.

Updating the check register in Quicken is now a two-step process (download the data, import into Quicken), but one I can live with. Especially considering we now aren’t paying a monthly fee to both the bank and the software maker! It probably takes an additional minute to balance the account… I can handle that.

Online bill paying is just as easy as shooting a check out of Quicken. In fact, it may be easier. I wasn’t sure I was going to like the online bill pay thing, but once I bought into the concept and really tried it for a billing cycle, I found I love it. The credit union sends emails letting me know a new bill has arrived. Then I check the budget to see when we are scheduled to make that payment and with one click I can pay it. Very nice.

One last account at the Mega-bank.

All that’s left at Wells is a Visa card. It’s our largest debt (currently about $15k) and will be the last one to be paid off. Here is where our debts stand as of this month.

So if you too are thinking about ditching your big bank and finding a local bank with a soul, I encourage you to give it a try! Get on their website and test drive their service. Go into their branch and do the same.

You may be blown away like we were and get reminded that banking and customer service can still go hand-in-hand after all.

the Dad

© the Dad, Climbing Out, 2010. | 11 comments

This whole get-out-of-debt nonsense has really screwed me up, you know that? I mean, really. When was the last time someone handed you $2,000 and you said, “no, thanks”?

Not long ago I mentioned some freelance work coming up. It’s a fun, challenging project, but one for which there has been little time lately.

It is for a dear friend and is not on a strict deadline. Nonetheless, I want to get it done sooner rather than later. I am shooting for the end of February. It should net around $3,000 toward our debt and I look forward to making that payment.

But the bulk of the work remains to be done. Like, 90% of it. So, although I have been keeping track of my hours we are in Happy Meal land on the balance sheet, you know what I’m saying?

Imagine my surprise when my friend hands me $2,000 a couple weeks ago.

“I need the expenses for 2009.”

Whoa. But, dude, I don’t borrow money.

“You’re not borrowing money, it’s for the project.”

Yeah, but it kinda feels like a loan, you know? So we put it aside it its own account where it sits untouched until the job is done. In fact, it will be the start of moving our finances to a new bank, but that’s another post that has nothing to do with this loan / pre-payment / friendship-risker.

I am trying to decide if it has taken on a weird connotation now; a strange specter of debt. I understand that it was business money that does not affect my friend in anyway, but my emotional connection to money, loans, debt and the interplay with relationships has changed so drastically that I feel a certain discomfort with the situation.

That is leading to lots of clear communication with my friend that, in the worst case, will end in me simply handing his cash back. I’m not sure I’m handling it right, but that will just make me get the project done even quicker. I wonder what you all think of it.

Plus the hole in my pocket is starting to stink.

the Dad

© the Dad, Climbing Out, 2010. | 11 comments

Last night I realized that with a $48k debt snowball, like a hostage situation, Stockholm syndrome eventually sets in.

We have become comfortable with our method, level of focus and debt-reduction. Yes, we have three debts left, but we are making steady progress and have a plan. Mechanically, the system has found a groove: income is earned, payments are made, debt goes down.

In a way, when you have gotten used to living on a budget and spending less than you make, you can buckle down, do the work and forget the “whys” of getting away from credit card companies.

Then they remind you.

Last night I received a statement for our largest debt. Usually I barely look at them, but the “minimum due” caught my eye right away. It has been the same for ages, but had been raised quite a bit!

“They raised our rate when I closed the account to new charges!”, I thought. Even though I specifically asked if closing the account would affect our rate at all. Paging down the statement, sure enough, our APR had gone from 16% to 23%. This is in addition to the rate increase of last October on our third largest debt.

I took a breath, grabbed the phone and waited on hold ready to uncork on whoever answered.

Of course, it wasn’t worth my time in the end. The rate increase was across the board, I was told, and had nothing to do with closing the account. There was no opt-ing out or reversing it. That’s just they way it is. Although they did offer us a personal loan at 18% instead which I declined.

My dislike for the credit industry is matched now only by my apathy for their business methodology.

Nonetheless, with our plummeting FICO score in hand (I think we’re at 680 now, via: creditkarma), I will try to get a lower interest rate personal loan from our local credit union or regional bank and move our business there.

I’m not sure it will be worth it, but as it stands now 63% of the payment to that card will go to interest this month. That change will extend our debt snowball by nearly four months and even a small fee would be worth paying to stay on track, I think.

Did I mention I applied at a Pizza joint to be a driver? Seriously. I’ll let you know how that goes.

In the mean time, thanks for the reminder, Wells Fargo. I hate you too.

the Dad

© the Dad, Climbing Out, 2010. | 12 comments

Oh. My. God.

After ten months (TEN MONTHS!) of financial responsibility… no, financial PERFECTION, today I screwed the pooch.

Actually, I screwed the pooch more than a week ago when I ignored our budget and decided things were going even better than I thought they were… and gave away the farm.

October was a rollercoaster of events and by the time November rolled around I was really ready for a calm month and a nice fat snowball payment. No little extras popped up and The Wife even brought home a fatter check that we had budgeted for.

So when the end of the month rolled around and I prepared to make our snowball payment, I found more than expected in our checking account.

“Well, of course, it was a pretty good month, wasn’t it!”

So I sent nearly the whole thing off to our debt. Um. Enthusiastic, yes. Smart? Well, I left no buffer in our account and today we paid dearly for that.

Seven, count ‘em seven, items posted to our account before today’s paycheck went through. Seven overdrafts. Seven overdraft fees.

Overdraft fees.

We haven’t seen those in nearly a year. Had I stuck to our original snowball amount we would have been fine. What does Dave Ramsey say? “Children do what feels good. Adults devise a plan and stick to it.”

I went with my emotion, my excitement in paying off debt, instead of analyzing a situation that had obviously changed. For that we are paying dearly. Overdrafts at Wells Fargo go for $35 each.

The Wife was brave enough to go to the bank, apologize for her idiot husband and get them to reverse some of the overdraft fees, but not all. What a trooper.

There are some fundamental questions this debacle raises. Where was the communication between The Wife and the Dad? Why had the extra money not been addressed together in a budget committee meeting? Were the seven items this morning expected and if not, why not?

We will sit down together this weekend, hold hands and answer those questions, shore up our financial defenses and I will keep my debt-paying in-check. Seeing a negative balance, a negative balance, in our checking account today triggers a visceral response that nearly brings me to tears.

Today, I stand before you a humbled man. There is always tomorrow. Another month. Another budget. Another chance to get it right.

the Dad

© the Dad, Climbing Out, 2009. | 12 comments

Have you ever watched a person or a business do something self-destructive and just stood there in disbelief shaking your head?

Two letters came this week from Wells Fargo, the holder of our first and third largest debts. One contained the annual new credit card. Yay! A new card to destroy. Got to come up with a creative way to do that.

The second letter was the mind-boggling one. Apparently they have caught on and we aren’t fooling them anymore. We are obviously evil, debt-hating people and must be stalled as long as possible. Despite the fact that we haven’t missed or been late on a payment to any creditor in almost a year, they nearly doubled the card’s rate to 26%.

Seriously? Really. That is going to win you my business? My loyalty? It’s so laughable I cannot even be mad about it.

Since we have been closing accounts as soon as they are paid in full our FICO score has been dropping so I don’t think we have a hope of moving that balance (our largest) to a new lender, but I will look into that anyway. Perhaps 26% won’t be hard to beat.

The reality is that this interest rate hike only delays our debt-free date by a couple of months, but it really flabbergasts me. How can anyone think that this is good business? How can any business think its customers will clamor to be treated this way?

What a bunch of asses.

As to the new card, I’m thinking draw-and-quarter. What do you say?

the Dad

© the Dad, Climbing Out, 2009. | 11 comments

Every time I watch a newly-married couple smoosh cake into each other’s face at their reception I have this uneasy feeling of something being wrong. When The Wife and I married we were giddy, ridiculously happy, and yet civilized about the darned cake eating thing. There was no smooshing.

Sadly, something was still wrong and I think even then I felt an uneasiness. I didn’t know what it was until nine years later. Nine years and more than $10,000 in accumulated overdraft fees.

Once again: more than $10,000 in overdraft fees in nine years.

The “something” we didn’t fix until this past February was part laziness, part Status Quo, and mostly dumb. We kept our separate checking accounts from our single days.

Having two checking accounts meant a lot of things for our finances and for our marriage that I see clearly now.

First, communication about finances was stifled or downright avoided. It was simply easy not to discuss the bills. Second, the person earning less felt consciously or unconsciously disenfranchised when it came to purchasing decisions. Worst of all, it enabled the hiding of spending and dishonesty to each other and to ourselves about our financial state.

For a time I was the one who paid the bills. The Wife would transfer most of her check to my account and I would do the creative shuffle every month to make sure almost everything was paid and I had plenty of play money. It took a couple of years of that foolishness and a pant-load of bounced checks before we gave The Wife the responsibility of paying the bills. I would transfer most of my check to her account and she would perform the monthly Quicken-mating-dance that eventually led to the same outcome.

All of it came with resentment, guilt and the underlying current of fear that results from living life sans safety net.

It should not be amazing at all that living life without a plan leads to a pile of poop no matter who is holding the reigns. Sometimes we would go for 4 or 5 months without an overdraft on one account only to bung it up royally on the other one. The pure genius, of course, being that we were actually paying monthly fees on both accounts as well. Like I said, dumb.

When we finally woke up, paired our banking down and got on a written plan our lives changed. Personally and financially we are better people now.

The monthly communication about money and the commitment that piece of paper brings has affected our marriage in every way. Not only are we kicking the crap out of our debt (I’ll do a six month update with real numbers soon), but since February we have not overdrawn our one-and-only checking account at all.

Not once.

I am not saying the way we have done it is right for everyone, but boy is it right for us. If you are on the fence about sharing a checking account with your spouse I challenge you to look seriously at the reasons why. It takes more commitment, more communication and a small amount of time to do a written plan every month, but the results are stunning. $10,000 stunning in our case.

Then again, some people actually like the whole cake-in-the-face thing.

the Dad

© the Dad, Climbing Out, 2009. | 6 comments

Lego was my childhood toy-of-choice. I didn’t really need many other toys because I could build anything out of those magical little blocks.

And yes, MY LEGO VERSION WAS JUST AS GOOD AS A REAL ONE, THANK YOU.

I didn’t know it at the time but we were on the dole at one point during my childhood so I suppose it’s good that I learned to build my own Transformers and dump trucks.  Sadly, as any 9 year-old can tell you, Lego is finite and sooner rather than later one finds oneself disassembling Leeds Castle to build Optimus Prime.

Priorities.  Priorities.

At 37 we are experiencing a paradigm shift in our financial priorities that is not likely to make our creditors very happy in the short term.  The Wife, I think, got to this point before I did.  Ramsey refers to it as the Four Walls.

Food, shelter, clothing and transportation.

These things come first.  Only after those obligations are met can one consider paying other things. You know. Silly things; like Wells Fargo, Washington Mutual and Bank of America.

Credit score be damned.

Yikes.  Like I said, a paradigm shift.  I have so often in the past creatively shuffled bills to make sure no credit card was paid late only to run a utility bill to its bitter end.

That brings me to tonight and a new milestone in our financial lives.  Two firsts stare me in the face.  First, my Quicken register looks unlike it ever has before.  The “balance” column is black.  All black.  The whole way down.  There are no red entries indicating a point at present or future where we overdraw if my creativity doesn’t save the day.

Second, a creditor is getting a third of their payment.  Ouch.  It’s a pro-rata version of their share.  I cannot say I am proud or happy to send in an underpayment, but even if they don’t believe me I know it is not forever. They can, and will, get mad and scream at us, but they’ll get their money.

They will. If it takes years…

And eventually, when that battle-cruiser is completely dismantled and all those Lego pieces are redistributed into a new, far sturdier financial life, we will look back on tonight as the shift in the red and black blocks that made all the difference.

the Dad

© the Dad, Climbing Out, 2009. | 4 comments

On the agenda was:

• drop The Wife’s checking account
• change the Dad’s to a checking account without a monthly fee
• de-link the over-draft “protection” credit card from the Dad’s account
• discuss the state of said credit card

The Wife also has a credit card with them that was “protecting” (I love that term, don’t you?) her checking account.  Together those two cards total $15k.

We went in with our first budget in-hand and showed the dear lady our plan.  I think we totally confused her.  She pleasantly made the account changes we asked for:

“You know you won’t have any protection if you overdraw your account and an item may be returned with an NSF charge, right?”

Yes, thank you.  You charge us the same charge to do the overdraft “protection” too plus the interest on the card so let’s just shove the whole thing while we wise up.

We were offered an unsecured loan in place of the credit cards, but I saw no advantage in it.

At the end of the day we didn’t really come out ahead in any way other than reducing our monthly fees a bit, but we do feel like we cleaned house and simplified our banking.

Hopefully tomorrow’s garage sale can bring us some traction in saving our $1,000 emergency fund.

the Dad

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