(This is part of the Selling Grandma’s House series. For the rest of the series, click here)

Turns out, selling a house is more expensive than simply paying a realtor.

The govern­ment has their fees, the realty company has their fees, the buyer has a few requested fees, and there are always a few surprise costs waiting to spring up at the last minute.

I’m not mad about the fees – they all seem reason­able, but I do want to know what my grand­mother is paying. Like most people, I’m ignorant. Continue Reading…

The leaning tower of misery

A friend of mine asked me how to settle old credit card debt. I mentioned the process to him a while back, and he is looking to settle some debt.

After breaking down the process for him, I thought it’d be great to share with you as well. I mean, credit cards are the most popular form of debt and the average person has about $15,000 in credit card debt on 10 or more credit cards. It’s likely a few in the community will need to know how to do this.

Before You Begin

Before you even consider settling old debts, you need to know a few things:

• Know the original amount. Before you can settle, you need to know how much you owed orig­i­nally. Collec­tion agencies add bogus fees and interest that in many states are illegal. Knowing how much you orig­i­nally owed and allowing for normal interest gives you a place of power to negotiate from.
• The debt has to be old. I’m talking really old. If you miss a single payment, the debt collector isn’t going to even hear a settle­ment. It needs to be 90 to 180 days old before a collector will consider a settlement.
• Deals vary wildly. There’s no method to debt settle­ment. The longer the debt has been outstanding, the more likely the creditor is to take a deal. A 5-year-old debt might settle for 30% of the original balance or it might not settle at all. However, in most cases, a 6 month or year-old debt will probably settle for 60–80% of the original. You just have to be persistent.
• Have cash. You need to have the total amount of the settle­ment in cash. If you say you’ll settle with them in three months when you’ve got the cash, they’ll laugh in your face! They don’t want promises, they want money. Don’t offer a settle­ment if you can’t back it up with cash.

If the debt isn’t old, you don’t have cash, or you aren’t realistic about the kind of settle­ments you can get, you’ll only frustrate yourself.

How To Settle

Now that you know how much you should owe, have cash in the bank and you haven’t paid on the debt in 6 months, you’re ready to negotiate.

When they call, let them know you’re willing to settle the entire balance for the amount you’ve saved up. Make sure they under­stand that this is cash money ready to put in their pocket if they’ll accept it.

Here comes the fun part.

They’re not going to accept it. They are going to yell at you, tell you their job is in jeopardy if they accept that low amount, or something similar to convince you to pay more than you have. Don’t fall for it. They’re a minimum wage worker in a cubicle 1,000 miles away. They’re paid to manip­u­late you emotion­ally so that you’ll pay them more. Tell them this is all you can do and it is all you are going to do.

Then hang up the phone and wait for the next phone call.

If you’re normal, this process can take weeks or even months before they finally accept the offer. In the mean time, they will yell at you, threaten to sue you, call you names, and laugh in your face. If anything like that happens, hang up on them. If you’re lucky enough to be sued, head on over to the court house and settle with the lawyer, they usually take the deal.

When the collector finally agrees to take the deal, you still have some nego­ti­ating left to do:

• Get the agreement in writing. If they won’t send you a letter that says they accept your settle­ment as “payment in full” (it needs that language) then don’t send them a single penny. You see, collec­tors lie. If they agree to a settle­ment and you pay them without getting it in writing, they’ll keep collecting from you. When you protest they’ll tell you that person lied, was fired, or that they don’t know what you’re talking about. Get it in writing or it didn’t happen.
• Only pay with a money order. They will want access to your checking account, but if you give it to them, they’ll clean you out and keep collecting from that account until you either change accounts or pay the balance and their ridicu­lous fees. Using a money order keeps you safe and keeps them honest.

They won’t like the idea of sending you a letter or accepting a money order, so you’ll probably have to have several conver­sa­tions where you make that offer before they finally accept it.

Once you’ve got the letter, mail the money order in a certified letter with return receipt requested. If you can’t prove they’ve got the check, they’ll say they never got it even if it was cashed.

Staple the money order stub and the mail receipt to the letter that says they accept your payment as “payment in full” and file it away somewhere safe. If you don’t keep the letter and the proof of payment they’ll come after you again in a few years (sometimes 10 or 20) and say they never got payment. Faxing them a copy of the letter, the returned mail receipt, and the money order will shut up and lying collectors.

Freedom Comes At A Price

Nego­ti­ating can be tiring, espe­cially when dealing with collec­tors. But if you go through the process you’ll end up without the weight of debt hanging over your shoulders.

Have you ever settled old debt? Do you know someone who could use this information?

This week it’s all about YouTube. I’ve got three clips I think you’ll like.

None of them have anything to do with money.

Akbar — Jeffery sings a song about his new friend Akbar. Can a man and some corn remain friends?

Movie: The Movie — Tired of seeing movies one genre at a time? Jimmy Kimmel has created the ultimate movie. (ps — they’ve evilly put an ad you can’t skip in the beginning; actual video starts at 20 seconds)

www.youtube.com/watch?v=w3NwB9PLxss

Amazing Basket­ball Ending — One of the coolest ends to a basket­ball game I’ve ever seen!

Getting out of debt was one of the best decisions I ever made. It relieved mountains of stress, made the first year of my marriage infi­nitely easier, and has made this website possible.

John White at JW Financial Coaching heard I was enjoying the debt-free side of the life and asked me to be a guest on his Debt Free Living Podcast.

We talked about how I got out of debt, how being debt free has affected my marriage, what advice I would give to someone who wants to get their finances under control, and I told a little bit of my financial story.

It was a lot of fun and has a lot packed into 30 minutes.

Listen to it by clicking here and let me know what you thought. I haven’t been on many podcasts, so comments, encour­age­ments, and advice are appreciated.

How did I do?

(This is part of the Selling Grandma’s House series. For the rest of the series, click here)

After choosing Brooke as our realtor, every­thing kicked into high gear. Brooke has proven to be an excep­tional realtor. She emailed me the contract imme­di­ately and was patient as I read it over and had my grand­mother sign it. The contract was long (11 pages) but my history as a paralegal helped me sort through all the legal mumbo jumbo and break it down for my grand­mother who was happy with it.

The majors of the contract work like this:

• Brooke is our only realtor throughout this process.
• When the house sells, she receives a 6% commission.
• We can end our contract at any time without penalty.

That last bit was important. If Brooke didn’t deliver, I wanted the freedom to switch realtors.

After dotting the i’s and crossing the t’s, Brooke and I discussed a price. After looking over compa­rable houses in the area, she suggested $50,000 dollars. I looked over the compa­ra­bles she sent me and thought it was a good price, but I wanted to end any nego­ti­a­tions as close to 50,000 as possible so I bumped it up to 53,000. She told me it might detour a few people, but still thought it was a good price.

We got her the key and security code and at that point she listed it. Continue Reading…

Normally, Monday is the day I do most of my writing, but I got pretty sick Sunday night and this is the only thing I’ve written. I’m already feeling a bit better so I plan to be back up by the time this goes live. Expect Today’s post tomorrow.

Spoiler alert: There’s some awesome stuff happening with selling grandma’s house!

God Bless,
–Alex

I need to write something, but it’s been a bit of a crazy week and I’m pretty burnt out today. Instead of doing the usual (picking a topic, thinking about it for a while, and then writing) I’m going to give an update on a few things that are going on in my life and here on the site.

I don’t talk much about me (except the occa­sional story) so unless you know me in real life you probably don’t know a lot about me.

For one, I’m 25. That shouldn’t be a shocker; I use to have that info on the about page. I talked about it a bit around my birthday as well.

Since I gave up pizza delivery, I’ve been making coffee drinks at a small inde­pen­dent franchise (not Starbucks, but similar). Like pizza delivery, I’ve already learned quite a bit but you’ll have to wait until a later post to learn about that.

Besides making coffee, I’ve been writing all over the web. I’m staff writing at two other financial blogs: Faith & Finance and Personal Finance By The Book. They’re both great sites that you should check out. They’re like my site, only less aggres­sive and with a more obvious Christian leaning.

Faith & Finance is a bit more big scale. Tim, the main guy, distances himself a bit more in his writing. He’s really good for money tips and obscure (and helpful) knowledge about things like when stamp prices are going up or when the best TV deals are coming.

Personal Finance by the Book is run by Joe. It’s similar to Entre­pre­Life in that it’s a smaller site where one guy gives his thoughts and opinions on money and finances.

Adding my voice to these blogs has been a lot of fun! I like getting write a bit outside my norm. It’s helped me develop my voice and intro­duced me to a lot of great people. If you want to have me guest post for your blog (it doesn’t have to be about money) shoot me an email.

In other news, A Stress Free Christmas is no longer for sale. The page is still up, but you can’t buy it anymore. If you missed it, send me an email and I’ll make sure you’re the first to know when I relaunch it later this year.

Besides that, I’m still working on selling Grandma’s house. Nothing to report, really. I’ll probably have a post about it next week, but most of what’s going on is boring: filling out paper work, deciding on a price, getting the relator a key, etc.

All-in-all I really enjoy where my life is now. There are some unique chal­lenges, but it’s the kind of stuff I enjoy.

PS — Read a few more personal thoughts at Personal Finance by the Book where I wrote the recent post, Words Are Like Wind.

What’s going on in your life?

This week’s high­lights is super-sized because I skipped last week. Follow me on twitter and you’ll see many of these links early:

30 Facts About Debt In America — It’s hard not to be shocked by this. “#5 For house­holds that have credit card debt, the average amount of credit card ebt is an astounding $15,799.”

10 Places Not To Use Your Debit Card? — Steve Stewart wrote this fantastic article a year ago. Unfor­tu­nately, it’s just as true today as it was back then.

You Think You’re Free? — Matt Rawling has a great article critiquing the FDA shutting down an Amish farmer for selling his milk to a few locals. You should also read the Wash­ington Times article about it. Completely ridiculous!

Academic Hypocricy- I’ll just quote this Thomas Sowell article, “if any business operated this way, selling customers something that was very costly in time and money, and which the sellers knew in advance was almost certain to disap­point their expec­ta­tions, academics would be bursting with indig­na­tion — and demanding full disclo­sure to the customers, if not criminal pros­e­cu­tions. But The Chronicle of Higher Education reports “faculty resis­tance” to collecting and publishing infor­ma­tion on what happens to a university’s history Ph.D.s after they leave the ivy-covered walls with high hopes and low prospects.”

Why Pirate TV Shows? — This great comic shows the pitfalls of trying to legally watch a TV show in the modern age. (warning: language)

What Publishers Can Learn From Airlines — This tongue in cheek article is required reading for publishers, book lovers, and anyone who has tried to fly recently.

Static Shock Blackout Trailer — I loved Static Shock when I was a kid and I was espe­cially happy when this fan film was funded on Kick­starter. Check out the trailer!

Not my high school…

Back in high school, my parents would give me a little bit of money on Saturdays so I could go out with friends after church (we had Saturday night services). Depending on the week, it was usually between 10 and 20 bucks.

The nerd that I am, I always squeezed every penny of that money so it would last the entire week. My friend Mike would drive (the only one of us with a car) and I would pay for snacks.

It was a good system.

As I think back on those days one thing I remember is how broke I was every Saturday. By the time Saturday rolled around, the money from last week was always gone. I tried to save some of the money a few times, but it never grew to more than a few dollars before I spent it.

My problem wasn’t my ability to save. At the same time I was spending this allowance, I was also holding onto birthday and Christmas money for months at a time. I’d get 50 or 100 dollars on these holidays (thanks to my big family) and hold onto it until I found exactly what I wanted: a special movie, a video game, the next Animorphs book. Something that would cost more than what my parents gave me.

And while saving my money was easy, the weekly allowances always disap­peared quickly.

An Obvious Truth

The differ­ence is obvious, isn’t it? It’s easier to spend someone else’s money. When my money was at stake, I was careful how I spent it. But my parent’s money? That I could spend without a second thought.

This, my friends, is the problem with taxes.

When govern­ments tax us, they’re taking our money to spend it how they see fit. I’m not anti-tax or anything. Taxes give us roads, a strong military, and other nice things. Unfor­tu­nately, the system also lends itself to overspending.

Both the Obama and Bush admin­is­tra­tions proved this with their bailouts. In a time when govern­ment spending was already at an all time high and the economy was at its lowest in decades, these admin­is­tra­tions spent close to two trillion dollars to postpone the inevitable recession. (Which they both failed to do).

What’s worse, after Bush’s failed attempt Obama did it again! Why would he take such a risk on the American economy? Because it wasn’t his money. To govern­ments, trillion is just a number. They don’t have to worry about things like budgets, savings, or the future because they think there will always be more.

Like me in high school, govern­ments assume they will always be able to get more money from their people. And if they mis-spend that money, it doesn’t hurt them because it wasn’t their money.

It’s A Problem

Over time, the tax mindset has really hurt the American people. Our govern­ment is horribly in debt; over­spending has become a detri­mental problem to the inter­na­tional economy; and the people who keep footing the bill are starting to get upset.

Upset like my parents got when I was angry after they wouldn’t buy me something. They knew I could work and save up for it so they told me to. I got angry and they asked why I was so willing to spend their money but not my own.

I didn’t have a good answer. And I don’t have one to the tax problem either.

Keep voting, I guess. Push for term limits when it comes up. Consider learning about the Fair Tax.

This post isn’t really about an answer, just a problem I’ve noticed for awhile that I thought you should be aware of.

What do you think we should do about the “someone else’s money” tax problem?

[Image by Kevin Dooley under Creative Commons license]

All his designs are unethical…

How do you know that a product you use is made ethically?

The answer is you can’t. There are too many loop holes and too many clever people to know that the business you’re buying from has made their product ethically.

Consider Fair Trade. Created to guarantee ethical treatment of employees in poorer nations, it has repeat­edly failed to keep clever people from using a few loopholes and over­sights to keep their unethical busi­nesses alive.

I’m not talking about “white lies” or other small unethical choices. I’m talking about things like slavery, pros­ti­tu­tion, and murder. The cotton in my shirt, the beans used to brew my coffee, and the diamond on my wife’s finger were probably handled by slaves at some point.

A few people may have even died creating the things I don’t think twice about. Continue Reading…