I'm sure at some point everyone of us has avoided opening a letter, a bill or ignored our bank statement in order to delay facing the music. Guilty as charged! I recently consolidated my student loans and the truth is I didn't want to know the exact number I owed. I just graduated from college with two degrees and finding work has been difficult, now I'm starting a business...the idea of paying my student loans for an eternity is beyond daunting. I even made a pie chart, Day 1 for this blog that was based on estimations of my debt...but the dreaded truth has been revealed. I owe $7,000 more then I estimated. BAM! Arrow to the chest.
But the saying goes, "The truth will set you free." How can I expect to intelligently pay off my debt if I don't have all the facts. I surveyed all my loan documents, visited websites and talked with a loan representative over the phone. (I recommend really educating yourself on any matter before talking with a representative--they can spin you in circles unless you are clear on all the facts and data) I learned quickly how to prioritize paying off my debt: The HIGHEST interest rate first. I heard author Dave Ramsey teaches a similar approach, his book is coming in the mail soon, I'm looking forward to cracking it open.
The List goes as follows:
- Credit Card 11.5% (look into lower interest rate card to transfer the balance)
- Private Student Loan 9.25%
- Govt. Unsubsidized Loan 6.8%
- Govt. Subsidized Loan 5.3%
- Consolidated Loans 1.54%
The credit card is my first dragon to slay! I began looking into smart ways to tackle it and I'm considering finding another credit card with a lower interest at a different bank. I have negotiated my interest rate before and got it down to 9%; I'm going to give it another shot! **YOU CAN NEGOTIATE YOUR CREDIT CARD INTEREST RATE - give your bank a call, if it doesn't work the first time, try, try again!** I'm also going to call other banks to get comparable rates and see if they are willing to negotiate. Check out these help links for comparing rates:
KNOWLEDGE IS POWER and when it comes to your finances you don't want to be powerless. So next time, tear open that bill and say "Here I am, B*tch"
On a similar note, always pay attention to those itemized fees and charges on your bills. Yesterday I opened my electrical bill and it was outrageously high. I almost peed in my pants. Instead of feeling defeated and just paying the price, I looked over all my bills with ConEdison. Then I noticed several errors. The biggest of them all, I was being charged for 59 days at double the price.
I went even further and contacted my neighbor who lives in an identical apartment using the same service. We compared bills and the results were astounding: 1) I had fees she didn't & 2) They were charging a different rate per kWh.
Then I took it one step further, I had my father who has a electrical background look at my bill. He was appalled at the rate .22 per kWh hour! He only pays .11 in Texas! He confirmed that I was being conservative with my energy usage (if it's plugged in its expending energy, so that plugged in computer cord or toaster your not using is still using 80% of your electricity) Then he asked if there was another service provider... I looked, there are third party administrators that claim lower rates .8 per kWh but they still go through ConEdison and their rates still apply!!! It appears that they have monopolized the business of servicing electricity. ;-{
I called ConEd and spoke to a representative---always ask for their name and use it! If you can, get personal fast, ask how their day is going--their desire to be helpful will increase. At first she tried to convince me I was wrong about my bill, but I insisted that I was being charged the wrong rate based on the wrong kWh. I had done my homework and she knew it! Immediately, she confessed that the ConEd workers were on strike during the month of July so all the bills were wrong and based on general estimations! My jaw dropped!!! I had developed a phone rapport with her and it paid off. She offered to send someone out on Monday to give me a real meter reading and she is personally going to call me to re-negotiate my bill! **It certainly pays to be nice!**
Lessons learned:
1) Don't avoid the financial truth
2) Organize debt by interest rates
3) Don't hesitate to negotiate
4) Knowledge is power, so do your homework
5) Pay attention to your bills, if you feel like something is wrong, your probably right.
6) Be nice but stern to the phone representative
7) If they can't help you, ask for someone who is higher up in power
8) Never fear!
Now go slay some dragons!!!
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