My Attempt At YNAB

Since April, I kept a budget, and since I have a strange enjoyment of organizing, it turned out to be easier than I thought. I became interested in YNAB because I wanted to know 1) why anyone would pay for a budgeting app when, even if you suck at spreadsheets, free apps exist (like the one I keep my budget in) and 2) if it’s as life-changing as the claims… claim.

I signed up, but changed my mind, so left the account. However, I forgot to delete it, so the free trial was close to running out when I remembered I had it. I started using it at the end of August. So far, it’s… meh.

Apparently, it’s based on a budget strategy called the envelope system, and I think real envelopes might be more useful (not that I keep envelopes anywhere). I essentially do the same thing I do with the free app I use. The one annoyance I have is I cannot budget my paychecks until I am paid. Considering I have my budget planned to the end of November, this is extremely irritating to me, so my budget in YNAB is not planned to the extent it is in the other app.

The reason I say real envelopes might be more useful is I move money around a lot. Apparently, this is encouraged, but since I can easily attain extra money if I want it, I alternate between categories like I’m playing with a pinball machine.

Supposedly, the idea is not to budget future money because anything could happen and you may not get that paycheck. Frankly, I want to know what crap jobs people are working for that to be a concern. Even when I worked in retail – a job that made me borderline suicidal – I never had to worry about not being paid. If the concern is losing your job, that’s different, but that would throw most people for a loop anyway.

All this said, I don’t think YNAB is bad. I enjoy playing around with it more than I probably should and, similar to why I use Mint (solely for my credit cards and student loans), it’s nice to see my accounts in one place. Speaking of which, the reason I was initially turned off by YNAB is they take a shot at Mint in their advertising. I’m not a fan of childish advertising, but I guess competition is nothing new.

The one thing I can praise YNAB for is customer service. I submitted a question to ask why I couldn’t connect one of my credit card. I got much more thorough answer than expected and an additional two weeks for my free trial, which I didn’t request or expect. Can’t argue with good service. I considered subscribing, so they ultimately cemented the decision.

I wonder if I’m doing it wrong. Even if moving between categories is encouraged, I can’t imagine you’re supposed to treat the software like a pinball game.

Only a week and a half passed since I began using YNAB, so I will give it more time. Some users are veterans of this software, so I suppose it’ll take a lot of time.

Too Much Credit

Me in 2018: How do people get in over their heads with credit card debt?

Once again, I need to stop talking! Then again, this blog is quiet as of late, so I suppose I have.

Constant advice I received about credit cards is “use it like a debit card”. Four years later, I’m paying off $10,000 worth of credit card debt. Why I took advice from the internet is beyond me.

When I wrote that article in 2018, my total limit between cards amounted to $2,700. One card had its limit decreased, but my total credit limit is now $9,810. My score currently sits at 620. One of my relatives with dozens of late payments has a higher score than me!

This year, I paid off two of my four student loans, and two of my credit accounts, although I’m paying one off again because I used it when my car broke down. Thankfully, I learned to budget like a maniac, and so long as nothing urgent happens again, I can get that balance paid off in two weeks.

My real debit card gets much more use these days, so much so that the chip is wearing down and it’ll likely need to be replaced before its expiration date in four years. I plan to keep my credit cards for emergencies only. A response I’ve gotten is I’m missing out on “tons of rewards”. Ignoring only two of my cards offer anything, and cashback turned out to be dreadfully disappointing, pursuing “rewards” is how I got myself into so much debt. Now, my reward is getting rid of it.

Hope Is Wasted On The Hopeless

In three days, I return to school. After all of the nonsense that happened, I should be happy to return, especially since I don’t have to pay as much as I initially did. The key word in that sentence is should.

I should be happy. But I’m not.

To pay off what financial aid did not cover, I have to make monthly payments, the first of which was due on the day I start school. Unfortunately, the time between receiving that balance and its due date were too close. While I have savings for this kind of expense, I’d rather not use it if I can help it. The result was I split the payment between my most recent paycheck and one of my credit cards.

I can pay the credit card off. There’ll be interest, but what that will amount to is barely a pinch in comparison. At the same time, this is the first instance I’ve put a large purchase on one of my credit cards. And since I’m still paying off a medical expense, it wasn’t really something I wanted to do. There was no option I wanted to do.

I’m not happy. I’m worried. I’m sad. I’m afraid. I’m frustrated.

The looming question in my mind, the one that stands over me like a collapsing tower, is: Is it worth it?

I have to hope it is, but debt, however necessary it may be, is never fun to owe. Putting any part of the payment on my credit card was a one-time thing. That I had to do it to begin with makes me hope completing this school is worthwhile, but fear more and more it won’t be. Excitement and fear are not two emotions that can mix within me. One kicks the other out, and in this case, fear has sent excitement packing. I feel unnatural as it is, being someone who’s just starting school while everyone else is graduating (two of my friends from high school graduated with their bachelor’s – one in chemical engineering, the other in psychology – just days ago), so more than anything, I want my time and money toward this school to prove to be worth the debt. Worth the stress, the tiredness, the temporary smacks to my credit score. But, admittedly, mostly worth the debt.

I won’t know if it’s worth it until the end. I have to hope it is. I have to believe it will be.

But I don’t know if I can!

Got Credit?

Things I need to do: stop talking. Too bad the chances of that are nil.

Almost a year ago, I mentioned I never want to have credit because, from the perspectives I got of many cardholders and reviews, it was overall a trap. Can I go back and slap myself now?

Okay, I still am cautious, but it turns out credit cards and debts aren’t so scary if you can manage them. Currently, I have a total of three credit cards and a limit across all three of $2,700. I only planned on one, but I was attracted to the second for its cashback reward and the third is a medical credit card, which is immensely helpful and allowed me to get the new eyeglasses I very much needed. I stick with the advice of spending less than 10% and several months of on-time payments with the first card was rewarded with an increase in my credit limit for that card. Before I attained the third card, my credit score read over 700, into the “good” zone, and I was very proud of that. The debt for my eyeglasses caused it to tank by a lot, but I’ve been assured it will climb again after I pay that debt off, which I have been doing steadily since. Thankfully, my job pays me enough to let me pay four times the monthly minimum payment so I can avoid interest after six months. With the other two cards, I pay off the balance in full every month.

Having just one credit card proved to be more helpful than I expected. It allowed me to pay for something I may have needed right then, but not have to pay with my own cash until I got my paycheck. That’s not to say I use my credit cards just for the heck of it, but they are used for small purchases like train tickets or a small snack to hold me over at work. The only “big” purchase I really use one card for is my cell phone bill, and I didn’t do that until I got the increased limit on the first card to avoid spending more than 10% of its limit. I don’t forget credit must be paid back!

I’ve had credit offers come through mail and email since I got my first card, and the offers have only increased since then. It’s gotten to the point I get at least one credit offer every week, some from the same companies I’ve already said no to. I just cut them them and throw them in the trash. I’d think the debt I have and my score tanking would decrease the amount of offers, but it seems like I’m now getting them simply because I have a pulse. One was even a pre-paid debit card, and it was not a sample card! It wasn’t activated, however, so I was able to discard it without consequence. Why the heck would I load a debit card with my own money when I could just use the one I already have from my bank that’s connected to an account with my money?

My experience does make me curious about one thing: how do people get in over heads with credit card debt? Barring medical and other unforeseen necessary expenses, and the company screwing you over (I’m not ignorant; I know some companies suck), it seems like credit card debt is the easiest debt to avoid. Yet, I’ve read of people being thousands of dollars in credit card debt, as high as $100,000 in one anecdote I read. I can’t even spend $100 in a week unless it’s for bills. I remember when I saw my first card’s limit increased and my immediate thought was, “What the heck am I going to spend that much money on?!” Of course, my viewpoints aren’t universal, but the point is reading of people in huge amounts of credit card debt that is not medical or other unforeseen expenses leaves me stunned.

I certainly don’t plan to acquire debt just because I know I can pay it off. I love not owing money to anyone! I cannot wait until my eyeglasses are paid off and the balance on my medical credit card reads zero. I could’ve paid it off with my savings, but I figured it’s better not to wipe out my savings account.

I have no regrets about getting a credit card. In fact, increasing my credit score is what let me get that medical credit card. I applied for it two years prior and was rejected because my score was awful. I had no idea it came with such a huge limit, but since it covered the whole cost of my eyeglasses, along with insurance, I’m very grateful. And yes, I know better than to max out my credit¬† cards! Not something I want to do anyway since, again, that money must be paid back! I also don’t plan to have a lot of credit cards. I do know a high limit of credit is good for your score, but I’m not someone who needs a lot of credit.¬† Then again, maybe I do to stay under 10% of my total limit.

Credit: A Necessary Evil

Lately, I’ve been researching credit cards and companies because my credit file is nearly non-existent. As much as that sucks because it makes some things harder, I think I’d rather put up with the lack of credit than deal with a credit card.

From what I’ve found, most of these companies are terrible, especially big ones like Capital One, which was full of reviews about how their customer service sucks and they’re terrible at handling fraud. I’ve had my debit card receive fraudulent charges before, so knowing how that would be handled is very important. Thankfully, it’s only happened twice, and each time, I was not held accountable for the charges and the matter was rectified immediately. Hell will freeze over before I do business with any company that would hold me responsible for something that isn’t my fault.

Aside from bad experiences, some of the requirements for these cards sound dangerous. Since my credit is close to none, I could only ever have a secured credit card, which apparently requires a deposit of up to $300. Which does make sense, but worries me for the sole fact that money is no longer mine. Apparently, if you miss even one payment, no matter how small, the company will run off with your deposit. That means the only way to ensure I don’t ever forget the bill is to use automatic payment, and I am not by any means allowing a company I have no trust in at the moment into my bank accounts (if they haven’t already gotten into them, considering a social security number is required to apply for these cards). The only company I have auto-pay set up with is my cell phone provider, and I didn’t even permit that until I’d been with them for at least two years. Also, the only way you get your deposit back (if they don’t run off with it, that is) is if you cancel the card… which will badly affect your credit score. How does that not sound like a trap? “You have to give us your money, but if you leave us, we’ll still damage you.” In short, either way, I’d be backed into a corner and screwed. The choices are stay with this credit company for life, even if I’m not satisfied with them, or take a hit because I dare to leave them. Sounds like an abusive relationship. At this point, I wouldn’t even want an unsecured one, though it’s not like the difference matters to me anyway.

The newest thing I’ve read is spending too much of your credit limit will harm your credit score. I have no intention of making large purchases on credit, but that’s besides the point. The point is you’ll be penalized for spending outside of your credit limit, but also penalized just for getting close to it. Why even have the limit? The point of a limit is “you can’t cross this line”, not “you can’t get this close to this line”. Yet on the flip side, I read about experiences where the credit company unknowingly closed the user’s card for spending too little. So, let’s get this straight. You can’t overspend (which makes perfect sense), you can’t spend too much within the limit, and you can’t spend too far away from the limit. I repeat: How does this not sound like a trap?

On top of that, those negative hits remain on your credit history for seven years. So, if I cancel one credit card to go to another, that first card is still badly affecting my score for over half of a decade later, no matter how well I’m doing with my current card. Or I miss one payment, but never miss another, and that one missed payment is still biting me in the behind for years to come. No times one thousand. Even my job isn’t that unforgiving, and they pay me!

The bottom line is I’d rather continue what I’m doing and stay as far away from credit cards as possible. Yes, I know having no credit history will make some things harder, but I’m not sure making a few things easier is worth trapping myself.