So, the hype got to me. Yesterday I headed to Verizon and bought a Motorola Droid, which runs Google’s Android operating system.

Last night my friend Luke Kilpatrick came over and we compared the Droid to the Palm Pre and iPhone. He’s a bit biased toward the Palm, and ran the first Palm Pre Dev Camp but he’s also a mobile freak and has an iPhone and an HTC Hero, which runs an older version of the Android OS. Plus we get together with other people at the Ritz and compare phones regularly and I know he is fair and knows his stuff.

Why did I buy the Droid when I’m a happy iPhone? Because for the past two days Dave Winer has been praising the Droid and because I want to stay up to date on what’s going on on the Android OS. It’s one thing to try a phone for a couple of minutes, it’s a whole nother thing to force yourself to use it.

For instance, if you see it in the store you might not see that the battery door keeps popping off. If it does that after only a few hours of use it’ll really bug the crap out of you after a year.

And that gives you some insight into why the Motorola Droid fails AS A PRODUCT when compared to the Palm Pre and iPhone.

Now, thousands of words have been written about the Droid here’s Chris Brogan who praises the Droid. CrunchGear did TWO in depth iPhone vs. Droid phone comparisons. Here’s the first. Here’s the second. I HIGHLY recommend reading these.

They are right that Android is an interesting phone because it has interesting technology that goes further than the iPhone. What is better about the Droid?

1. It has a FAR better screen. The screen is amazing on the Droid. The Palm Pre is similarly sharp but is very small.
2. Verizon is amazing. It didn’t drop on the usual dead zone on my route home. I have 3G in my house. AT&T? Major fail.
3. The call quality is noticeably better. Dave Winer and I did a comparison last night (we both kept our iPhones) and the phone quality is noticeably better.
4. There are some apps that are dramatically better. Google’s Voice (which Mike Arrington loves) and Google’s Sky Map are two that have already stood out. Other apps are noticeably not even close to as good. Facebook and all the Twitter apps, for instance, are a LOT better on the iPhone.
5. There are some features that are better on Android. The text completion, for instance, is better on Android. It shows you a selection of words it thinks you are trying to type. Dave tells me it learns, too, from your usage. Something iPhone doesn’t do nearly as well.
6. It has a physical keyboard. More on that later.
7. Developers say they like the Android platform better and find that they are able to push apps to customers faster than on iPhone. (Palm Pre has the same advantages and Kilpatrick points out that its developer platform is based on web technologies (Javascript and CSS) rather than on harder-to-learn Java.
8. Integration with Google’s apps (calendar, mail, etc) is better and deeper into the phone than on iPhone (new Gmails pop up on top with an icon, for instance).

Anyway, if you read all of these you might be already headed out the door to buy the Droid.

Here is why you might not want to head out the door yet and why the Droid just isn’t a great product (and, why, on the other hand, if you are a developer you should run now):

First, the out-of-box experience. My first reaction was “boy is the screen beautiful but boy am I overwhelmed by the complexity.” What do I mean by that? the iPhone has a far simpler UI. You can only drag it one direction, left and right. On the Droid you can drag the UI left and right and up and down. This introduces a LOT more complexity. I can see how geeks love it, though, because it’s like getting another monitor. More places to stick icons! Dave Winer told me I would get over this complexity. He’s probably right, because I’m a power user and can see the power in such an approach. It just doesn’t give you a nice out-of-box experience the way the iPhone does. Normal people will try this phone at a Verizon store and not even understand why it feels more complicated.

Second, the hardware. I totally disagree with CrunchGear on this point. Greg Kumparak said that the Droid is “a shining example of great industrial design.”

Oh, please.

It’s a phone an engineer could love. Compared to the iPhone or the Palm Pre it isn’t even in the same league. The battery door on the back proves my point. The iPhone? They just got rid of the idea of replaceable batteries and the Palm Pre spent a LOT of time making sure that having a replaceable battery did NOT make the phone have a noticeable door. The back of both the iPhone and the Palm Pre is smooth. The back of the Droid is not. That is NOT a shining example of great industrial design.

So, where else does the phone not measure up AS A PRODUCT?

The Web browser. Here, go to http://www.techmeme.com. The iPhone displays it properly. The Droid does not (the right hand menu is underneath the content area). This is one reason I’ve turned away from Nokia phones. If your web browser doesn’t work right on the first few websites I visit, what’s the chances it’ll work right on your banking site, or when you go to ESPN or something?

Where else does the Droid fall flat?

Well, last night we went to YouTube on all of the phones. Every phone displayed the high res videos except one: the Droid. Come on now, this is a Google OS running a Google service. It should work far better than the iPhone or the Palm Pre. But it doesn’t and there isn’t an obvious way to force the HD version to come down. Major fail.

What else does it fall flat on?

Most people, when I look at their iPhones, have a common set of apps. Facebook is #1 amongst them. When I visited Apple’s headquarters recently they had a huge screen with the top 3,000 apps displayed on it. Each app blinked when the app was downloaded. Which app was blinking the fastest? Facebook’s.

But Facebook’s UI sucks on Droid compared to iPhone.

Most people will see this and say Droid sucks. Just this one app will affect millions of people’s decisions as to whether or not the phone is a real product. If I were Google I’d make sure that Facebook had BY FAR the best app on Android and if they weren’t willing to play ball with you I’d build my own and put my best engineers on it.

And that comes to Twitter. The best Twitter app on the Droid sucks (everyone told me that Twidroid was the best app on the Droid for Twitter and, indeed, it has the highest ratings in the app store on the Droid). It does not even come close to ANY of the top five apps on the iPhone, not to mention my favorite, Tweetie. It is clear that the bleeding edge app developers are not yet putting their best work into the Android platform. That is quickly changing, Pandora’s founder, Tim Westergren, told me he is seeing the most growth in Android of all the platforms Pandora is available on and they are putting a lot of work into making sure Pandora rocks on Android, but it hasn’t shown up in the apps most people will try. At least not yet.

Some other reasons why the Droid isn’t a great product?

The keyboard and cursor control just don’t come up to the standards set by the Blackberry I had 10 years ago. It’s a low-cost glued on keyboard that just doesn’t offer that many benefits over an optical keyboard. I said on the podcast that I need a week to really give you feedback about why it’s unsatisfying, but here’s an example from my friend Steve Repetti: if you buy the optional case it peels the keyboard off! I talked with Steve last night and he said he almost didn’t write the blog post because he really wants Android to succeed (he’s a developer, are you noticing a trend?) but that he wanted to warn people not to use the rubber “bra.” This is an example of how the industrial design just wasn’t thought out. More and more I’m liking Apple’s decision to just get rid of the physical keyboard. Yes, people gripe about not having a physical keyboard, but no keyboard makes the device a simpler and better-thought-out product.

Another reason?

No multitouch. I just talked with Dave Winer about this and he says it’s the number one thing most people mention to him after he shows them his Droid. It doesn’t make sense, either, because other Android phones support multitouch (pinching to make things zoom in and out). If you really can’t use multitouch you MUST provide a better UI to zoom in. Last night I was at the Ritz with my Droid and tried to show some people some photos of Mavericks. I could not figure out how to zoom in. Later I found that the zoom control was hidden in the corner. Nice way to make me feel stupid. iPhone never had this problem.

Another reason?

In Verizon you could barely even tell that this was a huge product launch weekend. One dinky little sign. Now compare how Apple does the full-court press on its new products. Everyone is wearing T-shirts. There’s tons of signage. There’s tons of excitement. Our salesguy was excited but he was still carrying his old Blackberry. That spoke volumes to me that Verizon really isn’t behind the Droid. It’s just another phone in a long list of phones to them.

Another reason?

The camera sucks. First of all, it’s crashed on me several times. The iPhone and Palm Pre cameras have never crashed on me. Second, the iPhone camera seems magical. You can touch the screen to tell it where to focus. Don’t care about that? Yeah, the Droid has a flash but the flash in the Palm Pre works a LOT better (we took pictures last night in near darkness to compare). The iPhone also has a much better selection of photo apps to use and manipulate your images. Since the camera is an integral part of the experience, this one will leave most people unsatisfied. I do love that the phone says “5 megapixel” right under the camera. The iPhone doesn’t (it’s only a 3, but I found the camera quality to be about the same so far, so even the extra megapixels amount to little more than talk without action).

Anyway, I could keep going. I’ll keep it at least a week and push myself to use it. The voice quality is so much better that I might just use it as my phone and keep the iPhone for other things. I’m fortunate that I can afford to do that, but if I were forced into picking one, today, I’d pick the iPhone without hesitating and I’d recommend the same to everyone.

I told Dave Winer that it looks a lot like Windows 3.1. The Mac back then was way better, but we all know that Apple ended up in 1995 with a small market share compared to Windows 95. The thing is, the Droid is Windows 3.1. It is showing the momentum is shifting but now Google has to ship their metaphorical equivalent of Windows 95. It isn’t this phone.

That said, what do you think? Am I missing something?

Excerpt from:
The Droid fails AS A PRODUCT when compared to Palm Pre and iPhone

If you use any of this work, please link back to - OpenSourceBlogging.org or the author’s original link as the source.

Marti writes in with a question about the second step of Your Money or Your Life:

Step two, and I’m sure you remember, is about figuring out what hourly wage you’re actually earning at your job, once you factor in the commute, clothes for the job, lunch food and fast food, etc. I’m looking at the category “Escape Entertainment” and I’m a little stuck. Yes, I have cable. Yes, I have a Netflix subscription. Yes, I follow several weekly TV shows. But I don’t necessarily consider those escape entertainment. I never sit down in front of the TV just to channel surf and zone out. If the TV is on, it’s so I can explore characters and stories of a fictional world that I thoroughly enjoy, much the way I would a good book. “Bones” for example, is a show that I enjoy and watch regularly. “Stargate: SG-1″ is one of the shows that my husband and I have on our Netflix queue because we’re huge sci-fi fans.

Yes, I know that the time spent watching those programs could probably be “better” spent playing a game, or going for a walk, or reading, but I don’t consider them escapist entertainment. Am I wrong? Is TV (or for that matter, a pulp-fiction novel) by its very definition an escape, no matter how you look at it? And what about movies? I’m an avid movie-goer. Not because I hate my job (it’s not perfect, but it’s interesting and challenging and if, at the end of two years, I’ll be moving anyway, so it’s really only temporary), but because I truly enjoy movies.

But am I missing the point? The authors write, “Notice the common phrase, ‘escape entertainment.’ Escape from what? … If your experience of life were consistently fulfilling and exciting, from what would you escape?” (pg. 62 – 1999 ed.) And that begs the question, am I actually using those hours in front of the TV or movie screen to escape, and just telling myself that I want to be doing it?

So what do you think? Should I factor the expenses of those movies and subscriptions and the time of watching them, into my “actual hourly wage” as they suggest, or should I leave them out, because I’m not using them as a way to decompress or escape from my job?

Marti raises several very good points here that are each worth adressing.

Not All Entertainment Is “Escape Entertainment”
First of all, there’s a big difference between escape entertainment and ordinary leisure time One is part of a healthy normal life, while the other can be a sign of significant trouble.

I would distinguish between the two as thus: entertainment contributes a significant positive value to one’s life that’s independent of the other aspects of one’s life. Escape entertainment contributes a short-term positive, but only in the sense that it’s reducing the impact of a negative in one’s life.

The reason this distinction is so confusing is that escape entertainment and ordinary entertainment have a lot of overlap.

Take me, for example. One of my favorite television shows is Mad Men. I often enjoy watching it in the late evening after the kids are in bed. It makes me think about a lot of social and cultural issues: what constitutes a marriage? What impact does advertising have in our lives? The questions go on and on. Beyond that, I simply enjoy the well-written plots and characters in the show.

Yet, for a week in the middle of October, when my book deadline was staring me in the face, I had a tremendous case of writer’s block. I was nervous and anxious about the book. And during that week, I spent quite a few hours watching old episodes of Mad Men.

However, this time, it wasn’t enjoyable entertainment. It was escape entertainment. It was helping me to avoid something I didn’t want to face.

In other words, it’s not about the entertainment, it’s about the context. Why are you enjoying this entertainment? Is it because it fulfills you or is it because you need to unwind? Is it because you’re trying to avoid working on something else or is it because the entertainment itself is bringing value into your life? There’s no cut-and-dried answer for this – it’s one you have to look inside yourself to discover.

Do We Need to Escape?
The next question is whether or not escape entertainment actually fills a role in our life. Do we need escape entertainment to unwind or to reduce the stress we feel from our work?

My belief is that we do need an escape valve of some sort in order to help us deal with stress. Escape entertainment is an easy valve for it, but the problem is that it’s a horribly inefficient valve. Rather than focusing your energy on calming down and unwinding, you split your attention between the entertainment and the valve you’re trying to release. The end result? You don’t get much value out of the entertainment and you’re still stressed out.

As I sat there watching Mad Men, I’d often realize that I didn’t really feel any better. I’d also often realize that I had little idea of what was actually happening on the show. I would space out and think about the work I needed to do or about other things I was avoiding. Afterwards, I didn’t feel much relief at all.

The Cost of Escapism
Another problem with escape entertainment is that it’s often expensive for what you get. A new video game bought as fulfilling entertainment (I’m a big believer that interactive entertainment can be very fulfilling) is very worthwhile. A new video game bought as escape entertainment is money spent just to delay an unpleasant feeling.

Even worse, the time invested in escape entertainment is often immense. I remember countless hours playing Warcraft II in the dorms as I avoided my schoolwork, for example. I remember at one point during my previous job, I would come home and watch two episodes of Lost every single night after work.

Those hours lost are themselves a cost, since they’re not actively fulfilling you nor are they reducing your stress levels. You could likely be spending those hours doing something to actually eliminate whatever it is that is bothering you so deeply.

A Better Solution
If you wish to be entertained, seek entertainment. If you wish to de-stress, de-compress, or escape from the situation, do that. Go into a quiet room, turn off the lights, sit down, and close your eyes. Breathe in slowly and deeply. Try to clear your mind of all thoughts. Let the relaxation wash over you.

For the last year and a half of my previous job, this was my routine when I would arrive home from work. I would literally go in, lay down on the bed for about twenty minutes with my eyes closed, and think about nothing. I’d breathe in deeply, breathe out deeply and slowly, and just let my mind and body drift away. After twenty minutes, I would feel tremendously refreshed.

I also find that this works as a great de-stresser and a powerful way to break through writer’s block. Even better, one can easily do this in the shower. Go home after work, take a shower, and then do this under the water.

Here’s the take-home message: escape entertainment can be dangerously expensive in terms of both time and money. Find ways to split the two and you’re much better off – escape through meditation and prayer to quickly relax, and entertain yourself in ways that truly add a positive value to your life. Both avenues are often far less expensive than pure escape entertainment and leave your life in a better place.

Read more:
What Is Escapism? How Does It Cost Me?

If you use any of this work, please link back to - OpenSourceBlogging.org or the author’s original link as the source.

Many newer readers of The Simple Dollar haven’t been exposed to the hundreds of great articles in the archives of the site, so this is a weekly series that highlights the five best posts from one year ago this week, two years ago this week, and three years ago this week. I call it … the Time Machine.

One Year Ago (November 1-7, 2008)
Lessons from that Old Coffee Can over the Kitchen Sink This post makes me feel good because it conjures up one of my few very vivid memories of my paternal grandmother, who passed away when I was seven. Almost all of my memories of her make me feel as though she loved me very much.

A Guide to Winterizing Your House Winterizing your home can be a very powerful way to cut down on your winter season expenditures.

Excuses, Excuses It’s incredibly easy to make excuses. It’s incredibly hard to look past them and realize that often you have only yourself to blame.

The Suitcase Test: The Things You Really Need For me, this was a really powerful thought experiment. I do it every once in a while and it gives me great insight into what’s important and what’s not important in my life.

How to Focus in a Heavily Distracting Time These are the tactics I use when I have to work near the holiday season. For example, it’s two days before Christmas, I’m trying to get some work done, and there’s nothing but chaos around me.

Two Years Ago (November 1-7, 2007)
Revisiting The Happiness Scale This is a pretty interesting revelation about the things that bring us happiness in a given day and how it relates to how we spend monney.

Review: Born to Buy While it doesn’t offer personal finance advice per se, I found that Born to Buy had more impact on my decisions as a parent than any book I’ve read so far (except for perhaps Mindset).

Should I Eliminate Financial Support For My Child After High School? This one really fired up some debate. I’m in favor of eliminating such support, by the way.

Should I Go Without Health Insurance For A Better Career Situation? I really hope that this question becomes a non-factor in the near future. The lack of opportunity to buy health insurance shouldn’t restrict anyone from making a good career choice.

How to Construct a Killer Resume, From Start to Finish The advice here still generally holds. I’ve long thought about making an updated version of this article with a real-world example in it.

Three Years Ago (November 1-7, 2006)
Turning Off The Financially Irresponsible Mindset This article includes five really simple and straightforward tactics for changing your financial mindset. I really like how some of the earliest articles on The Simple Dollar reveal nascent versions of many of the values I’ve come to rely on in my life.

Liquid Laptop Accident? 9 Steps To Save Your Laptop I still remember this horrible, gooey mess like it was yesterday.

14 Ways Your Computer Can Put Money In Your Pocket I believe a home computer can be one of the greatest resources for saving money in a home.

The Road To Financial Armageddon #5: Love and Marriage This is a partcularly painful entry for me to read now, because I see that our shared love didn’t have to be signified with a spending orgy.

The Road to Financial Armageddon #7: Here Comes Baby That baby wound up being the inspiration for our financial turnaround.

If you’d like to browse through more of the archives, visit the chronology, where all posts are listed in chronological order.

Nine Ways to Get More out of The Simple Dollar
This is kind of a FAQ for new readers and is posted each week along with the Time Machine. Here are nine great ways for new readers to dig deeper into The Simple Dollar.

1. Subscribe by email or RSS. Visiting The Simple Dollar’s website is great, but for many people, it’s more convenient to receive the articles in another form. It’s easy to join 60,000 other subscribers and get The Simple Dollar’s content by email or in your RSS feeder (if you’re unfamiliar with RSS, check out Google Reader.

2. Comment. Each article on The Simple Dollar has lively discussion. Just click on the green square in the upper right of each article on the website and join in!

3. Read my story of financial meltdown and recovery. The Simple Dollar isn’t based on what I’ve read in books or learned in school. I’ve made a lifetime of financial mistakes – The Simple Dollar is a record of what works for me during the process of getting my life on a better track.

4. Download my free 49 page e-book. Everything You Ever Really Needed to Know About Personal Finance On Just One Page is completely free. It summarizes all of the key lessons I’ve learned along the way about personal finance in one tidy package – in fact, all of the main principles can be found right on the cover.

5. Follow me on Twitter – or other social networks. I post tons of interesting articles, quotes, follow-up material, commentary, and other material on Twitter. Follow me! If you’re unfamiliar with Twitter, it’s essentially an open discussion forum for people to share ideas and thoughts with other like-minded folks – you just choose the people you want to listen to and their ideas and thoughts are all delivered to you on a single page.

I also participate on several other social networks. Feel free to check me out on del.icio.us (it’s where I collect links, from which I select the ones that appear in my weekly roundups), wakoopa (what software I use), GoodReads (what books I’m reading), Facebook, and FriendFeed (which aggregates everything). I also have an irregularly-updated personal site, TrentHamm.com.

6. Dig through “31 Days to Fix Your Finances.” 31 Days to Fix Your Finances is an article series that outlines how you can get a grip on your finances over the course of a month.

7. Send me your questions and suggestions. Send me an email and let me know what you’re thinking, what you’d like to see, and any questions you might have. I try to respond to as many emails as possible and I read them all. I may even use your question in a future article!

8. Become a “Friend of The Simple Dollar.” If you find the stuff on The Simple Dollar valuable and are willing to spend five minutes or so a month to help me out with small things, please consider signing up to be a “Friend of The Simple Dollar”.

9. Email a great article you find to a friend. Find an article that you think your friend would love? At the bottom of each article, you’ll find a link that says “Email this” – just click on that, type in your friend’s address, and send it right along to them!

See the rest here:
The Simple Dollar Time Machine: November 7, 2009

If you use any of this work, please link back to - OpenSourceBlogging.org or the author’s original link as the source.

About a year ago, my mother decided to re-do the guest bedroom in her home. Before starting out on the project, she outlined her project to several of her friends, not asking for a single thing beyond advice. The end result? One friend gave her a crib. Another friend gave her a children’s bed. Another friend gave some paint to help refinish the room.

A few months ago, I needed some small cloth drawstring bags for a small project. Instead of just heading to Hobby Lobby, I told several people that I know about the project and mentioned that my next step was to get the drawstring cloth bags. Within a week, I had more such bags than I needed.

These two stories have an obvious connection in common. By exerting a bit of patience on projects and talking to others about those projects, we found success without having to ask for it.

Why did this happen? There are several factors at work.

First, in neither case did we ask for anything but advice. The items we received from people weren’t as a result of a specific request or out of greed. They were delivered out of goodwill.

Second, most people want to help others, particularly if it’s convenient. When a friend tells you a story that’s easily solved by a simple action, most people will respond by fulfilling that simple action. They won’t go to extraordinary lengths to make it happen (at least not normally), but if there’s something a friend can conveniently do to help you, they often will. Plus, they’ll feel great about being able to help.

Third, even if a friend can’t help materially, they’ll often help with good advice. Your friends will see your situation from a different angle than you do. They might know of opportunities, techniques, or other such information that can transform your project.

Fourth, the person actually working on the project showed patience. Instead of just throwing money at the problem and rushing around to complete it – something many of us do in the rapid-fire modern world – patience was exerted. They sat back, asked around, and found a better solution.

Fifth, such value exchanges strengthen friendships on both sides. Not only does the giver feel good about being able to help a friend, the receiver feels good as well because of the generosity of their friend. It’s the type of value exchange in which both sides win.

To put it simply, it’s well worth putting the word out in your social network if you’re working on a project of any kind. Simply tell your friends about the things you’re doing and seek their input. Time and time again, they’ll be happy to give their input, whether you choose to use it or not, and quite often they’ll provide someting of great value to you.

Of course, the reciprocal is true – when your friends ask you for advice and you can easily help them, you should provide the same help. If you have useful advice or information, provide it. If you have an item that could easily solve their problem (and you have little need for it), give it.

After all, in the end, what is a friendship beyond a long series of value exchanges? We are constantly doing things for our friends that lift them and our friends constantly do things for us that lift us.

The real lesson here is the value of patience. The utilization of one’s social network is just one piece of the puzzle. Without patience, both stories would have ended with a trip to the store, less money in hand, and a shallower connection with the people in one’s social circle.

If there’s a project you’re working on that’s not incredibly urgent, be patient. Put out the word about your project. Gather input. You might be surprised at the things you discover and the value you find.

See the rest here:
Putting Out the Word

If you use any of this work, please link back to - OpenSourceBlogging.org or the author’s original link as the source.

“Dear Steve,

Married couple, I am a CA State Employee who had a reduction of pay of approx. $700.00 a month. We have two car payments and a mortguage, in addition we have credit cards debt of approx. $25,000. THe payments of the credit debt is approx 1,4000 a month and seems that we are living paycheck to paycheck and we hate it.

We would like to reduce our credit debt but because of paycut we are only paying minimum payments. I did contact B of A on one of the credit cards and they reduced the finance rate on one card to 7% and they told me that the account will reflect closed by customer. How can we reduce our interest rate and get out of financial debt without any affects on our credit? I hate the situation we are currently in. We need help,

Martha”

Dear Martha,

If you can afford at least your regular monthly credit card payments but want an interest reduction then a debt management plan is the best bet. However, while your credit report won’t reflect you are in a debt management plan, the cards included will be closed by the creditor and that could impact your credit score.

But while the credit report and credit score are important, that’s not the real problem is it? The real problem is that the reduction in pay has left you at the breaking point each month and all it will take is one unexpected expense to throw you under the bus and all your credit will come tumbling down.

You should explore the debt management solution but after looking into it, if the payment seems to high to sustain for a long period of time, come back, let’s talk about other more drastic options.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big hug.

Steve
@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: California State Employee is Suffering From Pay Cut Disease. – Martha

Other Related Articles to Read

• We Are Barely Making Our Bills Each Month. – Tiffany
• I Make Over $80K a Year But Living From Paycheck to Paycheck. – Jennifer
• I Am Single, No Savings, 51, and Live Paycheck to Paycheck. – Tamara
• My Mortgage Went Up and My Income Went Down. – Damarys
• We Spend $1,000 More Per Month Than We Earn. – Tracey

Source: California State Employee is Suffering From Pay Cut Disease. – Martha

“Dear Steve,

Thank you for providing such a valuable service during these difficult economic times.

I am getting married in the spring of 2010. We have been discussing each other’s finances and unfortunately she will be bringing with her a mountain of debt. She is 50yo, Gross income is $120k, $45k of credit card debt, a condo that is valued at $100k that she owes $145k on, No savings, $60k in retirement adding $0k/yr. I am 47yo, Earn $85k gross, have a condo @ $225k/30yr @ 5.0%, $55k savings, $125k Retirement adding $15k/yr and a 50% Pension. From what I read she earns too much to declare bankruptcy, would it be wise for her to let the bank take her condo and tackling the $45k in credit cards with my savings?

Thx >

Sammy”

Dear Sammy,

Savers attract spenders. It’s the old opposites attract thing.

Purely from a practical point of view I think the best thing to do is tidy this mess up before you are joined in wedded bliss.

It sounds like you are not going to keep her condo anyway after you get married and selling it really isn’t an option. Also, she’s maturing and currently not saving any money towards retirement.

While some others might chastise her for considering bankruptcy, just purely from that practical point of view I mentioned, I don’t think it is entirely unreasonable.

Let’s look at it like this. Let’s say she hands the condo back and then enters a Chapter 13 bankruptcy for the next three years. It would be best to do that now before you are married. At the end of three years she’ll be totally debt free and you’ll have a clean slate to start from. You can help her to be responsible and start saving.

I admit that sometimes I can be a bit cynical but I think if you simply bail her out with your savings you are sending the wrong message. You don’t want to sacrifice your good savings by investing to try to address her bad behavior. Besides, I think a dose of pain will help her to wake up and get back on track.

Let’s not forget that it’s not going to be just $45,000 of credit card debt. The bank is also going to come after her for $50,000 or so for the deficiency from taking the house back. Do you plan on sacrificing more of your savings for that as well?

I think the two of you should find a local bankruptcy attorney you like and go in and discuss this matter together. Then go home, mull it over, and see if it makes sense to the both of you. If you want to make an investment to bail her out, pay for her bankruptcy.

Bottom line, this is her financial cesspool and it should be her responsibility to clean it up without dragging you in. That’s just not fair.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big hug.

Steve
@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: I’m Getting Married and Discovered She Has a Mountain of Debt. – Sammy

Other Related Articles to Read

• A Question Update From Sarah – Communication, Relationships, and Debt
• I Don’t Want to Get Married With Debt. – Brandi
• I’m Getting Married to a Guy That Has Not Paid His Credit Card Bills in 6 Months. – Monique
• I Just Turned 26. Should I Liquidate My 401K to Pay My Debt.
• I Went Bankrupt in 2005, I am a Disabled Vet, and My Student Loans are Coming Due. – Ben

Source: I’m Getting Married and Discovered She Has a Mountain of Debt. – Sammy

Editor’s note: This is a guest post from Annabel Candy of Get In the Hot Spot.

Did you know that moving house can be one of the most stressful times in your life? It’s right up there with losing your job, divorce or the death of a loved one, as one of the biggest causes of stress.

I’ve been there. In 2007 my husband and I sold our house along with most of our belongings and moved from New Zealand to Panama with our three young kids. We ended up spending 18 months in Central America and lived in Costa Rica for over a year during which time we moved house three times.

Moving house was easier in Costa Rica, because by then we’d got rid of most of our possessions and had less to cart around with us. We got good at giving things away, selling them or just chucking out all that rubbish that clutters up our lives.

Moving out of our home in New Zealand was the big one. I certainly felt the stress could come but managed to change that pressure into a buzz so I could enjoy the excitement of change and new beginnings. In the end moving house and countries was a fun way to declutter our lives.

Tips for a stress free move:

1. Get organised in advance. If you leave everything until the last minute it will be stressful. We sold our house five months before we left and then rented it back from the new owner. That way we could relax with the cash in our bank account and not worry about how we were going to finance the move.

2. Start selling non-essential items three months before you leave. Clutter and things you don’t use much build up in any house, especially if you have kids. You’ll find that there are plenty of things you can off-load two or three months before your move. Stuff like toys, tools, kitchen equipment, many clothes and everything that’s broken, or that you never use but have been saving for a rainy day.

3. Organise your personal belongings and paperwork. Get a concertina folder for essential documents like passports, birth certificates, and other certificates and keep them all together. Sort out your personal photos – put them in albums and chuck out all the blurred and boring ones. Give all the kids a memory box – a shoe box will be about the right size for them to keep all their school reports, photos, pictures and keep sakes in. Keep the box small – they will fill it!

4. Maximise this opportunity to minimalise. There’s no point in keeping too much stuff if you’re making a big move. Sending it overseas may cost more than replacing it and this is the ideal time to become more minimalist and get rid of all the possessions that are compromising your freedom. Make a list of everything you want to sell but need to keep until you leave: furniture and big electrical items such as the fridge, washing machine, stereo and dryer.

Write an email with title, description and price. Just sell everything for half what you bought it for. Remember, you want to get rid of it. Now email this to all friends and colleagues who live nearby. I predict a feeding frenzy. Print out the email, ask people to commit to buying something and add their name by the item. Ask them to swing by on moving day and pick it up. Simple yet effective and your friends will be delighted.

5. Have a huge garage sale for smaller items. Think of it as being paid to clean out your house and declutter your life. Again, remember to sell everything for a low price because your main aim is to get rid of stuff. If you’re not comfortable making money from selling your old clothes, toys, crockery and books then mention in the garage sale ad that all proceeds will go to a worthy cause, like Guampedia or your favourite charity.

By now your house, cupboards and garage should be looking nice and empty which will make cleaning easier. Don’t pack or store any breakables unless they have sentimental value or are not replaceable. Things like crockery and glasses can be picked up when you get there.

6. Packing. You can start packing up things you’re taking early too. Buy a big roll of bubble wrap, masking tape, cardboard corners for pictures and some tea-chests from removal company then pack a few things each night or blitz the lot in one day.

Give the kids one small box each for toys they want to keep. This will focus them on not over-packing and on getting rid of everything they don’t need any more. Tell them you’ll use some of the proceeds from selling their old stuff to fund a great family outing from your new home.

7. Moving day. When your friends come round to collect all the stuff they bought offer them all the crockery and glasses you needed until the last moment. If they don’t want it ask them to drop it off at a charity shop for you. They’ll be so pleased with the great deals they got from you they’ll be happy to oblige. Finally have a good clean up or use some of your garage sale money to hire a cleaner.

Boom! You’re out of there.

With less clutter tying you down, the world is your oyster. Just imagine if you were really good and got rid of it all, you’d be free as a bird.

If you’re like me you’ll enjoy the process of clearing out and moving house. Plus, it’s great knowing that your friends will think of you every time they open that beautiful old trunk you spent weeks restoring.

So you thought moving would be stressful? No way. Just adopt these zen habits before making a move and debunk the myth that moving house is stressful forever.

Read more from Annabel Candy at her blog, Get In the Hot Spot, a virtual treasure trove of inspiration, information and idiosyncrasies for people who want to live their dream. Or make her day and keep yourself updated on the latest articles, by subscribing to the free RSS feed.

More here:
Low-Stress Ways To Move House and Declutter Your Life

If you use any of this work, please link back to - OpenSourceBlogging.org or the author’s original link as the source.

“Dear Steve,

My wife and I currently have credit card debt of about $60,000. In addition to that we have 2 mortgages and 1 car payment with about 1 year remaining. We both have incomes, and are barely able to make the minimum payments.

We aren’t behind on any of our debts, but continue to live a lifestyle where we are putting groceries and gas on a credit card and not cutting down to the bare minimum on expenses. We are not friviolously spending money all the time, but probably spend at least 100 bucks a month on stuff we don’t need (daily purchases) and probably about 200-250 bucks a month on monthly things that we feel we need to maintain a certain lifestyle (maid/cable, etc). I am just overwhelmed with our debt number.

I have been a little more worried than my wife has been, and she manages paying the bills. Should we seek credit counseling or debt management before we start falling behind? Any ideas for good budgeting tools to help us look at how much money we waste monthly? I don’t want to file for bankrupcy, but with the amount of debt we have, and no real emergency fund right now, I know that we are just a blink away from having to consider it. We can’t even start a family because of the situation we have put ourselves in.

Scott”

Dear Scott,

It seems like I’m always suggesting bankruptcy, but here is a new one, not in your case.

First, let’s look at what is driving your concern, financial panic. It’s totally normal and natural. But before we wheel out the big legal cannon to deal with your debt, let’s take some baby steps.

Right now you are earning good money but operating in a fog. I seriously doubt you are tracking all your expenses and totally aware where the money is going. The first thing we need in your situation is clarity. And how do we get that? Tracking.

There are a couple of ways to track and budget. They range from traditional approaches like writing down when you spend any money on a pad a paper and what it was for. Or you can use more modern tools like the online service Mvelopes. The best solution is going to be the one that works for both of you. The Mvelopes approach may work better for you if you both have access to the web during the day and can quickly login and enter what you spent.

Simply tracking your cash will cut your spending by about 20%. This is because once you start tracking spending you become more aware what you are spending on and then make decisions to alter your spending habits.

Now tracking the cash can sound like a painful and boring exercise. Personally, I hate doing it but you don’t have to do it for ever if you don’t want to. Just promise me you’ll do it for at least three months.

Now the benefit of the tracking is awareness but it is also clarity. Once you know where you money is going you can then make conscious and educated decisions based on facts about what you might want to cut back or cut out.

This approach works so much better than the traditional budget approach. A budget is a wish list on how you’d like to spend your money and tracking the cash is a measurement of where you actually spend your money.

Try this approach first and build in some immediate savings. Just open a savings account at your local bank and transfer $25 a week into ti. You should be able to easily do this once you start handling your cash with clarity.

After you track the cash for three months, if you are still in trouble, come back and we can talk about the path forward. Does this sound like a reasonable and responsible path forward to you?

Oh yes, to reduce your debt with the most motivation, use the debt snowball approach. Trust me, it works.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big hug.

Steve
@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: Any Suggestions for Good Budgeting Tools to Dig Out of Debt? – Scott

Other Related Articles to Read

• My Fiance Left Me With His Bills. I Am Struggling to Get By. – Angela
• I Have Big Debt. I am From Guatemala. – Rebeca
• I Have Sleep Apnea and Debt. What Should I Do? – Karen
• My Wife and I Made Mistakes. I Can’t See a Way for the Family to Get Out of Debt. – Gary
• I Am Bankrupt What Do I Do Now? – Mary

Source: Any Suggestions for Good Budgeting Tools to Dig Out of Debt? – Scott

“Dear Steve,

Retired – husband 69 and I am 65

Husband worked for a now defunct airline for 28 years so pension is minimal from PBGC. I have an IRA worth about $210K (withdrawing $10K lump sum annually). We are both currently collecting social security. My husband has two part-time jobs and I have one part-time job producing an insignificant income. Our house payment is $1575 per month and we have two aging automobiles…1998 with 186K miles and 2004 with 110K miles. We need to buy another car and wondered if I should take the money from my IRA to buy a used car. We are currently very tight with out monthly expenses and having a car payment would really be confining for us. I know we are looking at approx. 10% taxes if we take the money from the IRA vs. a lower interest rate for monthly payments but it would really be tight to add more debt per month.

Your thoughts please.

Should I take the money from my IRA to purchase a used car knowing I will be paying more in interest than on a conventional car loan???

Brenda”

Dear Brenda,

My gut reaction is don’t do that. Not only will you pay a penalty but you will lose whatever growth that money will make if you leave it in as long as possible.

There are enough good car loans out there right now for you to examine those first. For example, eLoan.com offers used car financing for people with good credit, which it sounds like you have, for 5.69%. If you see what eLoan.com will qualify you for you can then go into the used car dealer, like CarMax and ask them to beat that offer. If they can’t then you’ve got a good deal. They’ve always beat it for me.

I think the goal here is to not set your sights too high for a luxury car. You need reliable transportation. I’d look at a car that was about three years old so you can get the maximum depreciation but still get a relatively new car.

So I took a look on CarMax.com for a car that looks like it would meet your needs. I found a 2006 Mitsubishi Lancer ES with 34,000 miles for $9,849. The monthly payment on that car would be about $188 a month.

I realize that your issue is one of monthly cash flow but do you think that $188 a month is doable for you? If it makes it too tight then consider upping your annual withdrawal to $12,500. The extra money will cover the car payment and you can leave the maximum amount in the IRA to grow.

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big hug.

Steve
@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: Should We Take Money From Our IRA to Buy a Car? – Brenda

Other Related Articles to Read

• My Husband and I Are Just Barely Making the Minimum Payments. – Janet
• 75% of Americans Will Work as Long as Possible to Make Ends Meet
• My Husband Was Forced Into Retirement and I Only Get Social Security. – Susan
• I’m 69 And Lost My Job But I Want to Pay My Debts. – Chuck
• I Invested in Real Estate Using Credit Card Convenience Checks. – Tina

Source: Should We Take Money From Our IRA to Buy a Car? – Brenda

“Dear Steve,

Hi my name is Glanda, i go to school. i got myself in a debt that i cant even pay back. how can i try to pay back slowly? i really need help with that. i dont even work anymore. iam really confuesed with this pls help me. iam willin to listen to any advise you give me just to get out because this not gettin any better but worst everyday. pls reply me back as soon as possible pls bye

Glanda”

Dear Glanda,

So you want to know the magic answer for breaking out of debt without any pain. I’ll tell you the honest truth, there is no way to do that.

Digging your way out of debt will involve the pain of legal intervention like a petition for bankruptcy in Canada with the help of a bankruptcy trustee or for you to work harder and earn more to repay your debt.

If you want to avoid bankruptcy then you may have to make the difficult decision that you will need to put aside whatever it is that you are doing now that occupies your days, like school. That might mean dropping out of school in order to get a full-time job to make more money.

As you can see the options are really between two polar opposite choices but that’s the way life goes sometimes. Sometimes the choices we have to make are between the lesser of two evils rather than two perfect options.

So how much debt do you owe and what kind of debt is it?

Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.

Big hug.

Steve
@GetOutOfDebtGuy

P.S. Be sure to read ‘The Secret of Surviving Through Difficult Economic Times. What I Learned On My Journey‘.

If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.

Source: I Live in Canada. I Go to School. My Debt Gets Worse Each Day. – Glanda

Other Related Articles to Read

• I’m Leaving the Country But Have a Lot of Debt. What Should I Do? – Worried in Ontario
• Will Banks in Dubai, Hunt Me Down in Canada? – Kent
• Canadian Bankers Whining About Credit Card Interest Rates. They Must Think Canadians Are Idiots.

Source: I Live in Canada. I Go to School. My Debt Gets Worse Each Day. – Glanda