Since paying off our non-mortgage debt with a Dave-Suze hybrid approach and vowing to only pay cash for all purchases going forward (we do use credit cards for the reward points and then pay them off completely before the grace period is up), we have had a few big-ticket items come up that have rattled us a bit. These have included a new A/C unit when ours completely broke down ($7,800 minus a $1500 tax credit), a car breakdown, and now foundation problems due to the severe drought. In each of these instances we have had several options which amounted to paying the cash up front for the item or slicing the huge cost up into monthly payments with interest or other fees. Taking the A/C unit replacement of last summer as an example, here’s how our options looked:

• Pay Cash: $7,800
• Pay by credit card and do a 0% balance transfer for 12 months: $650 per month + cost of balance transfer
• Financing through the company: $650 per month + interest

We don’t want to get ourselves back into debt and have taken great pains to save up enough money to be able to afford what life has to throw at us. But just because we have the money set aside does not mean it is easy to spend. In fact, we are finding it extremely unpalatable to spend money now. Savings represents money we have all ready worked for, whereas borrowing represents money we have not worked for yet, and so perhaps that is why it is so hard to part with savings—we all ready know how much work went into that money. Let’s face it: breaking down big ticket items into small monthly payments against future earnings makes the purchase price much more digestible than having to pay with earned cash all at once.

Retailers know this, which is why you can now pay monthly payments on an assortment of items besides vehicles and mortgages. In fact, typically monthly installments or monthly payments are interest free for a time period because they don’t need the extra profits from interest rates—they know you are much more likely to purchase a high-end item if they tell you what the monthly payment is going to be, and so by adopting this model, they make more sales. Infomercials break down products into “three monthly payments of just $19.95” (really $59.85), jewelry (diamond earrings for $495.00 or just 5 payments of $99), Dell’s monthly automatic payment plan allows you to pay just $20 per month (really $499.00). See how monthly payments make everything seem affordable to you right now?

Aside from the obvious benefits of not having to pay interest and not mortgaging your future by paying with credit, paying cash for everything also does have another surprising benefit I did not foresee: a reason to scrutinize the total purchase price of whatever you need and want. Doing so brings a lot of clarity to the situation and has all ready helped us to walk away from some purchases and stash away even more cash. The downside? The purchase price of even necessary big ticket items has sometimes led us into paralysis mode due to its large price tag.

Do you pay cash for everything, or are you looking to incorporate this into your future finances once you pay off your debt? If you have experience with this, has it changed your purchase decision-making at all?  

Two Saturday nights ago I had settled in for a long stretch of great financial television: Suze Orman’s show at eight followed by Gail Vaz-Oxlade’s ‘Til Debt Do Us Part at nine. Suze’s Moneylogue that night was called “Don’t be Debt Dumb”, during which she called out a “so-called financial pundit” she had tuned in to watch on television at an earlier time. Her lip curled and she gritted her teeth in distaste as she recalled literally screaming at this man through her television screen because he was touting “the dumbest debt pay-off strategy” she has ever heard. Listening more closely in between spoonfuls of Blue Bell Chocolate Chip Cookie Dough ice-cream, I was intrigued. Who was this “so-called financial pundit”, this master puppeteer of dumb debt strategy that Suze so disgustfully despised?

As Suze unveiled more details about his debt pay down strategy—pay off the credit card with the lowest balance first, forget about interest rates, psychologically feel good—my eyes widened. Suze never named the man during the segment, but anyone that knows his financial advice could clearly make out who she was referring to: Dave Ramsey.

Suze’s Advice

Suze’s debt pay down strategy is very logical and certainly makes good financial sense. Line up credit cards from the highest interest to the lowest interest. Call your credit card companies to see if you can get interest rates lowered (though she advises that this is not likely they will work with you in the current economy). Try to do a balance transfer from your highest rate credit cards to a credit union card with a much lower interest rate (the most credit unions can charge you in interest is 18% if they are federally chartered; still a whopping figure). Pay the minimum on each of your credit card debts, and then put any extra money onto the one with the highest interest rate card. Once the highest rate interest card is paid off, then you move the money you were putting towards that debt onto the next highest interest rate card, and thus continue with your debt snowball in that fashion.

Dave Ramsey’s Advice

Dave Ramsey is all about behavior modification and the psychological wins. He advises you to list out your debts from the smallest balance to the highest balance despite the interest rates (in fact, in his book Total Money Makeover he states, “I don’t care if some have 24 percent interest and others 4 percent”…the only time to pay off a larger debt sooner than a smaller one is some kind of big-time emergency such as owing the IRS and having them come after you, or in situations where there will be a foreclosure if you don’t pay it off.”) By paying off the smaller debts first and having some big wins in the beginning, you will get “fired up” and be more apt to stick with the program. Just as in Suze’s model, as you pay off each debt (from smallest to largest in balance) you then use the money you were paying towards the debts that are now paid off and throw them at the debt balance that is next in line.

My Take

I was a bit taken aback by her attack, quite honestly. I want people to pay off their debts and live debt-free, and how they accomplish this doesn’t really matter to me. The method is not as important as the outcome. Living debt free is an amazing feeling; Paul and I accomplished this (aside from our mortgage) last September using a hybrid approach between Suze Orman’s plan of paying off the loans with the highest interest rate first and Dave Ramsey’s strategy of paying down debt from the lowest balance the to highest balance. Since then we have built our emergency fund up to its fullest, begun investing in an index fund, opened up a “large expense” saving account for things like our next car purchase (not for years hopefully), and opened up a vacation fund. Being debt-free is allowing us to save ahead of every purchase, save up for large expenses, and spend on the things and experiences that we value the most.

We are all different, and what may work for me may not work for you and vice versa. In my opinion, having as many viable and effective options available as possible is best.

Which debt reduction plan do you think is best? Have you used one over the other, or have you used something different? I’d love to hear your thoughts.

Does our country’s debt scare you? At the time of writing this, the debt is over $13.5 trillion. Wow. Seriously—take a moment to let that sink in. I know that when I start to think about it, I get the willies. How are we supposed to get out from under this debt? What will we each have to do as citizens to pay off our portion of this burden?

I cannot account for our nation’s debt, but our household is on the right path. We have gotten to the other side of the curve. All of our debts are paid off (minus the mortgage), and so now we can save for every thing ahead of time instead of spending money first and then paying it off afterwards. Purchase now, pay now, and move on with our lives. If there is something large that we want, we have vowed to save up for it.

Since we have worked so hard to get to this other side of the curve (and I must say that the grass is greener over here), by the grace of God and our own personal vows we hope to never put ourselves or get on the other side again.

Our Vow Immediately Put to the Test

However, immediately after paying off our last debt on September 1st, our AC/Heater/Ductwork had to be replaced. Could we have continued living and sweating in 85+ degrees? Sure. But the summer had zapped our energy and morale quite a bit. You can read the background through the link above, but essentially the AC Company decided it was better to rebuild our 20+ year old AC unit instead of replacing it under our home warranty, and the rebuilt unit would not work after 19 visits (no exaggeration) to our home over the course of a hot and steamy Houston summer. Not only was the unit working intermittently, it was also too small for the area in the bottom of our home and so it churned all day and all night, sending our electric bills to $300+ each month. Aside from this, we were told by several repairmen that our 20+ year old heater was dangerous.

Options

Because the original repair was not working, our home warranty offered to replace the unit with the same tonnage, or to cash us out. We knew that we would never get to the right temperatures in our home without upgrading the tonnage from a 2.5 to a 3.5 unit, so we decided to cash out.

It was a particularly tough decision on our part as to whether or not to finance it through our credit card and do a balance transfer for 0% interest for 12 months, or to pay it all off now in one fell swoop (there is a third option–taking out a short term loan–but we are committed to remainining a debt-free household). The reason it was such a difficult choice was because of our vow to not go into debt again as well as our dwindling emergency savings. After paying off all of our non-mortgage debt, we had just enough left in the bank to pay off the new unit but it would leave us with close to nothing in savings.

In the end, we charged the unit to our credit card to reap the points, and we paid it off in the grace period with the rest of our savings. We are banking on the fact that we are both employed, that if one of us loses our job we can live on one income because we paid off all of our debts, and that we have a back up in our Roth IRAs should we absolutely, last resort, need some money (and I do mean last resort).

Next Step

I knew we made the right decision because I felt great about being out of debt and not adding another debt even after seeing our account empty. However, our number one priority now is to build up our emergency fund to full status. We are going to pursue this with the same gazelle-like intensity we pursued our debt, and hope to achieve this goal within six months.

How is your household debt shaping up? Are you following any particular plan? If you are out of debt, have you successfully funded a healthy emergency fund?

Hello Frugal Confessions Readers!

Some exciting things going on that I want to update everyone with. I have updated the Debt Reduction button on my website…and can finally declare that Paul and I are non-mortgage DEBT-FREE!!!! Be sure to read all about it.

Frugal Confessions is on abc news (Channel 13, KTRK) discussing how to make your produce last longer for people who want to grocery shop every other week.

Finally, I would like to announce the winners of Gail Vaz-Oxlade’s Debt-Free Book Giveaway. Crystal from Budgeting in the Fun Stuff, and Johanna O, as chosen by Random.org. Please email me your address at frugalconfessions [at] hotmail.com so that I can forward them onto the publisher.

As always, thank you everyone for reading, commenting, and engaging! Have a great Labor Day Weekend.

You can have it all; you just can’t have it all at the same time. – Gail Vaz-Oxlade

Gail Vaz-Oxlade is a woman who does not take crap. Just watch her show or read her book, Debt-Free Forever. You may cringe at first when witnessing her sometimes crass, but always blunt honesty about other people’s lives—like the time she told a young couple that they are kicking babies out like kittens, an occasional bleeping out of expletives, or a whack on the forehead to an unsuspecting (but not undeserving) debt monger—but her ability to bring couples who are on the brink of bankruptcy back from the edge is impressive.

And Gail doesn’t just bring couples back from the edge so that they can live a mediocre life. She leaves them with a budget that, if they stick to it, will yield them close to a million dollars in retirement! The numbers vary from couple to couple, of course, but to be able to bring someone from $70,000 in the red of non-mortgage debt, to $1 million in the black by the time they retire is incredible. What is her true magic? In a word, it’s jars.

One of the first things that Gail does with a new couple is to take all of their plastic away (both debit and credit cards) and give them glass and paper instead. She sets a budget and allocates each category to a jar with a label of the weekly amount the couple may spend in that category. Categories include: Food, Clothing, Entertainment, Transportation, and Other. That’s right; Gail is a practical realist, so she doesn’t expect a couple to go without clothing or entertainment in order to reach their goals, she just expects them to spend much less than they are used to in these categories (typically $25 a month, though that is in Canadian money).

Couples are allowed to finagle these jars; for example, if you have an unexpected spike in food expenses one week, then you can take from one of the other jars. But she is also quick to point out that pet money comes from the “Other” jar, and so if you need to take a pet to the vet later in the year, you should build up a reserve to pay for that in cash from not spending all of the money in that jar. If you are using another jar to pay for another category, you might not get that reserve you need later.

I don’t know whether it’s the simplicity of the system, or watching others who are financially lost use these jars and come out to the light, but I love the idea of money jars for budgeting. However, my husband and I aren’t really on the level where we need to use the jars to budget our money, and perhaps you aren’t either. So, I had an idea to take this a step further and make it relevant to people like you and I. Frugal Decadence is all about making do with less and not compromising on what you would like, so why not use a few jars for some of your variable expenses throughout the month and see if you can’t tweak out extra savings from these expenses to use elsewhere…say to make sure you have $5 left at the end of the month to commit a Random Act of Kindness?

Or perhaps you have another goal in mind, like traveling to an exotic location, purchasing a home, or acquiring assets to make your money work for you. Make a poster or rip out a magazine photo that embodies your goal and post it above your money jars. Now your decisions to reach for money out of these jars will be anchored around a purpose, and you may find yourself with extra at the end of the month to put towards your dream.

Giveaway Closed: Are you interested in reading Gail’s new book Debt-Free Forever? Leave a comment below for the two books that I have to giveaway. The winner will need to give to email me their address at frugalconfessions [@] hotmail.com (whatever address you are comfortable with), and I will forward this to Gail’s publisher who will mail you out a copy. Good luck!

Have things ever just…fallen into your lap? Call it luck, a perk from reading the book The Secret, the Baader-Meinhof Phenomenon (wait…have you just recently heard about this?), or an answer to your prayers, but you think of something—a need, a want, a nice-to-have—and then several weeks, months, or even days later it appears. And it doesn’t appear in an ordinary fashion, or even on my timeframe; but it does appear.

I can remember my desire for a pure, all-white cat as a child who grew up on dirty, mucky farm where it seemed hopeless to try to keep anything clean, much less white. Last week Danny Boy, a completely bleach-white kitten, fell into my husband’s email inbox. I am now rubbing his chin and fighting off his little bites and scratches while he chases after my jerkily moving fingers navigating the keyboard. I have developed a taste for mango salsa, and several months ago we had the tortilla chips, but we were out of salsa. Since we only go grocery shopping every other week, I was pretty much out of luck. The next day, I opened our front door to a paper bag from a local church inviting us to their sermons and welcoming us to the neighborhood. In the bag were pamphlets, a Frisbee, pens, and…salsa. When our honeymoon to Austria was grounded last month after the volcano erupted and we ended up spending several nights in my family’s cabin in the mountains, I couldn’t help but smile as I looked around and remembered that this is exactly what I had wanted: a secluded cabin in the woods nestled among mountains. Last week I heard of a great deal that if you purchase Gillette bodywash at a dollar general store with the P&G coupon, you could get the bodywash for free. I didn’t have time to do this…and as it turns out, CVS has a deal this week with free Gillette bodywash using the same coupon.  

                Perhaps it is because of my openness to receiving opportunities that makes me so adept at identifying them when they come, even though they are often disguised or at a time that may not be convenient for me. Or maybe I am subconsciously looking out for these things because I introduced the thought in my head, and so it is not that they occur after I have the initial thought, but just that I am now more aware of them. Whatever it is, it has taught me to say and think what I actually want, even if I think it is absolutely ludicrous and could never happen in a million years; after all, I have been surprised many, many times.

One of my ludicrous wants is to install granite countertops in our kitchen. It’s not the desire for granite itself that is ludicrous—there’s something so enticing about the depth, solidity, and clean lines of a granite countertop that would make most people want it—but my desire to pay less than $20 per square foot for it that would make most people balk. Lo and behold, last Tuesday I was driving to work and was stopped by a redlight long enough to catch a look at the F-150 that had pulled beside me into the left hand turning lane. My eyes nearly popped out of my head as I read the sign advertising granite countertops for $14.95 installed. I hesitated for a moment (literally, as the redlight was momentarily going to be changing), but decided that perhaps this was my opportunity for living my frugal decadence, even though the price seemed too good to be true. After hurriedly writing down the phone number I called the company and scheduled a free in-home consultation and quote for our kitchen.

The quote came in at $2,142, which included the labor, taxes, granite, installation, and five-year sealant. The only issue was that it was a promotion that was ending on that day (typically they sell for $30.95 per square foot). I checked out some of their reviews online, as well as asked for references. I even went so far as to pick out the type of granite that we wanted, envisioning the nice, sleek ubatuba adding an air of elegance to our kitchen. 

And then I took a deep breath, and felt my internal hesitation. Sitting on the bar stool, which could soon be housed under an actual breakfast bar made of granite extending from our countertops, I wondered, “Will this opportunity ever come again? Is this my sign that I should push the button and sign the contract? Or am I merely falling into the trap of spending for instant gratification instead of waiting until we pay off our debt?” I tried to think of myself as the next caller on Suze Orman’s “Can I Afford It” segment and wondering what I, as a frequent watcher of the program, would say to someone in my situation. I waited for Paul to come home.

That evening he and I sat down to discuss. Granite countertops would clearly increase the value of our home, and they were a sure upgrade from our current vinyl leftovers. But we are in debt. Our debt-free day will be sometime in August (excluding our mortgage). Even though the end of this summer is sooner than we had ever hoped to be out of debt, and even though the student loan we still have is only at a 1.25% interest rate, it would mean keeping ourselves weighted down for another two months or so before hitting the debt-free jackpot. What opportunities might arise in the fall that we can’t take advantage of because of this past spending? Granite countertops installed for $1500? (A girl can dream, right?).

                We said no. It was difficult to do, so difficult to do. I went to bed that night feeling that I had done the right thing, but still being a little disappointed. I dreamt that Paul and I had purchased a second home, and even in the concocted scenario of my subconscious I could feel that weighted, ugliness of debt seeping through my heavy, heavy pores. The next morning I woke up to the sun dripping through the leaves of the blooming magnolia in our front yard. In the haze of the morning, when I realized that it had just been a dream that we had purchased a second home with a second mortgage,, I had a glimpse of the feeling of debt freedom that is ours for the taking in just a few precious months away. That feeling—liberation from others, having nothing to pay for except the choices that we make from the present moment, and being able to realize our dreams—can never be replicated by granite. Granite is a gorgeous, distinguished, polished stone; but that is it, it is only a stone. Debt freedom is a feeling and a way of life. How can I take my $2,142 that could be used for one to pay for the other?

Granite is just going to have to wait, which leads me to the second thing I have learned from having all of these coincidences and opportunities creep up: another deal will come around. Deals are not finite and this deal is not the last one I will ever see. Except the next time around, I will be ready with cash in hand for when opportunity comes knocking on my door.

Paper walls, sushi on revolving tables, delicate décor inspired by nature, purposeful placement of stones, crowded metro trains stacking people tightly like sardines in a can; I am watching HGTV’s The Outdoor Room, and the hosts are working on redesigning the back of someone’s corner-yard into a tea room garden inspired by Kyoto, Japan. For those of you who do not know, Japan holds a special place in my heart. It is where Paul and I met, and where we both aspire to return to because of the connection we felt there with the people and the culture.

Watching shows like this just fuels our fire to become debt-free. Freeing up our paychecks to spend on things other than what we’ve already purchased in the past is like opening up a bottle of perfume to allow it to breathe, diffuse, and live. Dreams become more tangible when given the financial space to develop.

The Accumulation of Debt

Before getting together, Paul and I each had our individual debts. I had student loan debt and Paul had debt from purchasing a Mustang after finishing his service in the Navy. Then about a year after we moved in, we created some small debt together: Paul bought me an engagement ring and financed part of it at 0% interest for 12 months.

When Paul and I first got engaged, we agreed that I should head-up the finances—a task I clearly excel at and enjoy. Just a few months in though, I was dumbfounded as to where some of our money was going. It wasn’t as if we didn’t have money to do the things we wanted to, or to save consistently each month, or to set aside for retirement, which is perhaps why it took me so long to sit down and find the problem. One day I took a deeper look at our excel spreadsheet, and highlighted the debt payments we were making in red, discovering the leak in the process: $950 each month was headed out the door to paying off debt! It was unbelievable to me that I, a frugal person by heart, and Paul, someone who loathes owing other people money, could be paying almost $1,000 a month to debt! The three debts that took up three individual lines on our excel budget—my student loans (1.25% interest), his mustang car payment (6.5% interest), and my engagement ring (0% interest for 12 months)—had seemed manageable with small monthly payments that both of us had accelerated and had also seemed completely  unrelated. After all, one was for education, one was for driving around, and one was a token of our love. But after adding them all together, the relationship became quite clear: they are all money we have to pay back to someone, someday. We were now together, and $25,000 in debt.

Debt Attack Strategy

Even though the debts seemed more manageable when they were individual debts and not all added into one pot, and even though we created more debt when we got together, having two paychecks and half the bills really set our debt payment into motion. In fact, sitting down and adding up all of these individual debts really sobered us up.

Shortly after getting engaged, Paul and I purchased a home. We used $7,000 of the $8,000 first time homebuyer’s credit to put towards the mustang loan, and put $1,000 into our emergency savings account. Paul had been paying extra each month on his car since he purchased it, so we continued his usual payment. We paid twice the monthly minimum payment on my engagement ring. Also, I had been overpaying on my student loans since first graduating, so we continued with that payment as well.

Check-Up

As of right now, Paul and I have paid cash for our wedding, our last car payment is in July (hurrah—two more months to go!!!), and we have paid off my engagement ring before the interest kicked in. Aside from what we paid for our wedding, that is about $17,000 worth of debt we have paid down since focusing our efforts in the summer of 2009. This has increased our monthly cash flow by $700. Wow! We now only have the rest of my student loans to pay, which are approximately $8,000 @ 1.25% interest, and our mortgage.

Our Next Radical Move to Debt Freedom

 It is tempting for us to not pay down the student loan debt quickly and to keep it around as if it were a ‘pet’ (as Dave Ramsey likes to say; sometimes I feel like Sallie Mae is my 5-year old daughter). Most financial experts would tell us to use our money for better things because the interest rate is only 1.25%. However, the $7,600 is still debt that we will owe Sallie Mae (or the government, who has purchased a significant portion of Sallie Mae’s student loans) one day or another, so we would rather pay it off now that we are capable and can do so instead of saving it for a future date when God—literally—only knows where and what we will be doing. After going back to the excel spreadsheet and checking into our accounts, we have to the conclusion that our savings account and the amount owed on my student loans will intersect sometime in August. And it is at this intersection that we will write Sallie Mae one final check, and clear my name of all student loans. Hurrah!

One of our concerns with doing this, of course, was the depletion of our emergency savings fund. In fact, it’s not even completely built back up from having to purchase another car. But I recently sold the stock I had invested in US Steel when the stock market was down, and made a profit of $1500. That money plus the principal is waiting on the sidelines in a money market fund, and I will keep it there until we have our emergency savings back up to at least three quarters of the way full. On top of this, our other security to fall back on is our Roth IRAs, which we can tap the principal amount of money we’ve invested without any penalty if there is an absolute emergency. We will of course use this only if there is an utter emergency because we cannot make catch-up contributions once we are ready to pay back our IRAs. In other words, if I were to take out $3,000 for an emergency, this year I can still only contribute $5,000, not $8,000. But having this as a back-up makes us feel all the more confident that we are doing the right thing. As a third option, if we get into trouble, we can take a cash advance out of our credit cards, then transfer that balance to a zero percent transfer offer on another credit card and pay it off before the interest rate begins. This is not a desirable option, as we are trying to get out of debt, not back into debt, but it is a financial safety net for us.

So, debt freedom, here we come. And who knows where this will take us next. Sushi, anyone?

P.S. If you are in the UK this site has some great info on calculating and tackling your debts.

I am sharing this experience with you to hopefully help you protect yourself from future, random calls from collection agents, like I received last week. Read through to the bottom for tips on how to avoid future headaches.

Growing up, both sets of my parents declared bankruptcy within a few years of one another. This was a tough experience for all of us. I remember the relentless phone calls, and my father’s and mother’s orders to never answer the phone. If we answered the phone and it happened to be an agent, I would hand over the phone with an innocent “I’m so sorry, I thought it was my friend” look on my face. Occasionally a collection person would visit our farm and when my father saw them walking up the walkway, he would cower away to the bedroom and tell us to inform the collector that he was not home. It was an ugly sight.

                So how do I handle collection agents as an adult? Well, I had the pleasure of finding out last week, when I was shockingly called by one! And I will tell you how I handled it: head-on and with diplomatic aggression. And why is that? Well, I have nothing to hide.

                Anyone who knows me, and that includes my readers, knows how diligent and fiscally responsible I am. So it came as a complete shock to my system when I answered my cell phone at work and a collection agent was on the other end to greet me. The conversation went something like this:

                “Hello, is this Amanda Grossman?”

                “Yes (cheery-eyed and curious)”.

                “I am calling to let you know that you owe XXXX apartments $3,400.”

                “What?!? (incredulous and white-faced)”.

                The conversation went on from there. He emailed me a copy of the charges, and I explained to him that I had been quite diligent with my dealings with this apartment complex because I broke the lease early and had wanted to take care of any obligations so that something like this would not creep up and bite me out of nowhere (like the day after my birthday).

Back in 2008, when I decided I needed to break my lease after being laid off, I read over my contract diligently. According to the contract, if you broke the lease early you would owe an extra two months rent after vacating. After that, your lease is voided. I moved out on July 31, 2008—having given my 60 days notice—and paid August rent on August 5^th. I was then informed by one of the apartment employees that they had found a renter for my apartment for September, and so I was only liable to pay for the August rent (which I had all ready paid). That was the last time I had any contact with this apartment complex.

 Yet according to this collection agent, they have no record of me paying the August rent, or of any of these conversations. On top of that, the renter they found apparently did not move in until mid-October, so they are charging me for September’s rent and half a month’s rent in October, which is illegal per the terms of the contract (being a regulator, I pointed this out by reading the terms of my contract to the collection agent). Also, they are charging me $690 for the discount I had received over the course of the contract because I terminated early. Wow.

After receiving such an unexpected, shocking phone call, I took a personal day from work and rushed home to my trusty old filing cabinet. Next I called my old bank to get statements from these three months, as well as my cell phone provider to prove that I had called the apartment complex several times during this time period.

Armed with this information, I called the collection agent back (trust me, he was surprised to hear from me). What I still could not understand was that this occurred over a year ago, and the apartment complex never contacted me directly with any issues, even though I had provided them with my phone number as well as my new address in Texas. I asked him why I had not been contacted, and he said I should have received a final bill from the apartment complex. I asked for proof, by certified mail, that the final bill had been sent (because I have not seen this final bill at all), and he said he could not provide the proof. In other words, I never received a final bill.

The bigger issue is not all of these charges, but the fact that the person I dealt with at the apartment complex no longer works there. If he did, I could simply call him up and ask him to provide a statement of our conversations, and this would be easily dealt with.

Here are my tips for avoiding something random like this from happening to you:

• Keep a Filing Cabinet: Organize your life and finances into folders, and keep records of leases, contracts, loans, taxes, etc. for five years or more.
• Get it in Writing: It’s great if someone gives you a concession, or clears up an issue on a bill; but you need to get this in writing from that person. Employees leave agencies and companies all of the time, and who knows when an issue you think you had resolved may resurface.
• Read Your Contracts: You need to know what you are getting yourself into before entering into any contract or lease. What happens if you unexpectedly need to terminate a contract? Are you able to pay any extra fees or charges incurred as a result of your actions?
• Keep a Record: Make sure to write down any important conversations that you have regarding contracts, and note the date, time, person, contact information, and title.

At this point, I am faxing a copy of my bank statement to prove my payment of August rent, as well as sending a formal dispute letter that is going to call into question all of these other charges. Wish me luck!