Catching up with Jaimie at I’ve Paid for this Twice Already

Posted by DebtKid :: February 9, 2008 @ 7:41 am

First off....you have a PH.D in genetics?! That's quite an accomplishment. Is there any crossover between DNA and personal finance? We're not hard wired to be in debt, are we?

Well, I don't think we're genetically predisposed to be in debt. I didn't research that though; my dissertation involved plants. I think that there might be some genetic predisposition to be attracted to pretty things or something like that, but I don't think we're born doomed to a life of debt by the curse of our DNA. Most things have an environmental focus as well, and I think the culture of debt we live in helps people see debt as normal and accept it for themselves. I know it did for me.

Your blog title, "I've paid for this twice already" is great. How did you come up with the title?

Honestly, I'm not quite sure. I was thinking about starting a blog, and I was thinking about how, for me, one of the worst things about debt is that interest just keeps making it go up and up and up, and realized how I'd probably paid for things I had loans/credit for twice over already. So the title just kind of occurred to me. I'm glad you like it.

I know from my own experience how helpful blogging has been to my own financial situation, attitudes, and actions. How has being a personal finance blogger changed you?

I think it has done a lot for me - and I can think of two main ways. One is the accountability - I actually started blogging to have random people hold me accountable and keep me on track, so I expected that. But the other is realizing how little I know about finances - and how much there is out there to learn that is actually *accessible* to me. I really enjoy the community interaction and learning from each other.

How do you budget each month?

I use a spreadsheet form of PearBudget (they've since upgraded to an online version but I am still using the old spreadsheet). But the process is this - I look at our projected income (my spouse's is pretty steady, mine is variable but I estimate) and I assign it all to categories. Then, as I spend money, I track it on that same spreadsheet. As extra money comes in, I assign it to the snowflaking category. As I spend too much in one category, I adjust others to compensate. I am flexible about it, but also, having the budget written out grounds me in reality. I know what we have and what we can spend and don't just guess.

You've gotten pretty extreme with cost cutting measures. What items were the easiest to cut out of your pre-budgeting lifestyle? The most difficult?

Well, we were living pretty bare bones already, just because we mismanaged our money generally in small ways and always seemed broke. For me - eating out was easy to cut. We only went out once or twice a month anyway. Ask my spouse though, and that was probably the worst for him. The hardest to cut is buying stuff for my kids. I love shopping for clothes and small items for them, and well, now I really limit that to what they truly need. Due to the generosity of friends, my daughter won't need clothes until she is probably 5. I am VERY grateful and she has beautiful stuff, but a little part of me wants to go shopping for her anyway.

Do you do any investing, or does any extra income go solely to debt reduction?

Other than the contribution to my spouse's 401K, I don't currently do any investing. Once we are out of debt I intend to start contributing again to my IRA as well as increasing my spouse's 401K percentage. I do save a very small amount each month for my kids’ college funds but since that is still in savings accounts at the moment, I don't know if I would call that investing.

What is snowflaking?

Snowflaking is an extension of the Dave Ramsey concept of the debt snowball, but on a small scale. Once you've established your budget, and what you pay each month to reduce your debts, basically snowflaking is earning small extra amounts or saving small amounts from making cost-cutting choices, and then DIRECTLY and immediately applying that saved/earned money to debt reduction. Those little extra payments really really add up!

If you don't mind me asking, what is your credit score like? Have you ever thought about trying to pay off your credit cards with a personal loan. From say, I don't know...Lending Club?

Honestly, my credit score is pretty awesome. I'm like a creditor's dream - I pay my bills always on time, my available credit is high compared to my actual credit card debt, our debt to income ratio isn't actually too bad... creditors love me. I don't know my actual score right this moment, but when we were buying our house last year you get a copy of your credit report at closing, and my score ranged from the high 700's to the low 800's depending on which bureau you were asking.

I am almost completely done with credit card debt, so I haven't considered doing anything with that since what is left is at 0% and will be gone before the 0% is done. My student loans are another story, but honestly, I get a lot of really really low interest loan offers in the mail all the time. I do, however, think peer to peer lending is a great concept and I have been considering getting into it on the lending end in a few years when I am debt-free.

If you could only share one tip with our readers, what would it be?

It is never a good time to start - so just start now already. Part of my "debt reduction" problem was there was always something else on the horizon to focus on and debt reduction seemed like it could wait until we got through this thing or that thing. Well, the debt just kept on hanging around, and eventually I realized - the perfect time was never, so I might as well just take an imperfect time. Hmm, I think I just came up with an idea for a post...