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Thursday, August 18, 2011

What Do You Mean "The Bank's Empty?"

One of my joyous duties as Head of Household is monitoring our monthly budget and paying bills.  I'd rank the duty right up there with, oh, plunging clogged toilets.  But it has to get done so I do it.

As I was balancing the books, as they say, late last night I noticed a little discrepancy.  An $800 discrepancy which left me broke a$$ until payday.  The good news is that payday is two days away.  The bad news is I have a mandatory car loan and second mortgage payment due before payday...to the tune of $730...and my bank is empty!

Let the games begin!  Once I figured out where MY error was, and I take full responsibility, it was time to figure out where I was going to get $730 in less under 12 hours.  Having lived paycheck to paycheck for several years while going to school, I had become quite skilled at robbing Peter to pay Paul.

So aside from the embarrassment of being a financial dolt, I'll share with you the thoughts that went through my head on how to come up with a sizeable chunk of money quickly, as many people often have to do.

1- Flat out borrow the money from friends or family.  This could be an option for some...not an option for me.  My pride mainly but I've done it in the past and it just doesn't feel good to me.  If it works for you, more power to you.  There's no shame in asking for help.

2- 24 hour loan sharks or Payday stores.  I've done this before too.  I borrowed $500 at 20% interest from a brick and mortar money-to-loan type place.  Obviously I don't recommend this because the interest is WAY too high but if you are in a tight enough squeeze, it might be your only option.  I had to show proper ID and two recent pay stubs. Be aware, if you are late on payment they will also add fees to the ridiculously high interest rate.

3- Cash in your precious metals.  I thought I would have to do this today.  I have a handful of silver coins and bars that I could sell.  I've never sold precious metals and I am really interested in how it works.  I mean, I understand the whole "buy it and hold it" strategy but if the economy takes a turn for the worst and we have to start using our silver, how much will we REALLY get for it?  I was interested to see if I could sell the silver coins I bought for $18/oz for $40 to a currency exchange place.  Obviously pawn shops will pay as little as you will accept.  I could have tried CraigsList but I needed cash in 12 hours.  Fortunately, I didn't end up going this route.

4- Start scrounging through the house.  I have half dollars and coins that I purchased from banks in hopes they were silver.  Some were, some weren't and the ones that were NOT silver might as well be spent.  I have several rolls of half dollars like this.  I also bought several Presidential and Sacajawea gold colored coins just because the kids and me think they look cool.  There's always change in dresser drawers, couches, car ash trays, kitchen counters, etc.

5- Have you noticed aluminum is up to $0.85 per pound lately?  We have bags of aluminum cans in our garage waiting to be recycled. It takes about 31-35 cans to get one pound.  You won't get rich quick but as any frugal person knows, it all adds up.

6- There's the old handwritten shell game with checks called "check floating" which used to be fairly common years ago.  Here's how the game worked: I owed a payment to a credit union due by 5pm today.  I could write a check for that debt on say, a Bank of America check and turn it in at 4:45pm.  The credit union debt would be satisfied on time but the check from BofA wouldn't hit BofA until the NEXT business day or later.  Years ago, the float time was 2-4 days between when a check was deposited at Bank A and withdrawn or transferred from Bank B.  These days, float times are usually 24 hours or less.  In my case, I had a bill due today (Wed) by 5pm but wasn't getting my paycheck until Friday.  It could still be done but you'd have to use three banks.  The downside: you risk the bank beating your deposit and you get an NSF fee (usually $35) for each bounced check AND your debt payment would be deemed as late after all that work.

7- Use bank fees to your advantage.  I have had scenarios in the past where I ran out of money but still had a bill left to pay before payday.  There was still money sitting in my account but my checkbook register told me that the money was already spoken for via a "pending" or "outstanding" payment I had already made.  I weighed the costs of borrowing from a Payday Loan place (20% interest or higher) versus an NSF fee from my bank (usually a flat $35).  Let's say I had $400 in the bank.  I had paid a bill for $400 but it hadn't been cashed yet and could take up to a week to process depending on where the receiver is located.  Our old timeshare company was like that.  They would take ten days to process a payment. I have another bill due for $300 in the next two days for my electric bill but payday is three days away.   If I borrowed $300 from a loan shark, I would pay $60 in fees to the shark or I could withdraw my $300 and pay the electric bill and try to get cash back into the bank before the timeshare check was cashed (a slight variation on the "float".)  If the timeshare attempted to withdraw before I got the money back in, the check would bounce and I would get a $35 NSF fee from my bank.  I would call the timeshare company and apologize, then offer to send a money order asap.  A $35 NSF fee is better than $60 to a loan shark.  Banks will give you ONE reversal of an NSF fee per year too.  If you keep track of when your checks clear and when you wrote them, you'll learn how long everyone takes to cash them.

8- Always call the debtor and ask if you can get an extension.  I happen to know this credit union very well and there is NO extensions on anything.  I can honestly say this is the WORST bank I have ever dealt with.  I made it in there today to make my payments and just like always, they screwed it up and I ended up sitting there for an hour.  They still couldn't fix their screw up even with the assistance of a manager.  Maybe I'll share that story another day.  What a nightmare this bank is.  Anyway, my electric service, internet, gas, water, cell phone are all very good about extending a deadline. Heck, even my mortgage company will do it.  But don't ask a bank, oh no.  They give no breaks.  You know, cause they don't get any breaks...right.  Bailout anyone?

9- Ask if you can move a due date.  Don't mention you can't make the payment up front, just explain how the due date is close to another large payment you make (mortgage, auto) and explain it puts a pinch on you at that particular time of the month.  I've had companies move the date forward as much as two weeks.

How I feel about MY credit union.
10- Return some recent purchases.  We usually have items we purchased that can be returned for cash.  Just recently, Wifey had to go buy bras for three daughters and guess the sizes.  Two of the three were wrong and can be returned for cash with the receipt.  Did you just buy an expensive item a week ago before the checkbook snafu?  We recently bought a juicer from Walmart for $99.  There's a 30 return policy at Walmart.  If we had to, we could return the juicer for the $99 and go back for another one when we could afford it again.  It's important to keep your receipts.

11- Collect on your debtors.  Does Jim Bob owe you $200?  Offer to let him off the hook for $175 if you can drive by and pick it up in the next two hours.  Explain that you're in a bit of a pinch and, after all, you helped him, right?  You get quick cash and he saves a little dough.

12- Request an early paycheck.  My hospital did this for me one time, years ago.  I don't remember why I asked for it but I simply called the payroll department and asked if I could pick up my check a day early.  They complied and I got my paycheck one day early.  Doesn't hurt to ask.

13- Sell your stuff to a second hand store.  We have a clothing store in town that will buy used clothing for pennies on the dollar.  In college, I would take last years out-of-fashion clothing there and get some spare cash for it.  They will inspect it and make you an offer.  They won't want things that you think are awesome and they'll offer you chump change for stuff you paid $100 for, but you get the idea.  It is one more way to turn stuff lying around the house into cash the same day.  I've left that store with as much as $40 in cash.  Of course, that was 1994.

That's all I can think of for now.  Suffice it to say, I pulled it off.  Even though the bank screwed it all up, at least I did my part and held up my end of the obligation.  After I got back home and hinted that we might be having Ramen noodles for dinner, a neighbor whom my wife has been babysitting for lately showed up and gave her $60.

Anyway we look at life...we're blessed.  Hope you are too.

~OJD

11 comments:

cochinblogs said...

great blog....enjoyed reading it......
Joe

Anonymous said...

Hmmmm...some of your ideas are morally questionable.

The Orange Jeep Dad said...

@Anon yes, morally ambiguous. But like they say: desperate times call for desperate measures. Hopefully good things will happen for people and they won't need to try these tricks of the trade.

Lila said...

I made a much smaller error of my own. I keep our budget on a spreadsheet. What biils get paid with each check and the amount budgeted in a column and then I also mark the actual totals paid as I pay them each month. I marked a bill paid in the amount it should have been but for some reason didn't pay it. So go a double bill this month. Lovely. It happens. Great tips and glad you found ways to fix it!!

PioneerPreppy said...

LOL I wouldn't even judge an armed bank robber as being morally questionable. I hate banks. Ok that was a bit of an exaggeration :)

Still dude an 800 dollar error? I can't even imagine that. Of course my debt is none now so the only bills I have to worry about are electric, a cell phone (for the kid not me I use a pre paid one) and a property tax and insurance payment once a year.

I hate bills and I hate checks I only use cash or use my debit card so I can instantly see my balance. I have never written a paper check against my current bank account.

Anne said...

Interesting post.

I am not a fan of banks. While they can pull your money out lightening fast.. and in any random order/ time they so chose.. ours also looooves to delay several days actually putting money into an account. Even a check.. from their own bank from another branch.. several days to process.

Arsenius the Hermit said...

That can happen to anyone. My daughter has Ehlers Danlos syndrome. She has insurance but she still wound up owing about $40,000 in medical bills. My wife and I pay those on a monthly basis, to about 20 different hospitals, specialists, labs, and other assorted medical bloodsuckers. So I have to set everything up for payment on line, then log it into Quicken. From time to time, I forget to make an entry in Quicken. I have a line of credit on my checking account at the bank and they automatically cover any such mistakes up to $2000.00, although they do charge me a $5.00 "transfer fee" and I pay 12% on the money until I pay it back.

I have been at this same bank for almost thirty years now and if I get in a pinch, I can go to my banker and ask him to cover my overdrafts until I can move some money from retirement savings. They will do that for me with no charge.

Let me say, though, that when I was younger and had young children, I often had short falls and like you in this case, I would consider every alternative. It's very hard to float a check today because so many places automatically draft your account the same second they run the check, so that is not a very good option anymore. I know you said you didn't like borrowing, but I would do that if need be. I have two brothers who are well off and it doesn't hurt them any , nor would they mind. I think your family is your best bastion against financial problems. Be that as it may, don't feel like the Lone Ranger.

S. L. Haynes said...

Dear OJD,

I hoped it works/worked out for you! I said a little prayer when I read this. Steve

The Orange Jeep Dad said...

@SL..it always works out somehow. Holding me back is my reduction in hours at work. When you get used to making a certain amount, then reducing it significantly, it takes some adjusting. Some of these ideas, I used in college (20-ish years ago). I've lerned better options these days. I'm pretty stubborn sometimes. I used to get speeding tickets just about every two years and figure it didn't matter because I could go to driving school every two years and get the ticket dismissed. Took me a while to realize it was MUCH easier just to NOT SPEED in the first place.

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