After nearly a year of "discussing" it, last week my family officially Cut The Cable! Well, technically we cancelled our Dish Network account.

I just can't justify paying for a service I barely use anymore. The availability of my family's favorite shows and entertainment through other sources- such as Netflix, Hulu & individual TV network websites- was inescapable.

We paid Dish Network nearly $3000 in two years (about $125/month) but I don't think we actually used $1000 worth of it. My wife's biggest problem with cancelling the service was the fact our cable/satellite was the first thing we cut off when we had to file Bankruptcy in 2002. She fought me for a long time, because she didn't want anyone thinking we are having financial problems again. I finally convinced her- we're not eliminating our entertainment, we're just changing the way we access it. And once I showed her our viewing habits, it was hard to argue.

I broke it down so she could see we've been paying $125/month for 12 channels! Sure, we had over 300 channels available...but the four of us consistently watched just 12 of them:

• CBS
• FOX
• NBC
• ABC
• SYFY
• NICK
• DISNEY
• DISCOVERY CHANNEL
• HISTORY CHANNEL
• LIFETIME
• COMEDY CENTRAL
• BBC AMERICA

Not to mention, I can't even remember the last time any of us watched a show in REAL TIME. We record almost everything on the DVR. Most of the time we wait until 3 or 4 of the same show is recorded and watch several at once. I like batching it like this because I can immerse myself in the storyline & not have to wait a week or two to continue the story.

So, what's the point of us paying so much...for so little? That's right, there's not.

Instead of using satellite or cable, I signed us up for Hulu Plus for $7.99 a month. Several of our favorite shows are available to watch on our computer or played on our TV. The kids are already hooked. I also love the fact they have all the original SNL episodes to watch- CLASSIC!

I already use Netflix to watch other shows like True Blood, Dexter, Californication and Game of Thrones when they come out on DVD. They offer several of my other favorites- like Star Trek TOS/TNG/DS9/VOY, Quantum Leap, Sliders, SeaQuest DSV, etc.- and even documentaries via streaming. The only inconvenience is that now we might have to wait 6 months to a year until certain shows come out on DVD before we can watch them. I'm pretty sure we'll survive. I'm in no hurry.

To pick up our local news (mostly for weather & traffic) we bought a couple of $10.99 RCA Indoor Off-Air HDTV Antennas(Best Buy Affiliate Link) to pick up the local DFW TV stations. I'm also looking into buying a computer(probably costs $300 at most) to hook up to our HDTV to watch shows only available on specific network websites (like SYFY). After a few months, the tower will have paid for itself.

Have you figured out how much you're paying per channel with your satellite or cable service based on the number of channels you normally watch? Or are you part of the digital entertainment revolution, too? 

Now, if you'll excuse me...I have a couple episodes of Felicia Day's The Guild to watch on Hulu Plus! In the meantime- enjoy this video by the Geek Sundry crew- I'm the One That's Cool!

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2008 Bentley Continental Flying Spur Mulliner

My neighbor drives a Bentley. Yep- you read that right...my neighbor drives a Bentley! You would not believe the Financial Uproar its mere presence is causing in our neighborhood. I'm just waiting to get a text about some double-secret probation meeting about this Beluga (Bentley's expensive word for Black, apparently) Beauty parked down the street!

Personally, I find the whole situation amusing.

From what my wife told me, one of our other neighbors (who is our street's self-proclaimed Mrs. Kravitz) was the first person to notice the car. It didn't take long for the chatter to make its way to my wife. Everyone had questions:

Did they win the lottery?

Did they receive an inheritance?

Do they have a rich relative visiting?

Did they win it on a game show?

Are they drug dealers?

The thing is- no one bothered to ask. Instead, the rumor mill continues to spin. Well...that's not entirely true...my wife & I know the truth. I can't speak for my wife- but I don't plan to tell anyone. What fun would that be?

The reality is a bit boring- our neighbor works for a car dealership. A really high-end car dealership in Dallas (they also sell Maserati, Lotus, Rolls-Royce and are currently taking orders for the new 2012 McLaren MP4-12C). This 2008 Bentley Continental Flyer Spur Milliner he's driving is his current Demo Car. You'd think our other neighbors would notice the DEALER tag on the car...but not yet. (BTW- the Bentley can be yours for the low price of $109,700. And just in case you'd like to buy it & pay me to drive it to where you live- let's talk! I'm always looking for a good excuse for a random Road Trip!)

This entire situation is a great example of why some people in your life seem to want to hold you back or, in some cases, drag you back to their level if you try to change or improve your financial situation. If you stop spending money to attack your debt- people will think you're crazy and try to talk you out of it. If you start a business- people say you will fail and try to talk you out of making a mistake. Most Personal Finance & Business resources strongly suggest you ignore or avoid these people because they're "negative".

I understand why the gurus make that recommendation, but I don't agree.

I don't agree because I understand the psychology behind it- something known as the Boundary Model. The Boundary Model was created by Dr. Larry Prevost as a way to help people identify social standards of a specific group or culture. In this case- it's a form of socially enforced financial boundary.

If all your friends & family have always made $30k or less and you push to make $150k per year- you're going outside their standards & you get pushback. If your friends & family have always lived paycheck to paycheck and you start eliminating all extra expenses to save money- you get pushback. If you're a Personal Finance Blogger and you speak out in favor of increasing debt and living above your means- you're going to get some serious pushback!

Every group has a set of financial standards they live within and when you go too far outside these boundaries- the group will react. They're not being "negative", you're just causing them anxiety and throwing the group out of sync. You're throwing the social system out of harmony...out of behavioral homeostasis...and causing other members of the group stress. How dare you reject the collective consciousness! Didn't you get the text from your HOA? RESISTANCE IS FUTILE!

Picture from Memory-Alpha

Now that I snuck in my gratuitous Borg reference- back to the Bentley example!

Obviously, the people in our neighborhood think driving a $100,000 car is too much. Unfortunately, I also know what my neighborhood considers to be the other extreme- a crappy 94 Ford Taurus that is basically falling apart. I only know this because our neighbors called the cops when my Dad's car (he lived with us the first few months we were here) was parked out on the street for several days. The cops said they just wanted to make sure it wasn't abandoned, but I know it was because it was the worst looking car in the neighborhood. The officer gently suggested that it be parked in the garage to avoid any other issues. I'd say his Ford was probably worth about $500 at the time (and that's being generous).

We can continue to build the model of what's acceptable in my neighborhood by looking at vehicles that are merely tolerated by my neighbors...but just barely. I know my Tahoe falls on the same side of the boundary as my Dad's Taurus, because it's old, has high miles & gets dirty looks from a few of our neighbors. But so far, no one's said anything (to my face) or called the cops. I just get the occasional stares when I drive by. We have another neighbor who drives a BMW. A few snide comments are made about the driver "compensating", but no one's ever behaved the way they have about the Bentley. So, we'll say it is the equivalent of my Tahoe on the other end of the model.

The cars within the acceptable range can be filled with the typical makes and models most of our neighbors drive. We have a good number of Toyota, Nissan, Honda, Acura, Lexus and Lincoln owners around us.

With all of this information, we can now build our model to show what kind of cars are within tolerance, and which ones are not, in my neighborhood:

Both the Taurus & Bentley challenge the neighborhood standards and are, therefore, deemed unacceptable. My Tahoe and my neighbor's BMW are technically outside the neighborhood standards, but are tolerated within the area known as the "norm" - where a reasonable amount of latitude is given. The Toyota, Nissan, Honda, Lincoln, Acura and Lexus owners fit within the boundaries of our neighborhood standards- so they are seen as conforming with the acceptable standards.

So what socially enforced financial boundaries do you enforce or deliberately rebel against? What about your family and friends? Credit Cards? Investing? Home Ownership? Emergency Funds? Eating Out?

The great thing about Dr. Prevost's Boundary Model is you can apply it to a wide range of situations- financial and otherwise. I challenge you to try it with a financial aspect of your life and let me know what you find. Have FUN with it!

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Photo by Sam Howzit

I'm really excited about this post! I'm excited about it, because my wife wrote it. I've been asking her to write a few articles for the Debt Black Hole for a while...since she has such a unique point of view about our past financial problems. The things I've blocked out, she remembers quite well. I know how difficult this first post was for her to write. So here it is...let's hear it for the love of my life!

Do you remember a time when you had to tell someone information you knew would disappoint them?

Maybe you failed a class, stole a piece of candy, broke your best friend's favorite toy and you knew this would end the way they thought of you- FOREVER! Face it...you were a kid and still had lots to learn. As you got older, you just knew it would get easier. Or would it? How different could it be living on your own? I mean, after all, you would make your own money, pay your own bills, and still live the life you were accustomed to growing up. Best of all, no one would be there to tell you what to do or how to spend your money.

My parents made it look so easy. Little did I know what they actually did with their money. See, when I was a kid, I got an allowance and actually saved my money. In fact, my sisters used to come to me to borrow gas money. As I reached my teenage years, I didn't save quite as well, but I always had a little cash on me. I always considered myself to be pretty good with money. Never had a late bill, food was on the table and I always had money to go out with friends.

I am not quite sure when I started losing the ability to save money. I am guessing it was around the time I started college and the dreaded credit card applications appeared. I was naive back then, and wasn't sure what credit was. However, the first time I swiped my Discover card it felt good knowing the actual money wouldn't be due till later. Then I swiped it again and again and again. I was constantly shopping and buying things I didn't need.

At first, I didn't think there was problem with my spending. I paid the minimum amount and kept using the card. Dave never questioned me and I never thought twice about what I was doing to our financial future. Then we bought our house and a baby was on the way! All I could think of was what should I buy to make our house a home and all the baby stuff we needed for our bundle of joy. Mervyn's became my favorite place to shop! I knew we were having a little girl and the clothes I kept finding were too cute to pass up. She needed shoes, bows, socks, dresses...oh, the list goes on and on. Again, my husband said nothing.

Our daughter was the best dressed kid in town! I had so many clothes for her I actually spent time dressing her up in different outfits before she outgrew them, just so I could get a picture of her in them.

My spending was getting worse and I had no idea what to do. I was 26 years old and was scared to tell my own husband I was putting us in debt. I had a decent paying job and so did he. When he quit his job to run his own business, I got jealous and decided I would quit my job, too. We had another baby on the way, so why should he be the only one to stay home with our kids?

The problem was- I quit without a plan. I kept spending money on my credit cards and paying bills, but money was slowly dwindling away. I never stopped living the life I felt I deserved. Eating out, buying my kids anything they wanted, new clothes, new shoes, things for the house, and not once did I stop to think about where the money would come from to pay the mounting debt I was incurring on the credit cards.

Then September 11th happened and I was scared. Scared of where we would end up. I just knew he would hate me and never want anything to do with me again.

He knew how to handle money because his grandmothers took the time to show him where the money came from and how it went away. This is where I missed out. My parents never taught me how to handle money or where it came from. They only taught me how to ask for something and spend money to get it. In fact, it wasn't until after I was in college I learned a car needed oil changes and tire rotations every 3,000 miles. My mom always took my car while I was in school to do these things and never once did I ask why she needed my car during the day.

There were times my husband joked about me being a princess born with a silver spoon [Dave's note: would Platinum be going too far?] in my mouth and what I was about to tell him would not only confirm his thoughts of me, it would change the way he thought of me FOREVER. Or so I thought. You have to understand, my mother had me believing that by keeping my spending issues a secret, my household would run much smoother. I actually believed telling him would cause him to turn into some type of monster that would kick me to the curb!

My imagination got the best of me. When I finally quit listening to the voices in my head, I turned to him and told him how bad our finances really were. He was disappointed, but knowing the truth helped him understand my spending was spiraling out of control and I couldn't stop it.

I needed to spend money. I wanted to spend money.

I knew if I kept spending money the way I was, the life I was leading and loved so much would end with us being homeless or worse...him leaving me and taking the kids.

I wanted to change. I needed to change.

The only way that was going to happen was to open up and share every thought I had about money and why things were the way they were. It's still hard after 13 years of marriage telling him I spent money when I knew I shouldn't , but it is getting easier to open up to him and share my spending habits. He still gets disappointed, but instead of trying to fix me and get me to stop- he listens.

Isn't it amazing how the narratives we create in our heads about how something will turn out are usually worse than what actually happens? We certainly are creative when we're mentally preparing for conflict. My wife experiences this, I experience this and I'm sure you do too! Has there ever been a financial conflict in your life that you thought was going to be the end of the world as you knew it? What actually happened?

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Picture by Acarlos1000

Cue the dramatic music, because... I'm using Credit Cards again! Does that mean I've turned to the Dark Side of the Financial Force?

For more than a decade, after making stupid mistakes with Credit Cards & filing Bankruptcy, I was an extremely vocal member of the anti-Credit Card regime. I avoided Credit Cards like they were thin, plastic pieces of alien technology sent to Earth for the sole purpose of enslaving anyone who was stupid enough to use them. They seemed to possess some kind of magical power, giving them the ability to make you feel great as they suck the life out of you...and every last dollar from your bank account! As Arthur C Clarke was so keen to observe- "Any sufficiently advanced technology is indistinguishable from magic."

I think his sentiments are just as applicable to this particular financial concept.

So what changed? Two things- 1) my financial education & 2) my financial situation.

When I used Credit Cards in college I was naive. I didn't understand my spending habits or my temptations. Credit Cards were like FREE money now and, even better, something I didn't have to worry about paying until later. I could get the stuff I wanted now and just pay it off over time. Interest rates, fees and other charges were irrelevant because they didn't effect me in the present. I could enjoy everything in life I wanted now and worry about the future...in the future. It's not like my parents ever had Credit Cards. They barely had enough money to pay the bills, who in their right mind was going to let them buy something on credit. I felt like I was special...like the Credit Card companies knew my future was going to be better than my parent's past, present and future. Who was I to argue with these successful companies if they believed I was worthy of such an honor?

I already had a full-time job the last two years of my undergrad and was making (at least what I thought at the time was) good money. But I didn't realize how much of an impact carrying a balance could have on my finances and how quickly it could eat up all my income. When my wife & I got married, had kids, bought a house, bought a couple of cars and had to pay other bills- the reality of it hit...HARD. The future I had put off for so long had finally converged with my present. Fast forward a couple more years & we're being sucked into the Debt Black Hole (Bankruptcy). Like I said- HARD! I swore I'd never use Credit Cards again.

However, over the last year or so, my attitude about Credit Cards has started to evolve. Every so often I like to challenge my assumptions and absolutes. I decided to take a long, hard look at why I thought Credit Cards were evil. What I realized is- it was my financial ignorance that caused my problems. It wasn't the Credit Cards or even the Credit Card companies- it was me. It was so easy to try to blame others- but when I analyzed all the data- it was a lack of planning, a lack of understanding and a lack of personal responsibility that were staring back at me.

During our Bankruptcy I read just about every personal finance book I could get my hands on (it's amazing how much time you have for reading when you can't pay for cable or satellite because every last cent is going to your Bankruptcy Trustee). And almost all of them tell you to avoid using Credit Cards. But, I think, the main reason for that suggestion is the majority of the people who read those books are having financial problems and are already in debt. It's only logical that, when writing for this audience, you tell them to stop using Credit Cards and accumulating more debt. Take Dave Ramsey's Total Money Makeover (& Financial Peace program) as a prime example (and of course Dave still doesn't use Credit Cards- he doesn't have to- he's already RICH).

But once you have your financial life in order, is that advice still valid? It is...IF...you know for certain you can't avoid the temptation of carrying a balance (as a way to artificially fund your lifestyle) or using Credit Cards for UNNECESSARY purchases. On the other hand, if you can...without a doubt...limit your purchases and consistently pay off the card every month (or week if necessary to keep a azero balance), why shouldn't you use them to maximize your cash flow? Besides, I refuse to live in fear of Credit Cards.

I know for certain the people I admire from Enemy of Debt, Ninja @ Punch Debt In The Face, Dr. Cabler at Celebrating Financial Freedom and many other PF bloggers will adamantly disagree with me about using Credit Cards. But that's perfectly fine. Others like 20's Finances, Money Beagle & Financial Samurai will likely understand my new point of view. Everyone needs to identify and explore their Financial Superpowers (strengths) & Financial Kryptonite (weaknesses). If Credit Cards are a problem for you then, by all means, don't use them! Again, using another of Clarke's Laws as inspiration- "The only way of discovering the limits of the possible is to venture a little way past them into the impossible."

Want to know which cards are in my RFID Blocking Wallet (ThinkGeek Affiliate Link) right now? I must admit, I spent months researching every aspect of Credit Cards before signing up for anything. I wanted to make sure I was thoroughly educated. Thanks to the insights from Chris Guillebeau's Cards For Travel, Phil @ PT Money, NerdWallet, Geoff at NoobTraveler and several other resources- I put together a 9-month Credit Card plan.

Knowing I had not had any type of revolving credit account in over 10 years, I was pretty certain I would not be approved for a regular Credit Card. Because I didn't want to be limited on purchases, I decided against applying for any store cards. Instead, my best option was to sign up for a secured Credit Card. That's where my new Credit Card adventures begin...

CAPITAL ONE SECURED MASTERCARD

The first card I applied for was the Capital One Secured MasterCard. When you apply, based on your current credit, they'll ask you to deposit $49, $99 or $200. This money is refundable after a year or so. Even though they only asked me for the $49 deposit, I added a couple extra hundred to my initial deposit to increase my credit line. The annual fee for this card is only $29. A small price to pay to help improve my credit usage.

Once I got my card, the routine was simple. I started paying three small recurring bills with this card each month. I never charged more than 50% of the credit line at any time. I paid the bill in full each month. Not very exciting...but it's an effective system.

When I've used this card for one full year, I will contact Capital One & ask them to increase my credit line and refund my deposit to make this a regular card. I'm pretty confident they'll approve my requests.

After I used and paid this card consistently for 6 months, I applied for my next card. My first REWARDS Credit Card!

CHASE SAPPHIRE PREFERRED

The next card I applied for was the Chase Sapphire Preferred card. This has been the most popular rewards card for quite a while now. The reason I chose a rewards card was because of the initial 50,000 Point Bonus (recently changed to 40,000). This is worth about $650 towards travel or other rewards. You get the bonus by spending $3000 on the card in the first three months. You pay no foreign transaction fees, can transfer points 1:1 to several participating frequent travel partners and get discounted travel (20% usually) when you book through their Ultimate Rewards program. They waived the $95 annual fee for the first year, too.

This particular card is very useful to me for a few reasons. I get 2 points per dollar for travel and dining (which I obviously do a lot of) and 1 point per dollar for everything else. Since I've experienced a sharp increase in my Conflict Coaching & Conflict Engagement consulting work and Dispute Resolution speaking engagements over the last few months- my travel expenses are drastically increasing.

Even though I get paid UPFRONT for all of my services- I still have a 4-5 day span before checks clear & payments are posted to the appropriate accounts. Being able to use the card to pay for these travel expenses, instead of cash, allows me to better manage my cash flow.

As a bonus- I'll also be able to utilize the travel rewards to cut down on expenses when I start traveling outside Texas to attend Comic Book & Sci-Fi Conventions. I'm looking at you DRAGON*CON 2013 & the Cardiff Doctor Who Official Convention!

One of the most interesting things about the Chase Sapphire Preferred card is that I constantly get compliments about it when I use it. Not only is the Card # and other information on the same side as the strip (which makes most people do a double-take), but it's much heavier than most cards because it's made of metal. I also love the special 800 number where I always get to talk to a real person...<3 IT!

I managed to earn the bonus in no time with this card, basically using it to pay most of our monthly expenses. I just make weekly payments on the card, instead of to each of our individual bills. Making one payment is so much easier!

After using this card for a few months, it was time to apply for the next card. I decided to apply for AIRLINE MILES Credit Card this time!

CITI PLATINUM SELECT AADVANTAGE

I've always had good experiences flying on American Airlines. So I try to fly with them as often as possible. So it was a no-brainer to apply for the Citi Platinum Select AAdvantage OneWorld card. At the time I applied- I could get 30,000 Bonus Miles as long as I spent $750 in the first month and an additional 10,000 Bonus Miles if I spend $5000 in the first six months (sorry, but this offer is no longer available). This card also waived the $85 annual fee for the first year (the annual fee is now $95).

There are a lot of great benefits with this card though! I get priority boarding, first checked bag is free, $100 statement credit on my first American Airlines travel, I get double miles on eligible American Airlines purchases and I can transfer miles to other OneWorld partners- including British Airways (this was cool because we have plans to travel to London soon & I plan on volunteering for Mediators Beyond Borders).

I plan to use some of the Bonus Miles earned on this card to cut my flight costs to attend the Financial Bloggers Conference (FinCon12) in September. It's expensive for me to fly, because...well, quite honestly...I'm fat.

For my comfort (as well as for the comfort of the people around me), I usually purchase TWO coach seats (still less expensive than Business or First Class most of the time). When my family travels- that means I have to buy FIVE tickets even though there are only four of us! And despite most of the airlines claiming they will refund the price of the second seat if a flight is not full- I've never been able to get any of them to do it.

Not to mention, I don't want to have to have my own Kevin Smith-like "Too Fat To Fly" moment...Debt Black Hole doesn't have 2 Million Twitter followers (@debtblackhole) to back me up.

I'm excited about testing my ability to use Credit Cards again. Sure, I'm still a little nervous about it- but facing your fears is always somewhat stressful. Oh, and just in case you're wondering- NO- I don't plan to sign up for more Credit Cards anytime soon. I don't need or want them. These three cards suit my current financial situation perfectly. Plus, I don't want to have to deal with any more than three right now anyway.

But who knows...once these accounts have aged for a while & I've proven to myself I can effectively manage them...I might tap American Express on the shoulder & introduce myself. Only time will tell...

What about you? What's your stance on Credit Cards? Can you use them & consistently pay them off every month? Do you use rewards cards? What mistakes have you made using them? What do you love about them?

**Disclaimer: I have received no compensation of any kind for my reviews or usage of the Credit Cards or Rewards Programs mentioned in this article. The only affiliate link you will find in this article is for the RFID Blocking Wallet from ThinkGeek. I am not endorsing or promoting the use of Credit Cards to anyone who does not have the maturity to use them properly. In fact, I'm still against people using any Credit Card if you plan to carry a balance. Seriously- paying interest on them is ludicrous!**

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