Debt Hater

Without A Financial Foe, I've Been A Spendthrift.

If you read my blog enough, you know I'm not thrifty. Or frugal or however you want to describe it.

But I am pretty good at keeping track of my spending, working toward my financial goals and saving money.I have gotten comfortable.

That's good! Because I want to be able to get what I want and go where I please without biting my nails or hoping I didn't just drain my checking account.

But it's also not so good. With comfort comes complacency, which can mean sliding back into bad habits that got me in trouble with credit card debt.

I have noticed that without a financial nemesis, I have been awfully slack with my dough.

I used to think "Do I need this or want this?" I used to avoid spots that caused me to spend on impulse (Target, I'm giving you the side eye).

But now... now I just wander through Target when I don't need anything, just looking. On my lunch break I'll wander through the cosmetics aisle of CVS to see if there are any new colors of anything, just in case. In case what? And let's not talk about my constant perusal of the sales pages of my favorite retailers (J. Crew, Banana Republic, Zappos... you mutha frackas).

I make lots of impulse buys. I don't manage my food budget well and don't really try.
These aren't huge obnoxious expenses, no. But every little one seems to make it easier to make bigger purchases, budget be damned.

For example, I flipped through my latest J. Crew catalog and picked out three separate outfits, complete with shoes and jewelry and ALMOST clicked "Submit" online, to the tune of $1,500.

What the H E Double Hockey Sticks?

I guess the difference is, I DIDN'T make those big purchases precisely because I didn't want a balance on my credit card or I knew there wasn't enough money left in my budget. So maybe I shouldn't beat myself up so much -- thinking is not doing.

But it sure is the first step.

When I was in debt, all I wanted was to be out of debt. When I took a step backward in debt repayment, I got depressed, then angry, then even more determined to pay it off. Every payment was a victory. Watching the grand total fall was thrilling. I could see the finish line.

Now that I am out of debt (and don't ever plan to go back, thank you very much), I can't say I have a financial goal that really gets my heart pumping. I wanted to save six months of living expenses because it seemed like the responsible thing to do -- one because the economy tanked and I worked for a tech startup and two because I wasn't crazy about my job anyway, but didn't exactly have a bunch of options lined up.

I made saving for this goal automatic because it was easier and, honestly, if I had to think about it and manually make those deposits, I'm not sure I would have done it. I think I might have found some other fun, but not asset-building things to do with that money.

Now I am sitting on the cusp of achieving my goal, in exactly the amount of time I planned to do it in. YAY! But... not as big a Yay as paying off my debt.

As for saving for retirement, um yeah, see, my personal finance gene must be defective, because that DOES NOT excite me. Most smart personal finance bloggers, or any smart person, digs saving for retirement or talking about building their balances. Not me. That talk bores the daylights out of me. My current 401k is doing nicely, to my shock... and to my disinterest.

I have said way back when I started this blog that money and money talk did nothing for me. Freedom was what I wanted. And money, to me, was the freedom to do whatever. If I could eat, have a place to live and move around as I pleased, then everything else would work out.

So, what am I missing here? I need a GOAL, a S.M.A.R.T. goal. I think the part of missing is the RELEVANCE. Right now, I can't think of anything I want so badly that I can focus financially like a laser.

How about you guys? Think I'm nuts? Are you in the same boat? Let me know... unless you think I'm nuts, keep that to yourself :-)

Eating Out or Cooking In: Which One Will Save Me Money?

Once upon a time in the South, I could buy about a week's worth of groceries for $40.

That included breakfast, lunch to take to work, and dinner when I got home. I was adamant about cooking at home because $40 for a week could not be beat. I was also deeply in debt, so I pinched pennies and cut corners everywhere to focus on paying off my debt and saving in my 401k (because I got a company match and didn't want to leave that money on the table!).

As I mentioned in my October monthly report, I got so good at managing my grocery budget, I could eyeball the contents of my cart and tell within $5 how much the whole thing would ring up. I planned meals around coupons and what I already had in the apartment. Now, some months I'd be over budget on food, but I did have it down to a science.

Eating out was rare, but when I did, I almost never ordered drinks (including soda) or dessert. I usually split my entree in half and took the remainder to work the next day for lunch.

When I moved to Washington, D.C., most of that went out the window.

First, I had seriously underestimated the cost of groceries. The first few times I went shopping, I thought I had about $40 worth of stuff in my cart and the clerk would be like, "That'll be $65." For some peanut butter and bread?! For nearly the first YEAR I was in D.C., I had no clue how much my groceries would ring up.

I also started eating out WAY more. And, because I was quickly approaching debt freedom, I'd order a drink. I'd order dessert.And I usually ate the whole thing right there. No seconds for lunch the next day.

For those of you who keep up with my monthly reports, you see that just about EVERY month I go over budget on food. But, honestly, I don't do a lot of the things I used to do. I don't do coupons anymore. The return on investment (i.e., the investment of time) was not worth the pennies I was saving. I also plan my meals based on stuff that sounds good or that I haven't tried before. And because I work later hours then I used to, sometimes I just grab something on the way home. I don't feel like cooking when I walk in my front door.

You'd think that this is the sole reason my food budget is so crazy. But no, actually, some months I do way better when I don't go grocery shopping much and just eat out. It depends on where I eat though -- a $60 meal out and a $15 meal out make a difference. Since I eat at swankier places than I used to, sometimes it's hard to eat just half the meal -- the prices are higher and the portions are smaller (but the food is so much better).

So, here is the question: am I wasting time and money trying to cook at home? Should I just let someone else do the cooking?

Well, I still have no idea. I think I need a deeper analysis on just what sucks up my money without leaving my fridge full by the end of the week. Even though I keep track of every receipt, I think I'm not clear on where my food money goes.

Any suggestions from yall out there? What could I do to get a picture of where this money is going? Any suggestions for getting back control of this part of my budget?

October Monthly Report: In the Black Due to Third Paycheck

Can't pat myself on the back this month for being in the black -- it was a three-paycheck month.

I went $190 over my flex money budget -- that was entirely due to a pair of shoes I bought (I tweeted about it!) and I bought two sweaters on sale at Banana Republic.

Without the third paycheck, I still would have been in the black for October, by about 25 cents. LOL!

I also went nuts on food. Lots and lots of eating out and STILL going over budget on groceries.We all know that the clothing thing is bad planning and my weakness -- sometimes I turn to retail therapy, other times I don't plan well for something I need to buy anyway.

But the food thing, I have been struggling with that since I moved to D.C. In my next post (which I promise will be tomorrow, not two weeks from now), I'll talk about my out of control food spending.

The good news is that I am well on my way to reaching my goal of saving six months of living expenses. Even with the car repairs, I should have that amount saved by the end of December. Happy New Year to me!

Some Cash on Time to Help With Car Repairs

The good news is, I got a freelance assignment that pays $1,000.

The bad news is, I'm pretty much using it to pay for my car repairs.

Blech.

As I mentioned in my last post, Nina was having some issues. I took her for a second opinion diagnosis to a local dealer (yes I know, service repairs at dealers is more expensive, yada yada). The dealer said the exact same thing as the first mechanic I took it to (who told me to get it checked by a dealer).The cost of the repair by the dealer was about the same amount as the first shop. So, I left it with the dealer. Long story short, all of Nina's ills cost me $1,362 (which came out to be a little less than the original quote... and I do mean a little, like $20). That's not including the new windshield I need, now that the little crack has spread into a big one (but not obstructing my view in any way).

So... this extra money, which it truly was extra since all other expenses and savings goals were on track, is just now for dumb old boring car repairs, because I don't want to gank my emergency savings for the whole amount.Not fun man, not fun.In the last post, I asked how much money should you put into a car before you just purchase another?

Well, I think I haven't nearly put enough money into Nina to even ask that question. This year, so far, Nina's cost me less than $3,000 in repairs, which is a little less than $3,000 more than usual. But that's it, no more to pay. Whereas another car would be years of payments and higher insurance costs. And I hadn't saved for that. My e-fund, as far as I'm concerned, isn't for a new vehicle or even a downpayment UNLESS I really needed a car and Nina blew up, was hit by a train or got stolen. I.E., real emergencies.

Thus, Nina and I will be together for a while to come. What I need to do now, though is more accurately assess just what regular maintenance on a car approaching 100,000 miles on it will need each year and work that amount into my monthly budget.

Nina Once Again: Dipping Into the Emergency Fund for Car Repairs

Nina, seriously.

I love my car. It's reliable and we've been through a number of scrapes (y'all have read some of my auto horror stories, most of them my fault) and get out pretty well.

Well now that Nina is all paid off, she is acting up.

I was driving home from yoga class when I turned a corner and BOOM! The car rocks and suddenly I'm riding a little low on my side, the rear tire making a funny noise. I get home and park, and find a big, jagged hole in my rear driver tire that looked like a velociraptor tore into the tire.
AAA put on the spare for free, but I had to pay Sears $220 for a new tire and an alignment.

Not four days later, I noticed a crack in my windshield way down low, so much so that I didn't even see it until I was dusting off the top of the dashboard. It's longer than a dollar bill, so the whole windshield has to be replaced.

I eliminated comprehensive coverage from my auto insurance to save money on the premiums, so there is no free glass repair. I have to pay out of pocket to get a new windshield. Thankfully, I did sign on with AAA, and can get a decent discount using one of their glass partners.

But that's still $194 (about $60 cheaper than the other two companies I called for quotes).

Then Nina started shaking. A silent rumble, but you could feel the vibration in your chest and it made my hands dance on the steering wheel. The Service Engine light came on, then went off. Came on again, went off again and the rumble disappeared. Then they both returned with a vengeance when I came back from Hawaii. I take Nina to get checked out. They told me to go to a dealer to get the definitive diagnosis, but it's either the spark plugs, an inexpensive repair, or something wrong with parts of the engined, which could cost upwards of $1,000 to repair.

The check engine light has gone off and the rumble disappeared... for now.

Cutting my insurance premium in half for the past year will pay for the tire and the windshield, but that still leaves the engine. And all of this will still set back my six-months-of-living-expenses goal... hopefully by no more than a month, but still.

At what point do you stop putting money into a car?

I was hoping to keep Nina running for at least another five years with routine maintenance and simple repairs (like brake pad replacement, new tires, etc.). A whole new engine? Is it even worth doing that with today's cars or should you just get another one? As much as I DO NOT want the hassle of getting another car (and making a car payment for years AND paying higher insurance, lord no, help me), I also don't want to pour what could amount to a new(er) car into this one. Come on Nina, you're only five, work with me!

How do you guys decide when it's time for a new (as in new to you, it could be used) vehicle?

September Monthly Report: Back In the Black After A Lovely Birthday

Last month, I was $120 in the red.

Carrying that deficit into September, I finished the month with $45.
Whew!

Being in Hawaii for a week spending money I had already saved for the trip saved me!
Which, I must confess, is not a good thing. If I finished with $45 by essentially eliminating a week from the month, then I undoubtedly would have run deep into the red again.

There are two problems as I see it:

• I am NOT sticking to spending only the $675 I have available in flex money. Instead, I spend what I save in other budget categories. So, if I save $50 on groceries, $50 on gas, then I just spend $100 more on clothes. Technically, that's not terrible, but if I stuck to my pre-determined spending allotments, there would be more available to save each month, getting me to my six months of living expenses goal faster.

• I front load spending. I spend up to 45% of my budget within the first week of the month. Um yeah. So I spend the rest of the month trying to stop the bleeding to stay in the black. It's a cycle -- I curtail spending so much for the last half of the month, that I kinda go nuts at the start of the following month. If I can spread it out, I think I can avoid blowing my wad before the month gets started good.

The question is: Just how do I solve these two problems?
I wasn't always doing this, so I need to figure what worked before and why I am having trouble now.

DH

Happy Birthday to Me from Hawaii!

Hello readers!

I have not forgotten you. I am just on vacation on Maui for my birthday.

Aloha!

Went hiking Haleakala and today went surfing. Heading to a luau for my birthday dinner this evening.
I will be back, when I am back in the continental US.
Until then, hang loose!

Mahalo!

DH

My August Monthly Report: I Blew It! And On Just Two Things...

I was $120 in the hole for August.

While that is bad, I gotta tell ya it's not as bad as I thought it was going to be!
I told y'all I tossed my budget to the wind. I spent $400 more on non-necessities than my budget allows (currently, that's $650 a month not earmarked for savings and the essentials). That's way crazy. The only reason I'm not further in the red is because I came way under budget in every single spending category besides my rent and such. I even came under budget on groceries and dining out! Merciful heavens, I don't think that's ever happened before!

So what the heck happened? Two spending categories are responsible for my entire deficit: Cosmetics and Clothes.

I include hair care and such in my cosmetics budget (it still tickles me that I even have a cosmetics budget) I never get my hair done, but this month I wanted to and I found a neat little salon on my clandestine visit to NYC this month (Clandestine because all I did was stay home with my mom and gram and visit with my brother. I didn't tell my peeps I'd be in town.). My stylist was off the chain and she created a cool style that would play well at work, keep for two weeks and look HOT when I unbraided and untwisted the whole shebang. Well worth the money I spent -- $80, a small sum for what I had done, but $10 would have been too much because I hadn't budgeted a penny for this.
But before I even got my hair did I was over budget on cosmetics by $4. As I mentioned in my post on my sudden cosmetics hunger, I talked about all the stuff I was suddenly so interested in. Spent more this month on make-up than I think I have total in the past three months. But my eye shadow is fierce!

Clothes, fall approaches and I just wanted some new digs. I wish I could say I am done shopping, but not even close. I bought most of what I got full price (I know, please don't throw anything at me) and at my favorite boutiques, which tend to be overpriced as it is anyway. I didn't do any of the  searching pricing, considering that smart shoppers know to do. I saw what I wanted, tried it on and bought it. Shopped like a man... a fashionable spendthrift man, but a man nonetheless. I burned $433 in this category this month. At least I love everything I bought...

And that's it ladies and gentlemen. So now I have to commit to holding in the reigns to make up for the hole I dug. I am sure I can do it and, like I said in my previous post, I really don't have a choice. I HATE consumer debt and I am not in it now, but keep on running into the red each month and that's just where I'll wind up. Not this tall brown girl. Been there, done that and NEVER going back. Here's to a more responsible September!

DH

My Financial Coaching Experience

I started to volunteer with a university-affiliated, volunteer financial coaching program (thanks to Mapgirl for telling me about it!).

All they really expect you to do is provide basic, common sense advice to people in a financial bind. There is a 12-hour training course and a big, fat binder full of materials to use in session so you're not just making stuff up or flailing about when meeting with your client. But I was still a little nervous because I am not a professional and money is not an issue to mess around with.

Especially not for these clients. These are usually people or the heads of families who are seeking some kind of government assistance and one of the requirements is for them to get financial counseling. They're not like me -- young, gainfully employed with a steady paycheck and benefits, no children and no worries as to where I'll sleep or when I'll eat in a given day. They might be facing eviction, have lost their jobs, have more than one child, are in debt and have cut their spending down to the bone as it is.

I got a client about a week ago and went to meet her. She was a mother of two and in debt because she wasn't making enough money to cover all the regular bills. She had borrowed against her 401k and took cash advances from her credit card. When she laid her numbers in front of me, I thought "Um, ok, you're screwed. You'd need to earn three times this to clean up this mess."
But of course, I didn't SAY that.
I just sat there eyeballing her balance sheet.
The money she spent on daycare and her rent essentially ate up her entire check. Thus, anything else she spent money on that month put her in the red.

"Ok," I said, feeling terribly inadequate and unprepared. "Let's break this into small chunks."
We spent the next hour hunting for money in her budget. I kept pressing her (nicely though) to find out where she might be blowing cash and not realizing it -- snacks for the kids? The movies? Starbucks? Cable? She did wind up spending quite a bit on birthday parties and all those random, annoying school expenses and dining out with other families. But she didn't know just how much. "Ok, you're going to keep a spending record for a month and track every single penny."

I told her to get in touch with her social worker and find out if there's any way she can get assistance with child care. I stared at her numbers some more. Her car note was big, but she was five months away from paying off the whole thing. "Ok, when's the last time you shopped around for car insurance?" She hadn't. "Good! Check into lowering that too without losing coverage."

Finally, we came up with the following action steps and I meet with her again in September to figure out where we can trim more fat to blast away her debt and build a small emergency fund (I'm talking maybe $500 to start).

1. Keep track of your expenses for one month. Hold onto all receipts and sit down each day to write it all down.
2. Shop around for car insurance with the same coverage, but lower premiums.
3. Visit HR to discuss adjusting tax withholding to keep more money in the paycheck.
4. Check with social worker and the county to find childcare assistance.
5. Check to see if the children are eligible for Medicaid (she was spending quite a bit on her son's dental work, which Medicaid would cover). If they are, see how much money you'd save if they were enrolled and not on your work health plan.

She seemed far more hopeful when she left than when she first arrived. She told me it was a big help and she'd be back in a month. I'm crossing my fingers.

Ok, so, how did I do? Anything that I missed in these initial action steps (and be gentle with the critique, it was my first time :-)  )

DH

I Want! I Want! I Want!: A Bad Case of Covetitis

Covetitis (noun) Strongly desiring to have, get or purchase things, but not actually having the money available to do so. Covetitis may lead a person to purchase said items anyway, leaving them in a financial bind or a mad scramble to fix the money mess it creates.

I get Lucky magazine, which, for those of you who may not know, is a magazine all about shopping, primarily for clothes, cosmetics and such. I didn't subscribe to it. I've never thumbed through it. But for the last three months it's been showing up in my mailbox. In each issue is a page covered with little sticky tabs that say Yes! or Maybe? on them. The idea is to tag up the stuff in the magazine you want to buy.

This last issue was the Fall Fashion issue. Now, for those of you who have been reading my blog for a long time, you know I LOVE the fall. It's my favorite time of the year. My birthday is just days after the autumnal equinox. I love the weather and the blazing leaf colors. And I LOVE fall fashion. Best stuff you'll see all year. So indeed I flipped all the way through this Lucky magazine I didn't subscribe to and I pulled out that sticky tab page and started tagging up the magazine -- some boots here, shoes there, jersey dress here, turtleneck with sheath dress...

I am also hankering for a smart phone. Why? Honestly, I've wanted one for a long time and was going to need one, I felt, for some of my future business plans (well, not so much plans right now. More like... visions, hopes, dreams, maybes, you know). Anyway, the one and only reason I haven't already bought an iPhone is that I didn't want to switch to AT&T (that and I can't get used to the text type, no tactile feedback). So now I am all hovering around the Palm Pre. The thought of dropping that much dough on a phone still sticks in my craw, but these things are less phones than mini-computers these days. Anyway, I covet.

Honestly, there is nothing wrong with wanting to purchase things you want. The trouble comes, as explained in the definition of covetitis that I made up, when you don't have the money for the things you want -- but you start buying them anyway.

Take me this month, for example. I pretty much flipped my budget the bird and bought jeans, tops, shoes, movie tickets, tasty restaurant dinners, random gelato and lord knows what else. I am $50 in the hole for August, with an entire week left. I could put the breaks on now, but I somehow don't think that I will. Will I be more sober in September? I won't really have a choice. Because we all know how I feel about DEBT! Not getting on that slippery slope again.

But the larger question is, what causes covetitis anyway? Why do I want want want? That's the real issue. If I knew what was fueling that, I could address it. In the past, I've noticed that when I am sad or feeling like I need some comforting, I get the I wants. When I am dissatisfied with some aspect of my life (or my self), I get the I wants. I want to be someone else, perhaps. When I don't have clear goals or purposes for my money or for myself, I get the I wants. When I feel unrewarded for things I worked really hard to do or that turned out successfully, I get the I wants.
But then sometimes I get the I wants because the weather changes! Or because everything looks so darn cute in the windows...

I think this month I have been dissatisfied with myself and what's going on in my life right now. I think if I had these things, I'd look and feel so cool and so good and it would motivate me to... I think that's where my head is.

So, when you have a bad case of the "I wants" what is that you get hankering to have -- and what is it that you REALLY want, the shopping just being the proxy for that? Share. Group therapy is good. :-)

DH