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August 16, 2005

The Cautionary Tale Girl talks about money. Hilarity ensues.

Today is exactly the one year mark since Mr. X slammed the door on me and the cats. In that year, I have managed to stop bawling at my desk, stop smoking (so far, so good!), start writing stuff, discover the durable love of battery-operated devices and Face My Debt.

(Hi Dad! All the um, battery-operated flashlights are working great! They're just waiting for an earthquake!)

Of all the things I have accomplished this year, fiscal responsibility has been the most rewarding. It's like taking hold of my future and really, truly having faith in myself. Believing that I can live as a grown up, a real woman, one who brings home the bacon and puts it in the fridge. And then has a glass of wine and feels FANtastic about bringing home that bacon.

I can't control when stuff catches on fire, or when I'll bump into Mr. X in North Hollywood, or when the spontaneous belts and hoses and radiators may break on my car.

But I can control my money.

I can develop a plan, and have a goal. (In fact, my ONLY financial goal this year was... well. To develop a financial goal. Task solidly accomplished!) I tell you all of this because maybe out there somewhere is another girl like me who wants to hide in the closet and eat oreos every time their credit card bills arrive. Or go shopping. And we all know the best way to tackle your finances is to SHOP THEM AWAY.

The truth is, hiding from money and debt only increases your fear of money. And I kind of suspect that when you FEAR money, you will mistreat it. You may ignore it, strive for less of it, want it but feel selfish and greedy, or be completely emotionally strung out by the whole thing and your remedy is to go shopping. Or hide. Or pull a Scarlett and say tomorrow... tomorrow is another day. Pass the wine!

(And by "you" ... I mean "me.")

What we have learned, however, is that I AM A CAUTIONARY TALE. And if I can get a handle on my finances, what with my love of shopping and hatred of math and general ignorance of all things fiscal, than any human on the planet can get into shape and shake their little moneymaker.

To that end, I share with you my Remedial Adult's Guide to Money:

1) Never ever EVER lose track of your money.

So, hi ya'll! I was married. And in my fantasy life, I had a Barbie/Ken marriage and Ken was a Man (debatable, but still) and therefore imbued with the Ability To Handle Money. For years I worked and shopped and let Ken do all the manly money managing. Well. Not only was I wrong about Ken's personal predilictions, I was also wrong about his money-managing talents.

The Moral of the cautionary tale: While it is tempting to have someone take care of the adding and balancing and so on, never NEVER cede your personal financial power to anyone.
Participate in your financial well being.
Draft goals together.
Have a family money plan. Talk about savings and retirement and debt and debt repayment strategies and approach it as a team sport: two against the world.

Think about it this way: You wouldn't let anyone, not even your one true love, take total control of your yarn stash and do with it whatever he/she wanted at any time. Would you? Then why on earth would you let anyone have control over your finances?

2) Figure out what you owe.

Can't speak for all ya'll, but I was too scared at first to even know HOW MUCH DEBT I had. Sure, I had a pretty general idea ("general" meaning "a whole lot of debt" and "maybe I will cry" and "is there any ice cream?") but I did not KNOW the actual AMOUNT. And ya'll, that is sad.

The Cautionary Tale: Write down every bill on a piece of notebook paper. Or use my Excel budget (it's pink! makes it less scary!) Add it up.


3) Figure out what you make.

This should be pretty easy. Write down what you bring home for the month. See! Not too hard! You did it!

4) Spend less than you make.

Um, again. Things I have had to learn that most morons KNOW, yet me? With the hoarding habit and shoes and cats? Had to LEARN. Anyway. Moving on.

Spending less than you make will always be a smart goal, even if you make a bazillion dollars. Because when you spend more than you have, you're poor. You're endebted. You're unable to quit your job and join an alpaca herding community until you DON'T OWE PETER & PAUL.

Plus, debt clings to you mentally like a bad smell. The stink of debt permeates your day to day life without you realizing it, sucking the happiness out of every splurge (if you've ever had Acute Buyer's Remorse, ya'll know what I mean.) There's a psychic drain that comes from feeling like all you do is go to work, pay the bills, and toil away in the coal mines. That's why you have to spend less than you make. So when you DO spend, it's either to keep you living, keep you on the debt-repayment track, or keep you sane.

I started out with the budget but it took me SIX MONTHS of tracking my spending to figure out where it all went wrong. A month or so ago, I got a comment on my website that mentioned my allotted $550 was an awful lot for food & household items for a family of one girl + four felines.

I was a little ticked off at first. WHO ARE YOU TO TELL ME I SPEND TOO MUCH MONEY AT TARGET AND RALPH'S AND 7-11????

Then it dawned on me that maybe she was... you know. Right. Research on the Internets told me that an average family of FOUR spends $400 a month on household and food items. Ya'll. I was shamed.

Now I am down to $60/week at the grocery store, and extremely limited visits to Target for essentials only. My ATM spending was also out of control -- in one month I withdrew $360 from the ATM. FOR WHAT? Looking back over my receipts, I found out I was spending about $7 a day on lunch, plus more for gum, smokes, bottled water, and hi! $42 on MAGAZINES.

The cautionary tale: Track what you spend. Ya'll know that diet trick, where you write down every potato chip and carrot stick you eat? Treat your money the same way. Track it. Understand where you can cut back. And then, ya'll know, CUT BACK. You can use Quicken, your check register, a Word doc, a sticky note, or the back of a napkin. But figure out to the penny where the hell your money is going.

5) Pay off your debt.

I have massive consumer debt. MASSIVE. I'm still paying off my lawyer for chrissakes. But I have a plan now, one that involves calculating my balance and figuring out how much I have to pay each month to be FREE of debt in 24 months. Me! FREE! And when I say "massive" debt, I mean I could cry sometimes.

I have had consumer debt since I was nineteen years old, coincidentally when I got my very first credit card. Every day since then has been a payment. My paycheck, my life, it's all tied to a bill right now, and being free of that is my greatest achievable goal.

The cautionary tale: You have to stop accruing debt right now. This minute. DO NOT CHARGE ANOTHER ITEM. Research debt reduction online. Read what the experts have to say. Google "debt repayment." Find ways to lower your interest rate. Cut down on the lattes or movie channels or magazines, whatever you can, for a 12-month period and use every penny to pay off your debt. Start working on a plan, one you can live with, one that makes you feel in control of your own financial well-being.

So, those are my five Cautionary Tale pieces of learnin' when it comes to money. I don't know a lot -- let's be honest, until a few weeks ago my savings account was an old butter tub in the vegetable crisper -- but I'm learning. I keep thinking to myself... how do you knit a whole sweater? One stitch at a time. How do you become a financial grown-up? One dollar at a time.

Posted by laurie at August 16, 2005 3:46 PM