Money Monday$: Crazy Thought of the Day & What to Do Next

So I've paid off over half my debt in a year, and have $21K left to go. How long will it take me to pay it off? Well, that depends on what I do next. I am on track to pay off my car in the next 3-4 months and would love to knock out the credit card before the end of the year as well, which I think I can do. In an ideal world I would pay off the student loan and be totally debt free by the time I turn 30 at the end of the year. BUT there are a few key components to my life that need to be sorted out first...like getting a job or finding a "career" or just saying screw it and taking off on another adventure.

My BFF and I often have conversations that start with “Here was my craziest thought today….” and boy do we have a lot. Right now, the crazy thoughts in my head sounds something like this:

“You’ve just made some extra money in Oklahoma, what are you going to do? Take a trip to Costa Rica and learn how to surf, obviously! Wait, no, you should just go to the Bahamas and lie on the beach and drink fruity rum drinks! No, no, no, you are on the Ramsey get the hell out of debt plan and need to pay down on your car, then your credit card and finally your student loan. Then 6 months of living expenses and start an IRA. Oh don’t forget about life insurance somewhere in there too. Screw paying off the car, sell it! Pay off the loan, pocket the extra money and go to Costa Rica, then the Bahamas and maybe Asia! Now, now Kate, you should really settle down and get a real job, maybe find a career. You know, figure out your life. Get some actual reliable insurance and a 401K. Most of the people around you are settling down and having babies, aren’t you ever going to do the same? COSTA RICA!!! Go teach English in Thailand! Bike across Cambodia! Get a job. You made some extra money, but not THAT much. Calm the **** down, continue the 100 Day challenge and keep writing, thinking and dreaming. You’ll figure something out.  COSTA RICA!! Oooooh, didn’t you want to buy yourself a fancy new road bike?”

It’s amazing that I ever get anything done. If any of you ever wonder why I seem to change my mind/life/plans “on a whim” it is actually because I’ve been mulling it over for days, weeks or even months but haven’t verbalized it to anyone. Much of my time is spent analyzing the crazy thoughts and debating the best option for me at the time. Who? Where? What? How much will it cost? What do I have to sacrifice? What do I have to gain? What do you want to do? What should you do? Who is telling you that you should?  Who can I talk to about this? What does my BFF think? What is my ultimate goal? Do I have a goal? Will this bring me closer to all the fame and fortune that I am clearly seeking? 

Okay, that last one was a joke but most of the other questions are applied to the variety of situations I find myself in and options that I come up with.  Ultimately, I aim to make the best decision with the information I have at the time (and the money I have, or lack there of). I bought the Airstream because I was using it quite a bit while traveling for work at the time and not living in my apartment which I was paying good money for. When it turned out that I had steady work in Austin and was not on the road anymore, I sold it. Don’t get me wrong, I love the crazy thoughts that run through my mind. Many fun, interesting and good experiences have come from them, but they can be frustrating as hell to sort through to get to the good stuff.  

I’ve got an idea for the career direction I want to go in (I think, maybe, well, we'll see) but it involves some training and education, an internship or two, lots of experience and completely switching gears from the one I’ve been running on for the past three years. Film work is definitely hard, but it would be the easy thing for me to keep doing. I know film; I am comfortable with it and am confident in my abilities as an assistant production coordinator. 12 hour days? Unpredictable schedule? Random tasks? Coordinating crazy travel? Arranging meals for lots of people at different times? Dealing with a wide variety of personalities and egos? Sure, I can and will do it all but I don’t really want to any more.  It does not fulfill me. I am capable and good at my job (or so people tell me) but it is not good for me in the long run. The more film jobs I do, the further away I get from finding a career that fulfills me and allows me to fill the rest of my life with things (and people) that I love. Why would I stay in film? For the money (and the people, I do get to work with friends), but that isn't enough anymore. When I chase money, I am not chasing my dreams, even though they aren't clearly defined just yet, I know for a fact that my dream is not to work in film. So what is my dream? Question of the day my friends! I've been trying to figure it out during this 100 Day Challenge while still trying to pay down on my debts and not dip too far into my savings. On a recent day when I was particularly annoyed with my current "job" situation, I got this email from TUT (otherwise known as The Universe):

First, choose from the options that thrill you.

Then, choose the ones that also teach you.

And from these, Kate, choose the scariest.

Butterflies in your tummy are good,
    The Universe

Damn that universe! Always has something worthwhile, appropriate and timely to say. As soon as I narrow down my options I'll let you know, but in the meantime I'll be throwing all my nickels and dimes at my debt while trying to have a little fun and learn a thing or two in the process.

Peace, love and debt free dreams,
Po$$

Money Monday$: Smaller But Still Stinkin' Pile of Debt

So it is Tuesday, sue me. I’m playing catch up and trying to get my “life” back in order after living out of my car for the past 5 weeks. And so here is long overdue next episode of Monday Monday$, errr, Tue$day. …

In January 2010, I had $49,567.28 in debt. Smallest to largest they were as follows

Wells Fargo Credit Card - $2,213.20

Honda Loan - $7,967.00

Citibank Credit Card - $9,944.36

Sallie Mae Student Loans - $12,358.08

Airstream Loan - $17,084.64

 If I didn’t get aggressive and merely made my minimum payments on everything, like originally planned, I would end up paying over $65,000 on everything. ACK! I knew it all had to go and had to go fast, but how? In the past, I had read various books by financial “experts” including Suze Orman, Jean Chatzky and a Personal Finance for Dummies book; all have different advice on paying off debt. Highest interest first, largest debt first, smallest debt first, hold onto the student loans to better leverage your money, consolidate it all and pay one payment, etc. Even with this knowledge, I was making big mistakes with my money and had not changed my behaviors.  It wasn’t until I was introduced to Dave Ramsey and “The Ramsey Plan” last year that I really changed my spending behavior. My BFF and her fiancé at the time were taking his course before they got hitched and they kindly shared everything they learned (and the DVDs) with me. You can read about his plan on his website, but basically he teaches simple “baby steps.” Save a small emergency fund, get out of debt using the “debt snowball” method of paying debts off in order of smallest to largest, save more, invest, save for college and pay off house if applicable, and give. He advocates simple methods of using cash, spending only what you have, never taking out auto loans or credit cards and other methods that we (I) have forgotten in times of easy access to “free” money. Live like no one else now (frugally while paying off debt) so you can live like no one else later (spending and giving whatever you want).  Sounds cheesy, but it works.

So I started the baby steps. I had a little savings built up for the lean times between film projects (probably around $1500). I decided that January to stop using credit cards once and for all. Previously, my unemployment M.O. was to put everything I could on credit cards, use my savings for rent and things that didn't take plastic, and then pay off the cards once I got a paying gig again. As you can see, I never quite got the "paying it off" part down and owed over $12k on two cards. When I started working again and got actual paychecks, I knocked out the Wells Fargo credit card in a couple months and canceled that card.

Next up was to assess the Airstream situation. As much as I loved that thing, I made a bad choice by taking out a loan for it. It was well "within my budget" and I was paying slightly less than I was when I was paying rent in an apartment. But as my perspective on debt changed, the Airstream turned from a symbol of freedom (hello, a home on wheels! can't get much freer than that!) to a burden. It would take me at least 4 years to pay it off and in that time, it would probably depreciate at a much more rapid rate than I anticipated, considering the wear and tear I (and my cats) put on it. So it had to go. Luckily a coworker happened to be in the market for one, she happened to mention it to me one day at work and it just snowballed from there (pun intended.) I sold it in June, which meant I paid off the loan (down to around $16k by that time) and essentially got back what I put into it (I paid $19,600 for it and had put at least $2000 worth of repairs on my credit cards in 2009). I put the profit into my new "hills and valleys" savings account and oh my God did I breathe a sigh of sweet, glorious relief. I had not had that much money in my account at one time since working on location on a film in 2005 (turns out that per diem and 6th day extra pay was pretty awesome). I decided on my "safety number" for the H&V account and threw every extra dollar I could into it. Then I paid extra on my car when I could, while maintaining minimum payments on the other debts. Two down, three more to go.

At this same time, I cash flowed the summer of weddings all over the country (and Dominican Republic). It was important to me to spend time with the lovely ladies in my life and to be there for their big days. This is where I deviated somewhat from the true Ramsey plan, as he is all about sacrifice, including vacations, travel, etc. This would be one of my "weaknesses" - travel with or to see friends. I know this, so I try to plan for it and pay for it in cash so it doesn't follow me home. At least half of that $10k on the Citibank credit card was from the last summer of weddings I had......in 2007. Ugh.

Which brings me to today. The Airstream is gone and the Wells Fargo card is paid off and closed. Currently, I owe $10,489.44 on my student loans, $8,831.50 on the Citibank credit card (10% interest on a $10k balance is $1000/year, which is why it looks like I didn't pay shit, when I did, it just is not yet enough) and $2,292.77 on the Honda for a total of $21,613.71. It is still a lot and frustrating at times, but it is a hell of a lot better than where I was a year ago. When I focus on the fact that I got rid of $26,561.88 in a year, I feel pretty darn good about it! Now, how long will it take me to pay off the rest of the debt? What will I do after that?

As Dave says: Cash is King,
Po$$

Monday Monday$: Big Fat Pile of Debt

I like to think of myself as a fairly intelligent person. Feel free correct me if I am wrong. Though I was an English major, I have a well rounded education and seemed to excel in math up through high school. I know that negative numbers are "bad" and less than positive numbers. Heck, I think I learned that back in grade school. So how the h-e-l-l did I start 2010 with $-49,567.28? Yes, you read that correctly. I had $49,567.28 in the red as of January 2010, when I started actually paying attention to my own personal finances. I owed almost $50K to a variety of banks and financial organizations that willingly and happily loaned me money throughout my adult life, so long as I agreed to pay them back and then some with interest. This included a loan for my "house" (an Airstream trailer), student loans, a car loan and two credit cards. 

I thought I was living within my means. I had two credit cards with a combined available credit over of $20,000, so long as I didn't exceed my available credit and made my payments on time means I was doing pretty good! The interest rates were the lowest available and I always tried to pay extra when I could. My car loan was reasonable, I bought a cute brand new Honda Fit at the end of 2007, making sure the monthly payments were well below what I could afford so I'd never have any problems making them. The Airstream loan was reasonable too, I thought. I gave up my apartment and moved into it full time, the combined payments for the loan and the rent at the property where I parked it added up to slightly less than my rent at the old apartment. No problem there. Then there are the student loans. Everyone has student loans. How else do you go to school, especially a private one? Answer: Sallie Mae. We're pretty close now, she's been in my life for over 10 years and only made me start paying her back 6 months after I graduated from college. Not only that, but she only makes me pay $132.05 per month until the loans are paid off. This is less than I spend on groceries and so generous!  

As I read and learned more about personal finance last year, being the nerd that I am, I created a few spreadsheets to calculate how much I would actually pay on the loans versus the original amounts I borrowed. Please note, I did very simple math and multiplied my monthly payment times the number of months in the terms of the loan. I realize there are probably more complicated exact calculations involving interest and integers and cosines or something, but remember I am an English Lit chick just starting to figure out this personal finance thing. This is what I discovered:

ARE YOU KIDDING ME?????!!!! I was going to end up paying OVER $14K MORE than I originally borrowed????!!!! I could buy another new car for that! I could take an extended trip to Europe or Asia or anywhere I wanted for that!!! I started sweating, cursing and threw a little fit by myself when I first saw those numbers. I know how to multiply, divide and add things up. How did I not calculate the ACTUAL amount I would be paying instead of just worrying about the original loan amount and the monthly payments? And to think, this doesn't even include my credit cards, which I am not going to get into today. My blood pressure still rises when I look at that chart. Ugh, ugh, UGH! What the hell was I going to do?

To be continued next week...

Money Monday$: What Will You Do For Money?

Driving through central Oklahoma

I didn't post last Money Monday$ because it was Valentine's Day, and pictures are way prettier and more fun than money, most of the time. This Monday I am posting super late because I spent the better part of today driving 600 miles to northern Oklahoma for work. As I mentioned in my last post, I wasn't exactly planning working on a film during this 100 Days Challenge, since I knew of nothing on the horizon and I am looking for alternative forms employment, or maybe even a "career." But this short job popped up and my savings account did a little happy dance when it starting thinking that it didn't have to support me all by itself for a little while.  So here I am in a delightful hotel overlooking a small town mall with a Dillard's AND a Sears and will be slaving away 12-14 hours a day for the next 25 days.

It could be worse; there is free internet, free breakfast and a little gym at the hotel! Not to mention I am working with one of my good friends and it is an interesting film project that will be cool to be a part of. I do have a special place in my heart for random small towns and cross country road trips so a month in Oklahoma is a little adventure for me. But the real reason I took this job is for the money, which is pretty much the reason I have spent most of my working years in film so far. It pays me, sometimes well, sometimes not at all, but either way I have managed to make a living doing it for six years. Even though I bitch and complain about film jobs more often than not, I just can't say no to a paying job. Crazy right? Who would turn down paying work? But I am walking a fine line between paying down my debts, saving up money for a career/life change and working positively towards that change while trying to put my health/happiness first, before jobs and before money. So why am I at a hotel in Nowhere, OK? Because I see it as an additional stepping stone to my next move. I can save more money and buy myself a little more time so I can do a thorough and conscious evaluation of my next move, without having too many money induced panic attacks in the process.

It is a compromise, as I would much rather be back in NB doing "nothing" but focusing on the 100 Days, but I don't live in a total fantasy land (yet) and do feel like I "need" to be working if the opportunity presents itself. Something about feeling productive, making a living, contributing to society, blah blah blah.  Hopefully someday sooner rather than later, I will be in a financial position where I don't have to make compromises and sacrifices for money. In the meantime, I will be working my 100 Days off as a temporary Okie.

What sacrifices and compromises have you made for money?

Monday Monday$: Volume 2

So Much Room for Activities!*



I need to find a way to finance my activities. I've got plenty of room for them, as my preferred activities all happen in the great outdoors. I have known this for a while, but was reminded of it this weekend after having a blast at tennis camp here in NB, which was not free unfortunately. I've fallen in love with triathlons in the past year, a pricey hobby with the fancy bikes, heart rate monitors, wet suits and entry fees. This is why I still ride my cheap mountain bike, use my fingers to calculate my pulse, wear the "free" wetsuit I got from my first training group and am only doing a couple races this next season.  If I could afford it, I'd go on a scuba diving trip once ever three months instead of once in my lifetime, which is all I've done so far. I want to take up rock climbing, but this involves a whole different set of expensive equipment, not to mention the skill set and muscles I must acquire in order to pull myself up many feet in the air with the tips of my fingers in tiny crevices.

These are the things that fill me with joy and make me jump out of bed in the morning, excited for my day/week/month/year. When I don't have a fun athletic activity to look forward to and train for, I become lethargic, bored and usually end up eating more ice cream and frozen custard than I should and then wonder why the top button on my pants is putting up such a fight.

Half the reason I don't always do some of these activities is the money, or lack there of.  I have the usual bills to pay, debt to get rid of, groceries to buy and don't always end up with much left over to fund my "recreation and entertainment." There was a time when I financed much of my lifestyle with credit cards in between paying jobs, but that is for another post. These days I operate on a "cash only" basis, meaning if I don't have the cash on hand (or in my bank account), I don't buy it. WHAT?!!!! I know this sounds crazy, but sometimes I have to tell myself "no," which I have recently learned is not a four letter word.

The word "no" sucks. It means sometimes I don't get to do what I want in order to still do those things that I need, like make my car payments so the repo men don't show up at my house and take away my adorable little car. I've started this thing called "irregular income planning" which means I look ahead to see how much income I may or may not have coming in the next month and budget accordingly in the order of importance. 1. Food (groceries only, no going out). 2. Rent/Utilities (if applicable) 3. Transportation (car payment, gas/oil).  Once these are taken care of and I still have money left over, I move down the list to my cell phone, student loans, credit card, household repairs/expenses, restaurants/going out money and recreation/entertainment.

This means that some months I can play and other months I can't (or shouldn't) because I just don't have the money coming in to justify another $140 entry fee to a triathlon. Or this means that I don't go out to eat or drink to save up and spend that cash elsewhere doing something that I really love. This might be why you haven't seen me hitting up the latest restaurants and bars in a while. I'd rather eat oatmeal for dinner and be able to pay the entry fee for the half marathon in April. It's hard and takes "discipline,"  another new word in my vocabulary.

Some months I am really well-behaved and strictly stick to my budget. Other months I am not and I blow all of my "entertainment" money in one weekend, then dip into other budget categories to pay for another race which is a big no-no. Rather than kicking myself, I try to think about how well I am doing, especially considering my previous habit of not thinking about my expenses. I'd  throw everything on a credit card and assume I'd be able to pay it off on my next job. Right, which is why I am still paying for trips and things from 2007.

If I have a bad spending week, I try to squeeze in some cheap or free activities that still contribute to my health and happiness without breaking the bank. This might be a run around Lady Bird Lake with friends. I already own the running shoes and I don't have to pay anything to use the trail. Or maybe I start going to group tennis lessons once or twice a month. It won't break the bank to spend $12 for an hour of fun tennis practice instead of spending a lot more money for private lessons. I am trying to find a nice balance between allowing myself to still do the things I love that don't lead me to the bottom of a gallon of ice cream and keeping my recreation/entertainment expenses reasonable and under budget as I try to dig myself out of debt and survive unemployment. I am still learning from all my money mistakes, which sometimes seem constant, and try not to repeat them in hopes of creating a better future for myself and a fatter recreation/entertainment fund so I can buy a fancy new bike AND learn how to rock climb with the correct equipment.

Po$$

*P.S. Step Brothers is quite possibly one of my most favorite movies, only topped by Dumb and Dumber. Highly recommend multiple viewings of it, as I find it to get funnier each and every time.

Money Monday$

How’s your sex life? Did you blush a little or spit out your coffee when you read that question? Thought so, but chances are you talk more openly with your friends about your sex life (or lack there-of) than you do about your money (or lack there-of).

Still reading? Great! Because today I'm going to talk about one of my favorite subjects.....me. I mean money, actually me and my money, or is it my money and I (I can never remember. Clearly I was day dreaming during 6th grade grammar class). 

I just finished reading two books related to personal finance.  Nudge, which is actually more of an economics book, discusses the different ways people make decisions about their health, wealth and happiness and how businesses and the government can “nudge” people to make the perceived “best” choice for their 401k, organ donation, eating habits, etc.  Instead of presenting a new employee with 47 confusing choices about their 401K, an employer might have 5 easier to understand options based on the employees predicted retirement year. To encourage participation in a 401K, an employer might have a default system in which the employee will automatically be enrolled in the most conservative 401K investing only a small percentage of their income. The employee can always decide to opt out or to invest more aggressively, if they actively choose.  This same principle can be applied to nutrition in school cafeterias. Put the salads and vegetables first in line instead of the pizza and nachos and students are more inclined to make the healthier choices. Just a couple ways we consumers are "nudged" to make the choices deemed "best" by an authority. Think twice before you pick up that salad! Is that what you REALLY want or is someone else nudging you to eat your veggies besides me?

The other book I just finished, The Millionaire Next Door, is not about how to snag a millionaire spouse unfortunately. Go watch Millionaire Matchmaker for tips about that. The Millionaire Next Door is about the unassuming and not-so-obvious millionaires - the school teachers, firefighters, and small business owner types who live within their means, save, invest and have a net worth of over one million dollars. The authors interviewed many millionaires to find out what they know and what they do that might teach the rest of us a thing or two (or million). The moral of the story is to budget, live within your means, save, invest, and plan. 

Sounds easy, right? Yeah not so much. Dave Ramsey, a personal finance guru, often states that personal money management is "20% knowledge and 80% behavior." I can tell you first hand that this is true. Over the past few years I have developed an interest (some might call it obsession) in personal finance. I am fascinated by people and their money. I cannot seem to read enough about it or have enough conversations about it with willing friends, family and even strangers. Just the mention of money in a conversation will elicit a variety of emotional responses. Some even come across in body language - brows will furrow, arms will cross, shoulders tighten, they might even slap you, or just completely shut down and stop talking. Wow, I don't think people even do that when asked about their sex life.  Which brings me back to my favorite subject.....me. Tune in next week for another edition of Money Monday$ in which I will not talk about sex, but will talk honestly about my struggling, on-going, somewhat abusive relationship with money.

Yours truly,
Po$$
(Pronounced "poe-money-money." It is also my rapper name.)