Penny Wise Pound Poor

One of the finance blogs I pay attention to is by Ramit S. While he uses different language than I do, we have similar takes. I think I required many more punches to the face to learn these lessons than he did though. I’ll throw my 2 cents into the arena of what does and doesn’t work.

Does NOT work: Budgets

My husband is convinced we have a budget. We don’t. We have an “average expenditures tracking sheet”, and if anything goes over average then it get noted such as ‘new tires’. I tried for YEARS to make a budget work, and in my experience they just don’t. They are more a recipe for beating myself up than anything else. Why? Being told “no” all the time brings out the inner two-year-old of rebelliousness. So, no. I do not use budgets as a means of keeping myself in check. Tried that, failed. I still however keep track of every penny in and out – but not for budgeting purposes, for awareness purposes. I know from experience that the moment I start to let spending become something I’m not consciously aware of, that’s when I start to get into trouble.


DOES work: Automatic payments

While budgets have never worked for me, I’ve always worked with automated systems. Direct deposit and on-line banking makes this a piece of cake! What I do is take every bill (variable bills like electricity get averaged from the last year) and add them together. This gives me the monthly “Keep The Lights On” figure. I divide this in half because I get paid 2ce a month. That amount then gets automatically deducted from my “available funds” so I now never even see the total in the account – just the non-allocated spendable total.

Since everything is automated, all bills get paid on time and in full every month. This system for me has always worked, and worked very well … until my income fell below the KTLO figure.

I now include my investing and savings figures into the KTLO figure and again everything is automated. I learned that if I didn’t prioritize my savings goals, there wouldn’t BE a savings. It’s kind of like understanding that you’ll never FIND the time, you MAKE the time to do what is important. Ditto here, you’ll never have extra money, so take it out up front and deal with what you have left. I was always surprised at how readily I could adjust.


Does NOT work: skipping the lattes

My mom is coupon QUEEN. She never bought something that wasn’t on sale WITH a coupon. We never went out as a family to a restaurant and paid full price. When I was struggling to bring things back into control, I tried aggressive couponing and cutting every corner. Then I realized that I was fighting for pennies while ignoring the fact that I could easily fix things if I got a better job. I suffered from low self-esteem and didn’t really think I was worth getting paid more, so I kept fighting for pennies when in reality the KTLO figure was literally higher than my income – with 3 jobs. And I was hardly living high on the hog!

So fighting to save a few bucks here or a few bucks there is a nice idea and yes, it does add up … eventually. Unfortunately for me, cutting so many corners triggers rebellious fits of overspending, which just nullifies all savings. What I now look for are the big ticket monthly expenses and ask if they can be cut. Can I lower my insurance cost by raising the deductible? Ching! That’s a $50 monthly savings – how many lattes would that be? I dropped cable and replaced it with a Netflix/Hulu combo – saving me $126 per month. Daaaamn. I’d have to cut a LOT of corners to dig up that much money every month.

What I’m saying is don’t quibble over the pennies. Look for the dollars. That adage “A penny wise and a pound poor” EXACTLY describes this approach. Instead, be a pound (British Pound) wise and don’t fash yourself over the pennies.


DOES work: Getting a better job

After my bankruptcy, I decided to bite the bullet and apply for positions I never in a million years thought I would get. Surprise! I ended up earning many times over the poverty level wage I had previously been laboring under. Suddenly I HAD money. OMG. What do I do now??! I could replace my multiple crap jobs for the one and now I take in embroidery and garment decoration jobs on the side for extra money.

Ramit uses the phrase “going for the big wins”. Upping the income is the biggest win. It’s the one many people – including myself – balk the most at for a host of reasons. Unless the reason is “I love what I do and the benefits from being where I am”, then most likely the real reason is simple fear.

Ultimately, my recipe for getting myself straightened out was constant awareness through expense tracking, getting a significantly better job, and cutting down all necessary expenses as far as I could get them while simultaneously cutting down all unnecessary expenses that didn’t support me emotionally. And no, I don’t skip the proverbial lattes.


My Money Story

I have made pretty much every single money mistake imaginable. Yes, this even includes a personal bankruptcy. I was standing in the courthouse waiting to meet with my representative. Bankruptcy is an open room affair, so I got to hear every sob story before I went. My reason was simple: I spent more than I made. Chronically, egregiously. Hearing the number of people who were there for their second(!), third(!!), fourth(?!) time was a heck of a wake up call. I think I was largely numb to the staggering level of debt and the reasons for it up until this day in court. It was like a lightening bolt to the forehead. What was I going to do with my fresh start? Was I going to be one those people who’ve done this many times? Or was I going to clean up my act and figure this financial thing out?

I vowed to never be in this position again, choosing to take the do-over that bankruptcy affords and do it right going forward. That was in 2003. There is something most stories don’t really mention, and that’s essentially a self-evaluation. Why did I get into trouble? Well, spending more than I made. Error one to be fixed, but … how? I think I got into the level of trouble that I did because of ignorance. While initially it was just ignorance, it evolved quickly into avoidance. I only had to think about it when the monthly bill came, right? And even then, I only thought about the minimum payment required – not the outstanding balance. I deliberately ignored that number. It was too overwhelming – and then it became overbearing, then crushing. It was this behavior that actually needed to change, ASAP. I needed to be aware of everything, and not just once a month. I needed a daily status update taped to the center of my bathroom mirror, deliberately shoving “money mindedness” into my face. What I was working on with this approach was changing my “ignore it” habit, and it is NOT EASY to change a habit, especially when it’s emotionally uncomfortable to do so. To facilitate this process, I knew I needed to make it as easy as possible to track what I was doing. I purchased a copy of Quicken and I use that program to this day.

While I was working to establish a new habit of money mindedness, I began reading personal finance books – blogs didn’t really exist at the time. As with many, “Your Money or Your Life” is the one that really sunk in and caused a fundamental shift in my approach. I don’t think I realized it much then, but I had an adversarial relationship with money. Over the years of learning to work with this resource on a conscious level in conjunction with the life-changing concept of making my money work FOR me has turned my financial relationship into an amicable one. My money is now an ally, and while it took years to establish new habits and mindsets, it’s been beyond a worthwhile approach. I’m beyond pleased to report that after having lost everything to the point of living out of my car and depending on kindness in order to eat, I am rapidly closing in on a personal milestone of being free from financial worry. There are many more milestones after that one, but it’s the biggest one. If I can turn this financial thing around by self-education and taking initiative, so can you. One day at a time, starting today.


Own Your Stuff … or Stuff Own You?

I have a post coming up talking about some of the colossal mistakes I made which landed me in bankruptcy and how I resolved to never repeat those mistakes. One of the big things that I learned from that painful process is that Stuff … is Stuff.

It was relatively early in my life-journey that I was stripped of everything. First was the bankruptcy, followed by moving across the country which meant leaving behind 99% of what little I had left. I kept only what could fit into my car. Within a few months of moving, everything of any value that I brought with me was either stolen or broken. Even my car engine completely seized. By this point, I pretty much had nothing but some clothes and a few precious books. It was like the universe systematically took away everything and demanded “thou shalt start over from scratch”.

Alright. I got this. And I did. I eventually recovered and was fine, but I learned something most people don’t really GET until much later. Stuff is just stuff. It doesn’t bring me happiness, and it can all be lost in a heartbeat. The only things I can ever truly have are internal things – in my heart, in my memories. Because of this perspective, in 2006 when my husband was starting to panic that we didn’t own a house yet and therefore were missing out on a huge potential gain, I adamantly refused to purchase. Being in the Los Angeles area, we were looking at prices of $750k for a cracker box next to a drug den. No thank you! My argument was simply that I refuse to be owned by my stuff – to pay for that crushing mortgage we’d be eating Ramen everyday. Heck no! If I have to spend my energy and time and emotional well-being focused on keeping the stuff in my life, then it owns me. No. Just, no.

My husband, unfortunately, hasn’t quite mastered this lesson. He still feels trapped because of this or that, and my words of “it’s just stuff. We can ditch it and live off much less while still being happy” falls on deaf ears. Stuff owns him, and he resents ‘having’ to work as hard as he does. *sigh* In his case, he still has a huge amount of ego tied up in the concept of “proving that he’s made it” (whatever ‘made it’ means) so I think he’s more owned by this idea than the stuff itself – which is actually pretty typical. While I thoroughly enjoy what we have, I don’t give a crap about proving dick to anybody. My car is my car. Wanna look down on it? *shrug* Like I care. It serves my needs well and faithfully. It’s not an extension of my ego. My stuff are tools to help me attain the experiences and activities that do speak to my ego and soul. I’ve arranged our entire life so that if he actually let go of the ‘made it’ requirement, we wouldn’t have to work at all. Someday he’ll figure that out, but until then I’ll keep making sure that our stuff does NOT own us in reality.

So. Do you own your stuff, or does it own you?


Tossing a New Subject Into the Ring

I was thinking about finding somewhere else to post my money related entries, but ultimately have decided to post them here. My finances have been a HUGE factor in the evolution of my life and ignoring that aspect of my journey is rather short-sighted.

There is a large contingent in the spiritual community who feels that money and finances are dirty words, unfit for serious consideration much less discussion. I strongly, strongly disagree with this. Because money is the medium through which we trade for goods and services, ultimately it represents our own personal power. How I feel about money, I’ve noticed, tends to relate quite nicely with how I feel about my ability to influence and control the world around me. Another way of putting it is that it’s a measure of my personal power and how I relate to myself and my world. To put a really fine ass point on it, my relationship with money is directly related to my relationship with my own self-worth.

Is my self-worth worth paying attention to? Talking about? Exploring? PotI mouth says “fuuuuuuck yes”. So yeah, I’m going to start tossing in some of my experiences, mindset shifts and approaches to money here. Who knows? Maybe it’ll start a conversation – even if it’s entirely internal.


What is it about me…

There is a trait that I somehow exude which is extremely consistent and yet baffles me entirely.

People will stop and ask me for directions – where is this, where is that, how do I get here, when does X start, etc. It does not matter where I am, and sometimes even what I’m wearing doesn’t matter.

I’ve had people stop and ask me where things are in Nordstrom, Macy’s, Wal-Mart, K-Mart and every store in between, at concerts, at events, at dog shows, etc. I’ve even been mistaken for representatives from Corporate headquarters on a number of occasions. Boy is that odd when the manager is all kinds of treating me deferentially until I actually have to tell them “you know, I’m not from corporate. I’m just a customer”.

Today, I’m wandering through the courthouse complex in my city, trying to find where the heck I need to go to check in for Jury Duty. As I’m wandering around with what I expect is a “where am I?” look, some ladies stop me and ask where the bathroom is. Not having seen one, I couldn’t tell them. They apologized, as most do when they realize I’m not actually associated with whatever store or facility we happen to be in, and as part of that they tell me that I looked like a lawyer so they thought I knew. A lawyer … wearing jeans? Ooookay.

On the way BACK from check-in where I got reassigned and sent home immediately, I get stopped by another man who asks where he goes for Jury Duty. Well, now I happened to know that answer, and if I know then I’m always happy to tell people. So I gave him directions, he thanked me, and we went on our way.


But why? What is it about me that inspires people to think “she knows where this illusive thing I seek is, let’s ask”? I don’t mind, really, I’m just baffled. I don’t mind for several reasons. One reason is it means people think I’m approachable enough to in fact do that. Ok, I can be down with being approachable. It also means that no matter where I am, people think I belong there. From lawyer to sales clerk to event coordinator, apparently I fit the bill. Lastly, it means that something about me says “I have the answer you seek”. Whether I do or not is immaterial. It’s perception. Often, I do have the answer.

If I could figure out exactly what this energy is, perhaps I could use it somehow? Make it an active asset of some sort. I can’t even identify what archetypal pattern it might belong to! The only thing I can think of is that I’ve taken to smiling pleasantly at almost everyone everywhere I go, and I’ve stated in previous social experiment posts I almost ALWAYS get a positive response. Even it’s a confused look with that reverse-chin-nod of greeting. I can almost imagine them thinking “I don’t know you, why are you making eye contact and smiling? Guess I’ll nod in reply.” I wonder if this energy is associated with the current quandary – but being asked things while out started in my teens, looooong before I consciously begin projecting this general pleasantness attitude so I don’t think that’s really the source.

Oddly enough, this never ever EVER translates into anything which could remotely be construed as flirting or even an invitation to engage in any way beyond “where is X”. No guy has ever taken a smile from me while out and about as anything other than “how-do have-a-pleasant-day take-care”. It doesn’t even translate to have actual friends. I’m not approachable enough to ask out, or just chat with, but if you have a question about where something is, then apparently I’m the one ask.


About the Featured Image: something fun I found on a skillshare site talking about Photoshop layers. I’m sorry I didn’t get the link. It’s not mine. Do a google search for it and I’m sure you can find it.