Tuesday, March 16, 2010

Money Tips From an Artist Who's Not Starving

I have so much inner dialogue in my head and I wonder why I don't write this shit down sometimes. I have ideas and thoughts and opinions that the world should know about! Cocky, huh? Well you be the judge I suppose. I moved out when I was 16 years old and lived with my best friend and her now husband in a tiny little....well shack might be an appropriate word... and I have been paying bills and spending money since about that time. 10 years about I'd say. There's plenty of people out there with more experience then me in money woes, but I feel like I've made a monster turn around in the last few years. It started with me making a large amount of money for a 20 something with no responsibilities. You get used to just over spending on garbage you don't need. Then it becomes a habit. Then it becomes an addiction. Fast forward to me pregnant with my first son at 21 and finally in line for some real responsibility. Day care and diapers will slap you upside the head with a quickness. I think I'm ready to buy a house- shoot I have enough money for it. The housing market is just going up up up up and if I don't buy now I'll never be able to buy, right? Fast forward some more- here we are with an $1800 a month mortgage, gas prices up at $4 something a gallon, I am making car payments on two cars totaling around $600 a month not counting gas and insurance, approximately $600 a month for daycare (which is NOTHING compared to most places), oh and guess what? I'm pregnant again. Pregnancy complication equals thousands of dollars in medical bills on top of everything else, now we're paying more like $1200 in daycare bills (which is still NOTHING for an infant and a two year old- I am ashamed of how I had to slum when it came to childcare), and all of my credit cards (approximately 10 I believe) are piling up more and more. Sure, they started with a 3% interest, but the first time I made that late payment, bam! 33% interest. So as you can see, we're drowning in debt. My entire life one of my largest stresses has been money- it doesn't matter if you have it or if you don't, it's stressful for most people. I went from the scenario I described above, to now being completely zen and peaceful about money. And I have plenty of it the majority of the time.

The turn around started with me having to file bankruptcy and foreclose on my home at 24 years old. That scares the shit out of a lot of people, but I wouldn't take it back for the world. It changed my life. I saw it as a new opportunity to turn my life around. Firstly, I hated my job. I was away from my kids constantly, and I was just another number to these people. I am far too glamorous and interesting to be just another number ;) I have ideas and thoughts and opinions, remember? And who doesn't? Everyone deserves to live the life they're supposed to, but we're held back by the fear of changing what's already going for us, even if it's not working. So it started with me not having anymore credit cards. Not any. Not a single f-ing one. And two years later I still don't have any credit cards, and I'd prefer to never have a credit card again for the rest of my life. When we're being practical and looking at things from the outside- credit cards are for EMERGENCIES. ONLY. You don't need a Macy's card. Or a Target Card. Or a Best Buy card, or a Walmart card, or ANYTHING like that at all. Can you use $5000 at Macy's in an emergency? No- the only thing you can do with that is spend way too much money on clothing you probably don't need. So Tip #1- Break up with your credit cards. You have to close them, because you know as well as I do that if you don't have your Macy's card on you, they'll just go right ahead and look it up for you, wont they friends? Now if you have a Visa for emergencies or whatever, ok, but you shouldn't be using credit cards on any sort of regular basis whatsoever.

Moving on. Tip #2- Being reasonable with your car situation. Do you need a $300 car payment? Probably not. I had a 2005 Toyota Corolla with a $309 a month car payment. I got rid of it during bankruptcy and now I drive a 2001 Kia Rio that I paid $1700 for in cash. I have no car payment and I still drive a newer car. Honestly if I have to compare the two side by side, the Toyota really wasn't that much more glamorous than the Kia. I mean, slightly, but not $309 a month for the next 5 years more. And if you think you'd rather have a payment because you can't come up with the two or three thousand to buy a reasonable car outright, then wait until tax return season and start saving. A couple grand isn't that much money and if you can't save it then you probably have a spending problem you need to look in the face. Also when purchasing your car, for the love of Pete make sure it has reasonable gas mileage. Oh sure it's cute, but really? 9 miles a gallon? You might as well be making the $309 a month car payment.

Tip #3- Know what you're paying for when it comes to car insurance. Full coverage? Do you know WHY you have full coverage and what it's all for? Do you really need that comp with a $500 deductible in case you break a windshield that would cost you $200 to replace? Hmmm. Personal Injury Protection (or PIP on your card) will cost you quite a bit more each month... if you have good medical insurance then my opinion is to skip it. If you're younger than 25 and you're paying each month for a rental car in case you get in an accident, then you might as well light that money on fire because you can't rent a car if you're under 25 (I found this out the hard way). My suggestions are liability, collision if you must, and uninsured motorist. I have been hit twice and both times the driver was uninsured.

Tip #4- Don't skimp on your cell plan. If you think you can bring it down and save some bucks, be aware. If you go over on your minutes you're going to wish you never changed your plan. And furthermore, if you have a cell phone there's really no need for a home phone. So there goes that bill. And even furthermore (this is new for me and I'm stoked!), if you have a smartphone (which you should, just get one) like my blackberry, your phone is your internet modem!!!! Yes yes yes!!! Stop paying comcast a gajillion dollars a month for net. With a blackberry you have to pay for the bb package anyway, and this includes being able to use your phone as a computer modem for the most part. You get the cord that tethers it to the internet and log in through the software that came with your phone (it'll walk you through it). Voila, there goes a $60 a month bill. You know you were paying for that cell phone net anyway.

Tip #5- If you have the internet (and I imagine you do if you're reading this), then you don't need cable television. You can go to www.Hulu.com and watch tons o stuff, you can download shows from ThePirateBay.com, you can tether your computer to your tv so it's not on small screen. You don't need cable. I thought I was going to die when I got rid of my cable, but I bought my kids three box sets of Spongebob and I watch History Channel shows on Hulu (just our personal faves). That'll save you anywhere from $40 to $150 a month. How many hours of tv were you watching anyway? ;)

There's more tips than that of course, but most people can put those into play pretty easily. I made the hard choice to leave my well paying job over a year ago, and we're living better now than we did then. It's quality. I see my kids a million percent more than I did then. I have time for building the businesses I actually want to work for. It's just better. Just to do some math here... by implementing JUST these things above and not counting anything else, our family has saved close to $1000 a month and that's not counting the credit card stuff because I can't even remember what ungodly amount we were spending each month on credit cards. We live in a rad house that we rent (I never thought I'd be so glad to rent until after I owned a house)and it's in better shape then the house we owned- we save $900 a month there. I'm home with my kids so I'm not paying the $1200 a month for daycare. That's $3100 a month we're saving and I'm home with my kids (I work for myself, but I make my own hours so I can work while my husband is home with the kids). Most of the people I know my age don't even make $3100 a month. So working for yourself, or staying home with your kids, or going back to school, or whatever your dream is- it's not unattainable with a little creativity and some smart decisions. Good luck.