Queercents

Today is the end of my first month of rigorous budgeting, and I can tell you this: I suck at budgeting.

The upside of all this drama is that in failing, I will succeed. Take a gander at November’s wrapup.

Almost $460 over budget. That means that I could have used that money–plus the money I had supposedly earmarked for paying down debts–and gotten rid of nearly $1,000 of credit card debt. That’s a powerful lesson for me, and hopefully for anyone who’s followed the series thus far. You can see how easy it is to spend gobs of money without paying attention, and I admit more than most that I was not paying attention.

Going forward, my posts are going to be monthly as it makes less sense for me to talk about this every week. Just like therapy, you have an intensive series of sessions at the beginning and scale back as time goes on. I hope you’ll follow me as I pay my debt off, and hopefully find along the way that you make a lot of the same mistakes that I do.

A few observations: yes, my credit card debt swung up slightly. I used my cards (re-maxed them out) because I was cash poor. My goal next month? Don’t use them at all. On top of that, stop being freaking cash poor. That means I may have to skip a month of paying down debt yet again, but if it means I have cash to float on, so be it. Liz Pulliam Weston advocates not doing that as it makes less financial sense in the long run, but I can’t keep using my credit cards. I have to have cash as many places I go to don’t accept credit. Or perhaps that’s the lesson here, to cut myself off? Only this month will tell what I end up doing.

Areas of opportunity: my food budget is low, but I can send it far lower. I’m a big meat and potatoes guy, and if I start cooking for myself, I can get by on $20 a week. That would halve my food budget, and I’d have that extra for Christmas presents. For the sixth year running, my family has stuck to its policy of no-gift Christmas, so I’m just going with token gift cards for the kids. I may renege on that and bake for them instead. I have yet to decide, but I have to make up my mind quickly. That’d bring in $80, by the way.

I’ve also scaled back my mental health visits, as I have been pretty darn happy despite all this. I’m going to my therapist now twice a month instead of every week, so that’s an extra $30.

Although I advocate smartphones, I’ve found that I don’t actually use the phone portion at all. Looking into pay-as-you-go plans, I can ditch my phone and pay $25 a month to have unlimited texting and Skype for just about everything I do call-wise. I’d have to go back to a flip phone (ugh) but it might be worth it, since I’d be able to get a PDA to handle all my other stuff. That would mean a savings of $40 a month from my cell.

That means that right off the bat, I’ve freed up an extra $110 from my budget with a total $150 possible if I can ditch my smartphone this month. I’m probably going to sit back and wait to see how the tablet computer market goes next year first, but by April I plan to be smartphone-free since I never use the data, never use the voice, and only use the texts. It is not worth the cash to text someone for $70 a month.

On the tricky situation of porn, about which you all were extremely supportive and sweet bee tee dubs, I spoke to my therapist about it and he said that especially creative people suffer with the need to create. Without that need fulfilled, they will look for other sources, which is apparently what I’ve been doing. As a result, I have planned out my next six months chock full of new projects, endeavors, and creative pursuits to keep me off the paid porn sites (and free ones, for that matter) and doing stuff with my life that I’d rather do. I don’t know if anyone else out there has struggled with this like I have, but I hope that sheds a bit of light on it for everyone.

Let me know if you have any feedback. Next week: financial makeover for a lucky guinea pig!

I had no idea I was so damn bad at budgeting.

Money for the most part has not been an issue for me. I have almost always managed my finances fairly well. Recently, however, I have been experiencing an upswing in my social life and so I’ve been leaving the house a lot more. In New York City, that means spending a lot more too. Unfortunately for me, that also means that my debt repayment plans are being pushed back as I type this. Let’s take a look at where I currently stand. Click to expand if you can’t ready ant-tiny type.

Shockingly, I have spent nearly my entire month’s budget by this point, and I’ve got a minuscule amount of windfall coming in to save my butt for the next couple of weeks. I now have to be really good or I’m going to have a lot of debt to pay off in the long run.

Fortunately, I do have a game plan. I have decided that every single week, as I expose myself for the money-wasting jackass that I am (seriously, $125 in one day on just eating out), I am going to give myself a homework assignment. It’s going to be difficult, but I’m going to have to do it or else…well, there’s no consequence, really. But you might stop reading about my exploits, and I’d really hate that. As I start to improve and rehabilitate myself, I will post these less and less, by the way. If you’re thinking it’s tedious to read someone else’s finances, imagine what it’s like DOING this.

I’m going to have a no-spend spree coming up. Although there are a couple of instances where I HAVE to spend money, I’m going to limit myself as much as possible. This is about denying myself. It’s unfortunate, but I am going to have to pay for previous hedonistic streaks. Sadly, I know what comprises the bulk of my debt. I eat out constantly, and it’s obviously taking a toll. I have to pay for instance after instance of having chosen the easy way out over being responsible. And that’s okay–but I won’t lie when I say that it does suck.

My homework is to spend no more than $100 over the next two weeks. Can I do it? Find out here on Queercents. And let me know what you think in the comments below.

So here’s my secret that I’ve never shared with any of you. Although I’m your friendly neighborhood gay financial blogger, I am also in debt. Last year I was largely unemployed so I racked up a healthy amount of debt to the tune of $13,000. Seems like a lot? Yes, it is. It is an awful lot to have hanging around my neck. It ties up–in minimum monthly payments alone–about $250 of my hard-earned cash, and then I have to pay extra if I ever want that debt gone.

For the first time ever, I’m going to lay my financials in front of all of you in the hopes that I can inspire you to pay your debts off. I have had to do this before, but I always had student loans or something else in terms of a windfall to help me pay my cash off. Instead of doing all that, I’m going to have to pay my debts down the old-fashioned way, penny by penny, bit by bit. I will not stop doing these posts until I’ve paid the entire thing off. And in the process, I hope to help enlighten you guys as to how it’s possible.

It’s my dark little secret too, because I didn’t feel like I should share it. I felt like as a financial advisor (of sorts, I guess) that I should not talk about my own debt. But you know what? I have my own toolbox of skills here, and I’d hardly be a good teacher if I didn’t show you how to use them. I also want to show you that this can happen to ANYONE, and that the only way to get out is by the bootstraps.

My monthly income clocks in at roughly $2,000 a month after taxes. After rent, minimum credit card payments, and all my other expenses, I’m left with around $500 a month to play with. Rather than play with that, I’m going to throw all of it at my debt. In lieu of fun money, I’m going to just have to earn more. That means I’ll be blogging more, taking on other freelance projects, and even cooking up schemes to make more money. Literally, in fact. I’ve started baking for a little extra cash.

Challenge #1: stop spending on wants

I’ve set up a spreadsheet for myself to stop spending money on things I don’t need. Right now, my spending is out of control. I stopped budgeting last month and since I’ve spent more money on going out and things like that than I have in a long time. I’m going through something of a second adolescence right now, which is fine, but I need to be somewhat responsible while doing it. I’m running the risk of running out of money right now, because I have $60 to my name until Friday.

Here’s a quick snapshot of the month:

If you’ll notice, a full THIRD of my spending right now has gone to wants, not needs. Not only that, but only one of those was an actual social gathering. The rest were just lunches for work, games, and other things I really don’t need. That’s all money that could have gone to my debt–gone. My goal is to realign the balance. I should currently be spending zero on wants. My extra income should take care of that. So that means that this month, I need to make $2,228.01 just to make up for the money I already wasted.

I’m doing this to publicly motivate myself as well, so if you have any comments you’d like to leave, I’d love to hear them. This is new territory for me, so let me know what you think!

Layaway used to be a very popular method of paying for items and sticking to a budget, especially when it came to Christmas shopping. In the 1990′s, however, layaway seemed to go the way of the cassette tape. Credit cards became the method du jour, despite their high interest rates.

Layaway is making a comeback, however. In fact, you might call it the Betty White of budgeting tools, since 73% of consumers surveyed by Sears Holding Company stated that they felt like layaway was a responsible budgeting option. Layaway at Kmart and Sears resulted in more than three million new customer relationships in 2008 and 2009. As a result, stores like Kmart and Sears are using the upcoming holiday season as the perfect opportunity to revamp layaway’s image.

“Layaway is back – in a big way,” said Susan Ehrlich, president of financial services, Sears Holdings. “This isn’t just a trend created by the recession. Rather, the survey revealed what we’ve believed for some time now – that layaway, a shopping concept that was embraced by Kmart more than 40 years ago, has emerged as a viable and relevant option for cost-conscious consumers. It’s a financial tool that can help families successfully manage their budgets and expenses.”

Kmart’s website boasts about the interest-free payment method with layaway. You pay a non-refundable $5 processing fee to set up the layaway plan, and then 10% of the purchase price as a down payment. Payments are due every two weeks, and the contract period is eight weeks. Sears has a similar eight week contract period, but they require a 20% down payment up front, although their processing fee is only $5. Twelve week contracts are available at both stores for items over $300. Both Kmart and Sears allow you to use layaway for online, as well as in-store purchases. And the Kmart website even has a tool to help you calculate what your payments will look like. Read the rest of this entry »

Have any of you ever used Mint? It turns out that in all the time that this blog has been around, not a single person has ever covered the site, and I find that to be a shame. It has been mentioned here and there, but there has never been a full-on review. I say that changes now, because Mint is an incredibly easy to use and powerful tool to help you whip yourself into shape. Let me tell you about it and how you can fit it into your life.

First and foremost, let me express my intense hatred for two things: software and banking websites.

I hate software because it’s the 21st century. Why am I downloading things when I have a vast internet where I can do anything I want, plus Javascript, Flash, and HTML5 to emulate virtually anything I could do on my computer anyway? The only thing my hard drive should be used for is downloading media, and even then I am not a fan of that. That’s one reason to love Mint. It’s all browser-based and there’s zero reason to download a thing.

Banking websites, meanwhile, suck without exception. Okay, I do like ING for ease of use. But it isn’t exactly an analytical tool. Even though Discover Card has started to offer spending analysis, I have four credit cards. There’s no reliable way to analyze all my spending. In fact, according to Discover Card, all I did was buy a computer last year. That doesn’t encompass my unfortunate takeout addiction and my predilection for Amazon.com purchases. Thanks, but no thanks. Also, that doesn’t nearly help when I just withdraw money to stuff singles into some sweaty college kid’s g-string at the club or tip an inappropriately surly bartender.

Mint covers all that plus some. I entered all four of my credit cards, both bank accounts, my student loans from Sallie Mae and from the federal government, and even my Roth IRA. Instantly, I had account information stretching back three years into my past and was able to see that I had spent an embarrassing sum of money on delivery. I suddenly had an urge to start cooking for myself, especially because I had shamefully ordered grilled cheese to the tune of $10 a pop three times in one week. I have a firm policy of only ordering food I can’t make myself.

Yes, I discovered I’m not in a great spot in terms of credit, but that’s okay. Mint even broke down my spending into a budget, so I found that I was spending more than I was earning. I could plug holes in my spending by altering my behaviors, not just tweaking some abstract numbers. The less I called my local deli, the lower my restaurant budget went until my earnings outpaced my spendings. That’s precisely where I needed to be.

It’s a powerful tool just for spending analysis but even more helpful if you want to knock together a budget. There are shortcomings, however. I have a couple phantom charges that I cannot ascertain nor delete, and often I look pretty awesome because Mint inexplicably tracked my credit card payments but not their debits, so I came out a couple hundred dollars ahead when I’d really broken even. Until Mint finally allowed me to use custom tagging, I’d filed all cash purchases under porn (well, ‘entertainment’) because I had no idea what they were, despite some being legitimate purchases. Fortunately, Mint has fixed that issue and even allowed me to split cash into nearly infinitesimally small chunks, so yes, I could theoretically track which singles are currently pantyliners for some gogo twink and which are being collected by a grinchy barkeep. Not that I would, but I could.

Do you use Mint? Or do you have alternatives? I’d love to hear from you. Let me know!

Do you know how to budget? Lord knows I talk about it enough. If you look over my extensive posting history here, you’ll see that I talk about budgeting virtually all the time. But I realize that I haven’t been all that specific, so let me share a method that I started using a couple of years ago and continue to use to this day. It works really well, and I think you’ll find it to be an effective way to set your cash aside for the month.

Back in the day (I hate people who start things that way, but here I am…sorry) there wasn’t such a thing as autodeposit from your employer. You couldn’t just get your paycheck sent directly to your bank account. Checks actually didn’t really exist for most employees at companies, so instead they just got an envelope full of money. Pretty sweet, although a bit tempting to walk home with a big wad of cash and not blow it all at the local mead tavern.

Provided you got home with enough to keep your family fed for the next month, your wife would take the envelope from you and stuff the cash into various envelopes that were earmarked for different expenses. Five gold ingots for groceries, a shekel for clothing, perhaps a doubloon for going out on the town. With cash, it was impossible to go overbudget–in fact, there were pretty strong incentives for staying under. If you absolutely had to go over, you took cash from another envelope. That month, if you overspent on mutton, that means no new clogs for little Inga.

It sucks, though, because you can’t exactly do that nowadays. Virtually no one needs cash, nor is it exactly easy to pay things like your credit card bill or your student loans with just cash. You’ll have to do it electronically. But you can still earmark certain accounts for some things. I have an account solely dedicated groceries, and I’m opening new ING accounts to split up the rest of my finances. ING is nice in that you can do that easily–other banks aren’t quite as kind about it, but you can nonetheless use some tools to split up your different budget categories. ING Direct is one, and the PNC Virtual Wallet is a slightly different but awesome way as well.

The envelope method is a great way to keep track of what you’re spending and makes it hard to overspend, even when you feel like a splurge. In fact, one of the accounts I’m opening is called Splurges. I suggest that you try it. Do you have any tips or tricks to share? Let me know!

Happy Groundhog Day, Queercents readers! It is I, your friendly neighborhood vlogger, back from hiatus with a new blog post on holiday credit card debt.

I know the holidays are long gone, but if you’re young and just went through your first holiday season without school as an excuse, you probably racked up the charges on your card. It’s okay. I wouldn’t recommend doing it again, but it’s understandable. You’re not alone! Millions of others do the same thing. The only thing is, millions of others are in credit card debt and don’t save any money. Don’t be like that! Nurture the sugar daddy within. And please, follow my advice, which follows below.

A Money 411 clip on the Today Show last week had some really surprising comments about things that could be hurting your credit score.

Some of the factors weren’t surprising – late payments, or mistakes on your credit report. But the idea that going to a mental health therapist was really beyond the realm of reality to me. That shouldn’t be something that is allowed to be viewed by anyone but you, your therapist, and your insurance company. What about HIPAA? And would this actually show up in a credit report if you paid cash, or only if you used a credit card to pay your bill? I’m really curious. Read the rest of this entry »

When I first heard about the financial woes of Annie Leibovitz, the gay media had latched on to erroneous reports that it was somehow related to the “gay tax” incurred from inheriting the estate of the late Susan Sontag. That theory took about three seconds to dismiss, but I’ve been hooked on the unfolding drama ever since.

Then an article in The New York Times pointed the finger at the root cause and I posted about how Jean Chatsky used Leibovitz’s story to deconstruct the behavior of creative types. Even then, I was amazed at how someone who had achieved her commercial success could be so utterly challenged with the financial aspects of day to day life.

But now I’m a believer. The New York Magazine has a fascinating read with its recent study by Andrew Goldman in How Could This Happen to Annie Leibovitz? It’s several pages long, but basically explains how she had spent her way into a $24 million hole through the pretense of unlimited means:

Leibovitz had also built a life that had become extraordinarily expensive to maintain. It wasn’t just the mortgages on the homes. It was the Range Rover, the trips to Paris, the chef and housekeeper, the handyman, the personal yoga instructor, the terrace gardener, and the live-in nanny… Read the rest of this entry »

In a recent post about credit card interest rates, Philip Brewer at Wise Bread explained:

I use credit cards for transactions, not to borrow money.

One of the smartest things you can do for your financial health is to pay off the total balance each month on your credit card. Whenever we use a credit card, we’re borrowing money. Interest gets added to the balance if we don’t pay off the total amount we owe each month.

The big money-maker for credit card companies is consumer interest. They want us to carry a balance. But they don’t make us. A lot of people just do. Why?

Please don’t say it has to do with how much money one makes. At the age of twenty-two, I never carried a balance; nor do I now at forty-two. Just because I have an available credit limit doesn’t mean it’s my money to spend.

What makes some people get this concept and others don’t? Behavior and money… sometimes it just doesn’t make sense to me.

Photo credit: stock.xchng.