Spending Roundup for April

Here's the breakdown of where my money went in April:

Fixed Expenses
These are the easy ones. My car payment, car insurance, AT&T bill, cable/internet, and CC payments fall into this category. I budgeted $750 and spent $750.

Groceries/Household
Budget was $250. I spent $263. Oops!

Gas
Gas is currently $3.89/gal. in my area. I increased my budget to $250 and still spent $253.

Roth/Savings
I contributed $213 to my Roth in April (the $13 was to round my rollover from March to an even number) and $200 toward savings. I also contributed $60 to my 2012 Vacation Fund and $33 to my new Friend Fund.

Utilities
Budget was $150. I spent $134. That really should have gone over a little but my electric bill won’t come out of my bank account until Monday.

Restaurants
Budget was $150. I spent $136. This is miraculous for me! It really motivates me to decrease it even more.

Cigarettes
Budget was $100. I spent $110. So much for smoking less than a pack a day this month - I actually smoked more I think.

Miscellaneous
I’m very excited about this one. The only thing I bought all month long was a new cell phone case yesterday after mine broke. After Target giftcard, I spent $15.90.

Overall, my budget for the month was $2150 and I spent $2167.90. Only over by $17.90 this time! If you consider the fact that I saved $93 more than planned, I was under budget. I truly believe the only reason for this is the second job - I’m either working, driving, or so tired I can’t think, so I don’t have time to spend anything!

Help Me Save Money! (And Win Some of Your Own)

No, I'm not hitting you up for a donation. Although I do accept those if anyone has a couple million lying around!

I've decided to ramp up my savings a little and I'd like some help from SOD readers to do so. All I need from you is one (or all) of these things:

• "Like" So Over Debt on Facebook
• Follow me on Twitter (@sooverdebt)
• Subscribe to my RSS feed
• Link to So Over Debt from your blog

Starting today, every time I gain a FB like, a follower, a subscriber or a link, I'll put $1 in savings. I'll start a new progress bar specifically for what I'll call my Friend Fund.

What's in it for you? I'm so glad you asked! When I reach $1000 in savings, I'll hold a drawing for $100. After that, I'll hold a $50 drawing when I hit $1500, another $100 drawing at $2000, $50 at $2500, etc. I will also poll readers to help me decide what I'll do with the money I've saved - put it toward debt, keep it in savings, or put it in my Roth IRA.

I'm putting my motivation to save money in your hands - looking forward to that first $100 drawing!

Financial Advice that Annoys Me

There is a ton of financial advice out there for beginners. While I like to think I'm beyond that stage, I never let myself think I'm too smart to benefit from the knowledge of someone else. After all, until a few months ago, I was what Financial Samurai calls a Financial Dumb Ass. So I read a lot of blogs and articles about finances, including the ones discussing what I consider the basics of dealing with money. And I learn something new every single time.

Honestly, though? There are some pieces of financial advice that get on my last nerve.

I hate the idea that you're not supposed to save until you get out of debt. Yeah, so I'm still paying off debt. I'll be doing that for awhile. What would happen if I wasn't also saving at the same time? My car would break down, or I would come down with a horrible illness not covered by insurance, or my child would incinerate all of my clothes in some kind of science experiment. That's the kind of luck I have. If I didn't have money in the bank, I would use a credit card to cover disasters like those, which would increase my debt.

I do understand that you shouldn't save a ton while making minimum payments. That's dumb because you'll never get out of debt that way. But why not figure out how much you can put toward debt/savings without breaking yourself, then divide that in half?

It drives me insane when people tell you to get rid of your car. I think there are circumstances where it makes a lot of sense to get rid of a car, like when you have more of them in your driveway than licensed drivers in your house. But - stop me if it gets too crazy - what about people who just cannot get by without a car? I can't. I live in a rural area in the middle of nowhere. No public transportation of any kind, not even cabs. I drive 100 miles a day to work and back. My son's school is 10 miles away from my house. We don't even have sidewalks! Every time I see an article about living without a car, I want to kick someone.

I know the majority of people saying this stuff live in a city, and in that case I understand. But there are a lot of people looking for advice who don't have that advantage. I don't like feeling guilty because I can't live without my car. Believe me, I'd love to.

I can't stand being told I'm a bad person if I don't live a 100% crunchy/green/frugal/minimalist lifestyle. Not that any of those are poor choices, but they aren't the right thing for me. It is highly unlikely that I'll ever make my own shampoo or makeup from scratch. I'm not installing solar panels in my home. I don't purchase only organic food. And while some people are able to give that kind of information in a non-abrasive way, there are a lot of blogs that are pretty snide about it. So you've got a smaller carbon footprint than me? That's awesome! But don't make me feel like crap about it. I've learned a lot of cool tips online - I just don't have the energy to implement every single one of them.

Not everyone can be an entrepreneur. It seems every financial guru thinks I'm supposed to dream of owning my own million-dollar business. Don't get me wrong - I'd love to work for myself. But I'm realistic if anything, and I know it's probably not happening for me. Some people are going to work for someone else their entire lives, and they need to know how to survive that financially. It isn't enough to say, "Oh, just follow these steps to quit your job FOREVER!" I need to know what happens if I don't!

The best thing about getting financial advice online is that it's free, minus the cost of your internet connection. The worst thing? You get a lot of generalized, catch-all information that may or may not work for you. I guess that's an okay trade-off, but I still get annoyed sometimes.

These are my biggest financial advice pet peeves. What are yours? 

Dear 18 Year-Old Me

I got this idea from a post on Live Richly. How crazy fun would it be if I could actually send this letter back through time and warn myself of what's coming? Honestly, my 18 year-old self would probably think it was a joke and throw it in the trash, because that's how much I thought I knew at 18.

Dear 2001 Andrea:

I'm writing from ten years into your future to give you a heads up about some of the stupid crap you're about to do. If you choose to suspend reality for a moment and accept this information, your future could be limitless instead of the tiny box you end up closing yourself into.

Money Progress Update

Overall this has been a boring week. The two jobs are exhausting, it has rained nonstop, and I have done well to read other blogs, much less deal with my own. But that's okay because it's the weekend and I am NOT on call for work! It's those little things, and my financial week has been all about the little things.

Most importantly, I paid off my Target credit card. I can't tell you how empowering it was to click "Submit Payment" knowing I'll never have to do that again! (At least, not for that one.) Right now I'm trying to remember a single important purchase I made with that card and I can't do it. I'm pretty sure I bought a bunch of useless crap. I haven't been able to find the actual card in my house since I moved last year - I know it's here, just don't know where - and I consider that a good thing. I've paid off about 13% of my overall debt.

I also put $50 in my vacation fund. A slow start, but I was tired of looking at it and seeing a big fat zero. Eventually, as I watch that progress bar move, the idea of a vacation will seem more real and I'll talk about it all the time. My son wants to go somewhere fairly close to home - he says he doesn't want to fly and doesn't want to waste two days driving. I can't even think about location right now but I do know this trip will be LONG overdue!

ShareBuilder launched their new site yesterday and so far I can't get the updated app to work on my phone. My Roth is sitting at about $1000, which is 1/3 of my goal. Considering this is the 4th month of the year, I'm right on track. Hooray for retirement! Speaking of which, remember my cousin who "needed" a huge truck? I've finally convinced him to open a Roth IRA and get prepared to stop working someday. He's 21, so I'm pretty jealous of the extra 7 years he'll have that I don't. And the fact that he'll be able to max out his contributions every year.

Finally, I did not spend a dime this week other than putting gas in my car and eating out yesterday for lunch (less than $5 for the new chicken tender meal at Burger King). That's probably the most control I've exhibited in my entire life! It's not that I'm this awesome person who no longer wants to spend money; I just want to meet my goals more than I want to spend.

That's my financial week - how was yours?

I'm Going to the Financial Blogger Conference!

I'm really excited to report that I'm heading to Chicago for the Financial Blogger Conference on October 1-2. Originally, I decided not to go because I feel like I'm not a "real" financial blogger. And I still feel that way to an extent, but I figure wannabes can go too. :)

The funny thing is that I keep having these urges to spend money in preparation for the conference. I tell myself I need new clothes. New luggage. An iPad (which I'm saving for anyway) so I can blog more easily while I'm there. I need to pay someone to clean my car in case anyone rides in it. Come to think of it, I need to do something with my hair, too. Ever since I registered, I can come up with like fifty things I desperately need right this minute to be presentable enough to meet all the cool PF bloggers.

How messed up is that? A mass gathering of people who try to live within their means and be financially responsible, yet it tempts me to throw everything I'm working on out the window. And for what? To make everyone think I'm a dork who hasn't learned anything about money?

I'm not giving in. Nope, not going to do it. Okay, I might get the iPad if I save the money before October. And I will probably buy some clothes, not because of the conference but because I haven't bought clothes in over a year. And because I've gained a ton of weight and my pants don't fit any more.

*Ahem*

So in the interest of being accountable, which is why I started doing this in the first place, I am pledging now that I will not make any stupid purchases despite my excitement about going to the conference. I feel like I need a Spenders Anonymous meeting right now.  

Am I the only person who does stuff like this? It's okay if I am; I'm just wondering.

Personality Type vs. Financial Behavior

I first learned about the Myers-Briggs Type Indicator when I was a graduate student. The MBTI is a series of questions that assigns you a four-letter personality type. There are tons of websites dedicated to explaining the various traits of each type. The MBTI is never 100% perfect as all of us have varying degrees of the other traits, but it tends to be pretty close. (You can take one version of the MBTI here.)

One of the most interesting parts of my training to be a psychotherapist was learning about human behavior. It is so fascinating to look at the things people do and compare those behaviors to the patterns in their families, workplaces, geographic areas, and cultures.

The drawback of learning about human behavior is the tendency to analyze your own behavior. All the time. Even when you're not trying. Suffice it to say I know myself pretty well, maybe better than I'd like. Despite all the self-awareness I gained through my education, though, I've never thought about how my MBTI personality type might influence my financial decisions.

I have always tested as a strong INTJ. This stands for Introverted, iNtuitive, Thinking, and Judging.

Introverted
While many people hear "introvert" and think "shy," being an introvert actually means I lose energy in a group of people instead of gaining it. I'm far from shy - in fact, I usually don't shut up in a crowd - but it's draining for me to do so. After a large social gathering, I need some time to myself to reflect and recharge. I spend a lot of time thinking about abstract concepts with no real action required. Extroverts, on the other hand, feel awesome and energized after being around a big group of people. They tend to feel pressured to act NOW and think about it later.

How this relates to my finances: I spend a lot of time analyzing what I've done with my money and what I could do better. When I refer to "impulse" buys here on the blog, I rarely mean that I went out and spent money without thinking it out first. Instead, I usually think it over for so long that I convince myself it's the right thing to do. After a purchase, I am prone to over-examining - sitting around wondering if I could have gotten a better deal, if I should have waited, if I should return what I bought. I do the same thing with saving - I am constantly evaluating my savings strategy and tweaking it.

Intuitive
I gain information about the world through intuition. While some people need to touch, see, and hear something to gather facts about it (sensing), I tend to view facts as a way to discern patterns and relationships. This is especially useful for me as a therapist - when someone says, "My husband left me and I'm depressed," I'm looking beyond the factual information she just gave (her husband left, she's sad) to what this reveals about her (she cares very deeply for him).

How this relates to my finances: You won't see a lot of hard facts or strictly informative posts on my blog. Instead of looking at a spreadsheet of numbers, I prefer to determine what the facts are saying and relate them to my own experiences. Okay, so I was over budget last month. What was going on that caused me to spend too much? How does this relate to past overspending? What can I do to prevent this next time? I rely much more on patterns over time than the facts themselves.

Thinking
Depending on when I take the MBTI, I sometimes waver between Thinker and Feeler, though Thinker wins 90% of the time. Thinkers use logic and objectivity to make decisions, while Feelers look more for harmony and the needs of humanity. That doesn't mean Thinkers are unfeeling or Feelers don't think - it just means that, if truth and affirmation are competing against each other, truth will win out for a Thinker and affirmation will win out for a Feeler. For example, if my son asks me if I like his shirt, it's important for me to be honest with him. I'm not mean, but I will totally let him know if he looks silly. My ex-husband, a Feeler, would consider it more important to compliment my son to make him feel good regardless of whether he actually liked the shirt.

How this relates to my finances: If you've read this blog at all, you know I'm no stranger to affirmation. After all, that's what overspending is all about! If I just buy this, own that, and collect these, I'll be happy and fit in - that's what I told myself for years. However, I had to be honest with myself eventually. I knew the chronic spending prevented me from living the life I wanted, so I made changes. My ex, on the other hand, continues the same patterns and probably will his entire life. He will never find his truth because he hides behind the affirmation he gets through spending. (Confession: I made my final decision to divorce him based on the Myers-Briggs. I was already leaning that way, but as I tried to decide for sure, I came across several research studies that stated our types were the least compatible possible match. Weird? Maybe not, considering what I do for a living.)

Judging
The final letter of my Myers-Briggs type describes how I present myself to the outside world. My preference for Judging means I like a very planned and deliberate lifestyle, as opposed to Perceivers who tend to go with the flow. I can't stand having things up in the air or undecided; I need to know what's coming so I can think about it (introvert), figure out how it fits into everything else in my life (intuition), and make a logical, fair choice (thinking). I love checklists. I like to make decisions and know that things are settled. Perceivers are more likely to sit on a decision until the moment it needs to be made. They are more open to change.

How this relates to my finances: I have worked very hard to bring order to my financial life. Right now, there are about 100 scraps of paper on my desk where I have made lists of bills to pay, calculated various scenarios for earnings from my second job, planned blog posts, written out all my paydays for 2011 to find my magic 3-paycheck months.... You get the idea. Every week, I take all those lists and transfer them to a unified, neatly written list. And yes, I actually do draw checkboxes and check them off as I complete each task. I have a compulsive need to plan ahead so I'll already know what to do when confronted with something that requires a choice.

Do you know your Myers-Briggs type? How does it affect your financial behavior? If you're an INTJ like me, do my traits seem similar to yours?

5 Lessons Learned From Bad Money Choices

From failing, you learn. From success, not so much. - Meet the Robinsons

If you've been reading here very long, you know I've done some TOTALLY stupid things where money is concerned. Between bankruptcy, credit card debt, and expensive tanning bed packages, I have been the poster child for financial mistakes.

Long ago, I decided I can either beat myself up about the dumb things I've done or learn from my stupidity and move on.

When I think about all the things I've done wrong, I realize that some of the lessons I've learned outweigh the facepalm factor. It may seem strange to say that, but I credit my financial past with giving me a road map to my financial future. Here are some of the things I've done that taught me way more than I ever could have found out on my own:

Want to win $300? (Seriously!)

No, I'm not the one giving away money.

But my friend Gene at Stoopid Success? Different story. Gene is giving away $300 to the lucky winner of the Stoopid Success $300 Contest/Giveaway.

You should might be thinking, "Wow! 300 bucks! How in the world can I win?" There are a ton of ways to enter the contest, all of which are detailed at the link above.

They're all relatively simple tasks, such as:

• Follow Gene's profiles on Twitter
• Purchase the awesome ebook, "25 principles of the stoopidly successful"
• Subscribe to the RSS feed
• Share an article from the site on Twitter or Facebook

Each of these tasks (and more, as detailed on the site) earn you entries into the contest. The winner will be announced on May 15 at 5pm EST.

We're talking free money, people. Visit the Stoopid Success $300 Contest/Giveaway page to learn more details and enter the contest!

We've Moved!

As of right now, SOD has a new home - http://www.sooverdebt.com - though the old URL will still direct you.

I'm a little stressed out about it. My Alexa ranking has dropped to zero, which affects my progress in the Yakezie Challenge. Google doesn't see the new domain name yet and probably won't for awhile. I'm up way past my bedtime trying to get more information and make the transition a smooth one.

So bear with me for awhile! I'll have my breakdown for a day or so, then I'll be fine. In the meantime, if any of you have any tips, I'm all ears. :)

PS I think (hope) I've changed my RSS feed settings to reflect the new URL. Crossing fingers!

The Two Ways to Get Out of Debt

At the height of my spending frenzy, my dad said something that made a lot of sense. Actually, he says many things that make sense, especially regarding finances. He should be the one with the blog! Anyway, this particular comment is one that I have found to be universally true: There are only two ways to get out of debt - you can either spend less or earn more.

At the time, I didn't want to hear such nonsense because it simply didn't apply to me. How could I spend less? I was broke! I couldn't even afford to pay for the basics - there was no place to cut expenses. My dad was crazy! At the same time, I didn't see any way to earn more money. I was working a full-time job with crazy hours. A minimum wage job would be a waste of time. So you know what I did with this amazing piece of wisdom? I ignored it, as usual.

When I finally decided to change my money habits, I remembered what my dad had told me. Despite my efforts to pretend his advice was useless over the years, my brain stored his advice for the day when I would actually need it. And as much as I hate admitting he's right, there are seriously only two ways to get out of debt.

I'm Over Being Afraid of Goals

I'm usually nervous about setting SMART goals (specific, measurable, achievable, relevant, time-oriented) in my financial life. I do have some goals, like getting to my next e-fund goal of $5000, putting at least $2000 in my Roth IRA this year (I'm on track to surpass that one), and paying off my credit cards. However, I'm hesitant to put a time limit on reaching them out of fear that I won't get there within the specified time frame. For example, I'm currently putting $100 a month in my e-fund. My balance is $1100, so it will take 39 months to get to $5000. That should be fairly easy, right? But in my mind, I'm thinking, What if I have an actual emergency and have to take money out? Then I won't get there on time! OMG, the world will end!

I've decided it's time to quit whining, making excuses, and hiding in the corner. I want some real goals, darn it! I need to push myself a little - right now, all my goals are easy to reach because they're automated. I'm not really pushing myself to go outside the little savings comfort zone I've created. I'm over it - I need to do more to keep proving to myself that I can.

Here goes nothing:

1. I will have an e-fund balance of $5000 by July 2013. That's about a year sooner than I should reach it based on my current savings. To get there, I will continue my current plan, but will include extra money (Christmas, second job earnings) to put myself ahead.
2. I will save $1500 for a vacation by July 2012 (shooting for an October vacation). This will require $100 a month, which will come from my second job earnings.
3. I will finish paying off my credit cards by December 2011. (This one is kind of a freebie. Leave me alone.)
4. I will contribute $3000 to my Roth IRA in 2011 instead of the $2000 goal I previously set. I'll need to contribute $75 more each month.
5. I will max out my Roth in 2012. This will require about $200 per paycheck.

 Okay, I have to admit I'm freaking out a little. Five goals might be a little much for me at this point, but as I said, I need to keep reaching. I'll be changing my progress bars to note the target dates for these goals, and I'll keep everyone updated. Time to take a break before I chicken out!

The Stages of Overspending

When I think about my financial weaknesses, there are plenty of them to talk about. Until recently, I didn't save money. I didn't have a retirement account. I paid overdraft fees constantly. Probably my biggest weakness, though, is my predisposition toward spending. Even when I was a kid, money burned a hole in my pocket. If I didn't have something specific in mind, I'd buy something random, like 20 packs of Bubble Yum that I chewed in one day (true story).

That "OMG need it NOW!" mentality followed me into adulthood. I didn't like shopping as an experience like some people do; I liked walking in and out of a store very quickly while still finding something to buy. It was like a game - what can I spend money on in 10 minutes or less? Some embarrassing facts about my past impulse buys:

• I have donated or thrown away more than 50 brand new pairs of jeans in the last 10 years after getting them home and deciding I didn't like the way they fit.
• I own close to 1000 books. While I've read all of them multiple times, I never once borrowed one from a friend or a library before deciding whether to purchase it.
• There are 4 Rubbermaid totes full of toys in my basement that I never brought upstairs after we moved. My son has never noticed they're missing.

These are only a few examples of how I ended up with $62,000 in debt after Chapter 7 bankruptcy. I was a spending machine; I bought things just to get that millisecond of joy when I threw the shopping bags in the trunk of my car and thought, Wow, I have money and this is proof that I can get what I want!

Except I didn't have any money. I was using credit cards to pay for these purchases, reasoning that I didn't have all the money at that moment, but I had enough to pay a minimum payment for months on end. Realizing the error in this logic took a long time, but once I did, I couldn't believe how much I've wasted over the years. Even when I got divorced, I left all the junk I'd bought behind because that's how little it mattered to me. My spending had done nothing to improve my life or provide for my basic needs, so it was easy to start over without the things I bought.

So how do you go from rabid consumption to a healthier financial lifestyle? It's not easy. I like to compare the transition to the stages of grief. While overspending is nothing compared to the loss of a friend or loved one, the process is very much the same.

Stage One: Denial 
This is the place where many chronic spenders live. If you don't admit you spend too much, you don't have to face it. This is only a temporary stage, though; eventually you are forced to confront the consequences of your spending. I returned to this stage periodically throughout my money rollercoaster.

Stage Two: Anger
Angry? I got angry plenty of times. Like when I paid all my credit card minimums and didn't have enough left to buy groceries. Or when my son had a last-minute field trip for school and I had to use a cash advance to pay for it. When you spend too much, anger is often misplaced - instead of getting angry at myself for overspending, I was mad at my friends for inviting me on a shopping trip, the government for taking so much of my paycheck for taxes, or anyone/anything else I could think of to avoid the truth.

Stage Three: Bargaining
This stage involves the hope that you can somehow delay or avoid the consequences of your spending. In this stage, I did things like promising myself I wouldn't put another item on my credit cards if this one last purchase would go through, and deciding to pay more than the minimum payment as long as I have money left at the end of the week. Bargaining is a sign of desperation - if you're in this stage, your spending is out of control.

Stage Four: Depression
It's easy to feel depressed when you're drowning in an ocean of debt. It's also easy to comfort yourself by purchasing more stuff. I had these isolated moments where it became clear what I'd done, and I would freak out and gather all my bills because darn it, I was going to do something about it. Then I would become overwhelmed and do nothing, or I'd go shopping to make myself feel better. You can get stuck in the cycle of depression for a very long time, making periodic stops in the other stages along the way.

Stage Five: Acceptance
This is where you want to be. After you flop around through the other four stages for awhile, you start to come to terms with what you've done and prepare to face it. Until you reach this point, you will likely do very little to change the way you spend money. Once here, though, you become empowered to form a plan and carry it out. It's very possible to improve your life once you have the motivation. Acceptance can't be faked - if you're saying, I need to change, but _____, you aren't here yet.

Where are you right now as far as spending goes? Have you accepted responsibility for financial mistakes, or are you still clinging to the hope that you can continue the life you're living?

When the Right Choice Isn't Easy

This is a little more personal than financial, but I really felt the need to post this today.

Few people know that my ex-husband and I tried to date each other after we were divorced. I think a lot of divorced/separated people go through that stage - the relationship is familiar and comfortable (and dysfunctional, but you don't see that at the time) and wouldn't it be so great if we could work things out and keep our family intact? He emailed me one day, probably 7 months after the divorce was final, and begged for another chance. I had tried dating and found that most single guys are on drugs, have a criminal history, or are actually married guys looking for someone on the side. I was over it. So, against my better judgment, I agreed that we could try one more time.

This happened right in the middle of the ex losing our marital home to foreclosure. He was staying with his parents, felt he'd lost everything, and he seemed very motivated to change some of the behaviors that led me to file for divorce. And he really did make an effort to change. Things were going great.

Until he moved into my house.

Financially Responsible? 5 Great Reasons You Should Be

The following is a guest post from Money Sanity, who writes about making the best of opportunities, living frugally, prioritizing, planning and preparing for an uncertain future. The post is part of Yakezie Blog Swap #5, with the topic "What motivates me to be financially responsible?" Also check out my guest post on his site.

What motivates me to be financially responsible? Well, I should tell you right off the bat that I view financial responsibility as more of a mindset or way of life than simply a way to get more stuff. Sure, a new Porsche would look great in my driveway; it would really be a head turner for the walkers in the morning, but the fact of the matter is that I am not motivated by most stuff. Of course I am motivated somewhat by possessions but my style is more about living in a safe town with a great school system , having access to healthcare, and a safe car to drive- than flashy stuff.

1. Being financially responsible is a great way to build credit. If you wondering how to build credit when you have no credit, the first step is simply paying your bills on-time and in general being financially responsible.
2. Financially responsible people waste less. Remember the adage Waste not - want not? Being financially responsible is efficient, not just financially but also in terms of time spent. Most people know that being financially responsible can save money - but did you realize that it saves time too? I know very few financially responsible people who handle a bill twice. They don’t spend time fighting with collectors. Their mind does not race to that unpaid bill 10 times a day. They have the time to look for new ways to save money, to increase their wealth further. They sleep peacefully - unless they have a neighbor with a broken car alarm - but that’s another story.
3. It’s financially responsible to give back. You can’t give back unless you have something to give. The more you have, then the more you can give. Have you ever noticed that the people who are most active in charities are financially secure? That’s because it’s easier for them to give of their time and money because they are not struggling.
4. Being financially responsible is the right thing to do. If everyone were financially responsible the world would be a much better place. Think of all the money that is wasted on fees and penalties and interest, then add in all the money that’s wasted on junk - household junk, junk food, plain old junk, you name it. Imagine if all that money were put to good use; standards of living and life expectancies would rise. Divorces over finances would end. Greenpeace would be happier in that less junk means a better environment. The biggest reason to be financially responsible is a moral one - it’s just the right thing to do for yourself, your family, your community and your country.
5. Being financially responsible makes you feel good about yourself. Makes sense, right?, since people who are in debt, living above their means are worried and stressed that removing all that is a real self esteem and confidence booster.

I Messed Up Today

I guess thinking about paying off my credit cards got me all hyped up.

A few weeks ago, there was a fire at the tanning salon I go to. (I know, tanning is bad, skin cancer, etc. Not the point of this post.) There really aren't any other places in town to tan, so I decided to buy some visits close to my work.

I walked in planning to get the $19/month basic package recommended by a coworker. When I walked in, though, I found that the new tanning salon is WAY cooler than my old one. They have all kinds of advanced tanning beds that do amazing stuff, like spraying vanilla and lavender scent while you tan (no joke). There's even a tanning bed that promises to give you a real base tan after 2-3 visits. I used it today and it was impressive.

You can probably guess what happened. I walked out with a contract for 6 months at $80 a month.

I can afford $80 a month. That's not the issue. I'm just mad because I convinced myself it was okay to pay a total of $480 to tan for 6 months. Yes, it's unlimited. Yes, I can use any bed I want. Yes, I smell like vanilla and lavender right now and I kind of like it. But $480?!?!?!?

When I pulled up outside the tanning salon, I laughed at a sign advertising a year of unlimited tanning if you pay $500 upfront. That's crazy! I thought. Who would pay that much money to tan? Yet I'm paying the same amount for half the tanning. Stupid!

I'm so mad right now I can't even formulate my thoughts. I'll come back when I'm a little more coherent.

My Credit Card Debt is Almost Gone

Maybe this post is a bit premature. After all, I still owe $870 before my credit cards are paid off. But if I keep going at this rate, they'll be paid off in November - hopefully sooner once I start my second job. I can't believe I'm even thinking about a day when I won't have credit card debt! Not because of a consolidation loan (I've done that a few times), not because of bankruptcy (did that too), but because I have concentrated on paying off this debt all on my own.

Until last year, I made minimum payments on my credit cards every month. Oh, and I kept using them too. I would check my available credit online, and instead of being excited that the balances were dropping, I got excited because I could spend 60 bucks on junk. It was pathetic.

The change of heart came when I met with my divorce attorney in September 2009. We were dividing up the list of debts for the divorce petition, and she casually stated, "You know, your life would be so much easier if you weren't the one with all the credit cards." It was like being slapped. I thought, do I really want to be known as "the one with all the credit cards?" I wasn't fully aware of the financial changes I needed to make at that time, but I did make a decision to get rid of the credit card debt.

I started paying extra toward all my cards. After awhile, I decided to focus on one at a time, and I threw every extra dollar I could find at my debt. I even used my entire 2010 tax return to pay off cards, despite really really wanting to buy stuff for my house. When I filed for divorce, I owed $6200 to Merrick, Orchard Bank, Dell Financial Services, and Target. Today, just 19 months later, I'm down to $870. It's awesome!!!

So now my mind travels to the future and what I'm going to do with the $130 I'm now paying toward credit card debt. There are a lot of choices. I already pay $60 extra toward my car payment each month, but I could round that up to $200 extra and pay my car off 1.5 years early. Alternately, I could increase my Roth IRA contribution to $330 and come closer to maxing it out for the year. I could put that money in my emergency fund and reach my $5000 goal faster. I could also start saving for a vacation in 2012, which is waaaayy overdue. (Last vacation was Orlando in 2003, with my parents footing the bill for themselves, me, the ex, my son, and my sister and her husband.)

What I won't do is leave the money sitting around to be wasted. I've already learned the dangers of leaving even $20 unaccounted for. I feel a compulsive need to plan ahead and make the best possible decision with my money.

So I leave it up to you - what should I do once my credit cards are paid off? Answer my exciting turquoise poll below!

What should I do with the $130/month I've been paying toward CC debt once the cards are paid off?
	Keep the snowball rolling - put it toward the car payment!
	Max out your Roth IRA
	Contribute it to the emergency fund
	Save for a 2012 vacation
	None of these! I'll tell you in the comments.

Guest Post: Debt Stack vs. Debt Snowball

Today I'm featuring a guest post from my friend Kevin at DebtEye. Kevin blogs about all things personal finance, with an emphasis on debt reduction and solutions for those with ailing finances. Go check out his blog - you can also read my guest post, Five Unnecessary Bankruptcy Fears, while you're there. Let Kevin know which method you prefer - debt stack or debt snowball - in the comments.

If you’re having some sort of debt problem, you’ve probably considered some options such as: debt settlement, bankruptcy, or credit counseling.  However, if you’re current on your payments (not behind), there are several options to pay down your debt.  We will examine two common strategies to pay off your debt without seeking help from a debt relief company.  I always encourage all my readers that the most important part of this process is learning how to budget!  It doesn’t take a rocket scientist to develop a budgeting plan.  All it takes is discipline and willingness to get out of debt.

Debt Stacking

The first option we will explore is called “debt stacking.”  Debt stacking is a simple method to pay down your balance in the shortest amount of time without changing your monthly payments.  The concept is quite simple.  After you create a budget (important) and decide how much you can allocate towards paying down your debt, you will make the monthly minimum payments on all your accounts except the one with the highest interest rate.  After the account with the highest interest rate is paid, you will apply that payment to the next account with the highest interest rate. 

For example, let’s say you had three accounts:  Visa - $5k @ 18%, Discover -$3k @ 29.99%, & Chase- $2k @ 9.99%.  You figured out that you can make a monthly payment of $350 towards any of the accounts.  Respectively, the monthly minimum payments are as followed: $150, $110, $40.

The account you want to focus on paying first is the Discover account (since it has the highest interest rate).  You will apply $150 to Visa and $40 to Chase, leaving you with $160 to pay towards Discover.  After this debt is paid off, you will pay off the next highest interest rate, which is Visa.  This time, you will make the minimum payment for Chase $40 and apply $310 towards Visa.  You will continue this process until all accounts are paid in full!

Snowball Method

The next common option is called “debt snowball”.  This method requires you to pay off the smaller balances first.  As you start to pay down the smaller debts, you will see immediate results and be motivated to stay on track.  This method also requires keeping your monthly commitment constant.  Every time you pay off an account, take that payment and apply it to the next account with the smallest balance.  It’s called a “snowball” because this method creates the greatest momentum throughout the process. 

Both techniques require you to hold your payment constant.  It can be a daunting task to keep up with these payments.   Debt stacking is the most efficient approach of the two options mentioned.  You will typically see a 10% savings compared to the snowball method.  It will be a difficult road ahead, but patience and determination will play a pivotal role in your quest to become debt free. 

Author Bio: Kevin is a writer for www.debteye.org. DebtEye is a place where you can get unbiased opinions on anything related to personal finance. Kevin owned a debt settlement company prior to joining the DebtEye team. He is a certified debt specialist and also works with credit counselors across the nation.

3 Money Mistakes I Keep Repeating

Over the past 4-5 months, I've made a ton of changes in my financial life. I've worked very hard to identify my problem areas, reduce wasteful spending, save money, and hold myself accountable. Despite these efforts, though, I have noticed that I keep making some of same mistakes that caused my financial downfall in the first place. While I feel like I'm fairly safe from returning to my old ways, I also realize I still have a LOT of room for improvement.

Mistake 1: Window shopping.
I've been on a shopping/spending freeze since December. That means I don't go into stores. Period. The one time I broke this rule was enough to prove that a shopping freeze is appropriate. Yet I find myself searching through Amazon, Target, and Old Navy and adding things to my online shopping cart. I don't buy them, but the want is still very much there. I have 37 bookmarks for things I absolutely must buy "when I have the money." Well, at that rate, I'll never have any money because I'll spend it all on stuff I don't need. I don't know why it's so hard to stop looking - what am I even looking for? The consumer frame of mind is hard to set aside, even when I'm motivated.

Mistake 2: Keeping cash.
I hate cash. I always have. In my brain, cash is separate from the money in the bank and I don't have to account for it. Recently I've been selling some of the random junk in my house, and every time I get cash in my hand, I make the decision to keep it instead of putting it in the bank. Ahem. Let me repeat that. I make the decision to keep it. That's right; I look at the money, think about it, and make a conscious choice. If I get a large amount, it's much easier, but less than $50? It's going in my pocket and I promise I won't even be able to tell you where I spend it. I don't even know how much money I've wasted at this point, but I'm sure it's a substantial amount. Given a choice, I ask people to pay me via check or PayPal, but I have to be honest - who even writes checks any more? And PayPal isn't always a possibility. It's hard to tell people, "Look, I need this money, but if you give it to me I'll waste it on crap. Please take it to my bank for me." I did order an entire pad of deposit slips so I won't have the excuse, "What if I need this deposit slip for something important?" Mostly, though, I'm going to have to make a conscious decision to stop this madness.

Mistake 3: Failing to create concrete savings goals.
Don't get me wrong - I'm saving money. I have $1100 in my savings account right now, which is a miracle for me. But aside from saving $5000 in an emergency fund and contributing $200 a month to my Roth IRA, I haven't created any other goals for myself. I feel like I should be saving for something I want or need so I can have the joy of getting something I worked for. Honestly, I should probably start saving for some bedroom furniture - I've been in my house for 16 months and still don't have a headboard, dressers, or nightstands. (I do have a step stool beside my bed with my alarm clock on it. I have to go get it periodically to reach something in the top cabinets in the kitchen. How ghetto is that?) I'd also love to take a real vacation next year. Sometimes I think I avoid setting financial goals with a time limit because I'm scared I won't get there on time. Which is a stupid excuse.

I could probably keep going and make this "100 Money Mistakes I Keep Repeating," but I try not to overwhelm myself. Right now, these are the things that are bothering me most. While the solutions may seem obvious, I refuse to say I'm going to do something I know darn well I won't do. I just need to sit with these mistakes for awhile, decide whether it's worth it to keep making them, and make a plan.

What money mistakes are hardest for you to stop making? I'd love to hear your comments!