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Epic Fail

by Melanie
written by Melanie

I am currently recovering from another hellish weekend. Last Tuesday, I worked a 16-hour day between my day job and my part-time job. I was so exhausted and out of it the rest of the week. Then I also worked my crazy carnival gig on Friday, and Saturday, and worked a very long, Passover dinner yesterday. I’m beat. To make matters worse, on Friday I was rushing to get somewhere, so while I was texting and walking I ran into the edge of a wall. I proceeded to bleed,  and felt very disoriented, and now my eye is a little black and blue and I have a nice cut on my eyebrow. I was beyond embarrassed and it just felt silly. Apparently, texting and walking is really dangerous, so be careful.

I’m beat, but I’m also really excited because this is the last of it. I am working one day this weekend, and in May my schedule is a lot lighter. I have more freelance writing gigs, and will focus my attention on online efforts. I am really excited about this– finally seeing progress on some things and I get to stay at home more!

I’ve learned a lot working so much the past three months. This past weekend really tested me. The accident was just a manifestation of how busy and tired I am and it is starting to affect how I take care of myself. Even though this month will mark the most side hustle income I’ve ever made, I consider it a failure on a lot of fronts. I’ll write more on it later, but working this much really has diminishing returns after a certain point. I have reached my limit and now want to focus my energy on creatively fulfilling work I can do from home. The running around part is really costing me so much energy and money! In light of these realizations that I have failed in some ways, I thought it would be fun to start the week off with some of my epic financial fails.

1. When I was 17 and spent $250 on breast enlargement pills (haha, no they didn’t work).

2. That time in Rio I got off at the wrong bus stop and had to take a $75 taxi ride back to the hostel. While drunk on the beach in Rio, I also got swindled into getting a fake tattoo which cost me another $50.

3. When I was 13, I found $100 bill…..and spent it on shampoo, conditioner, and skin care products?!?

4. That one time Ryan and I went to happy hour, with coupons and still spent $50.

5. In Reykjavik, I tried to order a glass of wine, and ended up buying a bottle of it. I didn’t realize this until after I signed the credit card receipt.

6.  The first time I used my emergency fund after running a stop sign and getting into a car accident.

7. When I was 18, I really wanted my then boyfriend to love me….so I paid for our flights and a concert….in Vegas. We couldn’t even drink, so this was just such a waste. We didn’t even last more than six months!

8.  After getting my first real career job, moving into a studio all by myself and paying $1,000/mo, even though I had student loans.

Me and my karaoke mama

Me and my karaoke mama

9. From 22-23, I went out to karaoke 3-4x a week. Yes, I was addicted, but it was also my therapy. That shit adds up.

10. Not being insured and ending up in the ER.

 I want to hear from you! What is your most epic financial fail?

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Oh No! I Owe (Taxes)

by Melanie
written by Melanie

I finally got my taxes settled this weekend and for the first time in my life I owe the IRS money. After some back and forth, and crunching the numbers, I owe roughly $300. Earlier iterations proved to be much higher, but were due to human error (note: triple check your taxes!)

I’ve always been one to gloat over tax refunds. That has been extra money towards my student loans, partial vacation funds, and saving cushions.  I was making such a low income before I got my current job (16k/yr), but doubled that this year by finally getting a full-time job. I hustled all through out this year and made close to $5k in side hustle income.

In the past 2 years I’ve been hustling, I guess the low-income and the untaxed income just evened out. This year I continued and didn’t give a thought to paying taxes on my independent contractor income.

I know, I know. Total PF fail.

I’ve really learned a lesson here. Although $300 doesn’t seem like a lot of money, it felt like a huge burden to me. It’s almost my half of the rent. It’s practically what I pay in interest per month on my graduate loan. This $300 sparked so many conversations this weekend. Because I have depleted my savings and choose to throw almost all extra income toward debt, I have very little fluid cash to work with. This means I will inevitably have to lower my student loan payments a bit, which really sucks. But here are the steps I’m taking to get through it.

#1: Start a Tax Savings Account

After I realized I was going to owe, I immediately started a tax savings account. The great thing about Capital One 360 (affiliate link) is that you can have sub-savings account. When I got paid on Friday, I transferred over several hundred dollars to my new account to ensure that I had funds available to pay my taxes. Going forward, I will put 10% of all my 1099 income in my new tax savings account, to prevent this from happening again!

#2: Don’t Panic

I’m not going to lie, I panicked a bit when I found out I was going to owe. Sadly, I didn’t even think that it was a possibility. I have been so focused on paying off debt, I hardly thought about my taxes. My empirical evidence gave me no reason to think I would owe. But the good news is I made more side hustle income this year! The bad news is I need to pay taxes on that biz! All this to say, panicking doesn’t help or change the situation.

#3 Don’t Get Discouraged

The only certainties in life are death and taxes right? Don’t get discouraged. Unfortunately taxes are a part of life.  You are a not alone. You are not a loan. This will be just one more thing to get over.

I will be paying my dutiful part to the IRS in the next few weeks. I will look forward to the side hustle income actually hitting my accounts in late February, early March. Although I’ve felt a bit down about this unexpected money, it just reminds me that the debt repayment journey is a process. It’s ups and downs, plateaus and setbacks; the main thing is that you got to keep going!

Have you done your taxes this year? Are you expecting a refund or do you owe?

 

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I’ve Been Naughty

by Melanie
written by Melanie

I think Santa is going to bring me a bucket of coal. I’ve been a bad, bad girl. (Fiona Apple, anyone?)

I’ve been MIA from the blog this week and not without some regret. The intention was there, but every time I sat down to write, I didn’t want to admit the truth. Things in writing seem so permanent, so determining.

I wasn’t ready to accept some things.

Remember how a few months ago, at the age of 28 I got my very first credit card? Well, it hasn’t worked out so well.

Let’s back up and remember why I thought having a credit card was stupid: Why buy something if you can’t afford it? Why not just pay with cash, to ensure you can afford it? For so many years, I never understood it.

For 28 years I was diligent with my money and cash flow. There were times it was tight, but never once have I relied on a credit card for anything. Because of my love of travel, I thought having a credit card that earned miles would be a good idea.

Everyone says that as long as you pay off your credit card each month, you’re good. And I did exactly that. At the end of each month, I diligently paid off my credit card and saw those miles accumulate. It was exciting and I felt responsible. I can do this, I thought.

But I became a statistic. I did exactly what people expect. I spent more money using the credit card than I did with my debit card. Even though I was able to pay it all back each month, I ended up spending more money than I usually do.

It’s all pretty simple. Credit cards allow you to alter your cash flow. With a debit card, if I didn’t have the money, I couldn’t afford it, therefore I wouldn’t buy it. With a credit card, I said, “Oh well, I can pay this back at the end of the month, when I get paid!”.

I would say for the past two months my spending has increased 25%. Some of it was for Thanksgiving travel, some of it was necessary, and some was indulgent fun.  Last month my credit card spending was ridiculous and this month I am paying the price for it.

I’ve “only” been able to put $900 towards debt this month, compared to my goal of $1500. I’ve had to transfer some money from my pathetic savings account just to get through the rest of the month until I get paid again.

I’m also becoming acutely aware of how much my side hustling has really helped me survive. The past two months have been slow. I’ve made $200 in extra income the past two months, where most of this year I averaged $300-$400 per month. So it’s been a bit dry and coupled with my credit card fail, I’m feeling pretty low.

I know this is merely one moment and I am acknowledging the issue. I am resolving it by only buying my groceries with the credit card. I think I subconsciously wanted to spend more because I knew I was getting miles and it would get me closer to a trip.

Although the past two months were bad, I have to keep focused on the bigger picture. The bigger picture helps me keep perspective. My goal this year was to pay off 15k in student loan debt. When I wrote that in January, there was no way that was possible. I was making 12/hr and my job was going to end in four months.  But I got a new job, hustled and I put $16,660.29 towards debt in 2013!

Bad news? Almost 3k of that went to interest so I currently owe $43,913.55. I cannot wait until I am under 40k! About 35k of that has crazy high interest: 6.8%-7.9%. The rest is my undergrad student loan, chilling at 2.5% interest. I will be super excited to get my grad loan in the 20’s and my overall debt in the 30’s. That is much more manageable than 50’s or 60’s and the total 81k (with interest probably closer to 100k 🙁 ) that I’ve owed.  I’m almost half way there (and I’m living on a prayer).

In the next week or so, I will attempt to get out of this funk, forgive myself, keep to a spending freeze, not touch my credit card and hustle for work. I have big plans and big dreams for 2014.  Although I am feeling low now, I never thought I’d be able to accomplish what I have this year. It literally wasn’t possible before.

I need to remind myself that your failures are not your future, and your present is a work in progress. I am ready for a fresh start.

Have you had any setbacks lately? Any end-of-year disappointments?

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