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I was lying to myself about my finances and finally faced the facts...
Old 02-11-2010, 12:39 AM   #1
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I was lying to myself about my finances and finally faced the facts...

I've been spending like my income was that in 2007 and 2008....which it is not. Especially at this time of the year. I find it difficult to truly budget and set automatic plans in motion when my income is sporadic (self employed).


Well, I KNEW I was putting a bit too much on my ccards....ignoring the mail for a few days here and there...just generally hiding from my finances...and that is NOT me. I've digressed. Weird.

I just sat down and entered EVERY SINGLE debt, source of income, asset, monthly bill, expense etc into a spreadsheet and faced the facts. Although I dont like what I see...I feel EMPOWERED for finally snapping out of my 6-month trance. WTF was I thinking? Time to go back to basics.

I have weird methods of 'mental accounting' that dont always go as planned...mainly because my life is becoming more and more complex as I explore more and more business and personal opportunities....my mind just isnt as sharp as it once was...or maybe it IS, but just cant process all this info all the time.


Nonetheless....I never thought I'd get to this point. I'm actually paying too much interest on some business-related revolving lines of credit and ccards just by not moving them to lower rate lines....SIMPLE stuff...ELEMENTARY. I never used to carry debt....but now it's crept up on me.

LUCKILY, the smart me has several small savings accounts with auto-deposit features that have a nice little stash by now. I also WAY overpay my mortgage and other lines of credit...so if it were to really get out of hand, I could trim my monthly expenses by 25% and not bat an eye....nor change my lifestyle.

Time to put the pull up the bootstraps. And hopefully get some work ($$$)so I can make it happen.


My name is Jason, and I am a recovering financial idiot.
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Old 02-11-2010, 12:48 AM   #2
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Don't feel bad - - Most (all?) of us have been there at some time in our lives.

Paying off high interest credit cards is a great thing to do in order to fix your situation. Sounds like you already have that figured out.

Quote:
Originally Posted by thefed
My name is Jason, and I am a recovering financial idiot.
If you really feel that way, you can start with the same book I started with: Personal Finance for Dummies. What a humiliating title, but it got me on the right track.

Good luck and congratulations on realizing what was going on before it got worse!
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Old 02-11-2010, 01:00 AM   #3
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Don't feel bad - - Most (all?) of us have been there at some time in our lives.

Paying off high interest credit cards is a great thing to do in order to fix your situation. Sounds like you already have that figured out.



If you really feel that way, you can start with the same book I started with: Personal Finance for Dummies. What a humiliating title, but it got me on the right track.

Good luck and congratulations on realizing what was going on before it got worse!
is it normal to think "i dont need no stinking book!" at 26 I am much farther ahead than most of my peers...due to what i have always perceived to be financial intelligence, planning, and an entrepreneurial drive. I know the math behind what makes sense.... but good lord WTF was I doing?
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Old 02-11-2010, 01:14 AM   #4
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Maybe you can identify what it IS that you need, if you don't need a book to help you keep your financial realities in mind. After all, you know yourself better than any of us do. At any rate, good luck!
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Old 02-11-2010, 02:22 AM   #5
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Don't feel bad - - Most (all?) of us have been there at some time in our lives.
I didn't even have a credit card till i was 35. (49 now) Just never really
needed one. I finally got one when i started traveling a bit more as a
software contractor. I just decided from the start never to carry a balance
By that time i was just second nature i think.

Now i hardly ever use cash.
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Old 02-11-2010, 03:57 AM   #6
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My name is Jason, and I am a recovering financial idiot.
(from the crowd, in unison)

Hiiiiiiiiii Jason.


Seriously, don't beat yourself up too much. Just get yourself back on track.
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Old 02-11-2010, 04:13 AM   #7
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Financial education can be as simple as:

1. LBYM
2. Save early, often and as much as you can
3. Investing in a mix of low cost index funds (equities and bonds)
4. Take advantage of any matches provided by employers (aka free money)
5. Tax shelter where possible
6. Reduce or avoid consumer debt (excepting a home mortgage)

That said, the more good materials you read the better.

You are 26 - you have plenty of time to get your finances in order and are doing a lot better than a lot of people.

Good luck.
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Old 02-11-2010, 06:02 AM   #8
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My name is Jason, and I am a recovering financial idiot.

You have made the most important step in recovery, one that most people do not recognize until it is far too late. Kudos to you Jason.
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Old 02-11-2010, 06:45 AM   #9
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My name is Jason, and I am a recovering financial idiot.
So... at 26 years old, the only thing you learned from this experience is what a terrible person you are. You are in big trouble. In the years ahead, life will throw many challenges at you -- most, if not all, will make this one seem silly. If all you get out of them is noting how poorly you behaved, then you will have a miserable existance indeed.

My take is that you (should have) learned some very valuable lessons and, I might add, in a much less painful way than others have. Take the positive from this experience, make appropriate changes, and move on. That way you can meet the next challenge head on.
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Old 02-11-2010, 07:27 AM   #10
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I think being a entrepreneur when money becomes feast or famine it get's hard to put the brakes on after you've sacrificed to start a business. I think it get especially hard when you have more than one young business. After sacrificing a lot last year I opened up the purse strings to enjoy ourselves more. Just create a plan with enough wiggle room that you won't feel deprived and still grow your business.
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Old 02-11-2010, 07:49 AM   #11
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What is measured is managed.
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Old 02-11-2010, 08:48 AM   #12
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is it normal to think "i dont need no stinking book!" at 26 I am much farther ahead than most of my peers...due to what i have always perceived to be financial intelligence, planning, and an entrepreneurial drive. I know the math behind what makes sense.... but good lord WTF was I doing?
It is certainly a typical male trait never to open a manual DW is always berating me on this

So, don't feel bad that you don't know all you should know without reading books or other sources. 26 is a great age to discover that you do not know everything you need to know about finances - I didn't get to that point until I was 38
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Old 02-11-2010, 08:57 AM   #13
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I did not get smart about finances until I was 32 divorced and a single Mom so you are way ahead of me !
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Old 02-11-2010, 09:14 AM   #14
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You are at a time in your life (young family, growing business/career) where it is not uncommon to be overextended. Not that you shouldn't get control over your finances/cashflow, but this overextension won't last forever--your businesses will grow, your family expenses will stabilize. Maybe as your businesses grow you can work on the accounting side of things (with hired help, or maybe your spouse can learn how to do it if she doesn't already).

I think you need more than Personal Finance for Dummies (which my daughter read cover to cover just before college; my son would not even open it, so yes there is something to be said about the gender issues ). Maybe look around the sba.gov site, check out some community college classes about running a business, or get one of the Accounting for Dummies books.

Probably the most important lesson you've already learned is one that a ton of affluent more experienced businesspeople are moaning about--plan for a rainy day.
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Old 02-11-2010, 10:32 AM   #15
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my life is becoming more and more complex as I explore more and more business and personal opportunities.
I've noticed this, and I almost get stressed just reading about all your different ventures (bounce houses, duct cleaning, house flipping, lawn care, bathroom renovation, rental, rental property management, third child, Ebay sales, moving, more).

Maybe simplifying would help you clear your mind and let you concentrate on finances more.
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Old 02-11-2010, 10:39 AM   #16
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T-Al may be right. I sense a case of "entrepreneurial overload" - attempting to spin way too many plates simultaneously.
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Old 02-11-2010, 11:30 AM   #17
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Interesting thread title, thefed, "I was lying to myself about my finances and finally faced the facts..."

I've always lied to myself about money, pretending that my PF contains 30% less than the numbers show because numbers cannot be trusted

. . . . and risks should be taken.
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Old 02-11-2010, 12:26 PM   #18
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The spreadsheet you made is probably the single most effective tool you have. You might also look at your various ventures and figure out if they are actually profitable when you consider the time involved.

I live by spreadsheet but I'm planning to retire soon. It will be interesting to see if reality and spreadsheet match

You have a lot of time (age 26) - get rid of credit card and car loan debt (if you have that). Amazingly cars can last many years... put aside the money to buy the next one for cash. Use credit cards for the float but pay them off in full, every month.

And - track what's coming in over a year.

My two cents - and congrats on realizing you were in trouble!
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Old 02-11-2010, 12:45 PM   #19
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What is measured is managed.
You get what you measure for.
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Old 02-11-2010, 12:56 PM   #20
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I've noticed this, and I almost get stressed just reading about all your different ventures (bounce houses, duct cleaning, house flipping, lawn care, bathroom renovation, rental, rental property management, third child, Ebay sales, moving, more).

Maybe simplifying would help you clear your mind and let you concentrate on finances more.





That was impressive T-Al...did you have to do a search or was that off the top of your head?
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