Today my final student loan payment posted, making me 100%, totally debt free for the first time in, um, let’s see, a decade? Yes, that sounds right.

I thought I would scream this from the mountain tops and do a little happy dance right now in the days or minutes before I have to buy a new car when mine inexplicably explodes or I’m hit by shrapnel from my exploding car and rack up lots of hospital bills. The good news is that medical bills can be discharged in bankruptcy, whereas student loans can’t be.

So, wheeee! Look at me, debt free! I don’t owe anyone anything and it is awesome!

I am always disappointed that Trader Joe’s does not let you actually trade for items. It seems to be a great deception in regards to their name, just like Dress Barn isn’t really housed in a Barn and Burlington Coat Factory isn’t an actual factory.

It would be rather exciting to walk into Trader Joe’s and bargain with the cashier. “I will give you this never-used souvenir coffee mug from San Francisco for two boxes of blueberry oatmeal. What do you say?” What do you think I’d have to exchange for the huge pumpkin pictured above that was in the lobby of the Ann Arbor store?

The nice thing about Not Quite Plush, But Reasonably Padded Corporate Job was that I did not have to watch my money that closely. I paid all my bills and at the end of the month I actually had money left over! To put in savings! Amazing! Suddenly a lot of stress and anxiety faded out of my life, and I realized the nice part about having money is that you don’t have to worry about not having money. Eventually I decided to leave Not Quite Plush, But Reasonably Padded Corporate Job, so now I’m back to watching my income and expenses very, very, closely.

Last month, I recorded every single purchase and every pay check in one budget program and took a good look at where the money is going. My realizations:

• Wow! Cats are really freakin’ expensive, especially when they both have fleas and are due for their annual exams during the same month.
• Most of my excessive spending is on food. Shocking, I know, that the former morbidly obese woman who likes to cope with her chronic headache with sugar would be racking up the grocery bill. It appears to stem from two issues:
  • In my effort to be social and stay in contact with friends and work buddies, I go out to lunch about once a week, spending more than I would eating at home. I’ll also buy a coffee if I’m using free wi-fi and Barnes & Noble or Panera. This starts to add up.
  • If I’m not feeling well (which is quite often), or I’m tired from working all day, I rationalize getting a Subway sandwich or the pricey sushi at Kroger. I really like rewarding myself with food, but that’s not great for the budget or my weight.
• I thought my gas expenses would be cheaper now that I’m not commuting to the office every day. However, I’ve been going to visit friends in Louisville, running a race in Lexington, and other such traveling, so my gas expenses are about the same as they’ve always been.
• On the positive side, I under-spend in the clothing and leisure categories. I’ll probably have to buy new clothes in winter, but I’ve made do with what I have for summer and fall. As for leisure, I’ve been using the Internet, the library, and Netflix streaming for most of my entertainment, keeping costs low.
• Other good news is that the total electric bill for the shared 3-bedroom apartment is lower than the average total for my old 1-bedroom apartment. I know! I don’t know what’s going on either, except that the new place doesn’t have as many walls exposed to the exterior, plus we’re well shaded. So my electric bill is now less than half what it used to be after I split it with my roommate.
• And of course, I’m saving $300 a month on rent compared to my old place. I’m making up for it by paying bank cash for my health insurance each month though. Oh well! *cough* It sucks to be a sicko.

So, I’m going to try to stop spending so much money on food. However, I think it would be really rude to use free wi-fi without buying a coffee, so I’m not going to stop that. However, I can try to get my friends to eat at cheaper restaurants. Otherwise, I think I live pretty thriftily.

I know many freelancers have accountants, and I think that is a wise decision. However, I’ve been paying my own self-employment taxes for years and haven’t been audited yet, so I prefer to do it on my own. My business is simple enough and I keep good enough records to handle it myself. I also like to look at all the numbers and know how much is coming in and how much is going out. I went a little spreadsheet-crazy last night and entered all my numbers into Outright to determine how much I have to send off to the IRS by September 15th. It’s a sad number, though I suppose I should be happy that it is so big because it means I’m doing ok.

I am not against paying taxes. I like driving on roads and having running water and living in a generally peaceful society policed by cops where I can go about my life without having to fight off roaming marauders or looters or mutant rhinoceros. I am willing to pay for that. I just wish I got to designate where my tax money went, just like I choose which funds to invest my money in my Roth IRA. I would put some of my taxes towards roads and hand some of it to the cops and firemen. I’d save a little bit to fund the arts and put a lot more towards education. A big chunk would go towards health insurance. Wars wouldn’t get any money, nor would corn subsidies. (Get your high fructose corn syrup elsewhere!)

I guess that’s not how it works though. I’ll write my check in a few weeks, but I wish I knew where it was really going.

As much as people’s lives are changing, mine hasn’t changed that much. Sure, my job is as secure as a lockbox sealed with chewing gum, and I moved to a cheaper apartment to cut my living costs, but otherwise I’m living the same life I’ve always led. Financially speaking this means I save money, sock cash in my retirement accounts, and spend less than I earn. Evidently I was a radical ahead of my time for doing all these things.

I feel genuinely sorry for the suffering this recession has caused, for people who are stuck in houses that have lost value, for people who can’t make ends meet, and for the retirement plans that have been torpedoed because the stock market went KAPOW!! I know that many people have done all the right things, handled their money wisely, and have still been screwed over by life circumstances. That said, I’m happy that the recession is making some people handle their money in ways they should have been handling it all along. People are saving more, spending less, and watching their budgets like never before. It sometimes takes a disaster to make you do what you should have been doing, and I only say this is because in my early 20′s I learned the hard way how to manage my money too, which means I went SPLAT! into debt.

By the time I graduated college, I had about $5000 in credit card debt. I’d used all my student loans, but I could still use my plastic! I carried a balance for 3 months before I started playing a game where I would sign up for a new credit card that gave me 0% interest for 9 months. Nine months later, I’d sign up for another one and move the money again. I would not recommend this as a good way to handle money, since I have no idea what it did to my FICO score, but it did save me lots of money in interest. I was also fortunate that I’d never missed a payment, so I was approved for these cards.

Have you ever played the board game LIFE? Wasn’t that game a lot more fun before it resembled your actual life? Over the next year I was hit with “Pay $7000 for gallbladder surgery!” and then “You owe $1200 in dentist bills” and then “You transmission breaks! Pay $2000 for a rebuild.” I kept chipping away at my debt, but something always came along to bump it up again.

After two or three years of steady payments, I finally paid the credit cards off, leaving my only debt in student loans and a car loan. The number on those credit card statements had felt like the number of pounds weighing on my back. It was burdensome to be beholden to the credit card companies and to not have enough in savings to cover unexpected emergencies. That’s why I bought some books on personal finance and educated myself about IRAs, compound interest, stocks, bonds, mutual funds, money market accounts, and figured out which places I should put my money first and in what amounts. It was a lot of information, and could be very confusing, but I never, ever, ever wanted to be in debt like that again. So I took the time to learn it myself.

When I bought my car I carefully made a budget and determined how much money I could afford to pay each month on the loan and purchased a vehicle within that price range. When I moved to an apartment, I determined how much I could afford, or what other expenses I would have to cut if I decided to move to a more expensive location. It wasn’t fun, but it was necessary, so I did it.

These days, I use a simple budget program (called SimpleD Budget in case you were going to ask) to enter my receipts into every day. (Or sometimes every 3-4 days if I’m feeling lazy.) I can then look at the numbers and the graphs and get a sense of what I’m spending and if I need to pull back in one area until the end of the month. I’ve tried using more complicated programs like Quicken or Microsoft Money, but they have so many features that I feel overwhelmed. I just want to track my variable spending, not every single asset I have.

There are also free online programs that will help you budget and analyze your spending, like Mint.com or Quicken Online. I have heard great thing about these sites, but I am too paranoid to give a web site all my financial passwords. I’ve worked as a web developer at several companies, and I know how insecure some online products actually are, so no thanks.

If you are looking for more information on personal finances, Suze Orman’s books and shows are extremely helpful and are targeted at newbies and women. I read a book called Girls Just Want to Have Funds simply because I loved the title, which taught me a lot of basics. Sites like The Motley Fool have loads of information, and a good blog on how to manage money is Get Rich Slowly.

Even though the recession sucks, I hope it helps people learn how to manage their money better, just as my young and stupid years taught me to open a Roth IRA and start taking advantage of compound interest. Hopefully we’ll all keep our good “cents” even when this recession is over.

I blinked for a second as my neurons fired, trying to figure out how the man I had just met knew where I’d recently vacationed. I sat in front of his desk, staring at the computer screen he’d pulled up. Oh, right. It’s in my file. Mr. Grimm was not a purveyor of macabre fairy tales. He was my banker. I’d let them know I was leaving the country so they wouldn’t suspend my account for suspected fraud when I withdrew pounds from a London ATM.

“It was good,” I told him. I had come to the bank to close a savings account because every time I paid bills online the site defaulted to withdraw from my savings account instead of my checking account. A few times I’d forgotten to select the right account in the drop-down box and had even overdrafted once, though they waved the fees when I explained what happened. I have higher yield savings accounts at other banks, so I decided to close the account to solve the problem.

When I walked in to request they close the account, the female teller was all, “What? What? You want to close an account. WHY?! WHY, OH WHY?! Haven’t we been good to you? Haven’t we changed your $20 bills to quarters for the laundry?! Haven’t we given you complimentary coffee and cookies and Diet Pepsi?! Haven’t we greeted you politely every time you enter and wished you a good day when you leave?!” I was then shuffled into the office of a manager and quickly reminded that the tellers are all women, but the managers are mostly men, and something is probably wrong with the system to cause these gender inconsistencies.

Mr. Grimm set about calling four different people until he found someone who could change the default account on my bill pay screen. Then I couldn’t remember my banking password so we had to reset it via the automatic system that calls my cell phone to give me the secret confirmation code. So, I spent about fifteen minutes in Mr. Grimm’s office, sucking on a butterscotch candy from his dish, trying to change one little setting on one little screen, all so they could keep the $150 in my savings account at their bank. Times must really be tough. When I wasn’t thinking about how much time this was taking, I was mildly freaked out by how much information Mr. Grimm knew about me.

“You’ve got a lot of credit card companies in your payees list,” he said. I did. When I got out of college I had a lot of debt but a good credit score, so I played a game of musical chairs with my balance. Every 6-9 months I opened a new account that let me have a 0% APR for the first 6-9 months and transferred the balance. I looked at the rest of my payees and my automatic payments and realized that Mr. Grimm could figure out who my doctors were, where I liked to shop with my store-based rewards credit cards and how much money I made every two weeks through my direct deposit. He could see what company manages my Roth IRA and how much money I make off of my blog. He could see what I have earned in book royalties. All I knew about him was that he mentioned having kids.

“So, how many kids do you have?” I asked as he clicked on screens.

“Two.”

And that’s all I know about Mr. Grimm.

Finally my accounts were fixed and I grabbed a complimentary coffee on the way out, trying not to think about how my naked life had just been on display to a stranger. Next week I’ll be back for some quarters.

1) Sell your blood plasma

If you’re not scared of needles, you can donate your blood plasma for about $25 a pop. I had a friend in college who did this when she was tight on cash. It does seem a bit icky to be selling your body fluids for money, but if every dollar counts it’s an option

2) Sell stuff on ebay or Craig’s list

Most people have stuff lying around their house that they aren’t using. I’ve got a huge box of CD’s I haven’t touched for years since I ripped everything to MP3s. I keep meaning to sell them at the Half-Price Bookstore near here for whatever pittance they’ll give me. Some people make stuff to sell, like all the crafters on Etsy.com, but I doubt all the time it would take a novice like me to make something sellable wouldn’t be worth the money I’d get :)

3) Get a second job

It can be hard to find a first job in this economy, but if you can manage to get a part-time job it can help cover the rent. Of course, you’ll probably be out of the house so much it barely makes sense to be paying rent :) Searching for freelance work might also be an option depending on your career field.

And that’s where I ran out of ideas. Anyone else have advice, serious or silly, on how to make some quick cash without selling your body on the street?

When I first entered the work force and I had to fill out a W-2 form, I looked at it in cross-eyed confusion. Exemptions? Wha’? When I got my first pay check I was giddy and excited…until I saw all the money they took out for taxes. And when tax season came I only filed a return because my mother told me to. She volunteered to be my personal accountant and didn’t charge me any fees. I just signed my name on the line and trusted that she knew what she was doing.

Then I started to make money outside of my full-time job and became utterly confused about Schedule C’s and 1099 forms and self-employment tax. Was I supposed to be making estimated tax payments during the year? Huh? What? So I eventually cracked 6 years ago and paid $20 for software instead of trying to read and understand all the forms. TaxAct asks me odd questions, like whether I own farm equipment or if I had depreciation this year, but it also takes care of all the tricky stuff that comes with freelance income. It also reminds me that I get points off my return for being a renter, paying tax on student loans, and for all those medical bills last year.

Most of the time spent on my return is spent adding up all these miscellaneous expenses, trying not to forget anything. How much did I spend on postage? Domain names? Don’t forget to count the PO Box charges! Then I had to nag someone for a 1099 form that they were supposed to send but never did. If there were any discrepancies between what they reported and what I reported, I’d practically be begging the IRS to audit me. And the medical expenses, dear God, the medical expenses. It took hours to organize all the receipts and claim notices and prescriptions to figure out exactly how much I’d spent, praying and hoping it was a high enough amount to get a higher deduction. Otherwise all the time would be for naught.

I’ve considered getting an accountant, but I don’t want to spend the money on one. I seem to be doing ok figuring out all these numbers on my own. $20 isn’t that much to spend and it’s more than my mother pays. She’s hardcore, working out all the numbers with pencil and paper on the kitchen table.

After working on it on and off for several weeks, I finally filed my tax return this week. For the first time in a long time I’ll be getting a federal refund. I’ll try to focus on the refund and not all the money I paid in estimated taxes during the year. But at least I didn’t forget to write off the tax software as a business expense.

If you live outside the US, your concern is appreciated, however since you don’t get to vote here or pay taxes here, Congress doesn’t care what you think. You may as well write them and request research into how to make more pink dolphins.

I needed winter pajamas, not my flimsy summer pajamas that keep me cool in the summer months. The pink hearts and polka dots are cute, but I needed pajamas that would keep me warm enough under the covers that I could turn the heat down to 60 degrees for the night. That’s because I am becoming my mother, a woman who kept the house at 64 degrees during the winter to save on heating bills so we could afford to pay the mortgage. (Hi, Mom!)

At the time, I was not happy that I had to pile on comforters when I watched TV and that I had to wear layers of sweaters to keep warm. I would beg to turn up the heat a degree or two, and she would usually oblige. But now that my electric bill is creeping up and the stock market has crashed down, I’ve decided my mother was a smart lady and that the cost of a thick pair of pajamas will save me money on electricity in the long run.

These are the pajamas I got, Simply Vera Wang microfleece, except they have polka dots instead of a checkered pattern. They also don’t float in midair on their own, so I obviously got a defective pair. They are comfy and warm and will probably pay for themselves in a month or two.

I’ve been trying to think of other ways to cut costs. My job is safe for now, but I don’t know what 2009 will bring. There are always unexpected bills. I try to use coupons, but frequently I get coupon anxiety coupled with coupon guilt. I got my oil changed last weekend, but felt stupid that I’d forgotten to bring my dollar off coupon. The worry I felt was not worth the $1.00 I would have saved. I go through my coupons in my billfold occasionally and feel guilty for every expired coupon I forgot to use because I have not saved as much money as I could have. It is like life is a game and I’m not scoring as many points as I could. I will never get my initials on the high-score list this way.

Has anyone else been doing things to save money? I hear Goodwill is doing good business. I’ve cut back on buying new clothes unless it’s necessary. I’m not buying the new TV I was going to get before the recession. These are not drastic choices and aren’t anywhere near the sacrifices other people are making, but I wonder how everyone else is managing.