Jana Says

Fear factor: Self-employment

August 25, 2011 by Jana 15 Comments

I recently guest posted over at Broke Professionals as to why I work for the government. In all of that description, I left out one key factor–I’m terrified of being self-employed.

Please don’t get me wrong. I long for the day where I can work from home or a park or a beach without reporting at a certain time, doing what someone else wants me to do and wearing something that’s not my pajamas or yoga pants. Lack of self-confidence not withstanding, here are a few reasons why I am too scared to take the plunge into self-employment:

Taxes. Except for knowing that I have to pay them and what the little abbreviations on my paystub stand for, I don’t understand taxes. They are far, far beyond my scope of understanding. If I work for myself, I will have to figure out taxes and make sure that I pay them on time and accurately. I fear that this won’t happen and I’ll have to deal with an audit. That scares me.

Insurance. Right now, since my husband and I both work for the State, our medical insurance is free (some sort of double state share formula that is way too complicated for me to understand) and we pay very reasonable amounts for vision and dental insurance. The thought of having to find my own policy and pay the borderline obscene amounts make me want to throw up a little.

Retirement. Although I have a Roth IRA, I also have a guaranteed pension where the money comes right out of my paycheck. I also have extra money deducted and put in some sort of Fidelity account. While self-employment means that I’ll have to significantly ratchet up the Roth and Fidelity savings, and I’m OK with that, losing the pension makes me really, really nervous. Confession time: because of the pension, I’ve been very lazy with the rest of my retirement savings and I’m afraid of how much catching up I have to do.

Finding work/clients. This is where the self-confidence bit comes into play. I am the world’s worst at convincing someone that he should pick my work over someone else’s (the fact that I have the job that I have is, in my opinion, a huge fluke and/or divine intervention) because, if I’m being honest, I don’t think I’m really all that better than anyone else. I have a terrible time selling myself (this also eliminates my potential career as a prostitute. This is probably a good thing) and, as a self-employed person, I would have to put myself out there. It’s not the rejection I’m scared of; I can handle rejection. I’m just not comfortable with saying “Hey, I’m awesome. I’m better than a sparkly unicorn who breathes diamonds and you should hire me instead of that loser”.

Inconsistent income. As the parent of a small child, I love the fact that I can rely on my paycheck to be consistent every single time I get paid. I have a nice, comfortable budget that provides for all of our needs and the occasional want. I know that if my daughter needs something, I don’t have to worry about the money that may or may not be in my paycheck; I’ll know exactly how much will be there. Being self-employed, there will be ebbs and flows in my income and that puts me on edge. I know there are tools to help budget and plan on an irregular income but there’s something about the consistency of my current paycheck that’s soothing. I thrive on stability.

To me, jumping into self-employment is like jumping off the high dive into a really amazing pool complete with swim-up bar and big screen TVs playing Jason Segel movies all day long. Right now, I’m on the ladder of security and stability, thinking about stepping onto the diving board to jump into the pool. Each rung I climb is a step closer to my dream. If only I could get over my fear of free falling.

Are you self-employed? How did you get over your fears and decide to take the plunge?

Debt is like a dog in a closet

August 24, 2011 by Jana 2 Comments

This is my dog Barkley:

Normally, Barkley is a pretty smart dog. He follows most commands and understands (for the most part) not to pee in the house. He’s a very lovable, cuddly dog who (wisely) prefers me over any other family member. Except Barkley has one problem. He’s small and sometimes, when we’re not looking, he gets stuck in closets.

You see, Barkley has a terrible habit of coming into closets or the garage while we’re in there. Since he’s so small and stealth, it easy not to notice that he slipped in. So we exit the closet/garage not knowing that Barkley is still stuck inside. It’s usually not until about 5 or 10 (or once, almost a 1/2 hour) before we realize that he’s not around. This normally sets off a chorus of “Barkley, come here.” “Barkley, where are you?” and ends with “Did you check the closet?” More often than not, he’s in the bedroom closet.

What’s most unusual (especially for a dog that barks at everything) is that he doesn’t make a sound. He just sits in the closet, in the dark, waiting for someone to find him. There’s no barking, no howling, no whimpering, no scratching. Nothing but a little dog sitting in a dark closet waiting for one of us to let him out. When this happened (again) the other night it struck me–Barkley’s being stuck in the closet is just like being in debt.

When you’re in debt, much like being in a closet, you feel trapped. The walls feel very close, the room feels small, and everything is dark. You feel nervous and scared. You feel alone. You’re stuck. You pass the minutes assessing what seems like a hopeless situation and praying that someone comes along and finds you and lets you out. You’re too scared to scream or ask for help because doing so would alert someone to the fact that you are now stuck in a closet. It’s embarrassing. You eventually resign to being stuck in this small, dark, hopeless place.

You close your eyes for a few minutes and allow yourself to wallow in your own self-pity. You reflect on all the behaviors that you thought were good but now you realize, maybe not so much. Because if they were good habits, you wouldn’t be stuck in a closet. When you eventually open your eyes again, you notice something you hadn’t before–a ray of light coming through the bottom of the door. That light may be a book by Dave Ramsey, a debt reduction support group, an amazing personal finance blog. But something presents itself to you in a small way that makes you realize “hey, I have a tool to get out of here. I don’t have to be stuck.” The only thing that ‘s up to you is how to use that tool.

You can throw it against a wall and hope someone hears you. You can read it like a manual, absorb and use the information so you never get stuck in the closet again. You can share the tool with others to make sure that your stupidity has a positive impact. You can use it to stand on in order to reach the doorknob and turn it to let yourself out of the closet. And while you’re standing on the tool, you can thank G-d that you have opposable thumbs that help turn that doorknob. Because unlike my dog, we have the ability to get ourselves out of our debt closets. It’s just a matter of wanting it.

Money Tune Tuesday: Money Talks

August 23, 2011 by Jana 2 Comments

Bloggers talk. We talk on blogs, we talk on Twitter. Some of my fellow bloggers have even been kind enough to mention me on their blogs so I’m going to return the favor. When you get a chance (and make sure it’s sooner than later), check out my peeps at So Over Debt, Debt Free by 30, Baking the Budget and One Cent at a Time. While you’re out visiting, stop by my fellow Yakezie Summer Team Group 2 bloggers: Money Beagle, No Debt MBA, Money Crush, Bucksome Boomer, Couple Money, Frugal Confessions, Little House in the Valley, Squirrelers, Mom’s Plans, Mighty Bargain Hunter, 101 Centavos, Faithful with a Few , Stock Market Basics, and Wealth Informatics.

Money Talks. Well, AC/DC says it does. And that’s today’s money tune. I heard this song on the radio today (WYSP ain’t with us no more. Respect.) and I thought it was a great choice:

Also, if you know where that slightly paraphrased movie quote came from, post it in the comments and I’ll let you pick next week’s tune.

Earning my frugal merit badge

August 19, 2011 by Jana 9 Comments

A few weeks ago, in an effort to reduce the amount of crap I schlep to work, I bought a new, smaller wallet that fits in my wristlet. It doesn’t hold nearly as much as my old wallet, which is a good thing because my old wallet had way too much stuff in it. I had to really think about what I needed my wallet to hold. Here’s what’s in it:

My driver’s license
My 2 debit cards
My emergency $20
A picture of my daughter
My library card

You’ll notice that there’s no credit card in there. When I noticed that I had a library card in my wallet instead of a credit card, that was the moment for me I realized I officially earned my official frugal merit badge.

What was the moment you earned your frugal badge?

Go Greek or No Greek

August 18, 2011 by Jana 8 Comments

Here’s a fact about me that may be surprising: In college, I was in a sorority .

Most people who know me now, as an adult, are quite shocked to find that out. I am decidedly “unsorority girl-like” (whatever that means). When I decided to rush, it was not a decision I took lightly. I was 18 years old, a freshman in college and I had already found an amazing group of friends. Why would I need a sorority? But a friend of mine and I had a nice, long discussion and we decided that we would try rushing to see what it was like; we could always drop out if it wasn’t for us.

Going in, I kind of already knew which sorority I wanted to get a bid from. It wasn’t an easy decision in the end because another one really made me fall in love with them but I ultimately did go with my first choice. I really didn’t know what to expect because I was the first one in my family to join a sorority (I had a cousin who was in a fraternity but we’re not that close as he is weird). I had an inkling about pledging and the social aspect but no one ever thinks to tell you about the financial aspect of going Greek so that was a huge shock to my system.

Since I want you or your children to be better prepared than I was, here’s some things you need to know, financially, about the decision to join a fraternity or sorority:

Dues. This is probably the single biggest expense. Dues, at least at my school, mainly covered housing costs (if you had a house or, in the case of my sorority, were trying to buy a house) such as rent, utilities, and food and membership fees that you must pay just for belonging. Dues were to be paid each semester and there was no discount for paying the whole year in advance. I always paid in full at the beginning because a)I don’t think we had a payment plan and b)I didn’t want nastygrams or to be prevented from attending events. Yes, our Treasurer was like a perky debt collection agency.

Clothing. When I joined my sorority, I had no idea how much clothing I would accumulate. There was a T-shirt for everything! Rush, Greek Games, Homecoming, and Anchor Splash (this is a dead giveaway for which sorority I was in, should you be inclined to figure it out) plus just buying clothing with letters on it (including “house letters” which all members were required to buy). By the end of college, I had enough sorority T-shirts to last a month without ever duplicating the shirt, which was nice because I hate doing laundry. However, those T-shirts were approximately $15-$25 a piece. That’s a lot of money for shirts that now sit in a pile in my closet.

Date parties/formals. I was initially going to include this in the incidentals category but I feel that it warrants its own category. Over my 3 1/2 years in my sorority, I probably spent more money on this than anything other than dues. From buying professional photographer pictures to the tickets for attending to the dresses and shoes (couldn’t wear the same thing twice!) to drinks to favors, the money spent on these were probably the best money I spent. You see, my husband was also my college boyfriend and he came with me to almost all of these events. It’s nice to look back on the pictures of the two of us and reminisce.

Incidentals. Good lord, the incidentals. There were so many. First, there was being a “Big Sister” and having to spoil my little during big/little week (this was pretty much mandatory). Then there was all the accessories–key chains, cups, pencils, hats, a windbreaker (don’t ask), car stickers; anything to show my sorority pride. Next came all the things I’m forgetting that I know I paid for. $5 here for a sister’s birthday, $10 here for a senior week gift, stuff like that. It wasn’t too bad considering this was the area where you actually have the most discretion as this stuff is all optional.

Fines. This is the worst one and perhaps the most ridiculous. We got fined if we missed something deemed mandatory like rush parties or school sponsored speakers. It wasn’t a big deal for me since my job ended at 6 pm every day but for some friends, it was hard. They had jobs that weren’t as flexible and would often have to miss mandatory events. One friend got fined more than she made in a shift! This is definitely something to take into serious consideration.

Please don’t mistake me being candid about the financial aspects of going Greek as discouragement from doing it if you (or your child) choose. It’s very doable, financially, if you know what you’re getting into and it’s budgeted and planned for. I didn’t want my parents, nor did I expect them, to pay for my sorority so I made sure to get a job that would pay for everything. My sorority was a bargain compared to some others, too. There was one sorority on campus that paid $900 per semester in dues. I only paid about $300. To this day, I wish I knew what $900 a semester covered.

Being Greek was both an amazing and horrendous experience for me. I don’t for one minute regret joining a sorority but there was some stuff, financially and otherwise, that I could have done without. I just wish I had been better prepared.

For those not inclined to look it up, this was my sorority.