I Just realized I don't know what the hell I'm talking about

I started this blog to force myself into learning more about personal finance, leadership and management. Writing is a way of holding myself accountable. So far I have been getting inspiration from the books I was reading. But, sadly, I finished my last library book yesterday (I lie, I have Jane Eyre on my bedside table, and that could give me something to write about, but not yet) so I had to find some new fodder today. Of course my favorite place to look is in the blogosphere. There were some pretty interesting blogs on personal finance (see my favorites in the side bar under Blogs I love) but I think I O.D.ed a abit. Now I can't think of a thing to write about. Reading about others' journies, instead of helping me, made me feel small and dopey.

But then I remembered that the learning process is like that. You start out not knowing anything, then you realize you don't know anything, then you start learning but you don't realize it, and then at some point BAM, you know something and you know it. Barbara Stanny has a whole chapter on this in Prince Charming isn't Coming.

Well, I'm at the DAMN-I-DON'T-KNOW-ANYTHING stage, ready for a Crisis. This happens to my students all the time. I reassure them. It's all part of the learning process and it's cyclical. Just when you start to realize you know something, it all starts over again. Only the crisis doesn't last as long the second time around.

But it stinks being an adult because we are no longer used to going outside the comfort zone. We hate feeling stupid, we don't want to make mistakes in front of other people. But I guess we have to if we want to go to the next level.

So be it.

The road to financial independence is paved with HONESTY

This is what we use  to track EVERY GOSH DERN PENNY that enters and exits this house, physically or virtually, EVERY MONTH. This excel has been with us for the last three years. Writing down everything we spend was the first phase of our little project to see where our money was going and  to find out if it was really possible to live off one salary (while socking the other one away in savings). It was not possible, but we did come close by cutting a lot of the eating out column (beer was also included in that column, much cheaper to have happy hour at home!). Note: this sheet even counts coffee out of the machine and gelatos. No expense is too small to record. It may seem a little much, but if you want to do big things, you have to be drastic.

As you can see, the last column is what is left over at the end of the month. Sometimes it's in the negative (like when I have to pay my taxes) but it all averages out as the months go on.

It is a great way to be accountable for what you spend. I do not have a fancy cell phone (I lust for one. I am not made of stone, people!) but every time I look at this and see there's some money in the savings column, it reminds me of the big picture.

There's no better way to be honest with yourself and with your partner, than coming to terms with where that money is going (hopefully into your orange account, or, preferably somewhere you can get a little more interest).

You'll notice we do not have any credit card debt on this sheet. When I moved to Italy, I said good-bye to credit cards for good (paid them off with the money I got from selling my car). I paid off my student loans as fast as I could and now the only debt we have is our house (eight more years on our mortgage and that will be gone too). As a rule, we live simply and pay with what we've got.

ps I took out the numbers but I left in the comments just to show how we remember what we spent money on. We like to look back at last year at the same time and remember what we were up to. It also helps if you're looking to change phone companies, etc.

Opening a Business was not Courage but Survival

I know it's not nice, but I think it's time to de-bunk a few myths about women and work in Italy. I am speaking here from my own experience, of course. These are the factors that contributed to my opening my own business.

1. If you are freshly out of university, you have a chance of getting a job with a decent contract which could turn into a lifetime contract later. The general (un-written, but certainly talked about) rule is that the employer must have the idea that you will work at least 10 years before making babies (not kidding).
2. Most of the women I know have Co.Co.Pro contracts, which means they do NOT have those fancy benefits that we Americans drool over, like lots of vacation, maternity leave, etc. The more education they have the more this is the case. This is a contract with minimum tax contributions by the employer and a very clear expiration date.
3. Almost all of the men I know here have the lifetime contract (with all the goodies). Level of education does not matter.
4. If a woman has the contract mentioned in point two, she should expect it not to be renewed once she has announced a pregnancy (it's not legal, but there are lots of other reasons why your work is sub-par).
5. Myth 1: Women in the workforce are "baby-makers" who want to take advantage of the system. Women take jobs so that they can get paid for leaving for an extended period (while getting paid!!) once they get pregnant. This belief is held by men, but also by many women.
6. Myth 2: Once a woman has a baby, all she can think of is having another one, so it's best to give her a job with less responsiblity. (I only know men with this idea, and it happens all the time. A woman comes back after maternity leave, sometimes even after a minimal time away, and her job description has completely changed, her office is down in the basement without windows, etc. Let's punish her!! )

Other considerations:

If you find yourself without a job and you are in that magic window of about 30-45 years of age, it is VERY difficult to find a job. You cost too much and are high risk (it's that uterus thing!).

If you do free-lance jobs (as many teachers and translators do) you can only earn up to 5,000 euros gross without a contract.

I decided to open my own business when my last contract was not renewed (see point 2. I have never been offered any other type of contract while in Italy). I knew it was my only real possibility for moving forward. I decided that I was done having a "boss," especially a sexist one who routinely talked about women as being "Ok except when it's that time of the month" (while the other women giggled on in knowing agreement).

By the way, I am a foreigner, so I can talk about these things openly with people, especially men who hold some of the wackiest beliefs I have heard about women. I have point blank asked managers about their hiring practices. One told me he ONLY hires women from 20-22 years old. Otherwise they "leave you (to have babies) before the honeymoon is over."

At my first job interview in Italy, I was asked about my "family plans" as if they were more important than my qualifications!

What the big boys don't seem to understand:

1. How many smart women decide to open their own businesses and have a child-friendly workplace.
2. That female employees, when treated like human beings, tend to have shorter maternity leaves.
3. Maternity is a permanent situation, but leaves are temporary. Get over it!
4. Women are multi-taskers. They can be moms and ALSO think about work.
5. Italy has one of the lowest birth rates in the World.

So, for  lots of these kinds of reasons, I opened my little business. I got pregnant while I was independent, by the way. I worked up to a week after my due date (a week before the birth) and two weeks after the baby was born (I taught with her in a marsupial. My students didn't seem to mind).

Before opening my business, I was always a little worried (even though I wanted to start a family) about getting pregnant while I was working for other people for fear of what they (the MEN) would think of me. Now I think that is crazy.

Sure, I have not yet reached anything near my earning potential since I went independent (and I pay GOBS of taxes, which half what I earn anyway), but I negotiate my own terms and have higher status (Interesting: free-lance with a tax number, a libero professionista, has a much higher prestige than an employee who may make 10 times more money. It doesn't bring home the bacon, I realize, but it's better than feeling like a peon).

That, and, I only work with people I like. Period.

PS. Most men and women I know  are NOT jerks. They are hard-working and NOT sexist. But all it takes is a couple of sillies in positions of power and we have a problem...

How we wiped out 75 percent of a 30 year debt in one year

The other 25 percent will be paid (if things keep going the way they have been. Touch wood) by December of this year.

When Leo and I took over the Association last year (he is president, I am director), we found a mega debt that apparently went back as far as 30 years (the creditors changed, but the debt, not so much) that was accompanied by some bad habits, like always paying the rent late, updating accounting every 3 months or so, spending more than was coming in, etc. Considering that the Association takes in about 80,000 euros per year, a hole of 40,000 was pretty daunting. After we had about 3 heart attacks each, we decided to take action. We needed to be absolutely drastic in  order to stay alive. Here is what we did.

First step: TAKE RESPONSIBILITY. We committed ourselves to doing what was possible not only to save the Association but to give it a future. Well, not really, we just went into panic mode and put out fires with our legal friend, Federica, for the first three months. Then we asked our friend, Davide, to help with the accounting. From there we could finally concentrate on filling up classes and planning fundraisers with our colleague, Denise. Here's what else we did to save money and boost revenue. We plan on being completely debt free by the end of the year and as of yesterday it actually looks more possible than ever, thanks to a lot of team work and honesty.

1. Started treating the business accounts like a personal bank account. Started tracking EVERY penny that came in and went out.
2. Changed phone plan, down-graded ADSL, got a company cell phone for cell calls (which cost a lot from a land line). Saved over 100 euros per month.
3. Stopped updating website (600 euros per year) and started a blog (free)
4. Made the director (me) a volunteer (300/month)
5. Asked Davide to do the day to day accounting and make payment plans (Key decision).
6. Went to all creditors, asked forgiveness and made payment plans, stuck to them.
7. Gave our teachers a raise (best decision we made. Good teachers are like good hairdressers. They have a following). Made sure all teachers are paid the same (we only want the best, btw, so this is not a problem)
8. Bought office supplies on-line.
9. Stopped paying for expensive dinners for VIPs, having coffees out
10. Asked illycaffè to donate a coffee maker, they did. Now we have VIPs for coffee.
11. Changed our payment terms for classes (pay before, not after)
12. Asked big companies for help (some did!)
13. Held fund-raisers (Thanksgiving, 4th of July)
14. Received a grant from US Gov for materials, opened a children's library which revitalized our image.
15. Asked US Gov to donate our magazine subscriptions (500 euros/year)
16. Created a team of volunteers: Accounting, Legal, Fundraising, Graphics and marketing, Library, Public School Liasion, Programs and Events, IT. (savings LOTS).
17. Created a positive, family-oriented, volunteer-friendly community
18. Teachers donated teaching hours (no one forced them. It was voluntary and says something about the awesome atmosphere I work in).
19. Found an accountant who would provide tax help for free (Hopefully we will be able to pay him one day) saving us 2000 euros/year
20. Split the cleaning lady bill with our sub-renters.
21. Paid serious attention to energy consumption.

I'll tell you who DOESN'T have a problem with under-earning!

Christian Louboutin. I just read an article about him in Vanity Fair. I mean, come on! $6,000 for a pair of shoes?! And I feel guilty for getting paid my piddly hourly rate?! Clearly I need to change my marketing plan.

I mean you have to have some serious self-confidence to get that kind of dough. I will take THIS with me, though. He NEVER gives away his shoes for free. Even stars have to pay for them. He plays with the desire thing. If you are not required to pay, you don't want it as much.

I agree. I remember one time I took a big pay cut in order to help one of my students continue taking lessons with me even though times were tough for her and her family. Result: she stopped coming regularly, she was often late, everything else in the world became more important for her than our lessons. Apparently doing what I saw as the Right thing actually communicated that I was worth less than before. Not cool.

So Louboutin has something there. Believe in your own value first, then others will too. Unless you really suck. In that case, you should change your line of work.

Is the Sinking Ship Coming up for Air??

On Friday I have a very important appointment to see about getting some funding for the Association. This same foundation gave us a grant last year that saved us from having to close with a lot of debt that we found out our new President would be personally responsible for (Thinking about opening a non-profit in Italy? Make sure its status is RICONOSCIUTA and not NON-RICONOSCIUTA to avoid this problem). This helped explain a few things like 1. Why the old president was in such a hurry to get out and 2. Why past presidents kept smiling, pretending nothing was wrong and passing the debt on to the next president. Like I've said in earlier posts, they say our debt goes back about 30 years with creditors changing and getting paid depending on how loud they complained. Payment priority went to the creditor who sent the lawsuit threat letters. What changed the situation was the piece of advice our old accountant gave our last president about the rental situation which had been paid after it was due instead of before it was due since the Association moved to this building. The rent was always very past due. Finally, when the landlord threatened to sue and then did, no action was taken. The old accountant's words, I believe, were "We're in Italy, they can't throw you out!"*

Um. Yes, they can. But we solved that problem.

Anyway, today it turns out that I can finally report some GOOD NEWS. According to my friend Davide, who took over the day to day accounting at the Association last August (Rule number one, ask for help!), we should be debt free by December. Can you BELIEVE THAT? After 30 years of ignoring the debt, our team will have ELIMINATED IT IN A YEAR AND A HALF. Incredible. So that's it. We just have to live until December. Zero will never feel so good!

At least there is an end in sight. In later posts, I will tell you how we are achieving this amazing feat. But for now I am on cloud nine and I must feel the thrill for a moment.


*He is no longer our accountant by the way, he was one of the Baddies we eliminated, actually he eliminated himself-- THANK GOD. He was just recently in the paper for giving more stellar advice to another company in Trieste. I believe the words were "Sure, go buy that expensive machinery! OF COURSE the Region will pay for it!!" so they did, and then the Region told them "Hey, we can't pay for machinery that you already have!" Boom. Bankruptcy!).

I'm not the Only One

Since I started trying to turn my sinking ship into lemonade, or, when I took over a non-profit that was 40,000 euros in the hole last year, I have been putting out fires (first of which was an eviction notice. With help from some very nice people, we got that taken care of by doing a lot of begging, establishing a payment plan, and taking responsibility. We were able to get a new contract for 6 years to come up with another plan and I am happy to say that if we live until December, our Association will be officially out of debt for the first time in 30 years). Other fires included lawsuit threats, a couple of stalkers, you know, the usual. If you can imagine it, I have probably dealt with it over the last year.

I have also been reading about management, personal finance, being successful, anything to get some ideas on how to save our library/cultural Association/language school. A lot of the books are older, since they're library books that have entered our library any time over the last 50 years.

Here's what I'm reading today:
Beware the Naked Man Who Offers You His Shirt by Harvey Mackay

The title of chapter 4: "YOU'RE A LOT BETTER OFF BEING SCARED THAN BEING BORED"

Isn't that chancey?

Thinking into a New Income Bracket

Remember that scared feeling I had a couple of days ago because I had the opportunity to do a new kind of work? Well, it was an interpreting job and I was so excited I was frightened to death about it. See, this came like a DAY after I decided that I needed to re-evaluate my fees and try branching out in new directions. Poof, like magic this job came up!

Interpreting-- Wow! Getting paid for something I do nearly every day for free. You wouldn't believe how often I have to turn from one person to the other and explain what the other person just said, but it's always informal, and so automatic that it never seems like work enough to be paid for. So when Marina brought up this possibility it seemed so Hard. Because when you attach money to something you do anyway, you start to think about what the expectations are for the people paying (must be perfect, no mistakes, must know every word ever uttered in both languages).

So my real fear was not the work itself, but the guilt associated with putting a price on something that I do as normally as breathing air and feeling that if I ask for money for it, I probably won't be up to the clients' expectations. If you don't charge and they don't like it, well tough patooties!

But I decided I needed to change all that, I needed to be worth it, and come up with a price that communicated I was indeed a professional (the fact that I switch between Italian and English all the time should actually communicate fluency and experience, but I don't give myself credit for that.). I did this by consulting my business owner girlfriends-- Marina and Klementina. The funny thing is, when it comes to putting a fair price on things, none of us felt 100% confident.. Isn't that nuts? But we were able to kind of psych ourselves up and convince each other... Is it because we're perfectionists? We have a self-esteem problem?

Well, by the end of the second day I was feeling so good about that job and had rehearsed my non-chalant answer to the question "are you available for the job" with a very high  fair hourly rate.

But that call never came. The client cancelled. They said to send a bill anyway, but well, while I can get my head around upping my price to something respectable, getting paid for nothing, I'm not quite there.

I am not disappointed, though. I have totally changed my perspective and am thinking higher than I used to. I also realized that when it comes to these matters, it's important to talk about it and create a community. I can't wait until our girl financial group has its first meeting in September.

A Company's Job is to Innovate

That's what I've got in my head today. Sometimes you need to sit down and reflect on what is working, let go of what is not, tweak things and move on.

I am trying to tweak my habits a bit. In particular I am trying to force myself to get things done as they come to me, rather than think and worry about them until I have to react to them.

Case in point. I broke a tooth on Saturday. A TOOTH!!

Now that little rascal was bugging me for months, but I was too afraid to go to the dentist. I have never really gone to one in Italy, so I was worried about what kind of materials he would use (wooden mallet? Piece of string on a doorknob?), how much it would cost me, etc. Actually, who am I kidding. I was just worried he would say "Take 'em out!" and suggest I get implanted dentures, which is what a whole heap of people have around here. My solution to the problem: wait.

I waited and waited until the thing just fell apart, busted in half (it broke on a soft piece of pasta, by the way! I didn't even get the satisfaction of having it break on a beer nut or something hard at least!). Granted, it wasn't the front tooth (maybe I would have been faster about getting a dentist in that case), but having a tooth break just isn't my idea of a good time.

So I went to my friend, Dr. Gianni, the dentist. A perfectly gentle, sweet being, a friend even. And wouldn't you know it-- his office was super nice, really modern and he was wonderful. Built that tooth up and now it's just like before. It's even white (my other fear, that I would have a big black hillbilly tooth)! Next week I am going in for a cleaning so that I can avoid mishaps like this in the future.

The other kicker is that the tooth didn't even have a cavity. It just cracked and that's what was causing me the pain. Hmmm. Maybe he could have just stucco-ed it up had I gone earlier.

Lesson learned. Be pro-active.

That's what I am going to do with every part of my life now. If it feels scarey, just do it anyway. BTW since I wrote about being scared yesterday, I still have not lost that feeling, but I keep pushing through the anxiety. I guess this is part of personal innovation, change means going outside your macaroni and cheese comfort zone.

My New Plan

I decided to budget my time according to the following categories and have as a goal to complete three things in each category per day. I hope that by making a plan to do these things I can eliminate the number of fires in my life to react to.

1. My work (translations, teaching, independent work, billing, reports, etc).
2. Work for my Association
3. Stuff that makes me feel happy and organized (Planning, reading, writing, nail polish, baby play, organizing, blogging)
4. Relationships (cultivating friendships, work collaborations, etc.)

The more time I spend on 3, the better my day goes. This is called being pro-active.

Reading the Financial Papers Can be Enlightening!

So I was just scanning the Sole 24 Ore when I found this article. It talks about reducing taxes up to 96% and my type of tax number is included. We'll see if it will apply to me. Hope hope hope!!!

Finding that article made me feel pretty smart. We'll see how long that keeps up as I try to read and understand it.

I Forgot to Tell You

A Piece of Advice for Saving Money from the hugely successful, high-earning student that I told you about:

"To pay your tax bill for next year, I suggest you do like they used to do in the old days: two nights a week-- no dinner. Only caffè latte."

Made in the stove top moka coffee maker, of course.

IF I KNOW A HIGH EARNER CAN I BECOME ONE??

LESSONS FROM A HIGH EARNER: INTERVIEW ONE

One of my private students has a very high position at one of the companies I teach at. We have a good relationship and I decided to pick his brain about what it takes to become rich. Here is the advice he gave me.

First, “You are not the money-making type”.

Thanks. This is not a great start. Then, “if you want to become rich, choose a profession where you can work under the table, or get a real job. We are in Italy, the taxes are too high to be an independent professional. But if you want to work independently, at least write off everything you can.”

Q:Trust fund or real estate for your kids?

A:In Italy young people are helped by their parents, there are no trust funds, and if you want one you need to get it in Switzerland. We don’t use them here in Italy.

Q:Do you invest?

A:No. I don’t spend money. I don’t go on expensive vacations, I live simply. I bought my apartment. When I had more money, I bought the apartment below mine. When I had more money I bought my son a 250 m2 apartment downtown. He is a very lucky 28 year old.

Q:Did you take out a loan?

A:No. I only pay for things in cash. I don’t like to have debts.

Q:How do you pass the value of money on to your children?

A:It is normal for our children to live a privileged life when they are young. They do not appreciate the sacrifices made by their parents to give them a better future. My hope is that when my sons are older, they will understand the value of money. My older son is already starting to understand. He is working and knows first-hand what it is like to work a lot for very little. My sons have seen my wife and my way of life. We are not extravagant people. 

They could never understand where I come from. I was one of five brothers in a very poor family. My mother did not work and I still marvel at how she managed to feed all of us.

Q:Where are you the most extravagant?

A: I grew up in a situation where it was not possible to take a hot shower every day. Hot water was rationed and my mother was very careful about how long we were allowed to be in there in order to make sure there was water for everyone. Now I take LONG HOT showers, I waste water, it is my one extravagance. Long and hot showers.

Q:Regrets?

A: I have many regrets in my life. Most of all, I feel that I have lived too little. But I have taken care of my family, and as a man from the south, that is important to me.

Q: Does money buy happiness?

A: No, but it buys you the things that buy you happiness. That’s not a very nice thing to say, I realize that.

PLEASE DON'T MAKE ME GO BACK TO HIGH SCHOOL!

Going back to the self-esteem test, I checked this as true.

"I HAVE NO CONTROL OVER MY TIME"

Since I am an independent worker and don’t have an office (well, it’s in the living room since my “office” is now a baby bedroom), it is very easy to mistake just about EVERYTHING IN THE WORLD as being more important than my work. Plus, I have a baby and have never put her in daycare or with a sitter when I was not working billable hours (which usually means I am teaching outside the house, as even translations can be done when the baby is sleeping, which, by the way, is never during the day).

Even if I want to get something done, how can I NOT put everything aside and PLAY WITH HER if she is looking up at me with her big brown eyes and smiling with those two new teeth?? 

I do not give myself the time that I need to get my work done at home, which makes me feel lousy and frustrated. Not to mention how difficult it is to make money if you’re not doing your work. Huh duh!  But it is a convenient excuse. If I don’t have time, I can’t get my work done, if I can’t get my work done, I can’t make money. And that’s bad.

As I write this I realize that it’s not the WORST thing that could happen, though. It would be MUCH WORSE to DO THE WORK and NOT GET PAID, than NOT do the WORK and NOT GET PAID.

This is like the B student who doesn’t have to work to get Bs. With just a little effort, she could be an A student, but she is full of fear. What if she does the work and fails anyway? Then people will know she is a loser and make fun of her. In that case, she does not fail, she IS a failure and then everyone will know the truth.   

Hey, that B student was me pretty much all through school. I am my own worst hater.

WANT FRIES WITH THAT SELF ESTEEM?

After my tax bomb the other day I decided it was time to shake it off and move on. As these things sometimes happen, Marina had coincidentally left me the original copy of Overcoming Undearning in the classroom of the company we both teach at and I read between classes. Anybody who isn’t rich should know, by the way, that the money thing is an emotional subject and that in order to get more, you have to come face to face with some dark, ugly stuff—repressed feelings, childhood, your relationship with money, and your self-worth. First step to changing my financial situation: the self-esteem test.

Check if the following items are true.

I blame someone else for my situation.

(Husband, kid, Italy, dog, hmm. yeah. CHECK, and I feel terribly guilty for admitting it!)

I constantly blame myself even if it’s not my fault.

I’m sorry! I’m sorry! My fault! Excuse me. CHECK.

I do what others want even if I don’t want to.

Um, ok, we can do that but, um, I thought that it would, um be nice, if, um, oh forget it, let’s just do what you want to. CHECK.

I hold myself back, or easily give in to avoid upsetting, hurting, angering, or offending someone.

Alright, you win, you’re right. Okay okay. Sorry. CHECK.

I let others demean or put me down.

I know I should be less superficial about money matters, I’m not the money type, I’m messy and disorganized, yeah, ok. CHECK.

I hold grudges or I’m easily angered.

Try not to. It’s me, not you. CHECK.

I’m reluctant to set lofty goals for fear I won’t attain them.

If your expectations are low you can’t get disappointed, right? CHECK.

I’m filled with big dreams but don’t follow through.

Hmmm. CHECK.

I’m unwilling to ask for what I want, often because I don’t even know.

This one. I don’t know. Hmm. Wait. CHECK.

I give up at the first sign of failure or hint of rejection

How about we start with this one for a change. CHECK, but not for long (SUCKITUP, STECK!).

I have no control over my time

This one, too. CHECK and change.

Looks like you need a shot of self-esteem, Sister!

Ouch. Double ouch. Triple ouch.  And, oddly, COMPLETELY surprising.

Doing the Right thing is Expensive

There is this great scene in the Secret Diaries of a London Callgirl where the main character is shagging her accountant and after, he says "remember to put away 40% of that..."

I got a second opinion. The calculations were correct. But what annoys me is that my accountant didn't explain to me how things work (I asked, too). Well. For the healthcare system and retirement (not that I will ever be able to at this rate) you have to pay 40% ahead in July, another 40% in November, and the other 20% in July (along with another 40% for the year after). Great. Can't wait til november! (Sigh of desperation!!)

The good news is that at least the taxes are paid because my invoice includes a 20% tax that clients pay (ritenuta d'acconto). I should get a slight refund (ha) for what I overpaid that way, which will go towards (hopefully) reducing what I have to pay in November.

Realization number 1: Here it comes.

Doing the right thing when it comes to taxes in Italy is not advantageous for the pockabook (as they say back in Wisconsin), but it must be done...

Dear Italy,

What is UP with putting the deadline for filing taxes a week before my vacation??? I could forgive you if you didn't bill me for last year and 98% of this year (INPS). THAT IS ONE BIG TAX BILL (and I didn't even make that much!).


In fact, where else can you make less than 20,000 euros and be taxed at nearly 50%?!

OUCH!

That's it. I am going to go out and LEASE the most expensive car I can find, upgrade my cell phone and plan, and designate a room in my house as an office and write off all expenses (sorry, Baby, your crib is going in the living room).

Hmmph!

Love,
Karoline

50 Percent tax!

Now I feel totally justified in not wanting to call the accountant!!!

Why do I freeze up about finances?

I know what I need to do: schedule an appointment with my accountant to get 2010 settled. I just can't seem to get my lazy arse to do it. I think (but I'm not sure) I have to do it by the end of this month.

My finances are pretty simple. I just need to print my invoices, write the dates they were paid, and photocopy phone bills and any health receipts  (I get to deduct those for a 20% refund), put them all together in a folder and hand them over to my accountant. I deduct gas, too, so I will give him those receipts as well. I am not yet a big earner, so I only have to declare and pay taxes for my little business once a year.

Easy peasy.

But what's keeping me from making that call? It's the idea that I will then have to pay taxes, and him. Now, I remember last year, I didn't have to pay that much at all (I pay 39% tax total, but 20% is paid by the people I bill, and they pay it directly, so I never even see that money. The other 19% I have to pay after any deductions, which my accountant figures out based on the documents I give him. I haven't bought any equipment this year, I don't do much expensing because I don't travel very often and when I do, usually the client pays that stuff, so basically what I earned is what I will pay on. Period.) I have an excel sheet where I keep track of all of this, by the way, so I could even tell you exactly how much I will be expected to pay (I am paralyzed from looking for some reason). I know I have more than enough money in the bank to cover my tax bill and accountant fees (which is NOT the case when I have to pay the taxes for the Association. There we pay LOTS more taxes and the money is NOT there). I planned for them and as a rule spend much less than what I earn, so everything should be simple, right?

Well, I'm frozen anyway. It's that poor person in my head saying YOU DON'T HAVE ANY MONEY! THE LONGER YOU PUT IT OFF, THE MORE MONEY YOU'LL HAVE IN YOUR ACCOUNT.

This is the same voice that used to scream at me when bills were due in college; I often paid them late (dumb!) because I was so afraid of having an empty bank account. So I would accrue late fees and be even poorer once I paid them. I also lived from paycheck to paycheck then, because spending everything was more in line with the way I felt inside-- Broke.

I have come a long way since then. But that voice is still there sometimes, and it doesn't matter how much I have changed my relationship with money over the years. It awakens a real fear that I will end up with nothing.

I am not the only one who hears these voices. I'm sure those same doubts come to people who want to lose weight, change careers, create meaningful relationships, and do other kinds of difficult things. These inner voices are experts at the slap down.

You may not be into affirmations and things, but I can tell you that if you have these nasty demons inside of you, they can help to squelch them, at least temporarily. Here is my mantra for today:

I AM READY TO CLOSE 2010. I AM RICH.

Plus, it's Saturday and my accountant's office is closed. Phyooo!!!

I am reading a great book

It's called Overcoming Underearning by Barbara Stanny. She wrote one of my favorite personal finance books for women called Prince Charming isn't Coming: How women get smart about money. Well this book came from a workshop aimed at helping women earn more money and is filled with some good advice about getting over your psychological blocks to bringing in more money. I love this stuff, I confess.

I am an underearner. I give away a lot more of my time than I get paid for, I pay myself way less than I pay others for doing the same job, I often put off doing my bills, signing contracts, and doing other things that would bring me money faster (as I write this I am stressing about an email I need to write making an appointment to sign a contract with a new client for some academic translations-- what the HELL is my problem??). I blame my underearning on external factors (If I had a more expensive phone, I could be more available, I could pounce on jobs faster because I could see my email anywhere!!...),  yet... 


I think I would be a great rich person... given the chance!


So I decided to take one of the first tests in the book about what my earning ceiling is. It has you visualize and write about how you would feel if you made 5,000 bucks a year, 10,000, then 25,000, then 75,000 then 250,000 and finally a million.

Now I have made nowhere near 75 or 100 g's, but I sure didn't have a problem visualizing them. They almost seemed like too little (I'm worth so much more!!)- Then I got to 250,000 and realized I was completely insecure... The panic took over and I realized that at that much money, people would figure me out, that they would somehow find out that I am a fraud and have no business making that kind of money.

Isn't that interesting? That being said, 75,000 would put me in a new tax bracket and swipe away my poor person VAT number safety net of only having to pay taxes once a year in Italy, and that also scares the bejeezus out of me.

But I track all of my earnings, and immediately count them as 40% less than what I get (yeah, I honestly pay 39% tax-- I think the highest you can pay in America is 35%, but who really does??!), so having to pay quarterly or having to pay ahead of expected income shouldn't freak me out, but it does.

Which is all the more reason to learn more about money. Taxes are never going to be MORE than you earn, right? So earning should be a POSITIVE thing, not NEGATIVE. Right? Right?