Let me give you some background. In the past, I have had a little trouble managing my money. Okay, fine. I've had a lot of trouble.
Now, I'm not talking about problems like this:
"Oh, Clark Howard, I love your show! Here's my question: I've saved up $250,000 over eight years while I worked my way through Harvard Medical School doing double shifts at McDonald's and cleaning houses on the side. Now that I've graduated, should I put that money into a self-directed individual retirement account or put it into a charitable split-interest trust?"
No, I'm afraid my money problems (all of my own making) are more of the Yugo variety. In other words, more like this:
"Hello, Georgia Power? Yeah, I just found this disconnect notice in my backpack from two weeks ago, and the deadline for payment was yesterday. I don't get paid for a week and a half. I have $16 in checking and there's probably a couple dollars of change in the car.... No, I really don't have $325. I get paid in a week and a half.... A check by phone? Now? Ummm..... Sure, okay." [Sigh. It may bounce, but at least it will buy me some time and keep the fridge running.]I wish I was exaggerating. I just fished out my bank statements and tallied up all my overdraft charges for last year. It was bad, really bad. Someday I might tell you just how bad, but not today.
Anyway, I've been trying to get a handle on my finances for, well, pretty much forever. It's been an integral part of my struggle to recover from depression and the "ism" of addiction, and I haven't had much success.
After years of trying to wrap my head around the financial stuff, I heard about Mint.com, which is basically a budgeting app that you can hook up to your bank account. It's free, and has great reviews. But it's not the product I'm endorsing. Mint.com is a terrific product, but it doesn't partner with my bank. So the hell with them.
But I had to find a solution. My kid had gotten accepted into a really good, and really expensive, private college and I wasn't in a position to be much help. As has happened so often, I found strength to do things for her that I couldn't seem to do for myself. So I got rid of my car, pared down my expenses, and looked for a way to manage this monster.
In some moment of clarity (which, at the time, just seemed like pointless footwork), I found EEBA, which stands for Easy Envelope Budgeting Aid. Which, by the way, it isn't. Easy, I mean. But then, I'm pretty much on the short bus when it comes to money management.
EEBA is an online version of a low-tech gimmick: cashing your paycheck and putting all your money into budget envelopes. In EEBA, every time money comes in, the user allocates each dollar to a particular envelope: Housing, food, electric, entertainment, or whatever. This must be done in order to add money, so each paycheck is allocated immediately. Then, every time the user spends money, she records it, thus taking it out of the appropriate envelope. When that envelope is empty, the amount budgeted for that item is gone.
The basic version of EEBA is free, but with only ten envelopes, I found it pretty useless. For five bucks a month, though, I get all the bells and whistles I need..
EEBA is a pain in the ass to learn, and it's probably pretty clunky as these things go. It took me hours and hours to set up, and at first every transaction took forever. Now, it hums along pretty good, although I do still lose track of cash if I'm not careful about entering transactions.
The results have been beyond dramatic. For one thing, I haven't had a single overdraft charges since I started using EEBA in May. That alone is amazing, for me. But there's more: Before I started using this system, I was hundreds of dollars in the hole every time I got paid. Now, I can comfortably pay my share of college costs each month -- $1,300 -- and tackle small unexpected expenses. And as I slowly clean up my financial wreckage of the past, I even have an occasional latte, guilt free.
That, my friends, is a miracle.
So call me a capitalist tool if you like. Perhaps I am. But I'm also within sighting distance of solvency for the first time in, well, ever.
First. Time Ever.