Transcription
Kristin Wong:
So, I just cried. My now husband, who was my boyfriend at the time and he was like trying to calm me down. He was like, it's going to be okay. I just remember like I wanted to go to TGIF Fridays.
Bobbi Rebell:
You're listening to Financial Grownup with me, certified financial planner, Bobbi Rebell. Author of "How to be a Financial Grownup", and you know what? Being a grownup is really hard especially when it comes to money. But it's okay. We're going to get there together. I'm going to bring you one money story from a financial grownup, one lesson and then my take on how you and make it your own. We got this.
Bobbi Rebell:
Hey friends, spoiler alert, our guest Kristin Wong author of "Get Money" was crying because of something that happened to her at tax time. And I thought this would be a great time to hear her story about the time she, oops, forgot to pay her taxes. So her book, as I mentioned is called, "Get Money. Live the Life You Want, Not Just the Life You Can Afford." It makes learning about money feel like a game, which she really could have used her own book at this time because it was not a fun time.
Bobbi Rebell:
You've probably read Kristin's work in the New York Times, New York Magazine, Glamour, Life Hacker. Kristin got her start as a money writer at the fantastic blog, "Get Rich Slowly." This is a story you need to hear, especially right now at tax time. Here is Kristin Wong.
Bobbi Rebell:
Hey, Kristin Wong. You're a financial grownup. Welcome to the show.
Kristin Wong:
Thank you for having me on the show.
Bobbi Rebell:
I am loving your new book, "Get Money. Live the Life You Want, Not Just the Life You Can Afford." Full disclosure, I'm only about two thirds of the way through, but I will be finishing it very soon. Great job.
Kristin Wong:
Thank you.
Bobbi Rebell:
It's not easy to say something new in this space and you really did it.
Kristin Wong:
Yeah. And I've been writing about money for so long that it was kind of hard to say something new. So I really had to think about it for ... I had to take myself out of the money geek persona.
Bobbi Rebell:
You're not a geek. You're the cool money nerd.
Kristin Wong:
All right. I'll take it.
Bobbi Rebell:
You're the cool friend, talking about money and we have cool stuff to talk about. Your money tip is super cool, but before we do your money tip and that's a teaser for all the foodies out there, we're going to do your money story, which is so appropriate, because this is going to come out in April, which is our favorite month. Not. Because we talk about taxes and your money story is about the fun world of taxes. Tell us, Kristin.
Kristin Wong:
Oh man, I have a crazy tax story. When I first started freelancing six or seven years ago, I was full time freelancing and everything was going fine. I wasn't making that much money because I was new at it. I had no idea that you had to pay estimated quarterly taxes. It's just not something that I paid attention to. I was so used to having an employer take out taxes for me. So in April I decided to do my taxes, which usually I liked doing taxes because-
Bobbi Rebell:
Well, you were probably getting refunds. You were getting refunds when you worked for an employer.
Kristin Wong:
Exactly.
Bobbi Rebell:
So this was the time you would be getting like a bonus.
Kristin Wong:
Right. So I was looking forward to all this money coming in, thinking what I was going to do with it. But nope. I had a $5000 tax bill. And some of it was penalties but it was mostly, I hadn't paid any of my taxes. And the fact that my taxes were only $5000 should tell you that I wasn't making that much. I had an emergency fund, thankfully and it just depleted my emergency fund.
Kristin Wong:
I remember, I had just moved to Los Angeles and I was proud of myself for finding a job here and I was a writer and I was making it at work, and I had an apartment, and I just remember-
Bobbi Rebell:
You were very grown up except for one thing.
Kristin Wong:
Except for the taxes. Well I just cried. I remember it was a Friday night-
Bobbi Rebell:
Did you just literally cry? You actually cried?
Kristin Wong:
I cried. I did because it was just-
Bobbi Rebell:
Was there witnesses?
Kristin Wong:
My now husband, was my boyfriend at the time and he was like trying to calm me down. He was like, it's going to be okay. I just remember like I wanted to go to TGIF Friday that night.
Bobbi Rebell:
And spend more money.
Kristin Wong:
Yeah. I was like, I want to do it. Let's go to TGIF Friday.
Bobbi Rebell:
Now did you have everyone helping you? Did you just go to a tax preparer? What happened?
Kristin Wong:
No.
Bobbi Rebell:
How was this all discovered?
Kristin Wong:
I just wasn't prepared at all for it. I thought, you know I've always been when of those type of people, I'll just say yeas and figure it out later. And that can definitely work in my favor, but this time it did not. I was unprepared for the freelance life and the massive change. Like how different it is financially.
Bobbi Rebell:
All right, so let's talk about the lessons. What are the lessons, besides know whether you're paying taxes or not.
Kristin Wong:
Right. I'd say the lesson is just don't ignore money. Like I just ignored what it took to be a freelancer financially and I ignored all of that. And I think a lot of people do that. We don't like to think about money. We don't want to figure out the practical side of things. So we just kind of sweep it under the rug. I think a lot of people even take it further. They don't look at their budget or they don't look at their credit card statements, and that really was a game-changer for me because this was pre-writing about money days.
Kristin Wong:
But I really realized, nobody is going to care abut your finances. Nobody's going to hold your hand and walk you through it. And if you don't take care of it the somebody else will. Well if you don't care of your money somebody else -
Bobbi Rebell:
Somebody else will take it, somehow.
Kristin Wong:
They'll take it.
Bobbi Rebell:
It there like a checklist of things? So number one would be, be aware of taxes that you may owe. And if you're just starting out the truth is, you may earn so little money that you, especially with the new tax system, under a certain amount you may not even owe taxes. But you just need to figure out if you do.
Kristin Wong:
Right. And I would say, if you're going through a major work change like that, where your status is changing from full time to freelance, if you can afford it, go to a tax preparer and have them kind of walk you through the process. But at the very least, always research what your financial situation is going to look like if you have a major life change, especially when it comes to taxes. There are a lot of free resources on line, but I would say if you can afford it you certainly want to go to a professional.
Bobbi Rebell:
Are there some resources you can recommend?
Kristin Wong:
Yeah. The IRS.gov website is actually pretty great. They have a lot of resources for freelancers and independent contractors and that sort of thing. And Turbo Tax, their website actually has a lot of useful information. So I would check out those two resources.
Bobbi Rebell:
Let's go to the money tip because I teased it a little bit earlier. I love this Kristin. This is one for the foodies.
Kristin Wong:
Yes, so it is ... My money tip is the high, low method for restaurant spending. And I actually read this tip from a restaurant critic on line. And he or she, I don't remember, this was a long time ago, basically said don't go to any middle of the road restaurants. Save your budget. Spend it mostly on hole-in-wall, cheaper restaurants because they are usually mom and pop owned and the food is really good and they stay in business because the food is really good.
Kristin Wong:
You're going to save money going to those cheaper restaurants and then use that to splurge every now and then on a really high-end, nice restaurant that's known for their cuisine. So his or her tip was, basically just avoid any middle of the road restaurants. And so if you are going to go out six times a month on restaurants, go to the cheaper places five times and then save your sixth splurge restaurant meal for a nicer high end restaurant.
Kristin Wong:
The idea is, those middle of the road restaurants ... I mean there are some exceptions to this. This is a generalization, but they're usually like, the food is very mediocre, and your not getting the most bank for your buck.
Bobbi Rebell:
Right.
Kristin Wong:
But you will get the most value from the high, low method.
Bobbi Rebell:
Right. And you're usually just avoiding cooking at home because you just don't feel like it.
Kristin Wong:
Yeah.
Bobbi Rebell:
Hey, let me ask you ... So you talk about splurge. What is the most you've ever spent on one meal out, Kristen?
Kristin Wong:
Oh my gosh. I've told this story before but I ... I still I feel guilty about this but I spenT $40 on a steak once. And I don't know what I was thinking. I think that I had been ... My lifestyle-
Bobbi Rebell:
So the entrée was $40? The entrée. But that's not that bad.
Kristin Wong:
Yeah, but-
Bobbi Rebell:
Obviously there were other things to the whole meal.
Kristin Wong:
Yeah.
Bobbi Rebell:
What do you think the whole meal cost you, then?
Kristin Wong:
I was with a friend so we split it. But it was probably like $50, $60 for one person. And I had never spent that kind of money before. That's the thing. I grew up in a lower income household so $40 on steak. If my parent found out about that, they would slap me silly.
Bobbi Rebell:
All right. You haven't spent that much time in New York City, but maybe that's a good thing. New York City is not very budget-friendly. All right. We are never going out for steaks together. We are going to have some plain, simple coffee.
Kristin Wong:
I like the steaks, though.
Bobbi Rebell:
Yeah. Maybe we'll make steaks at home. That sounds like a good plan. All right. Thank you so much. I want to talk about your book quickly before I let you go. "Get Money." This is a good book. It is a paperback. I now carry it with me because it's like little nuggets of money tips and little things like what you just said about the restaurants. So many brilliant musings on money. Tell us a little bit more about it.
Kristin Wong:
Yeah. Well, it's a very actionable and interactive book so there area lot of exercises and there are a lot of assignments in it. You have to do work when you're reading it, so I would read it with a pen or pencil in hand. You can also go on line. There is an accompanying website to the book, called Thegetmoneybbok.com or you can find worksheets in like video tutorials for it, because I think sometimes with these money concepts, somebody tells you how to open a retirement account.
Kristin Wong:
And you're like, okay that sounds well and good when I'm reading it but when I go to the Vanguard website I have no idea how to get started. So I actually show you in some video tutorials exactly what you need to do to get started, so you have no excuse not to get your money in order.
Bobbi Rebell:
And there's a lot of value out of this book, because you quote so many of my favorite people, Cary Carbonaro. You quote Stephanie O'Connell, Holly Hansen, so many brilliant money minds are in here. It's great, so congratulations on the book. Where can people find you and what else are you up to?
Kristin Wong:
I am at the WildWong.com, is my website and all my social media handles. And I just sort of write about, of course personal fiance, but also resources for freelancers and that sort of thing too.
Bobbi Rebell:
Cool. And your background, by the way is so cool. You were a movie writer, a TV writer. So interesting.
Kristin Wong:
Thank you.
Bobbi Rebell:
Just quickly, how did you fall into the money stuff?
Kristin Wong:
Well I was actually writing full time freelance for about dating and relationships when I started writing about money. I actually started writing at "Get Rich Slowly', J.D. Roth's blog. I have always been fascinated with money. That's a longer story. But I would read his blog every morning and then one day he said that he was hiring writers, so I just applied to be a freelance writer and I started kind of blogging about ...
Kristin Wong:
Like I would write essays about my own dysfunctional relationship with money and I really just, I figured out how to get money through just writing about it for five years. So I wanted to share that knowledge with other people.
Bobbi Rebell:
Well, we appreciate it. Kristin Wong, thank you so much.
Kristin Wong:
Thank you.
Bobbi Rebell:
Much as we hate to deal with it, taxes are a reality of being a financial grownup. Here's the thing. Kristin was able to contain the damage of not filing quarterly taxes as a freelancer because she had the cash in an emergency fund. So great. There were some consequences, but all things considered, Kristin made the problem go away. In reality that is not always the case. In fact, I'm going to bet, very often it's not the case, so what do you do if you don't have the cash?
Bobbi Rebell:
Well, first of all, financial grownup tip number one. No matter what, you still have to file the paperwork on time. Now you can file an extension if you just want to procrastinate and not even figure out what you owe. But you got to figure out some kind of idea, because they're going to start penalizing you and you're going to be paying interest on what you owe. So when you do pay it, it's going to be so much more.
Bobbi Rebell:
The money is due April 17th. Now, as Kristin said, the IRS.gov website can very easily walk you through all of this. They even have an IRS direct pay area of the website, where you can easily pay tax estimates. I'm going to leave a link to that in the show notes.
Bobbi Rebell:
Financial grownup tip number two. Okay, let's say you literally do not have the cash. You need to get in touch with the IRS and you need to get on a payment plan. They can even give you extensions if you literally don't have the ability to pay anything right now. I'm going to give you a phone number to the IRS. 1-800-829-1040. 1-800-829-1040. Call them up, They will work out a plan.
Bobbi Rebell:
Be nice. The whole point is you're talking to a human being. You can be reasonable. They want to get their money and they want to get it consistently in a way that you're going to be able pay. So they're going to be flexible. In fact, they can often waive the penalties. Not only the interest on the money you owe, but the penalties. So ask.
Bobbi Rebell:
I do not recommend putting it on a credit card. In almost every case, unless you hae a 0 interest credit card, in almost every case the IRS, even with penalties will be less than the interest on a credit card. If you enjoyed this episode, subscribe and consider writing a review on Apple Piecasts, aka iTunes.
Bobbi Rebell:
It helps the show get discovered so we can share more money stories and tips and be in touch. On Twitter, I'm @BobbiRebell. On Instagram at BobbiRebell1 and Bobbi Rebell on Facebook. And to learn more about the program and to get on our mailing list for bonus content and more go to BobbiRebell.com/FinancialGownuppodcast. I hope you guys enjoyed this episode with writer and money expert Kristin Wong. Get her book, "Get Money" and here's to us all getting always bit closer to being financial grownups.
Bobbi Rebell:
Financial Grownup with Bobbi Rebell is edited and produced by Steve Stewart and is a BRK Media production.
