4 Things You Should Do When You Owe People Money

Are you good with finances? Congratulations, you're an anomaly. The numbers say that more than 75 percent of American households carry some form of debt, and a good chunk of those carry over $50,000 in debt. That's a hell of a lot of money. In fact, according to Federal Reserve stats from May 2015, total credit card debt is at just over $90 billion. Billion! That's so much money that you could buy all the waffles ever.

Turns out, I am one of the many, and have royally screwed my finances -- specifically, with student loans. In fact, I recently received a most ominous letter requesting $25,000, with a less-than-implied "or else" tacked on to it. This prompted me to start my own Indiegogo campaign wherein I offer an abundance of fun perks to anyone willing to help me out with my monster debt. Donate $1 and I'll write you a 100-word story. Donate $20,000 and I'll get your portrait tattooed on my back, no word of a lie. Or there's more fun stuff in between. I'm dead serious and dead serious in debt, so I need help. Feel free to check out my campaign and offer assistance if you can!

My mistake doesn't have to be yours. Learn from my foolishness now to save yourself trouble later. Here's what I know about mismanaging money!

#4. Give Your Money A Job

Noel Hendrickson/DigitalVision/Getty Images

Every dollar you possess should have a job. Don't let it just float around all willy-nilly like that breezy bag from American Beauty. The moment you have fun money is the money you hopped on a sled made of dipshittery barreling down a hill to ruin. No money is fun money, even if you spend it on fun things. That money should have been responsibly earmarked for entertainment.

Does it sound stupid to make yourself an entertainment fund and draw from it to go to movies, party with friends, buy yourself a kazoo? Maybe. But would you rather think you're a bit of a tool in your own head, since no one ever needs to know you do this, or wake up one day and realize you're so poor that you literally have less than a hobo? Just because you're in a house with a job doesn't make you better than a guy on a street corner. At least he's at ground zero. You're below it.

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"Wait, he has multiple pairs of shoes? Shit."

If you don't respect your money -- how much you have now and how much you can expect tomorrow -- you're setting yourself up for doom. This is also known as "credit cards." They're awful things that we should have never invented. They're financial Balrogs, born from us digging too greedily and too deep into a mountain of eBay crap and Etsy brownies.

New Line Cinema
"YOU SHALL NOT PASS ... and especially not with a 400 score."

Every month, at least, you should plot your spending. Why? Because it offers perspective. If your money has no purpose and you order a pizza here, take a cab there, you might find yourself looking at your bank account with a $100 balance, wondering where that other $300 you swore you had went. And you'll look over your transactions and confirm that nope, you were never robbed. You kept spending little bits and little bits and little bits, until you buried yourself in a hole where you can choose to not spend any money for the next week or rely on credit. Boo!

If you're old enough to make money, you're likely in a place where you can determine how it needs to be spent. You need this much for rent, this much for your phone, this much for Internet, this much for groceries. Do this every time you get money, and then, when you have leftover money that isn't absolutely, positively needed for a specific expense every month, divvy it up between having fun and saving. But make sure it all has a purpose.

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For example, this is my "buy a new jar" fund.

#3. Have Goals

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I said you should have savings, and that's a good idea, because you probably want a yacht or a flamingo. It's good, then, to have vague big-picture savings and clearer small-picture savings. Like, save in general for the sake of it, because who knows, maybe a trip to the moon will be affordable in 20 years. But save in specific if you really want that flamingo by next year. Don't just spend money because it's sitting around. If you put $100 in your savings, put $20 in the flamingo fund, just so it has that specific purpose.

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Soon ...

If you don't have any goal or purpose to having money, you end up like me. Yeah, I have goals now, but I had to get kicked in the head a lot before my brain sorted itself out. One time in grad school, I had just gotten my latest student loan and used it to buy the books I needed, but of course I had extra money for things like food and not living in a dumpster. In my wisdom, I went out to a bar with my friends that night.

Now, this isn't necessarily bad. Like, as far as I've written it. It was bad for me, but it didn't have to be. That night, not only was I buying shots for all my friends; I actually recall (the night is very fuzzy in my memories -- warm and fuzzy) getting the shooter girl to sit with me and have shots. And I was tipping her for each shot. So she's getting paid to be at work, I'm paying to buy her drinks, and then tipping her to drink the drinks I paid for. And have no doubt, that girl loved me. For one evening, I was her best friend, and I was drunk enough to be convinced that I had suddenly become amazingly charming. Because she was hot. And sitting in my lap a lot. Because I gave her $400. In about two hours.

Jochen Sand/Photodisc/Getty Images
I could have gone to Safeway and bought enough bottles to open an actual bar in my living room.

I am dumb. I know that.

Your best bet for financial stability is to never do that. You can do that by knowing what your money is for. I can't stress that enough.

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Felix Clay

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