Maybe you just got robbed by Zorro or maybe there’s now an unexpected child support payment (oh snap!?) — whatever the circumstances are, would you be able to live on half of your income?

A few years ago, I was reading a blog post by Trent at The Simple Dollar regarding living on half of your income, and at the time I thought to myself:  “Well that’s nice. So instead of thirty Cup Noodles per month, I get to eat only fifteen? That’s totally doable.*”

(*Cool kids often use the word doable back in the days).

But time has changed. I’m now a hard-working member of society (sort of) and I’m no longer a dreadful leech on my parents (again, sort of).

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Some may wonder if its redundant to pass legislation that’s similar to regulation already imposed by banking regulators, but regardless, the newly minted Credit Card Accountability, Responsibility, and Disclosure Act of 2009 has been signed into law.

Here’s the breakdown on the changes when the law comes into effect February 22, 2010.

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Half a decade ago when I was 19, I was sitting in a hospital waiting room as a family member underwent a medical procedure.

Spying a cute girl of similar age across the room, I proceeded to try and “look smart” by picking up the local newspaper so I can pretend to read it — but of course my real intention at the time was to have an easier means to take the occasional peek at the cute girl.

Ah. The shaping of a future creepy stalker. I’m not sure why I added this story to the post, but, there it is.

What really caught my eyes that day though was a story in the local newspaper about “killer” medical bills – medical billing errors that were so drastic that it affected the entire financial well-being of a family.  Apparently, a fat-finger mishap occurred where the hospital billing department mistakenly typed in the wrong billing code for the procedure done in the hospital, and the minor clerical error resulted in a fatigue-inducing, long drawn-out battle with the hospital over the medical bill.

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A recent instant message from my younger cousin pointed me towards the deliciously funny website: fmylife.com, which basically contains various stories and tidbits about how much one’s life sucks.

For example, here’s the top rated FML (f– my life):

Today, I received my passport in the mail. They got my birth date wrong. Then I picked up my birth certificate that I had sent in with the application. Turns out my parents have been celebrating my birthday on the wrong day for 16 years. FML

As with many websites geared towards sinking time,  fmylife.com can often be a funny yet sad read.  The reason why I pointed out this website was not to spread further misery, but to acknowledge the fact that, sometimes, life can throw a sucker punch in your face, and there’s not much you can do about it.

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If you’re still on the fence about acquiring a home, then Uncle Sam has just thrown an extra incentive for those of you that’s still debating on waiting further or buying — a nice fat, $8,000 incentive (it’s not $15,000 but you take what you can get, eh?) via the home tax credit.

Since they’ve been throwing around a bunch of different numbers and qualification scenarios, here’s the fairly-certain low down on the new home buyer tax credit.

To Qualify for the $8,000 “First-Time” Homebuyer Tax Credit:

• Home purchase must be made between January 1, 2009 and November 30, 2009.
• Must be a “first time buyer.” In order to qualify for this status, you must not have owned a home for the past three years.
• You must also live in the purchased house for at least three years, or you’ll be obligated to pay back the tax credit.
• Homebuyers must make less than $75,000 for single tax filers, or $150,000 for couples.
• Higher-income buyers will receive a partial tax credit, but details have not yet been fully released.
• Single family residence purchases (condominiums, townhouses, co-ops) that will be used as a principal residence will qualify.

How to Claim the Homebuyer Tax Credit:

• Simply claim it on your tax return.  You will not have to filed any other forms or papers.  If you’re not a procrastinator like me and you’ve already filed your taxes, you can simply file an amended return for 2008 to claim the credit.
• What type of tax credit is it? It’s one of the better type: a refundable one.  This means that if you don’t owe any taxes, you will get any excess credit in the form of a fat refund check.  Example: If you owe $1,000 in taxes, you’ll get a $7,000 refund check.  If you’ve overpaid $1,000 in taxes, then you’ll get a $9,000 check. You can read more about refundable tax credit in the resource link below.
• If you’ve already claimed last year’s $7,500 tax credit, then you won’t be able to claim the $8,000 credit on next year’s return. It’s one credit or the other, buddy.
• Unlike the previous $7,500 tax credit, there’s no repayment required for this $8,000 tax credit!  (Unless of course you sold your house within three years, as stated earlier).

Other Miscellaneous Notes:

• If you’re buying into a retirement community, unfortunately, the purchase won’t qualify for the $8,000 first-time homebuyer tax credit.

This post will be updated as the IRS release further details upon their interpretation of the just-passed American Recovery and Reinvestment Act.

Regardless if you think the first-time homebuyer tax credit in the stimulus bill is a smart move or that it’s entirely bullsh*t  — the tax credit will certainly be a nice bonus for those that are looking to purchase a home in 2009.

Not to brag or anything, but my discretionary income is rather healthy.  How so?  Well, the main reason is because I live (and look) like a bum.  Hah.  But regardless of how stable my financial life is, I always plan any purchases over $500 ahead of time.

Calling it “lazy budgeting” is sort of misleading, as I don’t really budget — the entire act is more of a reminder for myself.  For example, for the month of November (or whenever), if I’ll be spending an extra X amount on so and so… I make a mental note or jot the dollar amount and the planned purchase date on a sticky note, notepad, or a text document on my desktop.

Holiday gift for the family?  Mental note.  Jewelry for the mistress?  Sticky note.  Monthly payment to the loan shark?  Sharpie-written note on forearm.

What are some of the benefits of making a note on these purchases?

• No surprises when the bill comes the following months.
• Know exactly how much I need to transfer to checking to cover expenses.
• No freak-outs when credit card company calls to verify large purchases.
• Accountability: can’t pretend I didn’t spent the money.

If you’re lazy and you don’t budget like me, you should at the very least consider making a mental or visual note whenever you have a large upcoming expense.  A visual cue to the actual spending can actually be pretty powerful, as I’ve found myself at times changing my mind on a large purchase simply because I got sick of staring at the sticky note on top of the monitor.

“Birthday present for sister? Pff. Forget it.”  *tears off sticky note*

Teehee.

Whew. Good riddance to 2008 eh? What a craptacular year.

Without going into too much details, lets just say yours truly made a series of serious mistakes in 2008, almost on the same level of my previous stupidity of amassing around $10,000 in credit card debt back in 2002.

Yeah, parts of ‘08 was that crappy. Even though they were not exactly financial mistakes, they were costly mistakes.

Having said that, this brings me to the point of this post: dealing with the debt you’ve created from poor spending decisions.

As a very much imperfect person (my parents will attest to this) that’s slowly realizing he’s the harbinger of mistakes, I’ve learned a few things about dealing with poor choices in life.

Whether they are financial mistakes or something else, there are about two choices you have when you’ve made a mistake: 1) Suck it up, learn from your mistake.  2) Continue the fun fest of being stupid.

The Excuses We Make

Geez. Cap is being so negative. He must have gotten rejected by the local bowling team again.

Be that as it may, the truth of the matter is that we will often try to habitually justify our own ill-conceived actions through excuses and poor reasoning.  If you’ve ever made a stupid mistake that you’ve regretted before, you’ll probably know what I’m talking about.

“Its not my fault I spent so much. Work is stressful and I need some occasional relief.”

“Its not my fault I didn’t pass that test.  Chelsy was in a bad situation and she needed me to be there for her.”

“Its not my fault my body weight went uncontrolled.  I’m too busy with work/school/etc. to get a proper meal.”

If any of these sounds familiar — worry not, you’re not the only one that has thought of them.

Understanding the Mistake

When I woke up that one faithful morning six years ago and realized the asshat decisions I’ve made to get myself in the position of owing so much money — all the excuses I’ve been giving to myself suddenly disappeared.  For months, the excuses kept the realization at bay, but at that one brief moment, I had a moment of true clarity and realized that I didn’t want to continue to live a debt-ridden life.

What I’ve just described may sound a bit dramatic, but that morning was a definite eye-opener for me (being scared sh*tless by debt helped too, of course).  And from that eye-opener, I made the frequently mentioned mental attitude change. I decided to spend less than I earn, save money, budget, yada yada — you’ve most likely read it all before (if not on this blog, then on another).

Fixing the Mistake

If you have amassed debt from excessive consumerism (or some equally stupid reason), you should know that combating that particular debt doesn’t require some magic formula or a requirement of being a super genius.  You’ve probably noticed this already, but I’m not exactly a rocket scientist (again, my parents can also attest to this) — if I could paid off debt with an attitude adjustment, you can too.

Thus, suck it up. Realize that you’ve made a mistake and make a plan on how you can fix it.  There are hundreds, if not thousands of articles online with methods and steps you can take to pay off your debt.

Here’s a simple guideline:

1. Earn more money or spend less money.
2. Use excess from earnings/savings to pay off debt.
3. Done.

It’s a New Year. Make it a better one!

You probably know how it is.  Like me, you’ve reached that point where it’s entirely inappropriate to consider yourself a “kid” since it’s been years you’ve finished college (or should have finished) and you’ve ought to be a contributing member to society by now.

Damn.

Besides the added waistline, the unflattering effects of gravity, there are a few (financial) advantages as you get older:

1. Car rental will no longer be a rip off after the magical age of 25
2. Car insurance premium will slowly become cheaper
3. Your credit history should be steadily improving as financial accounts adds age
4. As you reach a certain age, you’ll get to join AARP (et al) and get senior discounts

Yeah, I know it’s a pretty weak sauce list but that’s about the only four things I can come up with.  There are a few other financial situations that should improve as you get older, such as your savings, your retirement accounts, etc. — but they’re not really a direct benefit that you get as you become older.

If you know some financial advantages to getting old, throw me some bones because there’s got to be something to look forward to — this quarter-life crisis is driving me nuts!

Haha. I kid, I kid.