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October 13, 2010

Money Shrink Makeovers

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Photo Credit: Bill Diodato

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I Haven't Paid Taxes in Six Years!

Maureen Tkacik, 32, freelance finance writer, New York City
INCOME: $50,000? ("I guess it could be a lot more")
SAVINGS: $0
DEBT: $20,000

I've never had a lot of money, and I never wanted it. I spent some time growing up in China in the '80s, where life for most was incredibly spartan. I often wondered how little I really needed to get by on. I worked hard, got into a great Ivy League school, but quit two years in when I ran out of money. When I considered the tuition bill, it dawned on me: There's no way I'm going into that kind of debt. It may have been the only fiscally responsible decision I've ever made. I wasn't worried about succeeding without a degree. I was a quick study and was already getting stories published.

I love my work. I'm at my most engaged when I'm obsessing over a story. When you're like that, money can seem like an afterthought, so I don't actually know how much I make. I guess about $50,000—not sure. It could be a lot more. My rent is cheap, and my only real indulgences are books. They're usually for work, so I always think I'll write them off, which is funny because I haven't paid taxes in six or seven years. I have a complicated system of rationalization that involves Alan Greenspan, the Bush administration, and TARP. But more likely, I just need to get my shit together. I think I owe the IRS somewhere around $20,000. I know I'll have to pay it someday and that in the meantime the penalties and interest are building up. I want to get working on that, maybe sell a book to cover it. But I just haven't been motivated to do it. It doesn't help that I hang around people with the same bad habits as mine, who live paycheck to paycheck, without 401(k)s or savings.

The Shrink Says: It's amazing that Maureen has become successful in an intellectual field without a degree. But she's something of a "money monk"—she keeps money far away, detaches from it. She restricts herself to maintain control, possibly because she's afraid that if she allows herself to have more money, to want it or enjoy it, she'll become "The Man," the kind of person she disdains as wealth-obsessed. I suggested a good accountant to help her begin paying what she owes. I also recommended she outsource her receipts—shove them into a folder and send them to shoeboxed.com, which will scan and log all of them for her.

Maureen's Takeaway: Money just isn't where my priorities lie. Still, I e-mailed the accountant and set up a meeting. I'm afraid the IRS is going to make an example of me. But when I consider it rationally, I know they'll likely help me set up a payment plan, and the punishment will be the interest and fees I've accrued.


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