I learned long ago that in business you need to track your expenses if you are going to manage and control them. If you don't, your expenses will get away from you and you'll end up bankrupt without knowing why.
I apply this to my personal expenses as well, and I keep a monthly income statement so I know where my money comes from and where it goes. But I'm unsure this month about how to classify an expense that relates to a stripper.
Six weeks ago, I took my ATF to dinner at a bar after work. She mentioned that she was out of her anti-anxiety medication and didn't have the $300 to refill her prescription. (Of course she doesn't have health insurance.) So I drove her to her pharmacy and paid for the prescription with my credit card. (Of course she doesn't have a credit card.) She said she would pay me back.
The next few times I saw her, she mentioned the medication and said she would repay me. Then she stopped mentioning it. Of course the money is gone.
I know better. Dancers never repay you. I could force the issue and simply tell her after our next OTC session that she had already been paid. But she's a hot blonde who's less than half my age, and I like to keep her happy since she keeps me happy. Besides, I only have myself to support, but she has herself, her young son by a deadbeat dad, and her boyfriend who can't keep a job.
So the $300 is gone, but I don't know how I should classify this expense on my personal income statement. I'm considering these categories:
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Medical: I bought medicine, but it wasn't for me. This would give an inflated picture of my annual medical expenses.
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Dancer Services: This is an actual line item on my personal income statement, and over the past three years it's grown to a significant monthly expense. But this doesn't seem right because I did not receive any services.
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Gifts: I give my ATF and other dancers gifts, but I did not intend this as a gift and so I don't think it belongs here.
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Education: This expenditure could be looked at as a part of my continuing education in stripperology.
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Tips: I am leaning toward calling it a tip. It could be viewed as a general tip for our continuing relationship rather than as a tip for a specific service.
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Memberships & Dues: My annual membership dues in the Pathetic Losers Club.
I would like to hear how you guys think I should account for this expense.
(For any IRS agents in the audience, please understand that this is purely a classification issue. I have no intention of trying to deduct this expense on my income taxes.)
It's a classic bad debt. You intended to be paid, and she intended (or so you thought) to repay you, but you have (wisely, in my pinion) decided not to collect. Classifying it as such will remind you to think twice in the future.
Or, in accountant-nerd lingo, the account is "CNC." Currently not collectable.