Beating Broke

Personal Finance from the Broke Perspective

My Wife Quit Her Job: One Year Later

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If you’d like to catch up on this on-going series, start here, then go here, and here.  Then come back here and read on.

There, now that you’re caught up, you know that my wife quit her job about a year ago.  Sometime around last August, she and two of her friends (and ex-coworkers) decided to start a business together.  And as of the last update, you knew that the business was going well.

Now, the business is still doing well.  Better than most of us expected, I think.  On May 1st, they began working with the clients that the certification that they picked up allowed them to.  Because of that, all three of them should be seeing full time hours fairly soon.  My wife has been working full time and then some for several months, but everyone else has been relegated to doing most of the office work (that is unpaid).  That’s good for us, but wasn’t all that great for everyone else, or for business partner morale.  Unfortunately, much of what my wife does is limited to people with certain qualifications.  Qualifications that only my wife has.  And, until the business is able to help pay for the others to get those qualifications, she’s got to do it.  With the new program that they just started, that should become more of a possibility towards the end of the year.  Of course, if the new program continues to do well, it might not be something that needs doing anyways.

As I expected, due to the added insurance costs, and some increases in withholding for ChildCare, my checks are much smaller than they were in 2009.  We had planned on that, and since a lot of the extra is pre-tax, it will help us in the long run.  It is a bit sad to see your net income be less than 50% of your gross income though.  To try and compensate, I’ve re-doubled my efforts here and at my other websites to try and make up some of the difference.  Income is increasing there, but it’s a very slow process, and it has yet to be enough to make any significant difference anywhere.

Due to my wife’s increased work load, we’ve been able to keep up with our bills and haven’t had any major issues.  It hasn’t been good enough for us to return to aggressive debt payments, but we haven’t added much new debt either.  That’s a win if you ask me.

The rest of the year looks pretty good.  My wife’s business looks like it will continue to grow and, with any luck, so will my side endeavors.  I’m hoping that we might even be able to start our debt snowball rolling again.

Picking Yourself Back Up Again

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Inevitably, you’re going to screw up.  You’re going to make a mistake and it’s gonna cost you.  If you’re lucky, it’s only going to cost you a few dollars or a bit of bruised pride.  If you’re not so lucky, it could cost you much more than that.

Let me tell you a little secret.  We’ve all been there.  In all likelihood, we’ll all be there again.  But, some of us will get back up, dust ourselves off, and get back to doing what it was we were doing in the first place.  The rest will sit on the ground where they landed, beaten and broken, and never get back up.  They’ve given up.  The world got the best of them, and they have lost the will to try again.

Getting back up isn’t the hard part.  Gathering the will to get back up is.

None of us who have fallen and gotten back up have any greater aptitude for it than anyone else.  Sure, we may be better at some things than other people, but when we fail, we are all the same.  Here’s a little bit more of a secret.  Some of us are better prepared for the fall.   We’ve done what we can to soften the blow, not because it’s inevitable, but because it could happen.  Think of it this way; you don’t buy health insurance because your sick, (well most don’t) you buy it in case you get sick.  You don’t wear a helmet while bicycling because you know you’re going to fall, you wear it in case you do fall.  Sometimes situations are out of our control.  We certainly don’t choose to get sick.  And we don’t choose to fall off of our bikes on to the hard concrete below.  But, sometimes it happens.  And the better prepared you are for it, the easier it is to get back up and get going.

An example.

Many years ago (something like 7), I drove a old pickup (older than I am).  One particularly cold day, then engine refused to start.  It refused to start the next day despite having a charger on it and attempts to pull start it.  I couldn’t go without a car, so what was I to do?  I had no savings, and no means of coming up with any extra money.  I had fallen.  In order to get myself up and out of the hole I had dug, I was forced to take on a massive (for me at the time) car loan on a used car.  The bank wouldn’t finance much without a down payment, so I took what I could get.  It was a terribly low spot for me, financially.  I went from having no car payment at all, to having a car payment of a little under $200 a month.  I could afford it, but just barely.  If anything had happened to my income or if an emergency of some sort had arisen, I would have fallen that much farther (and harder).  To be honest, I didn’t learn all that much from that particular episode.  But, I did get back up and back on the road.

A week or so ago, my car sprung an oil leak.  The repair wasn’t horribly expensive (only about $150), but enough that it could have been very damaging if I had been in the same situation as I was before.  But, I’m not.  I’m prepared.  I have a small emergency fund that can easily cover an expense of that magnitude.  The fall wasn’t nearly as bad.  It wasn’t as bad of a situation as it was before, either.  But, because I had prepared, the fall was very short and I was able to recover quickly.  In fact, it was less of a fall than it was just a little bump.

Preparing for an emergency isn’t a bad thing.  It doesn’t mean that you are expecting to have an emergency any more than having health insurance means you’re expecting to get sick, or wearing a bike helmet means you’re expecting to fall.  But it cushions you against the fall.  Getting sick is less stressful if you have insurance that you know will pick up part of the bill.  You’ll have less road rash if you’re wearing a helmet.  And, if you have an emergency fund, more falls will become bumps.

Do yourself the favor.  Prepare now, so that when you do fall, you’ve got some cushioning to land on.

Tax Day: What We’re Doing With Our Refund

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I dislike getting a refund from the government. I don’t like having to look up the my tax refund status.  I don’t have any good reason to give them an interest free loan, but any changes I make to my W4 don’t seem to make any difference.  I keep getting a refund every year.  This year, the numbers were really off, because we added a dependent last march.  After all the numbers were entered, and the forms filed electronically, the IRS sent us a nice deposit of a little over $3000.  Combined with a bit under $500 from the state, and we end up with $3500 in the bank.

Now, before I go on to tell you what it is we are doing with that money, I need to say something.  For the last several years, we have spent nearly every spare dime we have on paying off debt.  We still have debt that needs to be paid off.  However.  Despite my hate for debt, I’ve come to realize that you cannot let other things slide in order to pay off that debt.  With that in mind, here’s how we’re spending our refund.

We’re getting a new kitchen.  The cupboards in our kitchen are original to the house (circa 1950) and have been painted so many times that they no longer close.  The drawers grind against their frame and the resulting paint dust and wood dust falls down from them onto anything in the cupboards below them.  We have to wash our pans before we can use them because of the dust.  The linoleum on the floor is peeling up.  The carpet is ancient, smelly, and stained.  If you took just the kitchen from our house, it would fit right in with many of the run down slum rentals in town.  We want to move up to a newer (read bigger) house soon, so we need to make this house sellable.  In my opinion, with the kitchen in this condition, it would not sell for what it is worth.  So, we went and bought all new cupboards, countertop, and flooring. Oh, and a dishwasher.  That’s a certifiable luxury, but it helps that we bought it all on sale.  All of the supplies came in at about $2300.  There’s still a few odds and ends that we’ll need to purchase, but we should be able to keep it at about $2700 or less.

This weekend, my father is coming to town to help me install it all.  With any luck, come Monday, it will be mostly finished and usable.

If the plan works, we’ll still have about $800 or so left over.  And with that, we’re buying a couch.  And maybe a loveseat.  Depends on the sale I suppose.   This could be classified as a luxury that we don’t need if it weren’t for the hole in the one cushion, the rips in the spring lining that allows everything to fall between the cushions and disappear into the couch, and the stitching that is coming out at all the seams.  The couches that we are replacing are in dire need of it.  We got them free and have used them for several years.  The couches we had before that were hand me downs and garage sale finds.  It’s time for something new.  And, yes, we could go to garage sales and find new used stuff, but we’ve been saying that for at least a year and haven’t done it, so we’re going to splurge a bit.

When we’re done with all of that, we’ll go back to trying to pay everything off.  My wife’s new business is growing well (that’s another post), and her income is leveling off some, so we can more properly budget for debt repayment.  We’re leaps and bounds from where we were when we got married, and with any luck, 2011 will be the last year we spend with any real debt aside from a mortgage.

What are you doing with your refund?