Full-Time Work “Fail,” Personal Finance Win!

Last Tuesday was my final day of work at the full-time job I started seven and a half months ago. I did everything I could to make a go of it, but nine-hour days and the lack of autonomy inherent in a full-time position just isn’t for me, it seems.

Fortunately, we have our financial life arranged so that the hardest part of my decision has been saying goodbye to the co-workers I’ve come to love (and even that isn’t entirely true, as I’ll continue working there on an hourly basis). The money part isn’t so scary. Here’s why:

We have a fully funded emergency fund. Although we won’t have to use it, it’s comforting to know that we could maintain our lifestyle exactly as it is for a few months with zero income. Which, of course, we won’t have to. It took us nearly all of 2012 to get that money in the bank, but the peace of mind it brings is worth every hour of hard work we did to get it. We also maintain our hidden emergency funds, which go a long way when times get tight.

I had been unable to bring myself to actually quit any of my part-time gigs, so it’s going to be relatively easy to simply increase my work there, as well as in the freelance world. Doing occasional work for other employers has kept my options open, so although I am leaving a job, I am not unemployed. And although it would be uncomfortable, we have designed our lifestyle so that we could, if need be, live entirely on half of our income (I’m phrasing it this way on purpose: this was also something I did as a single person. Having a partner is lovely, but not a requirement for living beneath one’s means!).

We bought a house a couple of months ago, which could seem scary, except that we made sure to buy something we could afford, even if times got tight. Buying a small fixer-upper means that our house payment and utility bills aren’t much more than they were when we were in an apartment.

I know that we are fortunate to still have health benefits provided through Mr. Vega’s employer. Not everyone has that. But we have paid for our own insurance before, and have maintained a budget that could be arranged to do it again, if the need arose. It would mean giving up some luxuries, but first things always come first around here.

None of this has been easy: we like a night out as much as the next folks, and we’ve never had a “real vacation.” We’re happy that all of our relatives happen to live in vacation-worthy locales, but we haven’t visited as much as we would like to, because of our commitment to living debt-free and with a prudent reserve. There is so much more we’d like to do, and see, and have. But there is nothing we want enough to stay in jobs and situations that aren’t right for us… For that reason alone, the hard work and sacrifice has all been worth it.

Now, if you’ll excuse me, I’m off to start cooking the beans for tonight’s dinner…

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The Contingency Fund

One of the things we’ve learned from watching home improvement shows on television is that in any project, things will go wrong. Things will break. A simple appliance installation will balloon into the need to open a wall and re-wire part of the house. Your intention to do everything yourself will transform into needing a professional on-site ASAP.

When we found the house we wanted, we were annoyed by the clause in our apartment’s lease that required a 60-day notice to vacate. As it turns out, we will be moving into our new home on Day 59 of that period, because we’ve encountered a few unexpected problems.

Mr. Vega decided he wanted to scrape off the ugly acoustic ceiling before we moved in. Our internet search for “how to scrape a popcorn ceiling” yielded the suggestion to test for asbestos before doing that kind of work on houses built before 1980. We found a local lab that could rush the results for $75. We found out we were indeed the proud owners of a toxic ceiling that would cost $2500 to have professionally and safely removed. Ouch.

Fortunately, we had prepared in advance to expect the unexpected: in addition to our down payment and closing costs, we made sure we had about 5% of the purchase price set aside to make the place feel more like home. We also maintain an Emergency Fund, but as the asbestos only poses a health risk during removal, we agreed that Ugly Ceilings are not an actual emergency. Still, we’d feel better having the job done before we move our furniture, our pets, and our own lungs into the place, so we went ahead and had the work done.

Then when the gas company came out to connect the gas and inspect the appliances, they discovered that the stove that came with the house was leaking gas, which meant they weren’t allowed to connect it. The appliance repair men said it would be an expensive fix, and as it wasn’t a good stove to begin with, we had it hauled away, along with the old, moldy fridge that was in the house. We were lucky enough to find an inexpensive, well-reviewed fridge with a freezer on the bottom and in the smaller “apartment size” that we prefer, but we decided to splurge on a professional-quality gas range, to the tune of about $1800 (which is a great deal for the kind of stove we’re getting, but it’s not pocket change!).

We’ve got some other issues, like non-existent insulation in our central Texas attic, a colony of ants that have chosen that attic as the place to build their home, and a central air condenser unit inexplicably– and quite dangerously– perched on the roof that is not designed to hold that kind of weight. While some of these issues could become emergencies, they aren’t yet, and we’re grateful for our Contingency Fund. It will be completely drained before we even move in, so we’ll have to postpone our plans of replacing the old drafty windows with double-paned ones or installing a rainwater collection system, but we’ll still have our Emergency Fund, and we won’t have gone into debt to fix the problems.

We Did it…

… We bought a house! Our first house. And we’re pretty excited.

Four years of hard work, paying off debt, saving money and one cross-country move later, and we have a house! Right now, I’m going to say that it has all been worth it. We made a 20% down payment and bought the house for exactly market value, which is kind of a bargain in the real estate frenzy that is Austin. So we’ve already got a good amount of equity, and our net worth hasn’t changed. Which is strange and wonderful, considering we just handed over almost all of our savings except for our Emergency Fund.

It’s small. As in 800 square feet, 2-bedroom/1-bath, single-car garage small. Buying a smaller, older house allowed us to stay within our budget, which was several thousand dollars less than the current median home price in Austin, but still stay close to downtown and some of our favorite South Austin neighborhoods. Having a smaller house also means, of course, that it will be less expensive to cool and heat as well as being easier to clean. We want to replace both the roof and the flooring at some point, and those things will also be cheaper because of the house’s smaller footprint.

The lot is a relatively large 1/4 acre, which gives us plenty of room for gardening and entertaining. And there is plenty of room for the house to grow, if we ever decide that a third bedroom or a second bathroom is a necessity. We’re planning to build a compost bin ASAP, planting a mini-orchard of fruit trees, and even considering getting a few chickens.

Built in 1968 and used as a rental property for the past decade, it’s going to need a fair amount of work. We see that as a benefit, though because it was another thing that kept the asking price low, and also because we can do most of the improvements ourselves, to get things exactly how we want them. Some of the first things on our list are high-efficiency appliances, double-paned windows, and a rainwater collection system.

There are train tracks just behind our back fence, but it’s in a “quiet zone,” which means the trains are not allowed to blow their horns except in emergencies. Houses that abut train tracks are generally considered less desirable, which helped with the affordability factor, and honestly, I find the sight and sound of freight trains nostalgic!

The neighborhood is funky and eclectic… No cookie-cutter houses, and most importantly to us, no HOA. Homes in our new neighborhood have interesting creative decor and landscaping: some of them even have their vegetable gardens in the front. We were also pleased to spot a few harbingers of creativity and a laid-back vibe in the area: free-range children!

This is the thing we’ve worked so hard to do, and we’ve been able to do it on our own terms, so we’re very happy. We’re looking forward to what lies ahead, as we continue our journey toward self-sufficiency and financial independence.

My First-Ever Tax Refund

For the entirety of my career, I have worked part-time and freelance jobs. For all intents and purposes, I have been the sole proprietor of a one-woman business, and my tax status has reflected this: every year, I receive up to a dozen 1099 forms and maybe a W-2 or three. Every year, I comb through all of the previous year’s expenses, making sure I haven’t overlooked any possible business meals, office supplies, or mileage. Every year, I sweat it out in the accountant’s office, waiting to be told exactly how much I owe.

I got into the habit of filing my taxes as soon as possible each year, so I could find out exactly how hard I was going to have to work in the two months or so I had left before the Tax Day bill came due.

Over time, I got clearer about how this tax thing works, and started putting aside a set percentage (corresponding to my tax bracket) every time I received a check. Eventually, even though I owed taxes each Spring, it felt as though I was getting a refund, because after paying my balance due, whatever was left in my Tax Fund was mine to keep.

But 2014 was the year we moved more than fifty miles away from our employers, and found gainful employment in our new home town, all of which means we got to deduct our moving expenses from last year’s taxable income. And we moved to a state with no income tax, which was a lot like getting a raise (both our salaries are actually lower than they were in California, but we’re still not complaining). Combine all that with the first year in decades that my business expenses outweighed my freelance income, and it all adds up to a not-insubstantial tax refund.

Our tax preparer e-filed for us today, so we won’t see the money for a few weeks, but I’ve already spent it several times over in my mind: I’d like a Spa Day, a trip to visit family, some new hiking boots, and a few of the ridiculously expensive bras I like. Maybe some new shoes and baking pans, too, because I really know how to party. And Mr Vega has suggested a solar generator and some new iStuff, too.

In the end, our little windfall is going straight into the House Fund, but you probably knew that already. It gets us close enough to our goal of a 20% down payment toward a house we could afford on a 15-year mortgage with payments totalling no more than 1/4 of our total take-home pay. We’ll probably start looking for financing next week.

Still, I’ve enjoyed spending a little time thinking of ways to spend the money, if we were going to…

Did you receive a tax refund this year? What will you spend yours on?

Welcome, Get Rich Slowly Readers!

Years ago, during a pretty bleak time in my life, I happened across an article by Donna Freedman called “Surviving (and Thriving) on $12,000 a Year,” in which she outlined some of the ways in which she intended to not only get through the lean times she was facing, but to do it with grace, dignity, and even joy.

I wanted what she had.

I returned to that piece many times over the next few years, and continued to read everything she published that I could find. I followed along as she charted new-to-her territory as a midlife college student, as she healed her finances and expanded her career… I tried many of the money-saving tactics she wrote about and even began to do a little writing of my own about how things were going. I wrote about what it was like for me to begin that process– and begin againhere.

Nearly a decade after Donna’s words first illuminated a screen in my dark little studio apartment, I find myself sharing a life and a name with a man named “Vega,” who joined me on a journey to becoming debt-free, amassing a fully-funded Emergency Fund, and now, saving to buy our first home. Because we’re becoming financially literate a little “later” in life, we acknowledged that homeownership would be more likely for us if we left our native Los Angeles and struck out for parts unknown. Unknown to us, anyway: Austin, Texas is one of the fastest growing cities in America, and that trend shows no sign of slowing any time soon! You can read more about how we came to our decision here.

We’re learning our way around our new home town, working as hard as we can to make sure our “starter home” isn’t a retirement home, and trying to have as much fun as we can in the process without delaying our dreams.

Mr. Vega and I finally got to meet Donna in person last summer when she visited Austin on a short trip. We had only been here a couple of weeks ourselves, but I was happy to spend a little time talking with her over breakfast tacos in the Central Texas summer heat, and when she asked if I was writing anything, I mentioned this little blog that was only a couple of months old and was still finding its voice. It still is. But she took a look, and it was this post that inspired her recent article over at Get Rich Slowly.

If I could stumble across someone else’s blog and be inspired to make deep and lasting change in my life, then anyone can do it. And if some of the work Mr. Vega and I are doing inspires even one person to start doing it for themselves, then something wonderful is happening. Because if we can free ourselves from the burden of debt that has become the norm in our society, who knows what else we can do to alleviate the poverty and financial stress that keeps some of our best and brightest women and men from achieving their full potential?

That may sound pretty lofty, but every paradigm shift the world has ever known has started with just one person thinking quietly to themself: “What if I could really do this?” The idea of personal financial responsibility and freedom didn’t start with me, or with Donna Freedman, or with any of the other wonderful bloggers who have been brave enough to share their experiences with the public. But the most important thing is that the ideas don’t end with us, either.

Thank you for visiting, and I hope you’ll stick around and share some of your own thoughts in the comments. One person, one decision at a time, can change the world. But none of us has to do any of it alone. And the best part of all? We can have a hell of a good time doing it!

Nothing Changed When we Paid off our Debt

Mr. Vega and I became debt-free a couple of years ago. It happened quietly, and without fanfare. He’d been working hard to negotiate some old, unpaid credit card bills that had gone to collection, and ended up settling about $10,000 worth of debt for around $4,000, one bill, one phone call, at a time. The only thing left was my car payment, which for some reason, I had been stalling on paying off even as we amassed a healthy savings account. Then one day, on a break from work, I called the loan company and did the payoff over the phone. Just like that, we were free from debt.

And nothing changed.

Not having monthly payments outside of rent and utilities is nice, but we have continued to save so aggressively that our lifestyle hasn’t changed: we cook at home, search out free and inexpensive entertainment, consider even the smallest purchases carefully, and do our best to negotiate the best rate for everything we spend money on. This year, I volunteered to be a support person for our bocce league in exchange for free registration ($45), and a $25 weekly credit, which I share with Mr. Vega, at the team’s sponsoring pub. We exchanged both our juicer and our vacuum cleaner several times because we kept finding lower prices. And on our last Date Night, we hustled over to a local bar right after work because the first sixteen customers that ordered cheese plates (normally $16) got them for free. We chase bargains because it’s fun for us: we like getting a good deal nearly as much as we enjoy whatever it is we’re buying or consuming. Living frugally helps us live a little more lightly on our ailing planet, as well: growing and cooking as much food as we can for ourselves eliminates a lot of packaging, as does buying in bulk. Every article of clothing that we buy used or trade with friends is one less thing that has to be shipped from overseas and then driven by truck to our local store. Our habits and practices are right in line with those of our friends who earn less than we do, or who are busy paying off debt themselves. We also socialize with people whom we suspect make and have much more money than we do, but our friendships revolve around time spent together enjoying activities that don’t cost much, so the subject of money rarely comes up.

This week, I made a long-overdue phone call to roll a 401(k) from a previous employer into a personal IRA. I spent quite a bit of time speaking to a customer service agent at the investment firm, who was gathering our personal financial information in order to ensure I was getting into a product that met our needs (and presumably the company’s need for profit, as well). Part of our conversation went like this:

CUSTOMER SERVICE GUY: Okay now, so, if we were to take all your debts, your car loans, personal loans, credit cards, home equity lines of credit, and student loans… how much money would it take to pay all of that off today, hypothetically speaking?

ME: Three hundred and forty dollars. We use an airline miles credit card that we pay off each month.
(pause.)
CUSTOMER SERVICE GUY: WOW. Well, um… Congratulations!

I really enjoyed the feeling of hearing someone who is privy to the innermost financial workings of thousands of families so taken aback. We are not wealthy, earn a modest income, and in fact, are woefully “behind” in our retirement savings, but simply being debt-free is so unusual, it seems, that it rendered this guy momentarily speechless.

So, nothing about how we live our daily lives changed when we paid off our debt. We didn’t buy fancy new wardrobes, take a vacation, or start upgrading our electronics. But there is an indescribable lightness about us now that we go to work every day because we want to be of service and earn money to save for our house instead of showing up just because we couldn’t make the rent if we didn’t. Car troubles for us these days are inconveniences and not crises. And we moved halfway across the country to pursue our dreams knowing that if an emergency should arise for any of our family members, we could afford to be at their side within a day’s time.

Nothing really changed when we paid off our debt… but somehow, everything is different.

 

 

Why I’m Working Full Time

If you do an online search for “full-time work,” you’ll come up with loads of articles about how to fire your boss, escape the cubicle, and travel the world as a location-independent freelancer. I accepted a full-time position last week, and as excited as I am about it, I’m having a hard time finding anything good written about working a traditional schedule. I’ve been a freelancer and part-timer for most of my career, and have enjoyed the higher hourly pay, the flexible schedule, and the not really having a boss thing, but a job came my way that was so well-suited to me that I couldn’t turn it down. So I said “Yes” to spending forty hours each week doing the work that I love, and so far, I’m glad I did.

Probably the most obvious benefit to having a salaried position is knowing that I’ll be receiving twenty-four identical paychecks each year. A quick look at our marriage’s financial history reveals that money tends to get pretty tight each January and July… we’re looking forward to having a consistent amount of money to work with each month. Also, because we’re saving for a house, we’ve always wanted to live on one income, but it’s been challenging having two incomes that can vary so widely month-to-month. We now have an opportunity to try living on our one stable income, and to bank the rest.

Also, my new job, while paying about 75% of the money that I am used to earning as a freelancer, also comes with comprehensive benefits. My new health insurance will save us about a hundred dollars each month over having me listed as a dependent with Mr. Vega’s employer, and the generous retirement package will go a long way toward helping us catch up on the nest egg we started saving for in our thirties, rather than early in our working lives (Millenials, take note: Compound Interest is your friend… start saving now!). Additionally, my new situation will go a long way toward alleviating the stress that comes with my husband’s job in a volatile industry. If his job goes away with the looming corporate merger, it will be unfortunate but not tragic. Or if he chooses to pursue some fabulously creative opportunity that comes without benefits, we’ll be able to keep him covered under mine.

Financial stability aside, it will be lovely to have a base of operations for my work, and not feel like I’m living out of my car during the work week! For the first time in… well, ever, I’m going to have my own office, which means my reference books and office supplies won’t have to compete with my novels and personal stationery for a very limited amount of shelf space at home. Several of my other employers provide break rooms with sinks, refrigerators and microwaves, but I’ve rarely worked in the same place two days in a row, and so leaving food at work has not been a viable option for me. I’m perhaps unduly excited about the possibility of stocking my little fridge shelf with lunches and snacks for the week, and not having to worry about forgetting my lunch when I have a hurried morning!

Another exciting aspect of having a full-time job is that I’m no longer competing with colleagues for work. I’ll be able to focus my energy on collaborating with my co-workers to do the work we’ve been hired for, rather than trying to beat them to the next gig, before this one is even over! Everyone in this new workplace has been so welcoming and supportive, and I can’t help but think that their job security is part of the reason why.

All that said, the folks at my other part-time jobs have been so wonderful to me that I’m loathe to leave them in the lurch, so I’ll be hanging in on a part-time basis for as long as I can… one evening a week at one, and half a weekend day at the other. And you guessed it: those checks will go in the House Fund, too.

But I’d be lying if I said I wasn’t a little nervous about my new schedule: for the past week I’ve come home at 5:30, spent a couple of hours making and wrapping holiday gifts, had dinner with my husband, and gone to bed early. When I complained that there wasn’t much time for actual living after work, Mr. Vega replied with a smile “Welcome to full-time work!” I’m sure it won’t be long before I’m one of those folks shouting “TGIF!” and getting very excited about the return of Daylight Saving Time. I’ve already discovered that there’s very little margin for error in my daily schedule: if the dishes don’t get washed before bedtime, breakfast is going to be a disaster, and we haven’t got enough clothes in our closets to be able to miss Laundry Day.

All in all, though, I think the benefits to this particular full-time job will far outweigh the inconveniences. I’m looking forward to finding out more!