Tag Archives: career

Can Two Live as Cheaply as One? The Final Update (or, “When Our Only Job Imploded”)

Posted on by
1

Welp, we finally called it: After six months in a row of spending more than we brought in, Mr. Vega got a part-time at our favorite grocery store. That few hundred dollars a month goes a long way, and his employee discount has also helped to lower our grocery expenses. Most importantly, he loves his job, his co-workers and customers, and even after spending 8 hours on his feet, he comes home happy and energized. What a far cry from his previous career in high-pressure sales, which caused him constant stress and anxiety! 

I think that what we were really trying to do should have been called “Can Two Live as Cheaply as One Under-Earner?” because the significant pay-cut that I took in order to work a “full-time with benefits” job sure didn’t help the situation any! What we’re doing now could be categorized as “Two can Live as Cheaply as One and a Half,” which seems appropriate to our Post-Recession 21st Century economic climate. 

Over the past several months, there were some radical changes in my previous employer’s company culture. I tried my best to adapt, becoming increasingly uncomfortable as the changes mounted. But with Mr. Vega in school full time (and doing very well, I might add!), the pressure of being the sole earner in our household had me feeling somewhat trapped. And I was reluctant to leave the group of truly remarkable people I worked with each day… It’s no exaggeration to say that I’ve made some friendships there that will be lifelong. 

img_1776

First Day of School!

Eventually, though, I came to accept that working where I felt that I was being treated unfairly was taking too great a toll on my health and relationships. On the day I tendered my resignation, so did my direct supervisor and about 1/4 of my colleagues! I’m not wishing the company any ill will, but it was validating to see so many people make the same decision I did. That was a rough week at our little hippie house, made rougher still by the reality that I had just walked away from our only steady income and our health insurance. 

We went to www.healthcare.gov and selected a gold-level plan that would be accepted by most of our preferred providers, and that would give us an amount of coverage we felt comfortable with. It isn’t cheap, but it is something we believe to be more important than many other expenditures that we consider optional.

Throughout my career, whenever I have taken the leap of faith to leave an unhealthy job that I thought I “needed,” luck has been on my side, employment-wise, and this time was no exception: Two of my part-time jobs suddenly had a greater need for my services, and I was all too happy to oblige. One of them also instituted an across-the-board pay raise, the first in eight years. Those two jobs gave me enough work for the Fall that I didn’t have to look anywhere else. Because the work is at colleges, and employment during school breaks can be scarce in my field, we revived our practice of re-distributing that income by putting 1/3 of each school check into a “Summer Fund.”  While that makes for a little less spending money now, it also means that we won’t be scrambling to pay the bills later. 

While your mileage may vary, our takeaway lessons from our year of living on a single (reduced) income are these:

  • The Emergency Fund is Everything: although we were able to manage on one income during “normal months,” the unexpected expenses would have sent us deeply into debt if we hadn’t had any savings. Fortunately, all that saving we had done in the past kept us afloat when things got difficult, and we are now able to add to and rebuild the fund.
  • “Normal” Months are Pretty Rare: One month it was a tax bill that we hadn’t forecasted accurately, another was an large medical co-pay, and then there were car repairs and home repairs to be made. As one of my favorite old radio commercials used to say “Expect the Unexpected.”
  • Equitable Division of Labor Keeps us Healthier and Happier: While Mr. Vega was very willing to take on all of the housework duties, and I was very willing to shoulder all of the responsibility for earning money, dividing things up that way made us miserable! He is an extrovert who thrives on human contact, so that much time at home wasn’t good for him. Conversely, I am more introverted and truly enjoy homemaking, and being gone for so long each day left me too little time to enjoy the home we worked so hard to buy. Our current arrangement allows him more time around people, and gives me more time at home, making us each much happier with how our days are spent.
  • Be Willing to Seek Help: My husband has a diagnosed learning disability that qualifies him for assistance with his post-secondary education through our state’s department of Vocational Rehabilitation. When we made the decision for him to return to school and pursue a different career,  we knew we could afford tuition, but we didn’t anticipate just how much his textbooks and welding equipment would cost. His willingness to explore the support available to him is allowing us to remain debt-free while he completes his degree. And because Texas is in desperate need of welders, they are happy to support his training in the field, making it a truly win-win situation.
  • Work Where you Spend, if you Can: Taking on a grocery store job saves us not only a small percentage on our grocery bill, but also an hour or two each week by eliminating that errand from our schedule. Two birds, one stone!
  • Underearning is as Stressful as Overspending: We are strong proponents of living as far below your means as possible. We avoid car payments by driving used, sub-compact cars, keep our computers and smartphones for as long as there is software available to support them, our house is half a century older and 1/3 the size of the average American home, and we have never taken a trip that wasn’t to visit family. We know that many people don’t have the option to seek higher-paying work, and are already working more hours than they should have to in order to make ends meet, and we are grateful to have the opportunities we do. And there are a few things like craft beer, high-quality shoes and occasional nights out that, while they are absolutely possible to live without, make us happier when we have them. So we’re willing to work a little more in order to keep those luxuries.
At the Car Show
Drinks with Friends
DJ Z-Trip

There are so many factors that go into deciding how a household operates best, and we are lucky to be able to experiment with different ways of doing things. It’s been a challenging year, but also an invaluable experience in learning more about ourselves and about what constitutes balance in our particular situation.

What lifestyle changes have you tried making? How did they work for you? 

Can Two Live as Cheaply as One? We’re About to Find Out.

Posted on by
2

For several months, Mr. Vega has been in slow burnout mode at work. Telecom sales is a constant, high-pressure environment that has been fitting less and less with the person he is becoming. About a month ago, we spent five days camping off-grid, enjoying good food, the company of friends, and time spent in nature. His first day back at work, I got a text from him: I’m sitting here at my desk thinking that I’m wasting my time and my life here… This weekend really did me good.

We spent a week and a half talking about what he wants to do, how we want to live, and how to make that happen. We ran the numbers, and we ran them again. And a few more times, just to be sure.

Ten days later, he resigned.

The plan is for him to start school full-time in January, spending a couple of years training for a career in which he doesn’t have to sell anything, buy anything, or process anything. Or sell anything bought or processed, or buy anything sold or processed, or process anything sold, bought, or processed, or repair anything sold, bought, or processed, you know, as a career. *

For the next couple of months, he will be a full-time homemaker, quite literally: there are garden beds to be built, a porch to screen in, rain gutters to install, and a host of other home-improvement projects to tackle in our Little Hippie House. There is a lot that we’ve been wanting to do, but we haven’t had much time for it.

Building Raised Beds

We’ve spent the past few years ensuring that we could handle a shift like this: We are debt-free except for the house, and we made sure to buy a house that we could afford on one income, if it ever came to that. After we paid off all our consumer debt (and before we started saving for a down payment), we built an Emergency Fund that would allow us to continue our lifestyle unchanged for four months with zero income, or for much longer if we reduce our expenses and maintain some kind of income. Since purchasing the house, we have resumed our Emergency Fund contributions, with a long-term goal of saving a full year’s worth of expenses.

We believe that with the right cuts, we can live modestly on my freelance income, without tapping into our Emergency Fund, and maybe even continuing to grow it, little by little. Mr. Vega has committed to getting at least a part-time job if we find ourselves unable to manage, although we would both prefer that he didn’t have to.

There will be sacrifices, mostly involving entertainment and travel, but we’re excited to have the opportunity to walk our talk to live meaningfully, and happily. We’ll continue to work toward making our home as self-sustaining as possible, and welcome all the friends and family who have the means to visit us in Austin. And we’re grateful to be cultivating friendships here with folks who share our values, and who are just as happy as we are to spend a weekend camping or an afternoon playing board games, instead of doing spendier things.

At the end of his training, Mr. Vega will be eminently employable, with a starting income that will at the minimum match what he was earning at his high-stress job, and with the potential to double in a few years’ time. To our farway friends and family, you can expect a visit from us beginning in 2017, but in the meantime, y’all are welcome to come on down any time you like!

*with gratitude to Cameron Crowe, Say Anything (1989)

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

Posted on by
4

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…

How We Became Average Americans (And What We’re Doing to Stop It!)

Posted on by
3

Last year, Mr. Vega and I were living in a 486-square-foot apartment in a not-so-perfect neighborhood tucked into the vast urban sprawl of Los Angeles. We had a thriving container garden on our balcony, and we supplemented the soil with compost created by a colony of red wriggler worms that also lived in a container on our balcony and fed on our fruit and vegetable scraps and coffee grounds. Our meals were all organic and made-from-scratch, often in a slow-cooker, and supplemented with green vegetable juice fresh-made daily. We kept a batch of kombucha brewing on a kitchen counter, a small bottle of organic vanilla beans and bourbon (otherwise known as “vanilla extract”) in a cupboard, and a bigger bottle of cherries, sugar and bourbon (otherwise known as “cherry bounce…” if you haven’t tried it, you might want to!) under the kitchen sink. Our refrigerator was a smaller apartment-sized unit, and we liked it that way, because it was harder to overlook what we had put in there and let it go to waste. We did our laundry twice a month, two loads at a time in our building’s communal laundry room, and hung about half of that to dry on a rack out on the balcony.

We were weird.

We seemed like perfect candidates to move to Austin, Texas… the city’s motto is “Keep Austin Weird,” after all! Housing prices in Los Angeles were proving pretty unforgiving, and we had our hearts set on homeownership, so we packed up a U-Haul and headed eastward, towing one car and shipping another. We had come out a month earlier and secured jobs and an apartment, but because we didn’t know the area, we chose an apartment in a more expensive part of town than our old place in L.A. This one came with a much smaller balcony, and we moved in mid-summer, too late to start a garden. It also has an in-unit washer and dryer, which came in handy, as we weren’t used to the longer drying times required for hanging laundry in the humid air of central Texas. We also weren’t prepared for how we might have to adjust our home-fermenting efforts: my first batch of kombucha grew a healthy layer of mold, and I haven’t found the motivation to try again. Although our apartment in Austin has 50% more square footage than our last place, the storage options are not well-designed, and so the kitchen is much less functional. And we still haven’t learned how to cook on an electric stovetop without burning things!

After a lifetime spent working freelance and part-time jobs, I took full-time work about six months ago, in addition to keeping a couple of my part-time gigs, so that we could save for the house we came here to buy. While I’m glad I did, I now find myself without the time or energy to shop, prep and cook like I used to. Week after week, we found ourselves letting our fresh food languish in the standard size fridge while we stopped for takeout or reached for convenience foods, and without a compost bin, 100% of our food waste has been headed to the landfill. We decided to fill our freezer with some Trader Joe’s frozen options, just to get us through the transition… not ideal, but healthier and less expensive than takeout, or most of the big-name convenience foods. After Mr. Vega sustained a sports injury that makes it difficult for him to walk without pain, even the trek to our closest Trader Joes was proving difficult to fit into my busy schedule, and I found myself shopping at the chain grocery store nearest my workplace, buying and consuming the very products that we’ve avoided so diligently for the past few years. There’s a bit of a vicious cycle going on here: our busier schedules and poorer nutrition means that we have less energy to shop for and cook the healthy foods that would give us, well, more energy! But at the end of a typical 9-hour workday, all we really want is to eat something that we don’t have to cook, lie on the couch and watch TV. And we’ve gained weight. Like most of America, we are now overworked, overweight, malnourished, and trying to function in a state of near-constant fatigue.

Our expenses have gone up, too. Living in a “safer” neighborhood in Austin costs us more in rent than our dodgy-but-familiar part of Los Angeles. The landlord-tenant laws are different here, so our rent is about to go up $200-$400 (the amount would depend on the length of the lease we sign). And our incomes decreased considerably when we left the West coast. We’re fortunate to still be earning enough to give us some margin, even with our current spendy lifestyle, but we’re keenly aware that adding children to our family, needing to care for aging parents, or experiencing a health crisis of our own would change the balance considerably. From where we sit, it’s very easy to understand how some “low monthly payments” for anything that makes life easier would start to look pretty good to a lot of people right about now.

Now we’re average.

What’s keeping us going is the knowledge that our situation is temporary: We’re currently in escrow on our first home. It’s a two-bedroom house, not much bigger than our current one-bedroom apartment, and we’ve got a healthy down payment so our monthly payments will be about the same as our rent. It’s got a couple of fruit trees in the front, a big backyard for gardening, a good-sized kitchen pantry, and a covered deck where we can hang our laundry but still have it protected from summer showers and the grackles that are ubiquitous here. There’s also a gas stove, more counter space and the opportunity to buy whatever size refrigerator we like. If all goes well, in a few months we’ll be collecting rainwater, composting, eating home-grown vegetables again, and playing host to bees, bats and butterflies. We’ll feel more comfortable inviting friends over for dinner and game nights, because there is ample street parking and zero chance of upstairs neighbors complaining about the noise we make when the conversation gets boisterous at our dining table. It will take some effort to keep our tired bodies moving after we come home from a full day’s work, but I think we’ll be able to do it, because we know from experience the good financial and physical health that any amount of urban homesteading can bring. And loathe as I am to do it, because I’ve come to love the people I work with, once we’re settled and have made a few improvements to the house I’ll be able to leave my part-time job and keep my workweek down to a more manageable five days a week instead of six.

We are not wealthy people, but we have had the luxury of working less-than-full-time, or at least of keeping flexible hours, for most of our working lives. Our year of living like “average” Americans has brought me a lot of compassion for people with fewer options. I now have answers to some of the questions in my head that start with “Why don’t they just…?” This experience has taught me that “they” probably don’t exercise the options I’m thinking of because “they” are exhausted and feeling unwell, and there isn’t always someone else to pick up the slack. I’ve learned that an unexpectedly busy week means that fresh fruits, vegetables, and even meats are likely to go unprepared and uneaten, so it’s easier to just not buy them in the first place. I’ve discovered that something as simple as a poor apartment design can have a big effect on a family’s ability to maintain healthy habits. I can see how a weeklong disruption in a steady income could throw off a working parent’s finances in ways that, if you throw in a few late fees and re-connection charges, could take years to recover from.

Living in this country, in this economic climate, is a real struggle for the average American these days. Working flexible schedules, growing and cooking your own food, staying out of debt, and maintaining a healthy work-life balance can go a long way toward making life easier, but those choices aren’t available for everyone. And they certainly aren’t options that I’ll ever take for granted again.

Have you been able to stay out of the “average” American cycle of work-spend-work? What choices have you made to accomplish that?

Why I’m Working Full Time

Posted on by
8

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!

Paying Cash for Cars isn’t as Hard as it Seems

Posted on by
Reply

My grandfather gave me my first car, which had been his, when his deteriorating vision made it unsafe for him to drive any longer. It was a seven-year-old Oldsmobile that had begun its life as a rental car. It lasted four more years in the negligent possession of my teenage self, before literally going out in a blaze of glory (due to a previously undetected fuel line leak) on a California highway.

I bought my first– and only— brand-new car when I was 22, because I didn’t have the credit to finance a used car (there’s some great logic). The cheapest thing on the lot was a 3-cylinder Geo Metro convertible, which I drove for six years, until it was totalled in an accident that left me unharmed, but also left me with an insurance check that wasn’t nearly enough to replace the car. I worked out a deal with a friend’s brother who was joining the military, and no longer had use for a car. He gave me a great deal on his 10-year-old Honda, and let me pay him in two installments.

When that car was about to die, at the end of my twenties, my terrible credit and I managed to get a decent deal on a five-year-old Miata, but I had to list TEN references to qualify for a loan. I finally began to learn the value of regular car maintenance and started keeping to a budget that allowed my poor credit to recover. When that loan was paid off, I drove debt-free for three more years, but I didn’t set anything aside for the day when I would need another car.

My final auto loan was as well-researched as the car purchase, and I was so proud to walk into the dealership with a check from the finance company, gotten at a great interest rate. I paid the car off early, and went all Scarlett O’Hara: “With God as my witness, I’ll never make car payments again!”

Mr. Vega and I began dating as he was just coming out of a prolonged period of unemployment, and he was driving a 1987 Wag-o-Van that he had gotten through a friend-of-a-friend for $400, and that wasn’t very safe (or even street legal). I only rode in it once, and it was so frightening, I still have flashbacks! He was hired as an outside sales representative, and found himself in the heartbreaking position of having to use his first month’s pay to buy a reliable car for work instead of traveling to attend the wedding of his only brother at a resort in Mexico. He paid all the money he had in the world–$3500– for a well-maintained twenty-year-old Honda CR-X with 200,000 miles on it, and spent the rest of the summer helping me come up with creative recipes from my Project Angel Food box (remember those?), and the fresh produce I got from my friend’s backyard garden. His co-workers ribbed him for driving such an old car, but the jokes quieted down when one of their luxury cars was repossessed from the office parking lot one day, in full view of everyone.

We commuted to our jobs in our paid-for cars as we saved up to pay cash for our own modest wedding. We parked them out in front of the cheap 486-square foot apartment we rented in an edgy neighborhood, while we paid off the last of our debt and began to aggressively fund our Emergency Fund. We looked for Groupons for oil changes, and Mr. Vega did most minor repairs and maintenance himself. We drove those cars to the library to borrow DVDs for our weekend entertainment, and occasionally for a splurge at the $3 movie theater.

By the time my car began to develop problems that a series of mechanics could not resolve, our new frugal lifestyle had left us with enough cash in our Emergency Fund to replace it, or even upgrade (in Los Angeles, car trouble definitely qualifies as an “emergency”). We test-drove a bigger, nicer truck. We tried out a newer model year of the same SUV I’d been driving. Ultimately, we chose a late-model subcompact that used about $40 less in gas each month than my SUV had. Even with the mystery mechanical difficulties, we were offered enough in trade to offset about half the cost of our new-to-us car. We wrote a check for the rest, and our ultra-thrifty habits helped us replenish the Emergency Fund over the next several months, and even begin saving to buy a house someday.

After three more years of  a daily 40-mile round-trip commute, the CR-X was beginning to need more frequent, and more costly repairs, but still had enough life in it to bring it to Texas from California when we moved here earlier this year. We also wanted to make our next car purchase in Texas, where we knew we’d save about $1000 on registration and taxes alone, all else being equal. In addition to saving for a house, we started a little Car Fund and began making small weekly deposits.

Finally, the day came when Mr. Vega had had enough of playing the “Will My Car Start Today?” game, so we sat down to look at our budget and consider our options. We found that over the previous twelve months, we had spent a bit more in repairs than the vehicle was actually worth. He advertised his little Honda (with full disclosures) on Craigslist, for the same $3500 he paid for it, and the offers started pouring in. No one expects a car that old to be trouble-free, and that model is still widely sought-after. The young man who bought it was thrilled to get a “classic” car so cheaply, and will happily spend his weekends working on it in the driveway. The money we got from the sale of that car and what we’ve set aside in our Car Fund paid for about 1/2 of the newer car, and the rest came from our House Fund (we both agreed that this time, our car purchase did not qualify as an “emergency,” and have decided that we are willing to delay a home purchase for a few months in order to purchase the car).

My husband had been wanting a pickup truck for quite some time, and now that we live in Texas, it seemed an obvious choice. He test-drove half a dozen of them, but found the ones in our price range to be about ten years old, and with more than 100,000 miles on them. As reliability was the most important factor to us, we set our sights on something smaller. Since we were replacing a two-seater, we reasoned, we might as well consider another. We narrowed our search to Smart Cars and Miatas, and eventually, the Miata won. We came across a 1997 model with only 27,000 miles on it, but that one was snapped up before we could even drive it (someone got a great deal!). Finally, we found a 2009 MX-5 that was in mint condition. Mr. Vega staged a battle on the showroom floor when they nearly sold it out from under us after he had negotiated a price and announced his intention to buy it, but he emerged victorious, wrote a check, and left his own car in the dealership parking lot to come get me from work in our new roadster. As all happily married men know, “Mama Gets the Good Car,” so I’ll be cruising with the top down while my husband takes the subcompact to work.

Meet our new-to-us car, which I have named "Benedict Cumberbatch"

Meet our new-to-us car, which I have named “Benedict Cumberbatch”

Later that night, he examined the paperwork he found in the glove box: The original owner financed the car when it was brand-new, paid on it for five years, had it serviced like clockwork at the dealership, and the moment the loan was paid off, he got 1/3 of what he paid for it (not counting interest) to use as a down payment on another new car.

What WE got was a five-year-old, meticulously cared-for car with lots of upgrades, for below blue book value. Unless our needs change, and if nothing terrible happens to the car, we’re likely to keep it for a decade or more.

It will take us a few months of hard work and careful spending to get our House Fund back to where it was before this purchase, but we’re fortunate that living far below our means has become a way of life for us. We eat a lot of home-cooked meals, seek out free entertainment, and we only buy clothes and shoes when what’s in our closet begins to wear out. Those things are mostly fun for us, though, and even when they aren’t we do them happily, because when bigger things (like cars and computers) need repair or replacing, we’re able to handle it without going into debt. And most importantly of all, we’re flying back to Los Angeles in a couple of months to meet our brother and sister-in-law’s first daughter… We’re hoping our new way of living means we never have to choose between showing up for family and being self-supporting again!

Have you ever paid cash for a car? Would you even want to? Why or why not?

Battening Down the Hatches, Y’all

Posted on by
1

We received a letter this week from Mr. Vega’s employer, regarding medical benefit options in light of their upcoming corporate merger. There is quite a bit of uncertainty regarding how coverage will be handled, and they’ve made it clear that there will be employment redundancies. The bottom of the letter contained this lovely tidbit:

* If you are terminated, you may have rights to continue your FSA through “COBRA” (which we’ll explain more about if that becomes necessary), but you’ll do that on an after-tax basis, which is not advantageous for most.

This is the point in our program where we prepare for the worst, while continuing to hope for the best. All expenses must be questioned, and all unnecessary spending gets put on “pause” until our financial skies are clear again. Waiting to make changes until after a job loss could be devastating for us, both financially and emotionally: we could weather a transition much more gracefully if we were already prepared for it, rather than trying to make drastic lifestyle changes while also dealing with the psychological trauma that can accompany the loss of a job.

Fortuitously, I spent some time the other day creating a menu plan for November. I took my inspiration from The Prudent Homemaker, a full-time wife and homeschooling mother of seven children, who used their food storage as the basis for keeping her family cared-for during her husband’s eight-month period of unemployment. Using her seasonal menu as a template, and making adjustments for our smaller household, dietary preferences, and busy schedules, I put together a month-long plan for eating delicious and healthy meals that are also lower-cost. An unexpected benefit of meal planning is that it gets us out of our ruts, and reminds us to eat a greater variety of food. Left to my own devices, I’d eat Trader Joe’s whole wheat cinnamon rolls and a latte every. single. morning. But there’s a whole world of breakfast food out there, and writing it all down helps me remember how much I also love fresh fruit and Greek yogurt, oatmeal pancakes, and eggs scrambled ever so slowly.

As timing would have it, Mr. Vega’s 1991 Honda CR-X has reached the point where the annual repair costs are more than the value of the car itself. After running the numbers and weighing the pros and cons, we’ve decided to purchase a newer used vehicle. Counterintuitive as it may seem, we have enough in savings, and we’d rather buy a reliable car now than continue to pay for unforeseen repairs during a potential period of unemployment. And let’s face it, job interviews are stressful enough without worrying about whether your car will start to get you there, or having your air conditioning give up the ghost when it’s 90 degrees out!

Ironically, we do most of our shopping in anticipation of lean times, as that’s when we feel the need to stock up, in case we won’t be able to later. I dislike shopping so much that I generally don’t replace my clothes until they are threadbare, but I may look to upgrade my wardrobe a bit in the light of this merger uncertainty. I currently have just one pair of shoes that I wear for work, and I’d prefer to shop the sales now, rather than scrambling to get something cheap-but-appropriate if these give out during a time of hardship. This is also as good a time as any to start planning our spring garden so that we’ll be ready to plant our balcony container garden when the time comes. Fresh, homegrown food is lovely whatever one’s circumstances, but it’s especially wonderful to be able to get food from your garden instead of the market when money’s tight.

Because the merger threatens to leave us with reduced benefits even if we do keep the job, we’ll be sure to attend to our medical needs before the end of the year. We want to have healthy bodies, strong teeth, and brand-new pairs of eyeglasses that have been covered by insurance. One of us could use a new set of orthotics, as well. These are the sorts of things we should be doing anyway, but this new sense of urgency will make sure that we do.

Mr. Vega will indeed be updating his resume and LinkedIn profile and seeing what his options are, sooner rather than later. If his company’s merger results in widespread layoffs, the market will be flooded with folks looking for work, and we want to get the jump on the rest of the talent pool.  And because our household functions as a cooperative whole, it’s job-search time for everybody around here. So, while I do enjoy my part-time and freelance work, I also have two interviews scheduled this month for full-time positions that come with the all-important Benefits Package. Landing one of those would allow my husband to widen his job search to include less traditional opportunities, without worrying that we’d be left without medical coverage.

We’ll also be making a greater effort to keep up with our still-forming social and professional networks. We view “networking” as a way to cultivate and deepen authentic relationships, rather than as strictly transactional contact, and so it’s important to us that we spend some time with folks now, and not wait until we’re in need. Whether those connections result in professional opportunities or not, a robust social life will go a long way toward easing the stress of unemployment, if it happens.

We are very lucky to have moved to a city with so much free and inexpensive fun. There’s almost never a cover charge for live music (and when there is, it is oh-so-worth-it), there are plenty of festivals and activities happening all the time everywhere around here, so it will be easy to keep our spirits up and hang out with our new friends at bargain basement prices. We’ve got a couple of social buying vouchers hanging around for inexpensive dinners and movie nights, and we’re looking forward to hosting some game nights at home, as well. It’s good to have a little fun once in a while, especially during periods of increased stress or uncertainty.

We were already planning on keeping things low-key this year, but we’re still going to need to rethink the holidays. We generally do home-made, consumable gifts for everyone in our fairly large family and closest circle of friends, but this year’s gift idea is a bit pricier than usual. Not crazy expensive, but when you’re giving to a couple dozen people, it adds up quickly! We’re going to have to reconsider our gifting, and perhaps just send cards to everyone but family. We do feel blessed to have people around us who aren’t likely to feel slighted, though… material things mean much less to our loved ones– and to us!– than the actual relationships. A card means as much to all of us as a gift… especially if the giver is on a budget!

Closer to home, our own first holiday season in Austin will be spent exploring the city’s decorations, giving some of our time to help people who are currently less fortunate than we are, enjoying homemade seasonal goodies and free holiday movies, and video chatting with our faraway loved ones.

Once the merger has come and gone, we’ll be able to breathe our sighs of relief, and return to business as usual around here. If the layoffs don’t come, we might find ourselves on the other side of this with more stable, higher-paying jobs, closer relationships within our community, in better health, and with some more money in the bank. Sacrificing just a little comfort and convenience now, when we can afford to, seems like a small price to pay in exchange for the security of knowing that we could take care of ourselves in the event of a job loss.

How have you “battened down the hatches” when faced with uncertainty in the workplace or periods of unemployment? 

How to Start Living Below Your Means

Posted on by
8

I’m sick today. If I didn’t speak for a living, I could probably still go to work, but I’ve got laryngitis, so I am out of commission. Trouble is, as an hourly employee and freelancer, “no work” means “no pay.” The good news is, Mr. Vega and I have the great good fortune of a fully funded (3-6 months of living expenses) emergency fund, and have gotten the hang of living below our means, so we probably won’t need to dip into savings to cover a few days of lost work.

But it wasn’t always like this. Most of my work has come without paid sick time or vacation days, and before I learned to live modestly, even one sick day could create a financial crisis. Never mind “paycheck-to-paycheck,” I lived “credit card bill-to-credit card bill” for a decade, and viewed due dates as mere suggestions, racking up late fees and ruining my credit, while still getting $100 spa treatments on a regular basis. If I heard the suggestion during those years to live within or below my means, it didn’t register, because I wouldn’t have even known where to start.

It’s been eight years since I found myself living in a small, sad apartment, staring at thousands of dollars in credit card and tax debt, alongside statements for hefty paychecks, wondering how I could have earned such a high hourly rate for so long and have nothing to show for it. Less than nothing, actually, because I had a negative net worth!

Something happened in that lonely apartment, and before I knew it, I was canceling credit cards, filing amended tax returns in search of deductions that had been overlooked in my sloppy record-keeping, and trying out slow-cooker recipes to lower my food costs. I ignored my health and my relationships in order to work as much as I possibly could to get the debt paid. My intense focus got me debt-free within a year, but two years after that, I found myself with a $6,000 credit card bill, and a $20,000 car loan. I had learned how to pay off debt, but not how to avoid it in the first place. I hadn’t learned to budget, and I not learned to live below my means.

My first attempts at budgeting failed miserably, because I based them on templates that had little to do with my actual spending habits. As a single woman living in Los Angeles, I spent more than the national average on rent and transportation, but nothing on child care. Grocery expenses were low, restaurant spending was high, and visits to the hair salon were (and still are) non-negotiable. I came to understand that each of us is unique, and our earning, spending and savings will reflect that. What’s more, even one’s own budget will not remain a perfect fit year in and year out, or from one month to the next. Life changes quickly, and we have to change with it. I learned that if you’re ever going to get a handle on this money thing, you have to write down everything you spend. This is a requirement for success, but I struggled with it terribly until I discovered Mint (with whom I am not affiliated, and from whom I have received no compensation), which made it easy for me to see where the money was coming from and where it was going, so that I could begin to make changes based on what was actually happening.

With the whole ugly truth laid out in front of me, the first thing I did was to stop the most obvious money leaks. These are the areas where economizing is relatively painless: I started buying six-packs of soda at the grocery store and taking drinks to work instead of dropping $1.50 a day into the vending machine. I’d drive around the block looking for street parking instead of mindlessly pulling into the pay lot. My lifestyle didn’t change much, and I was still spending too much money, but I was beginning to wake up to the possibility of doing things differently. Things got much more refined later, but at this early stage, every time I didn’t super-size my order was a win for me.

After I got the hang of easier things, I began to get creative with the less-obvious opportunities for savings. I scoured my auto insurance policy for coverage I didn’t need, checked that my cell phone plan wasn’t more than I needed, and scheduled coffee dates with friends instead of dinners out. It became a game for me, and no savings was too small: the double-loader washing laundromat machine that cost a quarter less than two separate loads, the ten-cent savings at the coffee shop for bringing your own cup (later, of course, I switched to brewing my own coffee), the grocery store that offered a nickel credit for bringing your own bag…. I began to enjoy finding some sort of savings everywhere I went. After all, pennies add up to dollars, eventually.

Another major step in my financial awakening was beginning to declutter. I thought selling some of my no-longer-used things might be a good way to create more space in my home and in my budget. It was quite a shock to learn that I couldn’t expect to receive even half of what I had paid for most things, even if they had never been used! The exercise of decluttering and downsizing my possessions made me keenly aware of the purchases I made going forward. I have since cultivated a practice of buying less, buying for life when I can, and doing my level best to avoid retail prices everywhere else.

When I had just about reached the limits of minimizing my expenses within the life I was living, it became time for me to make a big move. For me, this first meant cutting cable and killing my TV, and later, moving in with a roommate to reduce my rent by $400 a month. And while it seems counterintuitive to not have begun with these things, baby-stepping my way up the ladder of frugality allowed me to garner small wins and develop an experiential conviction that larger sacrifices would be worth the effort. And they definitely were.

With my expenses cut as deeply as I could manage, my next task was to learn to earn more, which was by far the riskiest thing I did, as it involved working less, and taking a few chances with my schedule of part-time jobs and freelance work. But because I had finally paid off all my debt (again!), and brought my expenses more in line with my earnings, I could afford the gamble. The graphs and trends on Mint helped me realize that the job I deemed most stable, but that also caused me the most stress, accounted for only 10% of my annual income. With some trepidation, I left that job and increased my availability with the employer who was less stable, but paid much more. As last-minute freelance assignments come with a 20% premium, I held off on booking lower-paying work in advance, in the hopes that the higher-paying, same-day assignments would be plentiful enough to meet my needs. And I spoke up: when a new manager came on board at the freelance agency, I told him honestly that although the agency was one of my favorite employers, I frequently declined work there in favor of higher-paying jobs. Within the month, I was offered a rate commensurate with what I earned elsewhere. By choosing my assignments carefully, and giving highest priority to the highest-paying jobs, I was able to increase my income and reduce my workload.

Rinse and Repeat. By the time I had found so many ways to reduce my daily expenses, had brought down a few of the big ones, and learned to make more money in less time, life had changed enough that going back to the beginning seemed like a good idea. I had met and married my husband, and we began budgeting together early on in our dating relationship. “My goals” had been modified and expanded to become “Our goals,” which included saving for a house, and while the household income had doubled, regular expenses had not (two may not live quite as cheaply as one, but happily, the cost of running a household doesn’t double when its occupancy does). Eating a nearly meat- and alcohol-free diet didn’t work so well for my husband, so grocery expenses were higher, but cooking and eating at home was more fun with a companion, and so the restaurant budget shrank. And since we moved from California to Texas, we’re spending less on gasoline, but more on mosquito repellant!

Perhaps the biggest lesson I’ve learned on the path to living below our means is that you’ve got to have fun doing it. Brown-bagging my lunch means I get to eat healthier, more interesting meals every day, and still have enough money to get my hair done every other month, without having a minor panic attack when it comes time to pay. Losing my loyalty to name-brand products made by companies who aren’t concerned with my well-being means that I can fill our fridge without draining our bank accounts. Finding free fun on weekends lets us enjoy life while saving for a house. And taking a few calculated risks in order to earn more money allows me to stay home and write when I’m sick without fear that the lights will get turned off next month because of it.

Is living within or below your means important to you? What changes have you made, or would you consider making, to do it?

Work More, Earn More? Not Necessarily

Posted on by
4

A lttle over four months ago, Mr. Vega and I packed up a moving truck and left California for Texas, in pursuit of the American Dream. Real estate is cheaper here, we had read. Texas has no state income tax, and unemployment is lower, especially in Austin, our city of choice. What we didn’t quite plan for, however, is that while still much lower than in Southern California, the cost of living in Austin has increased dramatically over the past few years, and most incomes, including those in our fields of sales and service provision, haven’t kept pace. Our natural response was to kick into high gear at work, but we are coming to understand that working more doesn’t automatically mean earning more. Here are some things we’ve had to consider in our search for the sweet spot in our schedules:

In all freelance work, as in sales, it’s important to consider that opportunity cost is inherent in commitment. For every gig I accept, or every meeting Mr. Vega schedules, there will be others that we will miss. And while it’s unwise to try to keep one’s options so long that all the chances dry up, it’s generally a good idea to leave a little space in our schedules to take advantage of previously unforeseen opportunities. As a side benefit, rush jobs or last-minute gigs often come at a premium. In Los Angeles, same-day requests for service in my line of work are billed at a higher “emergency rate,” but that isn’t standard practice in Austin. What I’ve discovered as a freelancer is that, even though it’s out of the norm here, some clients are indeed willing to pay a 20% premium to have same-day service requests covered, and so I’ve gone against the grain and set my rates accordingly. In Mr. Vega’s line, the more urgently his customers need service, the more they’re willing to pay for it. If he were to schedule all his meetings three weeks out, he would run the risk of not being able to provide service to clients who need contracts signed today, so they can be up and running next week.

Profits aside, helping people handle their professional emergencies builds goodwill. There are many reasons besides procrastination that people need service at the eleventh hour: deals fall through, providers fall ill, and bad luck can befall anyone. Whatever we charge (and it’s not always more) for last-minute work, our clients and customers will hopefully remember that we came through when they were in a tight spot, and express their gratitude through referrals and repeat business.

Another good reason to avoid the temptation to over-book is that diversifying work environments grows word-of-mouth. We could keep the bulk of our efforts focused on a few select clients, but that increases the risk of decimating our income if we were to lose just one or two. Instead, we believe that the more people we can get our faces in front of, the more our phones are likely to ring. We need to leave a little margin in our days if we want to widen our sphere of influence in order to keep our income more stable.

Once the opportunities have been claimed, it’s important to bear in mind that working less can yield a higher-quality work product. There’s a joke sign I’ve seen hanging over the cash register in auto mechanics’ shops: “Good, Fast, or Cheap. Pick two.”  In order to earn more, we have to be willing to deliver a quality work product on-time, every time. The more over-booked we get, the more likely we are to cut corners or miss deadlines. And the more we do that, the more we have to lower our rates. So, declining work every once in a while allows us to do better in the work we do accept.

So, we’ve left some options open, and we’ve given ourselves time to do good work, but we also need to leave some room in our lives for self-care. Because in reputation-based careers such as ours, image is everything. I work closely with my clients, often when they are meeting new people, and am frequently viewed as an extension of them. If I am late, disheveled, or too exhausted to perform my duties well, that will reflect on the people I am assisting. One bad experience can result not only in losing that person or entity’s business, but also to developing a reputation as a service provider to avoid. And in sales, people are more likely to buy what you’re selling if they want what you have. The “used-car salesman” stereotype exists for a reason: too many salespeople have bought into the “work more, earn more” paradigm, and they come off creepy and desperate. But if a salesperson who appears fit, rested, and organized recommends a product or service, then unconsciously, folks are more likely to think that making the purchase just might make them a little more fit, rested, and organized. And because we allow ourselves a bit of time to attend to our lives outside of work, we’re not the people asking you to wait while we make personal phone calls or respond to texts. When we’re at work, we’re… well… working! Doesn’t that sound like someone you want working for you?

The concept of working more to earn more also reaches its limits when we find ourselves spending more money to maintain a busy work schedule. In our household, healthy eating is one of the first things to suffer when we get overbooked. We get so busy that cooking gives way to restaurant takeout, and eventually gets downgraded to fast food. “Just this once” becomes nearly every night, and then starts to include lunches, too. In addition to the expense of the food itself, the lack of quality nutrition contributes to lower energy levels and weakened immunity. The more poorly we’re eating, the less resilient we become, and eventually, our go-go work schedule leaves us sick and unable to work. Not to mention the weight gain, which can lead to having to buy new clothes that actually fit (Also, am I the only person who has ever bought clothes because I hadn’t found time to do laundry?) Minor clothing repairs can escalate into major wardrobe malfunctions when left undone due to busy-ness. Hectic schedules also deprive us of time to care for our homes and our cars… neglecting maintenance and repairs can be costly in the long-run, and few things are more embarrassing than exiting a cluttered, filthy car and finding yourself face-to-face with your client.

Keeping a too-busy life also harms personal relationships, which are a requirement for mental health and long-term happiness. After all, if we’re doing all this work to be able share the rewards with our loved ones, we’d better make sure there are some loved ones still around when we finally reach our financial goals!

To that end, I think it’s worth looking at why we’re so driven to earn. Perhaps you’ve heard the story of the American businessman who takes a vacation to Mexico, where he meets a young father who spends his mornings on the beach, fishing only enough to feed his family, and then spending the rest of the day with his wife and kids. The businessman tells the fisherman that he should fish all day in order to sell some of the fish and earn money, so that he can buy a boat and employ a crew to earn even more money. The Mexican fisherman asks the American what the result of all that work would be, to which the businessman replies “Well, after many years, if you work very hard, you can retire, and spend your days fishing on the beach with your wife and grandchildren.”

Certainly working and earning to better our lot in life is a noble goal… That’s exactly what we’re doing, and why we made our big cross-country move. But there comes a point at which simply doing more work starts to take us farther from what we’re trying to achieve, rather than moving us closer to our goals. As Mike Rowe says, “Work smart and hard,” and that’s exactly what we’re trying to do.

Networking Works, Y’all!

Posted on by
6

My work takes me into all kinds of environments, but there’s one I prefer in particular (I’m being deliberately vague, for reasons of confidentiality). Before we moved to our new city, I was told by several people that there was one person in particular I needed to speak to about working where I most wanted to work. We had met once, several years prior, and I correctly assumed that I wouldn’t be remembered. I arranged an introduction, which went well. A day later, someone more influential re-introduced us, which was good, because again, I wasn’t remembered. Sigh.

Later, I sent a follow-up email, and…. you guessed it, I still wasn’t remembered. I’m not sure what was going on with this person, and I know it didn’t have anything to do with me, but I was getting frustrated. So frustrated, in fact, that I decided to drop it and pursue other avenues of employment.

A few months later, I found myself at a professional event. The person was there, but I didn’t attempt to reintroduce myself, and in fact, it appeared to me that there was no recollection by that person of having ever met me. As it happened, though,  I met a few people who work where I want to work. I enjoyed talking to them, joined them for lunch, and handed out a few business cards. Upon learning of my credentials, one of them told me that there was a need for my services, and that I should call the person in charge the very next business day.

Before I had a chance to make that phone call, though, I received one. It seems there was an urgent need for me specifically to come work there right away! A hiring process that normally takes weeks was expedited, and I was doing my dream job less than a week later.

The person that everyone says is the gatekeeper to that job was never involved, and appears to work in another department altogether. I’m looking forward to learning why everyone around here thinks that’s the go-to person, because it’s sort of a mystery to me right now, but I’m glad I found a workaround. Or, should I say, I’m glad the workaround found me!