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We’re not saving as much money as we should be, and we haven’t been for some time now. That deeply annoys me, as I’ve been described as Type A, OCD, a control freak, whatever (although I don’t think OCD is actually correct). Part of it is due to factors beyond our control, like taxes. You can’t really help having to pay taxes. But quite a good bit is due to a severe lack of self discipline. Okay, I’m way too harsh in calling it “severe”. The way my budget is set up right now, I should be able to automatically contribute $50/month to savings, pay all my share of the bills, and have over $100 left…to also put into savings. Hubs should have close to $1000 left over at the end of each month for savings, yet over the past 6 months, our savings account has only grown by $900.
I mean, what the hell?
I’m not going to go into the causes of this. It’ll sound like excuses, and justification, and who cares? The fact is that our savings is going up too slowly (I’d say at least it’s not declining, but that’s also beside the point, and it will when we have to pay taxes soon). Why is this so bad? We have almost 3 months worth of expenses in savings, more that that really (because that assumes all income streams stop simultaneously; more likely at least one of us will stay employed).
It’s bad because my job is supposed to end in April, and I haven’t had success yet in finding a new one. I know it can take a long time to set that up, and I’m really worried about an employment gap. Mostly because of the second issue, I’m pregnant. Due in late June, and I’m also worried about being unemployed and having a new baby (at least then we don’t have to pay for daycare, but still, ouch). So what has our strategy been?
1) SAVE SAVE SAVE! We need to stockpile every penny we earn that’s not going to bills and taxes. And yeah, that’s been going..not well. I’ve addressed this somewhat by removing more money from my control and doubling my automatic savings transfer. I can handle that drop, and it’ll force me to be more careful. Hubs has agreed to consider automating some of his savings too so he also can force himself to set more aside. I’m also going to stop carrying my debit and credit cards with me so I can’t swing by Starbucks. I do plan to take more food (made at home) with me to work though, to keep nutrients flowing to baby.
2) Um, look for new work, to start as soon as possible. (Yep, been applying…I hear it can take some time to hear back). I also have had the awkward conversation about this situation with my boss, and he’s planning to extend my employment for a while (up to 6 months past April, so October if needed) to help out. He can’t keep me there indefinitely, but that helps me, and there’s still hope that no contract extension is necessary. Hubs is also looking for a new job, and the great thing about that is that we’ve been getting by/ahead on a fairly small combined income up to now. Starting salaries at the positions we want and are qualified for match or exceed that number, so if I can’t find new work but he can, we will get along as I can stay with the baby for longer. And he won’t have to deal with maternity leave issues and recovery, so it might be easier for him.
3) Accumulate needed baby gear as cheaply as possible. We’ve already gotten quite a bit for free (we have not had to pay for any baby stuff yet), and there’s also buying gently-used or frugal new. In many cases, not buying at all is a reasonable option. (Yes, I am aware that many baby necessities come as gifts, but it’s rude to expect such things and not terribly wise to count on it).
4) Should my employment end before any new begins, we will swing into action by immediately canceling all unnecessary spending (subscriptions and my “indulgences”; I’d also classify my public transit fare as unnecessary if I’m staying home), halting my college loan repayments to my dad (he is on board with this plan), and renegotiating my other student loan repayments. That way covering the rest of the bills will require minimal withdrawals from savings, while I try to bring in any income I can. I’ve even starting thinking about monetizing this blog since I get a few views/day even when I haven’t posted in months, but I’m not sure at this time how useful that would be. I’ve already canceled my gym membership, freeing up about $40/month. Helpful. Extra couple of days of groceries.
5) Worst-case scenario, my retirement account is an absolute last-resort emergency fund as well. It’s currently performing pretty well, with about $11,000 after not-quite 3 years, and might go up a bit more, depending on how the economy keeps doing. If it does go up it’ll probably be more from automatic contributions and less from my investment earnings, but maybe not. It could also go down, but I think I’m unlikely to lose all of it in the next several months. I’m not counting on it for several reasons, mostly because I’d rather not touch it, and also because I kinda can’t count on it, really. Past performance is no guarantee of future results.
Actually, a worst-case scenario is also food stamps, which would be smarter to start ASAP if needed. That’s what they’re there for, and since we gladly already pay into the system, it’s good to know we could benefit from it if needed. (Notice how I didn’t mention using credit cards? We could. We have $30,000 in available credit and only $500 charged, which is the reimbursement we’re waiting for. But…we worked so hard to get out of debt. I don’t plan to use credit cards until we’ve depleted our savings back down to $1000 or less.)
This ignores other things we’ll have to deal with, obviously. Daycare, if we both work, will take money (but at least if we both have better-paying jobs, we can afford it more easily. A place I applied to actually has it on-site, that would be great). A new patient on our health insurance, maybe having to pay more for it if I’m unemployed will also take money. Other expenses like diapers and stuff are also not free. But for now, we do what we can, plan as much as we can. On the table are obvious things like relocating to a cheaper place, selling stuff, blah blah blah.
Whatever. That’s our plan. I’ll keep you posted.