The Hustle of Sistah Ant

I have given some thought to the possibility of picking up a second job.

When I was in college, I worked a two job minimum throughout.  I was a multiple-job phenom!  The last time I worked two jobs I was living down south, trying to make a break for the Philly area.  I’d just finished school, had no definite "career" job at that point, and decided to temp until I figured out what to do with myself.  To supplement my income, I took a second job in a department store from 6-10pm after work and on the weekends.  It wasn’t so bad.  I had no time for anything, though, besides sleep, food, and laundry.  When I finally got up enough money to move to the Philly area, I was sooo glad to be unemployed, looking for just one job!  I haven’t had a second job since.

I could use some extra income now, though.  I’m taking a night class, but that should be over in about a month.  When the class is over, there will be a vacuum in my schedule, and maybe I’ll veg out for the first week or so… but then I’m going to start thinking, "You know, if I got a second job, I’d have ___ much more in my monthly budget that I could put towards debt or savings or even incidentals, which I’ve been really stingy with lately."  Retail jobs are soooo easy.

But then I’d have to think about how much my feet hurt at the end of the days working retail.  I’d have less time to catch up on the robust social life I had with my friends and family before this stupid night class started.  And worst of all - less time with my boyfriend.  That might be the proverbial last straw, right there.  I mean, I already have a plan for my debt.  And as long as I can handle emergencies (my minimum emergency fund amount is almost in the account), I should be OK, right?  I think that a big part of getting out of debt and having a solid financial foundation is about enhancing quality of life, and totally killing my social life to get out of debt, when I already have a plan to do so, is pretty much defeating my ultimate purpose.

I think a better strategy is to try to beef up the amount I can earn during my day hustle.  That’s totally what this night class is for, anyway.  If I made more money during the day, I probably wouldn’t even consider a night job.  Let’s make that Plan A.  Let’s make a second gig Plan B.  I’ll probably revisit the issue early next year and see how I feel about my progress next February… 

I talked to my mother the other day.  We talk about money as casually as we talk about the weather.  I told her about my plan to divert funds from tax withholding for paying off my debt and she thought it was a great idea.  Having her encouragement means a lot.

I just switched grocery stores this weekend.  The prices aren’t much different, but the quality of food is.  They also had some things on sale that I like to eat that aren’t on sale at my old store.  I tend to buy store brands as often as possible - some things I just can’t do that with, like ice cream or yogurt.  Some things I only buy when they’re on sale.  I always use the keychain card the stores give you for discounts, and it really can make a difference.  I don’t have the patience for coupons, and besides, they don’t make coupons for stuff I buy, anyway.  Whenever possible, I get stuff from the dollar store.  And I eat less meat than I did growing up - both for health reasons and for financial reasons.  That habit started in college when I found out just how much a pack of pork chops really cost.  I could probably save money by shopping at Reading Terminal, shopping in bulk, and having a deep freezer, but I don’t have the time or space for that right now - one more thing I don’t like about not having my own house.

As much as I want the house though, I realize that other things will tug on my wallet and time.  More space to clean.  Taxes.  PMI.  Repairs.  Homeowner’s insurance (mental note, remember to call and get that renter’s insurance from my new auto insurer for the discount).  Higher utilities bill.  No heat/hot water included…  But still… it’ll be mine!  That’s the important part, right?  My own dirt.  A veggie garden.  No footsteps above, no shouting beneath, no dingy common hallway.  Counter space.  Cabinet space.  My own washer and dryer.  Space for a deep freezer!  Storage space for bulk groceries and out-of-season clothes!  Maybe even, dare I say it?  A dishwasher.  (Not that I’ll run my water bill up using it, but work with me here.)  Aaaahhhhhhhh.  Now I remember why I’m budgeting so much and attacking this debt so hard… 

temporary layoffs!  good times… easy credit rip offs!  good times… scratching and survivin!  good times… hangin in a chow line! good tiiiii-himes!  ain’t we lucky we got ‘em…

Ain’t I lucky I got good times!  Why is every pay day an event!  That’s just hilarious, cause I don’t know why.  Every payday I’m broke before I get my check, just like my mom.  We both know where the money is going before we get it.  Electric company, credit card companies, housing, food, etc.  The end, right?

Wrong.

One of those places that my paycheck is committed to before I get my hands on it is my own piece of daydream - my savings account.  There isn’t much in there, right now.  I’ve had more before.  But it’s growing.  It is a symbol of what I can do - be wise enough to put some away.  It is a symbol of my parents’ accomplishment.  If every generation is supposed to do better than the next, then I am on my way.

I didn’t grow up in the projects hand-to-mouth or anything.  With the exception of time my mom spent full time with me before I started school and occasional layoffs, both my parents have always worked during my lifetime.  They’re in their second home as owners.  I never needed for any essential thing, be it clothes, food, education, or recreation.  They sent me to private schools from sixth grade on, and college was not an option for me, it was an expectation.  This differed a little from their upbringing - they both have GEDs.  But education was paramount in my home.  They knew how important it would be to my future.  They’re awesome people, and I thank God for them.  But Lord help ‘em, they don’t have a savings.  No thousands tucked away here or there.  No retirement funds.  No stock portfolios.  Just insurance, a few pensions vested to come from various old jobs, paychecks every two weeks, the occasional lottery tickets, and hopes that Social Security won’t implode during their lifetimes. 

My dad is so adamant about my retirement planning that he wears on me every chance he gets to start something, ANYthing, NOW, before I get older.  He and my mom are in their fifties now, and even though that’s the new forties, it’s still a decade away from retirement.  They figure that they’ll just keep working, from now until they just can’t anymore, to pay the mortgage, the electric bill, a secondary insurer to Medicare, food, etc.  It’s distressing to think of them getting out the door to work hobbling on canes.  But when I try to encourage them to save and invest while they still can, they say they can’t make any room in their budget for it.  Then I go home to visit and I see new appliances, new curtains, new landscaping, and the latest flea market bargains.

Know why it’s taken me so long to make a retirement account a priority, even though I’ve known as much as a decade ago that starting young is best?  Poverty, and the wrong attitude.  In undergrad I didn’t have enough to put to the side (which is how started to I get into all that debt).  In grad school, I didn’t make any money to put to the side.  And now, I’m in so much debt, I want all of what little money I have to be highly liquid in case of emergency, so that I don’t get into more debt.  It’s hard to imagine plunking down hundreds or thousands of dollars on a future that’s decades away when my debt is weighing on my choices RIGHT NOW.

Know when I woke up?  When I found out that you could start a Roth with as little as $250 - or even $25 increments which get invested once the balance is up to $250.  Know why that got to me?  Because not even two months earlier, I purchased a digital media player for $249 plus 7% tax.  Nuff said.  From that point on, savings and retirement became affordable and do-able.  Every paycheck I get says so.  My older self will thank me.

I have been all over the internet trying to figure out whose Roth IRA, out of those I can afford to start, would be my best investment tool.  I can really use an appreciable asset in my net worth balance sheet.  I’d also like to use these last few years of my twenties to try to take advantage of the miracle of compounding - my 20th birthday present to myself was supposed to be my very own first investment.  Seven whole years have gone by and all that unrealized interest is lost to me forever.  I really want to get started with the extra paycheck I’ll be getting in August.

However, my enthusiasm is a little bit limited because of the constant tension between my competing priorities of socking money away and getting out of consumer debt.  I don’t know, given my zeal to aggressively reduce my debt, if I can get an entire $4,000 contribution into a Roth by the 2007 tax year’s deadline, but I figure that any amount is better than a big old goose egg.  Another competitor for my money will be  the 401K I’ll be eligible for through my employer in October.  I intend to contribute at least enough to get my employer’s full contribution - I have NEVER turned down free money and I don’t intend to start at this stage of the game.

Whenever I wonder if I can do all of these things at once, I remember that I got by on about $9,000 a year while I was an upperclasswoman in college.  I had at least two or three jobs at all times, but my lights and gas were never cut off, and I didn’t starve to death.  If I could do that, then surely I can properly allocate my discretionary and pre-tax income wisely with several times the resources I had then.  Sure I’m in more debt now than I was then, but I’ve got more experience and financial savvy now. 

Any recommendations for a ROTH for me to consider (and features I should research in particular) would be greatly appreciated.  I haven’t found a tutorial online yet, and I don’t want to just pick one off of name recognition or because the company’s web site is pretty…

Now I know I have a lot of debt.  And I know I don’t have a down payment for a house yet.  And I know that things take time.  But Black Enterprise posted an article about a woman right here in Philadelphia who found down-payment assistance from two different organizations to buy her first house.  So I decided to follow up on the leads in the article, to see if I could get similar assistance down the road.

Of course, the programs look great.  Of course, I make too much money to qualify for either of them - or for any of the other programs I’ve found in my searching thus far.  I make too little money to ignore the prospect of searching for first time home buyer assistance, and too much money to fall within 80% or less of the average median income for my metropolitan statistical area, which is somewhere above $70K.   I’m in that step-child 20%.  It’ll get even worse as I get raises and start putting away retirement assets and the like.  So far, it looks like I’m going to have to do this thing by myself.

(That doesn’t mean I won’t continue to look for help, though!)

I want nice things, just like a lot of other people.   Problem is, I’m a tightwad.  Whenever I want or need new clothes, like now, I wind up making do with what I have.  I never know when I might need to use the buffer in my checking account for something unexpected.  Besides, if I have any extra money, shouldn’t it be going to something crucial, like paying down this ridiculous amount of debt I have, or boosting up my emergency fund?

Thing is, as long as I keep thinking that way, I’ll never buy new clothes for work or play.  And clothes don’t last forever.  They fade, they stretch, they shrink, they fall out of my favor, buttons fall off, hems fall out, and though I’ll do buttons, I don’t know if I have patience for all that other stuff.  Every season, I give or throw clothes like these away.  I hate clutter.  But too much time saying later, later, later, puts me in the exact position I’m in now -wearing the same clothes over and over again, struggling to make it look like I have more than a week and a half of clothes to rotate.  And I never have any money set aside to spend to get myself some more clothes.  Another problem is that, even though I’ve been shopping like this my whole adult life, I HATE bargain shopping.  I’m tired of spending hours wading through stuff I hate in order to find stuff I can tolerate.  Maybe if I was able to shop with some bank, I’d enjoy it more.  I’ve always hated the process of shopping.  For the past decade, it’s been one long exercise in settling for less than what I really want and feeling like I don’t have enough to get what I really want.  It turns into an exercise in guilt when I allow myself to buy something I really like that isn’t cheap or on sale, even if I can afford it.  I might shop twice a year, if I can motivate myself to do it.

This is the prime of my life and I want to look GOOD.  I want to like what I’m wearing EVERY day and not just once or twice a month.  I want to like the way ALL my clothes fit me.  And I don’t want to go into debt to make it happen.  Perhaps I should create a particular savings account that is specifically designated for spending.  I can put a nominal amount in there each month until it grows to something I can work with, and then whenever I want to shop, I can do it guilt free with that account.  Thanks Boston Gal!

In the meantime, I think I’m going to be hitting up as many sales as I can afford this coming August.  I haven’t figured out yet where the money is coming from - I don’t want to derail debt repayment to make it happen.  Lemme give it some thought…

I noticed a while back that for two consecutive months, I only paid the minimums on my old credit card debt.  My original plan was to pay at least twice the minimum - I totally make enough each month to cover at least that much of the balance.  I had to take a look at my spending and find out what was going wrong.  So why did I wind up coming to the conclusion for two months in a row that the minimum was all that I could afford?

Three words: that damned plastic.

I had to get rid of the crazy interest rates that were keeping me from paying down my debt, so about six months ago, I consolidated my credit card debt, putting the balance on a new line of credit to get a better interest rate.  This resulted in zero balances for both of my credit cards and one monthly payment that’s supposed to get me out of the balance after six more years of paying interest.  But hold up, I’m not trying to have this mess on me for another six years.  The plan is to have it all paid off by August 2008 at the latest.  But in order to do that, I have to send in way more than the minimum payments. 

Yes, it feels good to have a zero balance on those cards.  Yes, it feels good to be able to ring up a balance and then pay it down to zero before interest accrues.  But just because I CAN doesn’t mean I SHOULD.  Sheesh.  You’d think just looking at the amount of money I’m trying to pay off on old credit card debt would make me lock those cards away, but here I was using them again.  And the worst part was that I was using them because I wanted stuff that I couldn’t afford using my buffer (see my post of 6/20).  I figured, well, I’ll have the money next month to pay it off, so it’s OK to use the card now.  What’s even worse is that on some level I knew I was wrong when I was thinking it.  Unh, unh, unh.

So now, I have to put my cards back on lock down before I get myself in trouble.  The money that I should have been using to pay down the balance on my OLD credit card debt was instead being spent on trying to pay off NEW credit card debt before interest accrued.  The horror!  I am so ashamed…  This is how come other people get consolidations and wind up in worse debt than they tried to claw themselves out from in the first place, and I promised that I wasn’t going to do that to myself or my future family.  If I were to keep doing this, it would take me SIX WHOLE YEARS just to get out of the old credit card debt, let alone my other debts.  No thanks!

Well, the good news is I’m nipping that mess in the bud.  I already know how to get by without using credit cards - I’ve done it for years before now to keep from maxing out.  I can do it again.  This month I paid more than the minimum.  And next month, I’m instituting a new method.  My very own personal mandatory monthly minimum, withdrawn automatically from my account without any further effort on my part. Thanks, Single Ma!  (It’s more than twice the required monthly minimum, and I won’t even feel the difference in cash flow, cause it’s made up of tax and insurance premium savings.

My I-Guess-You-Can-Call-This-A-Budget

I am paid biweekly, and as much as I wish I could handle a month’s expenses on one paycheck, I’m not there yet.  I also am not able to use the 60% solution.  My first check of the month goes to everything but rent and the car note, which are covered by the second check.  My job deducts pre-tax dollars for my health insurance and a program called TransitChek, with which I buy the bus tokens I use to get to work using pre-tax dollars.  I have to figure out how to account for this when I file next year - according to my pay stub, this decreases my taxable wages.  Of course, my taxes come out next - fed, state, and local.  Philly has a wage tax of 4.5% - I hate it.  Then about 6% of my gross pay is deposited directly into my bank’s savings account, where it sits until automatic transfers take it off to my ING account.  (If you’ve seen my debt, you’d know why it’s 6% and not 10%.)  By the time I log on to my bank’s website and pay the minimum on all these bills, I’m left with a few hundred dollars, at best. 

I take the remainder and this is where my actual budgeting occurs.  When I was little, I used to watch my mom sit at the table with a pile of bills and scribble these long columns of numbers down the back of one of the envelopes.  I didn’t understand that childhood memory until college, when I found myself doing the exact same thing.  I sit with my checkbook register, a calendar, a calculator, and my bills.  I never was able to make that transition to Money, or Quicken, or whatever else there is out there.  I’ve been meaning to, but so far, my mom’s back-of-the-envelope system works just fine for me.

Day-to-Day

I anticipate how much money I’ll need for the next two weeks for groceries, prescriptions, gas, a parking meter card, laundry and particular incidentals I know about in advance.  For example, a while back, I took a trip, and I included spending money as an "incidental" that I knew I’d need in my pocket while out of town.  This amount is deducted from the money I had leftover after taxes and bills.  At this point all of my mandatory expenses are accounted for. 

The Buffer

There is always money left after these day-to-day expenses are taken out, usually something between $100-$200.  This is where my discretion gets tested every month.  I try to leave some money in the checking account as a buffer for who-knows-what-may-happen expenses.  Stuff like a sudden craving for pizza, or remembering someone’s birthday at the last minute, or EZ pass taking out $30 whenever I use that much in tolls.  However, I don’t want to blow through all this money - I’m trying to get out of tens of thousands of debt.  So I’ll try to at least cover the amount of interest that I know will be added to the balance of my old credit card debt in between my payments, in addition to my minimum payment.  Everyone who struggles with debt knows that a minimum payment gets whittled down to darn near nothing after they slap that interest on you.  If I can’t pay all of the interest, I pay as much as I can without destroying that buffer. 

My buffer is precious.  First, it keeps me from going under my account’s mandatory minimum of $100, which costs $15 in fees.  (I know, I should do something about this.)  Secondly, it keeps me from dipping into my emergency savings over dumb stuff.  Third, sometimes I know I’ll need my buffer to supplement my balance after my NEXT paycheck, because I know a big expense is coming up (this is how I save for upcoming expenses without touching my emergency fund).  This part of my budgeting is different every month, and it depends on what’s going on in my life.  It’s flexible.

Accountability to Myself

One thing it seems others do that I don’t is evaluate whether or not I went X dollars and Y cents over budget in Z area.  First, I usually don’t calculate amounts over budget.  However, I do hold myself accountable - I know when something ain’t right.  It usually happens when I’m struggling with a really small buffer until payday, or when I’m only paying the minimum on my debt repayment.  Then I go through my checkbook register, which I keep vigilantly, and balance against my online statements faithfully, and examine where exactly my money went.  Then I adjust my behavior accordingly, which I’ll discuss in my next post.

I’m so happy about my little progress bars!  They’re even better than my quasi-quarterly statements.  I could use some more progress bars, but I don’t see the point right now.  My ING savings pot and my old credit card debt payments are the only things besides starting an IRA that are important to me right now (and they’re the only areas where I am making any progress worth measuring).

I’ll be done with the ING goal quite soon - certainly by August.  That doesn’t mean that I’ll stop saving, but I just plan to start saving in a different way.  That’s when I plan to start my Roth IRA, if impatience doesn’t get the better of me first!  I’m going to split the amount of direct deposit from my check into my savings account between my ING fund (the smaller amount) and my IRA that I’ll start with August’s extra paycheck (the lion’s share).  I think that’s when I’ll make a progress bar for three months’ living expenses, and see how long it takes me to get there.

Recent changes to my tax withholding will help me pay the old college debt that much more aggressively.  When I’m done with the debt consolidation, which is actually a line of credit that I picked up to get a lower interest rate and a fixed term for my balance, my next target is my private student loan, and after that, I will pay my car loan off early.  Then, provided my budget can handle it, I’m going to start trying to pay off my big whopping grad school debt.  Maybe I’ll even get off the graduated repayment plan!  That’s the grand overview.  The faster I can raise my income, the sooner I can get this stuff done.  In the meantime, I am paying minimums on all of my debt except for the debt consolidation loan.  It feels good to know that I am shedding the baggage of my college consumer debt - all those car repairs, prep courses, textbooks, groceries, interview suits, (ahem - that one trip to Florida) and the like.  It will be such a psychological victory to conquer that goal!!!  I anticipate finishing that progress bar by next August.  If I’m really good, I can finish early.  I might have enough juice to ask someone for a mortgage after I pay it off.

*sigh*

I know I shouldn’t compare myself to anyone else, but for goodness’ sake!  Why does every single personal finance blogger I’ve found so far have a positive net worth?  Don’t get me wrong, I don’t begrudge them the fruits of their diligence.  But it would be nice to have some company down here in this negative net worth pit, so I wouldn’t feel like I was the only person ever to get into this much debt - so that I wouldn’t feel like I am the only person looking at zero as a goal.

Maybe, when I’m on the positive side, I’ll put a net worth progress bar up, starting not at zero, but at my November 2006 position, just so that negative net worth people who come to my site will gain some assurance from the fact that I didn’t start out positive either.  Matter of fact, why don’t I just do that today?  Matter of fact, I will have!