The Hustle of Sistah Ant

I funded an order for a stock today that I’ve been looking at that I think is a good buy for the long run.  I’ve had my eye on it for months, and I haven’t gotten around to buying it until today.  When the market tanked yesterday, I put in my order.   I believe that the market will rebound and stabilize, eventually.  And I figure that the particular stocks I bought in my Sharebuilder account won’t crap out before that happens.  It’s only $300.  If I’m wrong, I’ll be able to live with the consequences.

I’m not moving my stock-heavy IRA into bonds.  I’d lock in my losses that way.  It would be different if I were 30 or 40 years older and had less of a time horizon to recover, but I’m just getting started.  I believe that the market will rebound and stabilize, eventually.  And I figure that the particular fund I own in my IRA won’t crap out before that happens.  It’s only $2,500.  If I’m wrong, I’ll be able to live with the consequences.

My entire house savings and emergency fund are both in the bank.  I checked on the health of my bank at this website and am considering my options for whether or not I want to move it to a stronger bank. This would forfeit future interest earnings on the money but the money could possibly be safer somewhere else.  I am not pulling all of my money out of the banking system entirely.  It is FDIC insured.  It appears that the FDIC hasn’t been wiped out yet, after huge banks have failed, so if my bank fails, I think my deposits will be secure.  Besides, if I pulled it out, where in the world would I put it?  A fire or theft would destroy all that I’ve worked for.  All of that said, however, this is subject to change.  I’m just not nervous enough to panic.

There are a few things that do make me nervous, though.  First, I am still in the job market and when my contract ends, I will have no health insurance.  An emergency could deplete my house savings or put me in debt, making me less eligible to borrow for a house.  Also, if my credit card issuers decide to lower my limits because they feel they’re exposed to too much risk, and I wind up carrying a credit card balance for any reason, this will lower my credit score because the ratio of my balance to available credit will go up.  This will also drive up my monthly obligations in proportion to my monthly income, which is another thing that lenders look at when evaluating your creditworthiness for a mortgage.  If I get a house with a lower income than I’m getting with this contract job, it’ll probably make me able to borrow less.  The possibility that I’ll have a New Years’ Eve housewarming at my own place is threatened by the job market already, and now this is further threatened by this credit crunch in the marketplace than it was before, since investor confidence is shaken.  What a bummer.

Mister Ant is in favor of the bailout, since he figures propping up investor confidence is the name of the game. He thinks that not passing a bailout, in order to avoid rewarding fat cats and big companies, would be cutting off our noses to spite our faces.  I see his point, but I still have my reservations about whether or not we want our country to buy bad debts and simply hope that they improve, with no guarantee that these debts would have value again.  No one else wants these bad debts - there is no market for them - but we want our country to spend an obscene amount of money to buy them so investors will feel better?  That scares me.  How would it affect other aspects of America’s budget health?  What effect, if any, would this have on inflation and my ability to save for a house and retirement with a devalued dollar?  Why is it that the president can articulate why we need the bailout in speeches, but he can’t answer these questions in his speeches?  I need more answers.  I am not sold on this, even though I see from yesterday’s 700+ Dow drop that continued inaction really is threatening. 

Keeping track of your spending is difficult to do when you’re on the go, but it still needs to be done, sooner rather than later.  I had a very busy, emotional, sleep deprived weekend, but you’d be surprised at how quickly expenses can add up when your mind is on other things!  Towards the end of the weekend, my mom wanted to go to the outlet mall, and I had to just sit down and figure out how much money I could allow myself to spend first.  I’m so very glad I did.  Between checking my receipts and my online bank statement, I "discovered" things I had already forgotten I paid for in the space of a couple of days!  As a result, I was able to figure out how much money I really have and how much I could reasonably spend, given my other goals and obligations.  All I bought was a sweater that was on sale.  If I’d bought anymore yesterday, I’d probably be in debt trouble right now.

I will have been to two funerals in the past four weeks.  One of the funerals, this coming Saturday, will be for a thirteen year old boy, whose mother had no life insurance on him.  The other was for my friend’s (step)father, whose (step)children cannot find his will.  Neither the young man nor the grandfather had warning, through sickness or otherwise, that they were going to die.  Now one family is trying to bury a child with no insurance proceeds to help lighten the burden.  Another family is trying to settle the affairs of their beloved father at their own expense, while facing possible disinheritance and a failure to meet their dad’s last wishes.

Get your houses in order.

And I’m going to practice what I preach, and do it right along with you, keeping you posted here on The Hustle.

Sorry to end the week on such a somber note, but time waits for no one.  Enjoy your weekend, but don’t forget to put estate planning/insurance on your to-do list.

Well they think they have a solution to the problem.  Like to hear it?  Here it go:

Bailout Deal Nears, But Will it Work?

What do you think?

Yesterday, the day before payday, I realized that I was getting paid today and had hardly touched my allowance.  Then the foolishness ensued.

I bought a new set of earbuds for my mp3 player because I couldn’t find the old ones.  Of course I found the old ones within two hours of buying the new ones.

I also bought a new CD at the drugstore because it was by a band I love and it was on sale for $6.

I picked up breakfast instead of eating at home.

I agreed with Mister Ant that yes, a video rental service is a good idea, increasing my monthly obligations by almost $7 a month.  Not much, but it’s still more.

I let my friend talk me back into my house obsession, which I’d managed to forget about in recent days.

I have finally allowed myself to speak about my closet desire to get a new mobile phone, even though I don’t need one and my current phone works just fine, and I’d have to sign a contract to get a discount, and ohgoshthemoreItalkaboutit, the more I want it.  I’m salivating at the idea of a touch-screen, Qwerty keyboard, slider phone with a internet data plan included in the monthly fee.  It is taking all my restraint to stay out of the store.

I feel so dirty after all that greed.  LOL!

Look, it’s harder to save when you spend all your discretionary income.  Temptations will always be around, believe me.  The key is to take a cue from the government and take your money off the top as soon as you get your hands on it.  I save my money as I get my check, so that as the rest of my pay period unfolds, if a temptation gets the better of me, at least it didn’t cut into what should have been my savings.  So I’m not in really bad shape.  But I still feel a little guilty about that payday-eve-jones.  It’s okay though.  I’m sure it’ll go away long enough for me to start jonesin’ again by my next payday eve.

I just don’t like the way this bailout thing is looking.  I’m glad that the President and the Fed and Congress are all arguing about this instead of just nodding, smiling, and going with whatever makes them feel a little less scared.  I don’t want them to act without thinking - this is how Wall Street got into this mess.  If the government is going to saddle my great-great-grandchildren with the burden of bailing these companies out, they better think long and hard about the kind of precedent they’re setting and the responsibility that they’re taking on.  I’m suspicious.  This is all unprecedented so far as I understand this, and we don’t even know how far down this rabbit hole of new territory goes.   I understand that the Fed Chairman thinks that swift and decisive action would be best for the economy, but I honestly don’t think rushing makes the most sense right now.  I hope they get this right, thinking about long-term consequences just as seriously as short-term patches.

I’m still giving to a charitable organization, even though things are looking crazy in the economy and I’m not saving quite as fast as I want to be.  I’m doing it because I think it’s needed in these scary economic times.  I’m thinking that people might be cutting back on donations ‘cause they’re feeling the pinch.  I like what this organization does, and I don’t want them to miss a beat.  I’m not giving a lot, but I’m giving until I can’t anymore.  I’m just remembering what it was like before I was in a position to give, and I’m glad to be able to give now.  I like the way it feels knowing that I am pitching in.  I just wanted to encourage those of you who give to charitable organizations to try to keep going if you can afford it.  People can use the help, believe me.

Edited to add: It just so happens there’s an article in the paper that’s right on topic today.

I used a conservative estimate for my tax withholding allowances earlier this year, because I’m a contract (temp) employee and I didn’t want to chance owing the government at the end of the year since my income is somewhat unpredictable.  However, I didn’t want to overpay the government, so I used the 2008 Tax Withholding Calculator to figure out how I could increase my take-home pay while avoiding giving the government too much money throughout the year.

Well, that conservative estimate was a little too conservative.  It looks like I will have overpaid the government about $1,600 by the time my contract is up.  It’s a good thing that I haven’t had too little withheld from my check, but on the flip side, I just lent my country - this means you - $1,600 interest free that could have been working for me in either my savings, my IRA, or my stock portfolio.  See the sacrifices I make for y’all?  You’re welcome.  AIG, I’ll be expecting that thank-you-note any day now.

If/When I start working again after this contract is up, I will use the Withholding Calculator again to see how much of my money I can keep.

I’ve been notified that there’s a reasonable chance that I won’t be needed at my job after next week.  Barring that, the longest I could hope to continue with this position is until sometime in October.  I’ve known this for months. 

I need an eye exam, and possibly a new prescription, but I’ve been procrastinating because I don’t have vision insurance.  I’ll probably just have to pay out of pocket.

My wisdom teeth have been bothering me.  I can’t tell you the last time I went to the dentist.  It’s been years since I’ve had dental insurance.  I guess I’ll get some Orajel, ‘cause I’m still not planning to go to a dentist.

I have a doctor’s appointment for early next month, for which I might have to pay out of pocket.

The good thing is that I have seen a few job opportunities that I’ll be applying to this weekend, which would provide me with health insurance and continuity on my resume.  The downside is that they are in the public interest, which basically means I could probably earn as much or more if I were working retail, like I used to do when I was still in school.  My debt reduction and asset gathering goals would take a hard hit if I took such low-paying work.  I would love to do that kind of work… I just don’t know if I can afford it.  But I need work.  I hate being unemployed.  And I don’t want another contract position on my resume. 

My new part time job is sending out unsolicited resumes and cover letters.  It’s crunch time.  I can’t wait for jobs to be advertised before seeking them.  I have to create one for myself.  I need health insurance.  I need a real income.  And I need to do what I can to keep from having to raid the My Own Home savings and Emergency Fund, which symbolize sacrifices made for a goal that has been really, really important to me for years - that money is OFF. LIMITS. and will remain so for as long as I’m able to keep it that way.

I wish that right now I could be a beacon of light to all those looking to be financially encouraged right now, but this is my reality.  I will say this: I am thankful for the work I have now, for my savings, for my good credit, for the fact that my old credit card debt is paid off, and for the vacation days I’ve accrued that will let me get 75% of my usual paycheck amount next week instead of the 40% I thought I would get.  I’m thankful that I whittled down my standard of living drastically for more savings, because if I hadn’t, looming unemployment would be scary, but instead it’s just annoying.  I’m also thankful for Mister Ant’s encouragement and the knowledge that we are financially here for each other.  It’s not like I’m losing a house, or my life savings, or anything.  I’ve always known this was a temporary job, and I really couldn’t have prepared for the end of my contract much better than I have. 

I’ve been too busy to pay much attention to the market this week.  I had a death in the family yesterday morning.  I’ve been spending so much time in the hospital that I haven’t been hearing much of the headlines.  But what I did hear on the news yesterday lets me know that people are getting scared, all around the world.  I am concerned about the money I am losing, but frankly, I don’t have a lot of direct exposure to the market yet.  Most of my money is in FDIC insured deposits.  I’m behind in retirement savings, but the money I do have in my IRA is recoverable with time.  I only had $300 invested in stocks through Sharebuilder, and only $50 of that was my own money.  I also believe in the stocks that I picked.  This probably sounds like a rotten time to invest, but even now, after these dramatic one-day market dips, I’m not scared off.  I just don’t have the money to invest right now.  My real worries have less to do with market volatility and more to do with the fact that I’m missing three out of five workdays this week and that will cut my paycheck for next week to 40% of its usual amount - that’s how it works when you are a contract employee and you get paid by the hour.  I might have some vacation pay that I can use - I’ll have to talk to HR.  My real worries have to do with the fact that people in my field with my level of experience are getting absolutely no love in my local job market.  None.  NONE.  Unless you want to count temporary work featuring scant benefits, no vacation or sick leave, and virtually no benefit to your resume except to show that you haven’t been unemployed.  I don’t think it’s because employers don’t want to hire.  It’s because they are afraid to make the financial commitment to hire in this economy.  For now, they’ll make do with what they have or take a more experienced hire than take a chance on training a new hire and losing them or having to face elevating their salary and benefits over a longer period of time.  What worries me is not the Dow.  It’s consumer confidence.  It doesn’t just affect whether we still buy lattes.  It also affects whether or not businesses take risks, like expanding their labor pool.  That is going to have more of an impact on my financial future than whatever the Dow is doing to my current investments this week.  I need a job.  That’s an immediate concern that affects my day-to-day life.  Once I get one, then maybe I’ll have the luxury of worrying about my investments.