The Hustle of Sistah Ant

Tomorrow I smile. 

Last August, I set aside $25 from the interest earned by my Emergency Fund so that I could start a home down payment fund in its own account.  The growth of this new account was slow going, but I figured that if I was disciplined, just maybe I would be able to put together about ten thousand dollars by October 2008.  I decided to be ambitious.  I tacked another three thousand onto that goal, because I didn’t want to set the bar too low.  Besides, after looking at the market, I figured that ten thousand wouldn’t be enough.  I set up automatic deposits through payroll and looked forward to paying off credit card debt so that I could save more aggressively.  Then I was laid off.  Then I got a job.  Long story short, blah blah blah, tomorrow I meet my thirteen thousand dollar savings goal.  I will smile.

After tomorrow, I will fuss. 

I will knit my brow and purse my lips as I make another estimate of how much money I’ll need for the house.  As I’ve already discussed before, things have changed since I made my initial estimate.  I already know I want to increase my emergency fund by about four thousand dollars.  But I think, based on more intense scrutiny of home prices, local taxes and other various fees, that it would be an excellent idea to increase the amount of the down payment/closing costs fund.  I am willing to use some of the emergency fund to help with the house, within reason and depending on the circumstances, but using the overwhelming majority of the emergency fund is completely out of consideration.  I must save more.  Thousands more.  It is not fun to rain on your own parade, but that is the responsible thing to do.  However, I am not going to ruin tomorrow.  It is my day to celebrate meeting a lofty goal early.

I can fuss later.

I really like being able to take care of the lion’s share of my bills with one week’s pay.  I’m really going to miss it when I get a permanent job, at which point I’m all but certain to make less money than I’m making as a contractor, partially because I’ll be getting real benefits.  Even though I haven’t elevated my standard of living significantly, I have elevated my savings expectations.  So I won’t feel the pain of making less money when I’m paying bills or shopping at the grocery store.  Instead, I’m going to feel it when I’m making smaller deposits to my ING account.  I’m not looking forward to it.

It’s got me thinking about Moneymonk constantly saying that if you’re not happy with your financial situation, you need to figure out a way to make more money.  

Honestly, I am not interested in working a second job or starting a small business.  I want the time that I’m not spending in an office to be all mine.  Not only that, but I have never really had a viable business idea in mind.  Just today, I was thinking that if someone gave me $50,000 tomorrow with the stipulation that I start a business, I have no idea what I would do.  I’m going to have to make career choices that give me what I want, like how Single Ma has been doing.  Multiple income streams are great, but ultimately, I’m going to have to chart another course.

The more I look at houses and mortgage calculators, the more I realize that the amount I had in mind for a down payment and closing costs and emergency fund is too low, if I want to have the kind of security I want to have going into the mortage.  I could press forward with what I have, but I would feel better if I had more money to work with.  I’d rather overestimate than underestimate.

I am talking myself out of being disappointed.  

Actually this is cause for joy.  It’s better to know this now than later.  

On another note, I’m looking forward to further career development.   I’m working on a volunteer project that will: 1) help someone in need, 2) give me valuable experience, 3) help me network with other like minded colleagues.  I’m still waiting to hear back on the interview I had, but I can expect to wait a little longer before hearing back.  I’m consistently looking at the market, but it’s tight right now - all the more reason for me to believe that this job I’m waiting to hear from has my name written on it.  Often, the good things come with a little patience.

The last time I had a big money goal, it was to pay off the last of my old credit card debt.  I worked on it for many months.  Sacrificed for it, planned for it… scribbled on the backs of countless envelopes…  I came so very, very close.  I had even started to save a little bit of money from each paycheck towards My Own Home.  And then I was laid off from my job. 

I didn’t panic, even though part of me wanted to do exactly that.  Instead, I took my entire severance pay and put it into the My Own Home account, but I didn’t do it with a lot of enthusiasm.  I figured that since I wasn’t employed, there wasn’t any point in getting too attached to the money, because financial need might make me have to raid the account.  In case you were wondering, that’s why I put the word "tentative" next to this blog’s My Own Home progress bar.

Here I am, seven months later, making more money as a temporary employee than I’ve ever made before, and saving at a faster rate than I ever anticipated before I was laid off.  I am blessed.  Today, I am 94% of the way towards my down payment goal, and given my prospects at work, I can reasonably anticipate that I will meet my goal by the end of this month, enabling me to move on to beefing up my Emergency Fund.  I am in awe - I’m on the cusp!

But I did have these fleeting thoughts:  What if my project ends earlier than I think it will?   What if I have to dip into my savings?  Last time I got soooo close without actually finishing - what if it happens again?  Maybe I shouldn’t get my hopes up too high, too fast.

Guess what?  I can’t afford to do this to myself.  I have to stay positive and not get pushed around by fear.  When I was laid off, I wasn’t able to pay off the last of that debt for another two months, but that wait didn’t kill me!  When it was all said and done, I did eventually reach my goal.  If for some reason I’m not able to save any more for a while, I’m still 94% of the way there.  And even if I wind up having to dip into the account, it can be replenished when (not if) I’m able.  What’s to fear?  Only a negative attitude.

I’m just going to continue to push and push enthusiastically until that progress bar gets all the way over to 100%!  That’s where my head is at.  And that’s where I’m going to keep it.

Last night I sat down with my receipts and added up my trip costs, balanced my checkbook, and made a plan for today’s paycheck.  Everything is doing just fine!  I have a tendency to get a little nervous when I haven’t crunched my numbers in a few too many days, so I was nervous about how my balance would come out when I finally sat down at the table with the receipts.

I did spend $50 dollars more than I had planned on spending on the trip - it was the second tour on my New Orleans trip that put me over the edge.  But, seeing as how I left myself a buffer in my general spending account, that extra $50 didn’t put me in the poorhouse.  In fact, so far as paying bills and saving for the house are concerned, I’m not even breaking my stride.  But when I was on the trip, away from home, not checking my bank balances on the internet, and not sitting still long enough to go through my receipts, I was dependent on a loose tally I was keeping in my head.  I thought I was doing worse than I actually was, and that kept me just scared enough to keep from spending too much more money when I thought I was running low.  There’s still some cash in my trip spending account.

I am not advocating this approach to personal finance.  I think that it’s better when someone knows what their balances actually are so that they can make informed spending/cash flow decisions.  Mind games are not the way to plan.  But I recognize that there are certain circumstances (like when someone is traveling) that make it less likely that someone will keep up with every penny, even though they may find themselves in decision-making positions.  I think it’s better, when your information is limited, to err on the side of caution instead of throwing caution to the wind and spending too much.

Anyway, I’m back on the grind.  I’ve still got a house to save for.  I still haven’t invested my Sharebuilder money. And, I need to figure out what purpose I want to bestow on the balance left in my New Orleans spending account.  Perhaps it should be the seed money for Christmas?  It’s about that time to start saving if I don’t want to go into debt around the time of the holidays…  I’ll keep thinking about it.

My bag is already packed, for the most part.  I AM GOING ON VACATION!  And I don’t even want to work this week - mentally, I’m already in vacation mode!

How’re my finances looking today?  Well, my general spending account is kinda decimated, because I intentionally made my allowance smaller this week.  First, I made arrangements for cheap lunch through the week, and secondly, I went out for dinner over the weekend.  But it’s okay, I won’t need anything else between now and payday. 

My New Orleans spending account is down a little, too, because I used it to buy some pretty new dresses (all of which were on sale) for the trip.  Tomorrow, I’m getting that long-anticipated pedicure (only my second one ever) and I might pick up a pair of new sandals, too.  I’m putting a little more into the Nawlins account on Thursday when I’m paid, too.  There will be plenty of petty cash for transportation expenses like cab fare, enough money for my very first professional massage, enough for beignets at Cafe Du Monde, enough for souvenirs for myself and others, enough for at least one nice Louisiana seafood dinner - I’ve never gone away from home without having to worry about my spending before.  This is awesome!  I did it by putting a little money to the side from almost every check for the past two months or so.  I can spend it without worry, knowing that it’s going to be great to come back and still be debt-free.  Now that’s a vacation!

I can’t let the month fade out without taking note that I started this blog, The Hustle of Sistah Ant, about a year ago.  I have really had a good time writing this blog and reading others’ blogs.  If you look at my net worth chart, you may notice that although I was already making financial progress before starting this blog, there is a marked difference in the speed of my progress after I started this blog.  It has helped me very much, in various ways.  For example, my self-inflicted mandate to write at least four days a week has forced me to be more reflective on the state of my finances more often.  Also, having the progress bars in my sidebar has been helpful, because I would actually be more aggressive in paying down debt and saving money just to make the progress bars move faster.  Another perk has been getting feedback from commenters - thank you so much for reading and commenting!  It lets me know that I’m not just talking to myself, and it’s helped me to learn and get various perspectives.

And, since I’ve already directed you to my net worth chart, let’s talk about it.  Since June 2007, here’s how far I’ve come in my progress:

Total difference in net worth over the past year: $25,942

I put the money into a Sharebuilder account but I haven’t done any work yet to decide which stocks and/or funds I want to purchase.  Sad.  Pitiful.  I can do better.  But hey, I’ve been distracted.  So now, I need to make this enough of a priority, because if I don’t, my money will continue to sit in a money market account looking sad and pitiful, not getting any of the action.  For all this, I could’ve put it into my My Own Home account. 

There’s this little song that plays in my head on Wednesdays, the day before my direct deposit wire hits my checking account.  It has the same melody as the 12 days of Christmas: "On the last day of brokeness my true love said to me…"  That’s it. There are no more lyrics to the song.  That part just plays on a loop.  Yes, it’s annoying, but I can’t help the songs that play in my imagination.

This week, the last day of brokeness has come not a moment too soon.  I’ve got a credit card to pay off, retirement savings to do, New-Orleans-trip-spending-money-savings to save, bus tokens to buy - oh and most importantly, household expenses to kick in on.  Whew!

I’m still thinking about buying some new clothes before the New Orleans trip, and maybe getting a pedicure before I go.  I’m not too sure about these things, but I’ll see if I can fit ‘em in.

So, I am one day from spending* my paycheck into oblivion.  I like Wednesdays!  I should really flesh out the lyrics of that payday carol, though… hey, if you guys have any suggestions, help a sistah out.

*I know, I know, there’s something that seems un-frugal about spending your whole check before you even get your hands on it, but let’s remember, I am saving Herculean percentages of every check, so even though my checking account will be lean when I get finished with it, my savings account will get fatter by the time I’m done sending money from my paycheck to fly off in several directions.

I did all the stuff I had planned to do.  I put a super-sized deposit into the My Own Home fund.  I started a Share Builder account.  I gave to folks who need help.  I left myself an allowance.  And then, I went to get gas.

I usually fill my tank once it gets to the 1/2 mark, in order to keep from eating too much into my allowance.  However, I haven’t put any gas in my since I was on my roadtrip down south, preparing to come back home.  I’ve barely been driving at all in the time since then, and even though I had less than half of a tank, what I had left has been enough for the last three weeks.  But once again, when I decided how much I would leave myself as an allowance, I didn’t take account for how much I would need to fill up my gas tank.  Certainly, I could have only put a 1/2 tank of gas in when I went to the pump, but I would rather fill it at the current price, knowing that the price may go up and that if I don’t fill up now, I will eventually - might as well get it done.  I paid $3.93 cents for each of my 12.21 gallons for a total of $48.11.  I charged it to my credit card, which I’ll pay off at the end of the month.  That way, I’ve preserved my cash flow, which is good to have in case you need it.

I think of cash flow as cash-on-hand, which allows spending without incurring debt.  If you don’t have this, and you find yourself in a situation when you need to spend money, you will either use credit to get by or cut into your emergency fund (if you have one, and you should).  And of course, if you cut into your emergency fund, you’re in debt to yourself.  If you don’t replenish the dollars that come from your emergency fund, it will dwindle and not be enough for you when you really need it, which may lead to - you guessed it - using credit and getting into more debt.  (I’ve been there before and I don’t want to go back.)  I think of my "allowance"/"cash flow"/"spending account" as the fund before the emergency fund.  I can use it for spending, and the better I budget how much my allowance should be after dealing with other plans and obligations, the lower the danger of having to either use my credit card, like I just did for gas, or cut into my emergency fund.

In this situation, I will still keep an eye on my cash flow.  As I spend money between now and my next pay date, I’m going to try to avoid spending $48 of the cash I have now, so that I won’t even have to depend on my next paycheck to pay my credit card bill.  Depending on your next check to pay for something is merely another form of debt to yourself.  The best way to stay out of debt is to pay-as-you-go, not pay-as-you-anticipate receiving future funds.

The problem here is not gas prices, my income, bills, or other obligations.  All of this analysis and spending restraint could have been avoided if I’d simply budgeted differently.  Discipline is important, but so is good planning.  This is a recurring problem area for me in my hustle - one that I will continually keep working on.