Budgeting for Reality

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Contending with reality, as I faced headlong in my last post, I think I’m off to a good start for July 2018. I’ve got the budget nailed down to the penny, including the big chunk of change for one my loved one to go into treatment plus money for fall college tuition for two kids.

I barely recognize myself — I’ve got money in the bank to pay for things now. I don’t need to put a thing on a credit card. The money is in the bank. I can write a check. What a concept.

Shocking — until now, even though we make a quarter million dollars a year, we never had anything in the bank. It was always a scramble at the start of every month to put as much as possible toward paying off previous months’ — and year’s — debts. So there was nothing much available to pay for the coming month’s expenses.  How stupid is that?

I’ve got two master’s degrees and a PhD  — but somehow I never got a basic education on handling money.

Thankfully now, having woken up,  I am wiser. At the start of the month I set aside what I realistically need for the coming month (mortgage, utilities, food, insurance, car loans, parent load, minimum credit card payment), plus whatever I need to set aside for coming college costs, and only then do I allocate money toward my debt snowball. I then put as much as I can that is left over toward paying off debt. The difference now is that I don’t have to use a credit card for a thing.

Tbis morning, I withdrew $1200 cash from the bank to cover the coming month’s groceries for the family of four and the pocket money for the two of us. I then went shopping for at Aldi where three huge bags of pantry staples that should last the month cost me $42. Okay, not organic, but how amazing is this??? Then I went to the little organic shop to get some specialty things and that cost $35 for five items. I’m going to rethink specialty stuff, like maybe I’ll make my own seitan. Then later I went to the regular grocery store for Peet’s coffee and some other basics I can’t get at Aldi’s, and that cost about $78. I also went to the liquor store and used some of my pocket money to buy a case of wine.

So all told that’s a big outlay for one day, but I’ve found that this is the best way to start the month. There will be fewer runs to the grocery store, more cooking at home, more staying on budget.

And I’m still looking at getting out of credit card debt within one year, paying off car and parent loan by January 2020, and maybe even paying off the house by January 2025.

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Image: Pierre Koenig’s  Case Study House #21

 

Reality and Its Discontents

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It feels like I spend half the day with my head in my hands. It’s getting tough now, friends. I’m not at this moment the chipper cheerleader teaching you how to shop on a budget. I’m now the bedraggled parent trying to figure out how the hell I’m going to do everything I need to do — especially now that it is clear that one kid, a very young adult, needs treatment for major depression and anxiety. Which may mean $28,000 per month.

I’ve applied for financial aid.

I’m not even going to go to what-the-fuck-did-we-do-wrong-to-create-this-mess. As one revered psychoanalyst put it, the child is the symptom of the parents.

That aside, how to handle this? Insurance may cover some — and they should but they won’t cover it all.  I still need to budget for this kid going to college in the fall in case that miraculously works out. And I’ve got another kid starting college. At least they have some sweet financial aid, but still the bill is going to be ten grand a semester for that one, easily 20k for both.

For a moment I thought about just plunking down a credit card on which I’ve got a few tens of thousands of dollars of credit available. But the thought now is so incredibly painful that I’m simply not going to do it. It’s already horrible enough that the current credit card debt has been hovering in the low 80-k’s for a few months. Holy hell, I’m not going to go back to over 100k in credit card debt.

And to make it worse, on my recent travels, I lost my iPAD. Every time I turn around I want it, but it’s not there. And I can’t bear to plunk down nearly a thousand dollars for it and all the accoutrements.

Yes, this is what financial reality looks like. This is the kind of thing I previously avoided in my fantasies about how I made so much money and could just put whatever on a credit card. Now I know we’re broke and can’t have everything. And I feel the pain when what we really terribly need may be out of reach.

Moola and the Mediterranean

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I just returned from another trip, this time to a Mediterranean country: four days in a big city for a meeting followed by ten days in a more remote region where my mother had a hillside house built. (Yes, that’s the view above.) She and my siblings now take care of it and visit when we can. On this trip I focused on getting a local bank account and a way to have the utilities automatically paid from it. That was a huge hassle, but now it’s done. I put $1,000 into the account and my siblings are putting in some as well. We’ve put in so much because the bills had not been paid in a long while. Going forward, I expect the total to be maybe $30 per month total, just $10 each. Given that the house is totally paid for, that’s a pretty sweet deal.

I just added up how much I spent on that trip, aside from that $1,000, and also apart from the big airfare and hotel covered by my research account: $775 for other travel costs (including a short plane trip and a rental car for ten days), an extra $120 for the hotel in the big city (since I’ve now exhausted my research account for the academic year), and $537 that I used to buy groceries, eat out, and pick up a couple of small things, including one hat to ward off the sun. (Oh, holy hell, did that hat violate my year of no shopping? Can I just say that it was a cosmetic necessity?)

I am actually quite amazed that I only spent $537 on this and that over 14 days — which included a handful of extraordinarily delicious meals out and the costs for making several meals in for family and friends. This was no accident. At every moment I was super-conscious of my spending, including at the grocery store. And except for that hat, I was religious about my year of no shopping. No matter how I bemoaned not having packed adequately, I did not shop for any clothes, jewelry, shoes, or bags. I walked right by every kiosk selling local jewelry, I ignored the shoe stores. I lived with what I had.

The whole trip did slow my debt reduction process, but at least (forgive my rationalizing) I can write off the expenses since a good deal of them were work related, including the meeting in the big city and meeting with a couple of colleagues in the remote area.

I am also taking care of that house. In the past I might have ignored the need to take care of the utilities and set up a local bank account, but now I’m hyper-focused. This is all not just about paying off debt but about taking full responsibility for my life. And, yes, it’s a very nice life.