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Changes Coming – Decrease in Work Hours

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Since April, I have been consistently working 70+ hours per week – 40+ for my W2 job, 25+ for my primary 1099 job and then a variety of other hours for other 1099s. This week, my primary 1099 announced that they would be reviewing contracts for reduced hours for the next quarter. And now I will be decreasing my work hours, at least temporarily.



While I was not worried, as I am one of their top producers, I thought it might be a good time to cut back a little without long term repercussions. As of this week, I am cutting back from 25+ hours per week to 10-15 hours per week for them.  I am also taking the last 10 days of the year off from them.

Time to Revisit My Monthly Budget

Now I must revisit my budget, at least for the next quarter. And test the waters on cutting back just a bit OR opening some hours to another opportunity (no, I don’t have anything waiting.)

During my conversation with them, I let them know that I would like to revisit this in early January to plan for next year. And that was great for them. (I got an email ‘thank you’ from my bosses boss thanking me for voluntarily taking a cut in hours to help them plan for the rest of the team.)

I am not thrilled with my cut in budget. But I am excited with the opportunity to see what working less hours feels like, especially over the holidays.  Want to help me out…take a look at my recent budget, I’m taking about $800 out of my 1099 income per  month for November and December.

I will be working on the cuts over the weekend. I need to put them into place soon.

And on the Personal Side

I am hoping this will help address some of the issues my kids are facing specifically tied to my limited availability due to all my work time. This was really the driving reason for my quick decision to test drive working a few less hours.

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Unpredictability

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It’s funny, even after 3 years of blogging here, you guys always keep me on my toes! When publishing posts that I think might be controversial (like this one or this one), I’m met with nothing but understanding and support. And then I write a post that I think is more innocuous (like this one) and I’m met with backlash on a level I haven’t seen or experienced since early on in my blogging days. Before my financial successes, I was initially met with quite a bit of criticism (some constructive, some….not-so-much).

Nevertheless, I’m in academia. If anyone is familiar with the struggle of responding to “Reviewer #2” (an academic meme), then you know you must learn to grow thick skin.

For the record – nothing in the comments was as bad as “Reviewer 2.” In fact, most of the critiques were well-founded and reasonable. I agree with (most of) you! It’s definitely time for a reset. I’ve been working toward that end and am making some good progress on a total budget overhaul. I appreciate the time and efforts many of you took to leave tips and suggestions or recommendations. I’ll look forward to receiving more help and support when I actually post my budget numbers (eeeeeek! I’ll need it!)

For the time being, I just wanted to pop in and say thanks for your feedback! If you haven’t yet, check out the comments on my “controversial” post – I’m making my way through and trying to respond to as many as possible. I’m not always responding to specifics (in terms of numbers) because some of that will be addressed in a forthcoming budget post.

Have a great rest of the week!

~Ashley

 


Increasing Student Loan Payments

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Nothing like being kicked when you’re down, right?

Well, I’ve had a good run. After 3 years of Income Based Repayment where our student loan payments were only a couple hundred a month (it varied, but was never over $300/month in total), I knew there would be some changes in store after updating our income info using last year’s tax information (this update is required annually). What I did not know or expect, was that the change would be SOOOOOO extreme.

Overnight, we went from a minimum payment of $300….to a minimum payment of over $1,000. THAT’S MORE THAN OUR MORTGAGE!!!! My take-home pay is under $5,000/month, so we’re talking over 20% of our income!!! AHHH!!!!!

After my update, I was notified that we no longer qualified for IBR based on last year’s income. Unfortunately, this occurred during summer when all our finances just went straight to hell so I didn’t give it much thought like I should have.  No thought, that is, until the payment was auto-drafted and my account ended up being overdrawn.

To say I “freaked out” would be an understatement. It was my own fault for not paying closer attention, but I felt totally blind-sighted!

So I did something that maybe (probably?) messes up my credit. But I felt I had no option. I called and asked for my student loans to go into forbearance status for a few months. It was approved the same day. I’ve continued making smaller-sized payments (in the $200-$300 range), but no payment is actually due until January. I’m trying to reapply for IBR with our current income (since the update was based on our tax information from last year, it showed a much higher salary than what we have this year given that hubs no longer works and I dumped my part-time job, too).

Re-doing our current income paperwork is a whole process, as you can imagine.  I haven’t completed it yet but my hope is that this voluntary forbearance gives us the time to get all the paperwork submitted and processed and – fingers crossed – maybe we can get approved for a more reasonable-sized payment. It will still likely be larger than in the past. But we just cannot afford $1,000/month right now as a minimum payment. We’d be much more comfortable in the $300-ish range. I did talk to a representative who said there are other programs available, too (e.g., I was told we could apply for the “standard extended payment”). I’d love to get back on IBR if we can qualify but, if not, I’m glad other options exist. The one problem is the TIME it takes for all that stuff to be processed. I felt backed into a corner with the forbearance because I needed a lower payment NOW and didn’t have time to wait a month (or however long) for a new application to be processed and approved (or potentially rejected).

So that’s where we’re at with my student loans. Another piece of the messy financial puzzle.


Retirement Planning

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Let’s be real, if it weren’t for the mandatory retirement required by my employer (we’re required to contribute 7%, which is matched dollar-for-dollar by my employer!), I’d probably be a ways off from any serious retirement discussion. I mean, we should all be doing it, but when you’re just trying to pay your monthly bills, you’re probably not super concerned about how you’ll be paying for your golden years.

But we should be! Especially with some hints of BIG changes on the horizon!

First, did you see the IRS’ announcement with 2018 pension plan and 401(k) contribution limits? If not, check it out here. For the time being, annual income limits are going UP for traditional IRAs, Roth IRAs, and Saver’s Credit! That’s good news to those in the stage of life to be maxing out retirement contributions!

The reason I use the verbiage here (“for the time being”) is that, right on the heels of the IRS’ announcement, talk from the Whitehouse is suggesting steep reductions in the annual limits allowed for tax-deferred retirement accounts. Check out this piece from the New York Times with more info. Some of these (rumored) reductions would be seriously dramatic.

Where are you in the retirement savings spectrum? Are you actively putting away money for retirement or still in full-on get-out-of-debt mode? I have mixed feelings about my work situation. I like that I’m being compelled to save 7% (+ the 7% employer match!), but I do wish I had the freedom to drop down my retirement contributions in an effort to get out of debt quicker!!!

I sure do hope that by the time I’m able to fully focus 100% on retirement that the investment vehicles to do so still exist! My Dad (before being diagnosed with FTD) was a financial advisor all his life. He has cautioned us for years that he felt Roth IRAs would eventually be taken away in their entirety (note – this is just his gut – no special “inside info” here). He’s urged us for years to get our financial houses in order and be in a position where we can max out our Roths since, in his view, they could end up disappearing soon!

 


Summer Camp

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I realize that my stubbornness regarding the kids’ summer camp is rubbing some people the wrong way. I also realize that I am spending a great deal of money on their summer camp. In fact, the amount I am spending is probably more than I’ve spent on their weekly summer camps for the last 5 or 6 years combined. I am aware of this. I own this decision. And as much as I would like to put the money towards something else, my kids will always come first.

Summer Camp Reasoning

With that being said, and all the comments I’ve gotten each post, I felt like sharing my thoughts and reasoning was necessary. I’m sorry if you do not agree with this choice, but this is one choice I am not willing to reconsider.

  • The kids will be 13 and 14 next year. It will most likely be their last year going to summer camp. They will both be old enough to get part time jobs the following year, and will want to (they already want to.)
  • They are REALLY isolated in this tiny town. As much I attempt to get them out and involved, it’s just a completely different world here. These weeks are camp at are a needed respite from that isolation. And they LOVED this camp this past summer.
  • Although I have been attempting to hire someone to help facilitate getting them out and about, even just to volunteer opportunities, well, I haven’t had any luck. The summer is worse since their brother will be gone again. They understand that this camp commitment will replace any chance of me hiring someone, and they are in agreement.
  • They shoot guns, ride horses, jump off huge platforms onto blobs in the lake, play nightly games, go camping and so much more that they have never done before. Some I’ve never done before. I want these experiences for them. I never got to go to summer camp. I want this for my kids. I can’t give them everything I want to give them, but I can give them this. This is in my grasp now.
  • And probably the most selfish reason of all, but with this camp, I get TWO WHOLE WEEKS of me time. As a single mom, this is just a breathe of fresh air. Two weeks where I don’t have to drive anyone anywhere, feed anyone, answer calls about drama at home and so on. Unless you have walked in my shoes, don’t judge. I don’t EVER get a break, NEVER.

This is my justification, excuse, whatever you want to call it for the camp commitment. I know it is delaying my debt free life a little while. But I also know I won’t get this time back with my kids, they won’t get time in their life back.

I can’t be the only one with a hold out in their “minimizing budget.” Do you have an item in your budget that others would question? What is your Achilles heal when it comes to your money choices? Obviously mine is my kids and their activities.


Plan #1: Pay Off Debt

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I truly appreciate everyone’s thoughtful guidance and feedback to my last couple of posts on my Current Debt Load and desire to Increase my Credit Score. I am still working through all my lists of tips and suggestions. And frankly, it is too overwhelming to me to come up with a master plan. Thus, I’ve come up with a few bite size plans that give me immediate action AND immediate gratification! The OVERWHELMING advice that stood out, as expected, is pay off debt.

Thanks to our mostly No Spend Month, I have some extra money sitting around here at the end of the month. And it is burning a hole in my pocket, let me tell you! That leads us to the first plan.

Pay Off Debt

I will be tackling three debts with everything I’ve got with the goal of $0 balances on all three by the end of this calendar year.  Here’s my plan:

  • Amazon (current balance $527) – pay in full November 3rd with $$$ saved through No Spend October. This will bring it to a $0 balance before the statement date for the month of November. Question: do I leave the account open or close it? Bearing in mind the affect on my credit score.  Guidance please.
  • Computers (current balance $2,655) – pay $500 the first week of November with $$$ saved through No Spend October. And review November and December budgets to see if I can find a way to bring it to a $0 balance before the end of the year. Maybe a modified no spend month…we’ve still got quite a bit in our pantry. This will drop the balance quite a bit before the statement date for the month of November (yes, I’m still thinking of my credit score, but only as a benefit of making wiser financial decisions.) Question: do I leave the account open or close it? Bearing in mind the affect on my credit score.  Guidance please.
  • Collection Acct (Apartment) – call and see if I can negotiate a 1) pay to remove arrangement and 2) settlement amount, effectively decreasing the amount I must pay. Again, I will attempt to close this account out by the end of the year.

What about my credit card?

For the time being, I am going to keep using my one credit card as a revolving line of credit, effectively paying it off every month so I do not accrue any finance charges and using it to pay all my regular budgeted items.

I think this plan is very do-able for me. It’s definitely trackable. And if I could eliminate these three debts over the next 2 months. Well, that would be AWESOME!!!!


IRS Frustrations

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The IRS is currently working its way to the top of my list of most hated organizations to deal with.

My current Top 3 List of Organizations I Hate Dealing With include:

#3. Social Security (I am the representative payee for my father so I have to deal with them in reference to his disability payments, and it suuuuuucks the life out of me!)

#2. IRS! Read more below.

#1. Navient. Oh Navient, you know how much I hate you.

(Side note: Hmmmm, interesting how 2 of the 3 are government organizations and the third is also backed by the federal government. Inefficiency, much???)

Nothing like calling the IRS, sitting on hold for half an hour, and then having the line disconnected. Only to call again, sit on hold again, and have it disconnected again. I think there might be a 30-minute time hold limit and then the IRS system automatically disconnects??? I’ve been sitting on hold while working at my desk so I’m not out and about with poor cell service or anything like that. Grrrr!!!!! If you can believe it, I’m still trying to set up a payment plan from my 2016 back-taxes!!!! AGH! In April we sent a huge payment and tried to initiate a payment plan at that time. Thought it was all set up, but it turns out it was never accepted. I’ve tried calling multiple times but have been thwarted every time (to clarify, I’ve been able to speak to people, but they can never help me – they have to mail me something to sign, or transfer me to another department. It’s a whole cluster-f over there)! I’ve been making payments online through their online system just so they’re receiving something, but it hasn’t been officially set up yet. I was just able to (fingers crossed) finalize everything today, but they still deal with 1983 technology so the official agreement has to be mailed out, signed, and returned. Sooooo, still not completely set up but at least it’s progress compared to the past 7 months of nonsense. The issue, if you’re curious, is that when we did our 2016 taxes we also had a small amount they claimed we owed from 2015. We had an accountant help us with everything and agree the 2015 charges shouldn’t exist. So everything was on “hold” with 2016 stuff because we’d refused to sign an IRS agreement of taxes owed for 2015. I guess they couldn’t move forward with any payment plans unless and until the discrepancy was resolved, which took a long time and a lot of snail-mail back-and-forth. (Who doesn’t use internet these days??? I mean, I know it’s secure info but there are lots of ways to encrypt email, right???)

Anyway, it’s been a pretty shitty past couple of days. A lot of stress with work drama and some nonsense going on at our kids’ school in addition to the ever-present financial stress we have in our lives currently. I’m glad to have this minor “win” on the IRS front. Not that it’s even been officially completed yet. But I think we’re finally on our last step. Supposedly, the papers will come in the mail, we sign and return, and everything should be set for our first OFFICIAL payment starting in December. We’ll be paying $283/month, which is significantly LESS than what I’d been paying previously through their online system. The reduced payment means we’ll be paying for a much longer period of time (ummmm, approximately forever???) But with our serious budget shortfall going on right now, we really can’t afford to continue making larger payments. So it is what it is. And we keep moving forward.

My motto the past few days has been: Make today better than yesterday and tomorrow better than today. My husband thought it sounded a little pessimistic, but I think it’s optimistic. Looking forward to a better tomorrow! 🙂