Lifestyle changes

So I have this fantasy. I picture myself the embodiment of financial discipline. I pack our lunches everyday, I don’t buy clothes, I manage our household expenses with precision. I in-source, I frugalize, I scrimp.  And at the end of the month I have ample extra cash to which I apply dutifully to our debt. I maintain this discipline effortlessly and without much noticeable disruption to our life and then reveal to my husband a short time later – ta da! I did it! I just tried a little harder, made extra payments that you somehow didn’t notice and guess what? WE ARE NOW DEBT FREE!

I’m going to be honest that there have been moments (years, really) where I truly thought “If I just optimize our spending a little better we can get there…”

And then I woke up.

The reality for us is cutting out lattes and cooking at home simply isn’t going to get us there. Yes being more disciplined with our budget helps, but the truth is our fixed costs are way too high compared to our income. Which is what launched us to take a good honest look at our fixed expenses in the first place and make some bigger lifestyle decisions.

Lifestyle Change #1: Housing
We live in a really expensive part of the country. Bizarrely, our rent is considered reasonable because we have stayed in the same rent controlled apartment for 3 years, but it’s still way, way high by any normal standards. Further, we will outgrow our apartment at some point if we want to expand our family.  So our first change: move to my husband’s childhood home.

We are incredibly fortunate that this is even an option. My husband’s dad lives in the city (where we live and work) in a paid off home that is too big for him at this life stage. He very generously has offered to let us live there for a few years to save money. In exchange, we will rent him a smaller 1-bedroom elsewhere in the city at a cost that is lower than our current rent. There are a TON of questions yet to be answered with this plan (exactly how long will we stay? what sort of improvements will we make to his home while we’re there? how does us living in this home affect my husband’s sisters – Lady Red and Lady Gold? and so forth). But as of today, the plan is to move there next summer with the goal of saving $1k on rent a month. Boom. That’s the kind of expense slashing we need.

Lifestyle Change #2: Childcare
As a bonus to moving to my father-in-law’s home, there is a magical co-operative nursery school up the street that we would love our daughter to attend. My husband and his sisters went to this school as children and Lady Red’s children go there now. Further, because it’s a co-operative model, it is presumably more affordable than our current childcare situation. I say “presumably” because this is, yet again, a plan that is not fully formed. At face value, the preschool is much cheaper every month than the nanny share we are part of now. But the school is only a few hours a day, so we will still need childcare for the rest of the work day. I’m hoping that we can once again share childcare with another family for the non-preschool hours (although it makes me weep to think about leaving our current childcare provider – she will simply be too far away to make it logistically possible) and save money on this large fixed expense, but honestly I’m prepared for this to be cost-neutral. Ha. I guess I shouldn’t list this as an optimization quite yet, but one can hope. It will certainly be a lifestyle change.

Lifestyle Change #3: Side Hustle
Our three biggest expenses are housing, childcare and our loan payment. As I’ve detailed above, we are working to make those costs lower and of course our loan payment isn’t going anywhere. My husband works in sales and has varying commission from month to month, but in general, our fixed expenses make up about 80% of our net income each month. You don’t have to be a math wiz to know that isn’t great. So what does that mean? We need to make more money.

I’ve wondered for some time what would be a good side hustle for me. One that didn’t feel like it added stress to my life. One that wasn’t more of what I do during the day. One that didn’t feel like it took a ton of extra time away from my daughter that I already feel I don’t see enough. And that’s when Lady Red offered a perfect solution: work on some organizing projects in her home that she had previously been paying an external professional organizer to do. I loved it! Get to spend time with family and get to do something I already like to do. Further, I’m hoping working on some projects with Lady Red will give me practice so that maybe one day I can make a more formalized side hustle out of professional organizing. This is all new so we shall see – stay tuned.

So those are the lifestyle changes we’re trying to work toward in the next 12 months. It can’t happen overnight and it feels intimidating, but I know these changes can and will serve us better going forward. More deep breaths and more steps forward.

Debt payoff report: August 2017

Ever since my husband and I decided to get focused on accelerating debt repayment, it’s like a light turned on. Or a fire was lit? Something. We are looking at our finances totally differently in just a few short weeks and we’re so excited about the possibilities once we’re free of this load.

Of course, with any new goal there’s always the temptation to do everything at once. I love goal-setting. As soon as we started talking about paying our loans down faster, I basically wanted to cash out all of our savings and apply it to our balance. But obviously that would be a bad idea, so we practiced restraint and identified what felt (to us) like a safe amount of money. We wanted to apply a big enough chunk that it felt signficiant and that it was a marker of this mindset shift, but we didn’t want to dip into emergency savings or cash out some of our longer term investments.

Where we landed was moving some money we had been saving in a fairly low interest bearing account for a down payment (more on our ongoing debate about homeownership at a later point) over to our loan. So as such, here’s our August progress report:

  • Starting balance: $165,923
  • Regular monthly payment: $1,909
  • August extra payment: $9,924
  • New balance: $154,470

We paid a funky extra payment amount with the idea that we would kick-off with a nice even new balance, but mis-calculated how much of our regular payment goes toward interest, ha. Oh well – feeling awesome to start this journey with a big first payment.

It’s definitely not possible for us to make huge payments like that every month, but the idea of multiple loan payments a month feels exciting. This was also arguably the easiest month since no behavior change had to happen yet. Finding how to earn extra income and cut costs will be where the real hustle begins. It’s going to take awhile, but I’m feeling optimistic and looking forward to documenting this journey.

Becoming a Boss

When I graduated, the economy in my hometown had just imploded. I’d studied what I loved instead of what made for a good resume. I came home to my parents’ house, a broken heart and almost 42,000 in student debt. My first job was mucking buckets and lugging arrangements at a florist, and then an internship at an office, doing what I have done since. Both were earned in large part because of privilege and connections. And at $8/hr., I was looking at 5,250 hours of work to pay back my loan. Without taxes or living expenses. More than 131 weeks at 40 hours a week.

The impossibility of it didn’t help my general fuck it mentality about money and even though I went from hourly to salary very quickly, my salary (starting at $28k) wouldn’t surpass my year’s tuition for several years. So.

I racked up tens of thousands of dollars of credit card debt. On lunches and clothes. On life changing trips abroad. On stupid things and fees designed to take advantage of people like me. On bachelorette parties and bad decisions.

It was my secret shame, shared only with my sister. My friends were much more affluent than I, in school and then as they landed high-paying jobs that paid forward for life and savings, while my meager earnings went down a dark hole.

In my late 20s, I learned about personal finance in great detail and my debt started to give me real anxiety. As I neared 30, I was leapfrogging ahead in my career, and revealed my money mess in a relationship for the first time. To my now husband.

He said, “Seems you may have needed the travel and the clothes and experiences to establish yourself as a peer to clients. But now you are there. So you can stop.”

The recognition was a huge gift, and for the first time I saw my debt as something I could actually leave behind.

Through giant raises, a series of bonuses and tighter reins on my spending, I paid off school and my credit cards by 32. Mine was never the story of extreme frugality or of perfect control, but rather of the dogged pursuit to get paid. That continued through marriage, which brought with it two kids, and through the birth of two of my own.

When I was earning a multiple of what I thought I’d top out at, salary-wise, I also hated my job with a soul numbing pull. With four kids and a new mortgage, I laid myself off to create a career that would let me better balance among my needs: for self, for family and for money (plus a seemingly endless list of other buckets).

I am about a year into the venture, buoyed financially by a husband whose earning surpasses what I left behind. We overspend and under plan and have together weathered years where we live (big) paycheck to paycheck, with our cash meted out in envelopes, as well as years we’ve played fast and loose and fancy.

A decade since he helped me release my debt despair, and 6 years after paying off my final card, I am working to understand what financial independence looks like with so many dependents. And to earn and spend in ways that best support the world I want to inhabit. All while trying to raise kids who are the Opposite of Spoiled, even as I recognize how many of my deeply held values and fears and strengths come from being raised broke.

This is my money journey.

Love & Debt

When I was 7 years old I had a yellow purse stuffed full of cash. I had a variety of little hustles to earn money – dog sitting, bracelet making, plant watering – and every dollar I made got neatly folded and tucked into that purse. Sometimes I would take the money out and count it, but rarely did I spend any of it.

One day my mom and her friend needed cash to tip the pizza delivery guy and asked to borrow from the yellow purse. She and the friend were amazed and amused by how much money I had managed to squirrel away in that little purse.

I was less amused. I didn’t like seeing my money spent and I reminded my mom for a week exactly how much I had lent her until the yellow purse stash had been made whole once again.

I have no idea why I was like this as a child, but I know that these characteristics stuck with me through adulthood. Earning my own money has always been a source of pride and being careful with how I spend that money is deeply ingrained. When I was 16 and wanted to go on a high school trip to Italy, I carefully calculated how many shifts I needed to pick up as a waitress to cover my expenses completely. A full tuition scholarship to an in-state university and a multitude of part-time jobs resulted in minimal debt upon graduation – an amount I was able to easily pay off a few years later. The biggest debt I ever took on was to go to business school in my mid-20s. But once again, using a combination of finding a program where my tuition would be covered and a careful modeling of how much debt I could take on with my earnings potential, I was confident the hefty price tag of a MBA wouldn’t derail my financial plans.

So how exactly am I sitting here 5 years after graduation with a six figure load of debt?

The short answer is I fell in love.

The longer answer is embedded in the winding path I’ve been traveling as I learn exactly what it means to be in a partnership. A marriage. Knowing my financial self as an individual was easy – my natural tendencies are favorable toward money. But navigating joint finances? The invigoration of shared dreams and the challenges of inherited obligations all wrapped up in a commitment to another person? So much harder.

If I had to characterize our approach to money the past few years as a married couple I’d say at best we’ve been on auto-pilot and at worst I’ve tried to force and cram my money disposition on him. Neither has been doing much for us. Well, that’s not totally fair. We have assets, we have savings, we have been dutifully paying off our consolidated student loans painful installment after painful installment – but we haven’t had a real purpose. We haven’t had that drive toward a goal that we both felt all in and driven by – a vision we shared and wanted to work together to accomplish.

Until now. And that goal is to free ourselves of this debt as fast as possible – all $165,923 of it.

Go.

Saying yes, saying no

My mother calls me a shapeshifter, she has for years. The term was applied with an admiring shake of the head each time I showed up with a different look—different hair, different outfit, different vibe. I liked this description. Now I wonder if I’ve always had many shapes or if I’ve never known who I really am.

I wasn’t aware of wanting to erase myself. But I did want to leave as much space as possible for the people around me to do their own thing, unencumbered by anything I might do or say. I collect people—their stories, their faces and body language when talking about something that moves them. I drink them in. I want to see everything, taste everything, travel everywhere, learn everything. I have a hunger that is hard to assuage. Maybe this is because I came close to dying when I was a young woman. Some of it is certainly a result of that experience. But more and more I think it comes from a need to feel ok in myself. To compare myself to others and understand whether how I feel is normal or whether I’m having a totally weird life inside this skin of mine.

This endless hunger, this searching, this wanting inside me means I don’t often say no, I say yes. Yes to drugs, yes to picking up and leaving on vacation. Yes to fancy dinners, to another round of drinks, to another partner. Yes to things I should say no to, and then yes again because I don’t want to be governed by should. I’ve been feeding a bottomless need for more. More life, more feelings, more knowledge. And money flows through my hands, making it happen. I don’t like limits. When someone tells me I can’t do something it makes me want it that much more. And I’ve lived most of my life sneaking around the limits, keeping secrets, telling myself that the happiest I am is when I can do what I want.

My approach to a budget was and is “How much more than zero do I have?” I took out some loans for college, the rest my parents covered. I made increasingly more money over the four years, working in restaurants and bars. Not one dollar I made ever went into savings or towards my loans. I spent it all. It hasn’t changed, despite being a 40-year-old married mother of four. My husband came into the marriage with no debt other than mortgages. I still owed some on my student loans, plus I had credit card debt. I’d been to many countries, had wild and fun adventures, eaten many great meals and a lot of truly great cups of coffee I didn’t make myself. I had a 403B with some good money in it, the result of following a friend’s advice years ago about maxing it out. That’s the only good thing about money I’ve ever done. The rest I spend.

Turns out, I don’t really know what I want. Turns out, the limits are there whether I acknowledge them or not. Turns out, there might be happiness that comes with recognizing the self that I have and making choices that honor my own values—even if it means saying no to things I want. I’m starting to see that without saying no I give all my power away. Everyone has limits. Why don’t I know mine?

A deep anxiety has been my constant companion, causing medical issues for years long before I recognized that the constant monologue running in my head  had a name. The relentless assessment of situations–wondering how to be, how to be liked, what other people want or need, how to be a good wife, how to be a good mother, how to be a good girl who doesn’t make other people mad—it’s been eating me up from within. My deep self has been here all along, waiting to be noticed, sending me messages folded into illness and depression. Shame runs through me like fat marbling meat, judging myself for not being good enough, comparing my insides to other peoples’ outsides, wondering where my lack comes from. Throwing out the desire to be happy because I decided it wasn’t even a thing a person could be.

I’ve been committing to learning to pay attention to my deep self for the past seven years. It’s hard work and regularly frustrates me with how slow the progress is. On good days, I see and feel how far I’ve come. I’m not sure exactly what the end goal is but I think it’s to feel better. Whole within myself. And it doesn’t matter whether my teacher is my yoga instructor, my therapist, or a good friend. The message keeps coming down to the same thread to follow: what do I want? It embarrasses me that I don’t know.

Money has long been a source of shame. Shame due to debt. To being bad with money. To not knowing what I was doing. To having to admit to mistakes. To not paying attention—paying unnecessary fees, dipping into overdraft, living paycheck to paycheck. My shapeshifter ways have worn me down.  I struggle with appreciating what I have, the grass always very much greener somewhere else. I turn in circles, wanting to buy special treats for my kids that I wanted as a child and then feeling guilty for not living more simply, to not teaching gratitude. I’ve been so afraid of making the wrong choices that I haven’t made many choices at all. A choice implies saying yes to one thing, saying no to another. I’ve just said yes, yes and more yes. Even if the money runs out. Even if it feels bad as often as it feels good.

I thought my money problems were something to be dealt with separately. Attending a financial conference created by women for women brought things into alignment for me, showing me that I can work on getting my shit together financially and be working towards the same goals I’ve been reaching for in other areas of my life. Even though facing my finances scares me, it feels more concrete and achievable than fixing some of the other things in my life that need fixing right now. My marriage mostly. And my self. So I will keep taking hesitant steps forward, trying to remember to listen to this true voice inside of me, asking her “What do you need? What will make you feel good? What will give you ease? What will give you joy?” Let’s say yes to those things. And no to the rest. Is that possible?