The Weight of Money

We’ve found a house that we might be able to afford and might be able to live with — is that how it is supposed to go? I mean, don’t get me wrong, I’m all for finding a place to live but I’d think my response would be something more along the lines of “We’ve found our dream home!” However, we’re looking at a purchase power far below the average selling power of houses where we want to live. Heck, we’re looking pretty shabby compared to places that we don’t want to live and that is very disappointing too.

Now, I’ll admit that while walking through this 4 bedroom rowhouse (yes, I am actually looking at a rowhouse and hell has frozen over, I’m sure) I was quite excited about it. I love old houses and every house on the market that I’ve gotten excited about was built in 1900 and this one was no exception. I see with blind eyes when it comes to an old house because I love the high ceilings, the creaking floors, the tired plastered walls, the tiny rooms, the old fashioned everything. Luckily, the partner walks about looking for everything that is wrong about a situation and hyper focuses on that — he tells me he uses that as a method to seriously examine if he can deal with the crappy stuff enough to see the good stuff.

Anyways it is a 3 story house with the 3rd floor/attic as a 4th bedroom that is only suitable for someone 4ft tall — which I happen to have one around. The heat is the old fashioned heat pushed up from the basement through the floor grate on the first floor and then rising waves a colder air through the floor grates in the 2nd floor — the 3rd floor/attic looks like it’ll just need to rely on the fact that it is at the top of the house. There is no central air and I was told that the window units have to work pretty hard to cool things enough. The wiring needs some help but at least I’ve got an electrical engineer that, although he hates electrician work, will be able to help get that in order. There is a 2 car garage in the back — like way out back, it seem unusually far from the house. There is a two-story storage shed — really it looks like a tiny little old-woman-in-the-shoe styled house. It is really cute and I imagine a 15-year-old daughter dreaming of moving out of the house and moving into that.

It is downtown a local town that is undergoing renovation and improvements. The local school is better than the one we’re in now and it is on the other-side of the magic dividing line between a decent school and poorly performing school. Things are within walking distance and the neighborhood seems like it isn’t the worst of the worst — is that an acceptable criteria? Luckily the place is currently being rented by a man willing to share all sorts of details about the place. Like problems it has had and the landlord has done the minimum to cover over, that the heating bill for a 60-degree temp in the winter is around $300, that it gets really warm in the summer, that the neighborhood has its problems like his son’s car being broken into once and the general condition of a boarding house a couple doors down.

This house needs some serious consideration and we have to think about crossing that border of a house that is safe and secure, without a doubt, without a risk, or moving into an improving area and also an area that it busy during the day from commercial traffic and accepting the problems that may come with the downtown night life, that is probably nothing compared with Baltimore. So far, I’m pretty sold on the house for the right price and tonight’s conversation with the partner will show what action we want to take.

The partner heard about Rich Dad Poor Dad from a coworker and was suddenly interested in learning something about finances and investing. Now, I’ve not really looked into RDPD even though I’ve seen comments about it, but hope that it will get him thinking more about financial goodness that is possible and maybe even, somewhere in the book, get a clue about budgets!

I signed up on the Rich Dad website and took the Financial IQ test. I’m pleased to report that I scored 78% and am “Established” in the first quarter. This feels like good news in feeling like all of the reading I’ve done in the past 6 months might just be paying off. Now, to see what else the website has to offer and to glance at the book the partner just bought.

This month isn’t going quite as planned. I made 3 goals for myself and it looks like I’ll not meet any of them.

Goal #1 - Not exceed $150 eating out
Current Progress: $163.73
Comments: No more eating out this month! I should be able to make this happen as long as I keep cooking dinner at home. I have an interview next Friday and will need to plan ahead to take a lunch so that I don’t rationalize eating out again.

Goal #2 - Deposit $840 into savings
Current Progress: $480
Comments: That covered 3 weeks of back pay and a week of current pay for house cleaning. However, I will not be getting any more because I finally had to cut something out of my schedule and unfortunately the cleaning had to go. This means I’ll be short on savings for the house, but I’m just so strapped for time as the semester ends and house buying and the wedding approaches.

Goal #3 - Reduce transportation costs
* Current Progress: $239.09
* Comments; A lot of things have come up this month that I didn’t expect and are not normally part of my transportation budget. I realize I need to separate gas from other transportation/vehicle costs. First, I spent $10 on airport parking when dropping my daughter off at the airport. Second, my car threw a tensioner and that resulted in a tow ($57 paid from partner’s cash), repairs ($175.40), and gas in the partner’s car that was on empty when I needed to borrow it for a few hours ($20.04). I’ve only spent $33.65 in gas and will need to fill up one more time ($40 at current prices) — this is within my expected budget/cost at least.

Overall, I’m disappointed that I have not worked harder to keep within my dining out budget. I’ve really gotten carried away in that department the past few months and have been rationalizing eating out too often. I currently only have $60 left in this month’s budget and am not sure how it’ll work out. I should go buy some groceries but I don’t think the budget will allow for that and the gas I need to buy tomorrow.

Also, I feel bad because I said I’d sign the daughter up for soccer this spring, but it is starting to feel like that $140 will be hard to pull. Especially since I’ve been averaging about $100 a month on her for the past few months. Oh well, we’ll have to wait and see. The first session was cancelled and the second one, today, she’ll miss because of the field trip ($33) at school.

In reading IRS Error in Your Favor on Five Cent Nickle, I realized that this situation would really throw me for a loop. But, reading the comments gave me some insight at which direction I’d choose to pursue.

I’m a stickler for doing the right thing and am pretty sure that I would make the initial call. However, perhaps my morals are not quite high enough because I’d probably not push the issue if they insisted it was correct. Regardless, I would certainly put the excess funds in the bank and just leave it there. It could be drawing interest for me and if anyone comes to call, it is there and waiting to be handed back. Plus, I’m sure there’d be some sort of statue of limitations that would allow me to eventually make it mine, all mine.

But wow, getting a $25k return when only expecting $5K….

I’ve got a couple of posts that are queued up and waiting for pictures before posting. In the meantime, I’ll humor myself with the money meme. If money were no problem, I’d:

* have at least 3-4 children and probably more
* have a comfortable house - not insanely large
* have a large garden
* pursue my hobbies and artwork
* have a winter house in Milwaukee, WI (on lake shore drive, perhaps)
* take my children on vacations around the world
* provide college funds and investment funds for my children and nieces
* provide a house for my grandmother and great-grandmother with staff to care for them
* help my mom advance her business
* establish a retirement plan for my mom
* put my children in schools that I value
* pursue every theme camp/art project I want
* have someone sew clothes that I’d like to wear, custom fitted

I guess I just can’t get much more creative than that. That is all I can come up with it really related to the whole lottery fantasy too. Because I figure that a lottery win will give me most of these things, no problem. I just can’t really fathom more money than I’ll ever need to worry about because my desires just don’t need that much money.

This weekend, we’re having a major machinery sale to move out some high-mass inventory taking up space in the workshop. This is really to liquidate my partners assets and hopefully to have a little less stuff to move when we find a house. We’ve offered the daughter an opportunity to make some money this weekend if she’ll spend a little effort doing it.

Basically, we’ve said she can sell soda and sweets (brownies) if she can make it all happen. We’ll draw up a business plan with her, offer to front her some cash for buying supplies, and set her off on her merry way to make money. She’ll be in charge of setting up how much she’d like to buy, how much she thinks she’ll sell (with some reasonable suggestions from us), what she wants to charge, and making sure her business loan is paid off — regardless of whether or not she sells enough.

Luckily, there is a contingent plan for buying too many sodas. Our housemates often buy cases of soda and would probably be willing to purchase excess inventory from her at cost. So, it seems like a pretty sure fire way to make some cash. I just need to write up some worksheets to help her plan it out because I think it will really help make this possible for her.

She really hates the idea of having to buy supplies, but hopefully once we sit down and help her write it up she’ll see that she will be making money from nothing, essentially, is she plans it right. Yeah, there is the cost of her labor — but what is child labor worth these days? $0.25 a hour or something like that?

Now if I can get her to accept the fact that if she charges $2 a brownie she’ll sell less compared to selling a brownie at $0.50. Right now she is pretty set on selling brownies for $1.50. There better be some pretty big brownies.

Just to warn you, I’m not offering new insight to answer this question. For me, it is a moot point because I intrinsically know that having a budget is essential to financial success in my life. However, it seems that my partner is very anti-budget and feels that “numbers on paper then rule your life”. I’ve tried my sensible approach to this issue, I’ve tried my exasperated plea to this issue, I’ve tried my huffy fist full of spousal-like-power to this issue, and I’ve not gained any ground.

A budget is still a tool from hell sent from the financially extravagant to damn the lives of the simple people who merely want their freedom to spend as responsibly as the moment demands and without need to support, challenge, or verify their spending. Financial goals are simply philosophical impossibilities that can never be met with careful financial planning because life does not operate in accordance with anyone’s set agenda and therefore will rule any established plan moot and an obvious waste of time. Budgets establish a passive way of life where line items on a spreadsheet have more value than the need or want that a particular purchase would sever.

Sigh.

Now, we agree in so many ways about being financially responsible and living below our means, yadda yadda. But when it comes down to the nuts and bolts of it, my current detailed budget and record keeping freaks him out and he sees my plot to design and enforce a budgeted household will destroy the very value of life that he so often decries as irresponsible and unsuccessful (financially speaking).

I’m up on my high horse because I know, and cannot be persuaded otherwise, that a budget is the best thing for establishing and reaching financial goals as a family unit. I know that I’ve lost considerable ground in this discussion by my earlier attempts to somehow flip the switch on the beauty of budgeting. I hope that we will establish some common ground, that we’ll be able to build an acceptable budget together, and that financial prosperity will only be months (okay, years) of realistic and conscientious spending away.

But first, I need to get him to agree and understand how budgeting is a powerful tool for improving financial habits, responsibility, and progress.

I finished my taxes last night. As always, it is a good thing as I’m getting a state and federal refund of $981 combined. And, before anyone mentions the tax free loan that I’ve given to government, that isn’t the case for me. All of my income was from self employment and while I technically should pay that quarterly, it is not necessary if you will owe less than $1,000 in taxes - my self employment tax was $580.

Of course, when I have a normal job, I tend to get several thousand back. I wasn’t really expecting a refund; I just wanted to be sure and to claim income this year. Even though I’m a full-time student, I can’t imagine having a year’s gap in employment — that and cleaning and other odd jobs do add up. So, this should go directly into savings; however, I did not direct deposit it into my ING account because I thought it might show up around the same time we’ll need closing costs in hand and didn’t want to have to wait for ING to transfer to my checking account.

I’ll be working on my partners taxes this week. He’s never done his own taxes and I just can’t see paying someone else to do them when I think it is actually *fun* to do taxes. It’s a paper form thing, I love filling out any type of form — I don’t know why, I just do.

all the cool kids are doing it…

I grew up with a mom that liked to spend money. She grew up poor, as she said, and refused to feel poor even though we didn’t really have a lot of money. The biggest thing I remember was in regards to food. There were so many things we wouldn’t eat because “thats poor people food” and she wouldn’t allow it — amusingly, I often crave “poor people food” like meatloaf (which isn’t always cheap when I make it). My mother was married to a great guy for 7 years, but that fell apart when, along with other things, she wouldn’t stop spending money or credit. We always shopped at higher end department stores, usually on clearance, and my mom just wouldn’t control her spending.

I know they even filed bankruptcy at some point in life. I think my mom filed bankruptcy again after she was divorced, but maybe those references were from the same one they filed together. And, I just found out that my mom filed bankruptcy yet again recently. Wow! I didn’t know you could actually acquire enough credit after bankruptcy to need to do it again and again.

My mother spends every penny she has and often some she doesn’t have. She lived in Maryland for a while but then moved back to Oklahoma, leaving her bank here. Many times, I’ve been asked to go put some money in her account so something doesn’t bounce. Other times, I’ve watched her deposit money in the bank and be confused about why the balance was so low, just to figure out that she must have bounced a couple things. This always amazes me because I just can’t understand how she can continue such a negative financial cycle. Also, she doesn’t really mind.

We talked recently about long term care and retirement. I’m an only child and worry about having to take care of her. She admits she has no savings, no financial plans for retirement, and will simply rely on social security and the state to take care of her is she becomes ill. Sigh.

So, the beginning of my financial independence, which started before I was 18 because I was a teen mom, didn’t start off on the right step. I did alright but never learned to save money or plan ahead until a few years ago. I simply spent what I had and juggled things when money got tight between paychecks. I racked up some outstanding bills that I simply couldn’t pay and also credit card debt that I couldn’t pay.

A couple years ago I made the decision to quit my full-time job, got back to college full-time, and live off financial aid and loans. That meant I had to budget. That meant that I would only get paid 2x a year. That meant I would be screwed if I cheated on my budget. And so, 2 years later, I’ve done quite well living within my budget. I’ve also built up about $8K in savings in just a few months — this really amazes me because I always felt I didn’t have any money, but I was obviously able to buckle down enough to save up a good chunk of change in a short time.

My biggest savings boost is a part-time job cleaning a friend’s house. I took this job after I’d already established my budget. It pays $480 a month, which is 75% of my monthly ‘income’. However, I decided that since I wasn’t originally planning on that money that it should all go into savings and thats where it goes. I feel very proud of the fact that I’m willing to take all of the income and put it right into savings instead of adjusting my budget to allow for a little more wiggle room.

And now, I’m venturing into a marriage that is starting pretty far in the red in terms of net worth. I do feel scared about this, from time to time, but willing to accept that we all do stupid things financially and have to deal with them later. Also, for what its worth, my partner financed his 10-year pursuit of a B.S. on credit cards. So, his debt really isn’t much different than mine, just poorly financed and the interest rate is way too high.

While waiting to write up my overall financial goals, with the partner’s input, I figured it’d be a good time to make up some small goals for April.

Goal #1: Not exceed $150 eating out

To make this more achievable, I will not spend more than $37.50 a week eating out. So far, I’ve spent $40 this week. Next week, I have $35 to spend since I’ve already exceeded this week’s limit. Luckily, the daughter is out of town next week and that alone would reduce my dining costs.

reward: special meal at home to celebrate

Goal #2: Deposit $840 into savings

This includes the 3 weeks of pay that I’m waiting for and 4 weeks of pay for this month. To make this happen, I must continue to do the work on time and also give payment reminders so that they do not fall behind again.

reward: $840 into savings is its own reward

Goal #3: Reduce transportation costs

Gas prices are rising. I need to reduce my driving to ensure that I am staying in budget. My budget is $80 for a transportation and I will avoid making any additional trips in order to stay within budget, despite the current rise in gas prices.

reward: extra me-time for reading or crafting