Funny about Money

The only thing necessary for the triumph of evil is for good men to do nothing. ―Edmund Burke

Back to Personal Finance: The 2018 Budget

So it’s time for the annual Required Minimum Withdrawal (RMD) from the big IRA, which resides with Fidelity. Actually, I had to accelerate the drawdown by a few weeks, because I’m running out of money…waiting for the scheduled drawdown date in mid-September risked bouncing utility and car loan payments.

The car loan is the problem. Last fall when I bought the car, I put $4,000 down on it, which I could afford. What I couldn’t afford is the $400-a-month payments over the next five years.

Net 2018 annual income, based on the RMD and Social Security, will be $35,657. Net 2018 expenses, if they remain the same as they have been over the past 12 months, will be $36,899: a fine shortfall.

Payments are $194 twice a month: almost $400 a month, except…they’re set up to go out biweekly, meaning there are two extra payments a year, for a total of almost $5,044 a year.

I could probably cut the amount I spend by a couple hundred bucks a month: lay off Gerardo; buy cheaper dog food (or adopt out one of the dogs); eat more beans, rice, and pasta; grow some vegetables; stay out of Costco and cancel the Costco membership; cancel the Amazon Prime membership. That still wouldn’t make up the shortfall.

And…y’know…for reasons unknown, no substantial extraordinary costs have happened this year.

So even if I could cut $400 a month from the budget, it still wouldn’t cover surprise medical bills, dental bills, house repairs, car repairs, clothing, vet bills, and God only knows what else.

Somehow, then, I’ve got to get rid of that shortfall…and that somehow would be by getting rid of the auto loan.

One is not limited to the legally mandated RMD…one could (after all) draw down more than that.

Wonder-Accountant, however, pointed out that The Copyeditor’s Desk, an S-corporation, owes me money from a series of loans to it. If I drew a fair amount of it, I’d have to draw down that much left from investments. And the boss man at Stellar Financial pointed out that I could take the remaining cash out of an old Roth IRA. It would mean that much less would be earning tax-free…but the two strategies taken together would raise enough to get rid of the burdensome loan without incurring much tax liability.

Several expensive upkeep items are simmering on the burner…

The house needs to be painted: got an estimate of $3,000, which is probably about right.
A tooth hurts mysteriously. Whenever we figure out what’s causing the pain, that’s likely to rack up a stiff bill: $1,000+++
The pool still needs to be replastered and the pump replaced: $4,000 to $6,000

Holy mackerel. Maybe I should draw down an extra three grand for the painter now, while shares are still worth something; then pay off the car, thereby leaving enough to pay for one other major expense this year.

If you have to sell stocks to unload a damn debt, this is the time to do it. The stock market isn’t going to stay up forever. Even under the best of circumstances, what goes up must come down. And we are decidedly not in the best of circumstances. Sooner or later, having elected a mentally unbalanced bully to the highest office in the land is going to come back to bite us all…

 

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Author: funny

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7 Comments

  1. I thought that a few months back you were rocking it on the editorial work after changing the way that you charged. Has that slowed down or was that impact already factored in somehow?

    • First-quarter 2017 produced a full normal year’s income. This summer, though, has been extremely quiet. It’s feast and famine, though: I imagine a bunch of work will come in this fall, when we follow the journal to Austin.

      At the moment, the S-corp’s checking account is reasonably flush. If we draw down to just enough to cover routine operating expenses for a few months, we should be fine until the first issue’s pay comes in…especially if Crystal comes through with a couple of opportunities.

  2. I hear ya Funny….I am amazed at folks “obligations” when they apply for places to rent from us. Car payments…cell phone bills….student loans ….CC debt…..health insurance premiums. And the latest now….car insurance that you can/will pay by the week or month….IMHO folks are being challenged financially from all directions…
    In your case, based on what you shared, you could have either purchased newer transportation OR taken your chances in the “Dog Chariot”….YIKES! As for me …looks like “I’ll continue to drive junk”….The prices of trucks….new or used are just crazy….and a truck payment of $500 for 60 months is something I just don’t want to be a part of….My truck is about to enter it’s 15th year….

    • Probably could’ve bought a newer, smaller car for the same amount…but that bridge is already crossed.

      When Chuck said you cannot even get a new alternator — that they’re all rebuilt and they all crap out in short order — I realized it was time to get another vehicle. Pretty much over my dead body: still miss that van and am not very thrilled with the new electronically overburdened vehicle. Having the thing crap out in Tolleson, though, was definitely a sign from the gods: that’s not the worst part of town, but it’s far from the best. I did NOT enjoy sitting there for five hours waiting for a tow, and I especially didn’t enjoy spending several of those hours parked next to a couple of transients who were tweaking.

      Unfortunately, the Phoenix area is SO large and so much of it consists of sketchy districts, it’s just not safe to have an unreliable vehicle, certainly not for an elderly single woman. You can’t get from Point A to Point B without having to drive through a sketchy part of town.

      • You might be right about the “Dog Chariot”….I on the other hand am gonna choose to look at the glass as “half full”. So when I buy repair parts for the “ol’ truck” I buy parts WITH lifetime warranties….Sooo for example I did the starter, alternator, shocks and brakes front and back….and will never pay again….So EVENTUALLY the truck will have a lifetime warranty! LOL…

  3. Sounds like you have a solid plan in place. I’ve been holding tight on some house projects until I hear about my salary increase and bonus. Hopefully that will be tomorrow. If I get a decent bonus (and at my level, the majority of salary increases come through that way) then I can breathe a sigh of relief and get more bids to address the drainage issues in the yard that resulted in standing water around the foundation for days at a time. (And no, it’s not the downspouts. I have very long extensions on them and am tired of people dismissing my concerns so simply!) I had planned to use my tax refund for this project, but ended up using it on eye surgery instead since the stupid insurance company rejected the claim.

    • Digging up the yard to install drainage sounds like a pricey endeavor! And the whole business of medical costs: just outrageous! It’s no wonder people are so mad they’ll vote for a character like Trump, if for no other reason than to make SOME kind of change in the healthcare “system”…such as it is.