God, I hate waking up at quarter to four in the morning! It seems to happen every night unless I dope myself with Benadryl. And dammit, every single time I awake in the wee hours, my first conscious thought is some worry. I don’t know whether I wake myself up worrying in my sleep (in which case it’s no wonder I grind my teeth…), or whether there’s nothing else to think about in the dark and so the worrying comes naturally.
A dear friend is having some health problems. It’s potentially very serious. I can’t imagine how she’s going to cope…her job is running out and so she’ll soon be without health insurance. I think she figured she could just put her six-year-old on COBRA and try to get on our state’s miserly equivalent of Medicaid herself. But clearly she’ll have to buy COBRA for herself, which will be financially crippling. Awful.
Damned Republicans, getting us into this financial mire.
Speaking of financial mires, our clever right-wing leaders crow that they cut our taxes here in lovely uptown Arizona. To accomplish this, they’re shutting down schools, laying off teachers, closing school libraries, cramming kids into classrooms like sardines, trying to crush the police and fire unions, laying off city, state, and university employees.
Well, my property tax bill arrived yesterday. The county has devalued my home by over $20,000. And my “reduced” taxes have gone up by three hundred dollars!
Of course, because we were told our taxes not only would not rise, they would drop, I kept the self-escrow for property taxes at the same level as they were last year. So I haven’t set aside enough to cover this bill, nor have I set aside enough to cover the taxes for the downtown house, which we pay ourselves. Son of a bitch.
So that money will have to come out of the money budgeted for me to live on. Which means, effectively, it comes out of grocery money.
If they continue to raise the taxes at that rate—$300 a year—I won’t be able to stay in my home. In two more years, that will amount to a $900 increase. I already set aside $375 a month to cover property tax, homeowner’s insurance, and insurance on an 11-year-old junker. That is right at the limit of what I can afford, even working the equivalent of full time (which is what I’m doing when I’m teaching four sections—this year I’ve taught as many classes as I ever did when I was paid a full-time wage at GDU, and I’m doing it for less than half of what I earned there.)
In April, the city raised water rates 7 percent. That came on top of the 40 percent increase they’d already enacted. So there’s where the $170 water bill came from. Power bills are also beyond the pale: sweltering in an 88-degree kitchen leaves me owing $228 to the Salt River Project.
So I’m going to have to start thinking more seriously about moving.
I can’t sell my house for anything like what I paid for it. The value of this house has dropped to what it was about 15 or 20 years ago.
If I’m going to move into an apartment or patio home, it needs to be in a reasonably safe part of town. That means Scottsdale, probably, which is out of my price range. So my price range leaves me with Sun City. And, god damn it, I don’t want to live in Sun City.
Nor, come to think of it, do I want to spend the rest of my life teaching freshman composition. When I got out of graduate school, which I largely financed by teaching comp as a slave, I vowed that even if I had to go on welfare, I would never teach freshman comp again. But here I am, looking at spending the last functional years of my life teaching freshman comp.
I don’t hate it as much as I used to. And because community college courses, especially during economic hard times, are liberally sprinkled with adult students, teaching at Paradise Valley is a LOT less obnoxious than teaching at the Great Desert University. But it’s still a grind that requires you to spend most of your waking hours reading drivel and feeling that you waste your time trying to teach people in one semester what they failed to learn in 12 or 14 years of grade- and high-school miseducation. If they haven’t got it by the time they reach college, they’re not going to get it. And if they do have it (as some do), they’re wasting their time in your course.
Given this basic fact, teaching freshman comp is a profoundly frustrating activity.
Well, it’s finally dawn. I’d better get up and get going.
Looks like it must be overcast out there. By this hour the sky should be a little brighter. Goody! A hundred and twelve degrees predicted…and cloudy.
{ugh}
I can’t believe the tax went up on a devalued house. That would make my blood boil. What kind of shady accounting method are they using over there?
How much $$ are you underwater on your house? If it’s significant, it would probably be a smart move to downsize and cut your bills. It would be nice to own the house free and clear by the time you retire but, by the sounds of things, that’s not your situation. Over time, you’re paying more for that house than it’s worth and home values are not going to be rising anytime soon. Not for years. Having said that, do you have access to a lump sum (say $50K) that you could use as a down payment on another house purchase? If you could buy something nice but cheap, you could cut your mortgage payment considerably. You would probably have to go with a private money lender (a private investor) but, with a down payment like that and a correct appraisal, you could conceivably buy something else at today’s market value, even make an offer minus 1 or 2% below market. You would be looking at foreclosure and possible bankruptcy but your retirement funds would be safe as I understand it and sometimes you gotta do what you gotta do. It’s all about survival now. I would be looking at foreclosing those two properties, lining up a possible house purchase and planning a possible bankruptcy but timing is everything. I’d pull out at least $50k first (if possible), find the house, buy it, let the other properties go to foreclosure and file bankruptcy in that order LOL Like you, I have lain awake at night worrying myself sick but no more. Just my basic 2 cents!
UGH UGH UGH. I keep thinking you should divide your house in half (mentally), have your son move in for a year, and rent out the other house.
I’m facing even more dental bills–that’s what is keeping me awake.
@ Quest: I own my house outright; I bought it with cash.
My son and I copurchased a house for him so that he would not have to live in a dangerous, unsanitary firetrap. He earns the median household wage in Arizona, which is not enough to pay for a house or a decent apartment and still have enough left to live without having to run a tab on credit cards and borrow to buy a second-hand junker. This is what happens when industries are unregulated in a right-to-work state: wages are not enough for people to live on.
We are underwater on that house because we bought it at a time when we thought the real estate market was about to hit bottom. The price we paid for it infuriated the neighbors, because they felt the seller was pushing down prices unreasonably. We and the neighbors were amazingly wrong.
We have talked to a lawyer, who urged us to default on that house. My son, however, has noplace else to go. He also works in a financial industry and is aware that a default on his record could make it impossible for him to find another job. It is a very charming little house that could be rented for close to the monthly payment — probably more, now that the rental market is crowded with people who have defaulted or who can’t get loans. For these reasons and the fact that he feels he cannot find a job in California, where he would much prefer to live, that will support him without having to live with a roommmate, he wants to hang onto the place.
@ frugalscholar: If my son lived with me, the monsters in my closet would no longer be imaginary. Sorry to hear you have more wonderful dental work ahead of you! Ain’t gettin’ old fun!
Regarding the property tax bill frustration, ours also has gone up every year, while the value of the house has gone down. From my reading, this is a common occurance. I tried to fight this, but it’s true: you can’t fight city hall. So I have determined that there is little correlation between the house value and the tax bill. It is just one big pie and the value of your house as a percent of the total required city/county/school budget determines the bill. The value could eventually go to $1 and our tax bill would continue rising due to rising budgets. They will charge us whatever our portion is that they need to meet their budget. Even though this really ticks me off, it has made me let go of the idea that house values and tax bills actually have any relationship to each other.
I regularly wake up at 3AM. After trying sleeping meds, which worked for awhile but then I started waking again & went off them, I’ve learned (1) not to look at the clock if it’s still dark outside; and (2) to close my eyes & do deep belly breathing and repeat a mantra or soothing phrase – these days I fall back asleep most of the time, or at best don’t lie there entertaining worrying thoughts.
And although the tax situation is annoying & a surprise, I find it a little difficult to generate any sympathy for someone who lives on a tight budget but just spent $500 on patio furniture…. There should be some leeway in an “other” category in the budget to cover these little life surprises, particularly since you seem to often do a splurge anytime you decide you have some wiggle room.
LOL! Valleycat1, it does seem to me that after I’ve worked all summer like a dog, putting in quite a few hours (more than you or I could count) unpaid and quite a few more paid at a pittance, that I should be able to spend a few dollars on 50% off furniture. Especially given that I haven’t taken a real vacation in ten years — the last trip I took was funded by a grant and underwritten by the university’s travel budget, come to think of it: “vacation” meant sitting in conference meetings all day.
Besides, this afternoon I took the two rocking chairs back, securing a refund of $225. So the actual cost of the remaining four pieces was less than $70 apiece: hardly a splurge. 😀
Hm. If having some leeway in an “other” category in a budget expanded by extra work doesn’t constitute wiggle room, what does?
I think we all have the middle of the night heebie-jeebies.
One thing I heard and practice was to say to myself, “This will look better tomorrow when the sun is up.” It works somewhat.
And please STOP blaming every crummy thing in the world on Republicans. It’s much more complicated that that.
Funny – So, $500 (ok, now $275) on furniture is ‘a few dollars’ but a $300 tax increase is devastating & going to break you? Since you took back some of the furniture, your net ‘loss’ on the taxes is $75 this year, since you now have $225 back.
It doesn’t matter how much the price is reduced on something, or net cost per piece, or how many sacrifices you’ve made or how much you deserve it, if buying something means you can’t afford to pay your required bills. And since you’re projecting that taxes most likely will go up again next year, at least you can budget ahead for that.
I’m not in AZ, but where we live we get our property tax bill at least 3 months before the first half is due, with the 2nd half due 4 months after that – gives me plenty of time to save up in the event of an unexpected increase.
Well, the issue is that I each month set aside a large amount in self-escrow accounts to pay the annually recurring bills: $375 a month for the tax and insurance on my own house and my car; $120 a month for the tax on the downtown house; $110 a month for Medigap insurance. That is not “a few dollars” — that’s $605 a month.
When the county tells us through the news media — several times — that our taxes have been jacked up, few homeowners will see real increase because of the extreme drop in valuation, I think it’s reasonable to expect that the $485 a month that I’ve set aside over the past year to cover the taxes should suffice.
Laboring under that misapprehension, I spent $500 that I could afford because I worked like an animal all summer long on something that I have wanted and needed for the past two years. The purchase was NOT some kind of impulse buy. It was not a “want,” it was a “need.” The fact that the items were heavily discounted did not change the fact that I was going to buy them sooner or later; it only made buying them significantly more affordable. Had I not purchased them on sale, in the near future I would have purchased them anyway, even if I’d had to pay full price.
When I was blindsided by the county tax after having been told to expect to pay the amount I had carefully budgeted for, I was understandably (I think) infuriated and worried.
And, my dears, $605 a month out of my regular cash flow is at the high end of what I can afford. It is well over half my net Social Security income. Any more than that, and there will be no money to set aside for little indulgences like furniture that’s not falling apart and that does not need to be dragged indoors every time a cloud passes over the sun. Or for clothing. Or for shoes. Or for an occasional meal out.
The concern is not about whether I could afford to pay the extra gouge this month.
The concern is about whether the county intends to keep jacking up the tax year by year at this rate. If they raise the tax on my house another $300 next year, the tax will have increased by $600. If they raise it another $300 the following year, it will have gone up by $900.
Right now I have $200 of play in my budget. That amount is automatically transferred each month into an account that holds money to pay for such things as the suspect chairs.
The extra $300 tax on my house and the extra $200 on the downtown house add up to an additional $42 that I’ll have to set aside in 2011-12 to cover the 2012 bills. But since we can’t rely on the county bureaucrats to stand by their word, I can only assume the bill will go up a like amount next year. So now we’re looking at an additional $84 that I should be self-escrowing. That will have to come out of the $200/month that goes into my short-term savings. Effectively that means forget the once-a-month meal out if you think you’re ever going to buy another stitch of clothing.
If the bills go up by $300 a year on a regular basis — and since the morons in the legislature are axing school budgets, we can expect this will become a routine matter — then in two more years I will have to come up with an extra $252 from cash flow.
That exceeds the amount I have left over each month to put into short-term savings for unplanned expenses.
I have that amount solely because I’m still able to work. But I’m not getting any younger, and oddly enough, I’m not getting any stronger, either.
In three years, there’s a good chance I will be past the time in my life when I can work constantly for pay. I will be 70 years old by then. If my health holds — far from a given! — I may be able to dodder into the classroom until I’m 75. Maybe. But…then what?
Then I’ll have to try to live on drawdowns from my savings plus Social Security, which provides less than half of the amount I need to live on.
Will my savings last until I shuffle off this mortal coil? Sure, if I die soon.
But some women in my family have lived into their mid-90s. My father lived to be 84 despite a lifetime of smoking and steady drinking. There’s a very good chance I could live to extreme old age. Then what?
Would it be better for me to off myself before I reach the point where I have no more money?
And as for not blaming the Republicans, let’s remember that one of their presidential candidates has openly said he intends to eliminate Social Security altogether. The party is caving steadily to its extreme right wing, and one of that element’s express goals is to get rid of Social Security and all the other safety nets this country has put in place over the years — programs that make us part of the civilized world.
If they succeed, that would move the self-offing date forward significantly.
If the taxes continue to rise on this house at the 2011 rate, I don’t think I’ll have much choice but to sell and move someplace where taxes are lower. The only place you can go in Maricopa County to get dirt-cheap real estate in an area that’s relatively safe where the taxes are artificially held down is the older section of Sun City, which is exempt from school taxes. It’s a dreary place to live…but IMHO not being able to afford necessities and a few wants — such as an occasional taco dinner on the town — is a pretty dreary prospect, too.
Okay, you can cherry pick some looniness within the Republican party. But you can also cherry pick some looniness within the Democrats also.
For godssakes women, the world is NOT black and white.
Obviously not. In the wee hours this morning, I was thinking over the sources of our present national calamities. The result was a table, which won’t go into this comment. Let’s try for a post discussing this stuff.
The housing market has not gone off the cliff yet. It will get worse.
In 2007 the county assessed us at $165,000 (market value)
Property taxes $1500.
Now 30% of the homes in the county are in foreclosure.
Our assessed value in 2010 – $62,000.
We owe $90,000 on the mortgage.
The issue here is I did not get a NINJA loan, we have enough income to live ok.
Now what is going to unravel here soon is the DOJ is suing 17 major banks over these NINJA loans that the government told these banks to issue, mostly to low income and minority people who should have a house, I mean Chris Dodd thinks everyone needs a house so the Dodd Fwank (sorry about that Barney) bill let people with No Income No Job or Assets buy a house that they could not pay for.
Then the bankers went wild bundling these toxic assets into packages they could sell to investors knowing full well that they were buying a pig in a poke all while the SEC was turning a blind eye to all these deals.
There is over $616 TRILLION in derivatives out there in the markets.
When that finally come due who’s going to come to collect that pound of flesh?
So what did they do. Spent $800 billion or more bailing out banks that they should have let fail but did not.
By the time it was done $3 trillion was spent not on taxpayers, but banks, businesses and unions.
Vote them all out in 2012.
I sort of see where valleycat is coming from. At the same time I think your frustration is about the big picture not the little one. When I would complain about money to coworkers (when I was about 40% underpaid to my peers) they would balk I wasn’t allowed to complain as I owned an Xbox 360 or whatever. But being able to afford the little luxuries is quite different from having financial security and being angry (at whomever) seems to think b/c you are not starving that you shouldn’t complain (or in today’s economy, that you have a job at all). Even when month to month you are doing fine it’s hard not to be upset when real progress at all towards financial security seems out of reach. When things only get better not worse.
George- I feel your pain but as someone in a metro area where entry level homes cost two times your house and salaries are not (unfortunately) two times greater, or even much above the national average, the tax bill seems rather small.
And funny I hope this doesn’t come across as cold but I think you did your son a disservice in going in on a home with him that he couldn’t afford on his own. We bought without my parents help 3 years ago and I still sort of regret the stretch (though the home seems to be valued at just about what I paid for it). My parents feel bad we drive 11 and 16 year old cars but I tell them I’d much rather they be financially secure than help me. If they are secure and happy I have a place we can move into if we both lose our jobs etc. And their happiness in retirement is worth a lot more to me than a house or a car. But then I have no idea how you extricate yourself either.
@ Frau Tech: In retrospect, I think you’re probably right about the downtown house. At the time, it looked like a sterling idea. My son and I did not pull the decision to buy out of thin air. We conferred with his dad, who’s a corporate lawyer, with our accountant (who also is a lawyer), with a Realtor with whom we had already established a relationship and that we felt we could trust, with a second Realtor whom I happened to know personally, with a mortgage broker with whom I had a relationship dating back 12 or 15 years, and with my financial advisor. All them except Financial Advisor thought it was a good buy and that the plan to hold the house five to ten years was a solid one. Corporate Lawyer actually used the word “brilliant” about our little scheme. We weren’t looking to fix and flip, we weren’t buying a McMansion (unless 1300 square feet fills that bill), and the payments were well within our budget.
At the time — this was pre-Crash — I had so much money in securities that if anything happened to either one of us, I could have paid the mortgage off in cash without much harm. I was earning a good salary and making an extra $15,000 to $20,000 on the side, closing in on a six-figure income. And I planned to stay in my job until I was at least 70, about 8 or 10 years — which happened to be exactly the length of time we planned to hold the house. We didn’t expect to get rich on the thing; we figured we would do well if we netted 10 grand on it, meaning in effect we would about break even, given what my son would’ve had to pay in rent over that period.
What part of “Financial Advisor knows better than Realtor1, Realtor2, Corporate Lawyer, Tax Lawyer and Mortgage Broker” didn’t we understand? We should have listened to the guy who had his thumb in the dike. He probably didn’t have much more than a gut feeling, because his firm never explicitly said “we think the whole house of cards is gonna come crashing down.” If he or one of his senior partners (one of whom I have known for 30 years) had issued a clearer warning than “I think you’re already overinvested in real estate,” we either wouldn’t have bought residential real estate at that time, or we would have looked for something much cheaper.
Hindsight is better, I guess… What seemed like a “brilliant” idea then seems astonishingly stupid now.
Who, other than the odd doughty contrarian, would’ve thought we were standing on the brink of a depression?