Coffee heat rising

Budgeting

Summer Budget Overruns: When that sneaking feeling is right…

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This summer I’ve had the same feeling that I had last summer: as soon as the weather gets ultrahot and the power and water bills head for the stratosphere, that’s when everything goes expensively wrong and you get a hailstorm of unplanned bills.

Last summer I spend $3,348 on unexpected costs after all was said and done—not counting indulgences, of which there were precious few. In fact, there was only one: about $230 worth of artsy-looking clothes at the Yarnell Emporium, outfits that I’m still wearing this summer. So total unplanned and unnecessary expenditures last summer came to about $3,580.

I’ve felt a little more flush this summer, what with the summer classes, and so have imagined I could go out to eat now and again and also buy some clothing and shoes. Over the same span of months, I’ve coughed up $2,951 to cover surprise expenses—virtually all dental and medical bills, car repair bills, and pool maintenance and repair costs. Because getting two summer courses to teach made me feel more confident, I lost control in the self-indulgence department, going out to eat with friends and blithely spending on clothing, jewelry (well…street fair craft jewelry, but still: baubles), and shoes. These extravagances have added up to $1,094 so far, for a total of $4,684 in unplanned and unnecessary spending over the summer.

No wonder I feel broke!

This slide toward ruin started in the late spring, when during the March/April budget cycle I dropped $120 on the amber craft-fair jewelry and $201 on pain-free shoes. It went downhill from then on.

It appears that the reason I don’t run in the red in the winter is because my bills are so low I can afford to eat out two or three times a month and even indulge some other whims. In the winter, there’s about $300 of play in the budget, because year-round the budget assumes summer-level utility expenses. But it also appears that in the winter, nothing happens! The pool does not crap out (it’s not working very hard). The car runs like a top. The dog would never think of ingesting any suspect substances. The teeth wait until the weather warms before they crumble out of my mouth.

Come the summer, though…

This summer, overspending on optional things, like socializing with friends in restaurants and buying clothing, shoes, and baubles, has averaged $283 a month. Average forced overspending on things that can’t be put off, such as dental procedures and car repairs, has been $622  a month. Think of that: on average, I’ve run $905 over budget, all summer long.

{ugh}

Welp, I think the twin messages are

a) during the summer, I must—absolutely must—stay out of restaurants; and
b) I simply can not buy clothes during the summer sales, or under any other circumstances between April and the end of September.

It doesn’t seem to matter whether I’m earning a few pennies extra by slaving away in the classroom all through the 115-degree summer: I certainly am not netting $900 a month!

I’ve had to make up the difference by raiding various cookie-jar savings accounts: monthly savings slated for indulgences like clothing; tax & insurance savings;…and then the base survival savings account, from which I’ve now drawn two months’ worth of living expenses to pay the dentist. There’s no way to replenish that account, and so thanks to my teeth falling apart, I’m short the money planned to support me for two months in 2011/12. Instead of running out in November, I’ll run out of cash at the end of August…just, as we know, when expenses will be highest. 🙄

Gotta quit spending!

Still Pouring Out There…

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Geez. It never rains but it pours. So they say.

Paycheck for these past two weeks posted (but not received by my bank until tomorrow): $200 less than expected.

Bill for car repair posted on American Express: $786.58.

I don’t have that much left in emergency savings, so about $90 of it will have to come out of cash flow. But it doesn’t stop there:

Rip-off to register the car: $72.56.

Rip-off for car emission test: $27.75.

Fortunately, exclusive of the unexpected car repair bill, I came in $55 under budget this month, for the first time in recorded memory. So despite the $787 car bill and the $140 in repairs on the pool equipment and the $95 to the electrician to repair the shorted, overheating light switch, and the $140.76 in medical bills not covered by Medicare, I have yet to overdraw my checking account.

Barely. Give it time, though. Today is only the 27th. This month has 31 days. Plenty of time for some new expensive fiasco to occur.

It’s clear now that we won’t be receiving next month’s Social Security checks. Bloody lucky thing I managed to land these two summer classes; tomorrow’s paycheck is just about the amount of a Social Security payment. It will tide me over August.

September, however, is a different matter: I stashed enough in my son’s and my joint account for mortgage payments to cover the summer, but in September I have to start coming up with $717/month again. And if those bastards in Washington haven’t gotten off the dime, I won’t be able to pay it.

Well. I will, but it will mean my savings to survive on for the next year will quickly disappear.

Damn it. Even when I manage to keep day-to-day spending well within the budget, I’m still swimming in red ink!

Image: Rain from a thunderstorm over Fogg Dam. Bidgee. Creative Commons Attribution 3.0 Unported license.

Making $7,390 stretch for a year…and living decently

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Okay, so just now $7,390 is left of the $28,000 of layoff savings that I entered unemployment with 18 months ago. This little stash, which I found sitting in my various bank accounts as my fine former job wound to a close, has been supporting me, along with Social Security and the irregular pittance I earn as an adjunct professor of English, while I try to delay having to draw down my IRA and brokerage accounts.

It’s lasted longer than anyone thought it would, and with any luck at all, it’s about to last another year.

The other day I revisited my ultracomplicated cash flow scheme, largely because I need to find a way to extract more monthly spending money from this Pushmi-Pullyu. The truth is, I’m not giving myself enough to live on comfortably. It was tight when I started a year and a half ago, but the increases in food and fuel costs (not inflation, right?), along with a never-ending slew of unplanned expenses, lately have made it impossible to stay on budget. I’ve been allocating $800 for discretionary expenses (a total of $2050 a month for all expenses, discretionary and fixed), when the fact is I really need something more like $1,500, for a total of around $2,750.

Unless a miracle happens (for example, I land that one-year-only job or, more likely, win the lottery), not only am I never going to earn any more than the $19,200 I’m making this year, my earned income actually is going to drop $2,400, because of the recently announced tightening of the noose around the adjuncts’ necks.

That means, I guess, the allocation from this serendipitous little “survival fund” will have to be adjusted.

Also, I’d like to simplify my bookkeeping.

What I have been doing is when money comes in, I transfer some of it to the joint account from which M’hijito and I pay the mortgage on the submerged house, transfer some of it to a self-escrow account for paying insurance and tax bills, transfer some into a short-term emergency and diddle-it-away fund, keep some of it in my checking account, and transfer $1060 from the survival fund to make up the shortfall between income and outgo. This complex shuffle no longer suffices to cover expenses. Way complicated!

So, I’ve cooked up something slightly different. In some ways, it’s six of one, half-a-dozen of the other (or, could we say, robbing Peter to pay Paul?). But it’ll give me a little bit more money—raising the discretionary budget to about $1,100 most (but not all) months—and the process will be simpler. I can’t afford the amount I actually need, but even a little increase will help.

Instead of moving money from Survival Savings to checking in amounts that supplement Social Security and teaching  pay, I’m going to go the other way around: move every penny of income—Social Security, teaching, bank heists, windfalls—from checking to Survival Savings. Then, once a month, I’ll pay myself $2,300. If any cash is left from the previous month’s budget, I’ll just “top up” the checking account to reach a base figure of $2,300.

This gives me a raise of about $250 a month, which I hope will cover the increase in routine expenses.

The problem with figuring out whether this will work and what it will do to the Survival Fund’s longevity is the extreme irregularity and unpredictability of adjunct income. From pay period to pay period, I rarely know what my check is going to hold. One week I can get $300, and two weeks later it’ll be $800 or $1,000, with no clear rhyme nor reason. HR seems not to know how to figure out what one will be paid, and not being an accountant, I can’t even make an educated guess. All I know is that during the summer when I most need extra money, my teaching pay drops into the basement, and during the month between fall and spring semesters I get nothing.

The only way to project the effectiveness of this scheme—and the length of time the Survival Fund will last—is to enter 2010-11 pay amounts into a spreadsheet showing how the new transfer scheme will work.

The upshot is surprisingly positive. Well…all things considered. Transfers into and out of Survival Savings  look like this:

If my amazingly tedious calculations are correct, Survival Savings will run out in August 2012. At that time, I’ll have to cash in a whole life policy; the post-tax balance from that will probably stretch another year or 18 months. After that…well, let’s hope the stock market is doing OK, because at that point I’ll have to start drawing down investments.

During the winter break and the month or so of summer that I’ll have no income, I’ll have to drop my living-expenses budget back to its present level, $2,090. This will be difficult next summer, because utilities are so high during the heat and because, as we’ve observed for the second summer running, everything goes wrong when you can least afford it. However…that comes under the heading of tough nougies.

If all this comes to pass as estimated (a very big If, indeed), then I should be able to live adequately and pay my share of the mortgage without exhausting Survival Savings until a year from this August. Might even be able to stretch it out for another month or two, if I can keep expenses significantly under $2,300 for several of the cooler months. That’s not unreasonable; when nondiscretionary bills are at their lowest, I can have a surplus of $300 or $400. Four of those would keep that $7,390 grubstake going through September.

Obviously, I’m not thrilled at the precariousness of this system. On the other hand… I feel like it’s really not too bad. If in fact the insurance payout will last another 18 months or so, then I will have succeeded in pushing back the time I’ll have to draw down investments for four years after Canning Day.

Those investments have about recovered their former, pre-Crash glory. Assuming our esteemed leaders don’t bring on another market crash with their grandstanding shenanigans, a 4 or 5 percent drawdown plus Social Security (assuming, again, that it still exists in 2013 or so) should cover my expenses and pay the mortgage—without benefit of flakey part-time teaching income.

Planning for Emergency Expenditures

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Sometimes you feel like you can’t win for losin’. You just get to the point where you think you’ve got the finances under control, you figure you can finally cope, and wham! Another annoying little surprise whaps you upside the head.

Just got my first summer paycheck—about $600 net for the first week of teaching. It’s not much, but it’s one heckuva lot better than nothing.

Some time ago I estimated that I’d net about $3600 from the two sections I’m teaching this summer. Six hundred of that would go to help cover the June through August utility bills, which I expected to soar because I made the conscious decision to set the thermostat at a comfortable level now that a tiny bit of income is flowing in over the 115-degree summer. The rest, about three grand, would be folded back into the mid-term survival fund, putting off the date I’ll have to draw down retirement investments by about three months.

Things look a shade better than planned: if the $600 is for one week, as appears to be the case according to the PeopleSoft statement, then the 2½ more paychecks they’ll owe me this summer should net just about $3,000. However, thanks to the new AC unit, the June utility bill did not exceed my regular monthly budget—although it remains to be seen what will happen when the July bill comes in next month. But even one month of not having to pay astronomical power and water bills preserves some of that $600.

So. I’m thinking, wow! What to do with this vast lucre?

Could I (can you imagine?) actually spend it on something I’d like to have or do? I would so much like to take my dear and constant friends, La Maya and La Bethulia, out for a wonderful dinner on the town. But I can barely take myself out to dinner at Taco Bell, much less treat friends to a gourmet feast at the Barrio Cafe. I still need clothes. The Sanitas clogs I bought a year or so ago and wear constantly are about shot—they really need replacing. Six hundred bucks might allow me to do all three of those things!

Well. No.

Harvey the Hayward Pool Cleaner

Harvey’s still not working. That’ll be another $90 for further repairs, bringing the total cost to get him running to about half the cost of a new Hayward pool cleaner.

And then, to frost the cake, the pool system is sucking air from somewhere during its shut-down time. When it comes on after having rested overnight, great bubbles of air belch out of the inlets.

That, my friends, is what we call “not a good sign.” Very possibly…indeed, the operative term is “probably”…there’s a leak in the plumbing somewhere.

Don’t even ask how much that’s going to cost to fix. Just say good-bye to the $600, and then some.

Yes, I do have an emergency fund. As we know, each month we should put a few bucks aside for these little contingencies, and I have the credit union automatically transfer two hundred bucks a month into said fund; anything left at the end of a month also goes into that emergency account. Problem is, the contingencies have been coming hot and heavy, and every one of them has cost a helluva lot more than $200: the dental bills; the car repair; the shingles shot that wasn’t covered by Medigap or Medicare; the doctor’s visit that wasn’t covered by Medigap or Medicare; and on and on. Each cost ran significantly more than the $200 monthly deposit.

This means the emergency fund has steadily been shrinking. There’s only about $1,700 left in there. It may not be enough to cover the cost of pool repairs, if the problem is what I fear it is. That means yet another big bill will have to be paid from mid-term survival savings. Instead of extending the time I can live on the survival fund as summer pay goes into it, that pot may actually shrink because of this month’s adventures. And the extra income earned from working like an animal all summer won’t help.

{moan} Remember that 20-hour day?

Well, I have a strategy, though a half-baked one.

One of the things that’s given to crapping out when I least need yet another unplanned bill (which is just about any time, come to think of it) is Harvey the Hayward Pool Cleaner.

Leslie’s has a perennial “sale” on those things, which is to say that their regular price is about $75 less than you’d pay if you ordered it online. Tax on the retail price would be about $33, leaving one with a small saving if one bought the critter there.

I’m thinking I should buy a new pool cleaner, using survival savings for the purpose (since I’ll have to rob that fund anyway for the upcoming gouges). Then go ahead and get Harvey fixed, too. This would give me two of these gadgets that function.

So, if one of them dies at a moment when I can’t afford a repair bill, it won’t matter. I can attach the other one and let it run until I can afford to get the invalid fixed.

This would give me a little more control over the surprise bills. Not much, of course, but some.

LOL! By that logic, I could control car repair bills by spending 20 grand on a new car and keeping the Dog Chariot as a back-up vehicle. Must hurry out and buy one.

Seriously: Do you have a strategy to deal with unexpected costs when the costs exceed the amount you can afford to set aside in your emergency fund?

Image: Hyundai Santa Fe. IFCAR. Public Domain.

w00t! w00t! and w00-h00-h00t!!!

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Power lines

OMG! Who would ever think it possible for a person to be thrilled by a power bill? The electric bill just arrived in the mail: only $187.04!!!!!!!

In freaking JULY! It defies belief!

I’m budgeted for $225 in the summer months. Last July the bill was $176.63, but that was with the old unit cranked up to 82 during the day and 78 at night. It was very, very uncomfortable in the house. Some of my friends refused to come into the house at all last summer, not wanting to be invited to sit and stay awhile.

This summer, having a few more dollah to spare, I’ve run it at an unheard-of 76 during the night and kept it at 80 in the daytime hours. While 80 is a little warm when you’re in an enclosed space, the new AC unit has kept the house relatively comfortable. And it has exactly reversed the relative comfort zones that characterized the old unit. The decrepit Goettl kept the front part of the house fairly comfortable but left the bedrooms roasting hot. This Goodman unit, set at 80, keeps the bedrooms at around 81 and lets the kitchen and family room slide up to a cozy 84. Since I’d rather be cool enough at night to have a shot at sleeping than end up lying on the living-room tiles trying to get a few z’s, the new arrangement is just fine by me.

For the bill to go up just 11 dollars is pretty amazing, especially considering that the power company raised the rates by 4.9 percent. I expected to see a $300 tab, which is exactly what I would’ve had if I’d tried pushing the thermostat down to 76 with the old machine. Since $176.63 + 4.9% = $185.28, what it means is that the new unit’s improved efficiency is allowing me to keep the house almost comfortable without a real increase in cost. If the hailstorm hadn’t brought me a new unit, free from heaven, I’d be sweltering all summer for the same amount I’m paying to ratchet it down to 76 at night.

Last August the bill was $239.08, so I expect we could see a $250 bill next month. But with this month’s bill coming in $38 under budget, I can afford it. 🙂

Image: High-voltage lines in Washington State. Jeffrey G. Katz. Creative Commons Attribution-Share Alike 3.0 Unported license.

Close Encounters of the Wee-Hours Kind

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Ugh! What could be worse than waking up at two in the morning with a headache?

Well…waking up at two in the morning with a headache, booting up your Mac, and having Firefox try to redirect to an Amazonaws site.

{sigh} Good morning to you, too!

I think Firefox may have blocked it. FF popped up an “invalid certificate” message. Amazonaws is a redirect virus—from what I can tell, it hijacks your browser to a site that tries to sell you fake antivirus software. I was able to abort the tab before it could load. Cleared the cache, then rebooted Firefox and don’t see anything amiss just now. Started Safari: no problem there…at least, not that’s readily visible.

At any rate, everything I’ve been working on over the past several endless days is backed up to an external drive and to the cloud, so if this antique unit is infected, the world will not come to an end.

Nothing much new here. All work and no play is making Funny a very dull girl. I’m still laboring through the phenomenal amount of work involved in building my summer courses with the new scheme to raise their academic standards. I’ve rewritten the calendars and syllabi, cleaned up and revised the PDF packages, replaced the peer review guidelines with the new modified rubrics, scheduled time in the library and computer commons (I hope…assuming they’ll let my classes in as desired). Remaining to do: write weekly modules for 102 course; finish writing weekly modules for the 101 course; create the 101 website; post and schedule modules on both sites; create grade sheets in Excel and upload to Google Docs; create individual reporting gradesheets; set up organizational labels in gmail accounts for TAs. That should take about three more days.

Then I’ve gotta start all over again for the fall classes. Fall course prep has to be done NOW, because these second-session summer courses bump right up against the start of fall classes. There will be exactly zero break between the end of the 8-week 102 course and the beginning of fall semester. So my fall classes will have to be ready to go before these summer courses begin.

Now that the new Lady Cruella scheme is realized, though, it should be relatively easy to recycle the stuff I’ve written for the summer courses. I’ll have to write fall calendars and syllabi. Plus we have a new textbook for 101, starting in the fall, and so the 101 reading assignments will have to be rewritten.

The new text is much superior to the Longman handbook we’ve been using. Unfortunately for me, that means I’ll have to read the damn thing. There’s exactly a month to go before summer classes start…and I’m afraid every minute of that time is going to be occupied with unpaid labor.

In the money department, I’m afraid to enter all the charges I’ve run up in the past couple of weeks. The receipts are sitting in my wallet waiting to be entered in Excel. Though I’ve managed to stay out of Costco, I did go into the terrifying Pier One and spend something over a hundred bucks on decorator items.

Bad human!

Then to make things worse, I so much liked the tube dress from Whole Foods that I decided to go grab another one. They’re not expensive—under $30—but when things are tight even thirty dollah seems like too much. But where clothing is concerned, I tend to operate on the theory that if it fits, it looks good, and you really like it, you should get two of them because you’ll never see them again.

Didn’t stop there, though: got my hair done. Went back to my lady in Tempe, which was an excuse to go out to lunch with my former associate editor and present subcontractor, whose second layoff from the Great Desert University is being spun out over about a year.

Hair lady only charged $50, which is an amazing bargain considering that she produced a style very much like the amazing Shane’s for a little more than half of what he charges. The S-corp paid for the business lunch, so that at least doesn’t come out of my regular cash flow budget.

But a couple of other restaurant junkets most certainly will. Gotta stay out of restaurants and gourmet grocery stores! 😀

Spent some more money at Home Depot, speaking of places to stay out of. Still want a composter, but am not, not, not going to pay $150 for the privilege. I’d picked up one from Costco for $99 (even that was way too much). Brought it home and realized I couldn’t even begin to put it together: it required two people and power tools. Reviews on the Web were replete with people complaining that it took four or five hours to construct, and the job really needed three, not two people. If I’d had Jack the Handyman do it, he’d have charged as much as I paid for the thing.

So, having returned that contraption a couple of weeks ago, yesterday I picked up a plastic trash bin with a snap-on lid. I’ll punch holes in the bottom and sides, load it with vegetable waste, and voila! Compost bin. Secure the lid with a bungee cord, and you can flop it over on its side and roll it back and forth to turn your compost. Cheaper, but still…not what you’d call “free.”

Moving on, my car has developed an oil leak and it needs a new timing belt. Chuck remarked that sometimes oil leaks on that model spring up around some timing belt thingamajigger whose name I don’t recall at this hour; if that’s the case, he wants to change the belt now, not later. Interestingly, though, I don’t happen to have $350 or $400 laying around, not after the late, great dental adventures.

I hate to put a chunk of money into that old clunk. Really, I should get a new (or at least newer) vehicle. But this is not the time. I missed my chance to take money out of a brokerage account for that purpose; with the market plummeting, I’m not about to cash out now. And if I’m going to buy a car, I’d rather wait till the end of the year, when prices are a little lower.

Water bill came in surprisingly low, under a hundred bucks. It’s getting hot enough now that the potted plants need to be watered every day to keep them alive. So I expect it’ll be up to $125 next month. By then, though, a paycheck will be coming in. Mirabilis!

Welp, the headache is easing and it’s not even dawn yet. I’m goin’ back to bed!

Image: Perseid meteor striking the sky just below the Milky way. Mila. Creative Commons Attribution-Share Alike 3.0 Unported, 2.5 Generic, 2.0 Generic and 1.0 Generic license.