Coffee heat rising

Budgeting

KISSing the Bookkeeping

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Recently Money Beagle put up a post ruminating about whether his bookkeeping system, which entails subtracting earmarked funds against net worth, is maybe a shade on the overcomplicated side. I’ve been thinking the same thing about my own baroque shekel-counting schemes: this stuff is getting out of hand! As one of MB’s readers remarked, it may be time to apply the KISS principal: Keep It Simple, Stupid.

Bank accounts grow like topsy around this place. Right now I have four personal bank accounts, a joint checking account with M’hijito, a business checking account, and a PayPal account for the business. To keep track of credit-card charges, I use yet another spreadsheet. Then there are the spreadsheets for the budget: one for monthly nondiscretionary expenses and one for discretionary spending. Taken together, these little fellows have spawned eight spreadsheets for me to keep up-to-date.

These were relatively easy to handle in Quicken, because Quicken links accounts so that when you make a transfer from one to another it will automatically register the transaction in both accounts, and because it’s very easy to reconcile an account in Quicken. But now that I’m keeping my books in Excel, reconciliation is an old-fashioned headache, and transfers require me to manually debit one account and credit the other. It doesn’t sound like much extra work, but when you have to do it, you find it’s easy to lose track of stuff. One already has enough pains in the tuchus in one’s life without having to deal with some more.

How to decomplicate this?

Well…unclear.

In the first place, at the time I was laid off, I had a $14,000 emergency fund, which I stashed in my checking account and used as a “cushion,” ensuring I would never overdraw the account and eliminating the need to keep track of it someplace else. Since the market had crashed with a resounding thud, I really didn’t want to invest this money, because I was afraid of losing even more than the $180,000 that had already gone down the toilet.

After a difficult year of trying to live without pulling down anything from the remnants of my life savings, the market has pretty well recovered and savings are nearing their former state of normalcy.

So, in the fall I let my financial manager know I could not continue to live on less income than my base expenses and I would have to start taking a drawdown from investments. He suggested that instead of incurring a taxable event each month, I should use the after-tax money in the emergency fund, since in reality there’s plenty of money in taxable savings to cover emergencies. So I’ve been using about $1,100 a month of that 14 grand to supplement Social Security, providing enough to pay the bills before the unpredictable and unreliable pay from adjunct teaching comes in. To manage this, I opened a tiered money-market checking account to hold the amount remaining from the original 14 grand; from that I disburse the $1,100 to regular checking once a month. I figure this fund will be exhausted by September.

Adjunct teaching pay has to go to cover the mortgage on the downtown house. My initial plan was to transfer only enough to cover my share of each month’s payment to M’hijito’s and my joint checking account, which exists to hold cash for the mortgage. To keep from diddling it away on daily expenses, I started stashing teaching income in the money market account. Obviously, though, to keep track of those two items—the fund I was now depleting for living expenses and the money for the mortgage—and ensure I didn’t accidentally spend some of one fund on the other purpose, I needed another spreadsheet, one that would keep track of the mortgage payment fund. Now we’re up to nine spreadsheets. Make that ten: there’s one tracking investments, too.

Then something over $11,000 came in from the insurance company to cover hail damage. This money had to be carefully sequestered, because if I diddled it away there wouldn’t be enough to pay the swarms of workmen. Reluctant to open yet another account, I stashed it in the money market account, along with the mortgage fund and the dwindling cost-of-living fund. This added to the potential for confusion exponentially, requiring yet another spreadsheet.

Meanwhile, the bank account holding the self-escrows for annual tax and insurance payments (I have to set aside $325 a month to cover property tax, car insurance, and homeowner’s insurance) also held the summer stipend I got for developing the online course last year. The summer money would, I hope, carry me through what I expected would be four months in 2010 with less income than outgo (it devolved into five months, but that’s another story). There’s now just enough summer money left (if my arithmetic is right) to cover half the cost of the new pair of prescription glasses.

Okay. That’s the “system” as it stands. Is there a way to decomplicate this system?

Now that we have a permanent loan modification, it’s clear that the amount I’m earning during the academic year will more than cover a full year’s mortgage payments. The departmental chair has assigned me two sections to teach next summer, the proceeds of which will be gravy.

So, New Plan #1: transfer 100% of September-May teaching income to the joint account as it comes in. Let M’hijito figure out how to allocate it, with his share, to cover the mortgage. Use the summer pay (June-August) to cover the extraordinarily high costs of living in Arizona during a 115-degree summer, and, for a change, actually run the air-conditioning when typing on a keyboard will raise a sweat.

New Plan #2: At the end of each month, transfer any money left from that month’s income into the savings account for discretionary spending.

These two strategies will hugely plump up monthly savings, which is used for things like clothing, car maintenance and repair, and house repairs. In the winter, there’s often $100 or so left; in the summer, a fair amount should remain from the teaching income—possibly enough to add up to around $3,000, plenty to buy clothes, keep the aged car running, and cover small emergencies.

Decomplicating benefits: Moving all academic-year teaching income directly into joint checking eliminates the need to keep track of how much of the money-market account’s balance should be held aside for the mortgage. That takes one moving target off the field. Transferring whatever remains in checking at the end of each month allows me to see, at a glance, what’s in savings to cover unplanned expenses.

Once the glasses are paid for, all that will remain in the Tax & Insurance account will be dedicated fully to paying tax and insurance. This will decomplicate another spreadsheet; here, too, the bottom line will show how much is available to cover those exorbitant costs.

And once the bills for the roof, the new air conditioner, and the exterior painting are paid, all that will remain in the money market account is the balance of the survival savings. When that’s depleted, the money market account can be closed. w00t! A whole spreadsheet gone!

By the end of the summer, here’s how I expect this to look:

Still complicated, but at least it shouldn’t take 10 spreadsheets to keep track of it.

Speaking of those spreadsheets, why do I need ten of the damn things? Right now I have two workbooks, one tracking cash flow (in all those bank accounts!) and credit-card charges and one tracking the budget, along with various schemes, projections, and retrospective summaries. Why am I doing this?

I think I’ll collapse these into a single workbook, leaving all the fevered calculations in a separate file. This will allow at least allow me to move back and forth between cash flow and the budget, rather than keeping two files open in Excel to enter routine transactions. This will reduce the number of pages where I regularly enter numbers from sixteen to five. That is, from these (some of which have been defunct for over a year!)…

to this:

And that, I suppose, is as close to minimalist as I’m gunna get.

Excel vs. Quicken

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So…how’s the bookkeeping working, after a year of using Excel instead of Quicken for Mac?

Last January I switched to Excel for tracking my bank accounts, budget, and credit card charges. After years as a Quicken customer, I’d really lost patience: data vanished in the transfer from Windows to Mac, Quicken for Mac was clunky, and I’d long ago had it with having to upgrade to a pricey  new version every time I turned around. It appears I’m not alone in those sentiments.

Excel has its advantages and its disadvantages vis à vis Quicken. Biggest negative: it can’t talk to your bank or your investment house. Quicken lets you upload and download transactions and data from those august institutions. Nor does Excel care to converse with TurboTax, Intuit’s tax preparation software. Excel talks to you and only to you (or so we hope).

If you want to integrate your bookkeeping with your banking and investing, however, there are alternatives, some of them out there in the Cloud. Programs such as Mint.com (which, alas, was purchased by Intuit), Buxfer, MoneyStrands, Pear Budget, or Thrive sometimes do that sort of thing, and of course Mint will now interact with TurboTax. Not having tried one of these programs, I hesitate to state that any are better, worse, or the same as Quicken. But there they are: something to try if your patience with Intuit wears thin.

Excel has one helluva learning curve, especially for those of us with English-major math skills. After a year of working with it, I’d say my skills are no better than they were at the outset. A year of manipulating Quicken left me with a black belt in Advanced Quickening. However, a rudimentary understanding of Excel’s functions allowed me to build checking and savings accounts and to massage the data into something that I think will be intelligible for my tax accountant.

It’s useful to know that Microsoft now offers a variety of home and office financial  management templates, designed to work with Excel. But it’s pretty easy to build your own.

To build the new Excel workbook, I tried to ape the accounts and functions of Quicken. This entailed creating spreadsheets for each bank account, laid out in identical patterns, plus another spreadsheet for credit-card charges. The latter allowed me to reset the balance each month to the amount budgeted for discretionary spending (which is all that goes on my credit cards), so that the bottom line showed how much was left in any given month’s allowance.

Typical headers for bank account
Tracking credit-card spending against an $800 budget

Come the first of this year, I created what I hope is an intelligible spreadsheet for the accountant by merging data from the credit-card spreadsheet with the bank-account spreadsheet entries and then sorting all the data by category. This made it possible to summarize tax-related data while also making all the year’s transactions, organized by budget category, easily visible and transparent to her.

A number of revelations ensued as I tried to organize this material for the tax accountant. One is that it makes sense to number tax-related categories (1, 2, 3…), so a “sort” command will bring them up at the top of the “sorted” spreadsheet. For example,

1 Medical
2 Mortgage interest
3 Trade group dues

…And the like. When “sorting” data, Excel wants to put numbered items before alphabetical items; so, if you preface each tax-related category with a numeral, the “sort” function will gather all the tax-relevant categories together.

Yeah, I know there’s something called a “pivot report,” and yes, I do suspect it could solve all my problems. However, only a Druid could comprehend the instructions in Excel’s Help file. I gave up after several efforts at trying to call upon those spirits.

In addition to its impenetrability, Excel has the annoying quirk that the (very simple!) formula you enter to create a running balance sometimes comes unstuck for no discernible reason, giving you an incorrect balance. Occasionally I haven’t discovered this until I’ve tried to reconcile my books with the bank’s. Figuring out the problem can be really difficult, because it often results not from incorrect data entry but from some mysterious disjunct between what you’ve asked the program to do and what it decides, midway through the process, to suddenly start doing. When gut instinct tells you something like this is happening, the solution is to go up to a row where the formula is visibly working and then drag the “balance” cell’s qualities all the way down the column. This corrects the error, wherever the heck it started.

We know the irritants presented by Quicken. It’s bloatware. It’s vaporware. The Mac version is clunkware whose files can neither be read by the PC version nor converted to a readable version. Your accountant, you can be sure, uses the PC version. And worst of all, its maker Intuit forces you to buy new, ever-more-bloated versions every time you take a deep breath. IMHO, these are very, very large irritants.

So, of course, is the difficulty of learning and manipulating Excel.

For me, just now it’s a toss-up. For a brief, not-so-shining moment last month, I considered running out and buying the latest version of Quicken to restart my books in 2011. But, on reflection, possibly not. Quicken’s biggest advantage over Excel is its ability to commune with your financial institutions. I’ve never felt moved to use that feature; my financial manager does the buying and selling of shares, and it’s pretty easy to access the credit union, the IRA, and the brokerage accounts online. Comparing and reconciling them is very simple, and I don’t need a piece of intermediary software to perform the desired transactions.

So. To the extent that one can be said to ♥ any software, I suppose I ♥ Excel.

What program do you prefer for bookkeeping, and why?

Budgeting for a Windfall

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Things are looking up. The departmental chair has assigned me not one but two summer courses, God bless him! Even though it appears the magazine writing course will not make, that’s still seven sections for 2011 (assuming three sections materialize in the fall). Pay for seven sections amounts to $16,800, or a net of $13,272. We await the credit union’s offer in the pending renegotiation of the upside-down mortgage on the house M’hijito and I naively got ourselves into, but it can’t be any worse than we were paying before we got the loan modification at the time I was laid off. In the worst-case scenario, I would owe $9,600 in 2010. My teaching income is the sole source now of cash with which to pay my share of the payments. Think of that: $13,272 − $9,600 = $3,672, a nice little windfall!

What on earth am I going to do with $3,672?

Seriously. After a year of living frugally, I actually had to think about how I could spend an extra thirty-seven hundred bucks.

The obvious, of course, is stick it in savings! But in February another unpaid sick-leave reimbursement will come in. It will fund my Roth IRA with about $1,650 to spare; what I can’t put into the Roth will go into the brokerage fund. The net represents 31 percent of net 2011 earned income. So I don’t feel any great urgency to stash the the cash I’ve earned by actually working.

Au contraire. It’s time for me to have a life.

There are a few things I’d like to spend some money on. For example: air conditioning. I do not ever want to have to spend another summer sweltering inside my home with the thermostat turned up so high the activity of tapping on a computer keyboard breaks a sweat.

Then: water. In the summer of 2009, as some of you may recall, I kept a mostly unsuccessful container garden under the orange trees. Because plants in pots have to be watered every day and because I could afford to be lazy while I had a job, I would carry the hose to the pots and set the timer for ten or fifteen minutes…every single morning. The container garden was a fail, but the water bill was cause for celebration down at the city water & sewer department: $214 in July 2009! That’s about $90 over my water budget.

The $214 water bill, as it develops, produced nothing that summer, but it did buy a fantastic bumper crop of glorious oranges. By last February the trees were loaded with big, juicy fruit as sweet as candy.

Last July’s water bill was a far more  modest $96.10. I shut off the drip watering system, dragged the hose to the landscape plants, let the xeric planting in front go without, and most certainly did not indulge in container gardening. Or much of any other kind of gardening, come to think of it.

The result: Tiny little parched fruit on the orange trees. This spring’s crop, what there is of it, is hardly usable.

The fruit took a beating from the hail storm. About a third of the oranges dropped off the trees; maybe half the surviving fruit was all bruised up, left with brown scars on the orange skins. The fruit that managed to cling to the branches is stunted—no larger than a tennis ball, and many pieces smaller than that. While most of the surviving pieces are reasonably juicy, they’re not very sweet. Some are almost flavorless.

Obviously, orange trees need a lot of water to thrive. And since I adore those oranges, I want them to thrive.

The highest electric bill of last summer was $239.08, which was $14 over budget. It was hotter than the hubs of Hades in my house—truly uncomfortable, enough to start me thinking about moving away from Arizona. Supposedly the new hyper-efficient air conditioning will hold the power bills down a bit this year.

Right. I’ll believe that when I see it. The first power bill with that unit in place came to $85.64; the January 2010 bill was $104.34. Difference was only twenty bucks…but then, we didn’t have a hard frost last winter. Until the summer bills come in, we can safely assume the new Goodman will cost about as much to operate as the old Goettl unit did.

So, I figure that to cool the house to a reasonably comfortable state (say, no hotter than 76 or 78 degrees) and to irrigate those citrus trees adequately will take about an extra $300 per month.

Okay. That’s $900 for the three hottest months of the year.

Now. I need a pair of shoes, and I wish to shed the Costco jeans and start wearing some decent clothes. That’ll be $150 for one new pair of pain-frees and let’s say $200 per shopping spree in the midsummer and post-Christmas 2011 sales: $150 + $400 = $550 to upgrade the wardrobe.

The house needs a lot of work. To repair the foundation crack on the west side, repaint the sun-blasted gables, touch up eroded exterior paint, paint the office door (a job that never did get done!), spray-paint the grungy interior of the garage, and build a French drain to direct ponding rainwater water away from the patio will cost about $500.

I need a new pair of progressive shades in the frame style I favor, which I’ve already ordered. Price tag: $720.

And this last week I made a surprising discovery: going to concerts makes me feel happy. Yes. Very happy. Music tameth the neurotic beast. A week of attending Bach concerts every second day left me feeling an unaccustomed calm, unruffled by the usual minor aggravations. As you can imagine, I wish to continue this.

Season tickets to chamber music are $200 for eight concerts, which works out to a fairly reasonable $25 per performance. When you buy them one at a time, it’s $30 apiece. The Downtown Chamber Series is only $10, but they don’t do many performances. The Phoenix Chorale is doing four performances this season plus several special events; prices are $5 less for us old bats, and you can attend their rehearsals for free. The Louise Kerr Cultural Center has a jazz series; price is about the same. The Desert Botanical Garden has its “Music in the Garden” series, mostly jazz. Plus the community college and the university music departments mount performances all the time, at very reasonable prices. So there’s a lot going on. Five hundred dollars would buy two series and entry to a number of miscellaneous events.

Soooo…. What would this spend it or bust budget look like?

Holy mackerel! I can’t even think up enough ways to spend the extra money!

Whence this spectacular new lucre? Well, it’s happening because I finally gave up trying to avoid drawing down retirement savings. The nest egg recovered pretty well in 2010, to everyone’s amazement. Really, I don’t think the boys down at Stellar believed, in their heart of hearts, that the market would come back the way it has. On their advice, I tried my level best to get by on just Social Security and the piddling $14,160 that Social Security allowed me to earn from teaching last year. That was difficult; it just wasn’t enough for me to live on.

With happy days here again (except for the 17 percent of Americans who remain unemployed or underemployed, myself among them), we’ve changed the strategy. Right now I’m spending down the post-tax savings I had accrued before GDU laid me off, to the tune of about $1,100 a month. This should last until September, at which point I’ll start a 3 percent drawdown from retirement savings. That plus Social Security amounts to just enough to meet my base monthly needs. So, everything I earn teaching can be used to meet expenses beyond bare survival.

My initial thought was that the teaching income—virtually all of it—would go to pay the mortgage on the downtown house. And that would have been so under the onerous earnings limitation imposed by Social Security in 2010.

However, in 2011, I’m free at last of the earnings limit.  That allows me to take on two extra courses, about the max the community colleges will hire me to teach. Net income from two extra courses is almost $3,800.

If a miracle happens and the magazine-writing course makes, then I would net about $5,570 more than needed to pay the mortgage.

It’s a miracle!

Now, if I saved the money instead of spending it on myself, in three years I’d have enough to buy a brand-new car in cash, despite the low trade-in value of a decade-old gas-guzzling minivan.

But I figure…what the hell. Since I can’t dream up enough ways to diddle it all away, unspent cash is going to accrue in savings willy-nilly. My car has 100,000 miles on it. The mechanic par extraordinaire thinks it will run to 150,000 miles. That’s five more years. By then, we should have much better choices of fuel-efficient vehicles, and some of them will be a year or two old, available at post-depreciation prices. Hang onto the Dog Chariot until it’s ready to fall apart, and I’ll only have to buy one more car during my remaining lifetime. How to go about paying for this new vehicle is a problem that will have to solve itself when the time comes.

As for how we’ll cover the cost of the mortgage when I can no longer work—about four years from now, by my estimate—fifteen or twenty grand in savings would delay but not solve that problem. The mortgage also is something we’ll have to deal with in due time.

Image: Mitsubishi Electric Car. Tony Hisgett. Creative Commons Attribution 2.0 Generic license.

Calculating the next year’s budgeting

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The future of real estate, 2010

Now, this new scheme to do the 3 percent drawdown from savings so as to stock my checking account with enough cash to cover monthly expenses is not all beer and skittles.

The fly in the beer, alas, is the misbegotten mortgage on the downtown house, which under the influence of the Crash of the Bush Economy (duck! Evan’s got the Nerf Bat! :-D) has morphed from what looked like a wise move into a money-sucking black hole.

To cover my share of the mutual madness M’hijito and I got ourselves into, I’ll have to teach two sections of composition from now until the universe ends. It means that although my bills will be covered by savings and Social Security, almost everything I earn through adjunct teaching will go to pay the mortgage.

It’s annoying, but not dire: two classes don’t amount very much work. Three sections, more work than I’d like to do but not intolerable, would cover the mortgage and leave some pocket change.

Well. That assumes that we can talk the credit union into morphing our present loan modification into a permanent 40-year loan at 4 percent. If we can’t, then I’m screwed. M’hijito is planning to call the bank next week to arrange a meeting so we can negotiate the mortgage’s reset, since the modification expires in February.

This predicament would be a lot less annoying if the house were worth anything like what we paid for it. Though values in the central city dropped slower than those in the far-flung styrofoam-and-stucco suburbs, over the past year they’ve sunk into the sub-basement. We’re now about $100,000 underwater on the little house. Not counting the $35,000 we put into renovating it.

M’hijito says the house two lots down the street just sold for $140,000, and it’s larger and nicer than ours. We paid $235,000.

We’ll have to figure out what to do about that after he finishes graduate school, which will take another five years, assuming he works at it steadily. Coincidentally, about five years is as long as I figure I’ll be able to continue working, assuming my current ailment is something minor and not one of the several gawdawful things it could be.

Which reminds me…gotta get that will updated.

Meanwhile, if I live that long, for the next five years or so life will still be a little pinched—the $2,040/month budget just covers bills, with maybe $50 or $100 to spare for extra costs. But at least I won’t be wondering where even that minimal amount is going to come from. Though still won’t be any vacations, by working somewhat harder than I’d like to work in “retirement,” I can at least buy clothes and have an occasional meal out.

Image:
Zacharie Davies, Shack in Pigeon Forge, Tennessee. Creative Commons Attribution 3.0 Unported license.

Getting through a Social Security-free month

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Despite the late, great annoyance of having Social Security confiscate an entire month’s SS income in direct contradiction of what two of its workers said would happen, it looks like October will pass without too much disaster. I’ve managed to scrounge together some cash by combining last spring’s American Express kickback (which, mercifully, I’d stashed in a savings account and so not diddled away) with part of the summer stipend the college paid me to develop this fall’s online magazine writing course.

When it looked like I would only be teaching two sections this fall, one at a time(!), I’d planned to pay the saved stipend to myself over the four months of the fall semester, prorating it so as to provide what I’d get from teaching three sections.

Pay for a semester-long course disbursed over an eight-week short session, obviously, would amount to paychecks equivalent to teaching two sections over sixteen weeks. Not awful, but not enough.

Well. Yes: awful.

I’d figured that if I spread that stipend money over the semester, I’d have about the same as what I’d earn teaching three sections this fall. However, in September I had enough to get by, partly because we had a mild July and utility bills were lower than planned. So I just left that month’s prorated stipend payment in savings. Thank goodness! That allowed me to prorate the chunk of money over three months instead of four, giving me a monthly disbursal of $641.

Without the Social Security income, ordinary cash flow will not provide enough to get by in October. It wouldn’t under the best of circumstances, but…as usual, when you’re broke everything breaks. The most recent storm has cost $100 so far—Gerardo and his sidekick spent three hours yesterday afternoon cleaning up the blanket of debris that was spread over every square foot of my quarter-acre lot. I managed to get most of the crap out of the pool, but now the filter’s clogged. I’m out of diatomaceous earth and so will have to drop another unplanned $20 on that, so that I can backwash the pool. When I backwashed briefly yesterday, the backwash hose burst in three places, spraying me and half the yard with dirty, DE-mudded water, so now I’ll have to buy and install another hose. The electric bill hasn’t arrived yet, but it will be astronomical: last month was the hottest September on record, and it was so humid that I couldn’t keep the thermostat at its usual 84 degrees all day.

I hadn’t planned on having Gerardo come over this month—the storm changed that penny-pinching scheme. And I hadn’t planned on having to get another haircut this month—the new hair stylist, who took the place of the other new hair stylist who did such a great job but who immediately flew the coop, isn’t skilled enough to do a short style that lasts two months. So that’s $150 off the top, as it were…and we’re just one week into the month. Ugh!

Over this penurious summer, I’ve been eating out of the freezer and off the pantry shelves, and so the larder is about bare. Yesterday I spent $113 at Costco, and pretty quick I’ll have to buy more to restock the staples and frozen stash.

OK, so there’s $641 from the re-prorated summer stipend. Sifting through the savings account where that was stashed, I realized I’d never spent the $333 that came in from the Costco AMEX cash “reward” last spring. Actually, I’d stashed it to cover taxes and insurance, after I realized that the $300/month self-escrow I’d been making last year would not cover the jump in homeowner’s and car insurance, on top of property tax on a valuation far in excess of the house’s real value. The AMEX kickback went in there and I jacked up the self-escrow to $325, figuring that amount would cover the 2010 bills. Maybe.

However, this year the county cut property taxes, bringing them more in line with the actual value of Arizona real estate, which at the moment is about nil. So I figured I could raid that $333 and let the future bills take care of themselves. Thanks to the startling cost of Medicare and Social Security’s mandate that “early” retirees live in poverty, my medical expenses will come in well over 7.5% of 2010 income. So I should get a tax refund next April—that can help to cover the insurance and property tax.

Amazingly, $333 plus $642 comes to exactly the amount of a net Social Security payment: $975!

So, if no more unplanned expenses come in this month (har! this is only the 7th!), I should get by. Maybe.

The problem is, I have no idea what my salary will be and can only  make an estimate. It’s a rare day when two successive adjunct paychecks are the same. But if I’m right, there should be enough to make it through October.

November will be another matter. The government is withholding not one but two months’ worth of Medicare payments in November, since obviously if you don’t get paid in October you have nothing for them to engross the Medicare Part B premium from. So that will cut my net income by $111 right off the bat, merry Christmas to one and all. I’ll be buying precious few Christmas presents for M’jihito, and I probably won’t be able to afford the usual Thanksgiving and Christmas feasts.

Speaking of feasts, the choir director informed us last night that we’re expected to show up at the annual fund-raising shindig. The dinner is a hundred bucks! I don’t know what I’m supposed to do about that. I don’t have a hundred bucks to spend on dinner—the $20 donation I made toward the altos’ contribution to the silent auction was more than I could afford, with no Social Security coming in and no real idea what I’m going to earn from my laughable “salary.” Guess I’ll just lay low and pretend I didn’t hear him.

Last year he footed the bill for my dinner. But I really don’t feel comfortable about that and most certainly don’t feel it can happen more than once. Oh well.

Jeez…it’s getting late. Almost 6:00 a.m. Gotta run!

Friday Torpor

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Well, only ten more days to go in this month’s discretionary budget cycle, and I’m well on target, for the first time in months. Now that I’m finally getting paid, now I’m staying on budget! Every single month this summer I’ve gone over budget, with too little money coming in to cover base expenses even if I could have made budget. One little calamity after another racked up one big bill after another.

It looks like I’m going to be paid about $545/pay period, about $83 a month more than I expected. If I transfer $249 a month from the summer stipend (prorated over 16 weeks), then I’ll end up with about $185 a month more than needed to cover basic expenses.

As the weather cools, the amount of play will be more than that, since the air-conditioning and water bills drop steeply during the winter months.

That, btw, is without a drawdown from the 403(b). I cut the drawdown to a dollar a month by way of preserving capital. The state requires retirees to take something out, to remain eligible for the payout for unused retirement pay, which, thanks to our leaders’ infinite wisdom, is irrationally paid out over three years. I rolled most of the money in that account over to my big IRA, where it could be invested more intelligently, but had to leave enough to cover this year, 2011, and the first two months of 2012. The last RASL payment is due in February 2012; the instant that  hits my checking account, whatever remains in the 403(b) goes straight to the IRA.

I’d left enough to cover a $500/month drawdown, since no one at GDU, the State of Arizona, or Fidelity seemed to know what was the minimum drawdown one could take and still qualify as “retired” for RASL purposes. Late last spring, some guy at Fidelity finally revealed that you could take out as little as a dollar a month. Not having enough to live on over the summer, I kept the $500 ($383 net) coming through the summer but arranged for it to drop to a net 77 cents a month starting this month.

The stock market has been so volatile—and the fact that we’re in an economic depression so obvious—that I wanted to avoid pulling out money from investments whose value probably is near their nadir. This strategy will keep $6,000/year in that account, instead of having it come to me to be frittered away on living expenses.

Nevertheless… I’m thinking that next summer I’ll draw a chunk out of that fund to make life a little less precarious.

If I do get a summer course—or if I can find some other job—then I’ll take out enough to net about $2,000. That would allow me to run the air-conditioning enough to keep the house tolerably comfortable. I am tired, tired, tired of breaking a sweat by working my fingers on a computer keyboard! It might even provide enough, combined with whatever I’ve managed to economize over the nine-month academic year, for me to take a little vacation someplace cooler. If I don’t get a course, then I’ll need net $3225 to cover my living expenses from the end of May to mid-September: that’s a $3,970 drawdown. In that case, I won’t be living comfortably or taking any trips, but at least I’ll be able to get by.

At any rate, in theory I should be able to do OK without having to take much out of savings, as long as I’m teaching. I can improve on that theory significantly if, come next May when I reach so-called “full” retirement age (don’t you love it? at 65 you can be “fully” unemployed and unemployable, but you can’t be “fully” retired!), if next May I take my entire emergency fund and pay back the amount of SS the feds have doled out so far. This would jack up my Social Security payout to the amount it would have been had I managed to hang onto my job to age 66, a better pittance than the one I’m getting now. The amount would the more than the 4 percent drawdown one can supposedly take from investments, and so I think this would be a smart move.

It leaves nothing to buy a new car, however. The Dog Chariot won’t run forever, and so I’ll have to figure out a way to afford a replacement set of wheels sometime in the near future. Oh well…later. I’ll think about that later.

For the nonce, I’m in a daze—another 4:00 a.m. wake-up call, lhudly sing goddamn. Along about 6:00, stumbled into the kitchen to fix breakfast for me and the hound and was jolted awake by a sharp chomp on a toe: more Ondts! I think they’re coming in under the back door this time, but am not sure because I can’t find them outside. They may be entering through the woodwork. Sprayed the little gals with some more home-made window cleaner, mopped the floor, and am now waiting for the tile to dry so the dog and I can get some food.

One reader asked what’s in the window cleaner. I no longer measure, but just toss the stuff together by eyeball. It’s about half a spray bottle of rubbing alcohol, to which is added about 1/8 to 1/4 cup ammonia and a like amount of vinegar. Fill to the top with tap water, and voilà! A very fine grease-cutter, glass-cleaner, and ant-killer.

Sooo much work to do today…must get moving.