This morning while we were out estate-saling, La Maya reported on a recent burglary in which the thieves made off with the neighbors’ jewelry, and only their jewelry. Other valuables, including an iPhone left sitting on a nightstand, Mac and PC laptops, and a large-screen TV were untouched. But a lifetime’s collection of jewelry was lifted, apparently for the gold.
A chat with the police revealed that gold is now selling for $1,300 an ounce. The vic, on advice from friends, paid a visit to a nearby pawn shop, claiming to be looking for a gift for a sister who desired rubies set in gold (exactly the description of a set the couple had picked up on a trip to Spain).
They were advised not to tell a pawn dealer that they were looking for stolen goods, because of course it’s wildly illegal to accept stolen property. And as we all know, no pawn dealer would ever do any such thing, eh? Word has it that if you say you’re looking for something that was taken, the pawnshop people will freeze you right out. Instead, claim you’re shopping for a purchase that resembles the stolen jewelry and hope they bring it forth.
Anyway, when she went into this nearby pawn shop, the dealer remarked that people are flocking to sell their gold. (Yeah! And presumably everyone else’s! :-))
Prices, he said, are high and unstable—just that morning the price of gold had risen $120. He pointed out that at the current prices, you could bring in an earring that’s lost its mate or an out-dated bauble and come away with a nice pocketful of cash.
Dealers weigh your jewelry and pay by the gram or by the troy ounce. Today a gram of gold was selling for $41.66. One gram equals .035 ounce.At the end of trading today, gold was selling for $41.66 a gram, or $1,295.83 an ounce. He said even a thin piece of gold of the sort that decorates an earring could be worth a couple hundred bucks.
La Maya said she’s going to dig out the orphaned earrings she’s tossed in the drawer in the forlorn hope of someday finding their lost mates, and she’s going to schlep them to the nearest pawn shop. I’ve got a couple of orphaned earrings myself, plus a pair of old 1970s hoop earrings, massively out of style (14k, as I recall) and a gold ring that no longer will slide over a knuckle.
At those prices, you could turn your discards into enough cash to pay off a credit-card balance or take yourself out to a very nice dinner or two or thee.
Think of that. Gives new meaning to “decluttering,” doesn’t it?
Readers have suggested that one reason underlying my occasional fits of panic over money, which usually occur when something interrupts cash flow that I had planned on and depend on to pay bills, is my habit of allocating funds to various categories. Possibly, they imply, the sea would be calmer if all income poured into a single account and I just didn’t worry about whether enough was sitting there to cover taxes, insurance bills, and the inevitable little surprises. After all, I do have a decent emergency fund—$14,500, more than I gross all year from teaching. In theory, that should cushion the various little blows that strike from time to time, and it should cover the hefty annual bills one has to pay.
It is true that I have a bad habit of overmanaging my finances. The result is that I indeed do complicate things, typically by setting up piggy-banks to hold funds designated for this or that purpose. These organizational devices grow over time into weedy Gothic structures with lots of gingerbread on the facade and secret stairways inside the walls.
One facet of this underlying problem is that I’m now living on a highly variable income. From September through May, a steady flow comes in from the community college. But I never know how much that flow will be: there’s no way of knowing how many classes I’ll be teaching until they’re assigned; in September, January, and May, classes meet only a few days, and so pay from that is predictable only in its sketchiness; and I can occasionally earn little stipends by attending training workshops or preparing an online course. Social Security, we’ve seen, has its treacherous shoals. Blog income can be anything from $100 to $300 in a month. And freelance editing is very much a catch-as-catch-can endeavor.
This, for a person who harbors a pathological desire to know that each month enough cash will reside in the bank to cover the utility bills, is nervous-making.
During the time leading up to the layoff, I mapped out a strategy for “smoothing out” income so there would always be enough (I hoped) to put food on the table and run the house. Fundamentally, the idea is to build a “pool” with a reserve deep enough to protect one from unexpected expenses or periods with no income. Out of that pool, money is allocated to pay costs that recur over longer cycles than one month. In my case, these are all annual: property tax, homeowner’s insurance, car insurance, Medigap insurance. I can’t easily pay such large bills out of pocket; the only way to ensure enough cash to cover them is to self-escrow a prorated monthly amount. The income “pool” also disburses a small monthly transfer to a savings account, which accrues enough over time to pay for things like clothing and the occasional surprise car repair or plumbing bill.
As I was figuring this out, I realized the six or eight credit union and bank accounts (not to mention the many investment accounts at Fidelity, TIAA-CREF, and Vanguard) had become unmanageably baroque. I was spending way too much time reconciling accounts and trying to figure out arithmetic and data entry errors. I decided to consolidate as many accounts as I could…that’s how, last December, I unearthed some $28,000 that had been accumulating over the years, like so much dust in the House of Usher.
So I closed all but three bank and credit union accounts, invested $14,000 in mutual funds, and kept $14,500 in the bank to serve as an emergency fund. Actually, since I did not believe I could possibly live on a gross of $29,900 (Social Security plus the $14,160 I would be limited to earning in 2010, by SS rules), I expected I would need that 14.5 grand to live on this year, and so that money became the deep underlayment of the “pool” account. It would sit there as money from various income streams piddle in to the “pool.”
The three surviving credit union accounts, then, comprised a checking account to hold the $14,500 emergency fund and month-to-month spending money, a savings account to hold a monthly set-aside for short-term emergencies and necessities such as clothing, and a money market account to hold the monthly self-escrow to cover annual property tax bills and insurance premiums. I know myself well enough to know that if I don’t put those funds where I can’t reach them casually, they will get spent long before the clothing costs or the annual bills roll in.
My financial advisers and I knew that three sections a semester, the teaching load I could reasonably expect, would put me$340 over the Medicare earned income limit, which would mean confiscation of an entire month’s Social Security check. We did not know how much Funny about Money would earn, and the amount of editorial earnings is utterly unpredictable. But we did know that every dollar earned blogging and freelancing would trigger a 50-cent penalty from Social Security; that amount, no matter how small, would be extracted in a peculiarly abusive way that is not described in Social Security’s complicated guides. To avoid having freelance and blog income bring on even more punishment for exceeding the earnings limitation, my lawyer suggested an S-corporation, which would hold that money separate from my personal income. It would have to pay me a small salary—last year that came to $500, gross—but it could pay business-related expenses out of pretax dollars, and anything above the salary I drew out would be counted as dividends, not as “earned income.”
Because corporate income must be kept separate from personal income, of course I had to establish a business account for the S-corporation. So much for my bank account simplification program!
Still, even with that corporate account in the mix, I think my system for getting by on an unpredictable and variable income works pretty well and is relatively simple. The four credit union accounts are represented here by blue boxes:
All personal income goes into a checking account, which serves as the “pool” of funds to cover all expenses, self-escrows, and savings. The personal checking account also holds the large emergency fund, which, because it represents enough for me to live on (when combined with Social Security) for a year, I regard as money to cover living expenses during a serious illness or injury that would leave me unable to work at all.
At my age, it’s not a question of if such an event will happen; it’s a question of when. For that reason, I’m extremely reluctant to dip into the “major catastrophe” emergency fund for ordinary living expenses.
That is why I had a hissy fit over the misinformation recently dispensed by Social Security’s telephone CSRs and the subsequent confiscation of next month’s Social Security check. This fiasco will require me to use up to $1,275 of my catastrophic emergency fund. After last spring and summer’s clothing purchases and the Murphy’s Law spate that occurred when too little income was flowing into that account to cover the base expenses of utilities, insurance bills, and food, not enough remains in my personal diddle-it-away savings account to cover $1,275. Drawing dividends from the S-corporation, while it’s doable, would trigger some taxes I don’t want to pay and leave too little in that account to cover the business expenses I project for the next four to six months.
As you can see, living on freelance or nine-month teaching income is a very iffy arrangement.
If you have a large enough contingency fund… If you earn more than enough to cover monthly bills, more times than not… If no major catastrophes occur… If few expensive minor headaches occur… If no one shafts you… If you can keep on getting work… If you have the self-discipline to husband your money so it will last through lean times… If you don’t have a nervous breakdown when too little comes in to cover your basic bills…
There may be other ways to manage these unknowns. The only one that occurs to me is to build a nice, deep “pool” that will always hold more than you really need to live on, and then to budget out of that enough to cover expenses. Heaven help you if you don’t have an emergency fund!
This morning a student sent over his latest paper, a response to an assignment in which I asked classmates to write a narrative describing their response to a tour of the campus library. This library, in addition to functioning as a busy learning center full of constant activity, houses a Southwestern art collection donated by an emeritus professor, and so there’s lots to see in there.
As he was charming me with his usual well-tuned authorial voice, he remarked in passing that although he had been attending the college off and on for the past three years, this was the first time he’d sent foot in the library.
Boink! Even dinosaurs have startle reflexes!
After an internal holy mackerel dialogue, I realized that even though the library is still the heart and brains of a college campus, there’s a reason my students seem to have set as their goal moving through two to four years of higher education without ever visiting a campus library: they can.
So much learning is available on-line, including full-text scholarly articles and books, that a good student quite reasonably can expect to get through most courses, writing creditable term papers and studying for challenging exams, without ever visiting a museum of books.
Frugalscholar, is that your hat in orbit overhead?
As I continued to read his essay and thought about his passing observation, I realized he was commenting, unconsciously, on something that has occurred to me, to at least one of my academic coconspirators, and probably to Frugalscholar: Why the heck are we keeping all these books in our houses?
Frugalscholar has shown the way to peddling scores of books online. Are we sitting on a small gold mine here, one whose financial proceeds would do us a lot more good than the decorator quality of a wallful of books?
Like many other academics, I have ceiling-to-floor bookcases in the living room and the family room, and of course the de rigueur six-foot shelf of reference works in the office (make that 18 feet). As a writer and then later as a younger editor, I used to have recourse to this library all the time. Even the most unlikely occupants of those shelves would occasionally be picked up, looked over, borrowed from. My library was an integral part of my work as a teacher, a thinker, and a writer. And I used one part of it or another every single day.
Recently, however, I’ve come to realize that I hardly ever open a book anymore. The only works I use at all are a few cookbooks…and half the time I get my recipes off the Internet—like everything else. When I write, when I grade papers, when I edit a client’s copy, when I check facts, I invariably use the Internet. The encyclopedias, the various dictionaries, the OED, the history and political science texts, the novels, the chronicles, the tomes of literary criticism and social history and science and mathematics: they just sit there gathering dust. Two walls filled with dust-catchers!
Truly, today I could get by with a computer and the following:
The Oxford Dictionary of French
La Petite Larousse
The Oxford Dictionary of Spanish
The Harper-Collins Dictionary of Italian
Collier’s Latin Dictionary
Cassel’s German Dictionary
The Compact OED Random House Webster’s Dictionary
The Chicago Manual of Style
The MLA Style Manual
The APA Style Manual
The CSE Scientific Style and Format Manual
Roget’s Thesaurus
A couple of field guides to birds
A field guide to Southwestern flora
A few favorite cookbooks
And that’s it. None of these (except the recipe books, maybe) has an acceptable online equivalent. All the fiction? It could go. The classics are online at Project Gutenberg. Most of the contemporary fiction is eminently disposable stuff, occupying shelf space by default. The nonfiction tomes are largely out of date—maybe one in thirty is worth keeping.
Because Poisoned Pen Press keeps me supplied with light fiction (at the price, o’course, of having to edit the stuff), I hardly ever buy “airplane books” anymore—their detective novels supply all my bedtime and idle moment reading. Partly because I’m paid to read and don’t feel inclined to devote leisure time to reading and partly because I don’t have a helluva lot of leisure time, I almost never buy new books.
So…why is my house filled with books?
I asked La Maya the same question, and she responded with approximately my own sentiment: Books define our identity as academics. We keep them because they say something to others (and to ourselves) about us. Also, she remarked, a bookcase full of hefty tomes makes a nice decorator item.
Yes.
I wonder what on earth I would do with those big walls in the absence of running foot after vertical and horizontal running foot of books.
Fine art? The sum total of every book I could sell wouldn’t buy one Ed Mell painting. Maybe some Navajo rugs? They’d cut the echo, though not as well as all those books. I haven’t been up to the rez to price any of those lately, but one thing’s for sure: if you have to ask, you can’t afford it.
So, what we have here is a lifetime of learning—or the metaphor thereof—reduced to interior decoration. The truth is, everything I once used books for has been transferred to a computer monitor.
For individuals, that’s not necessarily a bad thing. Our students, at least the ambitious among them, can access as much information in an hour as once took us half a semester to dig out. I can check a fact in 30 seconds, a chore that once could have taken me anywhere from 15 minutes (if a source was at hand) to a day or more (if I had to traipse to a library or archive to track it down).
But what about our culture, our society? Now, there I’m not at all convinced that the demise of the book and the rise of the Library of the Internet are happy developments. For one thing, paranoia tells us that censorship of online resources is even easier than censorship of print material. But the big repercussions, the scary ones, are economic.
• Who will continue to produce “content” if all creative and scholarly work is available for free on the Web? • How many jobs will be lost when a print book is a rarity? • How many graphic artists, editors, circulation drones and managers, librarians, printers, paper manufacturers, ink makers, and booksellers will be stocking shelves at the Walmart? • How much more power will monied interests have over the intellectual and scientific direction of our country? • And when an entire generation has never known the pleasure of reading for the sheer joy of reading, what will that mean for the entire economy of the developed world?
I don’t know the answers to these questions. But the fact that we have to ask them makes me itch.
So after class this noon I schlepped over to the Social Security Administration offices with several missions in mind: First to find out what they’re going to do to me for the crime of earning yet another $2,400 over the poverty-level earned income limitation; second, to ask where to mail the Form SS-31 to ensure that this year’s RASL payment is counted as pre-2010 income; and third, to find out what to do with the couple hundred bucks that Unemployment Insurance is apparently going to send me.
Yes. Unemployment Insurance. Last week I got a $25 check and a notice saying the Feds had told the state Department of Economic Security that some of last year’s recipients were entitled to more payments than had been disbursed. No explanation of why, or of why I should be among those recipients when, say, La Maya was not so blessed. But apparently they’re going to send about a half-dozen checks. These also represent 2009 income, UI for the furlough days GDU inflicted on us in the first six months of that year.
Well. There’s no way of getting DES to fill out and send a Form SS-31. You can’t reach them on the phone—they don’t answer telephone calls, and if you manage to get through to an answering machine, they don’t return calls. They’ve barricaded the employees behind locked doors and they don’t let the public in. So how exactly to communicate to Social Security that this little chunk of illicit income—made so because it racks up still more dollars above and beyond the permitted $14,160 earned income—represents 2009 money remained to be seen.
After sitting around for an hour or so, I got to speak with a live human being, a very nice gentleman who seemed (as they all do) pretty knowledgeable.
He said that even though the amount I’ll earn as a result of taking on another class this fall will exceed the amount of a monthly benefits check, they will not withhold more than one check. So I’m only out the cash for October, not for October and November. In January, they’ll bill me for the small amount left to pay up. The missing $111 Medicare Part B premium, payable in October, will be extracted from the November check.
So, that’s not the disaster I feared.
He also pointed out that despite losing an entire month’s SS income in September, overall for 2010 I end up with more money than I would’ve had with full Social Security and only the income limit of $14,160. While that’s so, I noted, that doesn’t do me any good next month, when I need the money to live on.
Luckily, there’s an emergency fund to fall back on. But diddling it away on utility bills, gasoline, and food is not what I had in mind: that money is there to cover me if I get hurt or too sick to work. And we do know that at my age, the operative term there is not if but when.
Presumably by the middle of next semester—if the college gives me three sections in the spring semester—I’ll be able to replenish the $975 that will have to be consumed next month to meet basic expenses and the extra $111 engrossed from November’s income for October’s Medicare B payment.
It’ll all work out over the long term. It’s just annoying, because it puts the eefus on my goal of living within my monthly means. And it does bite into my emergency savings.
Meanwhile, the Social Security dude was able to enter the data from the Form 31 from the state while I was sitting there. He said that issue is now settled.
We shall see.
As for the weird burst of Unemployment Insurance, he said that UI is not regarded as earned income! And that issue is a nonissue.
So it goes. A couple of questions were clarified. It’s inconvenient and it’s going to make next month another straitened, penurious month, something I’m mightily tired of after three months without enough income to cover base expenses. But what the heck.
Not what I wanted to do with my afternoon. SDXB, who’s back in town for the nonce, had invited me over for lunch. That scheme was scotched. Tomorrow, maybe.
Among her many talents, my friend La Maya is developing as a fine artist. For the past several years, she’s studied with several graduates of leading art schools, and she still works with a mentor.
Some of her work is beginning to look very nice! Her friends have been urging her to display through a gallery and to start marketing her paintings. In the past, when she was invited to display her work at area art shows, they’ve sold quite well. Check out this pretty miniature:
Not bad for a Ph.D. in sociology, eh? She’s only just learned how to make these photographs…it’s a little tricky to photograph a work of art. Click on the image for a larger view.
La Maya started by working in pastels. She’s done some truly lovely pastels, one of which resides on my family room wall. A year or two ago, she started working in oils and decided she really likes it. She says she’s interested in the way brushstrokes work to abstract the feeling and texture of the image.
Here’s the other picture she sent over:
This still life is deceptively simple. While she was working on it, I also tried to paint it—in fact, I draw well and in my misspent youth could paint pretty well. But I made a total hash of it! Hers developed into a good, credible work.
La Maya says she’s willing to sell one or both of these. If you’re interested, drop me a line in the comments.
Remember how those two women at Social Security told me it isn’t true that when you out-earn the poverty-level earnings limitation imposed on those who are forced to take SS payments early, the government takes away an entire month’s benefit check? That instead in the following year Social Security calculates what you owe in tax (it takes back $1 for every $2 you earn over $14,160, effectively a 50% tax), and you are given the option of either having the amount prorated over a number of months and deducted from your benefits in relatively affordable chunks or of sending the government a check to cover the tax?
Well, it turns out they were wrong.
After having told “Roselyn” that I expected to earn $14,900 this year, yesterday afternoon comes a notice in the mail informing me that my September check, which is paid in October, will be withheld, fuck you very much. Any amount that remains after the government calculates and confiscates the tax it thinks it’s owed will be repaid in January.
This will leave me $551 in the hole this month.
Feeling a little skeptical about “Roselyn’s” claim, as you will recall, I telephoned Social Security a second time on September 3, reaching one “Alison.” This CSR confirmed what Roselyn said and reiterated that the government’s procedure is not to take away an entire benefits check when it finds out you will exceed the earnings limitation.
Based on these two assurances, which were repeated several times by each woman during those conversations, I accepted a third course this fall, to run in the second eight-week session of the semester.
The pay for that contract will push my income high enough that Social Security will withhold not one but two benefits checks!
And that will put me $551 in the hole for September and for October or November, whenever they next get around to raping my income.
For God’s sake!
I don’t know what I’m going to do. I can’t get out of the course the chair offered to me and I accepted. Piss these guys off, and they won’t hire you again. So, I’m going to have to eat an $1100 shortfall. I certainly won’t be eating food, since at that rate I can’t pay the utility bills and buy groceries.
There are two choices:
1. Withdraw enough from The Copyeditor’s Desk as dividends to cover the shortfall. Actually, the S-corporation will have to pay me a few hundred bucks as “salary” in December, anyway. A $500 salary amounts to about $600 taken out of the corporate coffers, because as my “employer” CE Desk has to pay its half of FICA and some other taxes. For me as an individual, the net comes to about $375. So to make up a net of $1100, I will have to withdraw about $2,000 from CE Desk, in combined salary and dividends. That’s about half the corporation’s present cash holdings.
or
2. Raid savings set aside for an extreme emergency in which I would not be able to work at all. The emergency savings fund is still in an after-tax bank account, and so no tax consequences would occur if I steal from it.
However, if I get sick or hurt so I can’t work—and we’ve already seen that, as possibilities go, this is not as remote as one might think—then I will have that much less to cover my needs. As it is, emergency savings combined with Social Security would just barely cover expenses for one year. Take $1,100 out of it, and it’ll cover a helluva lot less than that: maybe 10 months.
God. What a mess!
Why did those two women tell me a phony story? Did they lie on purpose? Did they think it was funny to deliberately mislead some old lady and plunge her even deeper into poverty? I’m quite sure of what they said, because I asked both of them to confirm it, and I wrote it down as they were speaking: I have almost verbatim notes of our conversations.
Here’s how this shakes out, projected dollar by projected dollar:
Because the community colleges, like GDU, outsource their payroll to PeopleSoft, paychecks come in at cockamamie times. My second paycheck in October, when the third class kicks in, will only cover one week, and so I won’t have enough to cover my expenses that month, either. Apparently I’ll make it up in November (this assumes they rape me in September, which they’ve announced they’re doing, and then again in October, not in September and November). But meanwhile, between now and the middle of November I have to cope with a shortfall of over $1,000!
While it looks as though I’ll be flush as Croesus in November and December, that extra money has to be saved to cover the month-long winter break, when I’ll have no pay, and the penurious summer, when there’s a good chance I’ll have no teaching income.
{sigh}
What on earth to do?
Probably it would be better to take the $500 annual “salary” from the S-corporation in September or October; this nets about $375. It’s required, but there’s apparently you can pay it to yourself whenever you please.
Defraying the shortfall with a CE Desk “paycheck” would leave $725 to to make up out of savings, but with no tax consequences. That much remains in the S-corporation’s account, and so if a really dire emergency came up, the money would still be there. It’s your basic theft from Peter to pay Paul.
Assuming, though, that nothing awful happens over the next year, because property taxes have dropped a bit, I should be able to use that savings to help replace the $725 raided from the emergency savings fund. If I drop the umbrella on my car & homeowner’s insurance, the two cost reductions combined could be put toward the lost $725.
If the gods smile and I get three sections a semester next year, I should be OK. A summer-session course would guarantee OK.
But it looks like we’re talking just OK here. Short of taking a large drawdown from long-term savings that are still struggling to recover from the crash, we can forget any fantasies about vacations next year. 🙄
On the other hand…it’s a nice opportunity to go back on the half-off diet!
