At last! The FIRST GLIMMER OF HOPE in the past 24 hours of number-crunching.
If my figures are right, after I’m booted out into the financial snow I can continue to pay toward the Investment House mortgage, continue to live in the outrageous style to which I have become accustomed, and not go broke. The trick is to earn about $13,500 a year, the amount a good part-time job around here pays. I would need to net $938.75 a month and add it to Social Security and 4% of surviving investments to pull this off.
My arithmetic skills are so wobbly that I had to add up a year’s worth of income and outgo to figure this out. Here’s how:
The amount I’ve used to represent monthly expenditures shows the highest monthly utility bills of the year. But the power and water bills drop by more than 50% in the spring and fall. The working figure also includes a $170 payment on the Renovation Loan, which I can easily pay off, dropping that monthly bill to 0.
It occurred to me that with the pending much-reduced income, I could create a “pool” account much like the one I fund now with biweekly paychecks. But because so little money would go into it and the demands of daily costs are so high, the initial “grubstake” would need to be much larger than what I put in to start my present, much better-funded pool.
My current pool account was bankrolled in the amount of one paycheck, which at the time was about $1500 (it’s significantly less now, thanks to the furloughs). What if instead of funding this new “pool” in the amount of a paycheck, I grubstaked it in the amount of an entire year’s net income, $22,500? I have more than half of that laying around the credit union right now, and if I pick up two classes between now and the end of December, I could easily come up with the rest. So, on January 1, I deposit $22,500 into my “pool” checking account, scrounged from present savings and future earnings. That becomes the account’s “cushion.” If unexpected repair bills or the usual astronomical summer utility bills outpace my income, the 22.5 grand will more than take up the slack. In theory, over the winter when bills are much cheaper, I should catch up.
First I added subtracted each month’s typical bills from each month’s balance (the previous month’s balance plus Social Security plus investment income plus a proposed amount of earnings), assuming I netted $1,000 a month from freelance fees or part-time jobs.
Lordie! The result is I live like a queen, never dip into the red, and end up $2,090 to the good at the end of the year.
Well…I don’t exactly live like a queen, but at least I don’t suffer a significant drop in my already modest standard of living. I get to keep putting $200 a month into a fund for unexpected expenses and indulgences, and, best of all, I have no problem paying my share of the Investment House mortgage.
Next, I repeated this 12-step process assuming I earned only $500 a month. This left me $5,265 in the red at year-end. To estimate how much I might need to break even, I divided $5,265 by 12 months and then added it to the $500 monthly extra income. This suggested I would need just under $939 a month to run in the black.
Since my math cannot be trusted, I ran an empirical experiment to see if this was accurate: plugged $939 into the 12-step process. And by golly! This scenario produces a surplus of $3.00 at the end of 12 months.
This is the first time I’ve run a set of figures that make it appear I won’t be taking up residence in a tent city after I’m laid off. With three potential income streams, it should be pretty easy for me to net around $1,000 a month. These activities will force me to get out of the house and interact with some live humans, which can’t be bad. And who knows? It may lay the groundwork for a full-time job after age 66, when the government stops grabbing back your Social Security just because you still have something to contribute to the workplace.