Well, I've been making good progress this year on decreasing debt, but I'm going to backslide a bit in the service of preserving my health.
I've been struggling with a growing fatigue problem for about 4 years. The last time I remember being my "old self" who woke up early and easily full of energy was about 5 years ago. I remember going out and taking lots of long walks early mornings during the times I was out in Los Angeles helping out with my mom during her final year; I remember having a job that required me to be at the office across town at 8:30 am and not struggling with it. Then I remember starting to work at a manufacturing plant in April 2012 and having my asthma get massively worse within 3 weeks, which interfered with my ability to exercise, and gradually I began to struggle to be able to get in to work at 9 a.m.--not because I would wake up late, but because I would wake up at 6:30 and just zone out over a few cups of coffee until making myself get into the shower. The asthma eventually came under control two years ago after I was put on Flovent, but my energy never returned.
Lately I've been struggling at the other end of the day as well--if I want to be out after 7 pm, I am often too exhausted to do so. Not that I am falling asleep that early--just being nonproductive browsing social media because I don't have the energy to go out more than one or two nights a week.
I had my doctor run tests and she ran the standard panels, but my tests all come back normal.
Then 3 years ago, during the 6 months I was unemployed, I went to hear a chiropractor talk on thyroid issues, since I suspect this may be part of the problem. My mother was on Synthroid, and my sister has been on it since age 19, so clearly it runs in the family. That chiropractor ran a test for thyroid antibodies--a test that my doctor did not run because it is not part of the standard thyroid test panel. That test showed that my antibodies were out of range, indicating that my body is in essence attacking my own thyroid (a condition known as Hashimoto's Thyroiditis). The doctor recommended going on a gluten free diet (so I switched from being vegan to going gluten free, not that the two are incompatable but I just couldn't manage too many dietary restrictions at one time) and paid out of pocket for periodic thyroid antibody tests. When I brought the topic up to my doctor, she gave me the standard allopathic medicine doctor response of "there's really nothing to do but wait until your thyroid levels go out of range and then use Synthroid.") The chiropractor also had another program of treatment he recommended--but it was mostly out of pocket except for the lab testing, and I couldn't afford it at the time.
By going gluten free, I had seen my antibody levels gradually go down. But this winter I felt the fatigue increase, and when I had another test done in March, it showed an increase in my levels again. They're still significantly lower than the first time I was tested (which to me is evidence for the autoimmune nature and the role of gluten in the disease), but this was the first time i 3 years that my levels rose rather than fell.
Then 3 weeks ago I was on facebook and I saw a talk by another chiropractor being given on Saturday. I went to that talk and signed up for a consult with him. I also knew of a third chiropractor who treats Hashimoto's who is actually on the list of recommended practitioners listed by Isabella Wentz, author of "The Hashimoto's Protocol" and I made an appointment to see him as well.
So after all of this, I've decided that now is the time to get my energy back, because that is what enables my ability to accomplish every other goal in my life. Having met twice now with each of the three doctors, I've decided to go to the one who is on Wentz's list of recommended practioners. Yes, it will involve a big out of pocket cost, since again, only the lab tests are covered by insurance. But I'm not making progress on the other goals in my life in the way that I want because of my lack of energy. I'll be going for a more extensive panel of tests next week--and if there is anything more serious going on that would require an internist, that should be shown by the tests as well (in which case I need to hurry up to find a new internist as my last one died in November).
I brought along my last few sets of bloodwork results to the exams, and the doctor who I have chosen noted a recurring anomaly in another marker that no doctor had ever commented on before, and told me what it indicated, which fits with some other information I have from "genetic genie" interpretations of my 23andme results (basically a methylation anomaly). That, plus his answer to another "test" question I gave to my doctors to understand more about their perspective, gave me some confidence that this doctor will help get me on the path to restoring my energy--since right now, as the song goes, "my 'get up and go' has got up and went." And that, frankly would be worth incurring another 2.5K expense (especially in the least invasive way. I've done a lot of reading about functional medicine in the past few years, and have come to believe that while allopathic (traditional) medicine is the best route to treating acute conditions, for autoimmune and many chronic conditions, you are best off starting with a functional medicine approach which may entail lifestyle changes to forestall further problems rather than waiting until the problem becomes bad and then sticking you on drugs.
Viewing the 'Goals' Category
Well, I've been making good progress this year on decreasing debt, but I'm going to backslide a bit in the service of preserving my health.
Financials First: My net worth is up to $490K, so I'm getting very close to the half-million mark. Very exciting!
My debt is also down, but still beyond what I would like it to be. There's more on the credit cards than I can pay off in one month and that makes me unhappy. I just need to keep that in mind and keep the discretionary spending more in check. Q1 always leads to my eating out going out of control what with tax season busy-ness.
Time also for a Goal Review. I definitely need a re-boot! Being at another new job and going through the tax season here for the first time, having them reorganize our work flow in the middle of this (which is ultimately much more effective, but the transition from the old system to the new system was bumpy since I didn't yet have the old system fully mastered) and then getting sick and feeling not entirely well for the past month have done a number on the goals.
So: Goal #1, Job performance: I'm improving on my technical mastery, but don't have full mastery of everything at work yet. I've definitely NOT managed to shift to an early schedule of getting in half an hour early. And I need to start studying for the CFP exam again--that's what got most off track during Q1.
Goal #2: self-care. Again, got off track. I've been feeling really tired and have been going to bed early but this doesn't mean that I'm getting eight hours sleep each night. I need to turn all screens off at 9 pm. I have spent too much time on social media, especially in light of my upset over the current administration's performance.
Does anyone else here have a Fitbit Charge HR 2? Have you noticed the new sleep screens? They now use your heartbeat to track your sleep stages: deep, light, REM, and awake and display your pattern over the whole night. Up until last Sunday, they just tracked times awake and times restless. The new output is much more useful.
I did really well on meditating daily until I got sick. Now I need to get back to it--and to find a new PCP.
I did get a blood test (one I ordered myself) and found out that my Hashimoto's has gotten a bit worse since I last assessed my antibody levels a year ago. I'm reading Isabella Wentz's Hashimoto's Protocol, which was just released this week, and I have made appointments with a couple of functional medicine doctors. I'm not sure if I will actually enroll in their programs right now, but getting a doctor's Rx for some additional testing and talking to someone will help. The traditional (allopathic medicine) approach is to wait until autoimmune disease gets so bad that it pretty much destroy's an organ (the thyroid in the case of Hashimoto's; the adrenals in the case of Addison's) and then just put you on medication for the rest of your life. The traditional thyroid tests that they give you if you ask your doctor to test your thyroid (TSH, T3, T4) don't necessarily catch the disease in progress. My regular thyroid tests are normal but the antibody tests are not, and I'd prefer to prevent this from getting worse and having to be on some form of medication for life, so this may mean more out of pocket health care expenses.
The Hashimoto's protocol author suggests that following her regime (supplements, more money sigh) will help significantly with fatigue. I've started with thiamine, selenium, and NAC. If I'm to get back to regular exercise, I need to feel more energetic.
I did walk to work one day this week, at least, and am looking forward to doing that much more often as the weather continues to warm.
Finally: Goal #3, getting organized. I have tentatively found someone to help me with the landscaping, and as things get warmer, I'll try to make progress on the inside-the-house organizing as well. This was always intended as a primarily Q2 goal, since this season has the best weather and is less busy with work than the end and beginning of the year.
So: I'd give myself a C- in overall goal progress. But today is the start of a brand new quarter, so hopefully by the time I sit down July 1, I will have a more positive self-assessment to report.
I have been drafting my tax return--it's mostly done, but I always draft the return at least a month before I submit it because I will often turn up additional deductible amounts during that time (I am not very good at regular expense tracking at the moment; mostly I keep things in check by using one rewards credit card for food and gasoline, which are "variable" as opposed to "fixed" expenses but shouldn't really vary that much from month to month, and another rewards credit card for all the truly discretionary expenses. If I have a high bill on that credit card for one month, I'll make an effort to make sure that the next month's bill is lower than average.
For the past couple of years, I've had an HDHP health insurance plan. At my old job, there was a set amount that went into the account per paycheck, and if I wanted to contribute more than that, it was an after-tax adjustment to the front of the tax return. (My new job allows you to adjust your contributions on a pre-tax basis, so for 2017 contributions, I am filling the HSA bucket that way.)
Just like with IRA contributions, you have until the tax return due date to make prior year contributions. I also have an inherited IRA where I have annual required minimum distributions. Cash flow is a little tight at the moment since I have recently paid off a big chunk of debt.
But what I have figured I can do is the following: Take an additional amount from the beneficiary IRA (and withholding 16% for tax, close to my effective tax rate), contribute that to increase my 2016 HSA contribution, add that adjustment to the front of the tax return, increasing my refund. Then when the refund comes in, I will take that money and contribute it to my Roth IRA. I know I would be ok filing the return and then using the refund to make the HSA contribution, but I'd rather have it out of the way before I file, since I always seem to be able to find ways to use extra money that is not "hidden" from myself in a deferred account.
So while my retirement balance will go down slightly, the total deferred balance (which includes the HSA) will stay the same, and I give myself a little float which will enable me to use my next paycheck to pay off this month's accrued credit card debt.
One of these days I will get back to having a month's worth of discretionary cash in savings, but liquidity in my accounts has been tight, and will be so for another year. But as long as I keep this job, the non-mortgage debt will be paid off in less than two years and I'll be able to start putting over 5K a year in emergecy savings and then a brokerage account, so my liquidity will increase a lot.
Overall goal assessment for 2016 is that I give myself a C on all fronts. Some progress but not significant progress on all fronts. The biggest achievement of the year was surviving a layoff proactively and landing a new position at a company that is a better fit for me within 3 months. (This is significant, but isn't nearly as good as having great success at my job and passing the CFP exam.)
As I mentioned in an earlier post, I did make progress reducing debt and increasing my net worth. My exercise progress was good from January until an injury on March 5, then when I finally went to physical therapy during June and July, I got back on track and am being more consistent again, but I was totally off track for March, April, and May. And while I did get my house presentable enough to have guests over a couple of times (something that I would have been ashamed to do the previous year), I didn't do any real decluttering, as in getting rid of stuff. There's still a bedroom (the master bedroom, in fact) that is just a storage room. I really do want to GET RID OF THINGS this year. I am targeting the spring for this project: late April, May, and June, when the weather and sunshine will motivate me, and the burden of tax season is behind me.
I read a blog post by James Clear, who talks about the "3 burner theory" and work-life balance. The theory is this: We have four burners we try to juggle: work, health, friends, and family. And just as a chef will struggle if they try to cook complex dishes on all four burners at once, so we can't tackle big goals on all four fronts at the same time, or we become less effective. Clear suggests that we tackle 3 or even better just 2 big goals at any one time.
So while I do have a more detailed list of 20 goals, I've just put the big 3 in the sidebar. Work and Health are the big two, with a focus on decluttering selectively in Q2.
Some of the other specifics that I hope to tackle this year are getting a passport (since PA drivers licenses won't be accepted for even domestic air travel after January 2018), getting estate documents in place, and visiting my sister in Los Angeles, who I haven't seen in 3 years now.
I also want to take two B&B weekends, one in the spring and one in the fall, plus go to a conference paid for by work. If they will pay for my CFP exam review, I'll do that in lieu of a conference; if not, there's a conference in Salem MA in July that tops my list but it's a bit expensive, so I have to do more research for alternatives. (Plus the company as a whole does an annual retreat at company headquarters in Richmond VA every November.)
I think of my goals as investments in my human capital. While I really haven't invested signficantly in the interpersonal domain in quite a while, I'm going to delay focusing there for one more year. If I can make significant progress this year on the work and health fronts, then in 2018 and beyond, I'd like to start investing more in the interpersonal domain, something that I've largely neglected since my last romantic relationship ended in 2009. (I also neglected the domain during my 30s as well.) Hopefully I'll assess myself a year from now as being in a place where I can make a change of focus.
A sweet New Year to those who celebrate (and those who celebrate alongside us).
A quick update here on my life:
My debt load is down to about 96K, 10K down from last December and close to where it was when it took a spike up with the HELOC last October. I keep on running projections for myself and am still optimistic that I can wipe out the non-mortgage debt by the time I am 60 (4 more years) and the mortgage by age 65. I don’t think I’ll ever again earn as much as I earned in my last position, but as long as I earn enough to repay my debts and cover my current living expenses, I’ll be ok.
A baseline rule of thumb for retirement income is to have at least 8 to 10 times your annual income in retirement accounts; this provides for a withdrawal rate of 3 to 5%. Now I don’t have 8 times my recent high level salary in my retirement accounts, but I do have 8 times my expected future salary in there, so as long as I don’t have to draw too much down before retirement, I’ll be fine. (Why would I draw money before retirement? Because part of this money is in inherited IRAs, which come with Required Minimum Distributions (RMDs). Ideally, pre-retirement, one takes the RMD, pays the taxes at one’s ordinary income rate, then rolls the money into a Roth IRA (so that you don’t have to pay taxes on it again). But these difficult years, I have been using the money to pay down debt at the beginning of the year. When I can also save for retirement through pre-tax deductions at work, these two amounts pretty much even out, but there have been years where it all ends up just being a paydown of debt without sufficient corresponding contributions.)
Bottom line: as long as I earn enough to cover my current expenses, I am fine. Being able to earn enough to save more for retirement would be ideal--I'd love to be able to retire with 12-15 times income in my retirement accounts (and will probably have to work until age 70 to do this)--but as long as I don't have a net withdrawal from the retirement accounts until actual retirement (as long as I am able to save at least the amount I take in mandatory RMDs) I have enough to survive retirement barring any black swan events (and I do have a long-term care insurance policy to cover the most likely black swan).
The biggest question mark in here is health insurance coverage. The COBRA plan offered to me was $762 a month so I instead went on the Health Care Marketplace and got myself a Bronze plan for the rest of the year at $524 a month. I may well go for a Silver plan next year if I don't have a job that provides any insurance, but hopefully I will. The idea of 8 to 10K out of pocket a year for premiums, deductibles, co-pays, and co-insurance is daunting. Having once owed additional tax for getting a subsidy and then in the end not being eligible for it, I will from now on avoid opting for the subsidy paid in advance (the Premium Tax Credit) and instead take it when I file my tax return after all is said and done.
In terms of my projected debt reduction, I have so far reduced my debt load about 8K this year. It had reached a recent peak last November at 108K and is down to about 96k (roughly 66K mortgage and 30K non-mortgage debt; by January, it should be down to 94K. Then I am hoping to reduce it by 12K a year thereafter. Once the non-mortgage debt is gone, I’ll be able to increase retirement contributions, and I’ll be able to up them even more once the house is paid off.
Presuming of course that I am back at work.
I am feeling hopeful about that at the moment. Things have really picked up the past couple of weeks, and I’m onto second conversations for planning jobs—these would be with insurance rather than investing oriented firms, but I’m actually eager to learn that side of the business. Then there’s a position that would involve being a rotating consultant working out of a staffing firm—I’d be an employee of the staffing firm with benefits, and they would try to keep me working on short-term assignments typically of a few months. They would keep me on the payroll for up to a month after each short-term assignment ended and try to find me another assignment (hopefully going seamlessly from one assignment to the next); if they weren’t able to find me another position within that time frame, it would be back to unemployment. But at least I would be eligible for unemployment and even if the pay would be less working for a staffing firm than it would be working directly as an employee of the client company, someone else is doing the heavy lifting in terms of getting me interviews. And often enough, the client company decides they want to keep you and makes you a more lucrative offer. In addition, I’m interviewing for a part-time holiday season job at a local department store two miles from my house.
Also, I had lunch with one of my former colleagues and learned that they are NOT seeking to replace me, but instead have streamlined and eliminated part of what I was doing and are outsourcing the rest of it, so I can honestly say that my job was restructured out of existence, rather than that I was let go for making mistakes (which is what my boss said to me when he let me go). As I am prone to shame and self-blame, learning this has been very helpful to my state of mind.
On that note, currently reading Brene Brown’s “Rising Strong” about dealing with failures in a resilient fashion and finding it helpful.
Well, I need to get some documents prepared for tomorrow and try to make an Eruv Rosh Hashanah dinner (I’m skipping the service, alas), so—Happy New Year to you !
Take this test: http://app.keysurvey.com/f/989930/d74e/
Links to a test developed by two psychologists who have written books on the subject (which I own but have not yet had a chance to read). The test measures four money scrips: money avoidance, money worship, money status, and money vigilance.
I'll report my scores in the comments. I suspect that many of us on this site will score similarly, by virtue of the fact wer are here!
I am finally starting to do some long-delayed decluttering. In the process, I came across a little balance wheel exercise I had done almost exactly five years ago (3/29/2011).
A balance wheel is an exercise used by life coaches, etc, that has you rate yourself on a series of life domains. You put your ratings on a circle that is divided up into a series of pie slices (You can see one at http://www.innernorth.com/links-resources/life-balance-wheel/). Then fill in the pie slices to the depth that corresponds with your rating. That is, if you have rated "Family" a 10 out of 10, you would fill in the entire pie slice, but if you rated it only 5 out of 10, you would draw a line horizontally midway along the spoke and color in a slice that filled up half of the slice. (There's a completed example here: http://www.innernorth.com/links-resources/life-balance-wheel/).
So, having come across this from five years ago, I had to re-do the exercise and compare.
Domain, 2016, 2011, change
Physical Environment, 3, 7, -4
Career, 8, 2, +6
Finances: 5, 2, +3
Health: 6, 5, +1
Friends & Family: 6, 7, -1
Sig. Other: 0, 4, -4
Personal/Spiritual Growth: 3, 6, -3
Fun & Recreation: 6, 6, 0
Gains in Career (+6), Finances (+3), and Health (+1); Losses in Physical Environment (-4), Romance (-4), Spirituality (-3), and Friends & Family (-1).
Overall net rating change: -2.
Just goes to show that things balance out. Five years ago, I was at the start of what proved to be an arduous career change and was only employed part-time at a temp job, my mother was dying, but I had more time and energy to spend on personal reading and with friends. Now, I've found a full-time job that satisfies me, but I have let a lot of things in my personal life go as I make the transition. This year I am focused on getting the CFP certification, but after that is done, I think I need to focus more time and energy on my personal life again.
OK, back to decluttering--maybe I can move that Physical Environment rating from 3 to 4 today and back to 7 before summer.
Last year, having found stable employment after several years of instability, I decided to stop rolling debt from one balance transfer credit card to another. So first I got a personal loan, then later in the year, a home equity line of credit. I already had a small loan against my 403b account, so since November, I've been paying three loans plus a mortgage. I had incurred some additional expenses during the year, so I wasn't able to use the HELOC to fully pay down the more costly personal loan, only partially. With one more payment, that personal loan will be down to half the original balance. At that point, I'm going to take out another 403b loan at less than half the rate of the personal loan. Then I'll be back to two loans plus a mortgage. The 403b loan doesn't decrease my 403b balance, just possibly affects the balance in the annuity portion I have in the account. It's only 10k against a much larger diversified balance, so I'm ok doing that. I'll reduce my monthly debt payments and give myself back a little liquidity, decrease the interest rate on that 10k, and only add a year to eliminating the non-mortgage debt totally: 2019 rather than 2018, which still works in terms of my plan to pay off the mortgage and be completely debt free by 2024. I've been feeling a little pinched even with higher income because I have been aggressive about paying down debt. Time for a little more liquidity at the cost of an additional year.
On another money front, today I'm sending in a check to finish fully funding my HSA for the year. Means less into the Roth, but since I can pay my long term care insurance premiums in a tax-advantaged way this way, it helps on the taxes since I no longer qualify for a traditional IRA deduction.
A year ago today (as it turns out--this was not planned), I wrote an entry here about planning for debt reduction. While my intentions were good, I didn't make the kind of progress that I had planned. I did reduce debt over the first part of the year, but then increased it back to its starting point (and a little bit beyond). In the end, I more moved debt around than reduced it. I *did* reduce my mortgage by $4,000 (more than double the reduction that would have occurred if I were still plodding along with my original mortgage, and over a thousand ahead of where the refinance would have had me if I had not added in additional payments), so that part is good. But the non-mortgage debt, I ended up mostly moving around, from being mostly on 0% credit card balance transfers, which I kept on moving around from card to card as the 0% rate expired (kicking in a balance transfer fee of 2-4%) to being more on loans...first a personal loan and then a HELOC. The debt increased a bit with some personal investments I made in my health and my career. At the moment, the total is about 35K. I just want to use this post to lay out some targets for reducing this. If I were just following the loan amortization schedules, this would be a several year project, but I can do it in three years. Overall acccording to the amortization schedules, I'd be paying about $400 a month on the non-mortgage debt; in actuality, I pay about a thousand, so Target #1 is getting the non-mortgage debt to 30K by mid-year and to 25K by year end. Mortgage debt at year end should be down to 65K, so that's a total of 90K total debt by the end of 2016. I can cut the non-mortgage debt in half during 2017 and get the mortgage debt down to 61K, for a 2017 ending debt balance of 73.5K. Then in 2018 I can pay off the rest of the non-mortgage debt and get the mortgage down to 56K total debt. At that point I can really accelerate the mortgage payoff to have the mortgage paid off by sometime in 2025, two years before I reach full retirement age. Then I can funnel that money to a final push to accumulate two years' worth of cash for living expenses to have in my accounts before I retire sometime between 2027 and 2030.
One of the things about financial planning is that it is never done--one always has to revisit it as one's personal circumstances and the economy change. But one doesn't achieve one's goals if one doesn't plan for them, so planning is hardly fruitless.
I'll revisit my debt progress...hopefully a decline, even though I am planning some additional long-delayed household expenses this year...as the year progresses.
This entry is mostly nonfinancial, tho I will note that I decreased debt by $7,630 and added $7,975 to my retirement accounts during the year, so over 15K total to the good.
I've gone ahead and updated my side panel for my 2016 goals--fewer than in previous years, with the hopes that I'll make even more progress on each.
Here are my goals/results for 2015.
Job Performance: Completed 1 of the CFP classes, gained familiarity with the top 40 clients, improved efficiency, and earned a raise mid-year.
Organization: very little progress at home, made a start at office organization. I did improve my financial organization by moving my non-mortgage debt from credit card balance transfers to loans (first a personal loan and then a HELOC at a better rate, which I used to partially but not totally pay off the personal loan, and partially for some capital improvements). This will be a big area of focus for 2016 now that I have one year at my new job under my belt. Making big improvements here will enable improvements in other areas in future years.
Health: Joined a gym mid-year and have gone 2-3 times a week pretty consistently since; kept my weight fairly steady; and got my chronic bronchitis under control by going on FloVent. But I am suffering from fairly severe fatigue and need to work on improved sleep/decreased fatigue in 2016, as well as keeping up with the gym and decent nutrition.
Social/Recreational: Took 3 short vacations (first since 2011), saw half a dozen plays and about two dozen films, participated moderately actively with my congregation--but did not manage to entertain at all. I'll get organized in 2016 and make having people over a goal in 2017.
Professional development: Went to about two dozen Board meetings and/or networking events, joined a new professional organization, wrote one entry on my professional blog.
All in all, not a bad year, even if I fell short of my ambitions. But better to aim higher and fall short than to aim too low and not perform up to my best.
Just looking at my balance sheet today compared to six months ago (11/30/2014). Overall I have a nearly 25K net increase, of which half is in retirement savings (and that increase is pretty evenly divided between new contributions and capital appreciation).
Of the other half, 5,000 is a net decrease in debt (which has been transferred from credit card balance transfers to a personal consolidation loan) and the rest is an increase in savings (some ready cash and the rest in my HSA).
Nice to see progress and especially to feel like it is progress that will continue, rather than a few steps forward and a few steps back. Of course, we'll see if there is any big market correction this year, but at least for the factors under my control, I am feeling positive.
Also, for those of you who have seen me on here for a long time, yesterday was the five year anniversary of Henry's passing. Hard to believe it has been five years. I always told him his middle name was "Retirement," since during the 4 years I had him I ended up putting the amount that I otherwise would have put towards retirement towards medical expenses for him--but he was well worth it for the love and purpose he gave me during some pretty tough years.
Confession here: I fell off the debt reduction horse during the past few crazy, unstable years. My net worth has grown, but whereas I was out of debt in 2009, I accumulated, at a peak, 30K of non-mortgage debt (currently $25,667). For the first time in years, my income is stable and no family crises loom, so it's time to get back in the saddle. First step was getting back to posting income and expenses with YNAB, which I used to do. Nice upgrades to the program during the past 5 years since I last used it. Second step was consolidating the credit card debt with a personal loan-20k, 5 years, 10.9%. I'm tired of juggling 0% balance transfers. And it won't take me 5 years to pay...but I have flexibility with a longer term, just in case. And step 3 was to temporarily cut my retirement savings to 3% in order to add $420 a month to emergency savings. I've been living with too small a buffer, which is why the debt accrued. Increase the buffer, pay down the debt, max out retirement savings once I have more liquidity...and hopefully not only keep the job but eventually get a raise. My net worth is currently 27K higher than it was 6 months ago when I started the job, and hopefully the market and luck are with me and I'll do at least as well in the second six months. Overall debt to equity is currently 20.7%. Aiming to get it lower still.
While the first two months at work were about mastering software and physical systems (like the phone and alarm systems) as well as preparing year-end tax projections, the second two months expanded my work into the financial planning domain with calculation of annual trust distribution amounts (many trusts distribute for prior year within the first 65 days of the following year) and preparation of my first retirement and educational funding projections and my first client meetings. This next month, until April 15, it's back to tax--this time reviewing client returns rather than preparing them.
Looking at my goals for the year (see the sidebar), I see that I've done pretty well at #1 and #5, adequately at #3 and #4, and a mediocre job at #2.
As far as the job related goals (1 & 5) go, I'm happy with how much I've learned, even though I've put studying for the CFP exam on hold for the moment. There has been too much to learn to deal with particular client issues and questions, like 401K to Roth conversion or whether the exercised stock options were showing up properly on the tax return (they weren't, fault of the broker who didn't calculate basis correctly), or looking ahead to optimal social security claiming strategy for a married couple. But all of this is what I'll need to know and learning it on an as-I-go basis will make the formal classes, when I do complete them, that much easier.
And while it's been a cold winter and I've spent most nights huddling under the covers with my kitties, I am on two boards (one for my congregation and one for the local chapter of a professional organization), and participating in activities of those groups means that I'm out one or two evenings a week most weeks, which satisfies both goals 4 & 5. There's also a recorder group that I play with monthly, and I've become friendly with another person who has an odd mix of professional backgrounds (she's a lawyer & former philosphy professor with an interest in bioethics) and the combination has made her more successful in her career than the success she was able to achieve with either career taken separately (which is what I'm hoping for for myself).
I haven't been exercising--too cold--but I did walk to work once this week and hope to make that an almost daily practice as the weather allows. That one time felt really good. As I regain some very basic fitness, I'll try to build on it by getting back to the gym again.
Also with regard to goal #3, I've been consistent at meditating thanks to an app called Insight Timer. I don't meditate for long periods--more like 5 minutes a day rather than the 20 I aim for--but I am very consistent at the moment, thanks to the "gold stars" the app gives you for each 10 consecutive and 100 total days completed.
With regard to #2, getting my house in order, one aspect of that is satisfactory. I have reduced my debt by about 7.5K and increased my assets by 12K since I started work, 19.5K to the positive. This is because I have been paying about half of my earnings to either increased savings or increased credit card payments.
Four months in to this, though, I am beginning to feel a little bit pinched. I make my payments right after each paycheck comes in, so that there is almost never more than $200 in my checking account. Spring is here, and I'd like to hire someone to clear out the yard, have my hair professionally colored, and go away for a weekend after the end of tax season.
Feeling just a wee bit more secure in my job, I've decided to handle my debt in a different way than I have been. For the past few years, as the debt accrued due to the combination of un- and under-employment plus additional expenses due to playing "pet hospice" for three beloved pets, I've been transfering debt from 0% credit card offer to 0% credit card offer, sometimes paying one off, but then needing to do another balance transfer when another pet hospitalization arose. Now, as soon as I get my tax refund, I'll pay down a little bit more on the credit cards and then take out a consolidation loan. I'll take it out for 4 years but hope to pay it off in 3. This will allow me about $400/month more in my budget, which I can use for current spending and to add to the emergency fund, which is down to $825.
It's time to get out of the "deprivation"/"I don't deserve this" mindset and allow myself some room for current spending as well as paying off old debts from the past and saving for retirement in the future.
So I've done an ok job at getting my financial house in order, but the PHYSICAL house itself is a mess--I've been too cold or tired evenings and weekends to work on it. I'm hoping to get a much better handle decluttering in the next six weeks!
I've drafted my tax return. I would have completed it, but I'm having problems installing the state module, so I need to wait for tech support to get back to me.
My income will be changing a lot between 2014 and 2015, so I wanted to figure out how to get the most benefit by saving, while also continuing to whack away furiously at my accumulated non-mortgage debt.
This will be the last year that I can get a deduction for putting money into a traditional IRA (for singles, the ability to deduct money put into a traditional IRA phases out between 60K & 70K this year). So I played around with my tax software to figure out the optimal amount to contribute--the amount where my total refund will be just about equal to the contribution. I figured that out back in January and have been putting aside money from each paycheck to make the contribution (which has meant paying less on my credit card debt). As soon as I've got my software glitch figured out, I'll make the IRA deposit, file my return, and then use the refund to pay more off on credit cards. If all goes according to plan, I'll have managed to lower my nonmortgage debt by about 10K by sometime in March by a combination of using my required minimum distribution from my inherited IRA and the refund, plus some regular payments.
After this, I'll continue to pay off the debt at about $1000 a month. A lot of this debt is on credit card balance transfers (12 to 18 month) at 0%; but two of those expire in June, by which time I figure my total non-mortgage debt will be about 18K. At that point, I'll need to determine whether I'm going to look for another balance transfer or possibly find a low-interest loan. I'm thinking about taking out a 36 month loan (of course, depends on the interest rate). If there's no penalty for early pay-off, I can then think about whether I want to keep paying at a thousand a month, or whether I want to halve that and start saving $500 a month to build my emergency fund back up.
In any case, getting the debt down by 10K after I get the refund will feel really good. I had no non-mortgage debt back in 2008 and 2009, and I'd like to get back to that place as soon as is feasibly possible, while also working on my other goals (paying for the certification program I am in, rebuilding emergency savings, having a little money to do things like hire a personal trainer for a couple of months and go on vacation for a week, now that I once again earn enough that those are reasonable things to consider).
Balance. It's all about balancing goals over time.
By 9 a.m. this morning, I had chosen a fork in the road. At 8:10, I received an email from the recruiter telling me that the accounting firm wanted an answer by close of business today. I then sent an email to the President of the financial planning firm, telling him that I had to make a decision today. He responded by 8:20 with an email including the offer letter, telling me that he'd dropped the hard copy into the mail on his way in to work this morning. The offer is at a salary that is fully 50% higher than the accounting firm offered, with full benefits, and the job starts next Monday. With that salary (at a level that I was thinking it might take me another 4-5 years to attain), the decision was literally "no contest." I called the Principal of the accounting firm to tell him, with regrets, that I was turning down his offer and why, and then the Recruiter, who worked very hard on my behalf to get me the accounting firm offer, so I feel badly that she gets nothing for her efforts on my behalf in the end (I will send her a Harry & David type gift). So, before 9 o'clock this morning, the decision was made and I set off on the new path. Today was mostly reveling in happiness and sending thank-yous; tomorrow I will figure out more clearly what I need to get done before I start work and work on that list.
After a very long transition from academic to accountant, I am hoping that last week marks the end of one phase and the beginning of the next. Fingers crossed, knocking on wood, finding a lucky rabbit's foot, and all that, because I thought three years ago that I had reached the "holy Grail" of the full-time job with benefits, but that one turned out to last only three months. So I'm not going to believe that this really IS a turning point for at least half a year into this.
Just in case you have not previously encounted my blog, my brief backstory is that I once was an untenured college professor and ten years ago, I decided to become an accountant instead. I finally attained my CPA earlier this year, after five years spent on schooling and exams and another five years spent gaining experience at part-time and temporary/contract jobs.
Now it looks as though I'll have two offers--one of them is just an oral offer, though, so I'm waiting for the actual offer letter, which I expect to get tomorrow, that will state details such as salary, benefits, and starting date.
One of the job offers is at a smallish (15 permanent staff) full-service CPA firm 22 miles from home. This would be a contract-to-hire job, with the owner indicating a very high probability that it would turn permanent after tax season. I'd be in the corporate tax area, with some individual tax, and would have the opportunity to work on reviews, compilations, and audits during the non-tax season part of the year. 51 hours a week during tax season (mandatory Saturday mornings), 29 hours a week over the summer (Fridays off), and 40 hours a week the rest of the year. A couple of years of this type of experience and I would feel that I had the necessary background to consider opening my own firm, which is not yet the case (nor do I really anticipate wanting to open my own firm--it might be another story if I were 10 years younger). This is the type of job I've have been focused on getting for the past two years.
The other job offer is rather different, and is in line with what I planned when I originally set out on my new path a decade ago. My background is in psychology, and I used to do research on self-defeating behavior. So when I thought about switching careers, I remembered my own lack of financial smarts during my 20s and first thought about becoming a financial planner, since CFPs are interested in both aspects of people's psychology (their goals, their risk tolerance) as well as in their finances. But then I looked into CFP programs and found out that most graduates landed in sales jobs for firms like Ameriprise. Becoming a salesperson and working on commission really did not appeal to me, so that's the point at which I decided to get my CPA instead and become a tax accountant and "back door" into also offering planning services.
The second offer is to actually BE a CPA/Financial Planner for a small, fee-based financial planning firm targeting high net-worth taxpayers, primarily doctors, lawyers, and executives. In this role, I'd spend about 50% of my time on tax planning, and I'd also learn about retirement, education, estate, and risk planning and get my CFP along the way. I wouldn't actually be doing returns, however. But what's really neat about this job is that they *like* the fact that I have the psychology background. While I've been focused on applying for tax accountant jobs, I've considered my PhD my "dirty little secret" and it doesn't appear on my resume...you have to google my name or scroll down to the bottom of my Linked In profile to find out about it. But while I DO love the tax work, I ALSO love psychology as much as I ever did, so there's an additional excitement about this job for me.
The planning job feels like the risky but potentially higher reward choice (risky since I haven't done much of the planning before), while the accounting firm feels like the safer choice.
I still have yet to get the offer letter in hand from the planning firm, but I expect based on our conversation that the planning job would pay at least as much as the accounting firm job, would start six weeks earlier (this month rather than Jan. 5), benefits could apply from the beginning (depending on whatever waiting period is included in their plan rules), and also, it's basically an 8-5 job (with a one-hour lunch) that is located precisely ONE MILE from my house--I'd be walking except on days when the weather is extreme in one way or another.
So you can probably tell that I'm leaning towards the CFP job, pending seeing the actual offer in hand.
But recalling my previous experience getting hired for a "permanent" job with benefits and getting let go 3 months later when they lost their biggest client, I am trying to keep my excitement in check.
Hopefully this is the start of a new phase in both my career and for my personal finances, where my balance sheet continues to improve as the markets have done well and our local real estate market is rebounding, but where I have now amassed some personal loan debt, most at low or zero percent rate, but personal rather than mortgage loan debt nonetheless, enough that it will probably take a couple of years to pay off to get myself back to the state of my only debt being mortgage debt that I was in five years ago when I left teaching.
The other thing I have been obsessed with this summer, besides long term care insurance and job hunting (expecting more interviews after the 10/15 tax extenstion deadline....things have been a little quiet on that front for the past couple of weeks, as prospective employers are busy) is learning about functional/integrative medicine.
My interest is the result of serendipity. Earlier this summer, I started attending the twice-monthly networking events offered by a local small business marketing professional, since I am hoping to work for a small business servicing other small businesses. The very first meeting I attended included the business director for a chiropracter who was offering a free talk that night on thyroid issues.
My thyroid tests have always come back as normal, but both my sister and mother are (were) on Synthroid, and I've long known that loss of the outer third of one's eyebrows is a signal of thyroid issues, and I have that, so I decided to go to the talk, where I learned that the thyroid affects everything else in your body since every cell has thyroid hormone receptors. At the end of the talk, the doctor offered a two-visit assessment for $100 that he normally charged $450 for, so I decided to see what my results would be.
The blood tests that he ordered were different than the thyroid test ordered by my doctor, which I learned is typical. Most doctors just assess TSH and T3/T4 levels, but ignore the thyroid antibodies. My results came back indicating normal (but relatively low) thyroid levels, but an elevation in one of the antibodies, suggestive of Hashimoto's thyroiditis, an autoimmune disorder where your immune system destroys your thyoid.
When I talked about the results with my sister, she said that her doctor said that it wasn't worth testing her for Hashi's, since her thyroid levels were low anyways, and the treatment would be the same. I have since learned that this is the conventional medical approach: wait until a disorder becomes severe enough that the patient develops symptoms, then give them drugs. If the drugs cause other symptoms, then use other drugs to combat those new symptoms.
While I can't currently afford the chiropracter's program (he suggested a six-month program of additional testing, dietary changes, supplements, etc), I got enough information from him to begin reading and making changes on my own.
The most important thing I learned is that Hashi's is reversible, if caught before the thyroid has been destroyed by the autoimmune reaction. The conventional medicine approach completely ignores this possibility--very distressing! Most patients never learn that their thyroid is in danger until it is too late and the thyroid has been destroyed, because conventional medicine focuses so much on symtoms and not causes, and considers things "normal" until they are acutely out of whack.
I learned from the chiropracter that most people with Hashi's have "leaky gut" syndrome and should go on a gluten-free diet, so I put myself on that immediately. I also am gradually working to greatly reduce all grains, and am considering, at least temporarily, eliminating grains and legumes, following the suggestions of the Autoimmune Paleo diet. I also learned that low stomach acid tends to be associated with these conditions and to make the problem worse, so I started taking betaine pills with high-protein meals.
I also learned that a vegan diet generally does not work well for people trying to reverse autoimmune disease.
This is distressing because I have been basically vegan (vegan at home, vegetarian away from home) for over two years now.
But I became vegan in order to address some annoying health problems (a big increase in my seasonal allergies and asthma starting three years ago), and the vegan diet has not resolved those problems.
I also found out from the tests that the chiropracter ordered that my ferritin (iron store) levels were quite low, at the bottom of the normal spectrum, and, distressingly, significantly lower than the last time they were tested. I have noticed for the past couple of years that my late-afternoon fatigue has been more severe, and that I don't feel as well-rested upon waking as I used to, and low ferritin levels are the likely cause of this.
I've also read enough now in the functional/integrative medicine literature to see that issues like leaky gut, ferritin levels, vitamin D levels, stomach acid levels, and symptoms, including asthma symptoms, can all be tied together, and the root cause starts with getting your gut in order, since the majority of your immune system is actually housed in your gut.
So deciding to abandon my vegan diet (especially after having been at least somewhat vocal in support of it on facebook) is causing me a great deal of cognitive dissonance, but is something I've decided to do at least temporarily. I've started by beginning to eat fish for the past month, and am contemplating whether or not to add in other meat sources as well. I also have been taking increased iron supplements, and before I decide whether or not to make further dietary changes, I'm having myself tested again for the thyroid antibodies and iron levels. I'm hoping that 6-8 weeks of being gluten free and taking increased supplements will be enough to show some positive changes on those indicators. If not, I'll consider making more "meaty" changes--though the idea of "bone broths" and particularly the organ meats that are suggested in some of these protocols turn my stomach. I don't think I'll ever go as far as to eat organ meat or make my own bone broth. But a weekly grass-fed steak I am willing to consider. In the meantime, I have fingers crossed that the changes I've made to date will show some beneficial effect.
Long Term Care Insurance
My big financial accomplishment for the year (part of my getting organized goal) has been to enroll in a long-term care insurance policy. This was something that took a couple of months to accomplish.
I started with research, first on the internet, and then reading a couple of books. Then I went to einsurance and asked to contact brokers for these policies. No sooner had I pressed "return" on my request than my phone rang!
I ended up getting estimates from half a dozen different brokers, and sitting through join.me sessions with three of them. This was worth the time for me since I learned something different from each new broker.
The most important factor in my decision was choosing the company. You want a company that is highly rated by the various raters (Moody's, S&P, AM Best, & Fitch), since you won't be using the policy for a decade or two or three. Then I learned about the difference between "mutual" insurance companies and the others: "Mutual" companies are owned by their shareholders (like credit unions) and thus have much less of a history of rate increases. So I ended up going with Mass Mutual. Once I had made that decision, I have a friend locally who works for them, so I decided to give her my business rather than one of the on-line brokers, even though some of those were quite helpful.
Having chosen a company, I then had to decide the daily benefit rate, the term that the policy would cover me for, and the inflation rider. Some companies have other options that you can pay riders for as well, for example, having a monthly rather than daily benefit, which gives you a little more flexibility in your spending if you use the policy. I ended up choosing a $250 daily benefit, a two-year term, and a 3% rider. The first two of those were based on average cost/use statistics for non-Alzheimers patients (people with Alzheimers tend to be in facilities longer, but there is no history of this in my family) as well as knowing the terminal health histories of my parents and grandparents. The 3% rider was based on cost--it ended up costing me just slightly more than 50% of the total premium! Back when my mother bought her policy in the early 1990s, 5% riders were affordable, but these days, they cost signficantly more than the cost of the policy itself.
While from a personal perspective (since I am currently unemployed), this was not an optimal time to buy a policy, buying one now made sense to me for a number of reasons: the older one gets, the worse one's health tends to be and the harder it can be to get a policy, so I might as well get one while I am relatively healthy; also, for each year one waits, the cost increases 3-4% based on your age. Also, this is a time of turmoil and change in the industry: several former key players such as Prudential have pulled out (they service their current policyholders but will not sell new policies), and most of the companies are changing from equal rates for men and women to a gender-segregated system, where it costs significantly more for women to buy policies than men because women use more of the care. I had the time to do the research now, and while I don't have the money from my current earnings, I do have an inherited IRA with a required minimum distribution that is more than the policy cost, and I think that my mother would approve of my using the money for this purpose.
Also, since I currently pay for my own health insurance and have a mortgage, I itemize on my taxes and have recently been able to take a deduction for medical expenses. This expense will count towards that as long as my income is still relatively low. Once I earn more and if I ever again have employer-provided insurance, I probably won't be able to deduct this, but at least then I'll be in better financial circumstances overall.
In recent years, I've seen my mother and several friends/acquaintences as well as clients end up in assisted living facilities or with home health care workers, and this has probably made me more attuned to this issue than most people my age (54).
At any rate, another item on my "getting organized list" taken care of. I also found a friend to be my durable power of attorney for healthcare, and before years' end, I hope to get the POAs for health and medical as well as a will set up.
During my two-month job search (February & March), I applied for 32 jobs, had 8 interviews, and netted two jobs, both of which I took--sequentially. (So my hit rate is 25% both for applications getting interviews and for interviews getting jobs....though there were 6 rejections before either acceptance).
The first job that I took was an end-of-tax-season position at a small CPA firm. The firm owner got my name from the business internship director at the college where I got my accounting degree, and contacted me, unexpectedly. Like me, she is a career changer who went back to study accounting in her 40s and passed the CPA exam just before her 50th birthday, so it was a good match, and I enjoyed the 3 weeks that I worked there very much--despite the long tax-season hours.
That job would actually have lasted at a part-time level for several more months, and possibly beyond, save for another opportunity arising, this one through Accountemps. I've gotten my first corporate tax job, and started right on Wednesday,the day after tax season ended. The work is very different than what I'm used to but seems interesting. And working in a corporate cubicle environment is quite a change! I took a $5/hour pay cut from what I was getting at the small CPA firm to take this, which hurts--but that job would have become part-time after tax season, and the long-term potential was unclear, and while I was learning some new things, it was mostly consolidating knowledge I already had. This job, if I do well at it, could be a temp-to-hire job at a fairly large and reputable industrial company where, if things work out, I could be working not only full-time but be back to earning near or above my old salary from academia in a fairly short period of time. And if it doesn't work out, at least I'll have gotten more exposure to corporate tax, which will make me more likely to be hired by a regional CPA firm or in another corporate job, so it is more helpful to my resume in any case. We'll see how things work out!
Two month status report: two months ago, I was suddenly and unexpectedly laid off from my new (3 month) dream job.
The first month after getting laid off, I got right back out, meeting with a staffing manager at a local accounting-oriented staffing firm within days and applying for jobs, but I did so a little willy-nilly.
During February, I had five interviews, three in the third week of the month. I got three rejections on the following Monday, and that really felt like a sucker-punch to the gut, as much as the original lay-off had been, probably because my coping resources had already been drained by the layoff.
It took me a little bit to get my footing again. I took a week to focus on studying for the new Registered Tax Return Preparer exam (which I took and passed....still waiting for the IRS to finish its tax compliance check before they issue my certification).
I also decided that it was time to strategize.
I decided to get a professional resume upgrade, and I spent one phone session with a career coach who specializes in coaching accountants. I'm also going to work on my interview skills and go back to my college alumni center and have a mock interview taped, in case it is the interview that is holding me back.
It's been extremely frustrating having tax season go by without doing more than a few free tax returns for friends and family. The very first thing I did, the morning after the lay-off, was to look at Craigslist for ads for tax season help--which were all placed the first week in January, and all filled by the end of the month, when I was laid off. But I figured that, with a month to go, some firms might be feeling some pressure, so I placed an ad in Craigslist advertising my availability for last minute help. So far, I haven't gotten a response from that. I also leveraged the ad by finding a local group of accountants that meets monthly and arranging to attend their meeting, with a copy of my Craigslist ad and my business cards near the sign-in. Still no takers, but a couple of people did take my cards, so I'll be curious to see if that strategy garners any calls.
When I got home from that meeting, there was a message waiting from another accountant--one who knows one of my professors who knows about the lay-off. I went in Thursday for an interview, got hired (for a dollar more per hour than my last job), went in Friday to join the office pizza lunch and meet the staff and explore the new-to-me tax package by doing my own return on it.
The job is part-time, so if I get any response from the ad, I might be able to do that as well.
For the next three weeks, I'm going to focus on doing taxes, plus work on preparing my interview answers, and I'll schedule that mock interview.
I'm also preparing a list of desirable employers. Most major metropolitan areas have a local business journal, and business journals produce a "book of lists" which lists each of the major players in an employment category. I've subscribed to my local business journal for a couple of years and have their book of lists, and I also special ordered the Philly book of lists in accounting. Many of the firms are in Center City, which is an unrealistic commute because of traffic, but about 10 of the firms are north of Philly and about an hour away from me, which is commutable (not that I *want* an hour each way commute, but I would accept one at this point).
I've also been planning for some informational interviews right after tax season.
I've decided that I am really two jobs away from the job that I want--first I need a job that will expand my skills and experience a bit, then with more experience and a more polished resume and interview, hopefully I will start landing jobs.
In the meantime, I have part-time work for the next three weeks and possibly beyond. My new employer also changed careers--worked as a computer analyst, then had 4 kids and was a stay-at-home mom for several years, then went back to school in accounting in her 40s (as did I) and passed the CPA exam shortly before her 50th birthday (as did I). She got her experience working for a firm for several years and then bought into the firm, and eventually bought her old boss out, and acquired another practice as well. Even if the job doesn't pan out to be long-term or more than full-time, I am very hopeful that I have found a mentor.
So here's my annual spending recap, with a comparison to Dave Ramsey's recommendations (rounded...he gives ranges). I'll note that my record-keeping was not as precise this year as I normally make it; I just summarized data from the Mint.com data aggregator about my spending and then put it into an Excel spreadsheet to graph it. This means that many entries are inexact--for example, a purchase at Costco might have been coded as groceries but was really half household goods. But the way life was this year, this approximation is "good enough for government work," as my Dad would have said.
First, I'll note that spending exceeded income by about $3000, the balance going to credit card debt. A no-no, but this was an extraordinary year--the "triple whammy" of negative life events.
So a comparison: my mortgage spending looks great by the recommendations, but then there's the "Other Home," which included about $1800 of needed home repairs (water heater and sidewalk replacement). Still, even that total is 32% compared to his 30%, so not bad.
My food and medical are both 5% above his recommendations. The medical is because I paid my own health insurance for 11 months out of this year. The food is always a struggle for me.
My utilities are within his recommended range of 5-10%, even though the #s aren't comparable here (I was making his ranges add up to 100%). My transportation costs are actually a bit lower.
He has 10% to charity and I have 9% to Pets (and maybe there's another 1% to Basset Hound rescue....Pets *are* my charity, I guess).
And of course, he has 10% to savings, which I didn't manage this past year, but now that I'm a working girl again, I'm well on track towards being able to meet that for 2012 and beyond.
Last year, my mortgage company (Wells Fargo) called me and offered me an easy refinance...no appraisal, no cost (though I'm not sure what that means...I'll have to look at the documents I have from last year to be clear). Last year, even though I was approved for the loan, I didn't go through with it, because I was employed only part-time and still collecting unemployment, and I was worried that somehow things would come back to "bite" me.
Now that I'm employed full-time again, it makes sense to think about refinancing with the rates so low. So I googled "mortgage refinance calculator," pulled one up, filled it out, and, as typically happens with these, got a list of potential lenders to call me rather than an actual printout of an estimate.
I talked to two of them today. Seems like I can go from a 30-year mortgage with 24 years remaining at 5.875% to a 20-year mortgage at 3.75%, AND lower my monthly payment by about $50. Sweet.
And, of course, if I keep on paying the same amount, I lower the payoff date to about 17 years, which brings me to full retirement age (not that I plan to retire then, but I want to be ABLE to, debt free).
So I'm going to do it. Now I need to figure out who to do it with. I have two phone quotes (both of which agreed that I can get the 20 year 3.75% rate; one also offered a 15-year, 3.5% loan, but that takes my payment a little bit higher than I'd like it).
If I stay in the house, I'll save about $24,000 in interest over the life of the loan (less any points or closing costs, which still leaves savings of over $20,000). Even if I decide to move and even if there are points or closing costs, it would be worth it in just a year or two.
I know that with both of the lenders that I spoke to today, there'd be an appraisal to get. Don't yet have the details on other closing costs.
Now I need to contact Wells Fargo and get their rate and see if it is comparable, and weigh whatever that is against avoiding the hassle of getting another appraisal.
This is my first house and I've never refinanced before. Any words of wisdom on things I should look at for as I navigate this process?
I drafted my 2012 goals--you'll see them in the sidebar.
The debt monster really ran amok in 2011 as I continued to run into emergency situations that were just not in the budget for a person surviving on unemployment, but now that I am employed, the extinction of the debt is in sight. As soon as I received my first full paycheck, I sat down and spent a day and budgeted and planned.
If I were paying off the debt based on my salary alone, it would take me 3-4 years, just as it did at the start of my career, when I got into debt the first time. I do expect to receive money from my mother's estate next year, however, and that will allow me to short-cut the process and pay off the debt all at once, as well as use the balance to establish the car and roof replacement and emergency funds I should have been building all this time had circumstances allowed.
Once the debt is paid off, I will increase my retirement contributions and think about other savings goals.
It is so nice to be able to plan again against a background of relative certainty compared to the planning with life-in-limbo that I've done since 2009.
The past 2.5 years have had so many ups & downs, with a long bout of un/under-employment, two pet final illnesses and my mother's final illness, that I just gave up the ghost on trying to plan ahead, and I racked up a lot more credit card debt than I am comfortable with paying for veterinarian bills, some major plumbing & other house and car repairs, and travel between my east coast home and my mother's west coast home.
I've been at the new job three weeks, and today I logged in to the payroll company and got a sneak peek at my next paycheck, which will actually be direct deposited on Wednesday. Because I'm salaried, each of my future paychecks will be the same (except that health insurance contributions are likely to go up come January, and the Social Security tax withholding is scheduled to go back up to 6.2% from its current 4.2%.
Knowing what I'm making, what I own, what I owe, and what I expect to inherit when we close out and distribute the assets from my mother's trust next summer allowed me to actually make some reasonable plans for the first time in a long time.
The first year will be tight, because I have a lot of debt payment going on. Nonetheless, I'm contributing 5% of my pay to retirement because it feels so good to be able to contribute again after not having been able to for 2.5 years!
When the trust distributes next summer, I will be able to pay off the balance of the debt, and increase my retirement savings. I'm also going to take a chunk of the expected distribution to put away for a new car and roof replacement, both things I expect that I may have to do within the next 3-5 years. Plus I'll also leave some of it accessible in a taxable account as an emergency fund in case I become unemployed again. Anything that's left after that I'll probably put towards retirement.
I also downloaded a preview of the tax package that I use at home (TaxAct) and ran the numbers on this years' anticipated taxes. This year, I'm in the 15% tax bracket and next year I go back to the 25% bracket, so I need to think about whether there's anything that, given that fact, it would be advantageous to do this year rather than next (maybe a second pair of glasses, since I definitely was way over 7.5% on Schedule A for medical expenses, given the fact that I paid my own insurance for 11 out of the 12 months this year.
What a massive relief to know that there is light at the end of the debt tunnel. I've been hoping and praying that this would happen, but now is the first time that I actually can begin to *expect* that the nightmare of debt will end.
I started my new job on Nov. 1. The first day was quiet, as half the firm was off at a continuing education seminar. I spent the first couple of hours filling out paperwork and reading over the details of benefits information (health insurance--I'll save over $300 a month from what I was paying on my own, plus there's $0 copay for doctor visits and only a $500 deductible; and there's a SIMPLE IRA with a 3% company match). Then the two partners who were there took me out to lunch, so we got to know each other a bit better. I was pleased to find out that they are dog people, too. In the afternoon, I started working on my QuickBooks ProAdvisor Certification--there's a 16 hour CPE course (which takes more than twice that long to complete if you're relatively new to QB, as I am). Most of the rest of the first week was spend on this certification course, with one of the partners throwing little assignments at me for an hour or so each day. Next week, I learn the billing system, as that will become my responsibility. So far, so good--I am enjoying things so far, but definitely have to get used to being away from home for 9 or more consecutive hours a day. As a professor, I worked that much, but was able to do lots at home, so wasn't away from home that much. And even last tax season, when I was working about 65 hours a week, it was at two firms, one of which was near my house, so that I'd come home for lunch and dinner. The new firm is 15 miles away, so these days I go home for dinner, but come tax season, I won't. At least there's a refrigerator and microwave at work (though no sink in this "kitchen.")
Once I have my first paycheck in hand and verify my take home pay, I'll have to start putting together a plan to get myself out of debt. It will be such a relief to finally start turning that debt around!
I can check off (most) of my Goal #1 for 2011--in fact, I've made good progress on all four of my yearly goals!
I finally landed a salaried job with benefits at a small CPA firm that will allow me to finish the CPA license requirements, although I won't have the necessary 400 audit/assurance hours by year's end. I expect to be able to apply for my license next summer.
I'm very excited about the job--it seems a great fit, as it starts out at a junior level, which is appropriate for me as a career changer, but there's a lot of potential for moving up at a good pace, which fits my 20 years of professional experience in another business (I was a professor in an unrelated field.) It's that potential for moving up which I had lost with my last career which led me to change careers in the first place.
The job is also mostly tax with some audit, and that fits my interests as well. I'm very happy to have landed at a small firm, where you do more of a variety of tasks, than at a large one, where you specialize more.
As an entry level job, the position comes with a salary that is about $15K less than I once made, but also considerably more than I made while combining unemployment compensation with part-time income. This will allow me to stop going into debt and start getting out. I need to make a plan for getting out of debt and saving for both short-term goals (my car is a 1998 with 150K miles so I expect to have to replace it within a few years) and retirement.
First, however, I am going to go get myself new glasses, pay for minor roof repairs to be done before winter comes, and buy myself a second business suit in preparation for my first month at the job.
What I'd Change
1. I'd have a bit tighter rein over my spending. I'm not cutting back as much as I should given my part-time employed circumstance. There are a few expenses I regret, but most of them I don't...for many of them, I feel like I've been making investments in my future (spending about $500 on CPE units, spending about $200 on nutritional supplements and $100 on exercise equipment/gym fees/videotapes).
So I'm already on to
What I Would NOT Change
1. Money and time spent on my beloved Henry, even though the cancer beat us in the end.
2. Money spent on CPA review classes....got me through all the exams the first time around and saved on future exam fees (I think it's about 20% who pass all four on the first try)
3. For the most part, money and time spent on my health, though there are months I paid for the gym and didn't go.
What I'll Change in the Future
1. More focus on debt reduction. The past 18 months or so have been hard. I've been unemployed or part-time employed; my long-term relationship broke up; I lost my beloved dog to cancer; my mother is seriously ill and spent five months in a nursing home and while she's home and stable now, she does have a terminal illness; and my best friend's grandson has been dying of cancer...the last month we knew it was getting close to the end and I spent almost every evening with her so she wouldn't have to be alone with her thoughts; he finally passed last Monday. Because of all the hardship, I've fallen into debt whereas before I had none and needless to say, I haven't saved anything either. I need to focus on getting out of that debt...the credit card debt will be gone this year one way or another although some of that may be by transferring the debt to five-year loans I can take out at a low rate by borrowing against my retirement savings. Better five years at 5% that can be paid off early without penalty than 10% or more on credit cards.
2. I'm praying that my mom stays stable this year, both because I love her and want her around and because I really need to focus on completing my CPA license and getting a salaried job. It actually gave me leeway to be with her that I was only employed part-time last year. This year I really need to finish the license requirements (which means finding an auditing job after tax season) and find a salaried job one way or the other....so far I've only applied to CPA firm jobs and haven't tried for corporate jobs.
Still no word on the ideal full-time job I interviewed for Nov. 10. About two weeks ago I sent an email and learned that the person who was hiring me had been having health problems and gotten behind on the interviews. He sent me a very complimentary email, which was nice. Then about a week ago, he sent a two word email, "still interviewing." So I haven't closed the books on that opportunity but definitely as time goes by I get more discouraged about it.
I did get some reassuring news from my part-time CPA firm job in case this full-time opportunity doesn't work out...they'll be able to use me part-time, though with a lack of office space, it'll probably mean working 5-9 pm weekdays and all day on weekends for about 36 hours/week. Definitely better than nothing and I'll be doing a lot more corporate returns this year rather than individual, which is the kind of experience I need to make me a better candidate for the regional firm jobs I've been applying for.
I've been working part-time as a temp receptionist/office manager at a small (one-doctor) medical office. That job ends Dec. 30. The doctor is interviewing now for permanent replacements. While it's not a job I'd be interested in permanently, it still is disconcerting when sometimes she has me make interview calls to prospective job candidates.
At least it's been good for learning a bit more about health insurance and billing. I have to deal with that on two fronts now--I'm dealing with my mom's long-term care and catastrophic major medical insurances over her nursing home stay and subsequent home health care aide use, plus I'm right at the point where I need to buy an individual policy for myself.
I've been on COBRA since Sept 1, 2009. For 2009, with the 65% federal subsidy, I paid $164.50/month. In 2010, it went up to $189/month. As of December 1, I ran through the federal subsidy, so I had to pay the full amount, which was $540 for this month. On January 1, it goes up to $604.50/month, and then I'm off COBRA on March 1 but could buy an individual policy with the same firm with no pre-existing medical condition clauses, but I think that'd be about $700/month.
Not something that I can afford on my mix of unemployment and part-time temp income--that'd be over a quarter of my take-home, and nearly as much as my mortgage.
So I'm trying to get new health insurance in place by Jan 1. I'll be comparing plans this weekend and making phone calls during business days next week. I'm suspecting at this point that I'll end up with an HDHP/HSA combination and probably about a $300/month premium. I'll post the details of my decision process once I decide.
I also decided to take out a substantial loan from my 403b plan to help pay down my credit card debt which has mounted substantially from zero to 14K during my 16 months of unemployment coupled with Henry's cancer and major capital repair expenses (about $3600 on plumbing and $3300 for car repairs during this interval...car has a relatively new engine (about 8 years) compared to age of the body (13 years) and things that are going wrong are just natural aging, e.g., replaced tires after 60K miles, replaced clutch mechanism after 125K, so I figure I'm justified in trying to avoid car payments until I get to the point where I have a salaried job and can save in advance to buy a new car). Between the loan and a substantial gift from my mother I'll be able to take most of that debt off of credit cards at 9.99% and leave myself with about $8000 in loan debt at 5.05%. There's still about $6000 in additional loan money that I could take if the car breaks down and I need to buy a cheap replacement before I find a real salaried job.
Progress, but certainly slower than I'd like!
I post rarely these days, so this is a catch-up post since July.
Life is calmer these days than it was early in the year, thank goodness. 2010 has definitely been a personal crisis year with Henry's dying and my mother's illness, but things have settled down for the moment.
I'm still on unemployment and still working part-time. I got cut way back on hours at the CPA firm for 4th quarter but found a temp job working as office manager in a doctor's office to fill in the gap until tax season. I've had some interviews at firms I'd really like to work for but haven't yet landed the salaried job with benefits that I crave. There are so many people with more experience than me out on the market that I lose out on the experience front. But at least this year I'm getting interviews--I wasn't last year. I'm crossing my fingers that if worst comes to worst I'll be back at the CPA firm that I've been at since April 1, and working more on corporate taxes this year, which is *exactly* the kind of experience that I'll need to get the kind of job I want. It's not a sure thing since office space is tight and the boss has another part-timer who he hired on after me who has nine years of experience...but if they can make the office space work I have a pretty good shot at having the job I need this tax season to get the job I want in a year or so, so I'm being optimistic.
The biggest thing since July is that I've actually made some progress for once on my weight loss goal. The last time I made any progress here was in 2008, when I joined Weight Watchers and lost 25 pounds in 3 months...and then slowly gained back nearly 20 of it during the intervening time. I turned 50 in August and that lit a fire under me to make a serious effort to lose the weight before menopause hits and makes it harder.
I had read Joel Fuhrman's "Eat for Life" about 5 years ago and thought it too extreme, but that's the plan I've ended up using. His advice is to have a pound of raw greens, a pound of cooked greens, any other assorted veggies you want, 3 or 4 pieces of fruit, a cup of beans, and a cup of whole grains a day--and that's 90% of what you eat. I doubt I get quite that many greens, but I have increased my intake of them significantly, mostly by becoming a fan of the "green smoothie." I have one or two of those a day. I ate a lot of salads in the summer, and now with winter it's more veggie-bean soups--and by upping my intake of vegetables and fruit significantly and limiting my grain intake to a cup a day, I've lost 14 pounds since mid-September, bringing me to my lowest weight in about 5 years. There's still a lot to lose (about another 50 pounds) but I'm finally making progress.
Where I'm not making progress is on cutting the debt. My income is currently about 50% of what it was when I had a full-time professional job, and that combined with this years' health crises with Henry and my mom put me into credit card debt for the first time in 15 years. Then in September I had a water pipe burst (about a $3000 repair), and various assorted larger expenses--this month it's going to be tires (on Subarus you have to replace all four at once so that's about $400 to get tires that will last the remaining life of the car--I hope to eek another 5 years out of it and get it to 200K miles), plus I need new eyeglasses before tax season again, and that will be another $200 to $400. As Gilda Radner playing Roseann Rosanadanna said, "It's always something."
But all things considered, I'm on an upswing emotionally relative to the beginning of the year and I hope to savor this period of relative calm for quite a while until the next crisis.
(That's Henry in the picture. His six-month yahrzeit is Nov 30)
I haven't blogged here in ages, but I thought I'd update.
Those of you who know me from my earlier posts (most active about 3 years ago) know that I have spent a lot of time and money on behalf of my beloved basset hound, Henry. Henry developed cancer just about a year ago, and during the past year I got myself back into debt trying to save him. It didn't work--I had to have my beloved baby put to sleep on May 30--but I bought him about six months, during four of which he felt really good, acting years younger. I have no regrets about the debt. But it will be a while before I adopt another dog. I'll do some fostering and other work for basset hound rescue in the meantime, though.
My mother has also been diagnosed with a life-threatening illness this year. She spent five months in a nursing home and only just returned home, where she needs a home health aide much of the time. I've had two visits out to see her and that has also cost some money, time and grief.
On the positive front, I'm making good progress on my career goals. I've now passed all four CPA exams and have completed about 20% of the experience requirement (one year of full-time work) working at a CPA firm. I still need a full-time permanent job, but I'm happy with where I am. Good thing, too--I turn 50 in a month, and making the career change successfully was a goal I set for myself when I turned 40. I'm not 100% to where I wanted to be, but I'm 90% there and feel fairly confident that I'll be where I wanted to be (full-time regular staff accountant position) during the year that I am 50.
I had also set some health goals this year, and could make better progress on those. The triple whammy stress of two family illnesses and being unemployed for much of the year definitely worked against me here! But I've lost a couple of pounds and maintained my walking schedule up until the last month of Henry's life, and am getting ready to get back to more of a focus on fitness now.
Every "decade" year of my adult life (20, 30, 40, 50) has had a major life crisis, but in each case, the crisis has been over by my actual birthday. I'm hoping that I'm done with crises for the year and can go back to focusing on more ordinary life goals--getting the full-time job I want, keeping fit and happy, and getting out of debt yet again.
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