I’m moving!
Argh, just when I’m getting back in control, when all my finances are being beat into submission, I up and decide to move! I’ll be moving into a new house Thanksgiving weekend, and having all those extra deposits to pay. That’ll mean putting off some debt payments and/or dipping into my EF savings for a little while.
My current living situation is a bit unique. I live (illegally) in an artist studio. More than half of everyone else in the building does too, and it’s not a big deal, but there are some related items that make it a challenge. The space is largely unheated (the heat is in one room, since a prior tenant built a wall around it to make a bedroom space, which resulted in 75% of the area being unheated (and it was in the upper 40s most of last winter). There are no laundry facilities, and I have to drive 15 minutes to get to a coin laundry (the washer/dryer got removed the week after I moved in). But the biggest detractor is the amount of homeless people that walk by the studio in front of our windows, every day. With the economic changes, the number of people that walk by has increased immeasurably. There is a big encampment up above that they all live in, in a large greenbelt to the side of the big interstate, which they access by walking by and then up a path just down the train tracks from the studio. There are a lot of men, and lately, a lot more younger men, latinos, white, you name it. It’s getting so that we’re worried to have the windows open. A girl in the building next door just told us that someone tried to break into her space, and one of the homeless people killed another within 1/4 mile of us. So we want out. I look at craigslist every so ofte, and when I did so last Wednesday evening, one place looked promising. J looked at it Thurs morning and it was great! Well, good enough anyway. We just got approved yesterday and I gave my current landlord notice.
The house we’ll be renting is the same price. It just has a lot less space. And it’s missing the 14′ ceilings. and the cool art neighbors. And the big open wide space for the cats to run around in. But it actually has a yard, a really really huge one, and we can have a ginormous garden (4′x75′) plus there is a basement for all of J’s stuff (which are quite volumous, he’s a bit of a packrat), a washer dryer, a larger kitchen, heat, and a really nice neighborhood in an area that I’ve been desperate to move back into.
So now I have to pony up:
First and Last month rent ($1800)
$250 damage deposit
$250 cleaning deposit ($175 is non-refundable for carpet cleaning, and it’s an ugly hunter-green carpet)
$250 pet deposit
My current place I had no deposit (after all, the walls are not structural and they don’t care what kind of build-out or demolition you do whatsoever). I only paid first and last month rent. SO the new first/last month rent is just like paying rent. I didn’t pay this month’s rent – that will become the new place’s “last” month rent. The triple $250 is what I have to figure out how to pay. That will probably mean no debt payments next month and some dipping into the EF. A temporary loss for a large gain.
One of the best things about the building I’m in now is that because it’s a commercial space, the utilities are very cheap. My $20/month in electric, my $60-$80 in gas heating (only in the winter), and my $15 garbage will be significantly increased I’m sure. Plus I’ll be getting internet. It’s been so many years since I’ve had to have it I’m not even sure who offers it and how expensive it is! It will definitely be nice to have access to it again. Again, since I’m in a commercial area, no dsl, no cable. Clearwire we tried, but the location we are in the building didn’t give us a good signal, so it was a waste of a year’s commitment (rarely useable).
J has agreed to pay more rent, which is nice. I hope he can afford it. He has no savings, he hasn’t paid off his credit card (it only has a small balance, under $1K), and he refuses to budget or talk about money. It’s his big trigger point. I’ve assumed that all the deposits will be paid by me, since he doesn’t have the money. I’ve also ensured that if he can’t pay rent, I can afford it. That’s why we’re in a tiny house. If I could count on him paying more, then I would have gone for the next step up in houses (larger, enough room, a second floor maybe), but I’d rather suffer a small space to continue keeping my rent manageable. I don’t want to overextend on housing and slow down my debt payments.
New posts coming
I have had a busy week getting ready for my art show. I also lost internet access at home, so haven’t had any time to do any posts this week. I’ll have time this weekend to do a bunch, so more to come soon, including some posts on my February budget, and my new road bike purchase.
Thanks!
How I made the change
I’ve never actually explained the reason I started my debt-free journey, so I thought I’d tell the story.
In 2004 I had no debt. I had a business with an ex-boyfriend, and it went well, but when we split up, he wanted me (understandably), to pay my half of the inventory expenses of purchasing the items we sold. Before that, he was the one fronting the money (he had the income, he started the business, and I was younger, in school, with no available income). I had to take out an SBA loan to do so. I was also in the last year of my degree at college. I would make money, but then never quite pay off the SBA loan. Then, in the next 2 years, I decided it wasn’t working out working together like we were, so I wanted to break it off completely. I had to take out a personal line of credit from the bank to pay out my share. I could have slowly paid it off but I didn’t.
At this point I graduated from college, and tried to make a living making art. Not fully successful, but I was so used to not having to hustle to pay the bills that I basically rested on my laurels. I got a part-time job in the arts about a year after I finished, but that didn’t fully pay the bills (on $12/hr, part-time, no benefits, and I was responsible for all taxes). After about 2 years I realized it was a big problem, and had to get a real job. I couldn’t live on borrowed money anymore. So I did get a job, also in the arts. It’s a good job, pays relatively well, for the industry, but wasn’t like I was making $60K a year, either. It was a liveable wage, not excessive, but just enough.
So fast forward to last year. I would go through cycles of binging and purging. I would buy a lot, and use my loans to pay for my living expenses, since I had used them all on other inconsequential things. Then I’d get a big paycheck and pay it all on the loans, not leaving enough for living expenses. You see the problem.
I realized by last summer that I was in really bad shape but didn’t know what to do. I always wanted to see if I could find a credit counselor to give me some advice about how to go about fixing things. I’m not adverse to paying off my bills, but I couldn’t quite figure out how to do it. I thought I might be able to be pointed to some method of consolidating everything together, with a lower payment, and just one bill due a month. (I see now that that would still have been a disaster).
About this same time, a very good friend had been telling me about her family’s debt troubles and how one of her friends, who is a debt lawyer, was helping her family figure it out and turn her credit situation around. I thought to myself, Hey! This is what I’ve been looking for! I called her up, made an apointment, and stopped in for a visit. That’s when it got scary, fast.
The whole meeting was about which bankruptcy I qualified for. I had just gotten promoted to being a manager, with a relatively large jump in salary. Along with that came required longer hours, and a lot more overtime, as I stayed late to close the building several nights a week and picked up extra shifts as much as I could. I was making a lot more than I had been. Apparently I may have been making too much – I would probably fall into the chapter 13 bankruptcy income bracket. If you make over a certain amount, then you can’t just wipe the slate clean like with chapter 7, you have to be put on a mandated budget, pay a percentage of all your debts and be on this program for 5 years. It was horrifying and a serious wake-up call to what bad shape I was in. I mean I knew it, but I didn’t really KNOW it, at least until that point.
I didn’t feel like there was anything else offered to me. Maybe that’s what most people want to hear and that’s what she was offering. Either way, I said ok, let’s do it, and left with a hefty pile of paperwork to fill out. Oh, and a really heavy feeling in my stomach.
I was scared enough to immediately start assembling all my information together, as needed, for the paperwork. The first step in the process was to pre-qualify for bankruptcy. I had to prove my income, see which chapter I fell into, 7 or 13, then go through some on-line counseling session to prove I was ready for it (I think that’s what the process is; I didn’t actually go through it, as I’ll get to shortly, but that’s what some of the details I remember from my meeting).
So I began getting my debt house into order. I found all my bank statements, my pay stubs, you name it. I started figuring out how I spent and on what in the last several months. The previous 4 months of budget history was really enlightening. I was spending like crazy, with no rhyme or reason. I was oblivious to my bank account balance, with the resulting overdraft fees coming as no surprise to anyone who has been there. Overall, it was really dismal.
It was at this same time, feeling terrified and sick to my stomach, that I thought there’s no way, what does bankruptcy really mean? Is it really “no big deal” like our culture makes it out to be? So I thought I should do my homework. I turned to the internet and started looking for bankrupty information. I wanted to see people’s stories of who had been through it, how it went, how difficult it was, and what the ramifications of it all were. I found a few blogs, but nothing that really was what I was looking for. Instead, I found all these websites about personal finance and getting out of debt, on one’s own.
Wow. Maybe all of you reading this can understand what an amazing concept that was to me. I didn’t really have anyone to talk to about this. I briefly mentioned it to my boyfriend, but never to my family. I have never even really gone into depth with my friends. So to see a community of people struggling (successfully) with it, and telling their stories, their innermost feelings about it, and even HOW to do it, well, it was really inspiring. I got hooked. I started reading blogs day and night and saw that it was possible to do this myself.
I never did get my questions about bankruptcy answered to the degree I wanted, but I decided not to pursue it after all. I decided to do it myself. By mid-October I had put my first budget together. I continued to read blogs all the time. Then in early November I decided to start my own blog. I figured, what the heck, I was infatuated with the subject, and maybe it would help me stay focused on it, longer.
The rest is public history. You can read my progress yourself.
The things that have changed is that I feel knowledgeable and finally in control of the process. I know there’s a light at the end of the tunnel and I am confident I’ll reach it. It will take a few years, but I can do it, and I’m satisfied knowing the journey will be a success.
The piggy bank collection
I’ve decided to make saving more fun. I’ve collected some piggybanks to have on my dresser to keep my mini-fund savings. I elected to not put it savings for various categories into one big savings account. Sure, I could make some money in 2-4% APRs out there, but I elected to do something fun and physical rather than theoretical with my money. And might I say how much delight it gave me to stuff $100 in my car piggy, $50 in my gift piggy (he has antlers, he’s a christmas pig), $50 in my kitty piggy (I still have to find a cat piggy bank for the pet fund: unexpected vet bills and the like), and $40 in my photo piggy (his name is Ralph, he’s tall, red, and very distinguished for a pig, and I bought him intending to use in a photo project I’m working on, so now he does double duty).
It definitely gave me a visceral thrill to fold and push into a slot, rather than type in some numbers, hit a button on my computer and have the money magically move from virtual home #1 to virtual home #2.
Week Vacation
This will be my last post until December! I’m heading out of town for a week to visit the bf’s family in the midwest for Thanksgiving. Tickets were already paid for 2 months ago, so don’t have to budget for that.
I will be bringing some minor hostess gifts (lovely Fran’s Chocolates, best chocolates in town!), and a bunch of munchies for the 29 hour train ride, and some bottles of wine for Thanksgiving (I’ve been told if I want to drink anything decent to bring it myself). I have my cache of library books. Don’t expect to spend much, but I’ll be taking $300 cash for discretionary spending and so that I don’t have to worry about not having access to my computerized budget and going over.
May you all be well and spend time with famiily and friends! See you in December!
Research & Budget Update
I’ve been reading up on lots of PF blogs lately – as I find good ones, I’ll add them to my blogroll. I know my current debts, I’m paying close attention to my statements, I’m making sure I don’t run out of money in my checking account and then have to resort to my credit cards or have transfer or overdraft fees. I’ve prepared a beginning budget. I’ve applied for a 0% interest rate card and gotten a 5K limit approval.
I’ve decided since starting this blog (all of 8 days ago) that I should have an emergency fund after all instead of expecting to use my credit cards for unexpected large expenses. I went and got a copy of my credit report to look at – it looks pretty good, nothing unexpected. I didn’t actually pay for my credit score; I don’t really care at the moment and I’ve been told that “it’s quite good.” I know I have a lot of debt, but I’ve always paid what I owe and I’m not usually late on payments. I don’t expect to purchase anything large for several years, so I don’t need to repair anything, just pay off those darn debts!
I’ve made an estimated stab at my debt-free goal of 6 years, but it’s not all that scientific; I’ll adjust it as I continue the journey. I have begun to live much more frugally, and I’ve updated a bunch of widgets on the side of my blog (showing the charts of percentage paid on my various debts). The visuals were fun and I think will be really useful to chart my progress (I know it’s the first thing I look for on other blogs!).
Now I’m anxious to start paying them off! I have had a few setbacks this month. I have been horribly sick and missed 4 days of work. That caused me to lose a lot of hours (I usually have 1-3 hours of overtime every day). It’s also a really short month on both paychecks – 10 days in each (payperiods are on the 15th and end of month). I expect I’ll be $3-400 short from previous months. Next payperiod is also short (10 days) and I’ll be on vacation for the entire weekof thanksgiving, that looses me about 7 hours of overtime, so next month’s first paycheck will also be significantly less than what I’ve come to expect as “normal.” Previously this would have been a disaster on my finances, but I’ll make do and be ok, just be paying less on debt.
Still, I’m looking forward to paying my first payments on my personal loan and paying off my credit card completely! I’ve also learned that my budget will need some tweaking! I think I’ve allotted too much money to food, entertainment, and restaurants. I also realize that I’ll have fluctuating amounts of spending in photography, but I’ll save that category for another post. I’ve also decided that the next budget update (to be done at the end of every month) will have to be in a table-based format.
Here’s to all my co-PF bloggers out there, and thanks for the wonderful motivation and help!
