Does It Feel Like We’re Stuck In Neutral?

When it comes to personal finances, every so often I take a look at things over the long term.  For as much progress as our family has made paying down debt, contributing 10% of my income to retirement, and the like, from a personal finance perspective it often feels like we’re stuck in neutral.

Here are a few examples of how it seems like we’re spinning our wheels:

  •  Income level stagnant – I’ve heard it said so many times “I’m happy to just have a job” that few complain about not getting raises.  I was lucky enough to avoid a salary cut during the recent recession, but haven’t had an effective raise in years.  After more than tripling my salary from when I first started in the workforce in 1996 to 2005, this is frustrating (even though I *am* happy to have a job)
  • Stock market – It seems that the stock market has been stuck in neutral for over a decade.  Levels have risen and fallen a lot during that time, but aren’t the Dow and S&P pretty close to their trading levels from ten years ago?
  • Housing levels – OK, so everybody knows the housing market sucks but how bad is it?  Let’s put it this way, I bought a condo in 1999.  It went up in value over the years, but when I sold it in 2007, it had already started going down in value, and I sold it at 2005 levels, which I was bummed about.  Even though I don’t live there anymore, I still track what’s going on, and I’m pretty sure now it wouldn’t even sell for what I paid for it.  That’s pretty typical around here anyways.  So, in other words, housing values are below 1999 values.

I’m still fighting the good fight and keeping my chin up, but every once in a while, it seems like the one-step-forward two-steps-back adage.

The sucky part for me is that most of these ‘neutral’ indicators have happened during the prime of my working career, and the same probably holds true for those around my age (mid-30s).  In the past, this is where many people would get established financially, but now it seems we can barely keep up from the month before.  This could have long lasting repercussions as the effects of this personal finance neutrality will certainly impact us for the rest of our lives.


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When Desperation Rears It’s Ugly Head

My sister-in-law works at a child care facility.  Company policy states that they can’t take their personal items like purses and what not into the rooms where they care for the kids.

Well, with this, it was only a matter of time before someone started taking advantage of this and stealing money.  A couple of people (thankfully not my sister-in-law) have reported that they kept their purses here and that money has been coming up missing.

People are now starting to hold back on bringing anything of value in at all, but how desperate do you have to be to steal from your co-workers?

Many of the people that work in these types of places become friends.  Most of the employees are female, and many are younger.  Before Baby Beagle was born, my wife had jobs in similar places, and made many friends along the way.

Unfortunately, these places don’t pay very well.  Child care is not a lucrative field, so quite honestly, hearing about this type of theft doesn’t really surprise me.  Money is tight with most people that work here, and while it’s no excuse, probably one extra bill or unforeseen situation could cause someone to be desperate enough to go places where they shouldn’t.

Reduce your chances of being a victim of this type of workplace theft:

  • Take away the opportunity to be a target – Don’t leave your wallet or valuables lying around.  Keep them in a locked place, or if that’s not available, make sure what you bring in and leave unattended is minimal.
  • Keep your eyes open – Someone is being very bold here.  Keep aware of suspicious behavior or anything out of the ordinary.  Whether you know it or not, you become aware of people’s habits if you’re around them long enough, so keep an eye if something suddenly changes.
  • Report activity – Even if you don’t see something directly, if you have any suspicions, it’s better to report it.  If you’re uncomfortable, do so anonymously.
  • Don’t feel guilty – Because of the relationships that often get built at work, many people feel guilty about reporting a colleague, whether it be for confirmed activity or just suspicions.  Don’t feel guilty!  There’s someone breaking the law, taking something that doesn’t belong to them, and impacting the safety and security of everybody else there.  Besides, if you do know something and don’t speak up, you’re basically an accomplice and that’s not worth it.

If you’re desperate enough to consider or even follow through with such an action, don’t do it.  You might solve a problem easily but it’s a slippery slope and it’s just not worth it.

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The Time Off Juggling Act

I’m taking a day off of work today.  Part of our time off is accrued on a paycheck to paycheck period.  You get a certain amount per paycheck that goes into this ‘bank’.  It’s capped off at a certain limit, and if you hit that cap, you stop accumulating time until you use part of it.

There is an advantage to keeping the balance of this bank high.  The reason is that, with our company, this bank is paid out in full in the event that you lose your job.  This is in addition to any severance or anything else.

I’m feeling very secure in my job, but still, in this day in age, who knows?  So I strive to keep my balance of unused time as high as possible just so I know that, in the event of dire circumstances, I’ll have a little bit of an extra cushion.  Still, it’s one thing that I have to keep an eye on to make sure that I’m taking full advantage of this.

After all, my employer is including this as part of our compensation package, so why not maximize it to the fullest potential and make sure not to lose any time?

Off to enjoy the day and get some things done around the house!

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Financial Moves In The Event Of A Job Loss

With the economy the way it is, I think it’s a good idea to have preparations in the event of a job loss.
My job is what I would consider relatively safe. I recently transferred into a just created position that is fully funded for the foreseeable future. ‘Baseline’ positions, as they are known here, are considered the best type to be in, because the customer funds them for a year at a time, and generally funds them in blocks versus individually.
Still, even though I don’t feel insecurity, I’ve learned that it’s always best to be prepared.
So, I have somewhat of a contingency financial plan in the event that I suddenly found myself unemployed. This would require a lot of changes since my wife is (by our choice) staying home full time.

The Plan

Unemployment Benefits / Health Care

I would expect that any state unemployment benefits that I would receive would be eaten up by health care premiums, whether it be COBRA or a privately funded insurance policy.
Paying the Bills
We have an emergency fund specifically for events like this. The money isn’t earmarked for anything else. We would use this to pay essential bills. It is funded for about 4 months.
If unemployment were to continue for longer than that time, we would look into one of several options. First, we could sell some investments. We have non-retirement investment holdings that I could sell that would sustain us for another 6 months or longer. Second, we could re-evaluate some of our other cash holdings. We have additional dollars alongside our emergency fund that are earmarked for things like a new car, home repairs, etc. that could be re-allocated if necessary.
Concentrate on the Job Search
Due to having a fully funded emergency fund, I wouldn’t be panicked, as I know that we would be able to pay the bills for quite a good long time without running into financial difficulties.
This would allow me to focus on finding a new job.
Reducing Expenses
There are definitely some expenses I would look to cut as a method to reduce our cash outlays. Even though we have a fully funded emergency fund, the fact remains that with a job loss, it would no longer be fully funded after I found new work, and would need to be re-built. I would employ the following strategies to make sure that our cash lasts as long as possible and to ensure that we could get back on track as quickly as possible once I found new work:

  • Postpone student loan payment 1 – We have two student loan payments, once of which is paid ahead. We currently make at least the minimum payments, but we could suspend those if need be with no penalty for at least four years. I’m hoping that I would get a new job by then!
  • Eliminate Netflix – We’re currently on the barebones plan for $4.99 a month, but I’d still suspend that.
  • Eliminate eating out – We spend probably about $80 – $100 a month getting pizza, takeout, or going out occasionally. We would have to buy more groceries, but this would allow us to reduce this amount by a decent amount.
  • Unlevel some of our spending – I currently put aside an equal amount every month so that our monthly spending is fairly even. But, this has increased the amount of cash that is on hand. So, for example, instead of putting aside $35 per month for the cat’s vet bill, I would suspend doing that, although I would have to ‘catch up’ later on. There are other categories that would help us in this regard.
  • Let the lawn go brown – I admit I like having green grass. I don’t water nearly as much as some of our neighbors, but the sprinkler system would be turned off if I lost my job.
  • Reduce or eliminate the A/C – The design of our house and landscaping makes it where we run the air conditioning on most days when it goes over 82 degrees. I would increase this threshold as well as re-adjust the thermostat to reduce the energy use.
  • Cut back grocery spending – If the job loss was short term, we could get by pretty well by eating down a lot of the food we have in the pantry or freezer. I’m a big believer in stocking up just so long as you don’t waste food, but this would give a cushion for cutting back grocery bills as we could go through our existing food stockpile which would cut grocery bills down for a bit.

There are definitely other things that we could look at but I think that these would keep us afloat for a long time and let me concentrate on finding work.
In future posts, I will share some experiences in the past that gave me some of this knowledge. I’ve actually had to employ some of these in the past, but under different personal and financial circumstances.
What plans do you have in place that I missed discussing? I’m always up for ideas!

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