November 2013: Baring my Finances

I am going to assume that the first time is the hardest, which is why I am so squeamish about posting a snapshot of our finances. But being honest about my finances is part and parcel of being a personal finance blogger. I don’t know why it’s harder to publish the entire picture than it is to admit that we have mortgage-sized student loan debt, but it is! Now, in addition to knowing how we’re leveraged up to our eyeballs, you’ll also see how incredibly underfunded we are for retirement. Well, here goes … {{taking a deep breath}}

Before getting laid off, the goal was to empty the bank account each month and put the proceeds towards a loan. Now that I’ve been laid off, the goal is to break even each month. We’re not going to make any payments until our finances get steadier. With that in mind, I present to you our October Balance Sheet:

November 2013

2013 November

  • Cash: That $23,928 amount looks flush, but it’s less than it appears to be.
    • $6,400 — Saved for Tax Payments due to freelancing gigs. We should fork this over to the government sooner rather than later. I have been meaning to figure out how to pay estimated taxes.
    • $4,515 — Roth IRA. Yes, it’s in cash. In a nutshell, we wanted to contribute to our 2012 IRA’s but didn’t have the cash, so we dumped Emergency Fund money into it. Our rationale is that we can still access the principal but we could never get back the opportunity to make our 2012 contribution again. We put it in cash in case the market tanked and we needed access to it, but now I think we need to move it to an index fund because it’s missing out on earnings and we have $50k principal in our IRA’s that we could access in an emergency. Even if the market tanked, we would probably still have enough to get us out of a big bind.
    • $700 — Savings for Annual Expenses. We transfer money every month into this account, which pays for our annual life and disability insurance payments, our vacation, and Christmas. It’s not paying for Christmas this year, though. Our remaining Christmas budget is about $60 — for $10 worth of gifts and our Christmas tree.
    • $8,440 — Savings! This is because Mr. Stapler hustled his ass off freelancing and I picked up some freelancing work. We have put all of our freelancing income (after work expenses) into a student loan the bank. When we have a steady income, we will dump this into a loan or into our IRA’s for the 2013 contribution.
  • Credit Cards: We do any spending we can on credit cards, and pay them off every month. Our balance this month is really high because we had an expensive car repair last month — the first car repair on our Prius in 7 years of ownership, so I really can’t complain.
  • Loans: We haven’t made any paydown progress, aside from our regular payments, since I last reported them.
  • Investments: These are our IRA’s. I don’t have Mr. Stapler’s pension and 401(k) in Mint. They total around $20,000, making our total retirement accounts at about $78,000. I’m not happy with this number, but I’m glad that there is something there.
  • Property: We rent, so that amount is my estimate of our cars’ values.

I recognize that two thirty-somethings should be better off financially. Although we are not in dire straights for weathering this layoff, I am sad that Mr. Stapler worked his ass off to get that extra income and all it’s doing is giving us a cushion for our living expenses. I hope that we can get to a place where we are comfortable letting go of some cash and putting it towards a loan. We’ll get there either when we have a stable enough income stream to pay all of our bills each month or we have enough of a money cushion to let some of it go. For the record: We did empty the checking account this month, it’s just that we dumped it into a savings account and not a student loan.

That all begs the question for me: How much is “enough” to have liquid when your income is unsteady, before you would feel comfortable using it to pay down a loan? 

10 thoughts on “November 2013: Baring my Finances

  1. When I was a young thirty-something, I had student loans up the wazoo, rented, leased a car, had $10,000 in a retirement fund, $0 savings, credit card debt and owed a significant amount in back taxes. Your situation is not that dire, MAINLY because you and your husband have smart heads on your shoulders, you truly understand your situation, and you have a really good plan! Not so long from now, you’ll be sharing this all as a SUCCESS story! Thanks for gettin’ naked for us! :-)We can all learn from your story.

  2. I totally echo Clever Girl. Facing things with eyes wide open and a good head on your shoulders means that you’re way more prepared than you might think otherwise.
    That said, I tend to be of the theory that if it takes a little weight off your shoulders to have a little extra cash on hand rather than attacking the loans, then do that. At the minimum, I aim to have enough to pay for things like car insurance deductibles or health insurance deductibles as well as a few months of bare bones expenses. That’s a lot in cash for some people, but it’s what works for us.

    • Ah! I didn’t factor in deductibles. That’s a good idea: A few months plus all the deductibles we would need to cover.

  3. Enough is what helps you sleep at night. With uncertainty, it’s better to keep more in cash in my opinion. Am I crazy or do I remember reading that some of your husband’s student loans could be forgiven in 10 years with one of the federal programs? If that’s the case, I wouldn’t worry as much about the loan amount. It sounds like you both have good income potential and money to float you until you can realize that. Pretty smart in my book.

    • You’re not crazy — if Mr. Stapler stays with his current job, we’ll be able to get a $74,000 loan forgiven in about 8 years. It’s tempting to keep with his current job, but he’s been looking at some other opportunities that might take forgiveness off the table.

  4. Last year my wife and I got stuck with a big tax bill. We were so busy that we didn’t review our income close enough and her three part time jobs took out essentially nothing for tax purposes. I paid a small amount in quarterly taxes, but I really should have paid in more. I’m hoping the bill isn’t too high because I like to see the money in my business account for the blog, but a big chunk of it just might go to Uncle Sam 🙁

    • Yes, I should definitely get going on paying our estimated taxes! I was paying a higher amount through my W4 election, so I wasn’t worried about it when I was employed. But getting laid off threw that plan out the window. I have to see how far we are in the hole and make a payment before the end of the year. Hopefully, baring my finances will give me motivation to get that problem resolved before December’s update.

  5. The first time really is the hardest, but you get used to it. 🙂 Compared to us, you’re doing remarkably well, LOL. I think the important part is that you realize where you are and where you want to be, and that you’re committed to getting there. Hang in there, Rebecca, you can do this!

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