A crucial point– time to make cutbacks

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I am in desperate need of a revamp of my monthly budget. And it’s mostly due to the new car payment on the Prius.

I worry all the time if I got a car that’s outside my means. Is it extravagant? I think that it is. Here’s why: I went from a $128 a month car payment on the HHR to a $286 payment on the Prius. YIKES, right?! I knew it was going to be higher than what I had before, yes, since it was a more expensive car than the HHR. I also bought the extended warranty, so that got tacked onto the loan amount. I figured that the savings I’d see at the gas pump would even things out a bit.

And yeah, that’s true to a point. I am spending less on gas, but it’s not $158 less a month. More like $40 a month.

So I’ve decided to take some action to cut my expenses everywhere else. First thing: I’d like to refinance my mortgage if it makes sense to do that and would save me money on my monthly payment. The last time I did a refi, it saved me around $120 a month. It added a couple thousand to my loan once closing costs were wrapped in, but in the long run it still worked out. I’ll be selling it well before I am in there 30 years or something, and I don’t plan to put it on the market until I know for a fact I can recoup my mortgage amount in full. I don’t expect a profit anymore, because hell, NO ONE is seeing a profit when they sell these days. I just want to at least break even.

Anyway, the point is I am hoping to refinance and save some money there. I should hear back from the bank tomorrow.

Second, I thought I’d switch car insurance. I have Progressive at the moment, but have State Farm for my home insurance. I approached SF asking for a premium quote today, and not only would it not save me any money to switch to SF, it would COST ME $73 more a month! Wow. Even with a discount for having home insurance with them. I’m very disappointed.

The third thing is I’m finally cutting the cable TV and DVR cord. It’s hard, because I do love me some TV that’s only available on basic cable. (The Walking Dead, Falling Skies, American Horror Story mostly.) But times are tough, and I have to be realistic about what’s a luxury and what is a necessity. Clearly, cable TV is not a necessity. I should be able to save about $100 a month if all goes well. (Wish me luck– the cable company is relentless in trying to talk you out of cancelling service!)

After this, there isn’t too much more I can do other than stop all extra shopping completely. I mean, no more clothes, music, books, shoes, household stuff beyond essentials… none of that. I can do it. I simply need to discipline myself and remember that most of the time, when I buy stuff that’s not necessary, I’m doing it for psychological reasons. Boredom, depression, frustration, etc…

And finally, the last thing is trying to find another way to make more money on the side. Ideally, if I could find some freelance work that I could trust I would actually get paid for doing, that would be best. Problem is, in this market a lot of people are expecting writers to do their work for very little money or FOR FREE. The ads I’ve seen say they will “offer college credit” and talk about the value of “adding to your writing portfolio” like they are doing YOU a favor by having you do all this work… and yet they want you to do copy for an entire website, write a script for some commercial or do some other monsterous job. I don’t get it. Does this work? Do they really get desperate writers to actually do this for them for free? It’s terrible. It cheapens the freelance environment for ALL writers when this happens. (And I know this is true in art and graphic design, too. It’s a real shame.)

Either way, I’m looking into it anyway. I hope to find something out there that fits. I also wonder if I should take a course in other kinds of writing, like grant writing and technical writing. Those are the jobs that do offer payment, usually.

The other idea is to find a part time second job. I have no clue where or what I could do, though… and I sincerely hate the idea of never being home, and the stress of trying to rush home, take care of the pets and get back out the door to another job several times a week.

My overall conclusion in all of this? I am living outside my means.

I have too much debt. Too many bills and too much to take care of all by myself. I’m trying to do it all on just my salary and it’s been coming together somehow up until now, but I am never comfortable. I am always skating way too close to the line by the end of each pay period, and I often need to pull money from savings to get through to the next check.

I’m not happy with myself for living this way; for having all these expenses and for the way I feel trapped by all of it. I wish I’d never complicated my life as much as I have with STUFF. Do I need all of it? No, I definitely do not. I could be quite happy with a hell of a lot less STUFF.

It will be three years this July that I have owned my house as my primary residence. After that point, if I were to rent it out or sell it, I no longer would be obligated to pay back the $8K tax credit I got back when I bought it. I can hardly believe that ALL of that $8K went right back into my house, too. I got the yard landscaped, put in the new gate, had some painting done, had baseboards installed and the back porch added on. So I wouldn’t have been able to pay that money back if I wanted to. Technically, I should remember to add that $8K to the selling price when I eventually sell my place…

At this point, I’m realizing how exhausted and sad all of this has me feeling these days. I love my house… it’s very nice now and I’m happy living there and I love that I haven’t had to move for almost 3 years now, making this the longest I have lived anywhere since I’ve lived in AZ… but I see the other costs now that come with it, and it’s not worth it.

I should have rented instead of purchasing a house. And if I purchased something, I should have been more prepared for the closing so I could have gotten a better company to do the remodeling that was wrapped into the mortgage amount. (As it was, the company I did use ripped me off and did crappy work for the money.)

I could get rid of half of everything I own (except my pets!) and still have a lot of things. Half of my books, half of my furniture, half of my clothes/shoes, half of my computer-stuff, half of my holiday and yard stuff… and maybe I should. It might be a good exercise in not feeling so top-heavy right now.

Depending on how this refinance thing goes, I just might start considering a drastic move. Like renting my house out (the market rate in that neighborhood is at least $200 more than my mortgage payment) or putting it on the market in the fall. I do worry about one aspect of renting: can I find a place that will allow me to have my 2 dogs and 2 cats? Because I absolutely refuse to part with any of them, ever. If they were human kids, I wouldn’t turn a couple of them over to family members or give them up for adoption! So, it might take awhile to find the right place, but I’d do whatever it takes.

Maybe I am getting ahead of myself. Or, maybe I am finally getting wise to my options. In the long run, am I going to be so glad I hung on to a house I had trouble paying for, a car I struggled to pay for each month, and all the material things I own? Or would I be happier living simpler and with less stress? Maybe even having money to do things to enrich my life, like take vacations to real destinations and travel the world…?

I think it’s obvious which is the better long-term choice. Is it a pipe dream, though? Can I feasibly cut myself out of this money cocoon I’ve tightly knit myself into?

I guess we’ll see.

I often say, jokingly, how I want to just run away and live in the woods someplace. But really, that IS what I want. When I daydream about winning the lottery, it’s all about paying off all my debts as well as my family’s debts (especially my sister and mom). And after that, I buy a small, 3 bedroom cottage someplace. Not a mansion. Not a place with granite countertops and double vanities in the bathroom or something… just something LOVELY and small. I love small, older houses, always have. I love the coziness and simplicity of a small home. I love the idea of having “only what you need and nothing more.”

So that’s my goal, I guess. To pare it all down, strip it down to essentials and appreciate, once more, the things I DO have and make the most of my time on this earth rather than be a slave to my belongings and debts. It’s silly.

I don’t know what happens next, but anything I do has to be an improvement to the way my bank account is functioning right now, so… here I go!

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4 responses »

  1. Some of the it is the added stress of a higher electric bill due to the time of year, right? And it will get better when things cool off, albeit in a few months. Til then, at least you are saving $140 (gas and cable) which almost makes up for the extra $158, right? Are you still bringing lunch to work? or can you cut back on buying lunch/eating out? Maybe sell a few things on Craigslist or something?

  2. You’re right, it’s true: It really does just about even out. There were a lot of other things that came up over the past month that I didn’t expect or plan well enough for. I paid the exterminator to come out and kill that spider and spray my house perimeter; it was my sister’s birthday and I had so much fun getting her stuff I didn’t pay as much attention to the bottom line as I could have been; and finally, I got the windows tinted on my car ($189). This WAS a tough 30 day cycle, and I honestly need to remember that fact more than I do. Not all those expenses are monthly expenses!

    I panic and have kneejerk reactions to money stuff. Clearly.

    Thank you for causing me to realize this! 🙂 Sometimes just an outside opinion can bring to light the most obvious “now why am I not thinking of that?” thought. 🙂

  3. I don’t want to win a lot of money. Mainly about $30,000. Enough to pay off my car, the rest of my student loans and have a bit left over to take a nice trip. I’m not one of those who wants millions, but enough to get us out of the hole and live comfortably. NOt too much to ask, right? 🙂

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