Planning for a new financial paradigm

I'd tried and occasionally gotten by on very much less, and I'd shuffled small freelance gigs and guiltily spent windfalls instead of saving. But I just couldn't figure out a long-term way to make my rather meager freelance income work for all my non-household-bill expenses; food, child care, coffee shop goodies, lunches for my boys, the limited-but-still-precious entertainment expenditures, home office costs, clothes, and the rest of it. I was considering finding some more small jobs; I'd like to start paying back my student loans, which I've been avoiding thanks to income-based repayment. I was also a little (or a lot) stressed out about retirement savings, which had peaked in my late 20s. I'd emptied my account for a down payment on the house, at the time, figuring it would be fine; I was 28 when I made the purchase. Plenty of time.

Enter the decade of scraping by with a variety of situations in which either my husband or I was always unemployed or underemployed. My husband has been doing well with his military retirement savings, but, with my education and experience, it seemed a shame (if not a downright personal finance crime) for me not to have my own retirement savings.

I had recently started doing more consulting, but lots of it was for trade or for very small start-up businesses, some of whom couldn't pay me on time or couldn't pay my actual value. If only, I'd thought so many times that thought had worn a track in my head, I could somehow go back to investment banking without leaving the life I have now — without forsaking the magazine and my writing!

Enter the paradigm shift

Last week, my neighbor and founder of the nonprofit on whose board I serve as president drove me to the board meeting, and we were chatting about various things, including money. My immediate concern was the money to print our next issue of the magazine, but I had these other longer-term issues in the back of my mind. “I've been putting it out there!” I said, meaning, I had been posting about it on Facebook, I had been talking about it, I was sending off emails.

“One of my friends believes that,” she said. “That if you put an intention out to the universe enough, you'll make it happen. It works for her! She's been very successful!” I knew well that was true; this woman, a playwright, had a lot of success, including an Emmy-nominated screenplay.

“Well,” I said. “Here I am! Saying to the universe that I need money to print the next issue.”

The next afternoon one of my dearest business school friends messaged me on Facebook. “Do you want to do some MBA-style work?” she asked. “Yes!” I said. “Tell me more!”

By Friday, I had filled out a W-9 and sat in on my first conference call. It was investment banking work, part-time, from home. My first month's pay would be enough to print the spring issue of the magazine. It seemed hardly possible.

Making a plan with a new paradigm

It's hard not to get ahead of yourself when you enter a new financial paradigm. It's a bigger version of the conversation that goes on in your head when you have a financial windfall. Sometimes you've come up with a way to allocate four times the amount before it ever enters your bank account. So my first advice is going to be obvious (but I'll say it anyway, as much as a reminder to myself than anything):

1. Don't make any commitments until the money's in the bank. My first month's income is already committed for the magazine. I won't start allocating the rest until month two. Of course, not making commitments doesn't mean you can't budget and plan, but don't have automatic checks coming out of your account on the 31st if that's your first paycheck. Even if everything in the job is working out swimmingly, paperwork errors and delays happen, and besides, why do that to yourself? Give the new financial situation a few days or weeks — and check-clearing time — to sink in.

2. Try to live under the old financial regime for at least a month. After just looking at the headshots on one of our clients' web sites, it's tempting to go out and buy myself a new suit, or at least get a fancy haircut! But visiting clients in person is on the distant horizon (and maybe my circa-2000 wardrobe, still in my closet, is as timeless as I told myself back when I was buying it). The only expense I can rationalize is a replacement for my cracked iPhone, already in my budget. I am thinking of April as my first month with a new budgetary world order.

3. Make a prioritized list of needs. My list of needs starts with “groceries and babysitting”; that's about $1,200 a month. I'll change to a phone plan that allows for more talk and data time, as the new job will mean lots of phone calls, and some of those will be away from home. But other than as-yet-to-occur emergencies (I'm wondering if my water heater is showing signs of wear, for instance), there are no other needs.

4. Paying down debt and savings go hand-in-hand. I've been slowly developing an affinity for the concept of the Balanced Money Formula, but it's been hard to implement with so little money left over after “Needs.” As I understand the concept, the 20% for “savings” can be also spent on paying down debt. For me, the thing that makes the most sense is to do it halvsies: pick a number — for me it's pretty big, about 65% of my new income — and allocate half to savings and half to paying down debt. I don't include my mortgage in that figure, as my husband is paying that (and we have ample equity and a low, comfortable payment). Like Adam Baker at Man Vs. Debt says, paying down debt IS a “Want” for me.

Because I've been going so long without a properly-juiced emergency savings fund, my first savings goal is that; when it's reached the “three months of expenses” level, I'll start putting half of my savings in retirement funds, and half in a “want”; a travel fund for me and my boys.

5. Don't burn bridges. It crossed my mind for a few minutes that I might give up on a few freelance gigs I have ongoing (n.b.: I never thought about giving up this blog!). But I quickly discarded that idea. As when we talked about risk, any new financial paradigm is a lovely uncertainty. If at all possible, keep the other income streams coming in, even if you have to reduce your commitments a bit for the time being, just in case.

6. Plan first for taxes. Even though this is #6 on my list, it's #1 in importance. I'm a freelancer and my income has been so low the past few years that I haven't needed to pay estimated quarterly payments; this will change immediately. Your new financial paradigm will surely cause new tax consequences and require new tax planning. You may want to run your last year's taxes through one of the online tax prep programs, with the new financial information added, just to see what happens. One thing I'll do, for instance, is take a home-office deduction; I've never done that, before, even though I believe I could easily have justified it.

7. Don't lose your old self in your new finances. Remember how I wanted new clothes? I believe firmly in not buying too many (if any!) new clothes. So I promised myself I'd buy one new pair of fancy boots, and then do a review of my existing wardrobe, taking some favorite shoes to be repaired and some favorite suits to be taken in, or out, or hemmed. Luckily, I have a “naked mama party” (a clothing exchange) planned this week already. I'll take it as an opportunity to purge the things that won't work in the life of either eccentric writer Sarah or part-time investment banker Sarah, and wait until I actually have a need to fill it with new clothes. If I'll be meeting clients face-to-face as seldom as I think I will, I'll have time to make new clothes, which would be as Old Self as anything.

8. Use just a little money to make your new paradigm work. After my waiting period, I'm going to find someone to help a few hours a week with keeping the house clean. It's already more than I can handle, with my husband overseas, and my new income means I can finally afford it. First on my list: organizing paper. Maybe that will be my next post…

More about...Budgeting, Career, Planning

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Jane Savers @ The Money Puzzle
Jane Savers @ The Money Puzzle
7 years ago

I struggle with how much to save versus paying my debt. It is so tempting to skip saving and throw everything at the debt but, in the past, that has meant I had nothing for emergencies and just ended up in more debt.

A cleaning lady twice a month is my dream in life.

Holly@ClubThrifty
7 years ago

Mine too =)

I have been considering getting a cleaning lady forever. I can’t bring myself to spend the cash. Maybe one day…..

michelle
michelle
7 years ago

DO IT!!!!! Best investment EVERRRRRRRRRRRRRR. Trust me!!! What is money for anyways??? It will energize you, leave you happier, healthier, more able to make good choices. Just saying (I have one that comes twice a month).

Kingston
Kingston
7 years ago
Reply to  michelle

And your housecleaner will, no doubt, be spending the money you pay her right in your very own community.

kate
kate
7 years ago

Hi, I’ve actually got rid of my cleaning lady after 10 years. I did it because she broke too much stuff and wouldn’t switch to non-toxic cleaners. Plus, she was a bit crazy. I started cleaning my own apartment and I give everyone in the family a job to help. I also make my own cleaning supplies here’s a link. Anyway, I thought you might want to hear from someone who has been there and done that.
http://www.consumerfu.com/forums/money-saving-tips/making-your-own-cleaning-supplies
Hope this helps- CheapS.Kate

Lacy @EarnVerse
Lacy @EarnVerse
7 years ago

Cleaning lady = worth it! My husband is an entrepreneur, and I was the sole breadwinner and now grad student. We are never home and are constantly making time investments in our future. At some point we asked ourselves what our time is worth and what would help save our sanity. Spending 3-4 hours each week to clean the apartment was causing fights, making us grumpy, and we weren’t really enjoying each other’s company. When time together is limited, that ain’t good. So we decided less money eating out meant we could get a maid to come in. I have… Read more »

Mom of five
Mom of five
7 years ago

This is exactly our experience. Two ridiculously luxurious expenses we’ve allowed ourselves for nearly 10 years now are cleaning ladies and lawn care. The lawn care is such a want that we consider it part of our housepayment, on a par with taxes. For our small plot of land, it averages about a hundred dollars a month. Money well spent.

I can’t say we’ll never again scrub a bathroom or kitchen floor, but we’re pretty close to certain that we’ll never again mow a lawn or rake leaves. Life is good. We’re living the dream.

Holly@ClubThrifty
7 years ago

Hey, you guys make having a cleaning lady sound awesome! The thing that holds me back right now is that my one (almost two) year old whips through my house like a tornado every day, making messes everywhere. I clean every single day and even have to mop the floors a few days a week. I am kind’ve a clean freak so I’m afraid that I would still be cleaning non stop anyway. But, it would be nice to have someone come in once a month and do a deep cleaning so that I didn’t have to do it. Maybe… Read more »

Jane
Jane
7 years ago

If you’re a total neat/clean freak, it is likely you would be still cleaning anyway. I’m not saying it’s not worth it to get one, but I have an acquaintance who is a super cleaner, and she has never found a house cleaner that does it to her liking. With two young kids, the thought of a house cleaner stresses me out more than the thought of cleaning. I imagine if you don’t remove things from a counter, that it won’t get wiped down sufficiently. Honestly our house probably has too much clutter at the moment to benefit from a… Read more »

Lacy @EarnVerse
Lacy @EarnVerse
7 years ago

To Jane: How can I spend 3-4 hours cleaning? I like to deep clean. I want top to bottom, sweep, mop, vacuum, wipe down baseboards, cabinets, etc… I actually live in a small apartment, but the tininess of it makes even little messes or things that you would maybe typically save for spring cleaning seem super gross. I admit its a bit OCD. To Holly: Yeah, if you are a big cleaner you might not find it worth it. You can hire someone to come through on a one off thing to see if they do things to your liking… Read more »

Jon @ MoneySmartGuides
Jon @ MoneySmartGuides
7 years ago

Congrats on the job! I always follow the old saying of save for a rainy day. Your experience proves the reasoning for it. We never think that we will be unemployed or underemployed and cannot save money. Many times we think everything will work out as planned in our heads. But then life has a way of happening and we get caught off guard. I hope your post helps others who are considering raiding their savings to think twice.

William Cowie
William Cowie
7 years ago

There is one other thing that helped for my wife and I: we created a separate savings account for no other purpose than for the new money to cool its heels while we decide its fate.

The mere fact that it’s in a separate account for some reason takes the pressure off to make an immediate decision. And the money burns less of a hole in your pocket when it’s out of sight a little.

Just a thought…

Phoebe@allyouneedisenough
7 years ago

Congrats on the job! When I was paying down debt it was extremely frustrating as I’d have emergencies pop up that would knock me back to where I started.

Having a small emergency fund for me was key, and then I threw everything else at my $65K of debt. The progess was very motivating and I paid it all off in a couple of years.

Good luck Sarah!! You can do it!

My Financial Independence Journey
My Financial Independence Journey
7 years ago

Congratulations on the new job. I think you have the right idea about how to handle your new income.

Whenever I had substantial career improvements, I always kept my expenses at their previous point for a while before making the decision to raise my standard of living.

El Nerdo
El Nerdo
7 years ago

Congrats Sarah! There’s no formula or method that can compensate for not earning enough, in the long run. I applaud your decision.

One thing I’d suggest is to take all due taxes right off the top, and put them in a separate account, then take 20% of what’s left and pay some debt with it or put in your emergency fund if it’s depleted. Then let the rest “cool its heels” as William says.

Re: printing costs– have you considered producing a digital edition and see how it sells? I’m more prone to buy digital media these days.

Sheryl
Sheryl
7 years ago

The savings vs debt repayment formula can be so frustrating sometimes. What I’ve come to think with that is it has to be flexible with the rest of my goals and situations in life. When my husband went back to school, for example, it was more important that we have some emergency cushion to fall back on than push through my student loans faster.

What’s so hard about doing both is that sometimes it feels like one goal is keeping you from reaching the other any faster.

Tyler Karaszewski
Tyler Karaszewski
7 years ago

Reading this article I couldn’t help but be reminded of this other article:

http://www.mrmoneymustache.com/2012/04/18/news-flash-your-debt-is-an-emergency/

And the difference between what the two sites are espousing becomes pretty clear. Makes me wonder what the goals are here.

Malcom
Malcom
7 years ago

Thank you for this the link. It really shows how much this site has changed since its founder left.

I am alarmed that the author thinks hiring someone to clean her house is a “need”. Paying off debt, getting an emergency fund and building a retirement accounts should be priority one for a majority of years to come.

Suzanne
Suzanne
7 years ago
Reply to  Malcom

I agree. In what universe is hiring a cleaner a “need” and not a “want”??? I paid off my debt, have 6 months of an emergency fund, and still won’t hire a cleaning agency until I feel caught up with my retirement savings. And on the subject of GRS having lost its moral compass, I also agree. It doesn’t have to be J.D., but if they had one person managing the brand who actually believes in “Getting Rich Slowly” we wouldn’t see this kind of ridiculous message. I do still see articles here that I like and relate to, but… Read more »

Alan
Alan
7 years ago

MMM is the best. I love the forums too, lots of really smart people over there.

Martha
Martha
7 years ago

I agree – As 99.9% of the world’s population knows, hiring someone to clean your house is a luxury. Especially if you have debt. Do I love cleaning my house? Not at all. But every week as I clean I think about the money that is NOT going toward paying someone else and is instead going toward my investments. This is certainly not to say that elements of the article don’t have some value, but to me this piece shows how GRS is slowly straying from it’s original message toward “Keep the Status Quo Slowly” or “Just Don’t Get Into… Read more »

Vanessa
Vanessa
7 years ago

Everyone has to find the balance that works for them and no one needs to justify why they spend the way they do, but I’m curious… You advise not to commit any money until it’s in the bank, but you’ve already committed money from the new job to the magazine and you haven’t even been paid yet, correct? What if the job doesn’t work out, or they are late paying you or…anything? What was your plan to the print the magazine if this job hadn’t come up? You also admit to not paying your student loans, not having any significant… Read more »

Lacy @EarnVerse
Lacy @EarnVerse
7 years ago
Reply to  Vanessa

Excellent point here Vanessa. It took me a long time of paying off debt, funding retirement accounts, and substantially increasing earnings before I looked into getting a maid. This is a luxury and should fall into the financial plan the same way you would any other luxury.

Alan
Alan
7 years ago

I’m very disappointed with GRS lately. It seems to be mostly freelance writers, writing about how hard it is to get paid, so therefore it’s hard to make progress towards his or her financial goal. Then there is some crazy platitude about putting out good energy into the universe and good things will happen. It reeks of “The Secret”. Good things happen when you bust your butt and work hard. Good things happen when you build up your network of contacts and develop real skills that you can use to start a business or that help you land a good… Read more »

Marsha
Marsha
7 years ago
Reply to  Alan

Exactly. She said she’d been posting her need on FB, but when she “told the Universe” (?!) somehow the very next day she got a lead on a new job. But the friend that contacted her about the job had read about her need on FB. I don’t think the “Universe” had anything to do with it. It was just old-fashioned putting the word out.

Greg Miliates
Greg Miliates
7 years ago
Reply to  Alan

To be clear: sending out brainwaves to the universe does NOT constitute a plan of action. Taking action is what changes the situation. And as the saying goes, the harder you work, the luckier you become. That’s not to downplay serendipity, chance, coincidence, or whatever you want to call it. But when you rely on fuzzy, vague platitudes instead of a plan of action, you’re setting yourself up for disappointment. In the thousands of people I work with and talk to on my blog, the only thing that has moved them forward toward their goals has been action. And what… Read more »

Curtis@PayOffMyRentals
7 years ago
Reply to  Greg Miliates

I think the suggestions about not allowing lifestyle inflation creep into a debt payoff plan are excellent. You lose the tremendously powerful snowball effect when that happens.

Hard work and a (snowball)plan is exactly the course I’ve chosen to pay off $177,650 of my rental real estate in 42 months.

Darnell Jackson
Darnell Jackson
7 years ago

Excellent post but I would caution you on step #4.

Remember when the credit collapse happened in 2009 even people with A credit couldn’t access it.

Remember?

The moral of the story is CASH is king, save YO money.

Savings > Debt

HappyFund
HappyFund
7 years ago

If your debt payment is a “want”, I’m assuming you mean you are okay with not paying it off with urgency. That’s fine since the debt question has an emotional and mathematical side to it. What is your take on the mathematical side though? Do your current savings earn more than your loans interest?

WWII Kid
WWII Kid
7 years ago

As someone who gets up every morning and goes to a “regular” job, pays bills on time, has a retirement account and emergency savings, I just don’t get articles like this. What am I supposed to glean from it? And I don’t mean that as a criticism. You sound like you’re living in financial straits. Your student loan is looming and yet you make it seem like you don’t want to use your education to earn a living. You want to follow a dream, to answer your calling. I applaud anyone who wants to do that. But would getting a… Read more »

Aram Durphy
Aram Durphy
7 years ago

For number 4 in your article, I wouldn’t recommend using your excess cash to pay half to debt and half to savings. It’s better to put that money towards the higher interest rate. For example, if you can save at 3%, but you owe debts at 10%, you’ll want to put all that money toward paying off debt. If it was reversed, then you would probably prefer to pay the minimum on your debt and maximize your savings.

El Nerdo
7 years ago

Actually I think the new paycheck shouldn’t go to pay for the magazine– the magazine should pay for itself. Usually it’s rich people who are patrons of the arts, and for a reason– they can afford it. Find a patron or patrons if you must, but don’t pay for it yourself. I’m in favor the magazine– but don’t pay out of your pocket unless you have a plan to recover the expense and then make a profit. I’m thinking a combination of digital subscriptions and good marketing could get you some revenue with little overhead. BTW, Apple’s “Pages” can publish… Read more »

Holly
Holly
7 years ago

No time or energy to clean the house, but you have time to make a new work wardrobe?! For real?!

Skip on the fancy boots. Take your most current circa-2000 suit to the tailor, and spend the fancy boot money at a consignment shop on a couple of tops you can mix & match with the altered circa 2000 suit.

Don Antle
Don Antle
7 years ago

4. Paying down debt and savings go hand-in-hand is great for people to read from you Sarah. Being in the debt consolidation side of finances we teach our clients about savings and importance of it. Your insite was great. And pointing out the importance of taxes and preparing for them is key also. What a great blog and some good key pointers for the rest of the world to know!

Janice
Janice
7 years ago

How exciting and wonderful it is when someone approaches you for YOUR SKILLS! I just can’t resist the caps. To have someone reach out and want you in particular to work on a project is such a rewarding experience–and when you’re going to get paid for the work that you’re good at? So satisfying! From a strictly financial perspective, I can understand that it doesn’t make sense to spend money on the magazine. But then again, from a strictly financial perspective, we should all be misers eating oatmeal three times a day in shacks without heat. It’s important to prioritize… Read more »

lmoot
lmoot
7 years ago

Wow. I really don’t know what to say about this article. In the beginning there seemed to be a lot of justifications, ear-marking un earned income for a magazine pet project/ not-very-well-thought-out business (which kind of tipped me off that you didn’t have savings). Also high equity and low mortgage does not an emergency account make. I’m surprised with your family’s history of spotty employment, that you don’t seem to mind that a low mortgage payment might as well be $1mil if there are no savings and no income. On top of that, it’s casually slipped in that you cashed… Read more »

Alan
Alan
7 years ago
Reply to  lmoot

I think http://earlyretirementextreme.com/ or
http://www.mrmoneymustache.com/2013/02/22/getting-rich-from-zero-to-hero-in-one-blog-post/ would be a better fit for you. I suggest these sites because they are more geared toward people that want to get things done NOW.

Get rich slowly, is well, too slow for what you are shooting for. I second the need for a reality check, though the author didn’t ask for one.

lmoot
lmoot
7 years ago
Reply to  Alan

How is not running off and getting an apartment I could barely afford right after college just because I got my first “real” job, extreme? There’s nothing I did that was extreme. It was all very logical common sense. I wasn’t aware that choosing to regularly contribute to a retirement account and not take money out was considered extreme…cool! Or that working a little bit more and cutting costs for a couple years in order to save 20% for a downpayment on a house was so avante garde, nice to know! I knew with my first job that offered a… Read more »

nicoleandmaggie
nicoleandmaggie
7 years ago
Reply to  lmoot

The irony is, that if you do all these stupid things with your finances that cause you to lose money in interest rates and fees and lack of earnings, you’re actually far less likely to be able to follow your dreams. Once you are freed from debt and have your money working for you, the money makes more money and it’s a lot easier to enjoy life and follow your muse. We sacrificed some in our 20s and now in our 30s my husband is able to quit his job to try to figure out what to do next (probably… Read more »

Alan
Alan
7 years ago
Reply to  lmoot

I’m not saying you are extreme at all. Saving money to buy a home rather than cashing out a retirement account is entirely reasonable. Given your no BS approach to finance, I’d recommend those blogs for your reading.

lmoot
lmoot
7 years ago
Reply to  lmoot

I’m sorry Alan, I misunderstood. I’ve browsed ERE before and intend to go back to it from beginning to end (while admirable I don’t know that I could go to THAT level, but I think it’s awesome). I’ve heard about MMM for a while but actually just started really getting into it over the last few weeks and it is absolutely brilliant. You are right that those are more my speed, but GRS used to be also…not so much anymore. I wish I could give the poster 1000 thumbs up who stated that GRS has basically become a place for… Read more »

Meghan
Meghan
7 years ago
Reply to  lmoot

GRS has a variety of readers, which I like, but this particular post bothered me and I am not the world’s best saver myself! I don’t come here to be told that I should re-use toilet paper and there are plenty of sites for the super frugal. I also don’t come here to hear advice from people who have no serious interest in bettering their situation. Maybe this person has held out on things for 13 years, and if so, that’s a long while, and I understand the urge to get a couple of things. I doubt that’s the story… Read more »

Alan
Alan
7 years ago
Reply to  Meghan

The tone of the comment is pretty harsh so I hear you on that. At the same time I would consider this article essentially malpractice. I can’t imagine any other personal finance blogger or TV/Radio host being so blasé about getting out of debt. Seriously, Dave Ramsey, Suze Orman, The Motley fool guys, Clark Howard, MMM; None of these people would stand behind this. I think all of them would be shouting, “WAKE UP, your financial house is on fire.” One other thing, re-use toilet paper?? What?? That’s a strawman argument. I’ve read a ton of PF materials and I’ve… Read more »

Meghan
Meghan
7 years ago
Reply to  Alan

Alan, for real? I’ve seen people bragging about reusing washcloths as TP more than once or bringing home napkins and using those. I’m wish I was joking. Check out some of the frugal momma sites. I’m a decent saver, but I don’t come to GRS because I’ve mastered it; I come here to be inspired! I agree that this article was disappointing and perhaps the writer should be getting inspired instead of doing the writing. I don’t want to completely bash her though. I’ve seen that quite a bit on here and that’s equally disappointing. To those who agreed that… Read more »

Jane
Jane
7 years ago
Reply to  Alan

I agree with Alan that the re-used toilet paper is a straw man people use to justify why they are not more frugal. Sure, go ahead and wipe your butt with brand new pulp every time you go to the bathroom. Feel free to disregard the advice of anyone who suggests you do otherwise. But don’t use that same logic (“I will not go to extremes”) to justify why you have a souped up iphone or still get your daily latte (or jalapeno cream cheese bagel..and Honey defenders, go ahead and call it a cheap shot and ignore my comment,… Read more »

Nick @ ayoungpro.com
Nick @ ayoungpro.com
7 years ago

I love your list, but your story about cashing out your retirement savings for a down payment on your house scares me! I just did the same thing with the thought that it would be easy to build it back up again, so I hope I didn’t make a mistake.

Alan
Alan
7 years ago

If you haven’t spent the money yet and it’s within 60 days of distribution, you may be able to return it to your retirement account. Google IRA 60 day rule for the details.

Ely
Ely
7 years ago

One of the things I like about this site is the reminder that life is about more than money. I think some readers have forgotten that.

lmoot
lmoot
7 years ago
Reply to  Ely

Some would say the problem is that too many people already believe that, and to the extreme; and that was the problem in the first place (the economy and state of lack of general savings and financial health). I doubt many people need to be reminded of that. I think it’s more important people are reminded not to use that as an excuse. Life quickly becomes about money when it’s not there. Ask the folks who’s lives have been turned upside down because of unemployment, emergencies, bankruptcies and foreclosures. Unless you live off the grid and reject modern necessities I’m… Read more »

Vanessa
Vanessa
7 years ago
Reply to  lmoot

“Life quickly becomes about money when it’s not there.”

This.

Jane
Jane
7 years ago

It’s never even crossed my mind that our retirement accounts would be money that I could touch for anything. I guess it’s good that I have so little imagination, since I think it is rare that such a decision is wise. Someone I know cashed out his entire 401K at 40 years old to pay off debt and to buy a house. But then he forgot about all the penalties and what he would have to pay to the IRS months later (we told him, but he didn’t listen). So he had to sell said house to pay his taxes.… Read more »

nicoleandmaggie
nicoleandmaggie
7 years ago

Having a cleaning person is great if you can afford it. It doesn’t sound like you can actually afford it.

http://nicoleandmaggie.wordpress.com/2012/09/24/its-not-really-your-money-if-youre-in-debt/

But hey, you can’t default on student loans and the house loan is secured. So it could be worse.

I feel terribly guilty getting these biweekly shots of Schadenfreude. But there you have it. (And it’s weird that Portlandia wins awards for best variety show, when it is clearly a documentary.)

Christopher
Christopher
7 years ago

I’m sorry to be a naysayer but I thought this article was a poorlyedited mishmash with no point.

Christopher
Christopher
7 years ago

I’m sorry to be a naysayer but I thought this article was a poorly edited mishmash with no point.

KSR
KSR
7 years ago

You found a new income stream! Yeah! Now, follow your own rules… and wait until its banked; stop dreaming it away on boots, vacations, and maids— save it. Invest it. You are a trained investment banker–hell!! Don’t change a thing in your current spending. I have to say–I’m a little shocked that you’re a participant in the world of high finance, given your written confessions. I didn’t know that. But, Sarah, being in the world of high finance should have already intrinsically informed you not to cash in your retirement for a down payment on a house and to NOT… Read more »

Hill Roger
Hill Roger
7 years ago

So wht does ths phrase meant that dont lose your oldself in new finances? I mean who would possibly do that. As we are working for future and earnings then what is the reason to look back?

PawPrint53
PawPrint53
7 years ago

I’m not clear why your husband was able to build retirement savings, and you were not. Was he just contributing up to the match, then the rest of his income and your freelance income had to go to bills? Gotta have that free money, but I would think any extra he contributed would have gone into a Roth for you. Hopefully you can get those retirement savings going.

Cat
Cat
7 years ago

I have a friend who has the same mentality and it always works for her! She puts everything out in the universe and it all comes to her! I try to do that sometimes, and never quite get the results I want – but it looks like it worked for you as well. Awesome! 🙂

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