It's a Brand New Day

Hate. Love. Positive affirmations.
Listen to me rave on.
Today, though, it's down to business. It's time to take a hard look at our finances.
We've crawled through about a month on the new, "streamlined" regimen now and a few things have become apparent.
Let's start with optimism. We can make it. It won't be pretty, but we'll be able to provide the basics of food and shelter (clothing may be a different matter). And hey, all those guys giving motivational seminars have a bounce-back-from-doom narrative. Why shouldn't we? If we can make a success of it, maybe we'll be the ones going on talk shows. Maybe I'll start writing the book right now. Hell, yeah.

Let's recap. In March, my husband was told he would be cut back to two columns a week (from three), he would become a part-time hourly employee and pay would go down by 33 percent.
Okay, fine. He wasn't laid off. At least the part-time option gave us a little time to work things through.
We've had a pretty good run at things, really. Over 20 years of work and this is the first time anything like this has ever happened to either of us. But that's small comfort. In fact, all those years of uninterrupted work made it impossible to imagine anything except disaster for our family when the bad news hit.
Reality is what we needed. The first thing we did was guess at the new paycheck and go to work on the budget. I ran the new paycheck estimate, subtracted expenses and we ended up with--whoa!--$46 left over after groceries to buy gas and any other frills. That's $46 for a two-week pay period.
Clearly, adjustments were in order. Since the "bridge payment" (a kind of severance given when you go from full to part time) had tax withholding at a rate of something like 40 percent, Mike changed the deductions. Then we took $2,200 of that bridge payment and paid the last of our credit card bill.
I ran the numbers again. Better, but still not good enough.
Our second biggest expense right now (excluding the house) is the college loans. We had a savings for this that was doing well in the '90s, but our first kid went to college at the turn of the century, just as the tech bubble burst and state colleges began increasing tuition by double digits per year. So yeah, the college fund was completely wiped out, and we still have loans.
College loan payments amount to about $275 a month. When my sons graduated, they were able to get deferments until they started working.
But when we checked into deferments, here's what we found: They're only available if you're laid off. Working 30 hours or more? Then you get a "forbearance." With a forbearance, you still have to pay the interest for the time out (limit, one year) and if you opt not to pay it monthly, it becomes capitalized. Result: You end up paying more for the loan.
We applied for forbearance anyway, though, because there's no other way around it. Now the end-of-the-bills number is doable--but only if everything goes just right. There's no room for extras, like the $100 plus it will take to enroll my daughter in public school, the tags on our 1997 Ford van, or the $175 per quarter to extend Mike's life insurance, formerly a company perk.
We won't lose the house. That was my biggest fear. We have only eight years left on the 15-year mortgage. But I think if worse comes to worst, we could cash in the 401k and pay it off.

No doubt there are some Mike haters out there who chortle at this as some kind of imagined "comeuppance." Conservatives have from time to time speculated on Mike's pay with hilarious numbers usually pulled straight from...well, you know. These guys (in some cases sitting on their own comfortable cushions) are so brainwashed they believe if you're the least bit liberal you must live in a mansion house and have a trust fund.
So let me set things straight. Mike's mother was a nurse, divorced, who often worked nights to make sure he and his brother had a good start in life. If anyone was an "elite" it was me. My grandparents had a successful hog breeding operation in rural Iowa. It had to pay for me, my brother and my mother, whose disability did not allow her to raise us. Neither of us has rich relatives or a trust fund.

So to business! We still have work to do in the expense-cutting area. HBO is in our sights, for instance. But--and this is crucial--we'll have enough on hand not to be totally consumed by anxiety over every-day bill paying.

We will not shuffle off in obedient acceptance of lowered expectations and a dismal old age.
We are, from this point on, all about the money.