What Now?

The Great WN & D Get-Out-of-Debt Plan

Today D. and I had a Serious Conversation, one we'd been dreading for a while. It was on Finances, one of our least favorite topics, but it had to be done, and so we did it.

The problem is that D. and I have managed to accrue some debt in the last three years or so. Well, we bought a house, so of course we got ourselves all mortgaged up! But we've also gotten into some other debt, some of it for very good reasons -- especially borrowing money from my mom so that we could make some home improvements that have made the house more comfortable and energy-efficient -- and some of it for less good but still not entirely unavoidable reasons (such as the fact that we were living on only one salary for most of that time). The debt isn't out of control or anything, at least by what seem to be modern American standards, but any consumer debt is a bad idea, and we needed to tackle this problem.

And we really did keep meaning to do so, especially once D got a new job and our monthly financial situation eased tremendously. We took sporadic stabs over the summer, but something kept coming up; major repairs on each of our cars and the need to fix the roof leak kept using up each month's money that we'd planned to send to the credit cards. We actually had some money in our checking account that was earmarked to send to credit cards, but I was afraid to send it because we didn't really have any sense of a monthly budget and I was worried about losing those liquid assets in case we really did need them in the checking account after all. And we weren't actually sure how much we owed anyway, and it was all just so scary and discouraging to contemplate that we simply didn't contemplate it.

But there was a piece in the Oct. 11 issue of the New Yorker on procrastination, and although I was only mildly interested in the article itself, I did take seriously the information that many people are in worse financial situations than they would be otherwise if they could just stop procrastinating on filling out the paperwork to invest in their companies' 401Ks. That at least I have done, mostly because our HR person does it for us so that we just have to sign (I love her!), but we had definitely been dragging our feet on some basic financial steps. Clearly procrastination was costing us money each month, and we were going to have to think about money so that we could work toward our goal of not having to think about money.

So today was the day to have the conversation. Here's what helped: D and I each played to our own strengths and avoided the parts that we hate the most. So I spent two hours fiddling around with budgets and calculating debt and doing some basic math (and here's where I have to confess that I don't know how to use spreadsheets and so did our budget in a Word table and used a calculator to do the actual math -- but it looks pretty!), and it actually wasn't stressful once I made myself sit down and get started, and then D. got on the phone with the credit card companies (which is the sort of thing I dread) and transferred balances and negotiated interest rates and all the rest.

Here are the steps we took today that have now improved our financial situation:

• Of the money we had sitting in our checking account, I put $1,000 of it in our savings account to pay for a couple of house repairs needed this fall and to give us more of a liquid assets cushion.
• We sent the rest of the "extra" money in our checking account to the higher interest-rate credit card.
• We transferred the rest of the balance on that higher interest-rate credit card to another credit card for which we'd gotten a zero-percent interest rate for the next year; and after that year is up, it's still a significantly lower interest rate that on the original credit card. So now the consumer debt is consolidated -- much easier, and saving an incredible amount of interest each moth.
• I set up a monthly payment from our checking account to my mother to repay our loan at a faster pace than we'd been doing. We're paying her a crazy-low interest rate, but of course there's also the emotional interest (which has been entirely on my side, not hers, I should say), and I will feel much better to be sending her bigger checks each month. And once that debt is paid off, that money will go to the credit card debt.
• On the theory that one should pay oneself first: the budget that I drew up includes adding to our savings account and to retirement funds. I hope that this will keep me from fretting during my morning shower about whether we'll ever be able to retire (which, sadly, is often the sort of thing I think about as I'm waking up in the shower).
• Plus, we'll now be setting aside money each month so that we can have a proper vacation next year; I figure that we'll both feel much better about sticking to a budget when we know that there's a nice reward in it for us next summer, and I haven't actually had a vacation since 2007 -- I deserve one!
• I now know that all of the bits and bobs of extra money I make tutoring and proctoring SATs go straight to the credit card; no more letting them get lost in the checking account -- now I'll simply deposit the check and then immediately send that amount to the card. It's good to have a plan, and in some ways I'm a scrimper and saver enough so that I will actually take pleasure in the tutoring and proctoring. Actually, I totally love one of the girls I tutor, so it was already a pleasure just to hang out with her for an hour a week, but now I have a good destination for that money as well. The SATs don't pay well at all, but every bit helps when paying down a debt, and now that we're not paying any interest on the majority of the debt, those small checks should really add up. Tutoring, I'm embarrassed to say, pays ridiculously well; an hour of my time should really not be worth that much, but apparently the local market will bear the fee I'm charging (which is a standard fee for FGS tutoring). And it's all reducing our debt, which will make it easier to contemplate giving up two hours a week to tutor these two students.
• I'd been hoping not to teach summer school again, but a clear sense of our financial situation has shown me the wisdom of sucking it up and doing so again, at least for the next couple of years. But it's only three weeks a summer, and the director of the program has just approved a fun class that I proposed, so I'm hoping I can make the task of teaching in July less onerous for myself.
• This is also stewardship season at church, and I'd been avoiding filling out my pledge card because I really just didn't have any sense of how much money we actually had in a month. I've now made my pledge, and while I wish it were larger, I think it's a fine amount of money that is both more than I was giving up until now, before I became a member, and is still responsible given our get-out-of-debt goals.
• D. and I are going to try to set about the lifestyle change of avoiding using our credit cards whenever possible. Not that we go crazy with them or anything -- neither of us has a shopping problem -- but we use them for gas and groceries and everything else. I think using a debit card or cash instead will make us more aware of how our expenditures are fitting our budget. Much of that budget was guess-timation, since I don't really know how much we spend on groceries or gas or cat food, so we'll have to do some revisiting and tweaking in the next couple of months, and I think avoiding credit cards will help us do that tweaking.
• If all goes according to plan, we'll be out of debt (other than mortgage and D's student loan) by the end of 2012. And the "according to plan" has A LOT of wiggle room in it, since of course I know that there are always unexpected expenditures and things going wrong. I think that we've now got a reasonable goal and one that won't make us feel like we're scrimping in the meantime. (I budgeted in pizzas and restaurant meals and books for our Kindles and other treats so that we don't feel like we're being punished in the meantime.)

So the bottom line is: Big sighs of relief on the credit card front! and on the domestic budget front! and on the planning-for-retirement front!

This was hardly the most fun I've ever had on a Saturday afternoon, but it wasn't actually terrible, and I'm hoping that we will reap the rewards of the Great WN & D Get-Out-of-Debt Plan for some time to come.

... and exhale

This afternoon we had the employee meeting at which we were informed by the head of school about next year's budget. I've been fretting about this for the last couple of days, not least because we had such a torrent of rain last night that the weak spot in our roof leaked extravagantly, such that we had to line the stairs with pans to catch the drips. Fortunately the leak seems entirely contained (knock on wood) to the stairs down to our unfinished basement, and we spent a fortune when we bought the house on putting a water barrier system (or whatever it's properly called) in the basement itself, so it was a very localized problem. Moreover, that leak sprang up only once before, during the fiercest and most voluminous rain I've seen since a hurricane came through campus in my freshman year of college. So this isn't a persistent problem, but it is one that will need to be addressed when we have the money.

So finances were on my mind anyway in anticipation of today's meeting. At last year's comparable meeting, the only bright side was no layoffs; the bad news was a wage and step freeze, an end to TIAA-CREF contributions by the school, and an end to having the school pay all of our health insurance costs. So in effect we got a pay cut, which was only to be expected in that economic climate, but we were all nervous about what might happen this year.

So nervous, apparently, that my face muscles have seemed permanently clenched every night for the last week or so, and I had a terrible dream last night that my job was in danger because I was being observed while teaching, and yet I kept getting kicked out of my room and then the students would wander off, all while my department chair was watching disapprovingly and scribbling notes. I woke up completely exhausted and was in such a terrible mood by the time I got to school. I was an hour into the school day before I put the dream and my money anxieties together. Not that I was actually worried about losing my job, but apparently I was about having that job somehow pared down, in compensation if in no other way.

But there's good news as of today! Still no layoffs, and indeed salary step increases reinstated to where they would have been without last year's freeze (well, sort of -- that is, we're now on track for steps, but of course those step levels are what they were two years ago, if you see what I mean -- but hey, I'm not complaining!), and TIAA-CREF employer contributions reinstated at the same level. Applause broke out at both announcements. This is good news indeed, so much better than what we'd been fearing. The optimistic folks had thought that we'd get either the raise or the retirement contributions, but no one thought we'd get both.

I'm finally feeling my gut muscles unclench, and maybe I'll finally get my face muscles to unclench tonight. What a relief!

I well know how lucky I am -- indeed, how lucky I would still have been if none of this good news had happened today -- but I am also currently the sole bread-winner in the family, a responsibility I find weighty and sleep-disturbing. I'm hoping the sleep will be a little sweeter tonight.

Summer of Health

Okay, I have all of these final exams to grade, which means of course that I'm in major procrastination mode. So here's one of my major summer projects: I'm proclaiming this the WN Summer of Health!

Here's the hope/plan/thought --

• Physical health: My eating spiraled out of control last October (the Halloween candy was not my friend!) and never came back under control, and my exercise habit has petered to a complete zero such that even my used-to-be-standard half-hour walks are no more. I don't want to be old before my time, which means that I need to start prioritizing my health. Unfortunately, this is much more of a goal that I think I should have than one to which I'm deeply committed, which worries me a little about its outcome.
• Mental health: I had a first appointment with a new therapist today; I'm calling him the Avuncular Dr. D., and I think it has a pretty good chance of working out. We shall see.
• Spiritual health: God and I need to get square, and I'm thinking this is the summer to start doing my part. I'm back to combing Adventure City to find a parish, and I'm also thinking of finding a spiritual director.
• Financial health: After last week's money meltdown, I decided that I need to get my act together and find an investment counselor (or whatever they call themselves) and that this was the summer to make that happen. I've also taken on a course overload in the fall (to cover a colleague's maternity leave), which is going to be absolutely exhausting but will bring in a nice chunk o' change, and I'll be making some extra cash this summer thanks to various irons I have in the fire. Plus D and I have a meeting tomorrow morning to do the paperwork for refinancing our mortgage to take advantage of the even lower interest rates right now. So this seems like a good time to do some long-term planning and put some systems into place so that I don't feel so anxious about money so much of the time. I know that financial health may seem out of place with physical, mental, and spiritual health, but I see the former as reducing my stress levels so that I have more energy for the latter three elements.

So that's the summer ahead. I have a clearer path for the mental and financial health components and feel fairly unmotivated about the physical health goal and sort of so-so about the spiritual health piece of this. There will be further reports as I start pursuing each of these.

There's one other summer goal, but writing about that will have have to wait until later this week, because the next order of business is to tackle those blue books. Summer can't start until grades and comments are posted.

The Bright Side

I had a complete meltdown about money earlier this week, and it's taken a couple of days to get over it.

The thing is that FGS is facing the same financial woes as every other institution in this bad economy. We've been promised no lay-offs, which of course is a relief for everyone, and we've got a salary freeze for next year -- no surprise there -- and actually we have essentially a salary reduction because we're now paying more for our insurance. (But I should say here that we haven't been paying anything for our insurance at all, and what we'll be paying next year is still less than what I was paying at St. Martyr's.) All of these changes were to be expected. The change that hurts the most is that the school is no longer contributing to our TIAA-CREF retirement funds, at least for next year; we're all hoping that the contributions return after that, but of course no one knows what's going to happen in the economy.

So earlier this week the school hosted a financial planning workshop at the request of the employees to help the clueless among us start figuring out how we should be planning for our retirements in this economy.

Being one of the clueless, I went and took lots of notes, and it was all very helpful. And then several hours later, I dissolved into tears with a hint of hyperventilation, thinking that D and I would never get ahead financially and never, ever be able to retire.

The next day at school, I learned that I was not the only one who had faced such a response. A sense of financial despair had hit several of us in different ways, and many of us were a little jittery and panicky as a result. There was some gallows humor -- "We can retire after we die" -- and some incipient hysteria.

This week wasn't the first time that I've felt really jealous of my sister-in-law and of my dad's wife. Both of them are a little older than I (yes, my dad's wife is only 7 years older than I am, although it's not as creepy as it sounds), and both of them went into lucrative fields and are on pension plans. My sister-in-law is an aeronautical engineer, which is not something I would have had the aptitude for, so I'm really jealous only of her income and her pension plan, not of her career path. But my dad's wife graduated with a degree in French and an interest in theater and music -- i.e., even less money-oriented than my English degree -- and got a job with the federal government right out of college, something I totally could have done as well. Indeed, both of my parents were federal employees in the executive branch, and this was absolutely a career path that was modeled for me by my friends' parents as well (which will give you a fairly good idea of where I grew up). And she climbed through the ranks much as I would, I think -- both of us bright people and good writers but not masterminds in any way -- and she retired last year at 48 with a pension that will allow her to do pretty much whatever she wants for the remaining decades of her life.

And that could have been me. Now, both the government and my sister-in-law's company no longer offer a pension option, so folks entering those career paths now are in the same boat as the rest of us, but I absolutely could have graduated from college in 1989 and gone into a career that would mean I was now quite secure financially. Whereas I thought, "I know, why don't I go to grad school and get a degree in English?"

Until a year or so ago, I had never regretted this decision. But there's something about turning 40 that turns a person's thoughts to supporting herself in her old age, and I've been feeling a bit panicky ever since and occasionally looking with envy at family members' financial security. And then this week's financial planning meeting put me temporarily over the edge.

But here's the bright side, as promised in this post's title: Friday was one of those days when I thought, "I can't believe I'm actually being paid to do my fabulous job!" My dad's wife HATED her work for pretty much the entire time she did it, and she retired as soon as she could; and now, as far as I can tell, she's having a pretty boring retirement because there's nothing she's actually passionate about. My sister-in-law seems to like her job well enough in that it's occasionally interesting, but mostly she set out on this career path because it was lucrative and she wanted financial security. And I ... well, I'll always be the relatively poor one in the family, but I LOVE my work.

Friday was the last day of classes, so, as tradition dictates, the faculty all gathered in the choral room to practice the faculty song for the seniors. Yes, every year, some faculty members write a new song for the graduating seniors, and then the entire faculty perform it at the senior convocation after classes end on the last day. So there I was yesterday morning, singing with my colleagues a funny folk song about the seniors and laughing and cutting up with my fellow teachers. There were guitars and a banjo and a piano and a washboard and spoons and, yes, a cow bell, and it was altogether a hilarious way to start the day. (The actual performance on Friday afternoon was fun and much appreciated by the students, but the rehearsal that morning was even more so.)

And then, after the interlude of song, I went to class and saw my wonderful, adorable freshmen classes for the last time. I was actually quite emotional on Friday morning at the thought of not gathering with these students four times a week anymore. And we had a great class -- the last in a series of great classes -- and they all promised to come see me next year. It was so clear to me yesterday how much they had grown and learned over the course of the year; I'm really proud of them.

Then, after a lunch of wide-ranging and enjoyable conversation with my colleagues, as usual, I had some time in the afternoon to think about next year; I'll be teaching the freshmen again next year, but I'm trying to decide about my other prep and whether I'd like to spend the year immersed in American literature with juniors or world literature with sophomores. These are both such good options that I'm having trouble making up my mind.

And so, by the end of the day yesterday, I was once again firmly ensconsed in gratitude for my work. Yes, I need to do some serious financial planning, and I have declared this the Summer of Money in which I do exactly that (a post on this to follow), but also, damn, I am so lucky! I have work I love, and I spend my days talking about cool stuff and soaking up the energy of adolescents who are engaging, grateful, and respectful, and working with colleagues who are smart and funny and for the most part share a sense of mission. So yeah, I'm going to retire A LOT later than my sister-in-law and my dad's wife, but I also get to have a sense of purpose and enjoyment in my work. So that's the bright side.