The following is the latest post in my "Reader Profiles" series. Each post in this series details the financial situation and challenges of an FMF reader. The purpose of this series is to help us all identify with people like us (in similar situations -- not all will be, of course, but eventually I'm sure you will find someone like you here), get to know the frequent commenters on the site, and hear some financial wisdom/challenges from people other than me.
If you're interested in contributing to this series, then drop me an email. The series seems to be very popular with readers and I need a steady stream of new ones to keep it going.
Also, please leave constructive comments, questions, and so forth. Simply telling someone what a mess they have, how they have made poor decisions, and so forth is not helpful. There is a way to say, "That was a mistake, but here's what you can do to correct it" that both acknowledges the problem and offers a solution. It's this sort of feedback that this series is intended to solicit.
Next in the series is FMF reader YA. She answered my questions (in red below) as follows:
Please tell us a bit about yourself.
I am a single 41 year old woman. At the beginning of 2012, I was a single 40 year old woman who lived alone with her dogs and fostered more dogs for a rescue and had a full time office job. Then I got the phone call. My mother wanted to move away from the snow and ice of the north and could she stay with me until the house sold. This move also included my father and my nephew whom they have been raising since his parents died when he was 2. I knew this might happen one day since my father's dementia has been getting worse and my mother cannot take care of him as well as take care of my nephew and the house.
They all moved in and we tried to make it work but after 8 months I suggested that my parents move to a town nearby which is geared toward retired people. I agreed to take over as guardian of my nephew and suddenly I became the mom. I jumped in to eigth grade homework, teacher conferences, juggling school and work schedules and all that a kid requires. It has been rough but we made it to summer and now I have 4 years of high school looming ahead.
Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).
I work full time and my nephew receives survivor benefits which cover his basic expenses including food, gas and utilities. I have a rental house which is paid off and managed by a company because I tried to manage it myself and it was too stressful. This brings in approximately $800 per month. My income is $2200 per month. I have 4 acres of paid-for desert where an old mobile home and my RV reside. I hope to build a small house and retire there one day. I also have a 401K with around $100k which I don't plan to touch for another 20 years or more.
Here are my usual expenses:
Car reg. and ins.: $31.00
Gas: $200.00
Electric: $125.00
Trash: $17.00
RV reg. and insurance: $30.00
Internet: $45.00
Cell phone: $45.00
Christmas: $50.00
Mobile home prop. Tax.: $9.00
Land property tax: $78.00
Food: $300.00
AAA: $4.00
Life Insurance: $11.00
Dogs: $150.00
Water/sewer: $33.00
Mortgage: $540.00
Netflix: $18.00
Total: $1,686.00
What are the current financial issues you're facing (saving, paying off debt, etc.)?
I want to quit my job and do something more creative and flexible so that I can be involved with my nephew's life and help out my parents. I have been blogging about my journey for 6 years now but I still haven't saved enough or gathered up the courage to quit my stable income. Now that I am in charge of a teenager, I want to be more involved in his school and activities. I find that I come home tired and grumpy everyday and I don't look forward to our time together which really is a shame because he hasn't reached that point where he is embarrassed to have me around. That is rare for a teenager so I can't miss this opportunity to be a part of his life. I only have 4 years!
What are your plans for the future (retire early, build your career, etc.)?
1. My first idea was to pay off my mortage in order to lower my expenses. I would be able to get any part time job to pay my basic bills. The problem with this idea is that it would take me 3 years to do it. My nephew will be almost off to college by then.
2. Next, I decided to save up enough money to pay for my basic expenses for the next 4 years. I could get a part time job for extra money and possibly find a new career during this time because after 4 years I would need to get a full time job again. It will take me until April of 2014 to save up enough money. His freshman year will be almost over. I am working on this plan but I want to do better. So far I have $3,500 saved and a $10,000 emergency fund which also includes rental house maintenance.
3. My third plan is to start an online store while I continue to work at my full time job and save for plan #2. I'm the kind of person that needs a dozen back-up plans to feel secure. I have begun the process and I hope to have my store up and running by August. School starts at the end of July so I am trying to get everything ready before that. It is my hope that my online store will generate enough income to equal a part time job. That would give me the confidence to quit my job sooner. Ideally, my online store will be so successful that I will make more money than I did at my full time job with half of the work hours and lots of flexibility.
4. Because I want a more flexible schedule as soon as possible, I am considering asking my boss if I can switch to 3 days a week. This is not ideal because I would rather leave outright than linger as a part time employee but I might need to do it for my sanity. I am at the point where I don't have enough time to do anything well. Everything is a trade-off. Clean the house on the weekends or help my parents? Ask my boss if I can leave early (again) so that I can attend a school function. I'm using my vacation time a half day at a time just to stay afloat.
The problem is the uncertain future of health care. I would lose my benefits and I am responsible for my nephew's health insurance too. Right now I can buy a basic health insurance plan for $140 with a $12,000 deductible and a health savings account. I have read that rates will rise for many states and I expect Arizona to be one of those states. Should I stick it out until I know what the rates will be (I hear we will know in October) or should I just make the leap and try to go part time now?
What's your best piece(s) of financial advice and/or your general philosophy on personal finances?
Spend more time with friends and family and find time to appreciate the free things in life. I'm trying to follow my own advice but it sure is difficult to let go of the lifelines and reach for my dreams.
If you're interested in contributing to this series, then drop me an email. The series seems to be very popular with readers and I need a steady stream of new ones to keep it going.
Also, please leave constructive comments, questions, and so forth. Simply telling someone what a mess they have, how they have made poor decisions, and so forth is not helpful. There is a way to say, "That was a mistake, but here's what you can do to correct it" that both acknowledges the problem and offers a solution. It's this sort of feedback that this series is intended to solicit.
Next in the series is FMF reader YA. She answered my questions (in red below) as follows:
Please tell us a bit about yourself.
I am a single 41 year old woman. At the beginning of 2012, I was a single 40 year old woman who lived alone with her dogs and fostered more dogs for a rescue and had a full time office job. Then I got the phone call. My mother wanted to move away from the snow and ice of the north and could she stay with me until the house sold. This move also included my father and my nephew whom they have been raising since his parents died when he was 2. I knew this might happen one day since my father's dementia has been getting worse and my mother cannot take care of him as well as take care of my nephew and the house.
They all moved in and we tried to make it work but after 8 months I suggested that my parents move to a town nearby which is geared toward retired people. I agreed to take over as guardian of my nephew and suddenly I became the mom. I jumped in to eigth grade homework, teacher conferences, juggling school and work schedules and all that a kid requires. It has been rough but we made it to summer and now I have 4 years of high school looming ahead.
Describe your financial situation (who works in your family, how your income is (general), how your expenses are, etc.).
I work full time and my nephew receives survivor benefits which cover his basic expenses including food, gas and utilities. I have a rental house which is paid off and managed by a company because I tried to manage it myself and it was too stressful. This brings in approximately $800 per month. My income is $2200 per month. I have 4 acres of paid-for desert where an old mobile home and my RV reside. I hope to build a small house and retire there one day. I also have a 401K with around $100k which I don't plan to touch for another 20 years or more.
Here are my usual expenses:
Car reg. and ins.: $31.00
Gas: $200.00
Electric: $125.00
Trash: $17.00
RV reg. and insurance: $30.00
Internet: $45.00
Cell phone: $45.00
Christmas: $50.00
Mobile home prop. Tax.: $9.00
Land property tax: $78.00
Food: $300.00
AAA: $4.00
Life Insurance: $11.00
Dogs: $150.00
Water/sewer: $33.00
Mortgage: $540.00
Netflix: $18.00
Total: $1,686.00
What are the current financial issues you're facing (saving, paying off debt, etc.)?
I want to quit my job and do something more creative and flexible so that I can be involved with my nephew's life and help out my parents. I have been blogging about my journey for 6 years now but I still haven't saved enough or gathered up the courage to quit my stable income. Now that I am in charge of a teenager, I want to be more involved in his school and activities. I find that I come home tired and grumpy everyday and I don't look forward to our time together which really is a shame because he hasn't reached that point where he is embarrassed to have me around. That is rare for a teenager so I can't miss this opportunity to be a part of his life. I only have 4 years!
What are your plans for the future (retire early, build your career, etc.)?
1. My first idea was to pay off my mortage in order to lower my expenses. I would be able to get any part time job to pay my basic bills. The problem with this idea is that it would take me 3 years to do it. My nephew will be almost off to college by then.
2. Next, I decided to save up enough money to pay for my basic expenses for the next 4 years. I could get a part time job for extra money and possibly find a new career during this time because after 4 years I would need to get a full time job again. It will take me until April of 2014 to save up enough money. His freshman year will be almost over. I am working on this plan but I want to do better. So far I have $3,500 saved and a $10,000 emergency fund which also includes rental house maintenance.
3. My third plan is to start an online store while I continue to work at my full time job and save for plan #2. I'm the kind of person that needs a dozen back-up plans to feel secure. I have begun the process and I hope to have my store up and running by August. School starts at the end of July so I am trying to get everything ready before that. It is my hope that my online store will generate enough income to equal a part time job. That would give me the confidence to quit my job sooner. Ideally, my online store will be so successful that I will make more money than I did at my full time job with half of the work hours and lots of flexibility.
4. Because I want a more flexible schedule as soon as possible, I am considering asking my boss if I can switch to 3 days a week. This is not ideal because I would rather leave outright than linger as a part time employee but I might need to do it for my sanity. I am at the point where I don't have enough time to do anything well. Everything is a trade-off. Clean the house on the weekends or help my parents? Ask my boss if I can leave early (again) so that I can attend a school function. I'm using my vacation time a half day at a time just to stay afloat.
The problem is the uncertain future of health care. I would lose my benefits and I am responsible for my nephew's health insurance too. Right now I can buy a basic health insurance plan for $140 with a $12,000 deductible and a health savings account. I have read that rates will rise for many states and I expect Arizona to be one of those states. Should I stick it out until I know what the rates will be (I hear we will know in October) or should I just make the leap and try to go part time now?
What's your best piece(s) of financial advice and/or your general philosophy on personal finances?
Spend more time with friends and family and find time to appreciate the free things in life. I'm trying to follow my own advice but it sure is difficult to let go of the lifelines and reach for my dreams.
Congratulations on taking custody of your nephew. While this is a HUGE responsibility that no doubt threw your whole world into chaos, you are showing him that you love him and want him by taking custody of him. I am sure your parents did a fine job with him, but it can be difficult to watch a loved one disappear into dementia, and even harder on a young person.
You don't mention what your online store will sell. I don't know your background, if you have retail experience, online experience, etc. I wish you well in this, but know that it can be very difficult. Is it an eBay store, or is it a free-standing (so to speak) store? I recently sold a few things on eBay and was shocked at their fees. All tolled, I made almost nothing, and am looking for other places to sell my excess items.
I think going down to part time at work is a good compromise. You want to have a stable source of income while you are responsible for someone else, and you never know what will happen. Perhaps your online store will take off like a rocket, but there is always the possibility of the opposite happening. And health insurance is a very real concern. High schoolers get into all sorts of scrapes. A $12,000 deductible will wipe out your savings account. I, too have looked into more affordable health care coverage, and found policies that do not cover pregnancy are much cheaper. Not sure if your mentioned policy includes that, but worth taking a look at.
Could you quit or go to part time and then manage your rental yourself? You don't mention what it costs to have the management company take care of it. If it is minimal, then nevermind.
Your gas costs seem high, but I haven't looked into my gas costs, so I am only speculating. Could you get a better fuel-efficiency car? Ride a bike (Not now, when the temp is 116) or take public transportation?
Your food costs are fairly normal, but they might be trimmed, too. Could you grow some of your food in a garden? Do you use coupons? Go meatless a few nights a week?
I wish you the best!
Posted by: Mrs. 1500 | July 06, 2013 at 08:47 AM
Wow, big responsibilities and big ambition. Kudos for taking on your nephew. I'm sure it will all work out.
I wasn't clear on where you were living. You mentioned paying off a mortgage, a mobile home, and an RV. At any rate, could you possibly sell one of those to increase your savings?
Going part-time seems like a good way to bridge the gap, but could be risky if your boss is not understanding. Perhaps feel him or her out first.
I saw in the news that the governor of Arizona recently accepted "Obamacare" over the objections of the general assembly. That should significantly reduce your heathcare costs and soon. It's confusing right now, but should become more clear around October, as you said.
You mentioned that your rental property was being managed. As another part-time job you could take over management again and increase your monthly income from that property.
Your expenses are pretty low, you're doing a good job there. Keep it up!
Posted by: Paul | July 08, 2013 at 10:35 AM
Congratulations! I wish you good luck for your big ambition and responsibilities. It's simply awesome how you manage your expenses and hats off to you for taking such good care of your nephew.
Cheers!!
Posted by: Mark | July 09, 2013 at 04:08 PM
As a single parent of 2 high school kids myself, I think you should reconsider your ideas that involve quitting or downsizing your paid employment. Especially since you have a nice nest egg, but you are not wealthy, you are approaching middle age, and you have to be strategic with your resources. You say your nephew enjoys spending lots of time with you right now. That is great and you should take advantage of it as much as you can, but that will likely change quickly.....high schoolers eventually end up spending most of their time with friends. You wouldnt want to free up your time and lose your health insurance and then find out he doesnt want to hang out with you. He will likely need you to provide a solid home and health insurance, and possibly college costs, far more than he needs someone to hang out with.
So My advice would be: do not quit or decrease the hours of your job....instead, try to use the existing goodwill you have built up at your job to free up a little more time to spend with your nephew in next year, while keeping that all important paycheck and health insurance. Stop being the perfect employee! Be selfish for a change. Yes, you should ask your boss if you can leave early one or more days each week. If your boss wont let you do that, propose coming to work at 6 or 7 am instead....your nephew probably gets up late like most teens and wont miss you in the mornings. Take longer lunch hours too.....just "push the limits" at your existing job to get what you need for your family...Think of it as a withdrawal from the bank of goodwill you have built up previously by being a model employee. Probably you will need to do this for only 1-2 years before it wont be necessary any more. Next, do not pay off your mortgage unless it has a really high rate. If it does, try to refinance. If you need more cash flow, perhaps the kid can get a job babysitting, pet sitting, dog walking, lawn mowing, working at the local diner as a busboy, or housecleaning (he should definitely help you clean your house). He would gain a lot from the experience, as well as saving for college and having a bit of spending money. Good luck! I am sure you will do fine.
Posted by: Mc | July 11, 2013 at 08:32 AM