Resolution #2, Get My Financial House In Order, has made 2011 a tough year so far, mostly due to a big step I took in securing my retirement fund.
I started working at a local community college when I was just 20 years old. Part of my compensation package was that the Commonwealth of Virginia would pay into my pension plan 100%. So, having gone straight from my father's house and high school to my husband's house and night school, I found myself working full time and going to this same community college as a part-time student. After many years of sacrificing my social life, going through a divorce, and taking a few semesters off here and there, I was in my mid-30s and still working full time and pursing an undergraduate degree part time. I had transferred to a four-year university but was still plugging away one class at a time and getting increasingly tired. When my grandmother died and left me some money, I decided to take that gift and supplement it with my retirement fund which had accumulated quite a bit over time. I quit work and became a full-time student.
What I didn't plan for was going back to the same job I'd had before graduation and reaching the point where I am now with 28 years of service and only 13 years of retirement. Couple that with a very real economic fear of losing my option to buy back my retirement, I made the decision a few months ago to invest a whopping $42,000 into my future. In less than two short years, I can now "retire" at age 52 and will receive one half my current salary for doing absolutely nothing. I'll still have to work to survive, but one half my income will be free and without obligation. How can I pass that up?
But where does this big SMART move leave me today? Broke with no immediate savings and in debt to my mother for part of my investment and another $3,000 spent on medical bills for my cat who was suffering from hyperthyroidism. Throw in no pay raises for the last three years due to the economic downturn, a decline in my condo's property value, rising costs everywhere especially for food, and a potential major increase in my condo fee due to a window-replacement issue which seems to be going no where and I am suffering even more. I am downsizing everywhere I can in an attempt not to self destruct.
Here's my list of Top Ten Budget Cuts, including those accomplished and those yet to come:
1. Eliminate cable television and Internet service at home.
I was paying $80 a month for both only because to get Internet service alone was nearly as much as the two combined. The plan when I cancelled service was to tether my iPhone but unfortunately found out afterwards that the G3 doesn't have the capability to hotspot unless you jailbreak your phone and open yourself up to hackers. Hmmm, so no Internet at home right now and using up massive amounts of Eric's tethering service when he's here. (TY, Eric!) And no regular TV because I don't have and don't feel like buying a digital converter.
2. Spend less on books and movies.
Who knew the library was such a good option for books and movies? Luckily for me, I live less than two blocks away from Arlington County's largest library and it has every book I could ever want and a fairly decent DVD collection. This change has turned out okay.
3. Spend less at the hair salon.
Instead of going into Georgetown every month, I now walk down the street to a local salon. It's $20 less per month and saves me a lot of time. At first, I was pained by the change. Georgetown has a good vibe and the salon was beautiful ... hardwood floors, beautiful light, hip clientele. Now? Small, cramped, and the shampoo girl - as nice as she is - talks way too much but Joseph, my new hair guy, is quite intelligent and a lot more interesting than my old hair guy who was awfully cute but not that bright. Another adjustment that turned out okay.
4. Spend less on shampoo and cosmetics.
I was a bit shocked when I started looking at how much stuff costs, or rather, how much I was spending on certain items when other less expensive options were available. I've been buying a tube of mascara that costs $28 (!) when there are many alternatives out there for just $15. The cheaper version probably won't last as long but heck I probably won't replace it any earlier so the savings is still there. And the Bumble Gentle Shampoo I was ordering is pricey but the Seaweed version is a just a little bit less so and smells a whole lot better so no pain here.
5. Spend less on food, or more appropriately, shop more wisely.
This has been a tough one and I've made no progress in this area at all. I like to eat and I enjoy eating out. Harris Teeter, one of the most expensive grocery stores around, is one step outside my front door. I could walk down the street to the Spanish market in order to save money but I don't. I could bag my lunch at work but I haven't. I could give up convenience and cook everything at home but then I'd have to clean up and wash dishes and that just isn't me. I'll keep trying ... really I will ... right after Eric and I pick up our take-away salads from Marvelous Market on our way back from the library today.
6. No more Starbucks on my way to work.
I quit this habit a long time ago. $3 a day is a lot for coffee but the real reason for stopping the Starbucks trip was it's a 15-minute walk to the nearest store and I want my coffee hot right out of bed first thing in the morning. I still give myself credit, though, for making this switch because it wouldn't be that hard to pick it up again.
7. No more expensive clothes.
Actually, hardly any new clothes at all and this sucks. I don't like it. This has got to change. Thanks to my mom, I still get a little bit of a fashion fix, though. She gave me lovely Repetto ballet flats for my birthday and loaned me money for an Eileen Fisher black sweater I was able to get for a steal. Heck, the $9 stripey jam jam pants I bought in the check-out line at the grocery store are pretty awesome all the same and there are some fun treats out there even if they cost less. (Yeah, sure, keep telling yourself this, Leslie, and maybe you will start to believe it.)
8. No more taxi cab rides because I'm lazy.
I've been car-less for years but got spoiled when I started dating Eric. He'd drive me here and there and I got lazy. Now that he's car-free (since buying Clementine), we fell into the habit of taking taxi cab rides from the marina to the condo, and from the condo to the marina. The totals added up at $40 a pop but we are back on track with public transportation and are healthier because of it in the long run.
9. No more gym memberships.
I never go. I join with good intentions and then feel guilty for not going and develop an aversion to the whole thing. There are many good ways to get exercise without having to commit myself to a monthly fee and contract. Eric and I row the dinghy out to Clementine. I can sign up for a pay-as-I-go yoga class. We can run outside instead of inside on a treadmill. The key is in actually doing it but no sense in spending money in the effort. A financial investment does not make for an exercise commitment.
10. Sell my condo
Or better title, Get Out From Under My Mortgage. Home ownership is not all it's cracked up to be when you consider how much interest you pay and how little you actually get back at the end of the year. Owning a home ties you down to a certain geographic area; even if you decide to stay there, the noose is pretty tight, and what's the point when you can't afford to make any of the modifications you'd hope to make when you decided to buy the place originally?
So, in 2013, when I "retire," no longer have a mortgage holding me down, and my financial house in order, the whole world will be my oyster, insh'Allah. May my health and good fortune permit me the opportunity to travel. I may move back to Adams Morgan, or down to Old Town, closer to Eric's boat, or maybe I'll study a year in Spain and see all of the wonderful architecture I have been reading about this weekend.
And my promise for tomorrow?
Not to blog about such important stuff in such great detail. I have some great rustic interiors to show you from the Balearic Islands.