Friday, July 1, 2022
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A Cash Crunch And Crisis Of Self


I recent­ly went through a cash crunch. It was not some­thing I’d care to repeat any­time soon. 

No mat­ter what I did, I could­n’t get the math to work out. 4200 minus 2000 always equaled 2200. I’m pret­ty good at math and yet I was being defeat­ed by 2nd-grade math. I don’t remem­ber the last time I had a bal­ance on my cred­it card at the end of a cycle. 

The last few months have been pret­ty rough for me in new and inven­tive ways, many hap­pen­ing at the same time! So fun! (Nar­ra­tor note: It was the oppo­site of fun.)

Oppor­tu­ni­ties were there with the poten­tial to improve just about every­thing in my life. I was in a new place, new­ly sin­gle, gain­ful­ly employed, the pan­dem­ic restric­tions were start­ing to die down, and then life tubthumped me. Y’know, the song? “I get knocked down, and then I get up again”. I prac­ti­cal­ly turned into a wee­ble wob­ble with all the get­ting back up I did.

First, mov­ing expens­es were slight­ly more than I antic­i­pat­ed. The cost for the movers went over the esti­mate I was giv­en due to more box­es than expect­ed (fair) and the ele­va­tor being fur­ther away from my unit (not so fair). That was $2k. Then I had a chance to buy an amaz­ing din­ing room set that includ­ed 6 chairs, a table with two leaves, and a side­board. The 1960’s mid-cen­tu­ry mod­ern Dan­ish rose­wood set matched my new apart­ment per­fect­ly and set me back $1,300. (I call it a great buy as I saw the exact same table with 3 leaves instead of 2 the next week for sale at a local retro fur­ni­ture shop for $2,375 that did­n’t include any chairs or match­ing sideboard.)

Dining room table set in my new apartment
Said absolute­ly gor­geous table set!

Short­ly after that I had to buy my flights for my Ecuador trip. All told, the total was just under $1800. Now, I did get reim­bursed for some of those flights so I did­n’t have all that mon­ey gone for­ev­er. Still though, I had to front a fair amount. 

Then I was dri­ving in my car on some errands when my right front tire entered what I can only describe as the Grand Canyon of pot­holes. My tire hit­ting the oth­er side of the crater sound­ed like some­one shot my wheel. I almost made it to Cost­co to get it swapped out, but I fell less than a mile short and was forced to change my tire on the side of the inter­state. I’m very grate­ful to have friends in St Louis who will come out and help me get back to func­tion­al. Because my tires were on the old side and get­ting a lit­tle thin, I could­n’t just replace one tire. No no, I had to replace both front tires. That was an extra $430. 

It occurred to me my friend’s wed­ding was rapid­ly approach­ing. I did­n’t have flights booked yet so that was an extra $450 on the old cred­it card. (For­tu­nate­ly I am shar­ing a hotel room with friends so my costs there will be low­er than they oth­er­wise could be.)

AND THEN.….……

My new car insur­ance pre­mi­um came due. Thanks to a tick­et (.….….…. or two…) and dri­ving a new­er red vehi­cle, my car insur­ance costs are high­er than they used to be. I had to shell out anoth­er thou­sand dollars. 

The flat tire on my car
Yeah that was not fun.

For those count­ing along at home, that’s near­ly $7,000 on things out­side my usu­al bud­get. My take-home pay is $4000 a month and that needs to cov­er rent, car pay­ments, util­i­ties, gas, food, and cat sup­plies. I had to car­ry a bal­ance on my cred­it card for near­ly two months until I got enough mon­ey to take it back to zero. 

Now, it was stress­ful to car­ry that bal­ance. I had to cut back on a lot of things I usu­al­ly do. I ate my way through my pantry, did­n’t go out to eat, min­i­mized my car usage as much as pos­si­ble, and cut out near­ly all shop­ping expen­di­tures. I knew, how­ev­er, that what I was fac­ing was a tem­po­rary cash crunch. The cash was flow­ing out at a much high­er rate than it was com­ing in, but it would­n’t always be that way. I knew I would have my usu­al steady pay­checks from work com­ing in. I was set to get a cash award for extra work I had to do at my job. I was going to get a hefty tax refund from the gov­ern­ment thanks to own­ing the house. I will get a big check from my por­tion of the equi­ty of the house I bought with my now-for­mer part­ner when he assumes the loan and takes my name off of everything. 

So, yes it was stress­ful but there was a light at the end of the tun­nel. I can buck­le down and be super fru­gal for a lit­tle while when I need to. I had a roof over my head, food on the table, and my util­i­ties on. I have so many free options for enter­tain­ment that I prob­a­bly don’t need to ever leave my place between my Steam library, Switch games, and games from var­i­ous sports that I like. 

Kiener Plaza in Downtown St Louis at sunrise
I attend­ed free Sun­rise Yoga on Kiener Plaza in down­town St Louis. Hav­ing fun and get­ting exer­cise does­n’t have to cost mon­ey! Pho­to cred­it: STL From Above

What caused the biggest issue was the inter­nal tur­moil caused by not hav­ing any extra cash on hand to pay off that cred­it card bill. A pret­ty big chunk of my self-worth and self-esteem comes from Being Good With Mon­ey. I am the mon­ey-savvy friend. I am the cowork­er you can ask about the best invest­ment options in our 401k or when is the best time of year to retire. For bet­ter or for worse, I take a lot of pride in hav­ing saved a ton of mon­ey for retire­ment and hav­ing that big net worth. 

But, what good does hav­ing a high net worth do me when I can’t even pay off my cred­it card bill? Sure my net worth hov­ers some­where between $300–350k depend­ing on the whims of the mar­ket, but I am over here mak­ing sure my bills go to my cred­it card and don’t hit my bank account direct­ly because I need that mon­ey in there to make my rent that month. I’m not even send­ing every spare dol­lar to retire­ment accounts any­more. My cur­rent deduc­tions are 10% to my Roth 401k. 

I am very glad I made the con­scious deci­sion to rec­og­nize my Coast FI sta­tus and back off the extreme sav­ing lev­els when I did cir­ca 2019. It turns out I real­ly enjoy hav­ing a high­er qual­i­ty of life now. The last time I checked, I’ll have rough­ly 2 mil­lion dol­lars in retire­ment accounts and a hefty pen­sion when I am 55. I will have plen­ty of mon­ey in retire­ment so it’s bet­ter for me to not hoard every pen­ny at this stage of life. I am incred­i­bly grate­ful to be in such a good spot for retire­ment at the ten­der age of 31. 

But here I am, Coast­FI and telling my friend I can’t come to her baby show­er because I don’t have mon­ey.  I had to tem­porar­i­ly dis­able emails from my Meet­up groups because it made me upset to see events hap­pen­ing that I could­n’t afford to go to. There’s a dichoto­my between my high net worth and the need to live on a shoe­string bud­get. I don’t think my base expens­es are too crazy for my income. Being tem­porar­i­ly unable to absorb an extra $15 bowl­ing night made me feel ashamed and stressed out. If I was expe­ri­enc­ing these feel­ings and emo­tions even though I knew it was­n’t long term, how do oth­er peo­ple feel when this is their every day life? It is this that made me decide to speak up about my bud­get short­fall. I am Good With Mon­ey, and even I still run into mon­ey issues occa­sion­al­ly. No one real­ly has it all togeth­er all the time and it can hap­pen to the best of us. So, if you find your­self in a cash crunch, iden­ti­fy your most impor­tant bills and make sure those get paid. If you can’t do that, call the dif­fer­ent com­pa­nies and see if they’ll work with you to delay pay­ments or break them up. See if you have any items that qual­i­fy for extend­ed bill pay. I had the option to break up big­ger pay­ments into small­er month­ly install­ments on my Chase cred­it card but I chose not to use it as I did­n’t feel I was in A Big Enough Cri­sis. In the end, I only paid about $45 in inter­est on the card I was unable to pay off which is a small drop in the big­ger picture. 

Graph showing net income Jan-Apr 2022
A whole lot­ta red on that chart.

I’m doing just fine now on cash flow thanks to my $4,000 fed­er­al tax refund, my $500 cash award at work, and a $400 check from a Face­book set­tle­ment. My cred­it card bal­ance is once again back to a rea­son­able lev­el and I’ve been able to loosen the tight grip on my wal­let some­what. This has been an incred­i­bly hum­bling expe­ri­ence and I’ll be mak­ing even more of a point to not let it hap­pen again. 

Until next time! 

<3 Gwen

As always, thanks for read­ing! Have you been in a cash crunch? How did you get out of it? Sound off in the com­ments below! 

 

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