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The Illusion of Having One's Act Together

August 20th, 2013 at 02:43 pm

Yesterday I was tooling around on LinkedIn when I saw an old article on the new way women curse. This article discussed a January Glamour magazine cover in which one of the featured titles was "12 Ways to Get Your Sh*t Together." The LinkedIn article was about the decreasing shock value of expletives. I was more interested in finding out what the article said. Unfortunately Glamour didn't put the content online, however from my Google search, I found many other websites concerning one getting one's "sh*t" together, including an actual website called http://getyourshittogether.org/ which provides guidance on life and death planning that most people neglect when they are healthy but can leave a huge mess for their descendants.

There were a number of other sites that discussed ways in which one can get his or her act together. It was very amusing and somewhat affirming that according to many of these sites, I actually have my act together as I am not on drugs, have a planner and a work bag (!).

As I reflected upon that, I realize that having one's act together is entirely perception. I know many people here may not feel that I have my act together because I buy lunch out. Yet when I chop my fruit in the morning and put it together my brought from home items of whole grain cereal and cottage cheese, many of my colleagues comment on how healthy my breakfast looks.

Also keeping with the "illusion" of having my act together is my planner. I don't have a formal budget but I spend the same on a weekly basis for transportation, food and gym. My expenses decrease when I am not working. In my planner I record all my outstanding debt, when my payments are due and my weekly take home pay. As I make my payments, I subtract the money accordingly from my available money and keep a running tally of what I have left to live on until the next paycheck. I also keep a running tally of my total outstanding debt as well. Since these are all in writing, I can see my progress or lack of progress. Some credit cards have increased while other have decreased. Overall I am $4,000 less in debt than I was the previous year.

In my case, the mere act of writing down my debts and looking at them makes them less scary and manageable. I've been a temp for over five years. Many of my colleagues have put their student loans in forbearance and have watched their loan balances swell. Mine are decreasing and it comforts me that I have been able to make payments on the student loans, and all my other bills, in spite of working as an independent contractor.

Hit the wall

August 18th, 2013 at 10:24 am

I've been thinking about money long before I've chosen to blog about my money issues. Working as a temp changes the way a person thinks about money. At least it did for me. Back in the day when I had a permanent job, I could count on a certain amount of compensation on an annual basis and was compensated for vacation and sick time. Even though my income is arguably steady, I've never thought of it as something that could be relied upon. It changes so much from project to project. However my fixed costs are such that they require steady compensation. It's difficult looking at a minimum of $1500 a month in expenses, including $900 for my student loan.

Recently I had surgery and I was fortunate that my project wrapped up two days before my scheduled surgery. I'm in recovery and the doctor recommended that I take 2 weeks off, but I can't see myself having no income for 2 weeks. Since I am in between projects, I have some time to recover, yet I am looking for work as well.

Many times I feel as if I "hit a wall." I start out with the best intentions that I will save money and not use my credit cards and then life gets in the way. The combination of unsteady income and high fixed expenses and life circumstances can derail the best of intentions. Sometimes the only thing a person can do is stay positive and ride it the lean times and try to make up for it when times are flush.

Unlike many of my colleagues, I have not put my student loans in forbearance or defaulted on my credit cards. I have been able to keep up with my expenses in spite of short times.

I do get frustrated at the thought of limitations. Worrying about small things like lunches, transportation or little indulgences is frustrating to me because I do make good money even though it disappears quickly.

Trying to stay positive for now. I just finished paying my monthly bills and I am happy that I have paid everything for August and the beginning of September.

Retirement Choices

July 24th, 2013 at 03:28 pm

Temporary employees lack the savings resources available to permanent employees such as 401(k) programs and company sponsored medical plans. This year, I was fortunate enough to have worked enough for an employer to participate in its 401(k) plan [no matching contribution]. Within a few weeks, I had painlessly contributed $2,000 in pretax earnings to the plan before the project ended. Now I am back to square one in establishing enough working hours to become eligible for an agency's 401(k) plan.

Watching that little bit of money accumulate had encouraged me to start contributing to a plan of my own. Many advisors insist that all credit card debt needs to be paid off before saving for retirement. My stance is that it could take years to pay off debt, yet there are only a finite number of years that someone has to save for retirement and money needs time to grow.

I view my debt as a long term situation and the best way for me to deal with it and take control of it is to learn how to live with and manage it. I feel more in control when I acknowledge my debt and continue living my life.

I decided to open an account with an online brokerage (E-Trade) and made small weekly post tax contributions to it. Choosing between a Roth IRA and a regular IRA was difficult and I decided to go with the Roth IRA. At this point in time, I am eligible to contribute to a Roth. I am optimistic that one day I will make enough money that I will not be eligible to contribute to a Roth IRA, and I imagined my rich self would look at my poor self in consternation over the decision to forgo complete ownership of the proceeds of a Roth IRA for a tax deduction that would result in a $100-200 more return from the Federal government.

I chose an index fund that permitted an initial IRA investment of $250. This was a no load, no fee fund with a 0.19 expense ratio (SVSPX- SSGA S&P 500 Index). I felt that it would be better that I get my small contributions working for me as soon as possible. Most of the Vanguard and Fidelity funds require $3,000 initial investment or $1,500 initial IRA investment. Maybe some people here can advise whether it would have been better to wait longer to accumulate more money and invest in a Vanguard/Fidelity fund.

I still have credit card debt and student loans that I am very slowly chipping away at. Maybe I should have contributed to my credit cards/loans as opposed to retirement, however I feel a little more secure and happier when I look at my little account.It's a step towards a brighter future.

---Edited to add fund and online brokerage specifics--- Thanks Petunia


Introduction

July 24th, 2013 at 01:18 pm

I am new to blogging and am still playing around with the format. I ran numerous searches online and was unable to find positive financial resources for temporary employees. There are many of us out there who have huge student loans and face a job market that offers very little in way of stability. I hope to provide and elicit support and suggestions from those in similar situations on how to save for retirement and deal with medical expenses without the support of a permanent employer.

There are many blogs that depict the horrors of document review and burdens of student loans. I prefer to take a positive view of my situation and try to better myself within the constraints of my circumstances. Complaining will not make life easier or lighten my load.

My law loans came out to a little over $127,000 when I graduated 7 years ago. They are currently at $101,000. Medical bills for my pets and myself, and periods of unemployment have swelled my credit cards to $22,000.

Last year I made a decision to give up my apartment and make a serious attempt to get my finances in order. My goal is to pay off my credit cards and to start putting money away for retirement. Eventually I would like to pay off the private portion of my student loans so I can have more options in my career. Document review is lucrative enough that it pays my bills however there is very little career growth.