My cheese has been moved.

Last week things at work took a huge shift; a majority of my colleagues signed union cards and filed their intent to vote on organized representation with the National Labor Board.

I’m not going to debate the idea of union vs. non-union work here, but as a jack-of-all-trades whose position is impossible to classify, organizing is not in my favor at all. The two most likely outcomes I see are either a strict narrowing of my duties and a pay decrease of about 50% or an elimination of my position.

The entire union process, as I understand it, can take 6 weeks to several months or even years to complete should it be voted in. This means for us an undefined period of uncertainty followed by a potential large cut in pay.

The Wife and I sat and talked several times since the announcement and have decided to shift into emergency mode. Our current, and final, debt stands at $13,000 and we were on-track to pay it off by the end of the year. Instead, this month I sent in the minimum payment and put the rest (what would have been our “snowball” payment) into our savings or emergency fund.

Readers know we have a small, $1,000, emergency fund that has saved us and kept us going for nearly 18 months of this journey to become debt free. With the potential elimination of my position or reduction in pay we are going to boost that emergency fund up as high as we can until my employment is stable again.

But what is stable? And how high is high?

If the vote fails and things settle back to “normal” at work we will immediately pull everything but $1,000 out of savings again and throw it at the debt. We will have lost barely any time and will pay just a couple hundred more dollars in interest.

If, on the other hand, my career ends up changing either by taking on a new role, changing companies or starting up an entirely new venture, then “stable” may be defined as simply regular and reliable paychecks we can count on again.

The Wife is willing to take less risk than I am so she leans toward 6 months of living expenses while I am okay with 3 months. So, of course, we will compromise and do 6 months [sic]. We are in complete agreement on what to do if we hit that number and we still find ourselves in job-limbo: we will start throwing extra money at the debt again until either the debt is gone or work is stable.

I am amazed how clear it becomes when working together with your spouse with both of your priorities in-sync. It does not remove all fear from an uncertain situation, but it gives you control over the part of your world directly in front of you. “The power to change the things I can.” That alone puts the fear of change into perspective and puts logic and reason in charge instead of emotion.

What this financial plan has really created for us is a fantastic set of tools for communicating with each other and understanding each other’s needs. By focusing on our finances regularly we were able to see an on-coming train and prepare for the safety and security of our family with enough time to get through just fine.

Plus I have tremendous faith in The Wife as a woman, wife and mother, and she reciprocates that faith in me. There is no doubt at our house that something will be killed and dragged home every day.

Time to go find my cheese.

the Dad

© the Dad, Climbing Out, 2010. | 8 comments

This post is an example of what happens when companies put customer service last and the customer realizes there are other choices after all. Everyone who engages with customers (which pretty much means everyone) should be reading Seth Godin’s blog. That really is the sidebar to this post, but I think it’s so important I’m putting it right at the top.

I am consistently amazed by businesses that seem to go out of their way to make things more difficult for their clients. Not just slow, awkward or boring but down right more difficult.

The folks at Intuit, makers of finance software Quicken, seemed to do just that this Spring.
“We see you’ve been a longtime customer, but don’t upgrade to every new version we release; that just won’t do!”

A couple of months ago we got a notice from Quicken, the software we keep track of our finances with, that Quicken 2007 would no longer be supported. They release a new version every year or so with a $50 price tag, but we rarely see the need for new features. The version we are using works great.

In addition Quicken directly connects with our bank, Wells Fargo (we pay Wells AND Intuit a small monthly fee for this ability). Accounts are magically updated, transactions downloaded, and checks can be cut right from the software. It all works quite well and I am quite entrenched in that method of paying bills and balancing accounts.

Until now. The notice from Intuit says that although we will still be able to manually enter transactions, all online activity will be disabled until we buy Quicken 2010. There is probably a good reason, like they have undated a security encryption protocol and Quicken 2007 can’t read it, but the end result is the same: “If you want to keep the functionality you originally paid for you are going to have to pay us again.”

That was just the push we needed to bail on our big bank and its big bank fees.

So we made the plunge; one I had been putting off because it seemed too much hassle. We closed all accounts at our mega bank and opened a checking and savings account at our local credit union.

You know, it was easier than I thought.

It’s now been two pay-periods since making the switch and I love it. The credit union’s website is not as flashy and polished as the mega bank’s, but with their free bill pay service we can do everything we were able to out of Quicken.

We still have all the functionality, but none of the fees or advertisements.

Updating the check register in Quicken is now a two-step process (download the data, import into Quicken), but one I can live with. Especially considering we now aren’t paying a monthly fee to both the bank and the software maker! It probably takes an additional minute to balance the account… I can handle that.

Online bill paying is just as easy as shooting a check out of Quicken. In fact, it may be easier. I wasn’t sure I was going to like the online bill pay thing, but once I bought into the concept and really tried it for a billing cycle, I found I love it. The credit union sends emails letting me know a new bill has arrived. Then I check the budget to see when we are scheduled to make that payment and with one click I can pay it. Very nice.

One last account at the Mega-bank.

All that’s left at Wells is a Visa card. It’s our largest debt (currently about $15k) and will be the last one to be paid off. Here is where our debts stand as of this month.

So if you too are thinking about ditching your big bank and finding a local bank with a soul, I encourage you to give it a try! Get on their website and test drive their service. Go into their branch and do the same.

You may be blown away like we were and get reminded that banking and customer service can still go hand-in-hand after all.

the Dad

© the Dad, Climbing Out, 2010. | 11 comments

You know how every so often you back out of the dream world you live in and face facts? Yeah, me neither, but still… Don’t get me wrong, dream worlds can be hilarious.

For example, last night. I dreamed I pulled out my Google Credit Card and… actually… used it.

Like I said, hilarious.

What I realized last week with a bolt of spine-tingling clarity is that we were a stop sign, a break pedal, a mongoose-crossing-the-road away from debt. Last year we bought The Wife a $4,000 car with cash and gleefully insured it with liability coverage. Not comprehensive.

Not a big deal?

Really.

Well, let me tally what we have in the ole savings account… hmm… $1,000. Right. Baby step 1. How much is that car worth again?

So as of today we have comprehensive coverage on both cars and you know what? It cost us $192 more per year.

Our cars probably have three to four years of life left in them so for $600 – $800 we completely defer thousands of dollars of risk.

This makes sense. Maybe someday when we have enough in savings to write a check for a car when we total ours we can drop that full coverage, but to pretend that we can today is sheer folly.

I feel so friggin grown up I’m gonna puke.

So does Google even make a credit card? What was THAT all about?

Love,
the Dad

© the Dad, Climbing Out, 2009. | 4 comments

Race car, Lightning McQueen, gets thrown in jail in Cars after getting tied to a weighty statue and driving through town, tearing up the road behind him as he goes.

On my daily 70 mile commute I see so many cars that I envision dragging a huge anchor just like McQueen behind them in the form of a monthly payment. If not for the car itself then for the stereo in it, the custom tires or some maintenance that just had to be done. Not that long ago I would have been one of them. Thankfully, (say it with me now) we do not borrow money.

Since that includes “emergency” repairs I am proud to give you an update. It has been 6 weeks since I had air of any kind in my little Civic. In that time daily highs have been up to 104F. I did a 700 mile road trip through stinky cow country with the windows down. However, not once did we consider borrowing to repair the car.

We stuck to the budget and last Saturday I handed $950 cash to the nice lady at the service desk and the air works again.

Wow. We actually went without, stuck to a plan, and saved up for something we wanted. This behavior-modification stuff must be working. There was a time I would have just whipped out a credit card and paid for the repair immediately… then dragged that payment around for a year.

It seems ridiculous that it took so long to figure out that living with a deliberate plan for your money is not only the right way, but it’s easier too. Things are simpler when you budget to your values and not borrowing a dime has become one of ours.

It may have taken a month and a half to save up for the repair, but that car drove away from the dealer light as a feather dragging absolutely nothing behind it at all.

the Dad

© the Dad, Climbing Out, 2009. | 7 comments

Oh I did NOT just do that. You are kidding me. There is no way I just plowed into the car in front of me, right? I guess every plan needs a good testing now and then. This is apparently time to test ours.

On the way home from work last week I was stopped behind a minivan, second in line at a light in my little Civic. The light changed, we all accelerated and I allowed my attention to be distracted for a moment. Half a second, I’m sure, but nonetheless… I glanced away from the minivan then back to find it completely stopped again.

Crunch. Arg!

What proved interesting about the events that unfolded after said crunching was the calm and peace that I felt once it was clear everyone was okay. “I have a baby emergency fund, I have a baby emergency fund. This will be okay.” kept going through my head. Followed immediately by, “Dang it! No debt snowball payment this month!”

It was a fairly slow fender-bender that did minor cosmetic damage to the van’s bumper and our emergency fund covered it easily. In fact, I’ll bet the quote they gave me will never be filled and they just pocketed the cash I handed them. I have a receipt for the payment, so enjoy the money either way, folks.

My car, on the other hand, is a different story. It’s “stupid tax” time again and I sure deserve it for my momentary inattention. The steam that puffed from the front of my car right after the accident? That was my freon. The air system in my little car is no more. No blower. No air; hot or cold.

We live in the high desert of Southern California. Winter nights go down to the teens and Summer days up to 120F. The quote to replace the broken parts is $900. Back-in-the-day I would have put it on a credit card without thinking twice. I suppose I could make an insurance claim, but we have a high deductable and it really wouldn’t be worth it. Thus the Dad is going back to 255 AC for a while — remember that on your first car? 2 windows down, 55 mph — while we save up.

The wonderful thing was the calmness and peace-of-mind our little emergency fund of $1,000 gave me. Standing there on the side of the road I knew that whatever needed to happen with either car or our insurance, we could handle it and we would not borrow money to do so. I am amazed how a few months on a written budget can bring such clarity.

So we put the debt snowball on hold this month and go back to paying the minimums on our debts. Instead the snowball payment will bring our emergency fund back up to $1,000 with a bit more saved toward the future repair. I expect it will take three full months to save the entire amount. Right to the middle of August.

The middle of August. In the high desert. Oh God. I did NOT just do that.

Yep. But it’s going to be okay.

the Dad

© the Dad, Climbing Out, 2009. | 5 comments

Time for the safety-net that frees us up to chop the credit cards to little bits.

“What if the refrigerator goes out?”

“What if the car needs brakes?”

“What if our grocery envelope gets stolen?”

The first step Dave Ramsey recommends is saving a $1,000 in a baby emergency fund.  Something to mentally get us comfortable enough to attack  our debt and never borrow money again.

The quickest way we could think of to kick start the emergency fund was a garage sale and today was it!  I am beat.

For the last few days we have been pulling things out and piling them up in the middle of the garage.  This morning at 5am the alarm went off and The Wife and I set to work pulling stuff out into the driveway, putting up some homemade signs and bundling the kids up against the 30 degree desert morning chill.

I never realized tape (not even 100mph gaffer’s tape) doesn’t stick to a metal street sign at 30 degrees so I ended up zip-tying the yard sale signs in place.

The vultures began decending at 6:45am and The Wife took off for work at 8am.  Old furniture, tools, kids toys and clothing… almost all gone by noon and we netted $520.

More than halfway to birthing our new baby — the baby emergency fund.

Gimme a beer & get me to bed!

© the Dad, Climbing Out, 2009. | 4 comments