Re-calibration

surise-12-30-16

View from our porch

Sunrise December 30th 2016

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Spent this past Friday and Saturday crunching numbers.

The following thoughts are a continuation of this post.

I am self-employed carpenter/ remodel-er/landscaper/ table maker/ concrete pour-er/ whatever pay the bills, kind of guy.

Because have chosen to be a self-employed carpenter/remodel-er/landscaper/ table maker/concrete pour-er/ whatever pays the bills kind of guy in small town Iowa, I did not know  my net income for 2016  until all of the bills were paid and all of the checks came in….

Most of you reading this are no strangers to financial pressure.

It is  part of life.

I also think it’s fair to say, most of us are uncomfortable telling someone else what our income is. It  feels like letting someone see us in our underwear, (vulnerable)

I have no qualms talking to someone about these things in private..for me it’s like, what’s the big deal..this stuff is a lot of smoke and mirrors in the first place.

I had a friend who was an accountant for two trucking companies…Both had dozens of semi’s  on the road.  Company A owned everything on paper.  Owner was making his monthly truck payments to the bank and everything worked.  Company  B owner did not believe in debt.  All of his trucks were paid for.  This was about the time diesel prices spiked. Friend told me, he would be very surprised if company A would be able to stay in business… Company B, he felt, on the other hand should be able to weather the storm.

I am a Company B kind of guy…I hate debt, (although we do have a little again)

The model I use for coming up with how much money we have to work with is by coming up with a 3 year average.  Take the net income from 2014, 15, and 16, add them all together and divide by 3.  I totaled up the numbers Sunday morning and it looks like we may need to figure out a way to chop $400 a month out of our already lean, (we’re talking lean)  lifestyle.

ie.  our food budget for the two of us is currently $225 a month…and that includes toiletries.

The next few months may require some major life choices (again).

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21 thoughts on “Re-calibration

  1. I will put SWMBO on this task immediately!
    Most people are amazed at how little we live on.
    Come to think about so am I.

    The only thing we have no control over is taxation, rent, and insurances.
    So that’s government, a private landowner, and insurance firms.
    BUT it’s not what you might first think i.e. they are profiteering.
    A HUGE percentage hike on insurance costs comes yearly from the government constantly increasing taxation.

    So my global plan to save money is to fine government for all their broken promises!
    Should make my first million by Feb 1.

    Liked by 1 person

  2. Can I help Doug? As you know I’m a number cruncher and keep spreadsheets of our expenditure. I like your three year average idea but I don’t think that would work for us as things are going up out of all proportion.
    Generally, I calculate on the previous year plus 10%. BUT, I am always working on the next financial year’s bills, so technically we keep a year in hand. So 2017 is more or less covered, and I am working towards 2018 now being 10% on 2016.
    It hasn’t helped when our compulsory boat licence fee has increased by a staggering 45% to come in line with other river authorities this year. When narrowed down to just under £2.50 a week, it doesn’t sound too bad, but a hike of an additional half of last year wasn’t anticipated, as it had been suggested a rise of ‘just’ 34%. That’s knocked my figures out, so the only things we can cut back on are fuel (for boat and car, and fuel for the boat keeps us warm, so we will be walking more!) and food.
    Our food bill was around £34.50 a week, including toiletries and dog food, so a little less than yours which I worked out to be about forty two pounds a week. I’m trying to tweak ours as a lot was down to diet fruit and veg, so I’ve revamped my sheet a bit.
    Good luck! Stews are on our menu a lot, they cost very little and serve us for 2 days.

    Liked by 1 person

  3. I hear you. We live on a fixed income S.S and my pension from At&T. This should brighten your day a little or at least make you laugh. We received a letter the other day from Social Security that we were getting a 3% increase (whoopee) reading further down the page my checks will now be $3.00 LESS a month than in 2016 because they raised the amount we have to pay for Medicare and part D for prescriptions. And there you go……nice raise but for who? And, our secondary insurance that covers the 20% that Medicare doesn’t pay went up $20.00 per month for 2017 as well. How’s that for cutting back. :o)

    Liked by 1 person

    • I hear you too 🙂 Our neighbors to our west are also on fixed incomes ..ss plus a little farm ground rent…their premiums for health insurance are going to jump, by 40% I think she said..and they have no idea where to come up with that additional $…It feels like I am in a vise that I am just now beginning to feel the pressure..it is snug but not crushingly so…but the warning red light on my dashboard is starting to blink so I know I need to make some major course corrections. thanks for sharing some of the details of your story!

      Liked by 1 person

  4. That’s a fairly large cut to the budget. I’ve no issue saying we service a debt load – and yes, each year there are adjustments to be made. Some of the things we do/have done to accommodate the issue:
    We never eat out. Ever – and we don’t miss it one bit.
    We purchase no processed food (though that has taken a lot of work and many years to accomplish).
    Turn off the lights. This sounds daft – but by paying careful attention to hydro usage I’ve managed to drop our hydro bill by another 20 dollars a month this year.
    No ‘unplanned/random’ driving/trips. We coordinate all of our ‘in town’ errands to jive with when we’re already in town for work. We’ve gone from only making a week and a half on fuel without filling up, to over two weeks on fuel.
    Buy as many things you can as used or second hand (jeans, jackets, household items)
    If you sell anything- raise the price! We did the math this weekend – our layers have not been paying for their food. Put the price of eggs up considerably. I will lose customers – but I would rather have fewer chickens than supply more customers with cheaper eggs.
    Run as lean and mean as you can on internet/tv.
    Just a few ideas (some of which you are probably already doing) 😊

    Liked by 2 people

    • Val, love, love, love getting practical, nitty gritty, in the trenches suggestions like yours! We too had to say “by-by” to all but 4 of our egg layers….they were not paying their way. This winter, rather than a heater for the waterer (@ $30 a month electrical) I am changing their water one or two times a day so they have water, plus we have not had a lot of snow, so they are out free ranging, rather than eating the $4.50 a bag cracked corn (used to feed them premixed layer mix, but that is 3 times the cost, so either they can get by on cracked corn, and free ranging or even those 4 are headed to the pot. My new cell phone plan is $12.5 month unlimited calls and texts..vs $45 from Iowa Wireless. The carrier is called Republic..can’t say enough good about them. We shut off 1/2 the house a couple of years ago…so our heating bill is about 1/2 of other years….don’t think you were a reader when I wrote about finances on the farm blog, but a couple of years ago, we had to figure out how to slash $700 a month out of our lives.putting in a smaller energy efficient furnace, and heating only part of the house, plus making some major changes to our health care premiums enabled us to pull that one off….I’m not sure how in the heck where we will ever be able to chop $400 more from…which is why I am studying for a CDL license this week..if I can get a Class A CDL, it will open up new doors of employment…at least that is my game plan for now.

      Liked by 1 person

  5. We’re fortunate to have the health care we have in this country – though south of the 49th there’s a misconception that it’s free – it’s not, everybody pays into it according to their income, and it does not cover things like dental/eyeglasses/prescriptions- though there are plans you can pay into that help with that. Still, the premiums are going up again this year, and hydro in our province is going up by another 5%.
    Ultimately I think what’s important – I don’t consider ‘budget cutting’ as a hardship – rather I consider it a challenge that I’m game for. Good luck.

    Liked by 1 person

  6. Well, your budget finesse is inspiring to me. I’m so bad at budgeting and right now have more debt than I’ve had since 2004. I like to tell myself it was all for the sake of relocation. And then the storm came this year of job change and broken ankle change. So 2017 is going to be the year to get out of debt. Buckle down and pay it off. By the end of July if it’s at all possible. And I thinknow it is possible! I’ve let the monster loose for far too long. Went a little spend crazy. But I’ve come to my senses. Nothing like a good ole fashioned medical crises to wake you up from your living beyond your means lifestyle eh? It’s time for me to get my house in order!

    I love that you’re getting your CDL. It’s a great idea. I am driving for Uber and Lyft and Veyo. They’ve been a great source of income and fun and I like driving people places and I can’t just sit around waiting to go back to my day job.

    Praying for you to ace your test. Do you think you’ll still have to cut your budget with the new source of income?

    Liked by 1 person

    • Good to hear from you Michelle. I am doing some last minute review this morning..plan to be @ the courthouse (for tests) when they open. I have 3 written tests I have to pass, then a doctor’s medical exam, then 3 driving tests in 2 weeks, or whenever I can get in after that..then will be issued the class A CDL. Brain feels relaxed and porous this morning so hopefully I will only have to make one attempt..if not, will keep going back until I do pass. The new revised budget numbers….that’s a good question. If I were to get a job for someone else full time that was guaranteed, and I knew what the net was..then we could go from there, otherwise, we still have some decisions to be made. I will let you know how the test taking goes today. DM

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  7. Appreciate your situation. At least you’re not ignoring it. I’ve got some of my own decisions to be made, as my contractor’s liability insurance, auto insurance, rent, and flood insurance all have gone up.

    I have covered parking where I live, which has been costing me $25/month. That seemed reasonable enough, especially when I got my new car in 2011. But that just went up, too — to $50/month. I was ready to give that up for the savings. Then, a nice hailstorm came through two nights ago. I’m still thinking. 🙂

    Liked by 1 person

    • Yep, You get it…..:-)…just think, if your car was outside in the hail, you might have been able to to total it, and get a new car….i know, it isn’t quite that simple…we had a nasty hail storm go through here two summers ago and totaled dozens of vehicles and hundreds of house roofs…(which is what made me think if it)

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