Yankee 2.0 : about me

Surprise career change

Anne Cross — Sun, 30 Aug 2009 11:56:00 GMT

It looks like half of my income/career is about to disappear. For the past few years, half of my income has come from the corporate training business that I own, and half has come from teaching at the local community college. The community college gig has been my rock, with the training business fluctuating in terms of income and busy-ness. Well, it looks like the teaching thing might not happen this semester -- which means half of my income will be gone, and I'll need to make up for it somehow. I will know definitely on Wednesday, but the enrollment is really really low, and the Dean has been leading me to believe that the classes won't run.

At first, I figured it would all work out (meaning enrollment would increase, and things would just keep trucking along), but now that I'm really faced with the prospect of that part of my professional life ending, I'm starting to panic a bit. I hope to get to the point of explaining "why I like failure" like Gary says he does in his post. I know things will work out one way or another, but right now it's slightly nerve-wracking to think that I need to change all my plans and figure out a way (in the middle of this big recession) to make up that income.... I don't like failure yet.

Career detour, fork in the road, etc.

Anne Cross — Sun, 07 Jun 2009 21:27:00 GMT

Three years ago, I started my own business. I decided to be a corporate language and speech trainer; I got certification in my area, did some market research, rented an office and hung out my shingle. I knew that I wouldn't be able to earn an entire living from this work immediately, so I hung on to my other work, teaching language as an adjunct at my local community college.

I love both jobs, and I love the lifestyle that being my own boss affords me. The idea of sitting at a desk 40 hours a week kills me. I knew that opening my own business was risky, and that even pre-great depression 2.0 only about half of all small businesses last even two years. So I've already beaten the odds, but things are sort of dire, and I am forced to consider working for someone else. One of my major corporate clients decided to do all training in-house (thus getting rid of consultants, like me, upon whom they had relied for much training), and others are cutting back dramatically, due to the recession. I currently only have one client, and my contract with them ends on July 1st.

I just finished reading an article in the NYTimes magazine section about people like me -- self-employed and flailing in the recession/depression/downturn. It made me feel less alone, but it also convinced me to look more earnestly for a "real job" working for someone else. I've been toying with the idea all spring, and have submitted a few applications. I even had an interview for one position this week. I consider myself a really good, hard worker, and my self-concept includes the idea that I can "always just find a job" if self-employment doesn't work out. Well, I think that time has come. I'm hoping to be offered the job I interviewed for, and hoping I can finagle a flexible schedule that allows me to still teach at the community college. Whatever happens, I plan to re-locate my business to a spare room in my house ("right-sizing it"), and laying low for a few years. The economy has to turn around at some point, right? Maybe after a few years of putting in my time working for the man (and earning enough money to live, having health insurance, and making some much-needed home repairs), I'll be able to go back into business for myself.

A year of thrift

Anne Cross — Sat, 14 Feb 2009 12:10:00 GMT

It was in February of 2008 that I decided to change my relationship with money. I was sick of living week to week, always being scrambling to pay bills, being in debt and being generally stressed over money. I bartered with a life coach for a couple of sessions, but quickly realized I didn't need someone else to tell me what to do. I knew what I needed to do! I was always listening to shows about personal finance and debt, I had gone through the Dave Ramsey thing (and paid off a bunch of debt, yet there it was again, creeping up on me) -- I knew what I needed to do, and I finally decided to just do it.

I put myself on a weekly budget of $200.00 which I took out in cash each Friday. This was to cover human food, pet food, gas for the car, and any shopping (clothes, household goods, books, etc.) and entertainment (coffee, meals out, movies) for me for one week. Anything left over would go into savings. I went back on to the snowball model to pay off my credit cards, and a few months earlier had started an IRA which had a monthly debit from my checking account (so I couldn't skip paying it).

One year in, I am in much better shape. I have paid off all my "little" credit card debts (Care Credit -- which provided much-needed funding for a pet operation and Sleepy's -- for a new bed), which eliminated a couple thousand dollars of debt and freed up a few hundred each month for other expenses. I started saving for the first time since I was a teenager. I usually had something left over from my $200 allowance and even if it was $1.00, I put that money into my passbook savings each week. I have depleted it a couple of times (once to fix a collapsed celing in my house, twice for my weekly allowance), but hey, it was savings, not debt! And then I've gone back to putting money into it and have continued my savings habit.I just completed a mortgage re-finance which also rolled in a large credit card (around $9500), and a home equity loan.This monthly payment will be less than what I had been paying (due to the great interest rate) and will eliminate two additional bills from my life.

I cancelled non-essential expenses. I got rid of cable tv (which was only costing me $6.00 per month, but I decided was non-essential), and a few months ago cancellled my spring water delivery (which was $40 per month, but was delicious mineral water and supported a local business). And I downsized my home telephone service to something that is local-only, per-call rate and is very inexpensive.

I buy almost everything used. Clothing, household products, books (if not simply borrowed from the library), etc. When I can't buy it used, I TRY to buy it from the source, especially for food. I buy my milk and eggs directly from a dairy, and get as much produce straight from farmers (besides what I can grow myself).

What has fundamentally happened is that I've changed my thinking. I used to operate in scarcity/fear mode, but now I feel like I'm in abundance/security mode. I have plenty of stuff (in fact, I got rid of a lot of stuff over the winter), I make big batches of food and freeze some, so I know I have plenty of food, I have enough money to make ends meet; I pay my utility bills as soon as they arrive so I don't worry about paying them; I live in a city with lots of free entertainment and I'm a block from the library; I have plenty of ways to keep busy, and as I pay down my mortgage (which is now, apart from my blasted student loans my only debt), I will eventually own my home and be even more secure.

I love doing what I can by myself -- soap and cleaning things, food, mending clothes and sheets, fixing clocks, resuing things -- it helps with the feelings of security and independence, but it's nice to be part of a community (like this one) where other people are likeminded and trying to reduce their consumption. I feel much less wasteful, too. I used to be proud of how much I recycled each week. Now I'm happy to see how little is in my recycling bin, since it means I'm consuming that much less.

While anything is possible, I am pretty confident that the changes I've made are lasting ones. My outlook on life has changed so fundamentally and completely that I don't think I will ever go back to my old ways of profligate spending. I used to feel a reward sensation when I bought something, but now I feel that same sensation when I put money into the bank. I like going to the thrift store and walking out empty-handed because I know that I don't need a single thing there.

It has been an interesting journey so far. I can't wait to see what February 2010 looks like!

La plus ca change....

Anne Cross — Sat, 29 Nov 2008 10:03:00 GMT

The past few months have been pretty tumultuous. I'm no longer selling my house. The main reason I was doing it was to move in with my boyfriend, and we both realized it wasn't a good idea for many, many reasons.

Although the economic benefits for me would have been great on a short-term basis, in the long run I was very anxious about not having equity (not to mention indepence, my own space, etc...). Since I've made the decision to stay, I feel like I had betrayed my house, which always stood by me, and kept me warm and safe. We're making up now. :)

My friends at Countrywide (they hold my mortgage) keep sending me refinance letters, which I have studiously ignored. However this time, I called to see what they could do for me. And surprise surprise, they can actually do quite a lot!

I'm going to re-finance at a lower interest rate (down from 6.237 to 5.78), and roll in my home equity loan ($14k), and the remaining credit card I have ($10,000 -- I've been living off it the past month). Due to an escrow shortage and applying rollover to the credit card, my monthly payments for those three bills had been $2200. My new monthly mortgage payment will be $1600.

Honestly, I don't even know where I came up with the $2200 each month -- eating lots of beans and finding odd jobs here and there helped. This lower payment will give me a lot of relief.

I still have the $73k in student loans to deal with, but I'm going to defer them for another year. I'm hoping for an increase in income through my business -- it's an ongoing hope... but with no other debt than a mortgage and student loans, I feel like I'll be in a good place psychologically. Plus, if worse comes to worst, the value of my house is still about equal to the total debt I owe.

So look for more posts from me about low-cost historic homeowner ideas!

Selling it -- the house goes.

Anne Cross — Mon, 17 Nov 2008 14:13:00 GMT

Well, I've decided to sell the house and all the stuff. I'm going to move in with my boyfriend on a "roommate" basis. I'll have my own room, my own space, and just split the bills with him. If it doesn't work out, I'll have enough in savings from the sale of the house to get a little condo (but I hope it will work out!).

I'm going to put the house on the market on January 1st and hope for a quick sale. In the meantime, I have to fix several things (small and large-ish) before it goes. So I will be dedicating December to all that.

Now that I have made the decision, I just want it to be done. I'm ready to move on and downsize. While I appreciate the beauty and fine craftsmanship of my lovely and large historic home, I also appreciate the heat, snug windows, and warm carpeted floors of the bf's place.

I've never been overly-attached to "stuff" and have sold all my worldly goods at least three times already. It's a good spiritual exercise.

I'm looking forward to my new life in the new year. I will have 0 debt. All student loans will be paid ($75k -- believe it or not), and I'll have a pretty good savings account. And I won't have to worry about being forced out of my house if I lose my job (a likely possibility, since I have really low enrollment in my classes). It's the right decision for me.

Should I sell my house?

Anne Cross — Thu, 30 Oct 2008 10:21:00 GMT

I moved into my dream house almost seven years ago -- it's a four-storey Victorian row house with marble fireplaces, pocket doors, mahogany banisters... it's gorgeous! It needed a lot of work, and I have it about half-renovated. Brand-new kitchen, gorgeous historic wallpaper, stripped wood-work. But -- but... I'm living beyond my means. My mortgage payment (due to reckless refinancing) is about 75% of my monthly outlay, and is more than twice what it originally was when I bought the house with 25% down seven years ago. I've kept tapping my house for equity and kept hoping that my job situation would improve. And it's not -- I am really stretched, and I am giving real thought to selling the house and all the stuff that goes with it.

It's such an emotional decision, and I haven't decided 100%, but I think it's probably the right thing to do. I'm self-employed and living month to month. I keep scraping by, but I am not living comfortably, and I'm working as much as I can right now. My (new) boyfriend and I have discussed my moving in with him (to his brand-new, very comfortable, no renovation work needed house), and that is what has put this whole plan in motion. I owe about half of what my house is worth (so I own two of the four floors, is the way I see it), plus a TON of student loans. If I could sell my house and all my stuff and move in with him, I would be totally out of debt, my monthly expenses would be about half of what they are now, and I would be living within my means.

It seems like the rational thing to do (maybe not the moving in with the boyfriend, but if not that, at least getting a little condo or even renting an apartment again), but it's such an emotional decision. I love my house, it is so special, but I'm walking around in a hat because i can't afford heat. And I've been waiting two years for my business to thrive, and it's still not happening.....

I welcome any thoughts as I make this decision.

Favorite things -- kitchen edition

Anne Cross — Mon, 06 Oct 2008 22:08:00 GMT

I was listening to NPR while cooking dinner (as is my wont) and was getting really anxious about the economy and the future. But then I looked around me and saw many things to be thankful for. I love my kitchen, it's the heart of my house. And while I'd really like a shiny stainless-steel mandoline, I have everything I need to make really good, wholesome food for myself and those I love. Here are some of my favorite kitchen things, and why I love them:

Meyer's anodized aluminum pots and pans -- I bought these 19 years ago at JC Penney for $100. I've used them nearly every day for those 19 years and hope to get many many more years out of them. I bought them because I couldn't afford Calphalon, and quickly discovered I love them much better than the little Calphalon sauce pan I already had.
$5.00 sink -- I got this at the local salvage place (faucet included). It's a drop-in, nice and wide, and it looks really cute and retro.
$$$$$$ cabinets -- I splurged and got really fancy Italian kitchen cabinets (from Italy!). But I own them, and I love them.
Cheap-o granite counter top -- The handyman who put my kitchen in agreed to my plan of using inexpensive Home Depot granite tiles grouted very close together to mimic a solid granite counter top. It cost around $100.00
Collection of decorative serving bowls -- some of these were my late mother's, some I've picked up at thrift stores over the year, one I got from a friend for Christmas. They make me happy because they are pretty, and I love to make food for people in these nice pretty things.
Table runner -- I bought this very cute table runner at Savers for about $2.00 five years ago. It was clearly hand-made from a scrap of fabric, but it's really sturdy and has a very harmnious design.
Orange couch (aka dog's throne) -- A really charming orange settee that I picked up at a flea market for $30.00 a few years ago. Any time people who are into antiques or home design see this, they remark on how elegant it is. My dog, quite the aesthete apparently, also loves it and hops up on it and snuggles in a corner and looks at me longingly while I make dinner.

So, while I still worry about keeping my business afloat and earning enough to heat my lovely house, I can at least go down to the kitchen, invite some friends over, and cook under the dog's supervision. These are a few of my favorite things!

Scarcity and temptation...

Anne Cross — Mon, 08 Sep 2008 16:01:00 GMT

Well, I just got paid from a corporate client for my training business. Phew. I have had no income for about a month, and have been really stretching my pennies and living off savings (but NOT living off credit, for the first time in the past 20 years or so when in this situation -- why do I always get in this situation? Perhaps a topic for another blog post). So now that I have a bit of a cushion, I am faced with temptation. When I was little (and a little entrepreneur, always doing chores around the house, starting lemonade stands, selling junk at tag sales), my mother always said "whenever you get a dollar, it burns a hole in your pocket!" She was right.

My temptation now is two-fold -- one is to rush to pay off debts and the other is to buy myself a little "treat" like a massage for the pulled shoulder I have, or take a trip to my favorite used book store, or buy some fabric for some curtains I want to make. I get a very similar psychological reward from both of these thoughts, but I'm going to resist the pull to spend the burning dollars and treat myself to early debt payoff or buying a little something.

I'm going to leave the money in the bank, because I have *just* enough to live on through the end of the year (barring any unforeseen disasters), so instead of splurging now (so tempting after having been totally broke all summer), I am going to pay off my smallest credit card (the Care Credit veterniary account: $277.27), and go back to my system -- I give myself an allowance of $200.00 per week (for groceries, pet food, shopping, house things and gas for the car) and do my best to sock some of that away into savings. I'm saying no to the desire to pay off extra debts, knowing I might need that extra money to pay for essentials later.

So now with Care Credit paid off, I'm down to one 0% interest card with about $800 on it (this was for a new mattress and box spring), one 5.9% credit card that is my rollover/snowball target account ($9200), a home equity loan ($14,000), my student loans (7$0,000 -- an almost unfathomable sum of money), and my mortgage ($139,000).

I gained a new client last week (hooray), so when I get paid from them, I will pay off the mattress loan and put about $1000 into savings. Then I'll be able to really get to work on my rollover/snowball plan of chipping those big balances down. One down -- it feels good to pay that baby off!

Paying down debt - choices

Anne Cross — Sat, 16 Aug 2008 11:50:00 GMT

I have two main sources of income -- part-time (adjunct) language teaching at my community college, and 3/4 time language training that's my own business (sole proprietor). I know how much I earn each year teaching at the college (the scandalous $13,200 for teaching three courses per semester -- showing how wrong our society's values are), but the income from my business varies a lot (my goal is to earn $60,000 from it per year, pre-expenses, but I haven't yet reached that goal). I also get odds and ends from small translation jobs or other strange part-time things I pick up (I do personal assistant/bookeeping work once a month for a musician for $100 per month) that add up to maybe $5,000 per year.

I'm hoping that my training business will pick up this year, and I have taken on a commission-based sales person to drum up more work for me (I hate doing sales and am not good at it).

I have just gotten a contract for training for a company starting in September for $6,000. This will give me enough money to live frugally through the end of the year (unless home heating oil goes to $10.00 per gallon or something).

Here's my current debt situation: I've got a mortgage ($139,000), home equity loan ($14,000), and one enormous credit card ($9,200), plus a big student loan ($70,000) that is currently in deferment. I also have two small credit cards that are both at zero percent interest. One is the Care Credit card that is for pet expenses -- I owe $325. The other is a store credit for a mattress and box spring I bought a year and a half ago (something I don't want to buy used) -- I owe $850 on that.

Since the two small credit cards are at 0% interest, I've just been paying the minimum on both of them and putting any snowball/rollover money into my big credit card (which is at 5.9% interest). Should I take the $1200 and pay off these two 0% interest cards, just to cross them off my list, or should I put the $1200 against the enormous credit card?

I feel like crossing the two cards off my list would be very satisfying, but paying them down month by month is satisfying, too. However, if I paid them off, then I could roll the $186 I pay into each of them every month into my big credit card and that would mean an additional $2200 in 12 months.

I've paid off all my credit debt in the past, then had some emergency (one was a dog operation that cost $3200 and the other was owing the IRS $5000 in taxes) that I chose to address by using the credit card I had just paid off. I want this to be the absolutely last time I ever have credit cards and I really want to be living on a cash only basis to get off the grid, economically. I'm not always rational when it comes to money, so I'm not sure if paying off the two small cards is the rational thing to do, but it's where I'm leaning.

Any suggestions?

A modern-day Yankee in King Consumer's court

Anne Cross — Mon, 11 Aug 2008 13:55:00 GMT

Welcome to my blog, Yankee 2.0. I'm a New Englander trying to get back in touch with my Yankee roots of thrift and common sense, and trying to resist the lure of modern consumer culture. I'll be blogging about my financial goals (paying off all my debt in order to get "off the grid" when it comes to money and live on a cash-only basis), shopping (trying to live stylishly on a strict budget), work (necessary evil), and restoring my big and drafty Victorian home -- not to mention how on earth I'll heat it this winter.

I'm a long-time reader of the Dollar Stretcher, and have been following the Dave Ramsey snowball method for a while now. I'm really excited to share my story as I try to get out of debt and into a less consumption driven life.