Hello,
My name is Brother Job. Perhaps you have met my namesake from distant ages past in the pages of the Old Testament. You know, the guy who lost everything he had – family, possessions, health – the whole shebang. The stuff that takes all the joy out of life. This is Easter week, and let me tell you, there's not much joy around here. Brace yourself, this post is long, but perhaps not quite as long as Book of Job. Maybe there's hope after all.
Financially, my family (myself and two children) are slowly bleeding to death. We have bled through almost $15,000 of a $20,000 savings account (the only savings we have) in the past two years. Almost $5000 of the $15,000 has occurred just in the first three months of this year. If the bleeding doesn't stop soon, we will be broke. I will tell you upfront, I'm adverse to debt, and have been for most of my adult life. The only debt I presently hold is the mortgage on the house. There's about 12 years and 50K left to pay on it (a 15 year refinanced note with a rate under 3%). Until recently, the plan was to sell this house, take some of the cash we had along with proceeds from the house, relocate, and pay cash for a home and a bit of land elsewhere. And then invest every available dollar for retirement, which I realized for me will probably take more than 10 years. But those plans are becoming further out of reach with each passing day.
The broken shoelace laying on my desk serves as a daily reminder of what my life has become: utter brokenness. My employment, house, transportation, and perhaps most importantly, relationships. Things that you just expect to “work” on a daily basis have been failing in rapid succession without the time nor money it takes to fix them. I attempt to make one repair only to I discover that two or more things have broken before I can even get the first thing working again. I'm here to tell you that compounding interest really does work even outside the financial world. It's completely overwhelming and demoralizing to the point that there are days that I just want to purchase a one-way ticket to Antarctica. Except I know that wouldn't be the responsible thing to do.
A little more than seven years ago, just before “the crash”, we moved from the city and purchased a small house with a bit of acreage out in the countryside so that I could take a part-time contract job with a religious not-for-profit (some would call it an institution – there are other terms I might use). In addition to this primary employment, In addition I have and continue to work a number of part-time side jobs (mainly self-employment or on contract) in order to make ends meet for my family and sock some away in savings. I gross about $2000 per month typically working 20-30 hours per week. This has been largely dictated by circumstance.
Unlike Job, I might not have leprosy (who knows, that might be next!), but what I do have are chronic bouts of upper respiratory infections that began a few years back that have been largely resistant to antibiotics. After beating around the bush (and running up big bills) with my family doctor, urgent cares, and the emergency room (why do things like this always seem to occur on a weekend?), I took matters into my own hands and saw an immunologist affiliated with the Mayo Clinic. But I've seen little relief and still have flare ups that knock me out for days at a time leaving me unable to do much of anything (I'm in the midst of one right now). The immunnoligist wanted to refer me to a gastroenterologist next, but I have been warned up-front that I'm looking at big bucks, and there's no guarantee that's where my problem is emanating from – he just wants to cover all bases.. And with a $10,000 yearly family deductible on our healthplan, pursuing further medical diagnostics simply isn't in the budget right now. Add to our medical miseries my daughter needing to have all of her wisdom teeth out and experiencing further complications since the surgery which we are currently pursuing. Being dental related, none of this will be covered.
Then there are the vehicle issues. We've been through two vehicles in the past 5 years. Both have been money pits. The first vehicle (a 2000 Ford wagon with less than 100K on the odometer) was inspected by a mechanic and deemed sound. I'd come to sink more than $4000 to keep it on the road. The last straw was when engine blew at about 160K miles. I was quoted more than $3000 to replace it. I figured we'd do better taking that $3000 and putting it to a newer vehicle. What a mistake. We purchased an early 2000's GM minivan, and almost immediately, began having problems. We've spent over $4500 in 18 months to keep this van on the road. Notice I said “keep on the road” - there's much more I haven't fixed. I won't bore you all with a list. I've come to realize in the past several months, I'd actually come out ahead not working most of my supplemental jobs (each which requires a significant drive – we're a 60 mile r/t from the nearest Walmart if that tells you anything) because I'm spending more on transportation costs than I earn on all those jobs put together. I basically work to pay for my van so I can drive to work. It's a vicious cycle.
As for the house, we bought this house seven years ago for $75K (almost 25% below appraised value). I felt this made purchasing this house a safe bet, financially speaking, since we had built in equity. Unfortunately, real estate values in the past seven years in the area have plummeted 20% across the board and have never really recovered. At our last refinance 3 years ago, the house appraised at $82K. Like the first car I mentioned, we had a certified home inspector verify the integrity of the home before we purchased it. We worked with the owner to fix the only major red flag, but now we are staring in the face of some major problems, not least of which is a leaky basement. We have also had an issue with various, ahem, “creatures” (of both the warm and cold blooded varieties) entering our home. This necessitated the services of a wildlife management expert last year to seal the house at a cost of $1000, but this past winter, the flying squirrels managed to chew their way back into the attic again by through the soffit. In the meantime, we've been trying to sell the house (both FSBO and with an agent), and all we keep hearing is that our best chance of selling in this area is on contract/rent-to-own, because most folks have ruined credit and/or simply don't have the 20% to put down that most banks are now requiring. We did have one showing last week – the man who looked at it and claimed to be a master carpenter took one look at my roof and said “that roof needs to be replaced.” Let's say it does. Since my home insurance policy only covers the first 15 years of the life of a roof (and pro-rated at that), and we are right at that 15 year mark, guess where that leaves me? Ignoring the question of the roof, I'm estimating this house needs at least $5000 worth of repairs at this time. That's being conservative.
Finally (since I know someone will ask), I have no relatives in this area. My folks are getting up in years and are a long days car ride from here. I don't know what the future will hold there, but I would expect that as an only child I will be playing an ever increasing role in their life. We've given some consideration to moving closer to them. The problem is that average real estate values there are nearly 2.5 times what they are here and the tax burden is significantly higher as well. There has been no interest on their part having them move closer to us. They have said repeatedly that they don't want to be a burden on us, but I'd be lying if I told you that some of their recent decisions (or lack thereof) haven't been a great cause of worry. I mean, who custom builds a house in their 70's with all the bedrooms on the second floor and a full flight of stairs to reach them? And don't get me started about having all of their financial assets tied up in annuities...
I only came across this site a few weeks ago – and, minus the lack of investing (which I intended to commence as soon as we sold this place and bought another for cash) – and I've always felt like I've been playing the game of money with the right set of rules (and this seems confirmed by reading the Mr. Money Mustache blog). Why then, is everything going to crap in my life? It's like my new motto is “If it ain't broke... don't worry, it will be soon.” I don't know if there's some kind of cosmic battle, bad karma, a curse placed on our lives, or something else, but this isn't even remotely humorous any more. It's taken it's toll not only on our finances but on our family. Like Job in the Bible, I've been given a lot of “advice” by “friends”. I should never have bought the used cars, but financed something new. I should never have moved from the city (last I checked, similar houses in my old neighborhood were selling for $20K less than I originally paid for mine). I should get a “real job”. I should work from home (have you tried using the internet over a dial-up connection or a cell phone with 1 bar of 2G connectivity lately?). I should go on welfare and food stamps and file for long-term disability. And the list goes on.
To put it mildly, I feel like my life is in a garbage compactor: we're getting crushed and it feels like there's no way out. I wondered if this was the right place to post this. I briefly though that maybe this would be better in a psychology or spirituality forum. But no, I'm deciding to post it here. Don't you feel fortunate?
So have at it Mustachians. Feel free to tell me where I went wrong (I sure don't want to repeat the same mistakes twice). If you decide to face punch me please wear gloves – I've already been wounded plenty. Most importantly, tell me how to get out of this mess.
Brother Job
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Addendum:
Information which was requested per the sticky. Here's what I feel comfortable sharing.
I am in my late 30's and file head of household. I have two minor dependents who do not yet drive. We're in the US.
I earn on average $2000 per month gross. $1500 of that is from my primary employment which is paid on 1099. $500 is from other employment (W2, 1099, and self-employment).
No pre-tax deductions.
No other ordinary income.
After deducting self-employment expenses and adding child tax credits, I typically obtain a refund between $2000-$3000 from the Federal Government, but usually end up paying the state about $200.
No assets or liabilities other than my home.
Below is a list of budget categories and their average amount for the 1st quarter 2015, rounded to the nearest dollar:
1st Quarter Personal Expenses Monthly Averages
Housing – PI: $415 (includes $21 add'l to principal each month)
Housing – TI: $85
Housing – Utilities: $358 (Landline, Cell, Electric, Propane, Water, Trash)
Housing – Repairs: $60
Household Items: $16
House Sale: $105
Groceries: $253 (February spending was much higher due to child's restricted diet following surgery)
Restaurants: $205 (typically associated with W2 employment that I cannot write off -or- personal travel. Children typically travel with me for work.)
Miscellaneous: $29
Transportation - Gasoline : $190 (about 7/8's associate with various employment, some mileage is written off)
Transportation - Maintenance & Repair: $288
Transportation - Insurance: $36
Healthcare – Healthplan: $161
Healthcare – Doctor, Dentist & Pharmacy: $922
Clothing: $46
Charity: $46
Life Insurance: $17
Entertainment: $78 (includes hotel stay coming back from parents and an overnight personal trip).
Lawn/Garden/Homesteading: $22
Total: $3,311
What is not included in these numbers are the expenses incurred from my two businesses. The one business is a startup (specialty syrups and organic herb and bedding plants) which was started for an initial investment of $800. I would expect our break even point to be the end of June and to double our money by October. The other business (which all of my 1099 work payments funnel into along with various small ventures) has very little overhead (less than $200 so far this year). The two businesses are separated because one is classified as farm income, and the other is not, and needs to be reported separately to the IRS.