Financial Health, too
Friday, January 28, 2011
Last January, I decided to start on a journey of physical health and I'm quite happy with the results. By the end of the year, even with detour, I had lost 20% of my starting body weight (I need to lose almost 60% of the start weight of 348 pounds to reach a healthy BMI). This year, I decided to start on a journey of financial health.
For the past 5 years I've been self employed. I was making about what I made back when I had a salary, but stability was sorely lacking. My husband has been in startup mode for a few years, and a home reno went very bad and wiped out our savings and put us into debt. So it was getting increasingly stressful. Then a client I gave a big chunk of my year to went out of business and defaulted on a large portion of what he owed me. Ouch. No back up and no recourse except the overdraft.
So, just as I did with Spark a year ago, I took some small action steps. Last November I started applying for jobs (but only jobs that interested me). I decided that if I was going to take a high stress job (and my field of expertise is high stress) then it had to fit my value system. My backup plan was to take a job as a barrista or in retail, otherwise, so that I could home at the end of the day and let go of the work day easily. Right before Christmas I got a great job (not great pay, but it really fits my ethics) AND we negotiated to make it 2/3 time so that I could keep some of my more profitable contracts with clients I like working with. Stable income achieved.
Next step--get rid of high income debt. Emotionally, I hated to do it, but I took out a line of credit against my home equity. The interest rate was a quarter of the interest on my consumer debt and, even with the hefty fees, will save me almost $15,000 in interest over the 3.5 years of the term. It also reduces my monthly payments by about $900, half of which I will put back on the line of credit and half of which I will put into savings so that I get my emergency fund back.
I should point out that we had taken care of the other part of the equation, budget and reduced spending almost 3 years ago. But it's hard to stick to a budget when you have no idea of monthly income. Our spending is very minimal (no latte factor), we only use cash to shop with, and there is no impulse buys allowed, unless we have saved up for it out of our small weekly allowance (yep, we have allowances for our individual disposable incomes--that way I can buy my pricey face moisturizer without feeling guilty, although I have to plan well in advance and save for it). Budgeting HAS taught me that every purchase is a choice and that making the choice to buy a particular thing means that I have taken that purchasing power away for the next thing I want/need.
I've got way less shoes or groovy hair ornaments, but I've also got way less stress. No more keeping up with the imaginary Joneses...
And, I've had a good week on the physical health side, too. Ate mostly healthy food in healthy amounts (with one small fudge escapade), got some walking in despite my hacking cough, and went down another 2 pounds this week. 74 pounds of fat is gone. I like it!