Thursday, November 06, 2008
Budgets and Layoffs
Chinese Ledger Scrapbook Paper by Far Flung Craft
Over the last few years my husband and I have worked hard to eliminate all commercial credit. I work from home and have a small home business (micro really) but to date we run the micro business on a cash only basis. This includes a few downturns in our personal economic status and as a result, the business has stayed very small. As the economic crisis is on us, and it is possible that one of us may lose our job over the next few months we have pulled out the 'digital' pencil and started a budget again.
One of my favorite books is Your Money or Your Life. I picked up this book back in 1996 and chewed it up. I still have the old version (it has been updated since its first publication in 1992). The thought of tracking your expenses seemed wild, but we did it. For one period of time we tracked expenses for almost 2 years solid. It gives you a very good idea of where your money goes and how easy a 5 dollars here and 5 dollars there adds up to a whole chunk of change gone and out the window. Tracking in YMOYL means every single receipt, every penny spent is graphed and tracked, not just big ticket items, but every cent.
So, yesterday we (I mean me)sat down with fingers to keyboards and looked at the next 6 months if one of us was to lose our jobs. At my current rate of pay, if Jeff is unemployed we can continue to live without significant cutbacks in our lifestyle and still set aside money for the kids private school next year and take our vacation in December. What it also shows is that if we do cut back, don't take any side trips, cut back on our F&B expenses (B being the larger of the two) we can even set aside some money to invest while the markets are low. Before I read YMOYL I would have dreaded the "budget" thought, sitting down and planning for our expenses, but we know generally what goes where, we have no commercial debt (other than student loans) and we may even find a way to save in the horrible economy. Now, if Jeff is able to keep his job, the challenge will be NOT to spend what we earn, but to set it aside and live more frugally. That is the next challenge.
Now, if I lost my job, more would have to be cut. No travel, I would have to close the business and we would seriously need to assess if we could continue to put the kids in the American school. We could pay with our savings (we have about 4 months of our expenses in liquid cash) but I would rather find a way to economize instead. I think I am about to start tracking expenses every single cent that comes in or goes out of the house during this downturn. It is time to find those "leaks" and plug them. It is time for me to think about ways to stop spending, but still keep living and repledging to the Compact, albeit in a more modified form(i just couldn't do it full fledged). No, I am not worried about losing my job (I am about to re-sign with the company for another year) but the next year is going to be tough for everyone. This is as good of time as any to relook at our spending habits and think about those who have none.
Oh and as a side note... I don't think America is going to become any more socialist under this administration than it already is...it is just time to have those greedy bastards (my own company probably included) pay more on the money they earn. I sorry, but if you earn 14Billion in a three month period of time... you should probably be able to afford a few more dollars in taxes.
On another note, we may have our one and perhaps only tomato "harvest" this weekend from the kids' patio garden. I will show off the pictures when it happens.