Employment entries
Yesterday I promised to give an update on our personal financial situation and how it’s changed over the last half-year.
In November I wrote that we were down to a quarter of our prior income, as Jak’s employer had cut his hours by half just as I’d been summarily dismissed from my full-time job.
I am happy to report that this situation didn’t last long. After just a few weeks Jak was able to ramp back up to 30 hours, and eventually took over a project for a coworker on maternity leave that brought him back to 40 per week. On the down side, Microsoft cut their vendors’ rates by 10% across the board, so Jak got an anti-raise. (What is that, a ‘fall’?)
For my part, I put together a portfolio and spent several months applying for jobs. After the first few weeks, during which I covered the existing backlog, it became apparent that there were hardly any full-time salaried positions available in my field, for people of my skill level. I kept seeing the same dozen or so postings over and over again, and couldn’t break through on any of them.
I had a little more luck on the freelance side. The first big project I got was both exciting and potentially lucrative. Sadly it fizzled very early due to an unexpected change in the client’s circumstance — but at least they did pay me for the work I’d done so far. Then in February I answered a craigslist ad and landed another gig. The down side is a lower hourly rate than I’m accustomed to for freelance, but on the other hand it’s been steady at around 20 hours a week for four months now, and the client pays promptly.
The end of 2008 was cushioned by vacation payout from my ex-job, which carried us through November. December was bleak. But since the first of the year I’d estimate we’re pulling perhaps 60-65% of mid-2008 net income, which is a lot better than the 25% we feared. (Part of this is because I’ve dropped an entire tax bracket, so that even though my gross is much lower and I owe self-employment tax, my net income has fallen less than you might expect.)
On the spending side, we made some large changes. All major house-improvement projects came to a sudden standstill. Vacation plans for 2009 were abandoned. We slashed our Christmas and birthday gift spending to the bone.
Then we pared back the smaller, frequent things. As luxuries go, my biggest weakness has always been restaurant food (and drinks), which typically cost $80-100 per dinner for the pair of us. We cut that indulgence to 1-2 times per month, down from around twice a week while we were both working. I also severely reduced our alcohol purchase and consumption at home. We agreed not to buy any books, music, or movies, making do with the public library and Netflix. Clothes purchases are limited to absolute essentials (mainly replacement underwear).
We’ve had some windfall income from non-work sources. Between the two of us, we received $4800 in federal tax refunds — possibly the only perk to having a lower-than-expected income for 2008. I also sold some reprint rights to my “How to Toilet Train Your Cat” article for an extra $1700. And finally, we’ve gotten a few hundred dollars from online advertising and interest on our savings.
I’ve been able to sock away all of those windfalls, and a bit more besides. Altogether, over seven months, I’ve managed to grow our savings from $30K to $40K, despite our slashed income. In addition, I put an extra $2K this month toward the principal on our second mortgage.
The two mortgages are our only debt, but they’re still crushingly huge. I’ll talk more about that in another post. Otherwise we’re doing quite well, considering. I’m proud of our restraint — I think we’ve done a great job of ‘tightening our belts’ without overreacting and denying ourselves absolutely everything. Swing that pendulum too far and you grow bitter and depressed.
I have no idea how much longer this economic trough will last, but if this is as bad as it gets for us personally I will be ecstatic. Onward!
(Photo by alancleaver_2000.)
Well, here we are, seven months after I lost my job, more than six months since my last update.
My profession and field — and perhaps also, temperament — is such that employment cycles are inevitable. Full-time job to unemployment to freelance to full-time job and around again. Dot-com boom, dot-com bust, economy surge or crash-and-burn, company buyout, change in management … every two or three years something alters my situation, often dramatically.
Perhaps unsurprisingly, I’ve always found it easy to deal with bills and other financial matters during the periods of steady paychecks. More than easy — satisfying, even almost ‘fun’. But when income is sparse or erratic (or nonexistent), it becomes teeth-grittingly difficult, and my tendency is to avoid the subject as much as possible. (This is one aspect of the clinical depression I’ve been battling my entire life.)
In previous low-income periods my avoidant tendencies have caused me big financial trouble. Instead of checking in on the bank account every few days to make sure all was in order, I’d go weeks, sometimes a month or two. Instead of paying the bills as they come in, I’d stack them up to deal with later — where ‘later’ was ‘the last possible minute or maybe a bit after’. Often I’d miss due dates because I simply wouldn’t think about bill paying for weeks at a time. Late fees would rack up and interest rates would soar. Since at the time I was carrying credit card balances — sometimes living entirely on credit for months at a time — the effects were devastating.
I still experience that avoidant tendency as much as ever, but this time around I’m happy to say I’ve kept the effects to a minimum. At one point this winter I got too disorganized and was late on a couple of utility bills, which cost $5 each in late fees. But I’ve stayed on top of everything else: mortgage payments, credit card bill, bank account balances, tax filing.
What did suffer was the detailed expense-tracking that I’d been doing via Wesabe … and Pocketmint. I haven’t touched either of them in half a year. I felt guilty for abandoning the blog, but I had to triage something, and ‘number of personal finance blog posts’ doesn’t show up on my credit report.
I’ve been working my way back to posting again for the last month or two, and here I am at last. Next I’ll update on our financial situation over the last half-year, and where we stand today.
(Photo by Baron55.)
I’ve been quiet for a while, going through a number of struggles that have left me without the — in the vernacular of my childhood, the ‘gumption’ — to keep writing frequently. I’m trying really hard to get the spark back now, because I know in the long run the Pocketmint project is important to me.
Here’s a little of what we’ve been dealing with: about three weeks ago, the big corporate monster suddenly chewed me up and unceremoniously spat me out. By innocently mentioning what I thought was a widely obvious event, I apparently violated some unknown policy of the parent company (the details of which remain vague to this day) and in under 24 hours received my walking papers — no mercy, no appeal.
This abruptly cut our income by half. Then, last week, Jak learned that due to staffing cutbacks at Microsoft his hours will be cut to half-time. This means one-quarter income, and total loss of health insurance.
The bad news is that the mortgage alone on our house come to slightly more than Jak’s remaining half-salary, so we’re behind before we even start. The good news is that the mortgage is the only debt we’re carrying — we paid off the last of our massive credit-card debt a couple years ago — and we have a pretty decent cash emergency fund. I’ve been putting aside at least 40% of our take-home for the last two years; some of that we’ve pulled out again for major house improvements and additional (Roth) retirement funding, but we’ve got almost $30k in cash savings.
We can put off all the remaining house projects and hunker down to the bare essentials, and make it for maybe 6-8 months like this. Hopefully it won’t come to that; salaried jobs may be rare right now but I should be able to pick up some freelance or contract work. And Jak’s employer will be working on his behalf to try and increase his hours again. Right now he’s burning PTO to keep the insurance going through December. We’re trying to make this work, and hopefully something will get better before it all gets a lot worse, but we’re definitely in a new era now.
We had a talk with the kids last night, resetting their expectations about our way of life — we won’t be going out for sushi anytime soon, or ordering pizza; we won’t be funding any more weekend out-of-town trips for Michaela to watch her school athletic teams. They took it pretty well; Claire immediately wanted to know how we could cut our costs. Someone else must have previously explained to her about the connection between lighting and your electricity bill, because Claire instantly morphed into Lightswitch Nazi, turning off every light in the house that wasn’t immediately necessary, scolding all the while. We were amused.
I also made the point, which I hope Michaela at least will remember, that this is exactly why it’s important to save a lot of what you earn for a real emergency. She tends to spend money as fast as she gets it, which concerns me in someone about to turn sixteen. But only the difference between us and all those people with ‘foreclosed’ signs on their houses is going to be our empty credit cards and our emergency savings account.
If you have a job now and aren’t saving most of your money for emergencies, please start. You may think this is an isolated incident, but I fear it’s not; if the collapsing economy hasn’t touched you yet, it will. Be prepared.
(Photo by sunchild_dd.)
The post you’re about to read first appeared here on October 27th, for less than 24 hours.
On the morning of October 28th, while en route to work after a doctor’s appointment, I received a call from the Human Resources director of the company that had employed me for nearly three years. He asked if I had written this, and I said yes (I assume this was a formality — I’d never tried to keep my blog a secret, and my name was right there). He informed me that my post was in violation of company policy, and that I should not return to work. “Why? What company policy?” I stammered, in tears. “Disclosure of company private information,” he replied. I said I was sorry, that I had no idea I’d said anything private, but that I could take the post down. “Everything in this building is private,” he replied, and told me to go home and await further communication.
I went home, immediately deleted the post and emailed that I had done so, with another apology and protestation of innocent intent. The next day my manager called and told me that he’d been instructed to fire me, that there was nothing he could do.
So less than 48 hours after making this post, I was terminated, with no warning and no recourse. The fact that I had transgressed in ignorance, that I was willing to remove the post and not so much as mention the company ever again, made no difference.
I was floored. There’s a substantial argument to be made that I was absurdly naive and I should not have been shocked by this turn of events, to which I can only shrug, helpless. It’s probably true. No matter how hard I work to fit in, I am not very good at understanding, much less anticipating, the corporate mindset; my core personality traits — such as honesty and openness — are not assets in most corporate cultures.
After the first shock wore off, I was thrown into both a panic over finding replacement work and depression over my error of judgment. For a long time I was unable to bear anything to do with Pocketmint because of the emotional association.
Months passed; I recovered my equilibrium. I thought about Pocketmint a lot, and decided that it was too important to me to just abandon forever, and so began to post once more.
And now I’m returning the one post I ever withdrew. I’ve removed the name of the company I worked for and other identifying information; my intent here is not vindictive. I just figure that appearing to desert a blog after only five months makes me look like a flake or a dilettante, and I hope that, knowing the true situation, former and future readers will cut me some slack for the November-to-May gap.
• • •
Working for a financial company during a national (global?) financial crisis is … interesting, in the Chinese-curse sense.
Under normal circumstances, I have little contact with the brokerage side of the business (and none whatsoever with the bank). I do the graphic design for the subsidiary which sells 401(k) plans to small businesses, a nearly unrelated proposition.
For the past three weeks, though, it’s been absolutely crazy. [The company] was receiving nearly triple the expected number of new account applications for the month of October, and up to ten times the typical number of calls to its customer care line. The web site, being pounded mercilessly with people trying to trade, periodically slowed to a crawl, which of course only increased the calls to customer care, and so on.
In order to keep the phone wait times down, the company president called for all hands on deck starting October 6th. Dozens of new phone stations were cobbled together and staffed with employees from other departments. I sat through two hours of powerpoint training, a two-minute explanation of which buttons to push on the phone, and then was turned loose on the poor unsuspecting callers, with no more information than what I could glean on the fly from the [company] public web site.
I gathered later that some of the recruits received more training and assistance than I did, and many were coming from jobs that were more relevant than mine, but my personal position was fairly miserable. No one was asking the easy questions we were prepped to answer in our quick overview, and I didn’t know the answers to the questions they were asking. Nor did I have access to view any customer accounts, which almost every caller required. I felt useless and terrible, repeating my mantra of “I’m sorry, I don’t know, let me transfer you,” and went AWOL from the so-called “[X] Army” as quickly as possible.
As of today, things seem to be back to a more normal state; the emergency phone stations have sat empty all day. Twenty-seven new customer care employees are into their second week of training in the big conference room downstairs. Our saviors!
I don’t have any official confirmation, but word on the floor was that a large majority of the people calling in were trying to buy rather than sell — this also accounted for the high number of new accounts. I find that fascinating, especially considering that [my company] targets mainly inexperienced, small-figure investors. It suggests that a lot of ordinary folk may see the drop in the stock market as an opportunity rather than a calamity.
I hope they’re right. I’ve been doing a great deal of financial study lately, and not finding much cause for reassurance. I am deeply worried that we are making the same mistake about the stock market that we recently made about the housing market — assuming that because something has been true in the past, it will be true in the future. I’ll talk more about that in a future post (or several).
One thing I’m sure of: we are indeed living in interesting times.
A job-matching site which has my resumé on file just emailed me an alert about a new position for which I was supposedly a near-perfect match. I dutifully clicked through and started reading. Job description sounded good, and then I got to the ‘About the Company’ section:
Seattle — home to gourmet coffee, grunge, and thrift banking. Washington Mutual (WaMu), the largest thrift in the US, offers traditional consumer and commercial banking services, including deposit accounts, mortgages and other loans, securities brokerage, and the WM family of mutual funds, through about 2,200 bank branches in the West as well as New York and Connecticut, and nearly another 500 loan offices nationwide. It is one of the largest originators and servicers of residential mortgages in the US, in part through subsidiary Long Beach Mortgage, which offers subprime loans. However, the bank is exiting the subprime business.
Gotta love that disclaimer at the end. Really, if I were to change jobs now it would be out of the financial industry altogether, not from a relatively stable bank to … yeah.
WaMu, you can have my savings for as long as I don’t need it, but I draw the line at my paycheck. Sorry.
