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avatar You are viewing an archive of articles by Smithee. Smithee formerly lived primarily on credit cards and the good will of his friends. He is a newbie to personal finance but quickly learning from his past mistakes. You can follow him on Twitter, where his user name is @SmitheeConsumer.

Smithee


This article is by Consumerism Commentary staff writer Smithee, who is juggling about a dozen clients and creative projects as a freelancer.

It’s been a year since I was laid off and decided to become a full-time freelancer, and it’s been six months since my wife and I made a risky decision to move the family from Dallas to San Diego. Overall, we think moving was the right thing to do, but there are a few things keeping me anxious.

I’m writing this update from the Starbucks near the house we’re renting in San Diego, because Starbucks has air conditioning, and the heat and humidity in the house were too difficult to ignore. The good news is that today is only about the tenth day that it’s been too hot in San Diego since we moved back in April.

Productivity

As I hoped, moving to a place with nice year-round weather has had a good effect on my ambition and productivity levels. Some people like warm weather, but I found that Texas’s six-month-long summers would infect my outlook and attitude, creating tense and downright depressing work relationships.

In addition, working for myself means I can create my own hours and I’m not suffering from road rage or dealing with the rising gas prices. To be fair, though, San Diego’s rush hour is literally only an hour long, which is a level of sensibility I never saw in New Jersey, Seattle, or Dallas.

Most days I even have enough time in the morning to sit down and eat breakfast outside, which is part of my American dream.

San Diego at Night

Moving is expensive

Including fixing up the old house, packing, storing and moving all the stuff, animal medicine and drama, paying an agency to rent out our house in Dallas and $4,600 for the first & last months’ rent plus a security deposit in San Diego, moving wasn’t something we could do with cash on hand. We’ve created over $10,000 in credit card debt for the privilege of living somewhere better, and it almost always seems like the right decision.

Long-time readers might remember that I spent over a decade with thousands in credit card debt, before I finally buckled down and, with the help of a respectful salary, wiped it out over about nine months. I hate credit card debt, and knowing those balances are out there building interest against me causes some anxiety. The silver lining is that the “San Diego debt,” unlikely my legacy solo debt, is something that my wife and I are both contributing toward reducing, so it should go away that much more quickly.

The best part about our move (financially speaking) is that we’re saving at least $200 a month on air conditioning, which is the same amount more that we’re paying for housing. If we didn’t have to spend so much on rent deposits and agencies, it’d basically pay for itself. Over time, it will.

Debt reduction strategy

We’re not really reducing debt in a meaningful way, yet. At the moment, my wife has the big dependable salary. My work sometimes generates large paychecks, but freelance work is not reliable, so I’ve been spending more time finessing and futzing with each month’s household budget instead of putting payments and savings on auto-pilot.

I’ve been using the 50/30/20 guideline, and in the months where I have large freelance income, we’re able to save quite a bit. I know what I’m supposed to do is keep saving until we have three months’ worth of emergency savings available, or put it toward credit card debt and then build emergency savings.

What I want to do is use it to pay off the car loans early. One is on a schedule to expire in January, and the other one in June of next year. They add up to over $1,000 a month, and unlike the credit card debt, they always require the same regular payment amount, or else bad things happen.

In fact, once the car loans (and the old IRS installment) are completely paid off, we could fulfill all of our “needs” (the 50 part of 50/30/20) with just my wife’s salary. If things go the same way they have been, and if there aren’t any expensive emergencies, isn’t it smarter to free up $1,000 a month for saving or debt payments?

That’s the trick, isn’t it? You’re supposed to assume there will be emergencies that require you to have saved up a lot. I’ve never had that much saved in my life, but I’ve also never been hit with a truly expensive emergency, and I am impatient to be out of debt.

Photo: robsettantasei

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Change of Plans

This article was written by in Family and Life. 36 comments.

This post is by staff writer Smithee, who may just be the financial opposite of Flexo.

You’re going to think I’m crazy. At the very least, you’re going to think I haven’t learned how to live a financially responsible life. I’ve written here many times about my struggles with just making ends meet, and for a while, I thought I was in the clear. Last Spring, after thirteen years, I forced myself to pay off my credit card debt, and by the time August arrived, I was finally saving money in earnest. Then I got laid off the very next month, and since then, things have been unpredictable at best.

So, I’m 35 years old with less than one month’s worth of emergency savings. My wife and I are living off of her salary and my Unemployment income. What better time to move from Dallas to San Diego, right?

The short version of the long story

In 2002, I was living in Seattle and loving it, even though I was broke and living in a clean version of squalor. I moved to Dallas to be with a woman I loved, who dumped me within 72 hours of my arrival. I was stubborn and even more broke, so I stayed. I eventually met a different woman and we have a happy marriage, but we don’t like Texas. I’ve been here for about 8 1/2 years. Dallas has been very good for my career, and I like all of my friends here, but this part of the country doesn’t suit us. We visited a friend in San Diego a couple of years ago and fell in love with it.

My wife does some very specialized work with accounting software, and there are only a few people in the U.S. who have comparable skills and knowledge, so she gets a lot of attention from recruiters. She’s been unappreciated at her current employer since the beginning, but because of her contract, she can’t easily go to work for one of their clients, or most other places in Dallas / Fort Worth. Another state like California, however, is wide open. She followed a San Diego lead from a recruiter on a lark, and against expectations found the job offer tempting. Last Friday, she accepted the offer to start work there at the end of February.

Wisdom versus happiness

As I wrote for Consumerism Commentary and read more about personal finance, I came to the conclusion that my family isn’t going to follow a standard plan toward retirement. Given our ages and non-existent savings, we’ll never catch up by having normal careers and saving modest amounts. It’s simply impossible. The only advantage we have is that we don’t have children, and unless something radical happens in our brains and we decide to adopt, we won’t have children.

If we ever want to retire, the only available option is to “make it big” somehow. We both want to be successful in some corner of the entertainment industry. In her heart (and on her hard drive), she’s really a writer. As for me, I’ve been trying a little of everything, trying to figure out what I’m good at and trying to build an audience.

Then again, maybe we won’t ever want to formally retire. Maybe we’re the sort of people to work especially hard for eight months then take four months off every year. At this point, anything is possible… except for the normal plan of starting work out of college and saving every year until you’re in your 60s and coasting until death.

The new plan

All of the above is a rationalization of our decision to incur some significant credit card debt again, before finding a way to crawl back out. I don’t see a way around it. My wife has a set date she needs to be in San Diego working, and I need to follow her there as quickly as I can in order not to have two sets of monthly payments. I want to do this with the minimum of impact on our credit scores, but I am sure they’ll take a downward turn. I just hope it’s more of a stroll than a free-fall.

Photo: kimrose

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This is an article by Consumerism Commentary staff writer, Smithee.

This article assumes that some people smoke and some people don’t. It won’t address the notion that smokers shouldn’t smoke, and I hope you will also avoid that controversial viewpoint in the comments below.

People are vaporizing all over town, but don’t worry, they’re doing it on purpose using a “personal vaporizer,” also called electronic cigarette or e-cigarette. These are basically just alternatives to the normal cigarettes you and I have known about all our lives. An e-cigarette is made of plastic, has a battery, is re-usable, and lets you decide what to fill your mouth with.

If the advertising is to be believed, this is a product which doesn’t rely on smoke, or fire, or tobacco, not to mention dozens of foreign toxins normally found in cigarettes, for example, tar.

So how would this affect a smoker’s finances?

It’s almost certainly less expensive

E-cigarettes use cartridges to store the liquid that gets vaporized into your mouth when you take a puff. A cartridge is equivalent to about 10-12 normal cigarettes. Taking the low end of the estimate, a cartridge lasts about as long as half a pack. Assuming a pack of cigarettes costs an even $5.00, and you can get five e-cigarette cartridges for $9.00, you’d be saving about $1.40 per “pack” if you switched from regular cigarettes to the electronic variety.

Some models don’t use disposable batteries, either. You can get one that plugs into a USB socket in order to charge it.

It’s almost certainly less offensive

As an added bonus, smokers don’t have to smell bad to non-smokers anymore. The cartridges come in countless flavor varieties. You can even mix them if you want. I’ve been in the room with many of them, and none of them smell even five percent as bad as normal cigarettes do. Of course, part of that might be due to the vapor traveling less far than smoke would. It might still get on your clothes, but at least you can choose to smell like bacon, or vanilla, or chocolate.

Furthermore, you won’t be needing the ashtray in your car, anymore. Your occasional passengers will appreciate this a lot more than you know.

I personally think it might even be okay to allow e-cigarettes into restaurants and other public places. It’s really that inoffensive.

Is it healthier?

Nobody knows for sure, though most companies are making bold claims about the health benefits of switching. There haven’t been many studies done on the numerous providers of e-cigarettes, or more specifically, the e-liquid that makes them work. Some countries have banned them altogether, but those decisions may be political as much as anything else.

Recently, the U.S. FDA sent letters to five different providers about how they’re not in compliance with the law, and explaining the pathway the FDA intends to take toward proper regulation of this new product. Maybe in the near future e-liquid will also come with enormous, purposely ugly warnings about the dangers of smoking, which other countries have been living with for years, but which is brand new to the U.S.

People do seem to agree, though, that moving from regular cigarettes to the electronic variety brings back one’s sense of smell and taste.

There’s no timer

Since an e-liquid cartridge lasts about as long as half a pack of normal cigarettes would, it’s much more difficult to tell when you’re done smoking. Someone who switches to e-cigarettes as part of a plan to quit smoking might actually end up ingesting more nicotine in a day than they used to.

In order not to overdo it, a person would have to start exerting a new kind of self-discipline, which is always difficult.

Conclusion

I’m not a smoker, but unless some new damaging evidence comes to light, I have to conclude that compared to the paper kind, electronic cigarettes are better for your body (if only just your sense of smell), better for your non-smoker friends, better for the environment, and better for your wallet.

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Last Thursday I lost my job without any warning. The small web design agency I was working for lost a couple of big contracts and they decided they couldn’t afford to keep me on as their only full-time User Experience Designer. This is extremely frustrating, not only because I liked most of my co-workers and felt like I was doing good work a lot of the time, but mainly because I had just finished paying off my credit cards for the first time, ever.

I was just learning what it was like to walk around without worrying about paying all my bills on time. I was about to start seriously saving money and/or paying down loans faster than expected. I was going to be in a position to be more than a couple of months away from homelessness. I was stable, and I had plans. I have mentioned here on occasion that in addition to my own foolishness, something external always got in the way of my intention to be free of debt. Exhibit A: Jobs Go Away.

I’ve never worked for the same company for more than two years. Either I’d get bored, or move across the country, or the company would be acquired… okay, there was one time I was legitimately fired. The boss and I couldn’t agree on how to run that company. I was two months away from finally achieving this small milestone at the place that just let me go. It’s fortunate that in the web design industry, nobody seems to care much about longevity, but it’s personally annoying.

My brand new ex-employer sent me away with a one month severance package. Even just typing that phrase made me a little nauseated.

But the most frustrating thing of all is that in looking at our household budget, there aren’t many opportunities for cutting back. The only luxury item that we pay for monthly is lawn maintenance, which doesn’t happen in the Fall or Winter, anyway. At $10, Netflix is negligible, and the only other change I could make would be to sell one of the cars, which would seriously hamper my ability to pick up another job. From my experience buying and selling cars, I’m pretty sure that selling a 2006 Prius in favor of a cheaper car would somehow end up being more expensive.

Okay. Deep breath. All is not inevitably bleak. Two more paychecks should be enough to get us through the middle of October, and I’ll have eight hours a day during which to look for a new job. There are still jobs out there. I’ve been applying and talking with people and I have a lunch meeting set up with an old co-worker who knows I’m smart and good at what I do. Hopefully, we’ll both like what we hear and I’ll be able to pick up another paycheck before things start to deteriorate.

I’ve filed for unemployment, which I’ve never done before, even though I probably should have in previous situations. I’ve updated my résumé and online portfolio. I’m going to refresh my Monster.com profile every morning and look for industry jobs in all the places I can find.

Aside from that, do you have any job search advice? I am seriously worried.

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Don’t Like That Political Ad? Click On It.

by Smithee

I recently learned of a sort of fun game that you can play with the political establishment, regardless of whose ideas you want to be represented in Government. Maybe it’s the websites I frequent, but it seems like I’ve been seeing advertisements on many of them on a regular basis for more than two years. ... Continue reading this article…

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When Does It Make Sense to Pay More For Quality?

by Smithee

My brain is slowly re-wiring itself now that I’m finally free of credit card debt, and I’m wondering about things that I never seriously considered before. I remember many years ago talking with a friend who tried explaining to me that it made sense to spend $600 on a pair of shoes, if they were ... Continue reading this article…

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I’m Tired of This IRS Installment Agreement

by Smithee

Now that I’ve finally gotten my credit card balances down to zero, I’ve been trying to figure out the best use of the extra money I’ll have in my checking account. Options include: make extra car payments, put it in a savings account, put it in a mutual fund, make extra house payments, make impulse ... Continue reading this article…

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My Credit Score is Stuck at Good

by Smithee

I am a supporter of Credit Karma, a free service that shows you your TransUnion credit score, among other things, as many times as you want. Lately it seems like it hasn’t been working. It’s been reporting a FICO for me of 732 since March, and I’ve made what I feel are dramatic differences to ... Continue reading this article…

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Should There Be a Limit on Copyrights?

by Smithee

I have a poll that I’m hoping you’ll take part in. Current U.S. law says that copyrights on most creative works (songs, movies, books, etc.) are valid until 70 years after the author’s death. It used to be 50 years, but when the 50 year mark was approaching, it was extended another 20. There’s no ... Continue reading this article…

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More Professional Collateral for Free

by Smithee

Many of us who want to earn more money have side jobs, or a flourishing freelance business or two. We want our customers and clients to take us seriously, but first impressions are often ruined by amateur—or even bad—graphic design. Unless you hire a designer, you’ll never get the constructive criticism you need in order ... Continue reading this article…

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