Naked With Cash is the year-long series on Consumerism Commentary where seven readers’ households share their financial progress on a monthly basis, and February is “insurance month.” I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.
JW is thirty-one years old and a father of one with another one on the way within a month. He works in retail and is underemployed, and his wife and son are on state medical plans, and their income is supplemented by SNAP (food stamps). Read his bio for more information about his family’s situation.
His goal is to be able to provide for his family while still tithing 10% of his income to his church. JW is on Team Neal, with Certified Financial Planner Neal Frankle. In today’s report, JW discusses his progress throughout the month of February.
JW’s comments and analysis
Taxes. Our tax refund came in pretty close to the start of the month. With taking some time off for the baby, part of the refund covered the loss of normal income. Other spending from the refund is highlighted below.
Student loan. Our biggest spending this month was towards the student loan. We made a $1,500 payment from the tax return. This replaced our normal payment of $150 for the month. The minimum payment is $65 on my wife’s loans. Mine are in an Income Based Repayment (IBR) plan with a payment of $0. This last month we filed the IBR paperwork for the next year. We have not
heard about the payment amount on mine going forward, but we expect it to remain at $0.
We could file IBR paperwork for my wife’s loans, but because we are paying them in advance we have chosen not to file for an IBR plan on these.
Baby. Our daughter was born on January 29, weighing 5 pounds, 3 ounces. Through gifts and hand-me-downs we had plenty of size zero-to-three month baby girl clothes. They were all very large on her so we needed newborn and preemie sizes. We picked up a new dresser and a pair of birthstone earrings for mom as bigger ticket items. We purchased bottles, diapers, breast milk pumping and storage items, and additional clothing. We had planned to spend a total of $1,350 towards baby expenses, but we only spent $1,073.
Car. We needed to have our brakes serviced. The initial estimate was around $400, so we planned to spend $500. We took the car in and had the rotors resurfaced. The rest of the brakes were still in good shape. The final cost ended up being $120. Since we resurfaced the rotor instead of replacing the brakes, they will still need replaced somewhere around 15,000
miles instead of 25,000 miles. With the lower bill I ended up using fewer vacation hours instead of moving those savings to another area.
Food. Our total food budget was still in line. We ate from restaurants and fast food more than we planned and compensated by buying fewer groceries. In meal planning toward the end of the month this required stretching the groceries a little more. Our total spending was a few dollars under the $250 budget.
Upcoming expenses. This month we will get our piano serviced, which includes repairing the keys and tuning. We expect this to cost about $200. We have $275 set aside to get this
done. We have been saving toward this goal since November, building up the funds slowly. This needs to be done before my wife can begin teaching piano again.
Feedback from Neal Frankle
First, congratulations on your beautiful baby girl. What’s her name? That is really wonderful. I can’t wait to see picture. I’m serious!
I liked reading your update because you come across as someone who really is staying on top of the family finances and understands how important it is to watch the spending. Kudos.
You reported about the need to tune the piano as a means to get your wife back teaching lessons. This is a wise investment, of course.
I looked back at your first post and you spoke about “underemployment.” I think your career is your greatest opportunity. I know that you’ve been budgeting your money but are you budgeting your time well?
Generally speaking, people find it easier to get promotions and pay increases by moving to a different company. I believe your best opportunity right now is to create a strategy to maximize your earning potential.
Step 1. Create a list of potential employers.
Step 2. Network with friends and colleagues including using social media to uncover career opportunities.
Step 3. Interview connected individuals. This is a process by which you will dialogue with people in your industry to learn what different companies are looking for. Don’t ask for a job – or even a job lead. The people you interview will volunteer this information eventually.
Step 4. Follow up with the people you meet with and let them know about your progress.
Based on what you’ve shared, the best opening you have to get to the next level is to pump up your income. I am convinced that spending cuts are not going to be as significant at this point. For that reason, I suggest that you calendar time each day -– maybe 30 minutes –- to work on your job search.