Naked With Cash is the year-long series on Consumerism Commentary where seven readers’ households share their financial progress on a monthly basis. I’ve partnered with financial planners who will offer some guidance along the way. Read this introduction to learn more about the series.
LastDollar’s update this month includes her net worth as of the end of Jube as well as her own commentary and analysis. This is followed by feedback from Neal Frankle, CFP, as well as from budgeting expert Jacob Wade from iHeartBudgets.
Last month’s update described LastDollar’s financial progress throughout May.
Keep reading for this month’s details.
Comments and analysis from LastDollar
The month of June was extremely difficult for me on a personal level. My ten year old spent two weeks in the psychiatric children’s hospital, about an hour and a half from home, so I commuted back and forth daily for my one hour allowed visitation time. With backed-up traffic (visiting hours coincide with rush hour hours), dropping my youngest off with whomever was kind enough to watch him that day, and visiting, and then the return trip and pick up of my youngest — this was about 4 to 5 hours out of every day.
My subcontractors ended up doing the majority of work that I would normally do, which of course means I paid out more than I usually do. On top of that, I got a letter that the insurance company would only cover the first three days of the inpatient stay. I’m expecting a bill of over $7,500 to arrive any day now for the remaining days. On top of all of it, my poor child isn’t any healthier coming out of the hospital than he was going in, so our summer schedule is filling up with outpatient appointments.
Business changes. Our first invoice since increasing our prices for our largest client was paid at the end of June, so they accepted the price increase with no questions asked. It was a small increase per item, but because they have a large monthly volume the actual amount was quite substantial. This extra money helped offset the extra I had to outsource in June, and the difference for July and August invoices should help me get through the rest of the summer with the kids home from school.
We’ve also contacted someone we’ve worked with in the past who is a referrer of high-income projects, and as he is holding a conference in August we should expect to see a few new projects coming our way, because he will offer our services during the conference. In the past, this has meant an average of six new projects with decent income coming our way.
Tax liabilities. I’ve added a line for my estimated 2013 tax liability so I can start keeping track of the money I set aside toward that. Also, I finally set up a payment plan for the 2012 tax liability of $4,800, and that should start being automatically deducted on the 15th of each month. It’s currently only $100 a month, but I intend to send bigger chunks of money whenever I have a higher-income month. That will help me start chipping that away like I did for 2011.
I suppose I’ll be adding a medical line shortly with what I owe for the hospital stay and ongoing outpatient appointments, since he’s used up his insurance allowance for mental health for the year. It is unfortunate health insurance companies put such small limits on mental health care.
Other than that, there is nothing new or worthy of reporting financially. Keeping my head above water, mostly, and as usual it feels like my progress is one step forward and five back as no sooner do I pay something off, I get hit with a new, unavoidable expense.
Feedback from Neal Frankle, CFP
I can only imagine how difficult June was for you. When our children are ill nothing else matters. I understand that this is a major financial setback but mostly wish your child quick return to full health.
Very happy to read about the success of your small business pricing changes. I’m not surprised. You assessed very well and considered this from your clients’ perspective. As a result, you were able to implement these changes flawlessly. Certainly you won’t feel the benefits of this immediately because of your increased costs. But over time this should really pay off. Well done!
Also, I’m impressed that you hired the contractor to get you more business. That’s smart. I’m excited to hear the results.
Last, I’m glad that you are on planning on expediting your tax payment plan and getting out of tax debt faster. That can only be a good thing.
I realize that right now you likely feel overwhelmed. Just when you were moving forward, these hospital bills are going to pile on. But you will get through this too. You are determined and thoughtful. That is paying off now and it will continue to pay off.
Feedback from Jacob Wade
Published or updated July 23, 2013.