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LastDollar January 2013 Net Worth

This article was written by in Naked With Cash. 18 comments.

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.

LastDollar is thirty-three years old, an entrepreneur and single mom with two children with learning differences in private school. To learn more about LastDollar, read the bio published last month in advance of Naked With Cash. LastDollar is on Team Neal, with Certified Financial Planner Neal Frankle.

In this month’s update, LastDollar adjusted some of her previous numbers. So if you read her previous update, where she wrote about her progress through the month of 2012, some details below might be different. Her January 2013 update discusses her financial progress during that month, with a table that shows her progress over the past few months. LastDollar’s own analysis will be followed by feedback from Neal Frankle, CFP, and budgeting expert Jacob Wade from iHeartBudgets.

Keep reading for the details.

Neal Frankle, CFP appears courtesy of Wealth Pilgrim and Wealth Resources Group.

Comments and analysis from LastDollar

I had to make some adjustments to numbers reported previously, as I discovered I made a few mistakes (literally missed some accounts that should have been added into the numbers). I feel like I finally have it all documented now!

In January, I worked the part time job all month and realized it’s costing me money to do it. About $2 a day to be exact, after I factor in my new babysitting expenses required to get there and the increase in gas for the commute. On non-school days however — school vacations, snow days, holidays, and summer — it would cost me $30 to $40 per day to keep this job. Needless to say, I have an appointment to talk with my supervisor either to put in my notice to quit or to give them the option of allowing me to do the work from home.

This month I paid more than my monthly payment for my car loan because I have a few hundred dollar back balance I’m trying to pay down. Plus, I had to send them more because they were starting to call looking for the money.

I made a double payment to the IRS for 2011 taxes because I missed November. This puts me back on track to pay $150 a month toward the total obligation for 2011, but I’m terrified to do my 2012 taxes and see how much I owe since I’m not done paying for 2011!

Insurance. I mentioned I have a $50,000 whole life policy that I got when I was 19 years old and a $100,000 term life policy to help my kids if I should go before they’re adults.

Neal asked if that was enough insurance, and the fact is I’m sure it isn’t, but I don’t see how I can pay for more insurance “just in case” when I’m struggling to pay for our current expenses today. The reality is, if I die, the kids would then go to live with their father. It would be up to him at that point to make sure their needs are met and the $100,000 policy should at least help get them through until they are adults. I hope.

My biggest concern as far as insurance goes is my lack of health insurance. From time to time, I look to see what it would cost me to get health insurance in New York as a self-employed individual, and the rates are outrageous. Not only are the monthly premiums high, but they have high deductibles and don’t cover vision, dental, or prescriptions at the lowest rates. At the higher premiums, the deductibles are lower and you can get limited dental, vision and prescription coverage, but there is no way I could afford to pay for it.

I go to the doctor once a year and the dentist once a year and pay for it out of pocket, and it has worked for me over the last six years, but it’s always on my mind. I don’t know what I will do if I’m injured or get really sick. I just don’t know what I can do to fix the situation.

Feedback from Neal

It’s great that you looked into changing your work situation and have taken action around it. Nice job! What other alternatives do you have to earn more? Have you had a chance to look into other options?

The pattern I see with paying down your loans and IRS debt is that you are working very hard and trying your very best, but are still a bit behind the eight ball. You got a little behind on the car payments and the tax payments. And, if I understand correctly, you have not made payments on 2012 taxes. OK. So this isn’t going to be easy to turn around but I’d like to really focus on this. The only way to do this is get ahead of the game.

I’d like you to think about how you can get a little bit ahead. I want to really push you to build up a fund so you have the money to pay for the car and the taxes and other expenses that come out of left field sometimes.

This won’t be easy –- I get it. But if we want to push the ball forward, that’s what has to be addressed. Maybe once you speak with your supervisor maybe you’ll get a raise and that could help address this challenge. Whatever you have to do –- you know better than anyone else. But in order to improve your finances, this problem must be resolved.

Your strategy on life insurance is understandable but not optimal. I wonder if it makes sense to cash in the whole life policy and use the cash value to pay off debts and then use the saved premiums to purchase more term.

I get what you’re saying about health insurance. This is indeed very tough. However, I would again suggest that you consider looking at the possibility of finding work with an employer that offers health insurance. In this day and age, I do not personally feel that going without health insurance is an option. It has indeed worked for you so far but it’s just not prudent.

Feedback from Jacob

I’m sorry to hear that the part-time job didn’t pan out. I would suggest exploring other options for earning an income form home online. Being in the personal finance community, I have seen other bloggers get paid for doing online surveys, freelance writing, being a virtual assistant, and many other methods. Heck, my sister even gets paid to do “mystery shopping,” which might be kind of fun, who knows! But most of all, I would try not to get discouraged with the job not working out, and approach your supervisor with a plan for you to work from home. If you show that you want to do the job, and have a plan to do it from home, it may just work out.

As for your taxes, I would suggest doing them just to see where you are at, but you might need to file for an extension at this time, until you have paid off your previous obligations (hopefully before April 15th). And remember, if you do owe money for this year’s taxes, it’s due on April 15th, even if you do file an extension.

I saw your reply from last month about the rotating schedule for paying off bills. I do agree, it’s probably easier to keep collectors at bay than to stop paying, but at some point, you may need to make the choice at some point. If you have to, I would start with the credit cards, because they can’t turn off your lights!

I do wonder, how much would you say your car is worth? If it’s worth more than you owe, an option could be to sell (private sale, like Craigslist or newspaper), and then get a good, reliable used car with that leftover money, and be done with the debt. Just an option to think about, though I know it is more difficult if you don’t have access to any other transportation while looking for a new vehicle.

I know it’s hard to think about creating a budget when you’re behind on your bills, but it’s essential to see all the dollars coming in, and where they are going. If you would like me to put together a budget for you, just connect with me on my contact page. I’d love to get into the details and see if we can come up with some ideas to help sort things out and get ahead of these bills. Or you can share with the readers here on your next update and we can work it out then.

Again, thank you for sharing and I commend you on your hard work and dedication to care for your kids.

Published or updated March 1, 2013.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 18 comments… read them below or add one }

avatar 1 Anonymous

Just one quick thought, it may indeed be worth cashing in your whole life policy and getting rid of that monthly expense, but also putting that lump toward something you need. Whole life generally isn’t a good deal, and I understand wanting to stick with it since you’ve already paid so long.

I too bought whole life at 19. It was a high pressure thing and I didn’t know any better. I I cashed it out a few years later and got a term policy and had some money from it.

It may not be the right decision for you, but I do think it’s worth looking at the monthly expense, and how much you could get out of it.

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avatar 2 Anonymous

Thanks…. I took the cash value in the form of a loan (which I don’t really plan to pay back and they said there is no penalty not to pay it back) not that long ago and it was a whopping $2,500. I guess if I surrendered the policy there might be more money coming back to me?

I also have a term policy that I got about two years ago.

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avatar 3 Anonymous

Yeah it really stinks as an investment. Especially with the loan, it is probably decreasing your cash value for the long run. They should be able to give you more info. But when you look at your other monthly expenses, this one just isn’t giving you a good bang for your buck. Might be good to just cut and run.

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avatar 4 Anonymous

Neal, one of your comments really jumped out at me and is the same thing I’m always trying to explain to people who don’t get my situation :)

“However, I would again suggest that you consider looking at the possibility of finding work with an employer that offers health insurance. ”

Let me explain why that won’t work. I have two kids, and if I work outside the home, I have to pay for babysitters before and after school, and full time days on school vacations, school holidays, snow days, and all summer. The kids are home more than they are in school during the course of a year, which means the costs for daycare/babysitters is a 5-day a week expense that combined with commuting expenses (which I do not have at this time) will eat any income I would earn from a job. They also get sick or have appointments, and the only person who can take them is me – which means I would be calling in a LOT – and that would make it difficult to even keep a job…

I have looked at this repeatedly over the years, mostly for the health insurance, and every time I compare starting salaries to the expenses of being a single parent, it is not financially possible for me to get a job. I did try to do a part time job just as a way to get out of the house a little – but it ended up costing me money AND too much time lost from my business (which does earn money).

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avatar 5 Anonymous

Thanks Jacob. I have a full time business from home and earn more than I would in most jobs I could get right now. My income is decent over the course of a year, but it doesn’t come in as consistently as I would like (every Friday for example) so it can make planning difficult. While my income is reasonable, my expenses are too high. I realize I’m living outside of my means more so than I’m not “making enough money” – my biggest expenses are housing, utilities, and my kids school tuition (no, they can’t go to free public school). For example, I pay $7700 a year for my kids to go to a school that meets their needs. This is living outside our means, but it’s a non-negotiable expense. Our mortgage/school/property tax payment is $1280 a month (before we bought the house, my rent was $1,000 a month for a 3 bedroom apartment, so I didn’t think it was that much of a jump. The bigger issue with it is the utilities and maintenance costs of a home compared to the apartment)

As for budgeting, I’m using YNAB right now, and it’s really helping me keep track and see how much money is coming in and where it’s going to go. I used it all through February and plan to continue using it. I’m hoping that will help. I’m also almost done paying for tuition for this year, which means I’ll get a slight breather until tuition payments start up again. Do you think looking at my YNAB account would be useful? I know the goal with that is to get a month AHEAD on payments and live on last month’s income – but realistically I need to get caught up first, THEN work on that.

And again – I’ve still got fingers crossed to hear from one of my clients in the next month regarding a salaried position that would double the income I earn each month – while continuing to work from home. That would certainly turn things around rather quickly!

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avatar 6 Anonymous

Not sure how much in taxes you’re paying, but the mortgage sounds high to me given the balance. Is a refinance an option at all? Forgive me, I forget if you mentioned that in the past.

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avatar 7 Anonymous

Hi Anne&Matt,
Thanks for all your comments this month :) Does the mortgage seem high? I just bought the house 2 years ago. It’s got the taxes in the payment and the homeowners insurance right in the payment… I know our school taxes went up both years I’ve lived here, so that is probably why the payment is so high? I doubt I would be approved for a refinance, not really sure how I was approved to buy!

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avatar 8 Anonymous

Oh duh! I didn’t even think about taxes and insurance in the payment. I bet it’s pretty reasonable, then. Still, rates are WAY lower than they were 2 years ago, and if you could refi, that would be amazing.

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avatar 9 Anonymous

Understood. Thanks for clarifying.

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avatar 10 Anonymous

One other thing. If you get to a point where you can afford health insurance, know that you can deduct those premiums from your taxes. I was able to use my very small business income and deduct our private insurance from my profits, since we don’t have employer health insurance available.

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avatar 11 Anonymous

Also, does your kids’ school offer discounts or scholarships or anything? Could you take on a part time thing there to help with tuition?

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avatar 12 qixx

This sounds like one of the best options for making extra without adding childcare costs. If not their school another school could be an option.

A few notes on some of the standard work from home options i have done in the past. Mystery shopping pays so little that many people who really get into it and track all their expenses doing it actually lose money. Was that way for me and a sister of mine. Online surveys really depends on the company doing them. Many don’t pay cash but have a variety of gift card options. Almost all have Amazon gift cards. I average around $2 an hour from surveys but still do them because i like to.

For freelance/virtual assistant positions i have used with good success. Unless you really try to get job after job on there the work will be sporatic. Most jobs are 1-2 months completion time for computer programming. Have not looked at the other jobs on there. I have also never used any of the competitor sites.

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avatar 13 Anonymous

Awesome advice :) I have a business I run from home as a freelance writer – and I even have a few writers working for me on a contract basis to help me keep up with deadlines. I also started out years ago finding work on sites like – right now I actually have more clients that I can comfortably handle on my own, so even though I sound like I’m poor and complaining, I’m not! I just have ridiculous expenses and the income comes in sporadically so it’s really hard to manage it :) If only everyone I owe money to would just realize I pay them when the money comes in, and their due dates don’t mean anything if I haven’t been paid yet ! LOL

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avatar 14 Anonymous

We get a $10,000 a year discount on the tuition – but I run their website in exchange so it reduces the tuition payment, but I’m basically working it off. Still helpful!

Health Insurance where I live is about $1200 a month for a high deductible plan; it does not include prescriptions, vision or dental! WTF does it cover then, you ask? Beats me. I think it is just in case I have to go to the hospital.

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avatar 15 Anonymous

$1200/month is insane! I was able to find a lot of options on ehealthinsurance for my husband and kids. Their end of it is just under $200/month thankfully.

We have no vision, since without a good employer-sponsored plan it’s basically like pre-paying rather than something discounted.

We do have a private dental discount plan for around $12/month for our whole family. If you go through a preferred provider, you’ll pay less. The dentist agrees to certain lower rates for plan-holders. It has saved us a LOT. It’s through Careington 500.

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avatar 16 Anonymous

Anne & Matt,
YOu inspired me to do some new digging since it’s been a year since I looked. There are some new plans but …

One is a $1250 deductible before it kicks in at $302.74 a month. Individual plan. I don’t spend $1200 a year at the doctor or on prescriptions, so it seems like this just becomes an annual expense of $3600+ in case I go to the hospital. I did see a hospital-only plan for $165 a month.

or $685 a month for a plan that doesn’t cover office visits,at the primary doctor. (what? I never heard of such a thing) but has no deductible.

I understand why health insurance is important and I have hated being without it, but with money being so tight, I feel like these plans are still out of reach.

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avatar 17 Anonymous

I think it’s great that you took the time to look into it again to see your options! Now you’re more informed. Yay!

The $302/plan with that low deductible sounds like the better one, but I agree, it’s still probably too expensive.

My son had to go to the ER in November. Just got the bill. It will be $1800. What. Our deductible is $5k unfortunately.

No idea if this will get better or worse come next year. I’m thinking worse :(

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avatar 18 Anonymous

The hospital-only plan is definitely more affordable. And remember, you deduct the premiums from your income for tax purposes so that helps the tax situation some.

Maybe on down the line when you’re ready to get some sort of policy, something like that could be a good option to protect you from expensive ER visits or an overnight stay or something?

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