This month is Insurance Month in the series Naked With Cash. Each month, seven Consumerism Commentary readers anonymously share their financial reports to gain insight about their progress towards their goals. 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 her bio. LastDollar is on Team Neal, with Certified Financial Planner Neal Frankle.
LastDollar’s update this month includes LastDollar’s net worth as of the end of March, followed by her own commentary and analysis. Neal Frankle, CFP joins us to share his thoughts.
This month, the Naked With Cash participants are discussing their taxes as a focus within their monthly financial status updates.
Comments and analysis from LastDollar
March was more of a struggle compared to February. Some of my clients paid early in February, which was great because I was able to pay for everything on time, but it’s a double-edged sword. It also meant March would have a lower income unless I found new clients in the meantime. In March, just about all of my recurring clients were paying late. You’ll see an inflated amount as my cash balance in March -– this is only because some payments came in at the last second of the end of March, and I hadn’t yet used it to pay bills while creating this update.
In April, I will play catch-up for anything that wasn’t paid in March and hopefully keep up with what is also due in April so I can enter May on-schedule.
It’s tax season. My paperwork is currently with the accountant and should be completed this week. Then I’ll have a better idea of what I owe. I expect to owe; I haven’t gotten a refund in years because I don’t always keep up with the estimated tax payments I should pay. I;m still paying for 2011 taxes on an installment plan as well. I know I need to get better at setting aside money from all income I receive to put toward taxes, but it is really difficult to do when I have things that are due right now, or things that are late and will be shut off if they aren’t paid right now.
I’m not really sure how to get past this; the more I earn the more I owe in taxes, yet if I set the income aside for taxes more of my bills will go late or unpaid with the money sitting in the bank.
I had to pay $400 to the oil company this month. That did not go against our back balance or the monthly payment plan and wasn’t planned for. I’m supposed to send them $360 a month on the budget plan, but there were a few months that I didn’t do that. I would get caught up, then fall behind, get caught up, fall behind, etc. I currently owe the oil company $846, so when I run out of oil now I need to pay for the delivery when it arrives. (They won’t let me add to the balance or extend me additional credit until it’s paid off again.)
In March, I needed to get two deliveries of 50 gallons each, which was $200 each time. They told me the average family would last only one week with the temperatures here, but I’ve been able to stretch 50 gallons over about two and a half weeks by freezing our butts off!
Anyway, that was an extra $400 going out in March I really didn’t plan on just to keep hot water and minimal heat in the house so the pipes don’t freeze. It’s still freezing in New York as I write this. I’m hoping it warms up in April so I can get that balance caught up before winter hits again!
Feedback from Neal Frankle, CFP
Thanks for your response. I am sorry to hear that March was a difficult month. I understand that the cash flow associated with being in business for yourself can be a big challenge at times.
Here is the overall take-away from your update. You are working very hard but still struggling. The common thread is budgeting. This is nothing you don’t already know. I don’t get a sense that you spend like drunken sailors at all. But we need to get you back to an even keel. In a perfect world, I’d love it if you could pay off your credit cards and tax liability for starters.
How to do that?
The approach that comes to mind (not knowing you all that well) is to:
- Take massive action to bring in additional revenue through a part-time job.
- Refinance your debt with family.
I know both of these are difficult and they may seem impossible. But what you are doing now doesn’t seem to be as effective as we’d like. Bottom line -– and this may sound more harsh than I mean it to -– but are you willing to live with the current situation? If not, and if you don’t do anything differently, do you have any reasonable expectation for a change to come about? If you answer “no” to the prior two questions, the remaining question is, what are you willing to do differently?
Published or updated April 23, 2013.