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LastDollar March 2013 Net Worth

This article was written by in Naked With Cash. 9 comments.

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.

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

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:

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.

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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 .

{ 9 comments… read them below or add one }

avatar 1 qixx

I see Neal suggest refinance your debt with family. Have you ever looked at a consolidation loan or a personal loan that you happen to use for debt consolidation? What was your experience and outcome? If family is not an option i am fan of peer-to-peer lending. Also what are your thoughts on leaving some bills to sit such as credit cards (not irs or heat/food) and they get nothing until you get other debts completely paid off?

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avatar 2 Anonymous

If you don’t pay the minimum on your credit cards, the rates could skyrocket, making it SO much harder to eliminate later

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avatar 3 qixx

Sometimes even a late payment sends the rates through the roof. What rate are you paying now vs what the jacked up rate is might not be much of a change (at 18% max 26%) vs could be a ton (at 8.24% max 32%). Numbers pulled from my current cards. I figure it could be worth a look.

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avatar 4 Anonymous

I have done this before, skipped payments on lesser important bills to make a dent in more important ones… and since like you say – I’m already paying the highest interest rates anyway since I rotate who gets a late payment when the money falls short. The first time you’re late on one card, all the cards get the higher penalty rate. So, I’ll think about this moving forward as I try to figure out what I can do to make changes.

I don’t have family who can consolidate debts for me, and I would most likely be unable to borrow from any source (including peer-to-peer) at the moment.

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avatar 5 Anonymous

To me, it sounds like you are just barely treading water. It would be interesting to take a look at your cash flow. Is there any opportunity to generate a little more cash or decrease expenses? Could you take on a roommate for a few months? Would it be possible to charge more for the work you are doing? Perhaps a lawyer or law student would help you for free to see if you can get some of the private school tuition paid or public school problems solved? On a more drastic level, maybe you could move to a town who’s public education system meets your needs.

I’m certainly not an expert, but I don’t think I would be putting money into a 529 plan until all my family’s basic needs are met.

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avatar 6 Anonymous

I don’t contribute much to the 529 plans – $25 a month. I definitely understand what you are saying, but at the same time I wouldn’t feel right stopping it. There is no one else who will put money aside for them now or in the future.

I HAVE considered moving (we just bought this house 2 years ago though and it’s currently not worth what I owe according to recent assessment changes)… but I honestly feel my kids needs will not be met in any NY public school. They have special needs but fly under the radar for receiving help because they can pass the basic tests they give to prove they don’t need services… I’m certain this is a financial thing that goes on, yet the kids can’t keep up with the work or the social environment without help. (at the private school however, they are both performing above average and are learning the social skills they are lacking, thanks to having 6 kids to 1 teacher.) So then you wonder, why not move to a different state then! :) Well, it’s because I have to live within 30 miles of their father for potential visitation purposes.

I do think I could charge more for the work I’m doing, and will put that into action the next time I quote and invoice someone. With summer coming, my work hours end up decreasing because my kids are home 24/7 for 12 weeks, so I can’t physically work more than I am and the only way to increase income would be to charge more.

Thanks for the comments.

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avatar 7 Anonymous

Neal is asking some tough questions here, but I think he’s right. Something has got to change, even temporarily, or things aren’t going to improve :(

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avatar 8 Anonymous

I totally agree. But that’s where I’m stuck because I honestly don’t see much that can be changed at this point. Will have to dig a little deeper and see what I can figure out, I guess. June-August is a nightmare. My kids are home 12 weeks, 24 hours a day – and I LOVE THEM :) but it’s really hard to work.

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avatar 9 jake21

You want it nice, or the real world.

I don’t like being blunt, but it looks like blunt is needed.

I respect your actions for keeping the kids in private school, but if you can’t get the money to pay for it elsewhere (reduce other expenses, increase income), it’s time to bite the bullet and admit you don’t make enough money to continue. Summer is here, now is the time to move them.

Another tough one. The car. $8,000 in value? Your income and bills do not warrant such an extravagant vehicle. I drive a 2000 car valued at $4000. My wife, 1997 at $3000. Watch carefully and the deals are out there. For $4000, you should be able to find a nice vehicle with some good miles left on it. Sell the $8000 beast, pay of the $2000 loan, and pay bills with the $2000 remaining. This will remove the monthly car bill and bring you $2000 up in net worth.

According to your commentary, you do not budget anything except your monthly expenses. Not good. Your budget should include all of your annual expenses as well. Insurance, oil, taxes, etc. If you include all of these in the budget, you will know what your true monthly expenses are. Right now, you are negligent in many of them.

As for the taxes on your income, this is a will power issue. When you receive a check, the first thing out of it should always be taxes. Never anything else (this is the advantage of working for a company, they take it out before you get your check). Put this aside and don’t use it for ANYTHING. Whatever is left over, that is all the income you get to play with. We actually take 10% of our gross for charity before we figure out what we have available.

I know this is harsh, but so far, I don’t see any real progress when I think progress could be made.

I applaud you taking care of your children, but is it right to teach them to handle money in this fashion?

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