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Recent Money Moves

June 7th, 2020 at 08:24 pm

A few weeks ago I was celebrating the arrival of unexpected money: $212 from the car insurance for cancelling Bertha (minivan that departed), $54 voluntary refund from insurance to account for the stay-at-home order, and $40 refund from the school for the pay-to-play fee since the sports season was cancelled.

I also cancelled the 0% CC that was paid off which didn’t bring in money but did simplify my financial life by removing an account.

Then it went the other way and in a big way. The company implemented a 10% pay cut on total compensation across the board. The reasons were valid – they are trying to avoid layoffs and foresee the revenue being much lower this year. The pay cut is supposed to be for this fiscal year only and if the revenue doesn’t fall as sharply as anticipated, we may get some of it back later. Other cuts were made too – travel, hiring, and summer interns were some of them.

As a result, I had to make tough decisions about items in our family’s budget to cut or eliminate. No more ordering in dinner from local businesses once a week. No more family trip planned for this summer. Of course it wasn’t fun relaying this information to the kids but despite it being unpleasant, I did think it was a teachable moment. They got to see my response (as our family’s CFO) to a sudden unexpected reduction in income. And we’ll be fine.

I wish our local school board had enough fiscal maturity to go through that exercise. They also have realized that revenue will be impacted by the shutdown this year and instead of making tough decisions on budget line items, they are planning to raise taxes in hope of making up the difference! I usually don’t have strong feelings about local politics, but this time, maybe because of my situation, I am annoyed by them. One of every five neighbors is unemployed and probably wondering how they will pay the whopper property tax bill this year without selling their homes and you’re going to raise it? Such a lack of compassion and responsibility.

Posted in Budgeting, Personal Finance | 5 Comments »

5 Responses to “Recent Money Moves”

  1. creditcardfree Says:
    June 7th, 2020 at 08:57 pm 1591563463
    1591563463

    I'm sorry you had a cut in your salary! No one likes that and no one likes increased taxes when we see our politicians spending our money without making hard decisions in times of low revenue. Hang in there!

  2. Wink Says:
    June 7th, 2020 at 09:43 pm 1591566233
    1591566233

    I think there is going to be a lot more pain to come unfortunately. I fully expect my property taxes to go up. I'm sorry about the pay cut!

  3. Amber Says:
    June 7th, 2020 at 09:54 pm 1591566861
    1591566861

    Sorry to hear about the pay cuts. Was the organization not eligible for the PPP?

  4. LivingAlmostLarge Says:
    June 8th, 2020 at 05:00 pm 1591635659
    1591635659

    Sorry to hear that. I am not sure how we are paying other than printing more money with our current tax cuts. I always thought you pay down debt while times were good and then lowered taxes when bad. Instead we've lowered taxes during good times and collected less and now we're spending more. We'll see where this goes.

  5. LifeBalance Says:
    June 9th, 2020 at 01:43 am 1591667005
    1591667005

    Amber, I don't know the rules but the company definitely is not a small business. It's a privately owned global company with thousands of employees.

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