Does Unemployment Count as an Emergency?

Yes, that's a rhetorical question.

On December 30, 2008 I found out that I was getting laid off with the rest of my company (I work for a very small ad agency). We were simply hit by the perfect storm generated by our current economy: current clients cut way back on marketing budgets, dropping our projected billings for 2009 by over 80%; we weren't winning any new clients in the last quarter of 2008 as people were hesitating to take risks on new spending; we had a serious cash flow crunch for a few months as our receivables built up due to clients' inability to pay; we had to tap out our credit lines to make payroll and pay select vendors, who we had to string out just as our clients were doing to us; the nail in the coffin was Bank of America's refusal to extend our line of credit. Talk about feeling the effects of the recession directly.

It was disappointing but no big surprise, as we saw the writing on the wall for some time. I thought we had a few more weeks to try to get back to good cash flow, but apparently things were even worse than I thought.

The good thing is that I will be able to work on a part-time basis as my boss isn't filing bankruptcy just yet - we have ongoing projects, there is still work to be done albeit on a very limited basis, and we have opportunities still on the table. With a big new biz push and a little luck the company might be able to bounce back from the brink. So I will have enough coming in to live on as I look into other options for employment.

But even before I had worked out this retainer deal with my boss, I felt a strange sense of calm. The reason? My savings. Even though I have a relatively small amount tucked away (about $1,600 including emergency and other savings), it would be enough to get me through the next couple months after January assuming other work and/or unemployment was delayed or hard to come by. (I also have my Roth, which can technically function as an emergency fund to a certain degree from what I understand, but I'd like to consider that untouchable for now). I know I would have been panicking otherwise if this had happened back when I had $0 in savings.

So, in case you haven't yet taken it to heart: establish an emergency fund now for that unexpected emergency!

(Hopefully I won't have to tap into my savings anyway: I plan on cutting spending to the bare minimum while I use my minimal income to cover expenses during this transition period.)

Aaargh

My recent raise was supposed to be effective July 1st, and thus appear on today's paycheck.

But it didn't, because of a snafu on ADP's part.

Very annoying. I was counting on that extra money to help me get back on track this month. Oh well - it was going to be far more than I expected anyway. Good things to come!

A Taxing Issue

Hopefully this will be the last bit of my past fiscal irresponsibility that comes back to haunt me. I filed a late return for my 2006 taxes, in which I owed $550 due to my not adjusting my withholding after a raise. I have to pay a penalty of $156.75 for filing late ($123.75) and paying late ($33.00) and I also have to pay interest of $50.09 as of my notice from 3/17. This comes to a total of $756.84 owed for 2006, plus I owe $32 for 2007. This works out to a total of $788.84 owed to the IRS.

I have until June 20th to pay this in full before it goes to collections. It will accrue a modicum of interest in that time - the total if I don't pay anything until then will be $810.09.

Right around that time is when the tax stimulus rebate is expected, and it will go first to paying off any money owed. If I get the full refund of $600, this means I will owe a shade over $200 all told. This isn't too bad, but it's annoying because I had plans for that rebate (namely putting it into my IRA). I'm planning on paying off my 2007 tax now and putting the $130 I recently received from my MA state refund toward my federal tax, so my total payment will be lower with that cut out of the principal.

In the end this isn't a major problem, but it definitely hurts. I'm glad that I'm tying up the last loose end of my financial irresponsibility from the past but it's too bad I have to pay for it now. This also adds to my total debt and will affect my ability to hit my goals for this year, although they are still attainable. We shall see.

The NSTAR Saga Comes to a Close

Well it appears that the NSTAR story is wrapped up for now. Because last month I scheduled an automatic billing for the balance of the bill each month after I had just paid online but while that transaction was still pending, NSTAR withdrew twice as much as they should have. In the most technical of senses this was my fault; however I still think it's kind of ridiculous that their system would allow this. But they did credit me $25 to my bill, so I got back my $13 plus a few pennies for pain and suffering. I can't really complain. Although our electric bill for this month is through the roof. Might as well have let them keep it all.

Just can't win with these guys.

Taxes Filed!

I filed my taxes today. This is great for a couple reasons. Historically I have been rather lax in filing my taxes, usually needing an extension and often filing up to a year late. This is a direct result of my general tendency toward procrastination, and my specific tendency to ignore/put off all my financial responsibilities as long as possible. But no more! That was the old me. Now I am the Impecunious Investor, and part of my financial plan is filing timely and accurate tax returns. So now I am up to date, having filed both 2006 and 2007 federal and state tax forms.

The bad side of this is that I owe $550 in federal taxes for 2006 (more with interest, I'm sure) and $32 for 2007. I think this is because I received an enormous relative pay raise in late 2006 and didn't adjust my withholding (instead spending my extra money on things like bank fees).

This is partially offset by about $140 in state tax refund (thankfully). This is rather annoying and unfortunate, and puts a kink in my financial plans for the year. However I am looking at the whole thing as a positive because I am caught up, I understand the whole tax process much better than I used to (having spent a good deal of time reading up on the various intricacies), and it's just another step along the road to financial independence. Hopefully I can set up some kind of payment plan for these owed taxes.

Now I know to adjust my withholding after any major changes in my income, for instance. Although my withholding was pretty accurate for 2007, which is good.

Where do people learn about this stuff aside from self-education or friends/family telling them? Seems like a major failing of our educational system to me.

The Neverending [NSTAR] Story

Another installment:

The good: NSTAR finally (after two weeks) wired the overpayment back into my bank account.

The bad: There is a $13 service charge on my checking account to cover the wire transfer. This strikes me as ridiculous on Citizens Bank's part, but I can't blame the charge itself, rather the initiator of it.

The ugly: According to the last voicemail I received from the fourth NSTAR service rep I've spoken to in the last two weeks, they are still under the misapprehension that a) I decided for the fun of it to make the exact same payment to NSTAR that I had made a week earlier, b) it's reasonable to overcharge by almost $450 a balance that is at zero (!), and c) they aren't at fault.

You can bet your next utility payment that I'm going after my $13 plus credit on this horrendous NSTAR snafu.

Unbelievable

When I took over the utility bills for my apartment after my two roommates left last July, there was an extra month's worth on my NSTAR bill. I carried this up until this past January (I made no effort to pay it off but just paid the minimum each month) when I paid it off in full - $447.85. Being that I was now in my new financially-sound mindset, I also set up an automatic payment plan to pay off the bill in full each month. For some reason, last Monday I just happened to check my checking account and noticed that NSTAR had taken out another payment of $447.85 from my checking account! Thankfully I had the money in there to cover it; I would have flipped if I had to pay an overdraft fee. I spoke with a woman over at NSTAR who was simply awful. Now: I am extremely patient, I do not raise my voice or curse or anything with customer service people because I understand that 1) whatever the problem is it's not their fault, 2) they deal with assholes all day long, 3) I'm just nice like that. But this woman was extremely condescending, accusatory ("You made that payment online.") and generally unhelpful. I expected to have a refund check by last Friday (easy to take money from me but such a delay in getting it back) but I haven't gotten it. I didn't have enough money in my checking account to cover my rent and didn't want to touch my savings. Now I've strung out my landlord too long and need to pay her, so I'm forced to take $500 out of my Emergency Fund to cover my rent until NSTAR makes good. This really pisses me off. I'm losing the interest on that and just the idea of touching my "untouchable" fund is annoying. The good thing is I get another paycheck on Friday and hopefully NSTAR will have sent me my $ by then. I called them only to have to leave a voice mail - unbelievable.

I guess my points here are that 1) NSTAR sucks and 2) Always keep an eye on your money. I was shocked to see my checking account decimated last week. 3) The one positive here is that, although this wasn't technically an "emergency," I did have the money available to cover a large unforeseen expense, which I wouldn't have been able to do a couple months ago.