Economic Sustainability

 

Sustaindiagram

Many times if people have heard the term sustainable before, the thought that comes to mind is the environment and maybe climate change or deforestation.  At one point I googled the definition of sustainable and found out the definition according to Wikipedia was “the ability to endure.” If we break that down a bit, obviously if something harm’s the environment it will eventually run out of resources or cause other problems that no longer allows the Earth to function as needed. This is not sustainable.

If you look at the above graphic though, you see that sustainability isn’t just the environment. It has economic and social components as well. For today I am going to focus on the economics because finances have become a focus for me the last few years.

If we hop in the way back machine and go to maybe 10 or 12 years ago, I was trying to get my life in order after a breakup. I was trying to plan a birth and time off work without another person to help pay the bills. It was a situation where I would lose my job because I was through a staffing agency and didn’t qualify for any sort of leave as a temp. I needed to have my bills paid. I needed a plan to feed my kids. I was also at a point where I had racked up debt trying to keep us afloat when we had been out of work during my first pregnancy and a bit after that. I started trying to pay off debt. I had read Dave Ramsey’s Total Money Makeover and it made sense. Get it paid off and then move on. That made sense. At least until I hit the recession a couple years later and chose to go back to school when I couldn’t get a job. In case you are wondering- debt for a degree is not recommended. I know I was making the choices that were best for my circumstances at the time, but man has it added stress ever since. That is because it wasn’t sustainable long term. In fact, I should have stopped a lot sooner than I did from a financial perspective. And at least my brother would argue I need to finish my Master’s since the classes are all done and I just have to write the thesis.

But I digress. The point is, you can’t live off loans forever and expect it to meet that definition of sustainable as a plan that is able to endure. Eventually you can’t take out more loans. You can keep them from coming due by continuing to take classes, but that means another regular outlay of money to pay for your tuition. And since if they are federal loans you can defer based on income that is probably a better option if needed.

Eventually though you need a longer term plan. How are you going to be okay after retirement? Do you have pensions or maybe retirement accounts you can save in through work? Can you make ends meet right now?

I think there are a few foundational items needed in your arsenal if you are going to be sustainable when it comes to your personal finances.

The first is that you need a spending plan or budget so that you know where your money is going and what you have coming in. This may be on paper, in a spreadsheet, on an app. However works for you is fine. Personally I am using an old version of YNAB (You Need A Budget) because the new subscription model wasn’t sustainable in my current moment with my goals. Before that I used a spreadsheet. The problem that YNAB solved for me when I first got it was that my spreadsheet would lay out how much I had in each category…. But if I spent more or bought something else entirely it wasn’t accounted for. Maybe if I had ever mastered using a checkbook register for debit card purchases it would have worked.

The second key is that you need to get your actual income and outflows to match or preferably be so that you are spending less than you earn. Needless to say, if you have more going out than coming in you will eventually run into problems. You only have so much space in your credit card spending limit, you only have so many people or places to borrow from, and eventually the answer will be no. And then the people you owe money to will have their hand out wanting to be paid back.

Which brings us to the next paver on this financial path- pay off debt as necessary. These days I am spending a lot of time in the realms of FIRE…. Financial Independence Retire Early. I started out learning from Dave Ramsey and Total Money Makeover early on, but there are many differing opinions on debt when it comes to FI. Generally speaking, if you have credit card debt that you are not paying off in full every month, you need to work on getting this taken care of. If you have any debt above the amount of inflation(in the US it is somewhere between 2 and 3%), you need to work on getting it paid off. This might be happening at the same time as future steps though.

The next thing to figure out is what you need to sustain your lifestyle. Hopefully you were able to pare down if need be and you are currently living within your means. This would be the ultimate economic sustainability, to just have the money to live even if you didn’t go to work in the morning. Since I am not the greatest at explaining all of these concepts I am going to suggest you go check out Mr. Money Mustache’s article about The Shockingly Simple Math of Early Retirement. If you want a quick equation though it is 25 x Annual Expenses = Financial Independence. This gives a high probability of not running out of money in retirement before you die.

After that you have hit financial sustainability. Even if you add some padding into your numbers to mitigate any future changes or to give yourself extra padding, the end product is a financial life that will endure and keep you going even after you are done working. A great place to pick up actionable tips to help get you to FI is over on the ChooseFI podcast if you want to hear more. I may have binge listened to many episodes while at my last job….

Happy Planning!

~Going Greeen Mom

A Little Air and Patience… Laundry Part 1

Clothes hanging to dry

When the kids were smaller, and before I had heard the term “sparking joy”, I used to have piles and piles of laundry because we had too many clothes and a ton of other stuff in the house. I guess you could say that my house tends to follow the state of my mind. One day I was super behind on laundry and climbing over Mt. Washmore I got really frustrated.  I had turned the dryer on for the 3rd time and I figured they would probably still be damp when it got done… but then what was I supposed to do?

We live in a trailer park.  We aren’t allowed to have clotheslines outside.  I didn’t really feel like I had time to hang dry clothes anyway.  But of course I have damp clothes and a dryer that isn’t working.  So I decided to figure out places to stick clothes hung up when they got done so they would actually get dry.  I really don’t remember how or where or what I used that time, but I do know that I ordered a retractable clothesline.  I just didn’t have the cash to go buy another dryer.  I had been through so many washers, dishwashers, and the like that I just didn’t want to get another appliance I didn’t feel like I could afford.  So what is a Mama with two little kids and a mountain of clothes to do?  Well,  I tested it out.  I found that it dried clothes in less time than the dryer had been!  Granted it was dry and hot inside because I had fans going and it was the middle of summer, but I was amazed.  I have had piles a few times since then…. usually accompanied by illness or poison sumac issues, but not very often.

That clothesline gave way from where it was anchored a year or two later (I might not be the best at stud finding).  I still didn’t get a dryer though.  I got some more hangers.  I added a tension rod in the bathroom, and actually started hanging the clothes up on hangers.  This worked amazing!   So the hangers let me hang more clothes in a smaller space since the linear amount was reduced to slightly more than the size of the hanger.  Space them about 2″ apart and you are good to go.  You have air flow, and do you know what my kids did after a bit? “Can we leave our shirts hung up Mom?” It was actually about a year later I imagine, and they are used to hanging everything at their Dad’s.  This frustrated me.  Why does it have to be like it is at his house?  We’ve always folded our shirts here. But I was taking time to fold all of their clothes after they dried.  And did I mention we hung the clothes on hangers to dry in the first place?  Huh…  but we don’t have enough hangers…..  Enter the first culling of the clothes.  My daughter let go of so much, and still had way to many.  And my son let go of none…  and had plenty, probably enough for if he lived here full time. So she had some go into hiding, and they each had a set amount of hangers.  And within 2 months she had worked through all of the hidden piles by letting go of things she didn’t want anymore.  She has since sorted from more of a KonMari aspect and is at a very tight capsule wardrobe.  I think she has 5 or 6 t-shirts and just as many hoodies— mostly Pokemon costume hoodies. 🙂  She is totally inspiring my move toward a uniform, but I will deal with my closet in a different post.

So we got rid of the dryer.  Got rid of the pile because when you dry 3 loads at a time and plan ahead to have things dry when you need them you also tend to have time to fold and put them away.  We got rid of a lot of the folding as well.  And last but definitely not least, we got rid of dryer sheets.  Dryer sheets are full of chemicals that do a number on our bodies, on our dryers, and on our clothes.  I didn’t notice a ton of difference in my body with this, but I did notice some changes in our clothes.  We started using vinegar as a fabric softener in the washing machine fabric softener compartment, so our clothes are still fairly soft and static just really isn’t an issue when you don’t add heat and rub your clothes together.

So what did we gain?  We gained space—  from the walkway where we had the piles, the place we had the dryer, dresser drawers where we had clothes shoved, and from the passing on of clothes we no longer wanted.  We gained a bit of patience from the process of waiting for clothes to dry so we can wear them.  We gained a little money from the energy we saved, and from buying 1 less item for maintaining the household.

I know it seems crazy to question such a basic thing, but sometimes when something breaks it can truly be a blessing.  Join me next week for the second part of my journey when I learned how to let the water do the work.

~Going Green Mom

Curb Alert!!!

4 cloth bags, 2 divided wine bottle bags, 2 superhero bags for a friend (not pictured), 1 canvas bag, and a roll of brown craft paper for wrapping presents…

A few months ago I was reading a post over at Frugalwoods about how if you are open to the things you need being provided to you, a lot of the time you can spend little to no money and be very blessed in finding the things you need.  At the time I just sort of scoffed and said, yeah right… maybe in her area.  And then I found Facebook Marketplace. And don’t get me wrong, I had known it existed, but thought it existed for selling Coach knockoffs and used soccer gear.  I am sure it does that, but there is so much more as well.  When I finally opened it up and looked at it the purpose was to sell the dress my daughter wore for my brother’s wedding.

My daughter on the left in a blush dress from David's bridal with a flower headband, and my son on the right in blue dress pants, a white dress shirt, suspenders, and a bow tie
Kiddos looking all fancy and a bit bored…

Being a junior bridesmaid meant a really expensive dress in a certain color and not something that she really had the chance to wear much later. Researching a sale meant seeing things for sale.  And for Free.  And the hey, I don’t want to pay to have this stuff hauled off or to take it for donation, so come and get it, curb alerts.

Somewhere between these two moments in time I made a short wish list of things I had been wanting.  Apparently not all of them because what I picked up today wasn’t there when I went to cross it off. Oh Well.   It was there in my head.

A few months ago I had been getting something out of my back seat and an old Mr. Peanut jar fell and shattered in the driveway.  It fell because it was rolling around loose and not contained because if jars are just in a fabric grocery bag they clang together and chip or break so I just put them in the back and hope for the best most of the time…. usually when I think I will be using them in the next few days.  But I didn’t, and it is no longer.  Anyway, it dawned on me that what i really needed was something that would keep the jars separated like one of those wine bottle bags you occasionally see at the store….  and since I hadn’t seen one in years because I hadn’t been into those types of stores, I was like, yeah, but where do you find that?  And onto the wish list in my head it went.

On my way home today I was thinking about how it would be cool if I found a desk along the road and could surprise my son with it (he would like to get rid of the love seat in his room and get a desk).  And low and behold a few turns later, I do indeed see a pile by the side of the road— which is just as good as a curb in the country. No desks, but I decide to see what’s there anyway, and they had a bag of bags!  I have a ton, so wasn’t really wanting more bags, but decided I would sift through them and see if anything caught my eye, totally not thinking of the wine bags!  But then I saw it…  slid down to the bottom, next to something very natural colored, a bag that is thicker than the others, and not as big, and I am sure I was grinning from ear to ear. Oh, and those natural colored bags?  Actual fabric instead of some sort of fabric-like plastic.  All in all, I managed to not bring home clutter, I was blessed with bags that will work wonderfully for produce, bags that will keep my recent accumulations of Mr. Peanut jars in good shape, and was also able to pass a few superhero bags onto a friend.

So in the end, put out there what you are looking for, be open to things that serve the purpose, and I hope you find happiness in the hunt!

~Going Green Mom

 

Changes in Trajectory

Once upon a time, in a life far, far away, I met a financial advisor named Nick Liskey in a meeting about 401ks and planning for retirement. The room he was speaking in had a door in either direction beside him, probably 30-40 feet away from each other.  He asked where we would go if there was a fire, and inevitably most people pointed at the door they could easily see.  If you were facing one way, even if you were closer to the one behind you, most people didn’t say they would use that door.  His point after this exercise is that you tend to go in the direction that your feet are pointed.  That is great if you like the outcome, but if you don’t, you need to change direction.

Over the course of my adult years I have been blessed in many ways, but have also faced some challenges.  I come from a family where I had 2 loving parents with a relatively good head on their shoulders when it came to saving.  I grew up hearing various conversations about generic money topics, and saw examples of side jobs first hand.  My mom had a second income  using her sewing skills, my dad his computer repair skills.  They both worked on rental properties in various capacities over the years.  When I moved out of the house right around my 20th birthday, I was pregnant, in school (and really didn’t want to be), in a dead end job (for another couple days), and really had no plan.  The direction I was headed was debt, debt, and more debt.  First with student loans (the one thing I think was very bad advise from my parents), and then credit card debt, and as soon as my employer found out that I too was pregnant, no job.  I was also thrust into a little bit different mindset from what I grew up in.  I can’t really say why, and I am positive there are a ton of studies explaining people’s theories as to why, but moving into a trailer park with my kids’ dad, I was suddenly around a lot of people that didn’t have a plan.  Based on the trailer park I live in now, many of the people I was around probably didn’t have goals either.  Or rather the goal was just to survive.

I want to be very clear on this point…  if you move yourself into a position that allows you to save money on living expenses, but puts you with people that are just trying to survive, you need a plan to not adopt this mindset! 

This was actually the mindset of a lot of the people in the factory this meeting took place in.  They didn’t really have a plan, so they just spent the money they had and got more money next week when the next check came in.  Nick’s suggestion was figuring out what you need to retire, and then working toward putting money away each check that would help you get there.  I have no idea what he said as far as how to figure that out, but the point of moving your feet so they point in the right direction stuck with me.  I “need” to be saving several hundred dollars a month to retire in 10 years…  I can’t afford that right now, but I can at least put 1% away so that I am in my current 401k program.  Then once I am getting 40 hours a week regularly, maybe I can put 2 or 3% in.  Then maybe I’ll be able to get the full match.  But moving my feet closer to the direction they need to be going changes the trajectory of my retirement plans, because it is easier to change by a little bit at a time than trying to go from none to a whole bunch all at once.

One baby step at a time,

Going Green Mom