Monday, November 21, 2011

On Finding Meaning and Understanding 'Saving for a Rainy Day'...

As I've mentioned before, I'm the kind of person who believes there is a bigger picture and that all our life events fit into that bigger picture in some way that makes sense and is ultimately to our own benefit.

Bad stuff happens but I tend to believe it always happens for a reason; to teach us something or lead us down a particular path that will ultimately benefit us in some way. Often we can't see the silver lining until we have the opportunity to step back and reflect on the events of the past.

So, we've had a rough few years. At first I thought it was just one year, then one stretched into two and soon it'll be three years. Each month has offered new challenges from illness and operations to moving house to unemployment, to death of a close family member and so on and so forth.

Steadily, things have become more and more dire until this point in time, where one notice to vacate will see us homeless. We had a fright late last week when a middle-aged man and his young companion (daughter or girlfriend) parked in our driveway to nowhere and the man got out and basically inspected our property. The man and his daughter were Chinese. Our landlords are Chinese, but we know they live in Sydney. So, we figure either they were sent by the owners to make sure we had cut the grass back as promised (council deadline being today), or they were checking the property perhaps to buy it or move in.

You see, this happened to us at our last place. One day we looked out our front window to see a young man and an elderly couple standing just inside our front gate and looking at our rented property. About a month later we received a letter to vacate and when we did vacate the elderly couple (parents of the owners) moved in.

So, we're one letter away from homelessness. And why are we one letter away from homelessness? Well, because we have no savings whatsoever. We have no job (when you have four children you need a job to secure a rental property in an owner's market). The GOM has been working hard for months to secure a job but obstacle after obstacle has been thrown in his way.


Have you ever had that conversation where you scoffed at your parents trying to tell you to learn to save for a rainy day? If you haven't you're wiser than me (or you're lying, but I'll leave you with your conscience on that score).

I haven't had that conversation recently but between ten and twenty years ago, it would crop up every so often and go something like,

'You know, I never did understand what they were on about 'saving for a rainy day'...'

'Oh, me either, what's the point of having money just sitting in the bank and putting off enjoying it until you're too old and dried out to make the most of it?'

'Totally! And if I need to buy a washing machine in a hurry or the car breaks down, I can always just get a credit card to cover the emergency and then pay it off later.'


Yep, I had the conversation with countless friends.

Of course, this was before I had kids and before my husband hit that age where people feel they can discriminate simply because his was born in the 50s. That was before the rental market became so tight. That was before banks woke up to themselves and stopped offering credit cards and personal loans to people who couldn't afford to repay them.

Also, that was before I realised that 'A Rainy Day' is not, in fact, a single day. Don't laugh, but when I thought of a rainy day, I thought of a one off emergency event. I never considered that it could be one drama after another and that that could go on for several YEARS in one run!

Right now the GOM needs a job. The job offer he had in September was rescinded for no apparent reason and we're fighting it through the anti-discrimination commission but the wheels of bureaucracy turn slowly. We haven't even had a conciliation meeting yet. We doubt very much he'll be offered the job again, which means we either let it go or pursue it through VCAT. We'll probably do the latter on principle, however, that will not pay the bills in the meantime and the GOM really needs to work.

His other avenue of work is through an agency, for which he needs to be able to drive because he'll be sent to different facilities here and there throughout the eastern and south-eastern suburbs. He has been having trouble passing his driving tests because he stalls the car during the test. He never stalls it outside the test so we're thinking it's nerves. He's had hypnotherapy but that didn't seem to help at all.

So, we've been thinking for his next test he should do it in an automatic. The problem with that is his instructor doesn't have an automatic. He could get a different instructor but the last time he did that, the new instructor was completely unprofessional and rude to him. So, he's not keen to go that route again. So, we have to buy a car. A cheap hatchback (which won't fit all of us but is a stopgap for passing the test and getting a job - we can trade it in for a people mover once we're eligible for finance) is the go. To buy a cheap automatic we need at least $3000.

Ah, yes, this is where I finally gained some wisdom. We had $3000 earlier this year. I spent it. At the time I thought the GOM would have a job in just a couple of weeks. I thought he'd pass his next test. I thought I needed a reliable computer more than we needed savings in the bank. I thought the boys deserved an iPod and I deserved an iPad - after all, I had waited 18 months while most people I knew bought one, well everyone who actually wanted one anyway.

Yes, I've been pretty good with money. I always budget our rent and bills before food and fun, but I have also lived under the presumption that I had a right to have fun right now. I had a right to buy stuff I wanted whenever I perceived there to be 'extra money'. Even through the hard times of the last nearly three years, I haven't clued in that I needed to be a lot more careful with our finances.

'Saving for a Rainy Day' means saving for that time when everything goes wrong, not just once, not just for one day, but for weeks, months and even years on end. It means being aware that one day you won't be footloose and fancy free and one day you won't be able to just 'put in a little more effort' and make things go your way financially. One day, everything you touch may turn to shit and that is when having a little something put away will save you from the stress of anticipating homelessness with four children.

So - get to it, people! Don't be an idiot like me! Put away whatever you can. Even if it's just $10 a week (that's $520 a year). Put it in an account where you need two signatures to get it out - if you don't have a partner, recruit a trusted family member or friend. Just do it. Go without a little right now, so that you don't have to go without a lot down the track. If the rainy day never happens to you, excellent! Pass it on to your kids, or skim off the top and treat yourself to something, but always leave at least 3/4s of the nest egg in tact and only skim once a year! You won't regret it. I promise you. And yes, I am going to do this now, too. If I can do it - so can you!


Peta said...

That sounds really rough - it's so stressful when you have to depend on other people and crappy bureaucratic procedures before you can move forward. Is there anything you can do in the meantime to get some quick cash - babysitting, lawnmowing, ironing etc? Or how about family day care? Or afterschool care? My kids go to a pensioner couple after school two days a week and absolutely love it - they meet them at the school and walk them home and give them a snack and then they just hang out doing craft, baking, reading, watching TV etc until I pick them up. It's not an official thing (I just found them through friends) but my kids like it much better than the school's after care program. They charge $5 an hour and have around 6 kids a day and do holiday care as well. They are the sweetest couple - just like the grandma and grandpa I wish my kids had to look after them when I'm not there!

Sif Dal said...

Peta, the after school care option sounds interesting. It would require outlay though - our children don't get a snack after school so providing on for other people's children would be an outgoing cost.

Out of the other three suggestions ironing would be the most likely I could undertake, but are clients willing to drop off and pick up laundry, do you think?

Peta said...

I'm sure you could specify that kids should bring their own snacks and just provide water. Personally I wouldn't be fussed about the snack. The main thing I like about it as a working mum is that it is a bit more flexible than the school's aftercare - they charge $20 for every 15 mins I'm late for pick-up and get really cranky about it whereas the couple just charge $5 an hour and don't care when I come. Also, its a more homelike atmosphere which my kids like.

Re the ironing - I'm sure some people would be happy to drop off/pick up, esp if you are near shops/school route etc and they could do it on the way. Not sure how you wld go about advertising this though - maybe school/community newsletter?

Sif Dal said...

I guess that couple is making $30 an hour and when the kids are picked up they have their house back to just themselves, but as we already have four children (and our house is very small), we couldn't possibly take on six more, and we'd have to live with the fall out once the other children had left for the day. We normally eat at 6pm and the kids go to bed at 7pm. So, we would care if people were picking kids up long past 6pm. Truth is, we don't even offer our kids friends to come over for play dates because having one extra kid makes life crazy around here. Twice when one of the boys has had a playmate at our house, Ari has escaped onto the road because I can't keep track of everyone running in and out of the house.

Ironing is far more plausible. It's something I can do when the other kids are at school, and if people can drop off and pick up, that'd be about perfect! Wonder what people charge for ironing?

Peta said...

That's true - their house is smallish but there's just the two of them and they have a large garden. How about babysitting in other people's houses? We get a babysitter one evening a fortnight who doesn't drive (she comes on the bus and we drive her home). She charges $20 an hour which is usually $80 for the night. It's more than some pay I know but she is a registered childcare worker and also my kids don't go to bed often until 9ish so I figure she earns her money!

Not sure about ironing - there's a note at my local shops saying someone will iron for $20 an hour but that includes pick-up/drop-off.

Sif Dal said...

The babysitting might work. I'm part of reciprocal baby sitting club at our school. None of us pay, we earn points baby sitting for each other which we spend on baby sitting. D and I rarely use the service because we can't afford to go out. I could maybe put something inn the school newsletter (I have quails)... Would you hire someone who was legally blind to babysit your kids?

Peta said...

In my own home, yes. Prob wouldn't let him/her take them to the beach though.

Camille said...

I'm sorry Sif but I cannot reconcile your claim that you're good at budgeting while regularly relying on your MIL for food money, spending extra cash on multiple iPods and iPad and now claiming you need (at least) a $3000 car for your husband to sit his driving test!

You need to find a simpatico driving instructor with an automatic car or borrow a friend's car. At worst buy a $500 bomb. Even if you luck out and have to try more than one instructor it will be *way* cheaper than buying a car (not to mention the insurance, rego etc).

Don't get me started on your regular lawn mowing issues and the waste of money that results in. (Yes I think there is a simple solution that doesn't cost hundreds of dollars to fix).

Sif Dal said...

Camille, thanks for stopping by. When I said I was good at budgeting, I meant week to week. The money spend on the items you refer to was a lump sum which came at a time when I thought all our finances were about to ease up. My husband had just finished training for a field where we were told employers were clammering for workers of every age. Unfortunately, the job offer he did recieve fell through.

So, had everything panned out the way I had good reason to expect it to, then purchasing those items would not have caused any stress at all, and would have served the purposes they were meant to serve.

You have made the mistake of extrapolating one bad situation to my entire history of budgeting - we have always lived on far less than the average family, and lived well. What I have lacked in the past six months is foresight of the things I cannot control, unreasonable people who act outrageously.

You are right though, I should not have spent that money before securing the first wage cheque in the bank - that was the point of my post.

As for the lawnmowing. i completely agree that we should do it ourselves. If I had the means to get a lawnmower and have someone teach me to mow, I would. i don't.

I am also not able to force my husband to change instructors, and we have no friends who are willing to loan him an automatic for the test (he'd have to practice in it as well, to get to know that particular car).

Are you offering to bring around your lawn mower or car for us to use, or are you simply offering simplistic solutions to our complex difficulties?

Feel free to read my 10 Things Tuesday list from yesterday, particularly point #2.

Camille said...

I've been stopping by for several years :) and the same money issues occur over and over. No you're not good at budgeting week to week if you regularly require an injection of funds from the MIL to put food on the table. I'm aware that the money you blew on electronics was a lump sum. A good budgeter (is that even a word?) would not have spend that money until their finances were on a much surer footing (which is more than the first wage hitting the bank account). My family's lives very comfortably but, for example, we would never contemplate buying an iPod for each of our three children - that is just a extravagance that we cannot justify. I understand the need to sometimes treat yourself and given your uncertain financial position at the time iPod to share would have been more than enough.
Lawn mowers aren't expensive; you can get them second hand. Buying a mower is way cheaper than the fine you were facing or the cost of getting a gardener to deal with your over-grown yard. It is not that hard to mow. Your older boys could do it (once the grass has been cut to a manageable height). The guys at places like Bunnings would be more than happy to give you some pointers.
Your husband needs to be practical either he sits the test in the manual that he has been learning in or he finds a new instructor. Given your financial situation you cannot afford to spend $3000 on a car. Sure, you cannot force him to change drivers but you don't have to agree to buying a car. It's madness. What happens if he fails the test in an automatic?

Given that I live interstate it is a little impractical for me to bring my lawnmower and car around. I have read your Tuesday post. I've been tempted to comment before but never have mainly because I knew what the response would be. I guess it's frustrating to see an intelligent woman making stupid financial decisions again and again.

Sif Dal said...

I don't know how long you've been reading - I suspect only since you were sent here from the other forum, but we've only been getting assistance from MIL in the past few months. So, for the previous 14 years or so, we did okay.

The cost of our gardening came to $140. Have you seen our yard? Even gardeners tell us your run of the mill lawnmower is not going to get through the creeper we have in amongst our kouchgrass. That is the professional advice of people who garden for a living. Having seen a casual gardner's mower be overwhelmed by our nature strips and half the front yard, I have a tendency to believe them, too.

In previous years when we have received lump sums, they have always gone onto needs and not luxuries. In fact, I usually set up the utilities to be in credit. Even now, our week to week is strictly budgeted. Shall I break it down for you?

$410 in rent a week.
$200 in food.
$150 in utilities.
$140 in school excursion, public transport tickets, new shoes for the kids for school, birthday presents for kids friends parties, lawn mowing, school requisites, repairs and replacements of whatever falls apart or is lost by the kids, birthday presents, christmas presents, driving lessons, driving test fees, medicines, basically all the incidental costs of living.

We don't have any kind of insurance, medical, house and content, personal.

We don't drink or smoke.

We don't go on holidays.

We don't have any debt.

We don't have any savings.

The point of this post was to say, 'I thought I was doing okay, but I've realised I could have done a lot better.'

I was not saying, 'Do what I have done.'

I was in fact say, 'Don't do what I have done.'

But thank you for your concerned and supportive response.

Camille said...

I don't know what site you're talking about. FYI I started reading your blog when you were doing your childcare cert.

I have seen the photos you recently posted of your rampant grass as well as those at your previous house. Yes a 'normal' lawnmower would be overwhelmed but once the lawn has been tamed by a professional or not allowed to get to that state a run-of-the mill mower would be sufficient to maintain it to a reasonable standard.

I don't doubt that in general your family lives frugally but for an outsider, going on the information you provide on this blog, some of your financial decision are incomprehensible. For example, why you would spend all of your lump sum windfall — when you are just scrapping by — on non essential electronic paraphernalia? iPods to keep your children occupied in the car when 1) you don't have a car and 2) your husband doesn't have his licence. I bet the novelty of car travel would keep your four occupied (for a little while at least). I sympathise with your husband's driving test nerves (I've been there), particularly when so much is riding on getting the licence, but I'm intrigued by the thought process that takes you (or your husband) from a bad experience with one driving instructor to a solution involving a $3000+ outlay for a car.

As to today's post, which I assume is a reaction to my comments, I don't know where to begin. Yes, we the readers of your blog do not know the minutiae of your life we can only comment on what you decide to share with us. But you know even less about most of your readers' lives. It is presumptuous of you to assume that I don't think 'it could never happen to me', or what obstacles I've overcome to get where I'm today. It is because I know it could happen to me that I tend to be overly cautious - even when there is no need to - when it comes to financial matters. That is why I'm intrigued by some of your decision making because it is the opposite of what I would do if I was in your situation.

Finally it is a little harsh to suggest that if someone questions your choices that means they think they are wiser, more diligent, smarter etc. Some of the unfortunate things that have happened to your family are beyond your control (like your husband's problems surrounding his recent job offer) others are a result of poor decision making. Not all choices are equal. Plenty of intelligent, resourceful people, on occasion, make poor choices. Making the wrong decision doesn't make you an idiot - not learning from the mistake and repeating the error does.

Sif Dal said...

Camille, go back and reread your initial comments and tell me they don't sound as if you're saying, 'You're an idiot and that s why you are in your situation." which very readily could be translated to,'I'm not an idiot, this would never happen to me.'

Don't worry, we're not buying a $3000 car, as you rightly pointed out, we can't afford to. The process by which we came to the idea of buying a car was that it would be the quickest way to get my husband into an automatic and prepare him for the next test several weeks away, he could stay with the instructor he is comfortable with which would prevent further anxiety as he got to know a new instructor (and hopefully didn't encounter another bastard). Rest assured. He will mostly likely be attempting the test yet again in an manual and hopefully he won't fail.

I spent the money because I truly believed my husband would be working within a fortnight. I also thought my husband would pass his test. We do have a car. In as much as his father's car has been kept at his mother's place just waiting for him to pass that driving test for the past two years. My children have ridden in cars quite enough for it not to be novelty and if you can't imagine what it might have been like to drive a car for the very first time with four noisy children on board (unless you're suggesting we gaffer tape their mouths shut), then I don't really know how to explain it to you.

I wasn't talking about a regular mower cutting our grass when it's a metre long. I was talking about when it's regular length, a cheap mower can't cope. We had a regular gardener at our previous place who we budgeted for because we had more money then.

You suggest I don't learn from my mistakes. I have not been in this position before. It is only now I am having the opportunity to see the mistake I have made and I was actually acknowledging it and saying I had learned from it. I cannot see where you have derived the impression I keep making the same mistake over and over again.

You know, I will agree that people can only go off what I've written here. Funny thing is, I don't read other people's blogs and presume to comment that they are liars or idiots if I don't agree with their self-assessment. Maybe it comes down to whether or not you believe yourself superior enough to the other person to treat them as if they are inferior to you. Reread you comments if you cannot see that that is precisely what you have done here today, I am at a loss of what else to say.

Camille said...

I don't see it Sif and it wasn't the intent of my initial post. This is what I see in my first post:
1. disagreeing with your claim that you are good at budgeting with a couple of recent examples as my evidence. 2. providing unwanted advice on alternatives to forking out few thousand dollars for a car so your husband could do his driving test and 3. a snide comment about your grass.

As I said in subsequent posts IMO someone who claims to be good at budgeting would not spend - given your recent money problems - an entire windfall gain on luxuries even if a pay cheque was imminent let alone based on a belief that your partner would be employed soon. At worst I would have spent a fraction of that money on a modest treat for the family/children, perhaps given some cash to the MIL and definitely would have banked the rest of it for 'just in case'.

I drive, on a daily basis, with three children in my car. My eldest is not yet 7 and youngest is 18 months, it is possible to keep the noise down to a dull roar without resorting to either gaffer tape or iPods. Here is some more unwanted advice, I'd expect the older children would understand the need to be quiet and if distraction is required for the smaller children it can be done for a lot less than the cost of an iPod.

While I'm doing some reflecting may be you should do the same. Have you given any thought as to why you have reacted in the way you did to my initial comment? IMO it is OTT and unwarranted. Nowhere have I written that you are an idiot or suggested that this would never happen to me. In fact, I've said the opposite. I've explained that I'm intrigued by some of the spending decisions you have made (the iPad, iPods etc have not been the first instances where I have thought 'what is she doing?! That's not a choice I would make if I were in her shoes.') given, what I consider to be intelligent and considered comments you have made on this blog (and elsewhere).

I don't understand how disagreeing with your assessment that you're good at budgeting and suggesting that some of your financial choices are suboptimal = me believing that I'm superior and you are a victim and inferior. It means that I would have done things differently.

I'll go back to lurking now as it looks like you're only comfortable with warm fuzzy comments.

Sif Dal said...

'Making the wrong decision doesn't make you an idiot - not learning from the mistake and repeating the error does.'

I read this as you implying I was an idiot. You tone in previous posts had already suggested that was your underlying assumption, but these words confirmed that tone.

I'm not sure what other instances you are referring to, so I can't comment. The reasoning behind by the iPods stands as it it. I won't justify it further. Perhaps older children *should* understand. That is an adult projection which does not tally with the reality of most children's understanding.

Did you just get your license recently? Did you start driving after you had all your children? Do you suffer from anxiety. Can you say you know exactly how my husband might feel while driving in traffic for the first time with a car full of kids? You inability to see things from another person's perspective astounds me.

But then again, it doesn't. Had you had that ability, you might have thought twice before commenting here with nothing to offer but derision and judgement. I can't fathom why you bother reading my blog at all, to be honest. Unless perhaps just to reassure yourself on your own better judgement.

Good Job!