Monthly Archives: June 2014

Step 4: Do Not Spend (Much) Money When Work Gets Crazy

Here is a thing that happens when you are a lawyer: sometimes you get very, very, very busy.

Some examples drawn from friends:

  • It’s 4pm, and I haven’t eaten my breakfast yet.
  • My spouse has stopped asking when I’m going to come home for dinner because he knows I’m lying when I give an estimate.
  • I went to work with mismatched shoes because I got two hours of sleep last night.

Here is a thing that happens to me when I am slammed at work: I BUY THINGS.

Lunch (didn’t have time to bring it).  Coffee. (Obvious why I need this).  Chocolate (same).  More chocolate.  Yet more chocolate.

This time, however, I was determined to avoid I-Am-Running-Around-Like-A-Maniac-And-Therefore-Need-To-Purchase-Dumb-Stuff-Itis.  It worked . . . mostly.  My plan of action was:

  1. Bring cans of soup for lunch.  Keep them under my desk.  Going out to buy lunch is a giant waste of time when I’m slammed, anyway.*
  2. Bring a giant Ziploc of almonds to work.  This is healthy and cheap.  And, I swear, it is almost magic in terms of energy boosting.
  3. Pack my dinner (if necessary).  I did this three times this week.  It is possible.  I swear.
  4. Carefully save and submit ALL my receipts for reimbursement.  I can’t tell you how much money I have wasted by stupidly failing to submit reimbursement requests.  Hopefully you aren’t as dumb as I am.
  5. When I felt like I must leave my office for 15 minutes or my head would explode, instead of going out to buy a cup of coffee, I took a quick walk around the building.  Works even better.
  6. Bring my own, nice, tea bags.  This is key.  Everywhere you go has hot water, and this prevented the urge to go out and buy fancy coffee because the (free) office coffee is terrible.

Like I said, it mostly worked.  That leads to point 7: it’s OK to cave and buy a salted carmel brownie.

*This can be hidden by a pile of briefs or other lawyerly-documents if you are worried about looking like you’ve been evicted and moved into your office.

Step 3: Consolidate Finances

This week, Mr. DebtFree JD and I consolidated our finances.  Our strategy was: go down to EnormousMega Bank, get cashiers’ checks for all our money, and then deposit them in TinyFriendly Bank.

Don’t ever do this.  Ever.

Why not, you ask?

  1. EnormousMega Bank put what they called a “five-day hold” on our checks.  This is code for “we’re seizing your money for five days and you can’t touch it.”  Even with credit cards, five days is a long time to be completely money-less.
  2.  We thought we had canceled all our automatic withdrawals.  Wrong.  Our electrical bill automatically withdrew from our old bank account, which means we have to pay Enormous MegaBank for the electrical bill (and associated fees?) and then close our old account again. On the plus side, our lights still turn on.
  3. We also thought we had scheduled this transfer between any due dates for bills.  Wrong again.  We had a credit card bill due, and have to pay a lay fee.*

These minor speed bumps in the Highway of Life aside, consolidating our finances was a great idea, since we now know how much money we have.  Rather than having our money in seven separate accounts (two joint accounts and five individual accounts), it’s now all in one checking and one saving account.  Much easier.  It also led to a serious discussion about how much we need to keep in our checking and savings accounts, and how much can go straight to debt.

For bonus points, we signed up for Mint, so we could get a better grip on what we were spending. A half hour of poking around led to such discoveries** on my part as:

  • Our combined cell phone bill is $187/month?!?!?!?!?!?!?!
  • We are paying $166/month in car insurance on our used car which we drive maybe twice a week?!?!?!
  • Holy guacamole, that’s a heck of a lot of spending on restaurants.
  • Etc., etc., etc., etc.

In other words, after some very minimal effort on our part, we know how much we’re spending and how much we’re saving.  And it feels more like a partnership having all our money in the same pot.  Mrs. & Mr. DebtFree JD, LLP: Taking On Ridiculous Student Loans One Dollar At A Time.***

High fives and a celebratory beer are in order.

*If you are planning to change banks, my advice to you is: move half your money, make sure you’ve got your ducks in a row on automatic withdrawals and bill due dates, and then move the rest of your money.

**These were only discoveries in the sense that previously I refused to pay any attention to our monthly bills and now I can’t.  I “discovered” this in the same way I once “discovered” I needed to clean out my closet when I opened the door and a small mountain of clothes fell out.

***Sadly, I don’t think this actually counts as making partner before the age of 35.

Step 2: Throw Money at the Problem

Because the interest rates on my loans range from around 8% to around 7%, I have finally realized that it makes zero sense — as in none, zilch, nil and nada — to be investing money in anything else.

This is for two reasons.

  1.  I’m a lawyer, not a stock market analyst, and whatever you need to do to feel confident about achieving a rate of return of +8% involves skills and time that I haven’t got. By contrast, paying my loans involves a guaranteed rate of return of between 7% and 8%, and involves no special skills other than clicking the “make payment” button.
  2. My net worth is negative.  Investing is something people do when they have money.  Not when they are worth -$125,933.50.

Having come to this realization several years later than I should have, I called up Vanguard and sold all my shares in index funds.  End result:

Current Debt: $114,351.50.  Debt Paid Off: $11,582.  BOOM.

This being so satisfying, I began looking for more money to throw at the problem.  I consulted with Mr. DebtFree JD.*  Upon consultation, it turned out that unbeknownst to each other, we had both been keeping emergency savings of about $10,000.  This caused us to reach two conclusions.**

  • This is dumb.  We don’t need an emergency fund of $20,000.  Any emergency that emergent is very unlikely and will probably result in so much crazy that we will barely notice we have less than $20,000 to deal with it.
  • Keeping two separate sets of accounts where we don’t know what the other person is doing with their money is also dumb.  We’re married.  We’re adults (or at least we’re trying).  It’s time to act like it.

This led to Step 3: Consolidate our finances into ONE checking account and ONE savings account.  This will allow us to throw further money at the problem by reducing our foolishly large emergency fund.  It will also allow us to figure out how much we are spending on things.  We are nervous about this, because honestly, we have no idea, and we also don’t really want outside supervision on what we’re spending.  And by outside supervision, I mean Wife makes fun of Husband for dumb Magic Knight Space Alien Invaders v. Secret Assassins of Most Ancient Civilization Video Game Purchase or Husband makes fun of Wife for extravagant Salon Day with Sparkly Purple Polka Dotted Toe Nail Polish and Soothing Acoustic Bach Music.

So, onwards to Step 3.  Hopefully the DebtFreeJD Marriage will survive.***

*Who, it should be noted, has no student loans, but also makes a good chunk less than I do.

**If you have concluded that I think in bullet points, you are right.  I’m a lawyer.  So sue me.

***I’m not actually worried.