Thursday, May 28, 2020

Our Quarantine: The first 30 days

My partner and I are both teachers, which some of you may already know.  So, we're among those still receiving a paycheck during the crisis of COVID-19.  That is not to say we haven't experienced a loss of income.

In the middle of March, we were given notice that the school building would be closed until at least the end of Spring Break (a full month away), a deadline that has been extended to April 29th, and then again by the Mayor of NYC to the end of the school year.  We had three days to put all of our classes online and learn a completely new platform, not to mention, rearrange our already too small NYC apartments to include a "virtual classroom" for two teachers of completely separate schools, grades, and content areas.  Making these adjustments would ensure our students could still collect the credit they needed despite the growing public health crisis.

What could not be ensured is the additional income many teachers have come to rely upon.  We all know teachers in this country are not paid the best and may have taken on numerous side-gigs to fill in the gaps.  What does that look like in our household?  We both take on additional responsibilities at our schools which generate additional income.  This might be running clubs, after-school tutoring or test prep, scoring state exams...  We are also both certified tax preparers that work during tax season in local tax offices.  Needless to say, all of these sources of additional income have dried up, including tax preparation!  Once COVID-19's extensive reach became apparent, the government pushed back the tax deadline, and people were entirely more concerned with their safety than with their taxes.  Rightfully so!  Of course, this caused the tax offices to reduce the number of hours given to employees because of a change in demand...  More income lost.

Because we use a management company, there's a fairly large buffer between our renters and us.  We don't know what they do for a living but imagine their lives have been touched by the Coronavirus as well.  We've been notified by our management company that they plan to pay April rent.  We hope that they're among those who are able to work remotely and that this trend continues.  If not, we'll still be able to pay our mortgage.

Lucky, right?  While some of it might be luck, the money moves we've made to ensure our safety was anything but luck.  We deliberately choose to live mostly off of my partner's income, leaving mine to be used for savings and/or other financial goals.  So, we've been focusing our attention on building liquid savings for the past couple of years with the goal in mind of saving for a 20% downpayment plus a fully-funded emergency savings.  Also, every dollar of profit from our rental property goes into its own savings.  In fact, our rental property has it's own 6-month emergency savings.  Losing the majority of our side-gig income feels like it drastically reduces our monthly savings rate.  The truth is that we might be slowed down, but not devastated, and that's key!

I remind myself that if this experience teaches me nothing, it was worthless.  I can't have all of this time be wasted; so, what have I learned in this first 30 days?

I have learned not to take for granted my ability to hop on an airplane and see family members.  I lost a family member during this time (non covid-related). With everything that's going on, my only choice was to stay put.  Even if I had tried to fly to this person, I wouldn't have been allowed into the facility where he was staying because I was coming from New York State, the epicenter of the pandemic.  Fortunately, I went to see this family member just before the outbreak, and I feel really good about that.  Regardless, the ability to mobilize during a family emergency is really important and shouldn't be taken for granted.

It's also become clear to me that we need to pay off the mortgage on our rental property.  No matter what happens, we'll be able to make the payment.  However, when I think about the idea of the loan being paid in full, I feel very peaceful.  That seems to be my inner guidance system telling me what my next money move should be.  I tend to wait for that.  I let my brain do the homework so that I fully understand my choices, but then I wait for one to feel like the right one for me.  Paying off the mortgage feels like one that is rising to the surface as being the right choice.  Of course, I'll sit with it for a while.

I've also learned that our choice to learn to live on one income rather than both of our incomes was incredibly wise.  It has kept us safe within this situation.  It feels like something that we should continue to carry into the future.

Additionally, my career field is fairly stable.  Despite teachers being wildly underpaid, we can count on having our positions.

Have you learned anything about your financial situation from your time in quarantine?  Has it inspired you to set any particular goals or take any actions?

Friday, January 3, 2020

Why Slow FI?

Although I've been pursuing financial independence (FI) for some time, there are ways in which I have never fully fit into the mainstream FI community.  While I like to crunch the numbers, eliminate debt, invest, and can geek out about a variety of financial strategies with the best of them, there are areas where I absolutely march to the beat of my own drum.  I believe in the Law of Attraction, that listening to my inner self, and emotions, as well as mindset,  is important, as it heavily impacts my financial life.  I also believe in enjoying the journey.  In other words, Slow FI.

First, What is Slow FI? 

A recent post by The Fioneers defines Slow-FI as being "when someone uses incremental gains along the journey to financial independence to live happier and healthier lives, do better work, and build stronger relationships."  I've been going on for a seemingly long time about how important it is to feel good in connection with our money.  Feeling good breeds inspiration.  Inspiration leads to inspired action.  Inspired actions create the positive outcomes we desire.  Slow FI does exactly that!

What's really interesting to me is that many people in the FI community are focused on a destination.  A place in the future where they've reached the so-called "golden number," and ride happily off into the sunset with freedom in hand.  Actually, it sounds great!  I don't have any problem with it, as I too have a destination in mind.  But this is where my path diverges with theirs.  Many of the FI focused have cut pretty much all of the excess and diverted all of their additional funds to fueling their investments and eliminating excess financial baggage (debt).  In the process, much of life seems to be on pause.

I am very mindful of my spending, and pretty much every dollar has a job.  That being said, some of those dollars have the specified job of keeping the journey wonderful.  I need a little magic in my life and I am not willing to eliminate it in order to reach a destination faster.  I want the journey to be every bit as beautiful as the destination.  I believe that Slow-FI provides that.

Let me tell you a secret:

I still have federal student loan debt, AND I traveled to Italy last year.  How dare I!?  I'm not supposed to go anywhere until I've eliminated those student loans and reached the golden number (note: dripping sarcasm)!  But really, in all actuality, I think that's a move that would get mixed reviews in the personal finance community.  There are two parts to that choice.  Regarding the student loan debt, I am a teacher and eligible for some loan forgiveness.  I've been trying to make a decision about which forgiveness program to utilize, and have been waiting for the action to be inspired.  I won't pull the trigger on that until it feels right.  In the meantime, I can keep saving money.  Also, I don't know how many years of overseas travel are in the cards for me. I have a beautiful sister with Cerebral Palsy, and she may eventually come to live with me.  Now, this might be in twenty years; it might be never.  If that situation does come about, at that point traveling long distances by airplane becomes more difficult. I can't afford for my life to pass me by while I'm white-knuckling my finances.  While unlikely, it is possible that in ten years my sister could live with me.  If I spent the next ten years focusing on achieving the number (dollar amount to reaching financial independence) to the exclusion of everything else, I might never see Thailand, Australia, or Japan.  I am actively working with my partner in pursuit of full financial independence, but we're absolutely Slow FI because the journey is worth enjoying.

The Key to Slow FI:

I think one of the keys to success with Slow FI is being mindful.  Be deliberate with the choices being made with incremental financial gains.  Making choices that bring joy into the journey will increase mental and emotional well-being.  To me, that is not only the key to Slow FI, but also to Law of Attraction Finance.