Don’t Feed the Alligators

A Personal Finance Blog from a Small-Scale Landlord’s Perspective
11.13.2008
Rainy Window

Creative Commons License photo figure credit: Nictalopen

Having just settled in to the reality of ScrapperMom’s layoff, we learned this week that our tenant for the last year will not be renewing his lease.  Assuming that ScrapperMom gets no new work and that it takes us at least a month to rent the apartment, this leaves us with 38% less income in December than in November.  The only thing keeping us even next month will be the raise that I got last month.  This means that all of our savings and discretionary spending has gone to zero in the upcoming budget month.

Thankfully, we have planned well, and have an emergency fund that can get us by for quite a long time under the present circumstances.  Having just received that raise, there is no reason to expect that my job is not secure for some time to come.  Though with a paying down low interest debt in favor of boosting our savings and emergency fund.  We are still overpaying a couple of our loan accounts, and while it’s not by much, I may still have to bring these down to the minimum payment until our income rises again.

  • I’m glad that I have resisted the urge to invest given the down market.  While a great long term opportunity, this would have tied up cash that we may need to have available in a long term investment.
  • I wish that we had made it a priority to increase our savings sooner, despite the fact that we still have some debt.  This would have given us more confidence and breathing room in the current economy to know that we can weather the storm.
  • I wish that we had not bought an alligator.  We’re now feeling more stuck than ever, and I’m amazed out how quickly our fortunes have turned.
  • We’re not ruined yet, so we’re going to be looking for new ways to trim our expenses.  Many of our recurring expenses, like our Netflix or DirecTV plans can be trimmed by $5 or $10 per month.  Two months ago I would not have thought that this would make much difference, but now that every dollar matters so much more it may be worth doing.  On the flip side, we’ll be looking to stir up new business in the form of a new tenant, as well as looking for ways for ScrapperMom to bring in some new engineering work, or perhaps investigate some new opportunities.

    Have you or your families been affected by the economic downturn?  Do you have any ideas for us to trim our expenses or boost our income?  Let us know what you think in the Comments Section below!

    3 Responses to “When it rains, it pours”


    1. San Francisco Certified Financial Planner Says:

      Keep up the struggle. Saving money and making it through the rough times is always tough, but you’re going about it the right way. You have the right idea when you speak of those $5 or $10 dollar month things adding up to real savings. I always like to show my clients how small savings can add up to big money over time:

      Save $1 per day = $30 per month = $365 per year
      Save $50 week = $200 per month = $2,400 per year


    2. Rachel Says:

      Ouch, my condolences.

      Assuming that ScrapperMom gets no new work and that it takes us at least a month to rent the apartment

      I’m very much crossing my fingers that this is a fairly pessimistic assumption, and your low-income December doesn’t really happen. You didn’t mention how much notice your tenant gave you, and it may depend partly on how hard ScrapperMom is looking. I’d be curious what your plans for Christmas will be if it does happen… the holidays are a notoriously difficult time to be frugal in this culture. But as Dale Carnegie said, the trick is to accept the worst, plan for the worst but then work hard to make the best happen instead. Good luck!


    3. MITBeta Says:

      Rachel:

      Thanks for the encouragement. As for Christmas, we have been budgeting all year for it, so on the one hand, we’ve already got money set aside for gifts, but on the other hand it may be difficult to part with what we have saved…


    Trackbacks