What to do when your spouse loses their job

 

 When your spouse loses their job, it can be a challenging time financially and emotionally. This happend to us. My spouses position on eliminated during a downsizing.  This has been a difficult time for many reasons.  However, you can still work towards financial independence by making strategic adjustments and focusing on long-term goals. Here’s a comprehensive guide we came up with to help navigate this period:

1. Reassess Your Budget

Immediate Steps:

• Track Expenses: Identify all your expenditures and categorize them into essentials and non-essentials.
• Cut Non-Essential Spending: Reduce or eliminate spending on non-essentials like dining out, subscriptions, and luxury items.
• Negotiate Bills: Contact service providers to negotiate lower rates on utilities, internet, and insurance.

We change phone plans, reduce travel outside of points paid for trips, and put on hold IRA contributions while we figured out our budgets. 

2. Create a Crisis Budget

Essentials-Only Budget:

• Focus on rent/mortgage, utilities, groceries, transportation, and healthcare.
• Delay or minimize discretionary spending.

3. Build an Emergency Fund

Emergency Savings:

• If you don’t already have an emergency fund, start one immediately. Aim for 3-6 months' worth of living expenses.
• Use part of your current savings or reallocate funds from less critical savings goals.

This is something we had, but put more into it with the last few pay checks. 

4. Explore Additional Income Sources

Side Hustles and Part-Time Work:

• Consider freelance work, gig economy jobs, or part-time employment to supplement income.
• Utilize skills and hobbies that can be monetized.

5. Leverage Government and Community Resources

Unemployment Benefits:

• Ensure your spouse applies for unemployment benefits immediately.
• Look into other government assistance programs for which you might qualify.

6. Optimize Investments

Review Investment Strategy:

• Avoid panic selling; market downturns are often temporary.
• Consider shifting to more conservative investments if you need liquidity in the near term.
• Continue contributing to retirement accounts if possible, to take advantage of compounding interest.

7. Insurance Considerations

Health Insurance:

• Explore COBRA coverage or marketplace health insurance options if you lose employer-sponsored health insurance.
• Look into other necessary insurances and ensure they are up to date.

8. Reevaluate Financial Goals

Adjust Goals Temporarily:

• Adjust your financial independence timeline if necessary.
• Set short-term, achievable goals to maintain motivation.

9. Communicate Openly

Family Discussions:

• Have open and honest conversations with your spouse about the financial situation and the steps you're taking.
• Involve older children in understanding the need for temporary cutbacks.

10. Network and Skill Development

Job Search and Networking:

• Encourage your spouse to network and apply for new job opportunities.
• Both partners can focus on skill development and certifications that enhance employability.

After while we reached out to agencies to help with interviewing and resumes. To help get more attention along with Linkin and networks we already had. 

11. Stay Positive and Motivated

Mental Health:

• Maintain a positive outlook and support each other emotionally.
• Engage in stress-relieving activities and seek professional help if needed.

12. Monitor and Adjust Regularly

Regular Reviews:

• Regularly review your budget and financial plan to adapt to any changes.
• Celebrate small victories and progress towards your financial independence goals.

Resources for Further Reading:

• U.S. Department of Labor Unemployment Benefits
• Fidelity: Managing Finances During a Job Loss
• NerdWallet: How to Create a Budget

By following these steps, you can navigate through the challenging period of a spouse’s job loss while still working towards your long-term financial independence.  We are still going through it and with good planning of emergency funds my spouse can wait to find the right job.  Best of luck.

Maximizing Financial Independence: A Comprehensive Guide to Tax Preparation for FIRE Enthusiasts

Welcome back, Fox Caching FIRE enthusiasts! In our pursuit of financial independence and early retirement (FIRE), it's crucial to optimize every aspect of our financial strategy. One often overlooked but essential element of this journey is tax preparation. In this blog post, we'll delve into the intricacies of tax planning to help you maximize your wealth and accelerate your path to financial independence.

 

Understanding the FIRE Movement

Before we dive into tax preparation strategies, let's quickly revisit the core principles of the FIRE movement. Financial Independence, Retire Early (FIRE) is a lifestyle and financial movement that emphasizes saving and investing with the goal of achieving financial independence and retiring early. By carefully managing expenses, investing wisely, and generating passive income, FIRE enthusiasts aim to escape the traditional 9-to-5 grind and enjoy life on their terms.

 

The Importance of Tax Planning in FIRE

Tax planning is a key component of any successful financial strategy, and for FIRE adherents, it can make a significant difference in achieving early retirement goals. By optimizing your tax situation, you can retain more of your hard-earned money, allowing you to accelerate your savings and investments.

 

Tax-Efficient Investment Strategies

Explore tax-efficient investment strategies such as maxing out contributions to tax-advantaged accounts like 401(k)s and IRAs. Learn about the benefits of diversifying between traditional and Roth accounts and how strategic asset allocation can minimize tax implications.

•  Taking Advantage of Tax Credits and Deductions

Understand the various tax credits and deductions available to FIRE enthusiasts. From the Child Tax Credit to education credits, identify opportunities to reduce your tax liability legally and efficiently.

 

Tools and Resources for DIY Tax Prep

For FIRE enthusiasts who prefer a hands-on approach to tax preparation, there are numerous tools and resources available to simplify the process. Explore popular tax software options, online calculators, and comprehensive guides to ensure you're leveraging every available advantage.

• Online Tax Software

Review popular online tax preparation software, such as TurboTax and H&R Block, to streamline the filing process and ensure accuracy. These platforms often offer guidance on deductions and credits specific to your situation.

• DIY Tax Guides

Discover comprehensive guides and resources tailored to the unique needs of FIRE followers. These guides often provide step-by-step instructions, case studies, and real-world examples to help you navigate the complexities of tax preparation. I've been using H&R Block for year. I usually around this time a year find their Federal + State for ~$24

 

Consider Professional Assistance

While many FIRE enthusiasts successfully manage their taxes independently, some situations may benefit from professional assistance. In this section, we'll explore when it might be advantageous to consult with a tax professional, ensuring you make the most informed decisions for your financial situation.

 

As you continue your journey towards financial independence and early retirement, don't overlook the potential impact of strategic tax planning. By understanding the intricacies of the tax code, taking advantage of available resources, and considering professional assistance when needed, you can optimize your financial strategy and expedite your path to FIRE. Remember, every dollar saved in taxes is a dollar closer to the freedom and flexibility you desire. Happy FIRE planning!

 

Home Improvement and downside of home ownership

Owning a house is the dream.  A place of you own. A place you can do what you want with. It's an appreciating asset that can pay for itself.  Well that is what I thought.  Before taking the plunge into home-ownership, like many, I lived in an apartment. The incessant rise in rent coupled with the desire for more space to start a family led me down the path of buying a home. It's a familiar story for many, and while the dream of home-ownership is appealing, the journey comes with its own set of surprises. Beyond the initial purchase price, there's a myriad of expenses that can catch you off guard, ranging from furnishings and higher utility bills to HOA fees and yard maintenance.  In this blog post, we'll explore the world of home improvement and the not-so-glamorous downsides of home-ownership. From the joy of creating your dream space to the unexpected hurdles that may arise, let's hammer out the details of the home ownership experience.

1. Furnishing Frenzy: Transitioning from an apartment to a house often means more space to fill. While the excitement of decorating your new home is palpable, the costs of furnishing can add up quickly. From larger furniture to additional decor, it's essential to budget for these expenses to avoid financial strain.

2. Utility Bill Uproar: The shift from an apartment to a house can result in higher utility bills. Increased square footage means more space to heat or cool, and homeowners may find themselves surprised by the spike in monthly expenses. Planning for these changes in utility costs is crucial for budgeting effectively.

3. HOA Hurdles: Homeowners' associations (HOAs) can be both a blessing and a burden. While they provide community amenities and maintain a certain aesthetic standard, the associated fees can catch new homeowners off guard. It's important to factor these recurring expenses into your budget to avoid financial strain.

4. Yard Maintenance Mayhem: One of the underestimated aspects of home-ownership is the cost and effort involved in yard maintenance. Beyond the picturesque lawn, constant work is required, from mowing to bug and weed control. The expenses associated with maintaining a pristine yard can accumulate, making it essential to budget time and resources accordingly.

5. Appliance Aging Woes: Moving into a house often means inheriting appliances that are not brand new. With most appliances having an average lifespan of around 10 years, the likelihood of repairs or replacements becomes a reality. Unexpected expenses arise when appliances break down, as I experienced when our double oven gave out within six months of moving in.

6. Unexpected Repairs: Home-ownership also means being prepared for the unexpected. Whether it's a leaky roof, a malfunctioning HVAC system, or a plumbing issue, the costs of repairs can be substantial. It's crucial to have an emergency fund to cover these unforeseen expenses without compromising your financial stability.

 

The journey from apartment living to home-ownership is an exciting one, but it comes with its share of financial surprises. Beyond the initial purchase price, expenses like furnishing, higher utility bills, HOA fees, yard maintenance, aging appliances, and unexpected repairs can impact your budget. By being aware of these potential costs and planning accordingly, you can navigate the ups and downs of homeownership with greater financial resilience and peace of mind.

The Fox's Guide to a Blaze-Free Budget Christmas

Welcome to another fiery installment of the "Fox Catching Fire" blog, where we tackle financial challenges with wit and wisdom. As Christmas approaches, we understand that keeping your budget from going up in smoke can be tricky. Fear not, savvy foxes – in this edition, we'll explore cunning strategies to navigate the festive season without setting your finances ablaze.

1. Foxy Gift Tactics: The art of gift-giving is a craft, not a conundrum. Set a cunning spending limit and employ your wits to find thoughtful, budget-friendly gifts. Consider DIY presents or seek out deals that won't leave you chasing your tail.

2. Sly Savings Schemes: A fox is always prepared. Start building your Christmas cache early by setting aside a little treasure each month. If you haven't started yet, no worries – even a small stash can make a difference. The key is consistency and discipline.

3. Stealthy Shopping Strategies: Don't let the holiday sales trap you in a financial snare. Arm yourself with a list and a budget, and stick to it like a fox on the prowl. Avoid impulsive purchases that might leave you with regret instead of loot.

4. Cunning Cost-Cutting Measures: Hosting a festive gathering need not be a financial fiasco. Be clever with your choices – consider a potluck feast or a sneaky Secret Santa gift exchange. Cutting corners on unnecessary expenses will leave more gold in your pouch.

5. Avoiding Credit Card Snares: A fox never falls into the same trap twice. While credit cards may seem like a quick fix, be wary of the interest pitfalls. Use them judiciously, and if possible, stick to cash transactions to avoid the debt snare.

6. Crafty Christmas Traditions: The heart of the holidays lies in timeless traditions. Embrace those that don't demand a ransom from your wallet. Whether it's crafting decorations, watching classic movies, or savoring seasonal treats, let your traditions be as cunning as a fox in the snow.

Conclusion: As you navigate the Christmas season, remember that being a financial fox is all about strategy and foresight. Employ clever gift tactics, sly savings schemes, stealthy shopping strategies, cunning cost-cutting measures, vigilant credit card avoidance, and crafty Christmas traditions. May your holidays be as shrewd and sly as the wily fox, with a budget that remains intact and untouched by the flames. Happy hunting, financial foxes!

What they don't tell you about Credit Card travel hacking

 So I'm a fan of credit card hacking.  Which is signing up for Credit Card to get the award bonus and using those bonuses and benefits to travel for near free.  I recently did a driving trip with my kids to see my Grandparents.  We covered 5 states over and stayed for 6 days.  Outside of gas it only cost us 330 to cover 3 adults 2 kids and 2 dogs. Not to bad.   

All these sites that dedicate themselves to travel hacking like the points guy or nerd wallet don't tell you about business cards.  Many of the reward/Fi sites always talk about is levering business cards. They not only have great bonuses, but don't count toward your Chase 5/24 limit.  Signing up for a business card is easy. You provide a justification. They can range to an established business, blog, to selling something on ebay.  Now what they don't tell you if that these business bonus are usually big, but require a higher spend like 15k in 3 months for 100k points and the big hit in the face is they can give you a very low credit limit like 5k.  Which mean you have to keep paying off you credit card constantly to free up enough credit to get to the 15k.  Ok that isn't easy, but during the right time of year it can be. Like paying taxes, car insurance, or paying school tuition. But then again you have to keep paying off the card all the time. What a pain.  So if you want to go down this route be careful of this issue. 

How to deal with Collections

 I've had to deal with collections twice. Both were mistakes, but something I still had to deal with.

The first one was when was lawn company did unwanted work on our lawn and the second was a dentist bill they auto sent to collections because the bill exceeded $300. 

You need to deal with these immediately.  First things to do is call the company the collections is for to get it resolved. If you need to pay a bill pay it. If it's like my first one, get a manager on the phone and get it in writing the issue is resolved.  Second is to send a letter to the collection company. This is very standard and professional.  There are variations of these to use as a template everywhere.  

The credit score game

 Your credit score can be thought of like your grade.  It is a score credit agencies use to rate you against others on how you will do paying back your loans or credit.  

First thing you must know that this is a very bias system. It is system that reward people for taking out lots of credit and being able to pay it off. So those with higher income are more likely to have better scores which doesn't mean they are more worthy.

Luckily for all of use we can play the game in our own way and use the system to our advantage.  The first and most important thing to always pay your bills on time which should be easy by setting up auto payments.  Second is to work on reducing or better eliminating any balance carry over. This can be difficult, but should be everyone's goal.  Last is history. The length you keep a credit card open the better. So if you have a couple of good card or you have one you have had forever keep it open. If these card don't provide much in the terms of rewards just put the cards in your socks drawer and get them out once very 6 months.  

Keeps this up and your score will increase and will help you get the great rate for a home load.  Some will say all debt is bad.  That is true, but for 99% of us loans are part of life and since our world requires them we will use this tool and make them our own.