Monday, February 8, 2010

Feeling Poorer

I recently took a hard numbers look at why we'd been doing so much belt tightening lately. Since I'd gone back to work, money just seemed tighter. Sure, we'd used up a good chunk of savings on my maternity leave. And yes, we spent more on the baby (who is, I might add, turning 1 next week) than we initially planned. And the housekeeper, parking space and daycare costs definitely put a dent in our budget. But it shouldn't have completely stressed it, and yet, there we were, kinda stressed.

It wasn't until I ran a tax estimator that the answer hit me square between the eyes. I earned less than 2/3 in 2009 of what I had the previous year - and the year before that.

In short, that additional 38ish% of our income is the money we would be saving or having for discretionary expenses and home improvements. We had plenty to meet our expenses, but all the squoosh was out of our budget.

This revelation has given me some food for thought. The first is that we could, in fact, save more. The fact that we lived on so much less means that there is more room in our budget than we had thought. How we choose to apply that information remains to be seen, but there it is.

And the other is that I've proved to myself how long it takes to fully adjust to a change in the way money flows into our lives. It really is about 8 months to a year. That's how long it took me to adjust, years ago, to receiving a paycheck only once a month. More recently I went from weekly paychecks to 2x monthly paychecks. Same amount of money, different schedule. Same thing. My new job started last July, and it will be about March before we're fully adjusted. The new expenses didn't throw us so much for a curve ball as the schedule of paychecks did.

I'm still thinking about what to do with the information, and of course, Sander and I need to talk over how we're going to go forward. But it was pretty enlightening to me that our 'feeling poorer' was real and quantifiable - even though we were by no means poor. We really actually had less money, and catching up to the changes takes a while.

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