Hanging onto the safety net

At around this time last year, I was returning to full-time employment at my job after spending 4 months working at 60% under a 40% furlough, meaning that I was doing three days a week. This was implemented as a cost saving measure and a response to activity downturn as companies (it is a business to business SaaS company) adjusted for Covid implications. I also gave up some holiday salary and a percentage of my full pay for six months in return for options - this should work out a decent deal in the coming few years.

At the same time as this was happening, my own business (I am also self-employed, so work two jobs) saw a near total shutdown, with me losing almost all work for near six months. Unlike others in my job, me entrepreneurial status meant that I didn't qualify for any assistance during this period, even though I generate a hell of a lot more tax once all the VAT is considered. Suffice to say, it wasn't a pleasant time.

However, I also didn't adjust my tax card (the amount taken out of salary to cover tax obligations) down for this period either, meaning that I paid the full tax on my reduced job income, as well as the full "pre-tax" amount for my business, which is a kind of estimate of future obligations.

With all that was going on, this actually completely slipped my mind and in hindsight, I could have adjusted and bought some crypto at the lows with it instead, which would have amounted to about 7x the amount today. However, we were also renovating our house, so most likely, it would have gone to a tradesman or used to pay bills. Instead though, it went to the government and we struggled through with what little we had in order to meet our payments.

Today though, we got our tax returns though, and because of me not adjusting, mine was a bit larger than it would have been, which is nice. Of course, this isn't "free money" because it is already mine and I have essentially overpaid for the privilege to get it back, but still it is nice - Especially considering the last few months and what we have gone through financially to make it to this point.

We knew we were getting it, but rather than count our chickens, we kept our belts on the same notch and instead worked out what we needed. As "luck" would have it, a couple weeks ago our clothes dryer died and the cost of repair is about 60% of the cost of a new one and since ours is already seven years old and they expect five from them, we figure that will absorb at least some of that tax return. Dryers aren't completely necessary, but considering the autumn and winter in Finland, a five year old at daycare who plays outside, they are probably actually cheaper to buy and run than having enough clothes to all was at least send her to daycare dry and cleanish.

Tomorrow, we will head to find one I suspect, but I don't know if they have them in stock, as what seems to have happened is that because they can blame Corona, they are keeping far less stock on hand to keep their costs down. Long lead times also allow them to buy cheaper from the suppliers. But, we will try to get a deal and hopefully find one that is ready for delivery.

The tax return isn't a huge amount, but getting a bit of a lumpsum at this point makes a big difference for us and I am glad that we have kept our debt in check and covered the majority of our bills, as it means that this can be used to create buffer and a breather for us, especially since we aren't doing anything to the house for a while at least. What is both good and sad, is how a small amount can't make such a difference in experience - where rather than having the stress of scraping pennies at the end of the month, things are covered and there is zero outstanding.

What I have been reading recently from Australia, is that there are more people with less in the bank than before, even though the average savings held in the banks is going up. Something like 25% of households in Australia have less than 1000 dollars in the bank, which means that if someone's washing machine or dryer breakdown, they may not be able to cover the cost of replacement. This might not sound like a huge issue, but when there are so many things going on concurrently that need to be taken care of, a little convenience goes a long way, especially if living in small apartments and also having to work from home.

Now, banks themselves might not b the best place to have money, but having that little bit of a safety net available to backup for the small unexpected makes a big difference in experience. Much of my life has been without that there, meaning that it felt like I was constantly living on the edge, always running, always juggling my finances to make ends meet. It is stressful.

What it also means is that it doesn't have to be used to be useful. What I mean by this is that just having it there can help me get through circumstances without using it because I know that if I really need it, I can. This is actually part of the reason I have managed not to use crypto, as while it is potentially there, me really not wanting to use it adds an incentive to get things done without it. Not everyone does this of course as for others, having the support available means they are more likely to use it. I think it is a mindset thing in this regard, where I prefer to struggle under "my own power" than become reliant - even if my reliance is upon my own resources.

It is interesting how much our personal belief systems affect our financial outcomes, with many who struggle the most, apparently also the ones looking to maximize and generate the most value. It seems like the "more you earn, the more you spend" adage plays true, except people get used to spending even when they aren't earning, meaning that in the lean times, they are losing ground.

I believe that it is in the lean times that the most gain can be made or ground lost, because it teachers a type of financial hygiene that tends to not only minimize expenditure, but also better motivate for generation of value Plus, it likely also has implications when the good times roll, where rather than consuming to the max, availability is held back and turned into resources to buffer and be used to buy and earn when the lean times inevitably return.

I was saying to a friend just an hour ago that I hope the coming highs will be the kinds of highs that will build me a foundation to stand upon, so that I will never have to worry about the lows again. This doesn't mean I don't have to consider how I use my money as I have so much, it means that I consider it now so that there will always be something coming in and something to fall back upon if I really need - which I hope I won't because I will still have a job to meet my daily needs - if needs be.

For now though, I know that the mortgage is covered for the next month already, we are up-to-date with our bills, we can cover the dryer and there will be some left over that will hopefully not need to be used before I get paid again, meaning there is an IRL buffer for a bit longer and, a little less stress to cope with.

One thing I am really hoping from the next two to five years is, that I never have to live on the edge again, never have to feel that I am constantly needing to run so as not to be caught by mounting debt or have to juggle my payments to keep creditors at bay. It won't take much, but making it so it is sustainable and turning it into a growing resource of return takes some thought and planning. One thing is for sure though, not planning for financial availability leaves it up to chance and in general, chance delivers broken appliances, not economic freedom.

Taraz [ Gen1: Hive ]