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Feeling short, made some mistakes

April 21st, 2014 at 11:56 am

HI all

bad news but using this as a diary too

Bad news

I 'assumed too much and too positively."" on items that were out of my control

Assumed tenant (who moved out of the 2 flat early) would pay me $810 on time.. it is late and may be a week or more out or I may have to fight for it. I have to pay utilities on that the 2 flat til it sells and this would have gone towards it. potential $2-400 utility bill outstanding??

and assumed 2 flat would not confirm til the end of May. it is confirming on the 13th

also roofs will likely be $2000+ more than I budgeted (low budget!)

Thsi means I have an $800-1200 hole for this month (plus roofs) and owe the other 2 flat people $400 out of their security (which I already reclaimed)

I already used the security..so this represents $400 i have to come up

BAD assuming..

Here is my plan

1. sell my stuff (sold $310 worth so far.. got more to sell and appointments this week).. potential of $300+ more and may list other stuff ($300 more.. but not this week likely)
2. stop 401k for next check. potential $730 more $ to me
3. stop unnecessary costs (getting refund on 'just answer' website subscription and stopped that, stopping my fico.com, getti8ng refund of $120 on something else (potential $175 but refunds not coming instntly)
4. see if I can delay confirmation one more month (got a call into the bank).. worth $1025
5. start consulting ASAP (now).. probably can do $200-300 by end of the month
6, take $2000 out of rental emergency fund to pay for roofs AND maybe delay unti that one house is turned over
7. call that guy who owes me $6000.. see where that is at.. that will go towards the rental emergency fund by the way
8. stop auto savings plan for this month or next check

and lastly DO BETTER next time.. stop cutting things so close with stuff out of my control in the air

Onward.. hoping to update with good news.

tenant who owes $810 contcted me today but says they are short and do not have it.. trying to come up with when they will

also my not for profit is in a cash crisis.. which is stressing me and I have very little time to deal with it.. want to close that thing.

with the money shortage..'Necessity is the mother of invention!". I do not want to reduce my emergency fund accounts.. trying to make up as much as I can with adjustments etc.

9 Responses to “Feeling short, made some mistakes”

  1. just a thought Says:

    Do some of the things you've mentioned, even if they money may not come by the end of the month. Pay what you need to pay using the emergency fund. Replenish the emergency fund when the money arrives.

    The point of having an emergency fund is to save you the stress of having to come up with money that you don't have on short notice. So use it, learn from the experience, replenish it, and do better next time.

    But don't beat yourself up. Be thankful that you have an emergency fund that available!

  2. Another Reader Says:

    You need a cash cushion (reserve) as well as a true emergency fund. For now, you will have to pay anything that must be paid out of one of the emergency funds. Refill as cash comes in.

    Can the roofs wait a month?

    While you are looking at unnecessary costs, get rid of everything that isn't critical. Cable, newspapers, magazines - all subscriptions should be examined. You can always add them back once the mess is cleaned up and your income is stable.

  3. Rachael777 Says:

    Another Reader has it again. I do not have a 'cash cushion'. magic words. I got the emergency fund concept pretty quick there but missed the cash cushion concept. I willget to work on that once I clear this up.. I do NOT have to do the roofs this month.. it was more a goal I set and thinking it makes sense to wait until I get renewed and that house we are turning over is filled. No more cutting it too close for comfort. Not for me. On a high note. I have hit a year of the 6 homes. Only 4 more years left til paid off!!Smile

  4. creditcardfree Says:

    I wouldn't stop your 401K contributions, maybe reduce if you are stretching too far. You should dip into emergency funds BEFORE stopping retirement contributions. You have a lot of EF money that can cover your costs.

  5. Kiki Says:

    What do you mean you still owe $400 security to someone? Did you spend it?

    In CA when you have rentals and require a security deposit you are required to keep that money in an escrow account and not use it for anything until the renter vacates the property and you need to do repairs or return to renters. I had to do that when I managed apartments when in college and for my grandparents.

    I'd recommend that in the future for you security deposits. They are not part of your cash flow but are an escrowed account.

  6. Rachael777 Says:

    Kiki.. security deposits were and are escrowed. I am 'settling up' w these folks.. and am taking the security in lieu of rent for the last month. I thought they would owe 30 days rent so I took that.. turns out they only owe 13..so after other offsets I will be giving them back approx $400 (if confirmation is not moved)

  7. Rachael777 Says:

    2 flat was sold at foreclosure sale. so tenants are not moving. I am just settling up for rent/utilties thru the date ownership transfers which currently looks like May 13. All other deposit handling across the 6 homes, 3 units is more 'normal'

  8. Rachael777 Says:

    Thanks creditcardfree. for advice about not pulling out of 401k.I may take that.I had already logged on when you said that and stopped the withdrawal from the next paycheck (31st) but have time to reinstate it. Your advice and others have helped alot.. hoping to sell $350 more of stuff today and then only have 1 sofa left.. and will sell the rest of the small items at the 'New Uses' store in town.. also have new items to list.. some lawn care items and I may sell the 3rd row seats in the Tahoe. I am just storing them and expecting to drive that basically forever.. I did the same thing w my FOrd Expedition (sold the 3rd row) and realized no loss on the sale (at $120k miles) so I may do that. Thanks all. I REALLY HOPE these tenants come up with the cash or some cash by the first!!

  9. CB in the City Says:

    Good advice here. I recommend assuming that everything will cost more than you think and take more time than you think! Never assume on the lean side. Smile

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