Take Charge of my Financial Landscape (35 of 40)

Have you ever done that experiment where you see how many drops of water can fit on a coin? I must’ve done it with one of the kids at some point. I remember we were pretty amazed to see how much water it held before the dome of liquid burst and sent tiny rivers all over the table.

My life feels like a lot that right now; one stressor after another, always pushing the limits of capacity, just crossing my fingers that this next drop isn’t the one to cause the collapse. I don’t know if it’s being a single parent working full time in healthcare or just the being a single person adulting in Southern California, but on a good day, there seems to only be just enough extra energy/emotional bandwidth/motivation to accomplish one single additional thing beyond the scope of basic survival.

Most of these additional things are still related to keeping life moving, like preparing breakfast, lunch and dinner before 9:30 am so the kids have something to heat up at dinner time while I’m still at work.

Or, exercising/stretching my back so that my work day will be manageable and my mental health gets a bit of a break.

Or, researching a pressing topic that relates to the wellbeing and safety of my kids.

Or, doing the laundry.

Or, foregoing those things to attemp something more enjoyable like a social engagement, writing or working on a goal for this list. This one can be tricky because it comes with nagging all-the-other-things-are-currently-not-being-done guilt, but it is what it is.

So imagine my reaction when I opened a letter this weekend from the State of California Franchise Tax Board that kindly informed me that I owed them over $10,000 which should be paid in full by the following Thursday, this Thursday!

If you imagined a heart-stopping pause in which my brain fell directly out of my ass, you were correct.  

Literally shaking and flushed with sweat, I counted breaths as my friend reasoned to me that it was definitely a mistake, clearly a mistype of some sort and, in any case, disprovable by the information I already have. Those facts, however, did very little to dissuade the rising terror of having the IRS’s bright white interrogation light aimed squarely at this single mama.

I panicked. I cried for awhile and then dissociated by watching Instagram reels until it was time for bed. I woke up this morning, cried some more, and then attempted to tackle the beast first thing. #adultingamIright? 

I called the 800 number during their listed hours of operation, sat through five solid minutes of pre-recordings only to receive an automated reply to call back in an hour.

While I waited, I called the tax preparers, who are definitely getting a one-star yelp review, only to receive an out-of-office notice on the recording. Conveniently, they are gone until Thursday, my Thursday!

So 8am rolls around and I'm finally put in the callback queue for the Tax Board. Cut to forty-five hold-minutes later, and finally...a return call! The dude rambled off his name and ID as fast as an auctioneer, asked me a single question, then barely waited for my answer before rapid-firing a number and instructions my frazzled mind could not possibly understand. 

And then he hung up…before I could even say why I was calling!

I cried again. And this time, I cussed a bit. 

I won’t bore you with the following several hours of the same. damn. thing, but needless to say, by mid-day I wasn't much further along than when I started.

I had stopped crying though so at least there’s that.

You may be wondering, what does this have to do with the 40 by Forty list? So much actually. I had a goal this year to become more financially educated, and while I didn’t expect my post about it to go like this, it does highlight a few things I’ve learned about money.

In the early years of singledom, the idea of suddenly having to be solely responsible for my finances felt overwhelming. It wasn't that I was completely naïve about money, but the last time I had to go it alone, I was barely an adult, living in a $400 a month rental with no one else depending on me. This was next level responsibility without a safety net. I wasn't ready to dive right in. Instead, I regarded my finances like a nebulous elephant in the room and I side-stepped around it as much as possible. 

Last year, once the divorce was truly finalized and all the chips had fallen where they would, I decided to confront the beast. 

Lesson one: know my numbers. This includes all checking, savings, and investment accounts. I listed them all out so I had a complete picture.

Lesson two: develop a working budget. I gathered six months worth of spending info, looked for patterns and input a budget using Mint.com. Then I spent a few months tweaking it and making changes as unanticipated things came up. The best advice I received about effective budgeting is to assign high and low value items. For example, one person may spend $100 on eating out, not remember what they ate and feel physically terrible after. This is a low value item because that money had minimal positive return. A foodie, however, who loves trying new restaurants and eating socially with friends would assign a high value to that $100 restaurant budget because it brings meaningful value into their life.

Lesson three: maximize my savings. Conventional wisdom suggests having at least 6 months of living expenses saved in an easily accessible emergency fund. The good advice I found here was to open a high-yield savings account. I found one with a 0.5% APR so now the money I keep liquid is still making me a little somethin'-somethin' on the side.  

Lesson four: invest. This is definitely where I have the most to learn. I honestly did not realize that investing is a two part process. Setting aside money into a 401k or the like is only the first step. Once the money is in the investment account, you still have to actively invest it into the market in order to grow your wealth. This is the difference between having hundreds of thousands of dollars at retirement and being a multi-millionaire. While I am still learning about stocks and managing my own funds, I decided to enlist the expertise of a financial manager. Besides, I really don't want to spend my singular bonus task each day managing investments. 

Money is still a complex and intimidating subject for me but understanding it bit by bit has helped remove some of the fear. This latest issue with the Tax Board is just another reminder for me to take it one step at a time. The sheer panic I felt last night is all but dissipated. Within the span of writing this entry, I was able to get confirmation that the government had in fact made a mistake and I no longer need to worry about coming up with a small fortune in a matter of days! #winning