Where I work, we use SAP for Payroll and shift planning. It’s a dog of a system, truth be told, but it does have one advantage: ready access to historical data for ‘ordinary’ people (i.e. non-SAP administrators) like myself.

I decided to pull out how many hours I have worked each month since I have been there, to see if the stages of my life could be identified easily in the hours that I had worked each financial year. It only took  about an hour to do in total, and most of that was spent inputting the data onto my own spreadsheet for graphing purposes.

What I found, shocked me.

Seven Years in a Graph

Getting Married

If you have read why this blog even exists in my Financial Meltdown series, you will be aware I am now separated from my wife. If we delve into the year I got married (2005), you can see the events as they happen in picture form.

OV is OVertime hours (i.e. staying on longer than an existing shift). OTIRD is OverTime Including Rest Days Worked. RD is Rest Days, and AL is Annual Leave taken.

In the run up to my marriage in October 2005, I was working hard to save money for the wedding, the honeymoon and the venue payments. Come October, I took a decent chunk of annual leave along with my Rest Days. When I returned to work, it was at fewer hours than before with some more annual leave used.

At the beginning of our marriage, life was good. We enjoyed each others’ company, and thus I was spending less time at work. I did the minimum required for a while just so we could be together.

The Honeymoon Period

After I got married, I virtually stopped working over my alloted hours at all. I did very little overtime at all for 2 years. I was enjoying life, enjoying being with my wife, and not realising I was running up thousands of pounds of my own debt and her as well.

It looks good, but right where that graph drops off at the end, things began to go sour. I quietly realised our money situation was dire. I chose to bury my head in the sand. For two years I ignored my debts. I never missed a payment, but I was slowly heading toward implosion. My wife added her own issues to mine.

Our relationship did much as the graph did. Rolled down hill. Rapidly.

End of the Road

I began working harder again. As much to make more money as it was to spend more time out of the house away from the woman I had married. It was the nail in the coffin for our relationship – as if one were needed at all. I still stuck my head in the sand but at least I felt better for working more.

Towards the end of that graph, crunch time came. My wife left me, I handed back my home to the landlord, and I had my financial meltdown.

And I took my head out of the sand at last.

The Future (and Now)

I (and you) will have to wait until the end of this financial year to see my recovery in pictures. Assuming I get to the end of this financial year still in gainful employment.

Does your life play out in the hours you work?

• Dig Yourself Out of Debt: Know What You Owe
• Two Steps Forward, Three Steps Back
• Personal Recessions
• My Financial Meltdown: Part 3
• Credit Card Analysis: From Hell to Heaven

I am feeling a little blue today.

It seems that life takes great pleasure in kicking you when you are down, and today has been no exception.

One Step Forward

It started off well: I should have been off work today enjoying my long weekend, but instead I had arranged to go into work for 8 hours overtime (6am to 2pm).

The day got even better when I was asked to stay until 6pm instead. 12 hours at time and a half.

Despite how facetious that may sound, my regular readers will know I am working to pay off my debt before New Years Day 2010, at the very latest. A renewed sense of urgency was provided by my employer when they sent round an email two months ago warning that we were facing a significant funding short-fall over the coming years, and salary cuts were not outside the realms of possibility. Any and all overtime is therefore extremely welcomed, and worked in earnest towards my goal.

Two Steps Forward

As I was edging closer to being one or two months away from being able to pay off my largest, final debt, I phoned my loan provider today to ask what the settlement figure would be if I paid today. I couldn’t of course, but I wanted to know precisely how far away I was, as simply calculating on the loan outstanding is only half the equation.

It’s quite a complicated affair. There is an early settlement fee of 1 months interest if settled early at all, or 2  months interest if paid before at least 50% of the loan term has passed. There is also the added complication of a scaled percentage of the loan insurance being refundable, depending on what stage the loan is at.

If I paid today, I have precisely £8,036.64 outstanding (or $12,726 USD for my readers across the pond).  That is still £2,200 more than I have, so paying today wasn’t an option. But next month could well be!

One Step Back

All sounding quite good so far isn’t it?

Except, as of next month my eligibility for a 56% loan insurance refund expires. From next month onwards until sometime late in 2010, I become eligible for only a 26% refund instead. Despite my £415 payment next month, I will actually owe more afterward than I do this month. The settlement figure for next month will be in the region of £8,400. Canceling the insurance altogether whilst tempting, is not viable due to…

Two Steps Back

I found an email from the Big Boss with an update on the 5 year forecast for our organisation. It re-iterated the problem in the last email we all received, but put it starkly that despite looking initially at non-pay budgets, there will have to be cuts.

Department heads have been asked to identify 2% savings for next year, saving as a whole £5 million for 2010/2011. If it stopped there, I would not be too concerned. A one-off saving of £5m in an organisation the size of ours would be achievable with relatively little pain and likely no compulsory redundancy whatsoever. That £5 million though is merely the tip of the iceberg.

After 2010/2011, we will need to save £7.5 million every year until at least 2015.

Compulsory redundancy across the entire organisation is a certainty. My department may be insulated from the initial round, but I do not see how we can reasonably escape the entire period unscathed. Bad, bad times are ahead and I really dislike this feeling. I have worked for the same organisation for coming close to 8 years. I enjoy my job, I am good at it. The pay enables me to plan for my future.

Without it, and in the current financial climate, I no longer have a sense of direction.

Even the best case scenario is emotionally unpleasant – 5 whole years of wondering if I will have a job month after month. The recession has thrown my 5 Year Plan (and countless others, of course) out the window. My dream of becoming a home-owner in 4 years time, faded with this evening’s sunset.

Three Steps Back

A letter from my solicitor had landed on the mat for me when I got home.

Half expecting some good news, it was instead, the third and final kick of today. My wife (who wanted the divorce in the first place) has decided to contest it and defend the matter in court.

As she is bankrupt and to my knowledge unemployed, the public purse will be paying for her defense courtesy of Legal Aid, while I continue to pay for my solicitor and subsequent court hearings out of my own pocket, if there is any money in them come the end, given Kick Two.

Closing Thoughts

I must get consumer-debt free, and soon. It is reasonably likely that employment will continue for at least another year before anything starts rumbling in my direction; yet I cannot help but worry about “What if I get made redundant tomorrow?”. All my hard work over this year would virtually have been for nothing.

All my hopes, all my dreams, all my plans, gone in a single stroke.

What will I do?

• One in Four Households Struggling
• Frugal Friday! 5 Easy Ways to Spend Less
• The Importance of Redundancy Planning
• My Financial Meltdown: Part 3
• Is Debt Worth It? Does It Matter?

In 2006, long before I came to the realisation that my finances were in a dreadful state, Trent over at The Simple Dollar proposed a simple question.

Living on Half Your Monthly Income: Could You Do It?

I’m going to pretend first of all – for the sake of this financial experiment – that I am not still living at my parents house. In my mind that is cheating when it comes to the spirit of the question. So I will for the moment assume that I had a rosy life before now, and have managed to buy myself a wonderful little apartment and have a mortgage to go with it.

That seems a little fairer.

Ground Rules

• My monthly income is calculated without any potential overtime
• Income tax remains at 20%
• V.A.T. calculated at 15%

With those rules set, half my present monthly income after tax is around about £1,000 (or $1,600 USD for my American visitors). That is a little better than some folks, and between a little and a lot worse than others.

Playing With The Numbers

Continuing the assumption that I had been financially astute in my prior years and hadn’t been taken to the cleaners by my ex wife instead, for this little paper experiment I bought a wonderful flat with a £32,000 deposit and a mortgage of £71,000 for a 70% LTV (or as our American friends would say – a little over 30% down).

• According to the Barclays Mortgage Calculator: £336.
• Gas and electricity bills are £50 each, so: £100.
• Water Rates (Supply & Drainage): £40
• Council tax on a flat with 25% single-person discount: £82.
• Landline telephone (with broadband of course) £15.
• My mobile phone bill: £20
• Groceries: £75
• Road Fund License (Tax): £14
• Car Insurance: £30
• Fuel to get to work: £120
• Car Servicing: £20
• TV License: £12
• LoveFilm Subscription: £15.65
• Blog Hosting: £12

How Did I Do?

Half of my monthly income (without figuring overtime into the equation) is £1,000.  My total outgoings in my simulation above come out at £891.65.

I can continue my standard of living without making any changes whatsoever if my income suddenly halved! This is quite a surprise actually. In fact, I could continue to save over 11% of my monthly take-home if I agreed with myself not to go out or conduct unnecessary spending.By the end of a year, excluding holidays I could actually still save £1,300.

And If It Dropped Tomorrow?

In the spirit of the question as things stand for me right now (rather than my fluffy fantasy above), could I survive?

• Rent: £120
• Mobile Phone: £20
• Mobile Broadband: £5
• Landline Telephone: £10
• Groceries: £50
• Road Fund License: £14
• Car Insurance: £30
• Fuel: £120
• Car Servicing: £20
• LoveFilm: £15.65
• Blog Hosting: £12
• Credit Card Payment: £120
• Loan Payment: £413

Total monthly expenditure would equate tomorrow as £949.65. Still just under half my income, but a little tighter. My savings goal would struggle. This would leave me with 4.9% of my pay left to save, totaling just £604 for the year.

What Did I Learn

Every exercise you do, try and take something away from it. I have learned that I am pretty frugal already. I don’t spend excessively, and I even upped my normal food spending in the fantasy exercise to make it a fair fight. £50 a month on food is very low statistically. As Trent realised – if you can live on half your income, why aren’t you doing so now and saving or investing the other half? What unnecessary money drains are you entertaining?

Could you live on half your income? Would you need to make any changes?

• One in Four Households Struggling
• Dig Yourself Out of Debt: Spend Less Than You Earn
• My Financial Meltdown: Part 4
• A Guide to: Individual Savings Accounts (ISA)
• Beware The Balance Transfer Cheque