Emerging from my Personal Great Recession
October 14, 2011 1:59 PM Subscribe
The last eighteen months have been brutal for me and my small company. The company became over-reliant on a single client who then stiffed us for a lot of money. To avoid layoffs, I burned down the company’s reserves, then the company’s credit, then my own savings, and then my own credit. Promised payments never arrived, layoffs ensued anyway, productivity collapsed as staff panicked and I began living a crazy-frugal lifestyle. Meanwhile I worked hard to reboot the firm and project to friends, family and competitors that everything was under control: stress city. Now, today, comes the payment I negotiated. It’s enough to pay off the company’s debts, return me to the payroll and reimburse myself for enough of the money I loaned the firm to pay off my credit cards. But it’s really weird, Metafilter: practical and behaviorial economics questions within.
And probably some snowflakes too…
And probably some snowflakes too…
I have damaged my personal credit during this ordeal. To improve my score, is it best that I pay off the cards all at once or is there some other tactic that’s more effective? And what about for the firm?
It may make sense for me to postpone repaying some of the firm’s debts in favor of rebuilding reserves. And, of course, I would like to repay myself the rest of the money I loaned the company. For what it’s worth, the firm is now right-sized for current and projected business and enjoys a diversified client base; the future looks… okay. Any insights into how to allocate the money among these three goals (pay off firm debt, build reserves, repay me)?
There’s a lot of pent up demand in my life right now, not only for stuff—I have probably spent less than $200 on myself in the last year and many things are a little shabby as a result—but for the way things used to be, when I had a cleaning service and didn’t secretly cut my own hair or scout garage sales for things to resell on e-Bay. Ever since I learned the check was on its way, on Monday, I’ve been a little PTSD-ish. I’ve lost my sense of what’s reasonable. How can I recover a sense of proportion?
And in a related vein, how can I make better choices now that I can afford to have them? This week, while traveling for business, I found myself wanting to do things like pay $20 to check my bag just to experience, once again, what it feels like not to worry about every dime. Two minutes later I would be sternly admonishing myself not to spend $2 on the NYT for the plane since I can read it later on line. Once on-line I started looking at Maseratis since I legitimately need to replace my ancient car. I don’t want to become a profligate spender but I don’t want to be a cheapskate either.
Since I’ve gotten so good at living on nothing, I’m considering siphoning off a hefty percentage of my (reinstated) take-home pay into retirement savings. And yet I know I no longer see the post-poned maintenance around the house or my down-at-the-heel shoes because for months now there’s been no money available to deal with these sorts of issues. How can I re-learn to see what really needs to be fixed?
The stress and accompanying insomnia, long hours, poverty, etc. mean that I gained weight, quit exercising and failed to maintain friendships. I’d like to redirect the energy I devoted to survival to improving my performance in these three realms. Any tips?
Thanks, as always, for your help.