Monthly Archives: July 2013

Is it a 20% cut or a 10% or what?

“Every young man should have a hobby. Learning how to handle money is the best one.”- Jack Hurley

Well, the first step everyone should take is to put together a list of actions, ideas, opportunities — we discussed this already.  My husband and I did this and the first item was to determine the impact of furloughs on our income and, of course, on our budget.

Let’s look at what 11 days of furlough means?  I’m sure you have heard that “every Friday off is a 20% cut!”  That’s correct in regards to the next 11 weeks but it’s important when we do our budgets to look at the whole year.  It would take a 52-day furlough to lose 20% of our salaries.  That is one day a week.

My husband and I started this effort last fall when sefrustration first started to rear its ugly head.  At that time, we were exploring our 2013 budget and we looked at 22 days of furlough.  The simple calculation we used was:

22 days * 8 hours = 176 hours of no pay
Standard year = 2000 hours
Cut in pay = 176/2000 or 8.8%

                Not quite 20% but still a difficult bite to chew when the budget is tight.  I’m a teacher and I have taken paycuts the past 4 years with more to come.  It was critical for us to determine the amount of this cut so we could plan.

Using the same calculations, we found that 11 days would result in a 4.4% cut in pay.  Still a better situation but a concern nonetheless, right? Additionally, we do a budget based on calendar years, not fiscal years so this introduces another consideration.  For us, we chose to take the loss throughout the full year but we’ll have to adjust accordingly if we find furlough days await us in FY14( see post below!).  If they do, we’ll be ready.  If they don’t, we’ll put the extra money into a savings account for the next fiscal emergency that sefrustration may bring!

In our next post, we’ll look at how to allocate the loss in income and other details our gross estimate overlooked — change in taxes, change in retirement deductions, change in leave accrual, and so on.  All critical items to consider…

Looks like we have more Sefrustration ahead!

“Prediction is hard, especially of the future!”- Unknown

My husband said everyone at work is trying to predict what is going to happen next year.  Based on this news article, we’re looking at not only furlough days in FY14 but more furlough days than in FY13 and possible cuts in jobs (ie, RIF).  Let’s keep working together to help each other – post your ideas and suggestions!

Pentagon Chief can’t offer Hope in Budget Cuts

Monday – 7/22/2013, 9:02am ET
AP National Security Writer

The audience gasped in surprise and gave a few low whistles as Defense Secretary Chuck Hagel delivered the news that furloughs, which have forced a 20 percent pay cut on most of the military’s civilian workforce, probably will continue next year, and it might get worse.

“Those are the facts of life,” Hagel told about 300 Defense Department employees, most of them middle-aged civilians, last week at an Air Force reception hall on a military base in Charleston. Future layoffs also are possible for the department’s civilian workforce of more than 800,000 employees, Hagel said, if Congress fails to stem the cuts in the next budget year, which starts Oct. 1.

On the heels of the department’s first furlough day, and in three days of visits with members of the Army, Navy, Air Force and Marine Corps, Hagel played the unenviable role of messenger to a frustrated and fearful workforce coping with the inevitability of a spending squeeze at the end of more than a decade of constant and costly war. The fiscal crunch also lays bare the politically unpopular, if perhaps necessary, need to bring runaway military costs in line with most of the rest of the American public that has struggled economically for years. “Everybody’s bracing for the impact,” Army Master Sgt. Trey Corrales said after Hagel spoke with soldiers during a quick stop at Fort Bragg, N.C. Corrales’ wife, a military civilian employee, is among those furloughed, and they have cancelled their cable TV and started carpooling to work to save money. “The effects of the economy have started to hit the military,” Corrales said. “It was late in coming to us.”

The furloughs have hit about 650,000 civilian employees but also have slowed health care and other services for the uniformed military, which has stopped some training missions and faces equipment shortages due to the budget shortfalls. Troops were told this month they will no longer receive extra pay for deployments to 18 former global hot spots no longer considered danger zones. Troops already are facing force reductions, and the Army alone has announced plans to trim its ranks by 80,000 over the next five years. Officials agree that the military has undergone cycles of expanding and shrinking of the force over generations. Hagel said this time is different, and worse, however, because of what he described as a “very dark cloud” of uncertainty hanging over the Pentagon as Congress considers whether to reverse $52 billion in spending cuts that are set to go into effect in 2014.

At the Naval Air Station in Jacksonville, Fla., Hagel told an estimated 100 civilians gathered in a bustling jet maintenance hangar that the military had not been prepared for the $37 billion in cuts that took effect this year, forcing the furloughs. While he said he was deeply sorry for the strain the crunch has put on families, he said he would not slash troops’ training or other readiness budgets any further to prevent huge gaps in national security. “I’m sure you realize how disruptive the furlough is to our productivity. So I’m hoping that we’re not going to do it again next year,” Elizabeth Nealin, a research and engineering manager at the navy base’s fleet readiness center, told Hagel. “Have you planned for a reduction in force?” Nealin asked bluntly. Hagel said if the $52 billion cut remains in place, “there will be further cuts in personnel, make no mistake about that.” “I don’t have any choice,” he said.

The spending cuts this year may feel more dramatic than in times past because of a vast growth in Defense Department personnel and equipment costs over the past decade, said Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments in Washington. But current spending levels are close to what they were in 2007, when the war in Iraq was at its peak. “So we’re not even back to a pre-9/11 level,” he said. Since 2000, the number of U.S. troops has grown by about 3 percent to fight the wars in Iraq and Afghanistan, Harrison said. But the number of civilian Defense employees hired to support the troops has far surpassed that, growing by 14 percent in the same time. Hagel said he is taking a hard look at where fat can be trimmed from the Pentagon and said the military has been “guilty of wasting a lot of money on a lot of things.” But he also said he “can’t lead this institution based on hope, based on I think, or based on maybe” — and predicted more dollar cuts ahead.

In Charleston, where the hopeful crowd quickly turned worried, Sandra Walker pointedly asked Hagel what might be in store for her job security, retirement benefits and security clearances if the shortfalls continue. “I’ve taken a second job to compensate, because I have several children at home,” said Walker, who works in education and training at a medical clinic on base. “And if we are going to have future furloughs, will those things be taken into consideration for the future of our jobs?” Sticking to his message, and stopping short of directly answering her question, Hagel offered little hope. “There’s no good news,” he said.

Sefrustration – A hidden opportunity?

“The need for change bulldozed a road down the center of my mind.”  Maya Angelou

                My husband and I learned about sequestration a long time ago and we realized the ‘need for change’ this would bring.  Not only did the impact of a furlough paycut require our attention, but the concept of days off also intrigued us.  My husband has worked for the government (submarine officer and civil servant) since he was 17 years old.  Furloughs and sequestration have never been a factor until this year!  A road was bulldozed down the center of our minds and we drove down the middle of it!

The first step we took was to make a list of concerns, ideas, options, and opportunities.  This list provided us with a path to see us through sefrustration.  The list has been amended, corrected (ie, 22 days of furlough to 11 days of furlough), completed for some items, and updated repeatedly.  My goal with 22FurloughDays is to share this list so you can start developing your own list.  It is never too late to take advantage of this opportunity or to address problems created by this opportunity so start your list now.

Here are the items we put on our list.  We’ll explore each of these as we progress.  I look forward to your comments and ideas as we explore this list and I look forward to adding your own items to our list.

1.  Budget:  identify loss of income and changes in expenses due to furloughs and develop a budget to reflect these changes.

2.  Explore new revenue streams / revise existing revenue:  new job, refinancing loans, TSP allotments – how can we improve our financial situation from an income perspective?  The job may even be a replacement job – we will discuss retirement options, too.

3.  Identify big expenses:  we had family vacations planned already so it is important to consider how these big expenses would be impacted by the sequester – both from a fiscal perspective and from a annual leave balance perspective (the amount of hours needed for a week of vacation changes and the amount of hours earned for annual leave also changes).  We also had to buy a car – unexpected expense but a necessity.

4.  “Freaky Furlough Fridays!”:  Well, they don’t have to be freaky but my husband wanted to take advantage of his Fridays off so he compiled a list of things to do, tasks to accomplish, opportunities to grow.  One of his mantras was “just because I’m not serving my country, doesn’t mean I have to stop serving!”  We can explore all sorts of ideas with this category and make these furlough days a positive, life-changing event.  Of course, there is also an opportunity to do “freaky” Fridays or even fun Fridays.  One idea that my husband’s co-worker had was to all gather at the Alpine Beer Company in our hometown of Alpine, CA.  It’s probably the best beer in the world and the food is fantastic, too.

5.  Self-Improvement:  The combination of 8-hour days and off-Fridays provides an opportunity to improve our health (physical and mental), habits, productivity, and spirituality.  We will explore workout plans, diets, meditation, prayer, and character development via self-improvement tools like 7 Habits, for example.   My brother-in-law introduced us to Ben Franklin’s Twelve Habits of Virtue and we are incorporating those into our daily routine.  How about your 2013 Resolutions?  Have you looked at them since January?  Let’s dust them off and see what we can accomplish with some extra time in our schedule.

This is our list – what’s your look like?  Please contribute as we discuss these different topics.