Running On Fumes

You know those three chargebacks I’ve been griping about since February? Each time the bank yanks the money away from me, they fine me $25. Talk about adding insult to injury...I’ve paid $100 in fees so far with potentially $50 more in play. That’s on top of the $105 that was stolen and the other $210 that’s still in limbo.

Those hits have shaved my cash flow as thin as it’s ever been. Right now my available cash exceeds my obligations by a whopping $387 – not counting the aforementioned disputed chargebacks. I can’t even afford to replace the shipping supplies and wrapping paper that perished in the flood.

At least I can postpone buying boxes as long as the customers are on holiday. Wednesday was my first shutout (zero sales) since last August. I expect about one shutout each week from now through August, but I’m especially vulnerable this year with my customary cash cushion depleted. Even though an unexpected large sale yesterday brought some unexpected relief, Curio City will be running on fumes until fall. It takes several thousand gross sales dollars to recover a few hundred dollars in lost profits and we’re coming into the slowest months of the year.

My paycheck just shrank, too. I don’t earn enough to trigger the IRS withholding tables, but my pay does become taxable when merged with Anne’s income. Throughout the past five years I’ve withheld anywhere from 10% to 13.5% according to my best estimate of our actual tax bill. Self-employment tax on Anne’s 1099 income boosted our effective federal tax burden in 2009 to 14.9%. I increased my Curio City federal withholding to an all-time high of 15% effective with today’s paycheck. That was a $14 hit this payday. Ouch. That’s a 12-pack of Harpoon!

Don’t confuse me with a tea-bagging tax whiner, though. Nearly a third of our 2009 income came from unemployment checks. The feds subsidized our COBRA premiums to the tune of about $8,000. The state Medical Security Program has theoretically owed us $1,500 since last November, although they keep finding reasons not to pay it. And just last week FEMA – the poster child for bad government after Hurricane Katrina – sent us a generous check to cover our new water heater and ceiling damage. We collected much more from the feds than we paid them last year. Well, we paid our share back when we made big salaries in the late ‘90s. Now it’s payback time. Long live socialism!

Unfortunately, the party’s almost over for us. Our standard of living will fall when the COBRA subsidy expires next month…it will suffer again when COBRA itself runs out on August 1…and it will crash and burn dramatically when unemployment checks dry up toward the end of this year. Curio City wages are firmly below the poverty line, and Anne’s going to drop out of the mainstream workforce if she doesn’t find a conventional job by June 1. I should use my downtime to figure out how we’re going to get health insurance in the post-COBRA era, but the Health Connector is temporarily not offering individual and small business policies while the insurance companies fight the state over usurious rate increases.

On the bright side, Massachusetts’s unemployment rate fell last month for the first time in three years as the state added over 7,000 jobs. 300,000 Massholes are still unemployed, but economists say that things are picking up and the job market is gaining steam. Will Anne find a job by June, or will she carve a path in the post-employment economy?

Time’s running out.