Thinking about money
September 26, 2018
Parental responsibility paradox
I’ve always been responsible enough to cover at least two adults, if not three, and my condition hasn’t gotten better since becoming a parent. It’s led to some weird perspectives on money so I’m never quite sure of the etiquette.
If a friend was ill and you sent them food for a week, would you let them pay you back?
If you visit chosen family every year, they always feed you, and don’t let you contribute, would you engage in a long, probably losing, battle over it? Or is this a thing that family does and you’re supposed to sit down and shut it?
Income and savings
Once upon a time, at least ten years ago, I told a friend “I can’t wait until I make $100,000 a year. Can you imagine how much I could save???”
Answer: Not as much as I had originally planned. But still a healthy amount!
How much could you save on a $100,000 salary and do you have a single income, dual income, and/or any dependents?
Skills
“You know, I lied before. I didn’t really learn to play guitar. I just kinda … gave myself the ability. I did the same when I learned French.” – Chuck, Supernatural
If you could, would you just give yourself talents (musical, lingual, or athletic)? What would you pick?
Massive loans
We’re whittling away at the redwood that is our mortgage and I periodically check to see whether we should refinance for a lower interest rate. Now is really not the time – interest rates are approaching 5%! Our rate is a not great but not horrible 3.875%. I miss our previously pretty great rate that was a full percentage point lower.
What’s the best interest you’ve ever had on a loan?
I always treat food as a gift. I would never take money from a friend who I brought food to while sick nor would it really occur to me to pay back family members for staying over at their house for holidays or whatever. If I stayed in a friend’s home for a prolonged time due to unforeseen circumstances or vacationed with them then I’d split food costs.
When I earned 100k, I was probably spending 30k in taxes, 30k in living expenses, then saving the remainder. I earn more than that now, and we’re dual income, but our savings rate is probably around the same as it was then. Where does it all go, I wonder? Lifestyle inflation, I guess. Sigh.
If I could easily learn a skill, it’d be speaking and writing Chinese. I am just so very bad at it, but it’d be useful both for speaking to the rest of my family and for important life skill reasons.
Our interest rate is 3.25% on the condo. I’m happy enough with it.
That’s a good policy! Yeah I suppose you wouldn’t normally offer to pay back, I just thought that for a week of extra people and food, it’d be good to chip in since I’ve never had the means to do so before.
40% savings on $100k sounds lovely.
I’m really bad at Chinese too. Maybe we need to do group lessons š
The food is a gift, lovingly given! If I visit friends and if we happen to go to the grocery store together, I will very sincerely ask one time if I can please pay for the groceries, or give them some cash (while waving $20-40 in my hand). If they say no, I don’t press it. (This is with good friends who WOULD let me chip in if they wanted to, and sometimes we do that on longer visits. I might offer a second time, a bit later, if it were other host-friends.) I learned the term “opportunity for graciousness” – this is a way for a person who is more used to giving to practice being a graceful receiver. Perhaps try that one on for size!
I’m single income, no kids, no dependents. On 100k I’d pay taxes, max out 401k, and work on mortgage prepayment – working out to about a 25-30% saving rate on gross earnings. It’s a decent saving rate but not staggering!
If I could magically learn anything I’d be fluent in Spanish.
Side note: one of your Amazon ads is hilarious; it appears to be a book called Addicted to a Dirty South Thug. I .. am having a grand old time picturing what those plot points must be.
I like that approach – very very close friends and family I allow to chip in on occasion but I really do have to learn to get more comfortable with receiving than giving.
That sounds like a perfectly respectable money plan!
Hah thanks for that note, I’m a little curious but don’t dare look it up lest I be haunted by those ads forever.
Ill friend: I would tell them that I don’t want to be paid back and that it was a gesture of friendship. If they were clearly uncomfortable with that answer, I’d let them pay some, but probably not all unless they had a way to know the total cost.
Family: I used to resist letting my mother pay for things or give me checks, but over the years I’ve come to see that I need to allow her to enjoy our visits/give gifts in the ways that give her the most pleasure. My resisting made her feel unhappier; my accepting gracefully lets her enjoy showing love the way she wants to show it. I think especially with family, it’s worthwhile to try to shift how you’re seeing and feeling about it. Instead of making it a sit down/shut up situation, try to make it a “playing my part in their feeling good and happy” thing in your head.
Income and savings: I don’t even know anymore. When I was single and had no children, I saved a ton after taxes, even on a much lower income. Things have been really chaotic for the last couple of years with a serious husband health diagnosis, new childcare expenses, and some big fix-the-new-house expenses. The house stuff has been especially costly and I can say that I feel like our home inspector really dropped the ball.
If I could give myself a talent…sigh. The thing is, I don’t have time these days to use the talents I do have. I haven’t drawn or done any personal writing in years. I’m barely cooking, and only because the family has to be fed. Exercise has fallen by the wayside, and I was in the process of heading towards being a decent runner a few years ago. I used to like having a garden, and now I regard it as too much work to maintain– I haven’t even tried to plant anything in the last few years. A talent for making time to relax would be nice. If that counts as a talent.
Best interest on a loan: I have no idea. I try not to track that kind of thing because I have a tendency to get over-focused on it if I encourage my brain in that direction.
I still laugh remembering a dear friend who was overly sensitive to our financial situation and got mad at me for not letting them reimburse us for the food we sent them. I realized then that I had to learn to be more gracious in receiving or I’d turn into her in 20 years š
All of those things are stressful on their own, I can only imagine how stretched you feel with all of them happening at the same time! Sending all my best wishes that whatever can be resolved is resolved with a good result sooner than later.
Yes, relaxing and taking the time to relax is a talent!
Interest: fair point!
For a friend who’s ill, I would ask them to pay it forward to the next friend who’s ill.
For the family, I would graciously and gratefully accept their generosity, both verbally and by either taking them out to dinner or an event or buying some groceries. The gesture and acknowledgement are important, even if they refuse to accept it, to make sure they don’t feel taken for granted. A handwritten thank you is also lovely of course!
All good points. Thank you for weighing in!
I definitely don’t want to be paid back if I bring a gift of food (new parents, illness, etc). And, we once had a 2% rate on a 15 year loan. We ended up changing it to 2.5% in order to get to a 30 year loan, as it made more sense, but. . . 2%!!!
Both 2 and 2.5% sound DELIGHTFUL. I can dream right? š
The best interest rate we’ve ever had is our current 30 year at 3.75%. It’s right on the line for whether we’d feel motivated to get it gone or let it ride. For now, we want to aggressively pay it off in (hopefully) the next 3 or 5 years. We’ll see.
I agree that you don’t save quite as much on six figures as you think you will, or at least that was true with us. Lifestyle creep has proven to be a real thing for us.
Darn lifestyle creep anyway. At least the responsibilities I traded from the poorer earlier stage in life for what I have now are worthwhile.