September 26, 2016
Maybe not all of them are unhinged but these soundbites from startup founders in a survey where they answered questions about their finances sure make them sound like it. I noted that only 6 of the respondents were women so it’s likely there’s some sort of self selection bias going on there.
“Don’t save for retirement. That’s like betting you’ll fail.”
The complete logic fail here is astounding. It assumes that the only success will leave you so wealthy as to have your retirement secured. It ignores the fact that you might succeed but only modestly so, or that you might have more expenses in retirement than a buyout could cover, or that you might succeed but not ever be bought out. Running a business doesn’t always end in being acquired for billions. It also links the act of saving to actively betting against yourself which doesn’t make any sense at all. I have supreme confidence in myself and my success but you betcha I save for retirement because I want one, and I don’t control everything around me.
“You can’t save your way to being wealthy.”
Yes, you can. You could also, if you were really savvy, probably spend (invest) your way to being wealthy. Refusing to do one or the other if you have the opportunity to simply because it’s not the quick and easy way is pretty shortsighted.
“Bet on yourself rather than on external investments (housing, stock market, etc.).”
We all know that’s not an either/or proposition, don’t we? Of course one of our biggest assets is our ability to earn. But that shouldn’t be your only asset if you have a choice about it.
Does this founder also put everything on red and let it ride? Because betting solely on yourself as a single asset and refusing to diversify is pointblank stupid. What happens if you’re killed or crippled in an accident? What if you’re struck by a chronic disease that severely limits your ability to function? What if a dependent family member falls ill and needs full time or long term care?
I don’t pose these as unlikely hypothetical scenarios just to be contrary. All of them have happened to us or a family member.
Other bad advice
That got me thinking about times in my life when I was given pretty bad advice and was chided for being too stubborn to heed it.
I did listen to good advice, I wasn’t immune to all advice, but some of these were just too much.
“Maybe he’s just being nice.”
When a manipulative abusive boss tried to give me cash for a vacation.
No, he was never just being nice. He wanted to buy loyalty for petty change and the loyalty he wanted was unreasonable and unprofessional. You know what I’m talking about.
“You should have kids when you’re young and have energy”
A cousin 12 years my elder pressed me on this point when I was 21 and definitely unprepared for marriage, much less kids. To my family, who expects to see us married by 24 at the latest, it was looking like I’d spend all my time working and never getting married and having kids. The joke was on her, apparently. 8 years later she said, ok, yeah, you should enjoy your life while you can.
Thank you, I believe I will.
Yes, there are times I wished I had JuggerBaby earlier so Mom would have met and enjoyed zir too. But that’s one tiny fraction of the entirety of our lives that I enjoy so much: having amazing flexibility and autonomy in my job, being financially stable, having a solid marriage and partnership, these things would be missing from the equation. Only their fledging counterparts would have been there: paying down debt, managing my health, and growing my career would have been so much harder and would have meant I’d miss so much more of JuggerBaby’s life. We were late to having a kid but because of it, I’ve been lucky enough to enjoy so much of zir growing up. (May we always have this stability and flexibility.)
To be fair to her, it wasn’t objectively a terrible bit of advice. It was just a bad idea to suggest that I should model my life on everyone else’s. I prefer to aim for a little more extraordinary, and that doesn’t fit the safe cookiecutter lives they encourage.
::What bad life advice have you gotten? What’s the best advice you’ve gotten or given? How have you strayed from the expected path?
September 21, 2016
We dubbed him Seamus in the first, rough, weeks of his homecoming, a play on “Shamey-y”.
I can’t be more grateful that we weathered those days, welcoming him even when he broke almost every rule trying to learn the ropes, even when we had a baby on the way and weren’t sure how it would all happen.
From the moment he met JuggerBaby, the squirmy little bundle of noise and mess, with interest and hope, he’s been a trooper, the saintly dog you’d always hope for in just such a circumstance.
Life with DOG!
JuggerBaby and Seamus have a curious sibling relationship. You’d think they didn’t care whether the other existed, until you made the mistake of raising your voice or provoking screeches (which, to be fair, is really easy to do for a toddler of JuggerBaby’s age). Seamus would quietly insert himself into the room and check on everyone, clearly concerned that ze would survive the day, and leave just as quietly when it was clear no one was a casualty.
Likewise, you’d think JuggerBaby was kind of a jerk the way ze petted him like he was a first class drum set, until you notice that zir carefully leaning in to give him Mmmmwah! kisses, before and after overenthusiastic pets. And woe betide you if he looks bored and ze knows where the Chuck-its are hidden. Like an extension of Seamus’s will, ze unearths the toys, presents it to you with a demand: BA!! and points at zir brother. Throw that thing, parent, and do it now! He’s bored! And soon after, carrots! Ze pulls them out and points insistently, EY! Give him treats!
As part of my weekly grocery shop, I prep packs of carrot sticks for Seamus. They sit sit together on the floor, box of carrot sticks clutched in JuggerBaby’s still chubby fist, staring at me for permission to hand them over, one by one. Once in a while JB’s enthusiasm brims over and ze offers him the entire container. He’s no fool, he looks at me for the nod. Even when ze dumps the entire box on the floor in front of him, he waits for the nod before reaching for any.
We do bedtime together, he lays at our feet while we read bedtime stories and sing bedtime songs, then he and I decamp to the living room for his care: brushing teeth, pedicure, cream for his itchy and raw skin. He lays his head on my knee and naps for a while, before his last nighttime stroll with PiC.
Medical woes
His weight has stabilized, he’s lost much of that sympathy pregnancy weight, but he has had a rough road.
He’s had an ulcerated eye, twice.
JuggerBaby nearly poisoned him (maybe).
His skin looks worlds better than it did when he first came home but he still breaks out into hot spots so I’m always on alert for any new trouble areas. Twice a year it gets bad enough for the heavy hitting meds. They’re effective but we don’t want him on steroids more than 20 days a year, they aren’t great for his organs, so I aggressively treat all flare-ups to keep them from progressing past hot spots.
He’s had an endless stream of infections. They crop up when he gets scraped up playing too enthusiastically and sometimes just because it’s fun to make me jump. I’m his on-call emergency medic, always carrying a full kit of topical antibiotics, ointments, bandages and gauze.
We make it through each one because he’s generally an astoundingly good patient, for a dog who surely doesn’t understand why I’m making him lay still while I poke and prod his painful parts, and our vet is good about working with me in filling the appropriate medications when we need them instead of making me bring him in for an exam every time. This saves us anywhere from $200-500 a year.
A Dog and Our Money
I’ve been using the saved proceeds from the blog to pay for his numerous medical needs. Unfortunately, since this isn’t a cash cow, we’ll need another way to fund his care soon.
We can cashflow his food, supplements, the occasional toy, and any other gear a good pup needs out of our regular income.
I do most routine maintenance at home for the cost of materials: war cleaning, nail clipping, pilling, first aid. These could all add to the price tag but luckily I enjoy animal husbandry.
We’d love a companion pup for him, he does best when he has appropriate canine company, but I’m not sure we can take on Number Three any time soon. It’s nearly as much work as a kid in a lot of ways and the costs pile up quickly if you’re not careful.
And another pup would make travel even more expensive. When we go on vacation, so does he. Turns out all the dog sitting I did as a favor to friends back in the day, because I knew I’d appreciate it if I needed the same? Well, there is no dogsitting karma. Nor is there babysitting karma.
Please, keep reminding me of that, because I might still lose my head and adopt another senior dog one day.
:: Are you a dog / cat / other animal person? What makes them great?
August 15, 2016
I asked how you manage your money if you have to compromise with another human. It’s only fair to share how we’re managing ours!
It’s taken years, but PiC and I have a pretty good system for us these days.
Once upon a time, my money was my money, and then it wasn’t. The last time it’s been totally separate was when I was 12. Since then, my own money has been intermixed with family issues at various times for various reasons. After years of hard lessons with my family, I had to learn to trust, and take risks based on that trust again when PiC and I started to cohabitate, and that’s where our money started to intertwine.
It took at least a year after we got married for it to truly sink in that our money was irretrievably connected, however we chose to handle it. I was evaluating our life insurance 4 days after we got married but viscerally, it’s a lot hard to remold “me” into “we”. Over the course of that year, it was a tentative subject and we weren’t ready to say much, but we were slowly aligning ourselves with each other without words, just through actions.
It’s never painless, not when you’re talking about unseating a decade of habits. Our foibles would occasionally pop up and give us some trouble. It was at this point that we began to learn the art of compromising with each other, and realized that neither of us did well with a shared budget and separate finances. It’s taken a few more years and a lot of adjustments but we’ve got a working system now.
Ours to have and hold
Budgeting the money
Pretax contributions come out first: taxes, retirement contributions, health, dental and vision, pre-tax FSA account, disability and life insurance benefits. Those all come out of PiC’s paycheck because his benefits are way better than what my work offers.
25% of our take-home pay is automatically deposited to our joint savings account, this comes out of both checks. We added up all our bills and made sure that it didn’t exceed the remaining 75% which is dropped into our joint checking account. All the bills are paid out of that account: mortgage, HOA fees, rent, daycare, credit cards.
Spending the money
All routine costs that can be are charged to credit cards that bring in the best rewards and that’s paid by the joint checking account: gas, groceries, utilities, travel, dining out, medical and vet bills.
We kept our own checking accounts and credit cards. I pay most of the bills out of the joint account, he pays a couple of the utility bills and his own credit cards. I do all the accounting, oversee our retirement accounts and, since my eye is on early retirement, I actively manage our brokerage account and our real estate property. We use Mint for bills reminders but usually have paid it by the time Mint sends the weekly update.
Pretty simple all around.
Communication is key
Twice a month, I ask PiC what he’s going to pay in the next week. I don’t see all his credit card bills so that helps me keep a bead on the expected withdrawals. Our mortgage, rent, and association fees are automated monthly payments so asking regularly and a quick eyeball of the account tells me if I am going to run short. That really only happens when a big unbudgeted four digit check is cut, but I’ve been burned by keeping too low a balance in the checking account before. Never again!
We also created a shared email account so all our financial accounts go there. That way if either one of us is out of the picture, access to important financials isn’t restricted to someone’s email.
Bonus money
I do some credit card churning on the side to earn travel money, that’s how we paid for our travel to Hawaii and Washington without breaking the budget. I keep that simple too, one or two cards per calendar year for specific trips. This year I’ve already done our second card, but I’m considering a third before the end of the year.
I alternate between cards under each of our names and don’t bother with any sign-up bonus less than $250 value in travel money or miles.
I used to be cautious about keeping old credit lines open, which I still do, but I’ve spent enough years being responsible and carrying no debt that our credit histories are in great shape. I’ve shown that I can carry an auto loan and pay it on time for many years. I’ve got many years of credit card use, always paid in full and on time. Same goes for the mortgages – always paid on time.
This means our credit scores are always in the high 700s or low 800s no matter how much churning I do, so I stopped worrying about preserving it years ago. This is good for anywhere from $500-2000 worth of travel value. Not bad for several days of work.
:: Do you simplify your money management (fewer accounts, less active management) or go for the more complex (maxing rewards sources, bonuses, etc)?
August 10, 2016
I don’t think that the only way to express love is to spend money but it’s prevalent in both our family cultures. Well, naturally it’s commercially popular, but I also see this among family and friends who weren’t raised in a capitalist society.
Even among the traditional, Eastern philosophy set, money seems to reign supreme as the expression of love, loyalty, fealty, filial piety.
At Lunar New Year, married couples wish the young singles a happy new year and prosperous life by giving them red envelopes stuffed with cash.
For weddings, we don’t give gifts or make registries. Family and friends show their support of the wedding and the marriage by means of a red envelope stuffed with cash. It’s not called a gift, in my culture, it’s called “tying their hands together” (roughly translated), meaning you’re contributing to the fact of their union. I always liked that.
We never celebrated birthdays except for little kids, and you guessed it, gifts were normally red envelopes stuffed with cash. A wrapped gift item was rare.
Never coins, though, it had to be paper bills. I can’t remember the reason behind it but your envelopes should never jingle, only crinkle.
I see this mentality played out through other aspects of the culture, too, and while I loved some of the traditions, some of them get carried a bit too far.
Love is supporting your kids / dependents financially.
Kids didn’t ask to be brought into this world and a loving and responsible parent should be doing everything they can to make sure their kids are fed, clothed, educated and safe.
But it has to stop at some point, doesn’t it?
When parents are still supporting their kids well past their 20s, and into their 30s, and 40s, even when the kids in question are perfectly capable of supporting themselves, I’m not sure what the game plan was and how it went so very wrong.
I see parents insisting on funding things for their kids that seem outrageous to me when I know the kids are earning very solid incomes and have every opportunity to save for these things on their own: cars, down payments, vacations, household supplies. You have to wonder how the kids are going to manage on “just” their own incomes when the parents aren’t there to serve up another half salary.
Then again, Nicole and Maggie have me asking is it support or is it a gift?
Love is supporting your parents in their old age.
Within reason! Ten years ago, I dreamed of providing my parents a very comfortable retirement. But it was supposed to start closer to my 30s or 40s, not in my 20s.
But it started in my teens and 20s, so I can only provide Dad shelter, food on the table, and utilities fully paid. We’re not going to endanger our financial futures by trying to go overboard and provide luxuries he wouldn’t enjoy much for the look of the thing.
I learned that lesson by observing some cousins who are on financially shaky ground because they did that very thing: their parents were so grabby that the cousins couldn’t save for retirement, couldn’t save anything, really, and ended up needing support themselves. Both parents and kids are to blame in that case – the cousins were well old enough to set reasonable boundaries and refuse to volunteer money for luxuries like retirement and
Love is giving money gifts.
Under the specific rules above: Lunar New Year and weddings, sure. I’ll even throw in graduation presents up through college for very close relatives.
But we don’t do gifts for every occasion. We don’t gift on Valentine’s Day, Mother’s Day, Father’s Day, etc. It weirds me out when people have an expectation of gifts for everyone on every occasion.
Love is treating everyone else to a meal out.
It’s nice to be able to pick up the tab every so often.
But I much prefer paying our own way or taking turns or even just staying in and cooking. Not every meal has to be a dining experience. If you’ve ever seen an all-Asian table get into rugby mode over the bill, well. Let’s just say that following up a nice dinner with a knock down drag out fight a few times means that you’d be tired of this one too. I mean, it’s funny the first few times but …
And if you don’t participate then you never pay, and while always being treated when you eat out may seem nice, I certainly don’t like being that person. Let me pay my own way and have a civilized meal, for the love of Murgatroyd!
:: What do you think? When is it a gift and when is it support? When is it support and when is it enabling? Are you comfortable with the flow of money in your family and friend circles? What are your norms?
July 25, 2016
PiC and I have taken years to properly combine and organize our money since the wedding.
The end goal has always been that I shall take and keep complete Dominion over All Things Money! Given our wildly differing levels of interest, it’s for the best.
We started out with completely separate finances. It was all too complicated to merge, I thought. But as we started to combine our lives, the separation and siloed information started to drive me bonkers. It turns out that I need to have almost complete control over the whole picture to be able to make effective, informed decisions. It’s simply how I work best.
There are still some loose ends. Some of them may stay loose-endy due to their nature of being specifically one person’s thing to deal with. I recently wrapped one of my own, dealing with a retirement account that was weirdly designated and dumping those funds into my primary retirement account. I have another one that I’ve started writing about and am not ready to put out there yet.
Things like inheritance gets tricky. I don’t feel like I have a right to touch money inherited from his side, nor do I want to touch it. On my side, there’s been nothing but grief when it comes to money so I especially hate the feeling that doing anything to protect his inheritance feels like I’m a moneygrubbing so-and-so. Except I don’t want any of it for myself! I just hate seeing money managed less effectively than it could be. But because of the feeling that I didn’t come to this union with my own family money (except I did, it was all money that I earned with my own hands), I’m more comfortable ignoring the nagging feelings that it could be better managed and leaving it alone.
Viewing the landscape, I see friends of varying economic levels from poor to very high net worth with all kinds of financial arrangements.
I also keep seeing strong opinions on how, if you’re married, you need to combine finances. I agree that you have to have a system but I don’t agree that it has to be any specific kind.
:: Have you ever had intertwined finances or finances that were dependent on others (partners or roommates)? How did that work for you? Do you have a personal preference for combined or separate finances?
July 18, 2016
You might remember we just spent half the year on dealing with car stuff so when I spotted this comment over at Dad is Cheap it jumped out at me.
After working in the auto industry for 16 years, I’ve seen just about everything. Some of the things I’ve learned: 1) Never buy used from a private party. 2) When you buy used from a dealer, know that they almost always “pack” the car by at least $2k-$3k. In other words, start your negotiations by taking off at least that much and sometimes more depending on the model. 3) If you get a great price, know that the finance department will do their best at charging you high interest (they get a bonus) to make up for the loss. Don’t let them get away with it. Ask for the lowest “buy rate” if you need to finance it.
The commenter went on to explain why:
It’s more or less general rule of mine because I’ve rarely seen private sales work out in the long run. Unless you are car savvy or take it to a trustworthy auto technician to be examined, it can be difficult to detect a maintenance nightmare and unfortunately, I’ve seen far too many private party sales end up in court battles with little or no recourse.
In my personal opinion, an exception to the rule would be if you know the car and where it’s coming from, and you are able to make a determination that the car was maintained properly. Maybe from family member or friend. I most certainly would not take a chance on purchasing a car from an unknown party.
Rules 2-3 are useful, but Rule 1 directly contradicts ours. My first car was new, but since PiC and I joined forces, we have never bought new since and we avoid dealers like the plague. The convenience has never been worth the price padding for us.
PiC’s rules for buying cars (& approved by me)
Rule 1: Always buy used from a private party.
Rule 2: Always buy from an original owner or a 2nd owner.
Rule 3: Always review the owner’s paperwork and maintenance history, making sure that it all matches up. Don’t take their word for it.
Rule 4: Always take it to a reputable mechanic for a PPI (pre-purchase inspection) before making any decisions. You can, and we often do, negotiate a lower priced based on the recommendations from the inspection.
Rule 5: If you have car savvy friends (we do), don’t be too proud to consult them. Our very car savvy friends know certain makes inside and out, and were able to advise us to avoid certain model years due to known maintenance issues.
Together, we’ve purchased three used cars in the past ten years and they have all run smoothly and reliably. We budget for and pay regular maintenance costs every year, and we still spend less than the cost of a new car (financed or paid for in cash) and all the normal maintenance associated. We’ve never broken down due to mechanical issues, though we have had some random unfortunate incidents.
As an aside, this is why my parents insisted that I buy a new car in one of my earliest wastes of money. They didn’t realize that it just takes being more selective, and more legwork to save 50% or more on a used and just as reliable car.
It’s not that we don’t like new cars – we do! But believe it or not, we like cars that are quite expensive. Way too expensive for a family of four, and way too expensive for a family who intends to retire early and do some good in the world. And that stuff is more important to us anyway, so even though we might LIKE the idea of the super shiny techy, we choose not to go that route. Instead we pick cars that fit exactly our needs today, in excellent condition, and keep them that way as long as we can. Which, considering the JuggerBaby, takes a little extra work, but it’s worth the satisfaction of winning another battle against entropy.
And someday, when I hit the bigtime, PiC can have his Porsche. Any kind, any color. 🙂
:: What are your car buying rules? Does “used” make you think of a clunker or someone else’s lemon?
June 29, 2016
This is an entry in the #FinHealthMatters contest sponsored by Center for Financial Services Innovation and FinCon. This is my first year attending and the prize would help tremendously. One of the winners will be selected by top engagement on Twitter and Instagram using #FinHealthMatters. I’d appreciate your support by sharing this post with the hashtag on Twitter!
My parents did their best. Graduating from high school, daughter of immigrants, I headed to college armed with a $1000 scholarship, a minimum wage job, and the knowledge that it was my turn to study hard and make good on their sacrifice.
Ignoring for a minute that I’d been experiencing increasingly debilitating bouts of idiopathic pain, I couldn’t hide the thrill of embarking on Ye Grande Adventure of Adulthood.
“Weeping may endure for a night…”
It happened fast. Mom was diagnosed with diabetes. There were complications, she needed surgery. I stepped in with my meager paycheck temporarily, I thought, until she was better. Post-surgical anxiety and depression set in, the diabetes was complicated by a stroke, the stroke left her unable to work, and her inability to work sent her into a tailspin from which she never recovered.
Managing the household in her stead, an endeavor chronicled here for moral support and posterity, was more downs than ups, more tears than laughter.
To my horror, I discovered that Mom and Dad had been using credit cards to fill in gaps for years, paying only the minimum payment, to the tune of $100,000. It didn’t make sense! They worked 365 days a year. We never ate out, never vacationed, rarely shopped. Where did it go?
Answer: They’d been helping our extended family for decades.
I couldn’t leave. No one could pick up the pieces. Their family was unwilling to return the help, Dad was out of work and Mom wasn’t well. I felt obligated to fix the mess while hiding our shame from more affluent friends. (Y’all, everyone was more affluent than we were.)
The next decade blurred into a haze.
I ran the overtime meter, paying the bills, cutting swaths off the Family Debt, started my first IRA, started saving, and brought home my college diploma without any debt attached. Success, purchased at a steep price.
At my lowest point, sick with embarrassment, in chronic daily pain, seeing our car get repossessed because Dad lied to me, and having to fix that humiliating mess, my hope faltered. And then Mom died, suddenly.
Reeling, I stumbled into my new reality.
While I was focused on my family, my life path had changed, irrevocably. The stress of trying to settle my family on firm ground exacerbated my long-elusive diagnosis (fibromyalgia) so the career I’d dreamed of was impossible. And now, Mom, my inspiration and strength, was gone.
Any hope of rescuing my good health was sacrificed on the altar of filial piety. Now my job was to create my own financial safety net before my body gave out. It was time to make my own way in life, career and especially money.
“…but joy cometh in the morning (Psalms 30:5)”
I learned to plan: for tomorrow, for forty years from now. I needed to pay this month’s bills and know we could pay next year’s. I needed to know we would retire someday. Saving and investing were top priorities, equal to paying off that crushing debt, and I never regretted it for a minute.
Financial health means we work for our future, instead of scrambling to escape the morass of our past.
It means PiC and I were home together with our JuggerBaby when ze was born.
It means that we can afford reliable (expensive) childcare.
It means that when, not if, my health declines further, we don’t have to choose between medical care or food.
It means we can support those in need, lend a hand, and celebrate friends and family.
It means that we can grow old, keep a roof over our heads, and try to leave the world a better place than we found it.
:: What was your moment of joy, when it all turned around for you, financially? How are you financially fit? What drives you to do better?
*Part of Financially Savvy Saturdays on brokeGIRLrich, Disease Called Debt and Money Can Buy Me Happiness