January 17, 2012
A reader story on Get Rich Slowly was the most impressive set up of an estate for an executor I have ever seen.
Her father familiarized her with all of his key financial people, negotiated legal and funeral fees, made all the funeral arrangements that he could prepay himself, keeping all the necessary copies of records for her, and settled his money on the children in such a way that accounted for the extra work that she’d be doing as the executor.
He outlined and folder-tabbed the process of settling all the major and most of the minor aspects of the impact of his death on their lives long before he passed. If that’s not love, I don’t know what is.
~~~
For my side of the family, I had nothing but the funeral to settle and pay for when Mom passed, because I had long taken financial responsibility for just about everything else. The funeral arrangements still cost a fair amount of money, not to mention the travel and other costs.
Dad is now free to earn a bit of a living for himself, and is doing so, but there is no expectation on my part that his efforts will yield more than enough to pay for his basic needs, and just some of them at that.
I’m the first in my family to worry about any kind of estate planning and while I have the framework mentally shaped, it is nowhere near the level of organization that I know a true, developed estate will one day require. And for the moment, that’s ok. My own finances weren’t there yet a few years ago when I started the process, and neither are ours right now. I will be taking the post shared by Jody as a blueprint.
For PiC’s side of the family, we have no clue what the estate plan looks like. As they actually have some sort of family money, that scares me at least a little bit. I have no interest in the money or the estate itself. Marrying into money of any kind was the last thing this Make-it-Entirely-on-Your-Own girl wanted, but I do have concerns as a principle.
Handling any estate is a fair job and handling one with any real value well requires time and diligence that I just don’t see at anyone’s disposal. And by George, I can only imagine the mess of sorting an unfamiliar estate when you haven’t got any of the groundwork laid. Because of this, I’ve long encouraged PiC to have a conversation with his parent and siblings. They should have a clue about where to begin, end, and how the middle bits join up.
~~~
One good friend’s elderly mother, now in her mid 90s, is comfortably well off but frets over saving her pennies. There’s no good reason to, my friend scolds, her children most certainly don’t need, want or expect any money from her so she shouldn’t have to worry about anything but keeping her health and enjoying her days.
Another friend is into her 70s and is hale and hearty but is still working. Partly because of a late in her years divorce which left her financially stranded, partly because it keeps her busy. I don’t know if she’s also trying to leave something to her children.
Friends in our cohort who are just starting out with young families are just saving or new to investing and haven’t really begun “disaster” planning yet. To my mind, though, anyone with dependents really has to get that set down on paper. I would never want to assume that my children would automatically go to the surrogate parent or family of my choice without making certain of it and be raised or supported in the way I hoped. There’s no guarantee that an estate plan wouldn’t going to be needed until the children were well into their adult lives and were ready to assume the relevant duties of executor or help as necessary.
:: Have you got an estate plan in place? Do you feel any need for one or do you expect to spend down your money by the end of your lives?
December 19, 2011
I’m still working on this deceptively short but ridiculously time-consuming list of things to do to save money for the household. And I’ve added several items. Lists make life seem more manageable. Until you have lists of lists, at which point the system starts to break down.
1. Benefits seemed easy but it’s spawned more paperwork for life insurance purposes. I say thee, tomorrow. I shall complete the last bits tomorrow. Or at least make the next sets of phone calls to finish the last bits tomorrow.
2. Auto and property insurance research was utterly demoralizing. ie: took hours and was still nigh-on impossible to nail down a good comparison.
3. The mortgage stuff we’re getting a start on but we’re not at the point of dealing with the actual refi.
4. I’ve been madly dashing around at work trying to get everything to the right point for the upcoming new year and battling madly but quietly for my next step.
So ….
Check! I have finally wrapped five gifts purchased earlier in the year. But we’re still down at least five gifts. Yeeks!
Check! PiC blew our gift budget on ME. It wasn’t the classic (stupid) car commercial but it was a big gift I wasn’t expecting.
_____ And has been mum on the subject of his family’s gifts so they really may be getting socks. [see, blew our budget]
_____ We’re traveling a little for the holidays and then hosting a full house for a few days so we’re double whammy on the stress of preparations.
_____ I still haven’t planned anything for our anniversary. He wanted to do something special for our 1-year engagement anniversary.
_____ And I’m working on Holiday Gifts for the Office.
Check! Mission: Find Non-denominational Seasonal Cards was accomplished, though! I triumphed in the face of great mobs and traffic. *shudder* I had forgotten the state of any mall and parking lot in the end of December, since all the shopping’s been online lately.
That’s not terrible, eh? How’s everyone else doing out there?
December 5, 2011
With just about all savings interest rates in the tank, PiC and I have agreed that without waiting for me to further flesh out our annual budget for 2012, his next expired CD will go into a large prepayment toward the mortgage.
It isn’t the amount we need to get us at the right loan to value ratio for a refinance but it will be a substantial step in the right direction, and there’s no reason not to start this process. This is our primary residence, and the interest rate is nearly 5% while savings rates are barely hovering around 1%.
Even if we wanted to move out and turn this place into a rental, the current total mortgage and HOA costs are too high in comparison to market rental rates for the same sort of housing for us to break even in this economic environment. Between bringing down the total loan cost a significant amount and locking in a much lower interest rate, I think we could ultimately save approximately 40% of the current mortgage. That’s no small beans in cash flow and would make it easier for us to take any kind of rental situation risk.
I plan to sock that saved cash away again because I’m pathological like that. 😉
Actually, there’s a good reason – we would just have put something like $65,000 cash into the process. That’s my current estimate of the cash cost. We should be able to swing it if we put together our savings, prioritized carefully and set aside a new emergency fund. The huge cash defusion will still give me indigestion, committing that much cash when I’m still worrying about my next job-related moves is worrisome, but I do think it makes sense overall.
As for allocations: while that increased cash flow needs to replenish our savings because it will have been much decreased and that makes me nervy, we still have to set aside money for mid-sized savings goals for 2013 as well. That’s yet another reason it would make sense to let loose the cash bomb, we’d only be limited to looking for ways to increase income to fund any expenses for the upcoming year that can’t be carved out of this year’s budget. I’m a fan of planning a year in advance to break down the savings necessary for really big bills like property taxes, travel, and that sort of thing.
I feel like I’d better hurry up and make all the changes we need to, I’m running out of steam already!
:: Is this normal to feel so responsible for stuff this early on? Was the first of married life this hectic for anyone else?
December 2, 2011
With everything going on, it took two and a half weeks into married life to even look at the benefits. Ree-diculous. I’m normally obsessive about benefits but even I am now thinking 30 days post wedding is simply not enough time to deal with those changes. Still, we managed to wade through the majority of the issues.
I’ve been added to his full benefits package – Medical, Dental, Vision – and am retaining my own FSA. I was rather on the fence about that one – does it make more financial sense in terms of tax breaks for me to have the tax benefit, him, or does it come out in the wash since we should probably file together? I hadn’t a minute to do any tax estimates for the purpose of estimating how we should file so I just had to let that go for now.
A few things are still left to be done.
Because my additions to his benefits were made during his open enrollment period, his company won’t activate my benefits until the new year. Lovely.
Meanwhile, it turns out that I cannot, because of the way my benefits are structured, retain just my Dental and Vision with him as a dependent so that we have secondary coverary while dropping the Medical that I’m paying for. So I will have to drop all my benefits.
{Break for a moment of spazzing: Even though I’ll still be fully covered, that makes me feel naked. I haven’t not had my own full coverage since I was 17. Seriously. This is insecurity “I’m a dependent-what??” territory.}
I will now focus on the fact that I am exceedingly grateful to have the choice between two decent insurance plans that we can afford, even though his is more expensive, because there are too many people who can’t afford insurance at all including my own family. {That’s why the reaction, actually – I’ve always worked past the point of breaking to make sure I’d have coverage. Now we’re dependent solely on his job to provide. Dependent. *breathe*}
You will note that while I may fully intend to make rational decisions, I still have emotions about my money.
Estimated cost: Increases in monthly premiums of approximately 20% overall, but coverage will be more extensive for routine procedures.
One example: I’m expecting a slew of dental work to the tune of $1000+, and after the deductible, my cost was going estimated to be $388 on my own plan with a $100 deductible and an 80% basics coverage.
PiC’s has a lower deductible ($50) and covers 90% of basic treatment. While we’re paying $8 more/month for that premium dental plan, I’m clearly going to be saving at least that $100 difference right off the bat with this single treatment between the deductible and the extra 10% coverage.
Next up: When my coverage starts with PiC, I have to cancel my own benefits using the Life Status Change for Reason of “Insurance Coverage Changes”. I didn’t even remember that was one of the options under qualifying life event/doesn’t have to wait for open enrollment to change your plan! Learn something new.
We also increased our life insurance to more adequate amounts based on our new financial obligations and added each other as beneficiaries. That was weird. But necessary. I wouldn’t be able to carry this mortgage plus all the other finances without extra help and both PiC and my dad would need some financial assistance if I were bumped off.
That means filling out more paperwork this weekend and once again at the start of the year. After that, we should be in good shape until the next open enrollment period! *whew*
So much for simple, huh?
October 11, 2011
Wedding planning: We’re doing it wrong.
Not that we haven’t attempted going at it forward but the few months of planning over the summer was fraught with other deadlines, an incredible amount of travel for other obligations. As usual, it seemed like everyone else’s lives came first. And as we did our research for the very simple, very small budget wedding I wanted to aim for, more bits fell off the wagon than stayed on.
I still haven’t figured out what to do about the guest list as far as the question of the whole of my family, for one. I’ve had long heartfelt talks with my closest friends who know the history, know my mind, and me. I’m conflicted because what I want to do is not what I need to do. My willingness to cut out my family out of the wedding isn’t only my personal choice. No matter how much my dad says he’s willing to bear the fallout, it’s a sacrifice that he’ll have to live with. And I will have trouble knowing I’ve contributed to complicating his relationships and somewhat tenuous support system.
So instead of dealing with it, and the parks that won’t cooperate by costing less than actual venues by the end of all the fees, taxes or restrictions, we resigned ourselves to not making the November date and backburnered the wedding.
Not the honeymoon planning, though!
We were gifted an enormously generous gift for the wedding: a week in a timeshare. That came with an expiration date, so we had to get on that straightaway.
After searching the world over for available locations, which my confused Twitter followers might remember from my very random tweets one night (Me: British Virgin Islands? Netherlands? Sweden? Paris? Spain?), we found that we had, in fact, very few choices because everything is meant to be booked a year in advance and we were hoping to finish this whole wedding business sooner rather than later.
Change of plans
A more exotic locale, improperly researched or timed for the high season can easily burst your budget. Doing similar research, comparing prices on airfare as a starting point, I found that the initial places that sounded fun to us (Australia and New Zealand) were easily twice as costly during the months we speculated about traveling. With my visions of belt tightening on our honeymoon, we were happy to turn our feet to a different path as well.
We’re going to Hawaii!
It’ll be a more manageable trip insofar as flights management and time management go. We won’t fly for a day and a half just to get to our destination, and we won’t be paying nearly $4000 just for flights. Instead, it’ll be a morning’s flight there, and a day coming back. I might even be able to wrangle enough points or miles to pay for the flights themselves. This is still a work in progress.
Neither of us are emotionally invested in the specific vacation or destination. It’d be cool to be going somewhere really cool, but at the end of the day we’ll be happy to relax, eat good food and not incessantly worry if we’re going over budget.
[Honeymoon notwithstanding, I will absolutely worry incessantly so it’s just better all around to have a moderately priced and planned trip where we can eat and play to our hearts’ content.]
So that’s one thing, the last thing on the list, decided.
May 26, 2011
The average American wedding is said to cost in the neighborhood of $25,000. The average Asian wedding, of all the weddings I’ve helped to organize, are in that neighborhood as well, if not more depending on your guest list. We may not have too much set yet but I can tell you this much: that’s not happening.
It’s actually sort of funny that we’re caught in between the weird expectations of both. We have gently corrected people from all sides of the equation: no guys, we’re not throwing a big American-tradition wedding because we don’t actually have to live up to everyone else’s expectations. No, guys, we’re not throwing a Gigantor Asian wedding because we don’t actually have to. We’re not inviting many members of my family and depending on our guests to subsidize the bill. (To clarify: Dozens of family guest lists have been created by the phrase “who cares how many people are there? They’ll pay their own way.” I am happy to be an anomaly.)
We’re setting our own budget and paying our own bill out of pocket. And doing it our way. #utterlyforeign
Confession time: We have barely been saving for this thing. Yes, we have been together for years, but I honestly was not expecting to be engaged this year. I wasn’t expecting anything at any time. As far as I’m concerned, this thing just happened. For me, I’m scrambling to get ahead of the 8-ball. But the half lifetime of good habits means that we won’t be piling debt upon debt, we won’t be going into debt for this wedding, and we won’t be spending our entire cash reserves for it either.
You all know that a budget was certainly the first thing I’d want to do before we committed to anything. Still is, since we’ve only talked about plans in theory and the only thing we’ve I’ve spent on so far is a dress that I expect to return to J.Crew returned to J.Crew.
PiC, however, is not addicted to personal finance, nor a PF blogger, so found my need to laser-focus on immediately carving out savings goals disconcerting. I don’t blame him, though I did pout for a minute. 😉 Things are different now that we’re becoming more and more bonded – we move more slowly than I’m used to and I can’t make all the executive and financial decisions in a split second. The flip side of that change is that I no longer bear all the burdens alone. It’s a fair enough trade, I think.
I digress.
I’m working with a skeleton number mentally and that’s actually ok for now.
We’ve noodled our guest list. It’s not final but it’s down to 180 which is near miraculous considering what we were starting with. We’re happy with the concept of a tiny ceremony and a casual lunch type meal with the bigger group of people we’d invite (and therefore feed). Pictures are important to him, and by extension, me, so we’ll have to hire an actual photographer.
With those factors in mind, the three most important items we’ll have to worry about are: setting a date, booking a venue, and booking a photographer.
I’m aiming to keep our total cost within the $7000 range. I’d like to make it a challenge to myself, but I’ll be honest with y’all, I’m a bit worried I won’t be able to do it.
Obstacles:
Feed 180 people delicious food,
Hosting them in a relatively nice, clean (not relatively), place,
Caveat: Homes and backyards are not an option, we don’t know anyone with that capacity
Have great photos.
Do it all without stressing overmuch. **
Have I missed anything?
** Being annoyed doesn’t count. It’s not allowed to count.
We’re pricing things out now. The little things are easier. A marriage license: $100. Dress alterations: $ UM. Airfare to SoCal before the wedding: Southwest Rapid Rewards! <3
The big things, they’re negotiable. It’s a start.
May 8, 2011
I suppose this is a fitting enough post for Mother’s Day. Happy Mother’s Day!
In the aftermath of my venting posts about my brother, The high costs of Parenting Fails, or a Bad Seed Part 1 and Part 2, I feel I did my parents a disservice. In focusing on the mistakes that we made specific to my brother, I seem to have implied that my parents were a) ungrateful, and b) hadn’t done anything right.
Those two bits couldn’t be more wrong.
To compound the wrongness, some, especially after the Consumerist picked up the latter post, said I was asking the wrong question, that I ought to have asked how much I ought to be supporting my parents instead of how much parents should support their children.
To be clear, I wasn’t asking any question in the first place, I was just mad at my brother for being a clown.
But if I were, my simple answer would be this: parents are to love their children completely and equip them with the skills they need to become fully functional, independent adults. Many times, that will mean not just giving them things or money but rather imparting the knowledge of how to obtain those things. And the material support does have an end. The complicated answer is complicated.
Before I can answer the question of how much help this adult child should give her parents, I have to put in context this adult child and her parents as there were a number of assumptions drawn from the limited and rather irrelevant posts above.
Without getting into the details of their lives before us, some of which you can read here about my mom and a brief synopsis here, there was plenty that they did right and much they did to have inspired my desire to support them in return.
This isn’t a blind, enculturated sense of filial duty. Certainly it’s filial but it starts from the knowledge that they chose to sacrifice their established lives to come to a foreign country, learn a new language, and start over to give us a better shot at good lives. They could have stayed but instead chose to trade in their quality of life for an automatic “one up” for us. It was a roll of the dice whether their lives would improve or not since “Land of Opportunity” or not, life in America was equal parts luck (ill or good) and much hard work for the first wave of immigrants; we had relatives already in the States who could testify to the amount of work necessary to make it here. There was no such thing as an easy ride and they still chose to make the leap for us.
Making life even more challenging for themselves, they moved into a tiny predominantly Caucausian suburb instead of the established community enclaves, guaranteeing our better education and assimilation; the freeways creating concrete barriers between us and the vortices of gang violence developing in the LA/Orange County areas where much of our family had already settled.
Upon their arrival, my parents worked every single day, 14 -16 hour days. They never took a day off, never took a holiday and only alternated three vacations between the two of them in thirty years in order to do their duty in taking us home to meet our grandparents. We couldn’t afford those trips, of course but it was incredibly important for us to know them. We occasionally drove into the city on the weekend for a morning to run an errand as a family, but otherwise, my parents worked constantly to make the bills and send us to the best school possible. I never heard a single complaint, so I never knew this wasn’t “normal.”
During my teenage years, the hours actually got longer because they put my brother in private high school having seen one male cousin fall in with the wrong crowd at the public school and come to a tragically early end, planned to pay for our college education and ran two businesses to afford it all. They paid for music lessons and three sports of my choosing before my senior year of high school.
By the time everything started to unravel at the start of my college years, my parents had worn themselves to a thread giving us as much as they could. That didn’t mean they’d given up, though.
Despite Grandma’s illness, living with us, bedridden, and in the past…
Despite Mom and Dad having to tend to her every day even though Mom herself was quite ill requiring surgeries and rounds of medications that weren’t working…
Despite the businesses going south between the embezzlement and the health problems…
Despite the remaining credit card debts from the business and taking us back to the old country to meet our grandparents…
Despite Dad’s inability to get a job due to a combination of ageism and a limited resume that only had “business owner” on it…
Despite Dad’s losing money on his attempts to make money which caused him to spiral into further depression…
Despite Dad’s particularly tough realizations that he’d spent our entire childhoods working only to have his legacy for his family disappear and fear that he might well have lost his family into the bargain…
They still fought for their pride, for my sake, for our survival. Dad kept searching and digging, working odd jobs for old friends who would find something they needed his skills for. Mom was willing to put up with the worst of environments as long as she was helping me with a bit of cash at month’s end. They were driving themselves crazy (and me, into the bargain) for nearly nothing in return but to spare me an hour of work and I couldn’t stand it, so I took everything over. But as long as they could, they tried. We were at emotional cross purposes, all fighting, pulling each other away from our positions to protect one another from pain.
Of course they made mistakes. Desperate people make mistakes. Desperate people care.
Mom’s health deterioration was jagged. Reduced to menial jobs, places where supervisors and coworkers were abusive, she was shorted on wages because her mental and physical health was diminishing in loops and fades; she couldn’t truly function or keep a job. Until I made her stop, she was taking every job she could secure. Even then she tried strongarming my dad into taking her to job interviews when I was away even though she wasn’t capable of working because she was so pained about my working such long hours. She didn’t peacefully accept the loss of her functioning.
My parents are both very grateful to me for my help and communicate that. I’ve no doubt of that just as they know I love them and will always care about them. It may be a frustrating cognitive dissonance to know that and reconcile it with their actions toward my brother that ripple back to me. But at the same time, I understand because just as much as they love me, they love him. He is their child every bit as much as I am.
(More their child, ahem. Nope, not bitter, grumble grumble.)
In all seriousness, I love and respect my parents because for better or worse, they did the best they could with what they had. They always strove to be strong and good people. The choices and mistakes they made out of love for their other child that I disagree with doesn’t change the fact that they also raised and cared for me deeply and deserve to be well-cared for as best I can manage. If the circumstances were different, if they were a bit less unlucky in their health and business manager (the thrice-cursed embezzler!), perhaps things would be different but that doesn’t necessarily follow that different is better.
Perhaps some people might say that having supported them for the past ten years as I have was too much and “enabling” but there’s a hugely important factor: You can’t compare my brother to my parents because they are completely different people.
He might have worked all of three years in his total of 30+ years of life. They’ve worked two lifetimes. He’s done little but been an influence in my life. My parents both gave me life and nurtured me, succored me when I was ill, and would still do anything they could to ease my way now if they were able.
Supporting my brother would be enabling because he could, if he chose, find a way to earn a living and support himself. My mother is no longer medically able to care for herself or be independent and my dad has to care for her around the clock. Supporting them is a matter of their survival as the clock on their finding and holding jobs has long run out.
These past years have been challenging and I know it will take quite a lot more planning and resources to provide for them in their later years. But it’s not really a question for me whether or not I’ll do it.
How I’ll manage it has been a question posed a time or two (thousand).
Getting them safely into a protected home environment where idio-sib can’t moosh in with them is only the first in many steps we’ll have to take to get there since living together’s not really an option.
Getting back to the question: how much should I (we) support them? Well, no amount of money in the bank is worth the loss of my parents from my life, forgotten and uncared for. And PiC, bless his heart and soul, is on board even though I’ve only newly introduced him to Ship Support the Parents as it’s been such a private journey for so long.
Their basic needs will always be provided. They won’t be living in luxury. I can’t afford that unless y’all decide I’m a genius blogger, share this with millions of your friends and I become the next dooce.com. Hardy-har. But they will live in safety. They will always have enough to eat. They should always have some form of safe transport and access to medical care. The cost, even now, is stiff. Each time a situation or a crisis arises, I have to evaluate the situation to see what can be afforded or what the right solution might be given the circumstances and the resources remaining for the year. I hate that I can’t simply wave a wand or a card and throw money at the problems, sometimes.
They try to help in their own way, though I’d not asked for these things. They don’t go anywhere they don’t have to, unless it’s very local so as not to use gas, and they don’t go out to eat, ever. I think they’re doing their very best to show in their daily lives that they respect how hard I work to provide.
The cost in the future will be even higher so as ever, Planning. Earning. Saving. Investing. It all keeps the reality of needing a strong financial edifice at the forefront of my mind.
In the end, everyone has to answer this question for themselves in the context of their own lives and their own finances and their own relationships with whomever they may be called upon to support.
If they hadn’t raised me with love and respect, if they hadn’t treated me with so much care, humor and just plain sanity during my formative years so that for those brief moments before everything went to mush we had a great relationship, this would likely be a very different story. And I know for many of you, or for many of the first time readers who came to the other posts, it is a different story. That’s ok. It makes sense. This is what makes sense for us.