Tuesday, December 30, 2014

Money Dumb

When it comes to money and finances, I am an idiot. I used to believe I was "good with money" because I was cheap frugal and saved a ton. It was pretty easy to do when I was single and had limited expenses, and pretty much everyone I knew was in a similar situation. I've been thinking a lot about our finances recently. This post is pretty long, but it is helping me work through this in my head and I'm hoping to create external accountability for my goals.

Despite the upward swing in my discretionary spending lately, though, I still don't spend that much money. I shop at pretty middle-of-the-road retailers and always wait for sales, I'm not blowing $100s ($1000s?) on designer bags or shoes. Its hard to spend THAT MUCH at Ann Taylor Loft when they are always having 50% everything sales. I bring my lunch to work every day. We eat at restaurants maybe 2-3 times a month, and get take-out similarly 1-2 times a month. I have no expensive hobbies (my hobby is reading books that I get free from the library) and I'm not into gadgets or home decor. I get my haircut twice a year, color it at home with drugstore kits, and paint my own nails if I'm in the mood. I'll get my eyebrows waxed every couple of months or before an event ($12). I have virtually no social life, other than book club meetings rotating at member's houses every couple of months and an occasional 1-2 glasses of wine out with a friend (maybe twice a year we get around to it). We don't travel except to visit relatives, so the only cost involved is airfare. I work out at the Y where we have a family membership or I run outside with my dog.

Where I tend to spend on clothes/shoes, G buys lots of media (movies and music). Mostly cheap/used, but sometimes new. I don't know what it all adds up to, since its "Amazon" on the credit card bill. He also tends towards new and expensive hobbies every few years. Currently its woodworking. He bought a ton or equipment and tools this year on that. If he continues, and gets good enough to build some stuff for our house (or even for it to be a fulfilling lifelong hobby) it would be worthwhile. Other than those (admittedly pretty big) things, he doesn't spend much else.

We don't spend a ton on our kids, either. They are in a fairly low cost daycare (for the area). We are members of the Y and do swimming classes for a modest cost. They each will pick one other activity this year. This year was the first time I actually bought toys for the boys---in the past we had so much stuff from relatives we didn't need too---now that they are older and have specific interests, I'm trying to encourage those. We get most books from the library, but I'll buy one hardcover book every few months to add to our library. L wears B's hand-me-downs unless they've fallen apart---basically this means he gets new pants & shoes every year. B gets new clothes for each season (i.e. he got 5T winter clothes recently, and will get 5T summer clothes in 6 months)---these are ALL from Old Navy with 30-40% off or Children's Place. Tops generally $3-8, bottoms $8-15. He needs new shoes every 6 months. We don't skimp on shoes, usually $35-50. No impulse clothes purchases have ever occurred for the boys!

We don't have: a car, cable, landline phone.

There are some areas I'm sure PF bloggers would tell us we could do better on:
  • Our grocery bills are pretty high. There really aren't low cost options nearby so we either shop at TJs, WF, or delivery (which is also expensive). I don't skimp on groceries, mostly because we eat most meals at home and we send all the boys' food to daycare (they don't provide meals or snacks). We go through a LOT of fruit and vegetables every week which is pricey. We don't eat much meat. I sometimes buy fancy cheese so we can have a "date night" in. We drink wine/beer/liquor at home which some might consider an unnecessary expense (vs. water).
  • We have contracts and data plans on our (3 year old) smartphones (vs cheaper pre-paid options).
  • We have a dog, with the resultant expenses (boarding when we're away being the biggest, also she had surgery recently and whoa!)
  • We have a house cleaner come every other week.
So where is the "dumb" factor coming in? A few major things:

1) I have a huge pile of money in a savings account and in CDs. I haven't invested it. It is doing nothing for us earning <0.5% interest.
2) This is a big one and I'm embarrassed to admit it, but I think we got suckered into buying more life insurance (and I also have longterm disability insurance) than we need. A LOT of our paychecks gets direct deposited into these things. I've had the LTD insurance for about 7 years, and we've had the life insurance for 5 years. I don't know how to figure out if its "too much" or not.
3) I thought I was putting 15% into my 401K. Turns out I wasn't. I just realized this last month and upped it from 5% to 10% with plans to go to 15% when things smooth out after the holidays.
4) I have no idea how my Roth IRA, traditional IRA, 403b (from residency employer) or current 401K are invested.
5) I do stupid things with credit cards, like getting new airline cards to get the sign up bonus, but then forget to spend the requisite amount to GET the bonus, and then forget to cancel before the year's annual fee is due (this just happened).
6) Last year (2013) I completely forgot to submit receipts for our dependent care FSA and we lost $1800. LOST IT.

 What I want to do about these issues in 2015:
1) Invest all but $10K emergency fund. Where, how, I dunno. Deadline April.
2) Figure out and possibly decrease our life and LTD  policies. Again, not sure how. Anyone know who could tell us the answer to this? Deadline March.
3) Obviously, increase 401K contribution to 15% next month. Deadline Janaury.
4) Get together all my accounts, figure out where they are invested, and change those choices if it makes sense to change them (though I first need to learn what the best choice is!)  Deadline May.
5) If I decide to get new credit cards for incentives, put dates and actions to do into my calendar. I actually successfully did this with the United Credit Card. I got the card, put in my calendar to charge $1000 (and what to charge it on and when) in my calendar, and did it. I also put in the calendar to look for the bonus miles and when to call if they aren't there. And the date I need to cancel the card to avoid the annual fee. Ongoing.
6) This was added to my calendar, as well. I actually already submitted 3 months daycare bills already, which covers the entire academic year FSA maximum (its ridiculous, isn't it?) Ongoing.

Help me:
Investing books or guides?
Guides for how much life insurance one needs? (or how to figure this out). Guides for how to GET OUT of a life insurance policy, or reduce it, while minimizing penalties?

I want to be money smart by 2016.

Monday, December 29, 2014

Getting Off the Treadmill

No, this post isn't about exercise. It's about hedonic adaptation, otherwise known as lifestyle inflation. Like the sucker I never thought I'd become, I've let it creep up on me. I am spending way more money on certain things today than I would have even 5 years ago simply because I've gotten used to it. And because, of course, "I can". That last phrase is in quotes because its not completely true. No I'm not in any kind of debt. We are putting the recommended amount into our retirement accounts, and have a pretty hefty emergency fund. But we could be saving a lot more, donating a lot more to charity or even spending that money on something really meaningful for our family.

One thing I've been working on in therapy is identifying and trying to change some of my less healthy coping mechanisms. Wasting time on the internet, indulgent food and drinks, playing games on the phone---all of these I was well aware of, and I've written before about working on modifying those habits. What only recently occurred to me (in part, thanks to N sharing her struggles) was how I used on-line shopping as a way to cheer myself up when I'm feeling sad, anxious, or simply bored. This is what goes on in my head:

I've had a crappy day, ugh, and I'm on call this weekend, and G and I had a fight and...OOH sparkly shoes! Do they have my size? YES! Ooh, that's a bit steep. But its OK, I work hard and I haven't bought anything in so long. Do I need sparkly heels? Where will I wear them? Oh, I'll wear them to holiday parties! You don't have  any holiday parties, Ana. Whatever, maybe next year!

Its a not-so-cheap thrill to browse the sites, fill my cart, and hit "purchase". But the thrill isn't over yet! I can track my package, get excited when its delivered, and then look forward to opening it and trying things on and planning when and where I will wear them. And that's it. That's pretty much where the thrill ends. Then the dress joins the closet with all the other dresses to make its way into the rotation. The shoes get jammed in with all the other shoes, and in honesty may not be worn until I predict a pretty slow day given my fear of tearing up my feet in new, untested shoes.

In retrospect, I've given in to the idea of "retail therapy" for many years. But where it used to be a $3 bottle of nail polish or a $5 purse at Target that cheered me up, now the stakes are much higher.  I kept a budget in 2014 of how much I was spending on myself. I'm sure its a lot more than some people spend, and a lot less than others. But for me it seemed excessive. To say I am embarrassed at the total is an understatement. I am mortified. Yes, I needed some new things that actually fit my body, but no one needs that much. Yes, I like fashion and creating outfits and choosing something confidence-boosting to wear in the morning. But "fashion" is not a priority in my life. It is not a core value. It is not something I should be spending that much money on.

Recently I've gotten sucked into the world of personal finance blogs (I blame nicoleandmaggie). The blogs I really enjoy and find inspiring are not about tips on how to save money or get the highest yield on your investments (though those things are important and I'd like to learn about and start investing this year). What inspires me is the mindset, the focus on the true sources of happiness and the single-minded drive to achieve a life filled with those things. The maturity and self-knowledge that lead people to put all their money and energy towards creating their ideal life, without the distractions of "ooh pretty shiny!" getting in the way.

I am putting a stop to this right now. I was thinking of an all-out shopping ban, but decided instead to give myself an allowance. If I want anything non-essential for myself, it comes out of the allowance. This includes everything: clothes, lunch out at work, pedicures, a new phone case (mine is broken), books.  I've limited this exercise to myself only*---G can handle himself, and I don't actually overspend on the kids. I buy only the essential clothes for them to avoid doing laundry for up to a week, and we have already declared that NO toys or activities will be bought for the next 6 months as we work our way through the Christmas/birthday excess (our closets are STILL stuffed with things that we decided not to give them right away).

I haven't decided yet on the amount of the allowance. I honestly don't know what a reasonable amount should be---$100/month? Thoughts?

*The one other area I wanted to address was restaurant meals---again, we are spending more and more and it is taking more and more to get the same feeling of indulgence and luxury from a dinner out. I will write more about this in a separate post about date nights.

Tuesday, December 16, 2014

Home for the holidays

I've found holidays complicated and somewhat stressful as an adult. Navigating the family expectations does that to me. This year is the first, since B was born, that we will be here, at home, just the 4 of us for Christmas and B's birthday. I'm really looking forward to it, and already enjoying the lack of trying to plan and execute travel plans.

On the other hand, there is a lot of pressure, in trying to pull off our first at-home Christmas and try to establish some family traditions. I'm trying to keep it simple and focus on a few things that were meaningful to me as a child, that I'd like to pass on.

While the boys were away, I decorated the house---window box decorations, a new wreath, greenery and LED lights on the bannister, and our usual 4 foot artificial (ornament-filled for the first year) tree. Our closets are also bursting with presents, for Christmas and for B's birthday the next day---and more are on the way (Apparently B wrote a letter to Santa yesterday at school and asked for something I'd never heard him mention before. I spent quite a while trying to explain that Santa may not get exactly what he asked for...blah blah lots of kids, last minute request. then I caved and went on ama.zon and a dollhouse is on its way). I got a gingerbread house kit that I'll pull out on Christmas day, and some DVDs of classic TV specials.

These are all things I enjoy doing; there are no gifts for adults or really anyone else, no cards we are trying to send out (we usually send one out in January and have already taken the family pic for it), only giftcards for teachers, no batches of cookies to take anywhere or swap with anyone---none of that shopping and making and buying that we used to do until we realized we didn't have to and nobody cared.

B's having a party Saturday, at home, and Frozen-themed, per his request. I ordered a 1/4-sheet cake to pick up and bought figurines and blue powdered sugar snow to put on top, balloons & streamers are on their way, favors ready to go, and 3 Frozen-themed activities planned. We will order 3 large cheese pizzas. 10 kids are coming, plus their parents. I hope he'll have a blast; he's never had his friends over to our house before and has asked for it several times recently.

For his actual birthday, we'll do what we usually do for L---decorate the kitchen, blow up more balloons, and presents after breakfast. We'll make our own little cake. Hopefully the weather will be OK, because G bought him a new 2-wheeled scooter that we could go play with at the park. I got surprise tickets to a children's theater production for the evening & we'll get dinner after.

I want it to be special, 5 is a big birthday, and he's never spent it with just us before.

10 more days, and then I can breathe a sigh of relief! 

Thursday, December 11, 2014


G's cousin's wedding was last weekend. We all went to stay with MIL for the many-day festivities. I came back two nights ago, ostensibly because I had to work, but really because one week is more than enough. G and the boys are still there until Sunday. Yes, that means 5 kid- and husband-free days at home for me. I was initially excited and full of plans for a super-productive time at work and home. But when it really began, I was despondent. I miss my little guys and my big guy. I'm not being productive in the least because I've come down with my THIRD URI/bronchitis/sinus-y thing in the past month. And I don't feel particularly free, as there is lingering anxiety from some conflicts with my MIL last weekend. And the laundry. I put away 2 loads we hadn't gotten to before we left, and have already laundered 3 more loads. And then there are all the sheets that the house cleaners changed today, at least 2 more loads of those. Ugh.

What I've done, other than than going to work and the basic necessities of self- and dog-care is catch up on reading & commenting on blogs and watching (for the first time) Gilmore Girls on Netflix. I have not turned on the stove or washed a plate or utensil, though the dishwasher is slowly filling with coffee cups and wine glasses. Tuesday night I picked up 2 slices of pizza for dinner. Yesterday, in a particularly pride-filled moment, I ate half a bag of Pirate's booty and 2 mini-Twix bars for dinner. Today I picked up a burrito bowl. Tomorrow and Saturday evening I have social engagements. I also need to do the weekly cooking for us on Sunday. That leaves Saturday to decorate for Christmas and plan & buy things for B's birthday party which is the following Saturday. I booked my first car-share car for Saturday AM and will have time to go to the craft store and the big red circle store which should take care of party/holiday supplies.

I saw my therapist today, for the first time in several weeks. It was the most productive session we've had, and I left feeling better instead of worse and perhaps...hopeful? Its freeing to think I can actually manage my anxiety and that I won't necessarily feel that heart racing/stomach clenching/lungs can't breathe feeling for hours/days EVERY time I get in a conflict with my MIL or husband or colleague.

Now back to the antics of Lorelie and Rory. How can they eat that crap every day and still be so skinny? How can she drink that much coffee and not have a hypertensive stroke? Why do they waste so much money on eating out and coffee out when they can't pay Rory's private school tuition? Why do they have a shiny new Jeep, again, given the lack of savings for tuition? All questions that will never be answered, I'm sure.