Friday, October 21, 2016

Health insurance

When Peanut decided to stay home with the kids, we had to switch from his company's insurance to mine. It's been fine so far but it's really interesting to see the kinds of things we have to think about now that we didn't think about before.

Peanut's job paid for the entire premium for our health insurance. I have never seen that as a perk anywhere before, and it was awesome. It was a high deductible plan, but even so, the deductible wasn't that high (around $3,000) and the coinsurance/max out of pocket was an additional $3,000. Pretty much everything we ever threw at it was covered, and we didn't need to get referrals or anything. This is the insurance we were on when Pickle was born, and for the first couple years of her life we didn't have to pay that due to the state medical assistance she received. In all, that health insurance company paid out at least $1.5 million in claims for our family and we never had a single problem or issue with them at all.

So I was a little nervous about switching to a new health insurance company.

My job shares the premium payments with the employees, and both the deductibles and max out of pocket were higher than our old insurance. This is why at the end of the day, our take-home pay situation hasn't changed much even though my salary on paper is 14% higher than Peanut's was. On top of the increased actual cost to us, we also had to make decisions about primary care networks - one of which means we have to do a lot of legwork to get referrals documented appropriately but save $90 a month, or the other one that works more like the old plan worked where we just go to wherever we want for whatever care we need, but we pay for the privilege. If Pickle still had lots of specialists, we'd probably have to go with the latter, but we decided to take on the work ourselves of managing the paperwork and having slightly cheaper out of pocket expenses up front.

And it turns out, I'm really glad we went that route. We haven't needed and don't expect to need any referrals in the next three months, and it was just announced this week that in January my company is switching to yet another insurance company, which will have lower premiums and out of pocket expenses than we currently have. I don't know about their referral requirements yet, but I do know that we haven't spent any time to set up any primary care situations with our current insurance (at least not for Peanut or me) so we will have saved more than $300 to do nothing but take on a little risk.

Insurance was never something I thought a lot about, until we really needed a lot of it. We are so fortunate to have had such a good experience with an insurer (and a secondary state insurance) and it has drastically changed how I feel about that out of pocket amount now. I assume we'll spend it all in a year (4 out of the last 5 years, that's been true). I can start a year knowing that our max OOP is $6,000 or whatever, and just think, okay, that's about $500 a month for four people for all of the medical costs we can expect to have in a year (add in premiums and it's probably double that, but pre-tax stuff is so removed from my daily consciousness that it's like it doesn't exist). It's an easy way to budget for it, whatever we don't end up spending is bonus to our bottom line, and it takes a lot of the emotions and politics out of it.

I wish I could solve the health insurance system for everyone, but that mental shift has done a lot of solving it for our own budget. I used to begrudge paying anything on top of premiums for some reason, and now I treat it more like a sunk cost. The rest of it is a racket, but the perspective helps me deal with the bills that come in for an emergency room or urgent care visit.

Tuesday, October 18, 2016

Sold a car!

We sold one of our cars - the sedan that I complained about 18 months ago. We sold it to a family member for about half the blue book value, as a favor to them and also to us, because then we didn't have to do anything in terms of work but vacuum it out and sign the title. No advertising, no test drives, no worrying if someone's cashier's check is valid. That car has a lot of life left in it, and while I hated getting kids in and out of it, I feel a little guilty about getting rid of it before it was really and truly driven into the ground. I have actually never sold a car before - both of my previous vehicles were donated as scrap because I drove them until they didn't work anymore.

We still have our Rav 4 and the Jeep, which is stored for the winter. We should be getting a refund on our car insurance for the sedan and the Jeep, since we pulled insurance off it while it's stored.

It's been a bit of a shift to go from being used to each having a child-safe car we can drive to only having one of those, but not too bad. Peanut has taken up biking around our neighborhood which is great in a number of ways. We'll probably use some of the money from the sale of the sedan to upgrade his hand-me-down bike and get a nicer bike trailer for the kids, but bikes are definitely a lower-cost commuting option, when your commute is five blocks to the local preschool!

I take the bus most days, which is way cheaper than paying for downtown parking, way better for my mental sanity since I can read on the bus instead of glower at other driver's from my own car, and also helps me leave work at 5 on the dot every day. I had forgotten how nice public transit can be, and it's weird how easy it is to fall prey to the notion that I "need" to have my own car for going to and from work, where I pay $14 for the privilege of leaving it all by itself for nine hours. I am also getting so much more reading done!


It seems like you're usually either strapped for cash or strapped for time - or both, but rarely wallowing in an excess of either.

At any rate, I'm now time-poor even if we're doing okay financially. I was thinking the other day about how my idea of retirement is basically that I still want to work but I just want to control my own schedule. I don't know what job is out there that lets me do that, but that's what I want to retire to. Peanut on the other hand has more time on his hands than probably ever before in his life and he's enjoying it. I don't quite know how he has so much time to do projects he wants to do, because I sure didn't feel like that when I was staying home with kids! But I guess they are almost a year older than they were when I was last home 24/7, and they are getting better at entertaining themselves every day.

It's budget season at work. This is the first time I've ever had to manage a budget at work, and I'm really glad for the practice I have of managing our personal budget in such detail - I don't know how I'd cope otherwise. There is very little guidance or oversight of the budget creation process, but a lot of nit-picky details. I sat down today and did some SUMIFS and pivot tables to take a lot of the manual labor out of the process - and a project manager actually got teary-eyed at the amount of time Excel could save her now going forward. I thought it was maybe a bit of overkill to have pivot tables in our own private budget, but I'm glad now that I knew how to implement them at work.

Our spending is already down quite a bit in the last two months -between not having a nanny anymore and the savings we see from me not eating lunch out as much as Peanut did, we are enjoying feeling a little flush. After we pay bills this month we're going to max out one of our 2016 Roths, which will hopefully scratch the itch of wanting to spend without that spending being wasted.

I got a new cell phone and switched to Ting. My last phone was having some battery problems (totally dead by 3 p.m. even without being used at all), although I kind of wish that I'd tried harder to find a solution to fix that phone. Change is really hard for me and this sounds so stupid to say but I've had a lot of stress and anxiety about finding and getting used to a new phone. The savings from being on Ting is nice (and my old phone couldn't work on Ting), so that helps.

Trying to explain money to kids is hilarious. Pickle kind of understands it (she knows you can exchange it for stuff but has no concept of value) but Baby Bear has no concept at all. All he knows is that dogs don't use money because they don't have any pockets to keep it in. Ha!

Tuesday, September 6, 2016

Role Reversal

Today is a big day in the Moneybags household. Today, I become the breadwinner, and Peanut becomes a stay at home dad.


It's an option we talked about before we had children, and again when our kids were born, even though it seemed unlikely that I'd end up making more than him at any point (I have an advanced degree, but picked a not-lucrative field). But that's the situation we are in, surprisingly, so when our nanny gave notice a few weeks ago, we decided to go for it rather than find another paid caregiver.

It puts us almost exactly in the position we were in a year ago, when Peanut was the only wage-earner. My income is higher but my health benefits are more expensive too, so it comes out to almost exactly the same take-home pay. We'll be able to save some and live well. The kids will benefit from seeing a man as the primary caregiver (it's weird to think that if they remember any parent staying home with them, it will be Peanut and not me). I will benefit by not having to stay home, and by turning over a lot of the housework to Peanut. Peanut will benefit from getting to experience primary caregiving and getting a break from a career/job where he was getting burned out. We'll both benefit from walking in the other's shoes for a little while. Our nanny benefits by getting to do something she's always wanted to do (she didn't leave us for another family but for a unique job opportunity overseas). Everybody wins!

Probably the most challenging thing about it will be for me to let go. Peanut is a #1 fine dad, and he doesn't need my "help" or advice. I don't want to be one of those moms who leave a list when the dad "babysits". We've been talking about which chores we'll each do (when Peanut worked and I stayed home, I did everything but yard work, but the reverse doesn't make sense) but other than that, I am mainly looking forward to never having to make dinner again! (And so is everyone else.)

Sunday, August 21, 2016

Retirement Savings: Mission Accomplished?

There are so many ways to look at money, particularly at what is "enough". I've been thinking, reading, and writing about money for a long time now, but I always love coming across a new perspective that resonates with me, particularly when it comes with a pleasant surprise related to my own financial situation.

One example of this is the question how much do you need to save for retirement? Well, enough to retire on, obviously. We've calculated this out a couple different ways, and have a number in mind, which is about 10 times more than we currently have in retirement savings. It feels like it's so far out of reach. We're in our mid-thirties, and in the last ten years we've managed to put away a six-figure amount in retirement savings, but if we're trying to make to a seven-figure amount...sometimes it hardly seems possible.

Then Peanut stumbled upon this post from Mr. Money Mustache, The Man Who Didn't Realize He Was Already Rich. Basically, a guy in a pretty good situation feels like he'll never get to his savings goal but some math shows that, in fact, he has already saved enough to retire at age 65 - even if he never adds to his retirement account again! Therefore, he is only working to meet his current needs and/or save additional money in order to move up his retirement date. That seemed like a neat way to consider our financial position, and when Peanut did the math - woo hoo! - he found that we're already there.

To put it into more concrete terms, here are the numbers:

Retirement goal: $1,200,000
Current savings: $163,000
Compound Annual Growth Rate: 7%*
Yield in 30 years, with no additional savings: $1,240,797.57
Yield in 30 years, at our current savings rate: $2,279,866.22
Yield in 22 years, at our current savings rate: $1,261,218.61

WHAT THE WHAT. (Do the math for your own situation here.)

That means that, starting today, we could re-deploy our savings (currently around 10% of our income) in a bunch of different ways - we could move our planned retirement date earlier, we could start serious college savings funds for the kids, or we could up our standard of living. Or we could continue like normal and make big fancy retirement plans. Or we could choose to take lower-paying jobs that don't provide us with a lot of extra for savings since we really only need to cover our daily expenses for the next 30 years.

In reality, it probably won't cause any drastic changes to our lifestyle. Peanut and I are both fairly conservative, so we will save more than the minimum we need for retirement. We'll continue to take advantage of the tax benefits retirement accounts and HSAs offer. We might up our college fund savings rates, and we are definitely planning to cut our income (more on that soon!) with confidence. We'll build a bigger cash emergency fund than we've had the last couple of years. I'm not really one who's been super interested in early retirement - in a way, I've experienced that by staying home with kids for three years. And it turns out, I really like working! But man, the freedom that comes along with being able to take a job for the job instead of the paycheck - that's cool.

* Despite the fluctuations in the market the last 10 years, this is actually a conservative estimate looking at a period of 30 years or longer. See for yourself, here.

Saturday, June 11, 2016

This Week's Frugal Win

I was issued a laptop on my first day of work, and I carry it home with me most nights. I noticed it was getting a little scuffed from being carried in my bag. I don't want a dedicated laptop bag so I figured I'd buy one of those slim sleeves to slip it into. I've been too busy to get to the store or even look around online when suddenly I realized that I could probably just make one super easily. So I did!

 I used this tutorial, and in about an hour came up with something super cute - for FREE.

I used leftover quilt fabric for the outside (a pattern I bought at a quilt show in Paducah a few years ago for 50% off), leftover quilt batting (I always save the scraps for some reason), and for the lining, the bottom half of a family-company-branded t-shirt (I'd used the logo part shirt to make a pair of pants for my kids a year or so ago). I still need to put a closure on the flap, but guess what - I have buttons and velcro in my scrap drawer too.

 For less time than it would have taken me to get in the car, drive to the store, look for what I wanted, buy it and drive back, I had the satisfaction of "using up" and "making do" and every time I pull it out of my bag, I am reminded of a) the trip I took with my mom and sister to get that fabric, which I love and haven't used in a project yet; b) the fun of being creative (first time in a while I've made something instead of just repairing something), c) the fun of being frugal, and d) that shopping doesn't always have to be the solution to a problem.

Monday, May 9, 2016

Our Nanny Costs

We've had our nanny for almost three months now and she's wonderful. We found her through, a website for hiring caregivers of all sorts. We pay her well and provide a lot of standard benefits that more traditional jobs have. It's a huge expense, but childcare is definitely an area where I feel justified not cutting corners. was very easy to use to find a nanny - first I poked around at the people who were advertising themselves as nannies to get a sense of what the expected pay rate was and what types of jobs people were looking for. Peanut and I both work full time, so we need more than full time coverage, and we quickly realized that that wasn't something most people wanted to do. We also discovered that a lot of potential nannies wanted to care for kids from their homes or bring their own kids along, which I just wasn't comfortable with. One of the big benefits of having a nanny is not having to get the kids up and out the door every morning, and I didn't like the idea of having someone else's child in my home all the time.

Still, there were lots of great candidates on, so I signed up for a three month membership, which cost $63.20. A paid membership allows users to message nannies who have posted that they are looking for jobs, and also to post a job for people to apply to. I did both, and I got a TON of applications. Many people got weeded out early on - they were looking to be paid under the table, or were only available part-time, or it otherwise wasn't a good match. We interviewed four women, and made two offers. The first accepted and then had a family emergency which caused her to have to resign before she started, and the second we hired and has been with us since.

She works 50 hours a week (8am-6pm M-F) and gets paid a regular hourly rate for 40 hours + 10 hours of time and a half. She also gets five days paid sick time and 10 paid vacation days. And she gets off any holidays that we are off work, and still gets paid if Grandma comes and picks up the kids for the afternoon or something like that. This is intentional - if I'm going to book her time, then I need to pay to make sure she is available when I need her.

In terms of benefits, we don't pay a health insurance benefit (in large part because she has health insurance already, which is great for us financially - it's expensive!). We provide a car for her to use while she's working (so we don't have to transfer car seats in and out of her car), and we provide a credit card for her to use for gas and expenses for the kids. Paying for cell phone service was another common benefit we saw, but we opted out of that - we don't call or text her that often, and she already has a phone. We also withhold her income taxes and send them to the IRS, and we also pay into unemployment benefits for her. This and social security were two of the big reasons we didn't want to pay someone under the table (in addition to it being illegal) - unemployment and social security are important safety net benefits, and I expect my employers to provide them. Therefore, I will provide them for my employee.

All of the paperwork and calculations are kind of a pain, so we chose to pay for a payroll service that owns (Peanut corrected me: we use the service provided by Intuit, maker of TurboTax*). It manages withdrawing the money from our account and depositing it into hers every week, generates a pay stub, calculates withholding, spits out all the paperwork for her taxes every quarter, and will provide the tax paperwork for both us and her next year. It costs $22 a month.

Oh, right, and the question you are probably wondering most - what do we pay her? We offered $15 an hour, and she countered with $16 an hour. I was both proud of her for negotiating and kind of devastated at how much more it seemed to increase our expenses. In the end, I realized it was only about $2,000 a year - and I really was proud of her for negotiating! We settled on $15.50 an hour, which is only for those first 40 hours - after that, she gets ten hours at $23.25 per hour. All told, she's grossing about $43,000 a year (more than I made at my last job!). With taxes and the service fees, we're actually paying out just under $47,000.

It's a lot of money.

It's more expensive than the most expensive fancy daycare that we looked at. To us right now,though, the benefits of having a nanny (not having to get the kids out the door in the morning, not having them around lots of other kids and getting sick, them getting to go out to parks and storytime and develop a close bond with a single long-term caregiver) are so worth that cost. It feels right to me to pay someone a living wage to do a job that's really hard. And, astonishingly...even after paying her, I am STILL making more than I was at my last job. So it's not like we're missing the money; we're still coming out ahead.

I love this division of labor - payroll and taxes and all of that is his responsibility and while I have access to all the information through Dropbox and our finances spreadsheet, I know that he's taking care of it so I haven't bothered to memorize all of the details. Participating partner FTW!

Thursday, May 5, 2016

Women at Work: Sexism, money, and career

I just finished this really excellent book, What Works for Women at Work, and I feel like I need to talk about it with someone.

I've had kind of a weird career, maybe, in that for the first time (after about a decade in the workforce), my direct supervisor is a man. Previously I've always reported to a woman, and in most cases, those women also reported to women. Three of the four CEOs at my various jobs have been women. Most of the people in my master's program were women (easily 75%) and even more of the professors were women (easily 90%). Publishing is pretty heavily dominated by women in all divisions, so my experience isn't unusual for the industry but it's in no way representative of business as a whole, even in the United States in 2016. That's sad but it's a fact. What's also startling is that there can be a lot of sexism (conscious or unconscious) that holds women back, and is even perpetrated by women against women - and I was pretty startled to find myself in some of the examples given in this book.

What Works for Women at Work was written by a mother-daughter team and is based on social science research and interviews with women in different places in their careers. They've identified four buckets of sexism and have strategies for coping with each. The four buckets are Prove-It-Again (how women's past accomplishments aren't enough to gain faith in their future accomplishments whereas men are often promoted based on their potential rather than their accomplishments), The Maternal Wall (and rather simply decrying the way society isn't set up to accommodate families, they talk about the unconscious attitudes we have towards women who work and women who have children and how we need to resolve those), The Tightrope (how women get typecast as either a bimbo or a bitch), and The Tug of War (how womens' issues in the workplace are exacerbated by generational conflicts and other ways womens' actions can support or hinder progress for women as a whole). There's also a chapter about the additional bias faced by women of color which was super eye-opening for this white girl.

As an employee, I've not often had cause to think that I might be the target of sexism in the workplace. I've had to deal with a twinge of it since becoming a mother (worrying about what people might think when I went back to work while Pickle was still in the NICU - shouldn't a good mother stay at her side? Never mind that Peanut had gone back to work within a few days after her birth, and no one was judging him for being a bad father for doing so). I've also had to consider whether sexism would prevent me from re-entering the workforce in a way that would keep my career on track (thankfully, that didn't end up happening - but it was definitely harder road to get a job with a three-year gap on my resume). But on the whole I haven't bumped up against outright visible sexism.

And I think that's why this book is so important - because it showed me areas of unconscious sexism that I not only have encountered by have been guilty of perpetrating myself. I have noticed how my perception of a female colleague starts to change upon learning she has children, whereas my perception of a male colleague does not. I don't think that the woman is less competent; in fact, it's almost always the opposite - but why should it change only for women and not for men? I've also made assumptions about whether female colleagues will announce a maternity leave shortly after getting married. I've never done anything besides make those assumptions, like give them bad projects or anything like that, but it was still surprising to realize that as egalitarian as I like to think myself, I've got unconscious bias just like everyone else. The first step to eradicating it is to become aware of it, and What Works for Women at Work is so helpful at bringing that awareness about.

Saturday, April 2, 2016

Feeling the FIRE

Peanut and I have decided to set up a BHAG - a big hairy audacious goal for ourselves. We're going to aim to retire in twelve years.

We probably won't actually retire - but we want to be capable of doing that. Peanut stumbled upon a post at Mr. Money Mustache about the simple math behind retiring early, and we realized that with my job, we can actually pull this off. By saving 65% of our take-home pay, we can stop working in our mid-40s. It'll probably take us 18 months or so to get to the point where we are saving a full 65% of our income (because we need to do things like build up the emergency fund and pay off the car) but given that we're used to living on one income and have managed to pull off big financial plans before, this seems within our grasp.

To sum up, we'll need to basically keep living as if we only have one income, and save the rest of our money in official retirement accounts and other types of investments (because we won't actually be eligible to withdraw from retirement accounts by the time we're ready to retire). We'll have to pay off the car, have a healthy emergency fund, and not increase our housing expenses (we could also focus on paying off our entire mortgage instead of retiring, but we're not focused on that because Reasons). We likely limp along with a 30% savings rate for a couple of years until we no longer have full-time childcare expenses - that accounts for as much as 30% of our gross income right now. Once the kids are in school, it will feel like we got a huge raise!

I wouldn't say we've been floundering about without a financial goal, but "pinch pennies to be able to save a few hundred bucks a month on one income" is not a super inspiring way to manage one's money. "Bust our butts for the next decade to be financial independent forever" is WAY more exciting. Financial Indepence Retire Early - that's something to get fired up about!

Wednesday, March 16, 2016

Kid Update!

It's been a while since I did a kid update. I don't even remember if I posted the biggest big news of ever: Pickle no longer has a g-tube! We did a home-based wean back in September and the day after Christmas, we took out the feeding tube for good. She has a tiny scar (her second belly button) and is still petite but to look at her now, you would never guess her crazy history. It's amazing how far she's come. She can read a few words, remembers songs after hearing them only once - actually, her memory is astonishing. She just played a memory game on my father-in-law's tablet this weekend and was doing well in the eight-year-old range. It was crazy! She likes to bake and paint with watercolors.

Baby Bear is a full-on toddler. He's not actually toddling yet, but he could be if he wanted to. He walks around with one hand holding on to something and will take 2-3 steps into my arms, but doesn't seem interested in doing much more than that just yet. Which is fine - I know he'll go right from wobbly steps to a full-out run, so I'm in no hurry. He can crawl like a fiend, manages to go up and down stairs safely, does some sign language, and blows bubbles. He loves to be outside and will go fetch his shoes at the slightest invitation.

Friday, March 11, 2016

Women's Money Week: Investing in Your Future #WMW16

What does it mean to invest in your future?

Is it about taking out crushing student loan debt to finance a degree that's "guaranteed" to bring in a big paycheck?

Is it about buying a house when you'd rather be traveling the world?

Is it about watching the Dow like a hawk, trying to beat the stock market with hedge funds?

I don't think it's any of those things. Investing in your future might look like taking some classes or asking for a raise or even carefully evaluating a potential marriage partner. It might look like clipping coupons or taking the bus or doing an envelope system budget. It might mean up and quitting or it might mean sticking with it for a bit longer.

I've said on this blog several times that I'm so grateful to my former self for decisions that I've made, and I think that's the essence of investing in yourself. I'm thankful that Peanut and I practiced living on one income so that when we needed to, we could. I'm thankful that we didn't buy as much house as the bank told us we could afford, so we had money left over to deal with the emergencies that come with home ownership. I'm thankful that when I was rubbing two nickels together my first year in New York I didn't succumb to credit cards to buy something better to eat than day-old Starbucks markout sandwiches.

I'd be lying if I said that I was so forward-thinking that I knew those decisions were the best. There are more than a few moments in my life where I did not invest in my future self, and I've mulled over the wasted money those actions caused. Probably the most realistic thing I can say about it is that I'm a pessimist and so I tend to make decisions assuming that things will go badly - that's why I have life insurance. But it does seem to have generally served me well - I try to find ways today that will improve my life later on, and that is probably the root of it all. Treat your future self the way your current self would like to be treated, and it'll probably be for the better.

Thursday, March 10, 2016

Women's Money Week: Debt & Saving #WMW16

My former self is shocked at my current self's comfort with having consumer debt. Shocked, I tell you, and probably a little bit outraged. I am accustomed to thinking of myself as debt free, but I haven't been for a while, and probably never really will be again.

We have a mortgage. And a car loan. (And I use credit cards all the time, as my main payment method for everything, but we still pay those off in full every month.)

With my new income, we have the ability to pay off our car loan this year, but we probably won't.

What?! My former self is aghast.

I know. It goes against a lot of what I've said in the past. And what a lot of financial experts say. But I promise, we've done the math and it makes more sense for us to save right now. Here's why:

1. Our car loan is cheap. 1.9%, which made the finance guy do a double take - he hadn't seen a rate that low in months. Paying off the loan in full now vs over time as scheduled is a difference of just under $700.
2. We have non-recurring opportunities that we can put money into right now. Roth IRAs and HSAs have a limit on how much can be put into them each year, and if that deadline passes, you can never go back. Putting $5,000 in a Roth now to earn money tax-free until retirement will definitely earn me back more than the $700 I'd save paying off the car now!
3. Once we manage to fully fund Roths and the HSA, we plan to build our emergency fund back up. We've been treating our Roths as an extension of our emergency fund, but we'd like to have a very nice big cushion in the bank. We have a small cushion now, certainly enough to absorb any of the kinds of emergencies we've faced as homeowners, but we'd like to build that up more before we start funneling money against that car loan.

Truthfully, we'll probably pay the loan off early. With my additional income, we're on track to be on top of these other things in a year or so, with still 3+ years left on the car loan, and at that point, obviously that will be our big focus. It's hard to convince the old LMM of this, but it really does make a little more financial sense to wait on it.

Wednesday, March 9, 2016

Women's Money Week: Budgeting & Spending #WMW16

Dirty confession: I haven't had a budget in years.

I think there are two ways to approach personal finance, and I've done both. One is a zero-based budget, where each dollar is assigned to a category and once you run out of money in a category, you don't get any more until the next pay period or month. The other way is to track every dollar you spend, so you can monitor trends and adjust as needed. Both work very well, if you're diligent, but I think they work for different circumstances.

I did a zero-based budget when I was living paycheck-to-paycheck. I had very little wiggle room and needed to be the boss of all my dollars. I had specific bills in specific amounts and also specific savings goals that I wanted or needed to reach, and that's the only way I can think of to manage that kind of situation. I even did an envelope system for a while, where I cashed my paycheck into certain denominations and kept the cash in envelopes marked "groceries," "eating out," "household stuff," and "mad money." It was hard to borrow from Peter to pay Paul because it was so obvious what I was doing and when I couldn't afford to do it. During this time, I didn't have a credit card, so cash was my only option.

As my financial situation stabilized and I had a bit of cushion in the bank, plus the confidence in my ability to be disciplined in my spending, I transitioned to tracking each dollar instead of specifically budgeting and when Peanut and I merged finances after our wedding, this is the only method we've used. We have had budgets for specific things - our wedding, our cross-country move, our house purchase, traveling - which we've stuck to, but our organizing financial principle now is tracking our spending instead of budgeting.

If you've tried one method or the other and haven't liked it, I encourage you to try the other - budgeting feels very restrictive when you don't really need to do it, but tracking gives you all sorts of awesome data about your financial life.

If you've never tried budgeting at all, however, I also encourage you to do it for a while - it's a necessary skill to achieve any level of leadership in most professions, and my practice budgeting for myself has given me the confidence to manage budgets with lots more zeros than my personal accounts will likely ever see.

Tuesday, March 8, 2016

Women's Money Week: Financial Organization #WMW16

At the end of last year, Peanut and I decided to do something we've never done before: automate our finances. We signed up for autopay on every bill that allowed it (which was pretty much everything besides credit cards), figuring that it would be a lot easier than sitting down and paying everything once a month. It was taking a long time to reconcile our spreadsheet and pay all the bills every month and we just felt like we could get more organized and streamlined by taking advantage of automatic payments.

What a disaster.

We've not been doing a great job of staying on top of it, and this week we narrowly avoided overdrafting our mortgage payment and Roth IRA contribution. Ugh. We caught it and luckily my paycheck hit just in time to save us (in other words, we realized it but couldn't have done anything about it if I hadn't been getting paid when I was). Keeping up with the variable nature of our utility bills and remembering to enter those amounts into the spreadsheet when they were automatically paid was way more complicated than spending an hour a month doing it manually.

So we're taking everything off autopay and going back to doing it manually.

Our system is SUPPOSED to work like this:
We have a master spreadsheet that tracks every account balance as well as the cash on our persons (we round up to the nearest dollar). When we spend any money, we're supposed to input and categorize the data into the spreadsheet. Once a month, we reconcile everything and pay all the bills. We know our net worth on a monthly basis and can see trends over time (we've used some version of this spreadsheet for almost eight years now). It gets a little unwieldy but it works if we enter our expenditures regularly and reconcile monthly.

We've not been great about entering our receipts, though, and knowing that the bills were getting paid gave us no impetus to go in and reconcile anything, so it all fell apart. Going back to manual bill pay will fix part of that problem, and we're going to work harder at entering our expenditures more frequently to make the reconciling side of things easier too.

We've been doing this for so long that you'd think we'd have the discipline to manage it with autopay, but apparently not. We both feel more comfortable being this involved with and aware of our financial picture, so I guess we'll consider bill-paying to be a date night activity and kill two birds with one stone. :-)

Monday, March 7, 2016

Women's Money Week: Making Money #WMW16

What do I want my daughter to know about being a woman, as it relates to money?

I want her to be willing to make money. I want her to believe that every job has dignity and that no job is beneath her. I want her to aspire to support herself, and eventually a family. 

I want her to be able to make money. I want her to be educated and have every advantage to find a career that she enjoys and ca make a living at. 

I want her to be interested in making money. I want her to care about her financial situation. I want her to be curious about investment options and economic theory. I want her to understand that money represents more than paper and coin, but is all about values. 

I want these things for my son, too. But I suspect that they will come easier for my son than for my daughter. I don't think my son will feel twinges of weirdness if he out-earns his wife, the way I do sometimes for out-earning Peanut right now. I suspect Baby Bear will have an easier time negotiating salary or asking for a raise - there is no proven bias against men for doing those things, the way there is for women. 

Part of my reason for going back to work when my children are small is that I want them to see a woman earning money, and not feeling bad about it. I want them to see someone who is able to provide not only for herself but for a family and who is informed about the state of our family's finances. It's weird - and ridiculous - that this is even a thing I have to think about. Does Peanut think that he needs to work in order to set a good example of a man for our kids? No. He works because that's what you do as an adult - people need money for necessities and luxuries and you get money by working for it. 

So I guess that's what it really boils down to: I'd like for my daughter to make money the way her dad does - because it's a thing that adult people do, and not a man/woman thing at all.