I've been mulling over several interesting topics, so maybe I'll do more than one of these this month. We'll see.
Anyway, this one was kind of spur-of-the-moment. My office's annual seminar with our retirement provider (Prudential) is coming up, and one of the emails they sent in preparation was titled "It's time to simplify your retirement planning."
It went on to talk about rolling other retirement assets into my work 401(k) because it makes it easier to monitor.
Here's the thing: I recently opened Vanguard Roth IRAs for my family, and I was thinking of starting some Pax World mutual funds for us soon, too. I don't know exactly how retirement is going to look: tax implications if we retire in the UK, general course of this crazy economy, etc. I figured several different kinds of accounts couldn't hurt. It's a little more complicated to keep track of, though. If there wasn't any benefit, I'm not sure I'd keep it up.
So what do you think? Simplify or diversify? And what do you do? And if your philosophy is different from your practice, why? Are there pros and cons for each school of thought?
Feel free to comment on this entry or write your answer on your own blog if you're interested!
Archive for June, 2011
I've been mulling over several interesting topics, so maybe I'll do more than one of these this month. We'll see.
June was a very successful month for us; I even finished up early what I hoped to accomplish! I'm hoping I can even do a bit better on debt in July; I'm hoping to pay off at least $1900 of debt. I'd love to make progress on my other annual goals, but it's such a whirlwind summer so far that I'm finding it hard to predict what I'll get done. Oh well, the debt repayment is the important part.
AS's other student loan hit today: $61 went to principal, so that's $1849, $149 more than our June goal!
This is the student loan with the super-low balance: It's now down to $670. So tempting to pay it off, but it's got the second-lowest interest rate (2.25%) of all our debts -- only a little more than $1 goes to interest every month. So I keep resisting and putting our extra debt repayment money to our current highest-interest (6.41%) debt. (I say "current" because most of our debts have variable interest rates, so those could start to go up at any time and possibly surpass the 6.41% one, which is fixed.)
Anyway, since we pay $60 or $61 on this small student loan every month, at $670 that means we only have 11 months left on it. It's only a $62 per month bill, so it's not worth paying off. But it certainly is tempting!
One of AS's student loans hit. $122 went to principal, so that means we've paid off $1788 of debt, exceeding the $1700 goal. She has one more student loan payment that will probably hit before the end of the month.
I forgot how fast and hectic summer feels! In the dead of winter, I imagine long slow hot days lazing and reading and getting slurpees, like summer vacations in Virginia were when I was a kid. The reality is that Minnesota summers are so short, there's a sort of frantic feeling of wanting to pack in as many outdoor activities, later-evening (before days get shorter) events and socializing as possible. It's fun, but definitely not as leisurely as I think it's going to be.
As a result, I've jettisoned the logging of our grocery lists and figuring what each meal costs. It's just not a good use of summer time! We're once again struggling to catch up on our grocery budget after a couple of busy weeks where we didn't take the time to sit down and figure out a budget-conscious use of our grocery money. We also had some daycare-related purchases that came out of grocery/household, which set us further back. But I'm confident we can buckle down and get on track over the next few weeks, especially with our CSA farm shares coming in, getting more bountiful as the summer progresses.
Now that I'm done complaining, I have to say that so far this has been a FABULOUS summer.
* We've been to my college reunion in NY, had my family in town for a weekend, and attended the Pride parade Sunday and THREE parties (AA came with us to all!) on Saturday.
* AA is absolutely blossoming with help from the new daycare, and it's so much fun to be part of that.
* AS is making great strides at her job; the first book she acquired is getting great advance buzz, and she's successfully acquired a second book as well as convincing her boss to acquire some reprints that she thinks are going to do great. (And the reprints are of UK books, so she's building her presence abroad -- great news for emigration planning!) My work still isn't perfect, but it's gotten a lot more manageable so I'm not miserable here anymore.
* We've been branching out and having fun in our cooking: I made a Vietnamese BBQ mock duck and tofu spring rolls that were big hits; AS got a Kitchenaid mixer with an ice-cream maker attachment and has been whipping up gourmet vegan treats; NT invented a Cuban-style dinner of avocado-mango salad, plantains and black beans that was out of this world. I think the warm weather and fresh produce has us all feeling inspired.
I wish I could get more motivated to lose weight, but at least I'm trying to walk more and eat loads of fresh fruit and veggies, so I'm not being unhealthy, even if I've plateaued weightwise. Other than a quibble or two like that, I'm loving this summer.
I noticed mention of SA on a Yahoo story about stores cracking down on extreme coupon methods. Unfortunately, they spelled the site name wrong (savingsadvice.com) though the link was correct. Here's the article:
NT bought more minutes for his Net10 phone. Looks like taxes or fees have gone up a bit; it was $33.38 instead of the usual $32.87.
FY2011 spending so far:
NT's April Net10 fillup (300 minutes): $32.87
AS's May T-Mobile fillup (1000 minutes): $107.78
NT's June Net10 fillup (300 minutes): $33.38
FY2011 total: $174.03
We're nearing the end of the third month of our prepaid "fiscal year," so that means our average monthly cost so far is $58.01. Very close to our ideal $50-per-month average!
RECAP: I switched to prepaid in late March 2009, so our phone "fiscal year" begins each April. We have 2 phones on T-Mobile prepaid and 1 on Net10 prepaid. AS and I refill in 1000-minute increments and only need to refill when we run out or when it's been a year since our last fillup to stay active. NT needs to buy 300 more minutes every 60 days to keep his phone activated.
Our cellphone bill, for three phones on a family plan, used to range from $80-$95, depending on texts, calls to 411, etc. Usually it was close to $85. My ideal goal is to get my average cost to $50 per month, but any average number below $85 is a savings.
Just calculated our June net worth, and AS's is now at negative $2,616. It wasn't a great month for retirement accounts or we would have made even more progress. Considering she ended 2010 with negative $14,667, we've made amazing leaps this year and should get her to positive net worth soon.
$25 of automatic savings went to our EF as well as 47 cents of interest (they must have cut our interest rate in half, because we used to get about 86 cents a month; but it really doesn't matter). So that's $2,657.63 saved so far this year ($11,169.58 total EF). It seems unlikely we'll reach our $7,000 goal this year, but we'll see how far we get.
One of my sisters and two of her kids were in town this weekend, so that counts as our small-group get-together. We hung out Saturday night at our house playing games and eating delivery pizza. Then we cooked them brunch on Sunday and dinner Sunday night and we played more games.
It also means I was so tired after taking them back to their hotel room last night that I didn't weigh in, so not sure how my health progress is going. I did walk a ton this weekend; we walked to and from the baseball game, over a half hour each way, and walked them back to their hotel room, which was probably about 40 minutes.
Another $15 donation went through today, so our charitable donations are up to $770 for the year.
Yay, I'm loving this month so far!
NT's UK pensions:
#1: 13,753 pounds ($27,506)
#2: 16,005 pounds ($32,010)
#3: 3,709 pounds ($7,418)
NT's 401(k): $13,049
NT's Roth IRA: $3,419
AS's 401(k): $5,606
AS's trad. IRA: $1,682
AS's Roth IRA: $4,300
CJ's 401(k): $40,139
CJ's Roth IRA: $3,419
NT's flat: 130,000 pounds ($260,000)
CJ & AS's condo: $160,000
Baby/emergency fund (shared asset): $11,170
Total Assets: $569,718
Total Debt: $339,777
Current Estimated Net Worth: $229,941
May 2011 estimate: $229,657
Change in net worth: +$284
Summary: All but one of our retirement accounts posted losses, so it was only by paying down debt and adding to EF savings that we were able to stay basically even.
I will update my "Individual Net Worth" page shortly so you can see how it breaks out per person.
Notes on the numbers above: House value estimates are fairly conservative. I don't have a way to check NT's UK pensions or flat value, so their values stay static for the purpose of this update (unless I happen to get some info by chance). UK asset values and debt amounts are calculated figuring $2 for every British pound, which was the exchange rate when I started keeping track. I maintain that ratio for the purpose of tracking progress, even though the exchange rate is now closer to $1.60 per British pound.
We finally found some time to sit down together and settle our unresolved "extra money" issue. There had been some side discussions between two of us at random times over the past week, but every night it seemed like we were too busy and/or tired and all of a sudden it would be bedtime.
Today AA went to bed at a reasonable time so we had a chance to talk. We found it wasn't that hard to come up with some guidelines; encouragingly, they were pretty much in line with what we'd been following informally, but now we have some rules so there won't be differing expectations and possible hurt feelings.
So for things like selling one's personally owned items (books, records, clothing), the person selling it gets to keep the money for themselves. For surveys and Mechanical-Turk type stuff, the person doing the surveys gets to keep the cash/gift cards for themselves.
For other sources of income such as freelance jobs, overtime and bonuses, we're going to accumulate the money in the checking account and then, at the end of each month, we'll decide how to divvy it up. We're thinking we'll agree on a percentage or lump sum to distribute equally to each of us, and then put the rest toward debt, unless there's something else we want or need and can agree on putting all or part of the money toward that.
While we were at it, I ran through some other aspects of our personal finances just to make sure they were aware of them and on the same page. For instance, that if we stay the course we'll be out of student loan debt in less than five years. That if we wanted to move to England in four years, and stayed on our current EF savings course, we could use our EF (which should be about about US$37,000 by then) for moving expenses and/or toward a down payment on a new place.
We also briefly discussed what we're putting our discretionary money toward--travel, cleaning, cable, spending money--and found that we're in agreement about the current amounts as they are.
So the only thing that's changing is that we'll save larger amounts of extra money in the checking account and decide together how to use it. I like this because it'll mean a family meeting nearly every month, so I'll feel more sure that we're all informed and in agreement about our budget and financial progress as a whole.
We emptied AA's piggy bank--we put all our spare and found change there, and have replaced quarters with bills several times to get soda money--and it was about $120! I already have $130 in the checking account for her, so that's $250. I guess we'll build up to $1000 and then open another CD for her. She already has a $1000 CD as well as about 275 pounds in NT's UK savings account. Not bad for a 1-year-old!
My sister, niece and nephew are coming for a visit this Friday! We like our own space--especially having a smaller place--so we got them a hotel room. This marks only the third time any of us has had a visit from family, and it's always been this sister's branch. She and her husband and three kids came for our wedding/commitment ceremony; then my niece (her oldest kid) came a year later for a few days. Should be fun. We've planned a few things and are going to try really hard to fund it with our regular allowance; but NT has some eBay sales money that he will contribute if necessary.
I don't want us stressing about money while the family is here, so if we run through our spending money before the weekend's up, I'll find some money in the budget to make up the difference. So far we're going to take them to a neighborhood pizza place Friday night, then to a tiki bar/restaurant Saturday, and a Twins baseball game Sunday. (We've already paid for the tickets, at least, but all that food spending is going to add up, especially if we go for overpriced snacks at the game.)
We'll cook lunch for them Saturday and brunch on Sunday, so as long as they take care of their breakfast on Saturday and Monday, that should be it. I assume they'll pay for their own food at the restaurants and ballgame, especially since we treated them to a hotel room AND baseball tickets, so we only have to worry about our own food and drinks for those outings. The other things we're thinking about are just walks and free sightseeing--we live right across the street from the sculpture garden with the famous "Spoonbridge and Cherry" sculpture, for instance.
I applied for another job! This would be for the Minneapolis tourism board in a writing and editing job. Sounds really challenging but fun. I don't know if I've got enough writing history or if my writing samples will stand out--I'm not a flashy writer. Also I asked for $50K, so that might price me out. But I figured what the heck. I'm not desperate, so I might as well shoot for the stars. And really, that's not much more than what I'm making now, but something about it sounds really aggressive. Maybe because $50K is sort of my mental goal and has been for years. It seemed like I was gradually getting there, but since my company put the brakes on raises four years ago, I'm kind of stalled out in the high 40s.
If they don't think I'm underqualified, they might think I'm overqualified. I do have about a dozen years of proofreading/editing experience, and the job description said the minimum was two. So that's another reason they might not be thinking about $50K. Though the job sounds like it's a lot more authority and responsibility than my current one, so hopefully it's fairly well-paying.
So, we'll see. I'm at least making my current job more bearable; my new contractor is a lot more capable than the one we got rid of, so I see her shouldering a nearly equal share of the workload and client-facing responsibility, eventually. Since I'm not technically her supervisor and she makes over twice as much as me, I'm not gonna be shy about giving her work and responsibility! Taking on a bunch of extra hasn't gotten me much of anything, so it seems fair enough to offload if I can.
I don't know if this is another one of my ideas that will go nowhere, but I've been thinking about doing a more public blog that I can show prospective employers. Thinking about how much I like to write about food (and take photos of it), I might do some kind of food blog. I'm about 90% vegan, so I'm not sure if I'll play up that part (vegan is considered an all-or-nothing proposition for most, though Oprah has recently kicked around a "mostly vegan" idea that seems to be picking up steam, so maybe I won't be such an unusual case soon.) I'm still deciding on a site name, then I guess I'll save up to purchase a domain and see what I need to learn to actually create a site. I'd love to do more of a searchable site with different interesting pages rather than just a blog with a big scroll of dated entries. But I don't know how difficult that would be. Anyway, the harder it is, the more practical job skills I'll probably acquire along the way.
I guess I've blabbed long enough. I just realized it's after 10 pm!
First, off-topic, I wanted to share this lovely news story and video about a family that downsized from 2000 square feet to 320:
I guess it's tangentially related to my question in that family living is so much about finding consensus and balance.
Last night, AS, NT and I wound up discussing an upcoming (fall) trip AS has planned. She'll be speaking at a university in New York about publishing. It's job-related in that she was asked because she's managing editor of a publishing house. But otherwise it has nothing to do with her job. The university will put her up and feed her, and they'll give her an honorarium to cover airfare. She was talking about trying to find airfare below the honorarium so she'd actually come away with money. It gradually came out that I assumed she would put any extra money into the pot, whereas she assumed she would keep any extra money.
My perspective, which wasn't thought out or necessarily very logical, was that if she was going to be away from her spouses and children, it should be for something we all benefited from. Her thought was that since she'd be working all weekend and getting up at crazy hours for the cheaper flights, she should get to keep the money.
It opened up a larger discussion. We were all pretty tired so it didn't really go anywhere; we just sort of trailed off with an agreement to revisit the topic after we'd had time to think about it. I don't think it'd hurt to get some outside perspective on it as well, so here's the situation:
We all have full-time jobs, and all our paychecks are direct-deposited into the household checking account. This usually includes overtime pay from NT's job (AS and I don't get paid for our OT).
We all have various forms of additional income:
- NT does Pinecone surveys at $3 a pop; AS and I do other surveys mostly for giftcards
- Occasionally one of us will sell personal or household belongings via eBay, Craigslist or yardsales
- AS has a semiregular gig editing books for another publisher, with pay ranging generally from $400 to $1200 per job
- I've gotten very irregular proofreading gigs paying a couple hundred each
- AS sporadically does mending and alterations for $10-$50 per job
- We rarely get bonuses from work (if we do, it tends to be around the holidays, maybe $1000 at a time)
- We get gifts from family (anywhere from $10 in a birthday card to $13,000 pre-inheritance from my dad)
- We get rewards money for using our credit cards
That's all I can think of right now. But as you can see, extra money comes in, wildly different amounts, unpredictable, with varying levels of effort put in to earn it.
Since AS got her last full editing check ($900), her last speaking honorarium ($150) and now wanted her next honorarium, I was starting to feel a bit cheated: She does these things (admittedly hard work) that take her away from us, and she gets way more money than us. So we don't get the benefit of her time or the money. (As a side note, we all get the same allowance and a say in how our household money is spent, even though we make $49K, $41K and $30K, so that may have been part of the "hey, I don't get to keep all the extra money I make" feeling I had.)
But AS pointed out that previously, she has contributed thousands and thousands of dollars of extra income to the household (her extra income and NT's overtime pay are largely responsible for the lawyer fund) without asking for any of it herself, even though it's above and beyond her full-time job. She said she feels weird because it's like we aren't happy with not getting to spend time with her, yet I take the money for granted. It is hard; I love having the extra money to accelerate our goals, but I hate having less quality AS time. And if she were doing it strictly for her own spending money, I'd feel very resentful. But she's right that she's probably only taken about 10% at most for herself, and only very recently.
When we were first starting our journey out of debt, we were in dire straits and every bit of extra income went toward debt. But now that we're in a much better place (though still in debt and not quite where we want to be in savings), we've grown less strict or rule-based; NT keeps his Pinecone and eBay income, AS keeps her sewing money, and parts of our bonus money and credit card rewards are typically divided between us in some way, or (in the case of the credit card money) I'll make the decision to spend it on something indulgent (for all three of us, but clearly something that I thought of and wanted). Overtime pay and other work-related income usually goes toward savings or debt repayment, but occasionally to something like home improvement.
I'm wondering if we should come up with some guidelines for how all of this shakes out, so none of us feel cheated, overworked or neglected. Should we ask AS to limit her extra editing now that we're not hurting for money as much? Should we set up a percentage system of how much each person gets out of their personal "side hustles"? Or a percentage that each of the three gets out of each extra income thing, so if one of us tends to make smaller amounts we still benefit at the same rate (similar to how we all benefit equally from our regular paychecks no matter how much we bring in)?
It's not a huge bone of contention at this point, nor do I necessarily see it becoming one. But it does seem like something that should have a resolution, since all of us had minor complaints and vague feelings of injustice (though none of us thought anyone else was being deliberately malicious or anything like that) and differing perspectives on the matter.
Sorry if this was boring and complicated! I didn't realize how long it would take to write out everything, so that the situation is totally clear. Anyway, if you'd like to weigh in, all viewpoints are welcome and will be respected. Or if you want to write your own Share Your Thoughts blog post about how your family handles similar situations, I'd love to read it.
I sent an extra payment to one of NT's student loans, and $882 went to principal. That brings us to $1666 down, just $34 to go on the June debt goal! AS's student loan payments at the end of the month will bring us over the top easily.
Our cat Noodles has been acting a little strangely for the past few weeks; first we noticed more than the usual litter scattered over the floor. Then he peed on the couch because the door to the bathroom was shut (usually he can hold it until someone opens the door). Then we realized he was *always* in the litter box, only peeing a few drops at a time. Finally NT noticed some pinkish crystal-type things in the litter and took Noodles to the vet.
They didn't find anything serious and couldn't get a urine sample, so they gave him a shot of something and sent us home with some prescription cat food, with instructions to switch him to canned food. (So far he won't touch the canned, but if we can keep our resolve and not give him his regular food, he'll get hungry enough eventually. I hope.)
Since there were X-rays and a month's worth of prescription food involved, the bill came to something like $250. No worries; we've got $2700 in our medical expense fund, which is separate from our emergency fund. And we add $100 every month.
Already there's less litter scattered on the floor, and we've noticed him going a lot less, so the shot must have cleared up whatever it was. One thing NT read said that urinary infections could be brought on by the hormones of depression or stress, so we wonder if it was AA's joyous screeching and chasing. We're going to try and calm her down when she starts doing that, so hopefully his stress levels will go down, if that's what it was.
AS forwarded me an interesting writer/editor position yesterday, so I'm going to apply today if I find the time. Also, an ex-co-worker emailed me about a possible job opening at an agency that works for her company. I wrote back to definitely pass my name along to the hiring people, so we'll see if that turns into anything.
AA's daycare is so wonderful still. We noticed that now at home she sits on the floor when we give her a snack, whereas before she would run around while eating it (bad, I know, but we'd let her get away with it). The daycare lady obviously pays attention to her because she mentioned how much AA loves to dance. The fact that she's already dancing there shows too that she's already comfortable around them. Today she made a little show of crying when I put her down, but when the lady picked her up, she stopped crying and waved bye-bye to us. Yippee!!
So I haven't recorded charitable giving for a while, and we're up to $755 donated so far this year.
I noted in the sidebar but forgot to blog that with the NY trip, we reached our goal of going on at least two trips and paying for them in cash. I sent the credit card payments off this week for the expenditures we put on them (we're trying to use our new CCs as much as possible to earn our two $500 bonuses). We're still going to try for one more trip this year and maybe a staycation (or maybe just a few extra days off around the winter holidays). But our goal has been met, and it's nice to have checked off our second goal as being completed!
I read one book on the plane to New York: Netsuke by Rikki Ducornet. It's a gutwrenching semibiographical story of a wildly unfaithful psychiatrist and his slow self-destruction. Very adult themes but I recommend it if you've got the stomach for it.
I'm nearly done with another book that I'm loving, The Cry of the Sloth by Sam Savage. A depressing yet giggle-inducing epistolary novel about an isolated writer/literary magazine publisher/landlord whose life is spiraling downward. Self-destruction of a completely different timbre, but the unreliablility of the narrator is a common thread between these two books.
So that fulfills my creative and/or reading goal for June, and the month has barely started!
The small-group get-together goal will take care of itself with my sister and her kids visiting.
And I've exchanged a few emails with my lawyer's assistant clarifying a few points of our estate wishes, so there's movement on that front.
Overall a very fruitful month already!
We are so far giddy with delight about our new daycare. AA has been there two days, and already she seems to have leapt forward developmentally. Not only that, but she seems less sad when we leave her there after only a day than she did after a month at the old place. Even though she's the youngest by at least a few months, they've been able to include her in many of the activities, including sitting in a little chair at a little table to eat her meals! The daycare lady said she's been telling the other kids when they say what a cute baby AA is that, "No, she's a *toddler*!" I love that she's in a stimulating environment where she can grow and flourish at a nice pace, and have fun and feel loved at the same time. Fingers crossed that it stays as nice as it seems!
Got back from our NY trip late last night and have felt out of it all day! Luckily work has been manageable. AA started her new daycare so I guess NT will tell us how it went when he picks her up.
$25 went to our EF savings, bringing our 2011 progress to $2632.16 ($11,144.11 total EF).
I'll try to write a longer, more interesting entry later!
All our mortgage payments hit today.
US: $414 to principal
In total, $784 down, $916 to go on the June debt goal.
I was also able to transfer US$640 into UK savings, and $25.45 earlier this month into US savings, bringing our EF savings progress to $2607.16 for the year ($11,119.11 total).
I updated some other sidebar numbers too; sometimes I forget to do so since many of our savings and payments are on autopilot, but now they're all accurate.