• Posts Tagged ‘family’

    Childhood Financial Lessons Important for Adult Life

    by  • September 9, 2015 • Tagged: , , ,  • Comments

    Schools can’t teach everything. The early years of a child’s life is in the home and even when he or she starts to attend school parents continue to have the majority of the responsibility for how their children develop and the habits they form. It is not a paid job; the lessons are taught out of love with the aim of seeing children develop their potential and become people who can contribute to society. A young couple’s own parents, family and friends will be happy to provide help and advice but ultimately it is the couple themselves that have to decide what to teach their children. What they should try to avoid is passing on bad habits and one area where that is very important is in finance.

    Changing Environment

    The environment has been changing regularly in recent years but the rules are still the same even if the early years after the millennium saw a degree of complacency that is unlikely to be repeated. It was a time of easy credit when few people worried about building up debt. There was always another credit card company happy to offer 0% finance transfers and an immediate credit line. In addition real estate prices were rising so few people worried about spending; they could always re-mortgage. The recession brought a sudden halt to that and in theory that should have been the end to complacency.

    A few years of recession followed with many families struggling under the weight of debt they could not afford. A young couple starting out may well have seen the financial problems that complacency and then recession caused. The lessons should be passed on to their own children; buying on credit can be dangerous as well as costly. Children who see their parents spending on a credit card inevitably think that is the norm. If such spending creates a balance that receives a high interest rate charge at the end of the month because the full amount is not settled then it is a habit that parents should never pass on to their children.

    Troubling Statistics

    Some of the statistics in the USA are disturbing; almost two thirds of families have no emergency fund that they can use if a financial problem arises. The figures on retirement are no better with the Social Security system under extreme pressure. Anyone that thinks they can rely on that system when they retire are fooling themselves. Children should be taught the importance of saving to avoid joining the numbers that appear to be short of what they need.


    Children develop better in a stable environment and that is certainly more likely to be in one where there are no financial concerns. Those families that suffered during the recession because they were unable to meet their bills had to live through troubling times and that inevitably impacted on children as well as those towards the end of college education when the recession began, people who may now be looking to pass on good habits to their own youngsters.

    There is no reason to discuss every financial decision with your children but what you likewise do not want to do is to give them a false impression. If you are struggling to control your finances and if as a result you have built up debt on your credit cards then you should as a matter of urgency look for solutions to the problem. If you have regular income then online lenders are likely to look favorably on a realistic application. You will be paying less interest on a realistic loans than you are paying on credit card balances.

    You need to act; children can instinctively see when there is a problem and will not necessarily see it as a consequence of spending unwisely or extravagantly. There is an old saying that hopefully no longer applies: ‘Do as I say, not as I do!’ It pays to teach children the right way to manage money; perhaps to give them a few simple chores to earn their allowance. That is a valuable lesson and if parents follow the right rules themselves, hopefully their children will do likewise.

    The Trouble with Christmas

    by  • November 15, 2012 • Tagged: , ,  • Comments


    Merry Christmas!

    The title here is deceptive, because really, the obvious trouble with Christmas is that I’m Jewish, and don’t celebrate it. But! When you marry someone who does celebrate it, and you don’t have your own family competing to get you to celebrate it with them, then Christmas becomes your holiday too. No, the real trouble with Christmas is that it comes every year, and I am just not that good at coming up with things we need.

    I’ll explain – my husband’s family really, really does Christmas. It’s a giftapalooza, where you’re provided with not only the things you’ve needed for a while (new shoes, a suit, stuff for school, etc.) but all the things you want. There is a lot of gift-opening at their house. In my house, Hanukkah is a time for some latkes and some token gift-exchanging. My sister and I would get some candy, some fun things (pretty scarf! CD!) and that was it.

    But at the same time, my mother-in-law is incredibly frugal, and a planner, so at the end of the summer (yes) we’re asked what we need so she can start scouting deals. This means I start brainstorming an answer to “What do you want for Christmas” in June. And the problem is, I’m not that good at it. Oh, I can come up with “wish list” type items – a new cashmere scarf from J.Crew! That Diane von Furstenberg dress I’ve been eyeing! That $800 chocolate vault sold by a fancy chocolate store in Boston! But these are not things I would ever actually request, because they are exorbitantly expensive and ridiculous. So instead I take stock of what we could actually use, but haven’t bought. This year, it’s towels, since we’ve been using my husband’s college set, and they are unspeakably old and tattered. I’m pretty pleased with this decision – we’re notoriously horrible at replacing household objects, and this is something that my mother-in-law can shop for well in advance, keeping an eye out for deals.

    Of course, I think the real trouble is that I wouldn’t mind if there were some kind of Secret Santa agreement, or “we really can’t think of anything so why don’t we not make up some stuff we don’t need and save everyone the time/money” agreement. It can get costly to shop for everyone in the family, as I’ve discussed. But then again, I never really grew up with the Christmas sentiment, and while I’d be happy to overstuff myself on ham and pie and sleep in until it was time to watch It’s a Wonderful Life, I think my husband feels differently.

    How do you handle different spending patterns between families at the holidays?

    image: New Internationalist Magazine

    Planning for Holiday Spending

    by  • November 7, 2012 • Tagged: , ,  • Comments


    These Are Essentially Piles of Money

    One of the most revolutionary things my young financial mind discovered upon entering the world of personal finance writing after college was the concept of early saving for holiday spending. I had always found myself unpleasantly stressed as the holidays arrived, particularly after I started spending Christmas with my husband’s family. They are a very generous, and numerous, group, and I felt compelled to have something for everyone (even if that was only a batch of cookies). But costs added up – travel, gifts, baking supplies, etc. – and I couldn’t get my mind around a way to offset the sudden spending.

    Until, that is, I read about a bloggers’ technique (sorry, can’t remember exactly who) for ending that exact stress. Rather than wait until November to think about cost, they put a small amount of money into a “holiday” account every month until said holidays, at which point, you have a small but healthy savings account to fund your spending.

    This, quite literally, blew my mind. I already had automatic savings withdrawals taken out of my paycheck each month for other savings accounts, and so I added a small sum – I think about $25 – each month to this fund. While it wasn’t quite enough to cover all holiday costs, it substantially offset an amount that would have otherwise stressed me out significantly. I also didn’t miss the $25 each month, especially as it was gone before I could notice it.

    These days, I employ a similar tactic; instead of a set amount each month, I tend to add lump sums of money when I can (after substantial overtime, for instance, or when I have a few freelance checks come in at once). This means that, while my husband mocks me for ordering holiday cards in October, I can take advantage of early bird sales because the cash is sitting there. I can also take money out of the fund to cover our plane tickets for holidays, and any other expenditures that come up. I don’t feel so cash poor the moment the stores pull out the holiday themed items (way too early, in my opinion), and most importantly, it alleviates stress during an already stressful time. Did the jam sandwich cookies I’d been planning to send to family turn into jam disaster piles? Not a problem, I can replace the supplies without stress. Find a good airline deal in July? Take advantage of it, because the money is there. It’s such a simple idea that I kick myself for not thinking of it earlier.

    How do you manage the stress of holiday spending?

    image: FutUndBeidl

    Getting Over It

    by  • May 22, 2012 • Tagged: ,  • Comments


    Why Are You So Expensive?

    Recently, my husband stumbled onto a bit of fellowship luck for part of his graduate program. As a result, our loan burden for the coming year is somewhat reduced. Obviously, this resulted in much rejoicing, in large part because we won’t have to worry about the lack of interest deferment on Stafford loans in the coming year (I had a whole post on this planned, and it was going to pulse with rage). We can do a lot with this news, including an accelerated repayment schedule for the loans we DO have for his graduate program.

    But shortly after we found out about the fellowship, my sister emailed me to let me know that she would be remaining in Israel (where she is currently living and working/studying) for an additional year. We had put off visiting her this year for a number of reasons – prohibitive cost to the Middle East, lack of vacation time, and a previously planned trip to Spain to visit my husband’s sisters on their study abroad semester. But in light of this new financial situation, we started to consider a trip to Israel a possibility.

    And then I started to look at plane ticket prices. Because this would be quite a bit of a distance to travel, and because in addition to my sister, I have family members scattered throughout the major cities in Israel, we want to spend a significant amount of time over there. After all, there’s a lot to see (in addition to family); my husband and I come from two religions that have many interesting (and different) points of interest in Jerusalem, and we’re not likely to repeat the trip anytime in the coming few decades. We would like to make it a substantial escapade. This means looking at tickets over the holiday season, when we both have a significant amount of time off. This also means that tickets are SO, SO EXPENSIVE.

    Obviously, once I saw the upwards-of-a-thousand-dollar price-tag on tickets during our travel time of choice, I started to brainstorm ways to save. It’s so much cheaper to travel over Thanksgiving! We could definitely stay in the Zurich airport for 22 hours to save on travel, whatever! It will be fine! Slowly but surely, a creeping sense of stress and panic overcame me, and I confessed to my husband that nothing about planning this sounded fun anymore. After regarding me like I was insane, he asked me what was wrong.

    “Tickets are SO EXPENSIVE over Christmas. But if we go over Thanksgiving, we won’t have any time and it will be rushed and miserable and we’ll be jet-lagged and it will just be a stressful misery.”

    “Then let’s go over Christmas.”


    “Abby . . . we have the money. It will be fine.”

    And he’s right. As he correctly pointed out, this is the best time in our lives to take this trip. We’re financially sound (knock on wood), we have the time, we’re young and childless, and enough people are over there and happy/willing to host us and see us that if we don’t do this trip now, we’ll regret it. My sister will not be there for much longer; and sometimes, you need to value your life experiences over an unnecessarily accelerated loan-repayment plan. Sometimes, the extra few-hundred dollars to ensure that you get the most out of an experience, and aren’t rushing through it with an underlying sense of panic are worth it. Therefore, I am going to push the guilt-monster associated with spending more cash than I should, and taking two international trips in a year, deep down inside me (where I hide the rest of my feelings), and look forward to planning the (or at least, a) trip of a lifetime.

    How do you prioritize spending when a great opportunity arises?

    image: oatsy40

    Who Knows How Much You Make?

    by  • April 20, 2012 • Tagged: , ,  • Comments

    $12,000 Salary?

    Don't spend it all in one place.

    image: J Wynia

    What would you rather tell people: your favorite sexual position or your salary? Which would you rather people knew?

    Of the topics of conversation that seem to remain forever taboo, revealing how much you make will always be controversial. If you make more than your companions, then they might think that you’re bragging. On the other hand, if you make less than them, you’ll forever be sizing them up and comparing yourself to them. However, there’s got to be some people in your life who know how much you make.

    Does My Wife Know How Much I Make?

    Of course Her knows how much I make. Lately it has become a point of contention because my salary has doubled in the past 7 years and she has only received modest pay raises of 25% of her original salary in the same time period. While Her has one more Master’s degree than I do, our fields of work are vastly different. Her is beginning to feel like she’s not pulling her weight in this marriage, but I don’t feel that way. Our paychecks are combined into one pot of money so it doesn’t matter whose dollars are going where.

    Do My Parents Know How Much I Make?

    No way. Well, if I told my dad probably nothing would change and he would soon forget. But I’ve written extensively about how my mom asks me how much my bonuses are, tried to ask Her financial questions when I’m not there, buys herself a huge post-engagement ring, expects too much at Mother’s Day, buys wine she doesn’t even like, and expects money because we’re asian. She already snoops around my life too much, and if she knew exactly how much my salary is or how much my bonuses are she’d be waaaay up all in my business.

    Do My Friends Know How Much I Make?

    None of my friends know how much I make. In fact, I’m not even sure what my friend’s ballpark estimates of what my salary might be. This can be good or bad depending on which group of friends I’m with. I think that we all can guess by our living situations, the stuff in our houses, our cars (or lack thereof), and our vacations. I think that this is the category of people I least care about knowing my salary. Friends should be friends, no matter if I’m unemployed or if I’m a 1%’er.

    Do My Coworkers Know How Much I Make?

    Nope. I work at a small company and gossip is king. Everybody seems to be in everyone else’s business, and not in a good way. My coworkers all seem to talk about each other behind each other’s backs. Once during happy hour (oh the pre-parenting days) I got our office manager to divulge the information that new hires generally start at $30,000 per year. She didn’t seem to regret telling me this as she didn’t really get along with the new hires. Another time a senior executive accidentally left his W-2 form laying around and someone else found it. It turns out that this senior executive was making significantly more than the other senior executives at my company, and everyone thereafter tried to give that guy the shaft. He still works with us.

    What about you? Who knows how much you make?

    And Baby Makes Three – Yes, We Procreated

    by  • September 21, 2011 • Tagged: ,  • Comments


    Our family looks more like the one on the left.

    image: xkcd

    So all that non-posting in the past year? Yeah, we were busy having a baby and stuff. Did you realize how much time ONE measly baby takes? What the hell, baby.

    Also, as it turns out, ONE measly baby also tends to be pretty expensive. It is quite the transformation to turn our home from DINK-style to OMG-BABYPROOF-EVERYTHING. We’re still transitioning slowly into our new role as parents, and that includes the way in which we spend money.

    As you would expect, we’re not going to be the best source for money-saving tips when it comes to baby stuff. If you want those I would suggest reading Couple Money’s series on baby expenses. In fact, there was just a post yesterday on the actual cost of raising a child.

    Have kids? Share a tidbit of info in the comments on how you’re dealing with the expenses.

    To Love, Honor and Financially Obliterate

    by  • July 15, 2010 • Tagged: , , , , ,  • Comments


    (photo: lionheartphotography)

    “A lot of people wonder how you know you’re in love. Just ask yourself this one question: ‘Would I mind being financially destroyed by this person?’”

    I first came across that quote hanging on my friend John’s fridge, soon after he started dating fellow friend Fahmi. Since Fahmi was on the verge of trading in her lucrative IT consulting job to head back to grad school, it wasn’t an idle question.

    Happily, Fahmi got her degree, John and Fahmi got married, and they’re now cheerfully bonded and financially stable.

    But for an illustrative example of just how literally that quote should be taken, there’s the tale of Dawn vs. The Leech.

    Dawn (not her real name) has been one of my best friends for a decade. About five years ago, comfortably before the housing boom’s peak, she and her live-in boyfriend decided to buy a house together. It was a pretty good deal: a recently foreclosed, two-bedroom place in a Western city for a tad over $100,000. Dawn had a stable job and could comfortably manage the monthly mortgage payment; her boyfriend, aka The Leech, was a contractor who could handle the house’s badly needed renovations. They bought the house on an ARM, planning to finish the upgrades and refinance the house before it reset.

    You see where this is going.

    Over the next few years, Dawn and The Leech got married and worked on the house, but the renovations never quite got done. Time management is not one of Leech’s strong suits. To finance the renovations, they tapped a home-equity credit line, which added a second mortgage to the house’s debt load.

    Then the economy tanked. The Leech wasn’t getting contract work the way he used to. At the same time, the ARM on the house reset, and the interest rate zoomed past 11%. Once-affordable payments were suddenly a big struggle. Like millions of other Americans, my friends were being bankrupted by their house. Somewhere in here a third home-equity credit line snuck into the mix.

    It’s easy to point fingers (“An ARM — what were they thinking!?”; “Never buy a house unless you have enough money saved to make the payments for uppitygazillion years without an income”; etc etc.), but as they say, hindsight is 20/20.

    Here’s where the situation gets really sticky. Dawn came up with a clever solution to the ugly financial math: move. She’d worked in NYC before moving out West, and had a job offer that would pay about twice what her local job did. With that extra cash, she could afford to keep up the house payments and also get a rental in NYC. So, after extensive discussions with Leech, she moved back East. The plan was that he would stick around for a few months, finish the house and rent it out, then join her in New York.

    It was a pretty cool plan. One that got blown to smithereens a month later when Leech moved his new girlfriend into the house. (Here’s the part I like best: He didn’t want to get divorced. He was pretty happy to stay married to Dawn, keep her on the mortgage … and live with the new chick. Logical thinking is *also* not one of Leech’s strong suits.)

    Now, all of this still could have worked out if Leech had the income to support the house he wanted to stay put in. But he doesn’t.

    Dawn — who was far nicer to him than I would have been — took a fair stab at weaning him off her financial support. They drew up an agreement under which she would keep paying into the mortgages for most of a year, while he got his act together. Which she did.

    A year later, shock of shocks, Leech was still broke. He promptly fell behind on the mortgages, obliterating his already-shaky credit rating and Dawn’s excellent one.

    So Dawn is now caught in an epically nasty situation: She’s getting divorced but is still on the mortgages for an underwater house she isn’t living in and can’t sell without the consent of the house’s co-owner, Leech. The full face value of the loans on the house sits at around $200,000. The house’s market value is maybe 75% of that.

    This has to be a pretty common situation these days, but all the researching Dawn and various lawyers have done turns up basically no good way of dealing with it.

    No lender will refinance the house notes into Leech’s name alone; it’s underwater and his credit is shot to %@$!. The best option is to sell the house, but a) that requires Leech’s consent, and b) it’s probably going to be a short sale, which won’t fetch enough to clear all the notes. The second and third lienholders have little incentive to agree to that — and even if they do, they could then still pursue a deficency judgment for the shortfall.

    So for now, Dawn is stuck taking a credit hit every month that Leech fails to make payments, and remains on the hook for a life-destroyinging giant sum of money. She’s been waiting for more than a year for one of the three lenders to finally get fed up and foreclose, but every time that seems imminent, Leech chucks the lender a small payment and manages to stave it off a bit longer.

    I know the advice, before you co-sign a whopping loan with anyone, is always to be really, really sure you know what you’re getting into. But how can you? Very few people get married expecting to get divorced, and yet, almost half of us do. Neuroscientists keep pointing out that we’re hardwired to be overly optimistic, make irrational choices, and stay in bad relationships.

    So on top of all the many, many ways we now know that buying a house can turn into a debacle, add this one: That mortgage can be more like a marriage. You might end up bound to the ball and chain till death — or something else equally unpleasant — do you part.

    Money and power

    by  • June 29, 2010 • Tagged: , , ,  • Comments


    photo: angusf

    Personal finance blogger Eilene Zimmerman had a post recently that really intrigued me: How Money Can Hurt Your Marriage.

    Eilene hits right on the head a thing that has always played, subconsciously, into my own relationship dynamics: the way finances become a power tool.

    Eilene’s then-partner significantly out-earned her. "One of the biggest problems in our marriage was his demanding job (that paid well) and that the power in our relationship was – at least from my vantage point – all economic," she writes. "I felt like I had no right to ask for anything I wanted – not material things, but more like time away from the kids, time to work, time to go out with friends, essentially time – because he was working so hard. And although money is empowering in many, many ways, it made me feel powerless, because I didn’t have much of my own. My income was tiny compared to The Husband’s, so how could I declare I would be taking a nap on Saturday afternoon?"

    Ding ding. That’s a thought process I suspect is common to a lot of women. Maybe it’s prevalent with anyone, of either gender, in an income-imbalanced relationship, but  my impression is that women are more susceptible to it. Including me — on both sides of the equation.

    Money matters because the most important thing it buys is flexibility. Greater financial resources means greater control over where you live, what you do, how you allocate your time, and a vast swathe of other variables that shape our lives.

    But it’s easy to let money become something else: a way of keeping score. Beyond the ubiquitous cultural programming that tells us money works meritocratically, with more flowing to those who work harder/better/smarter/longer than others, it’s just easy. It’s why people are drawn to sports. The results are black-and-white, simple to compare, to rank.

    And the kicker is that it’s very easy to say "money doesn’t work like that; incomes aren’t neatly correlated to effort," but like most things in life, this is a gray area. Sometimes they are and sometimes they aren’t.

    In college I made $7 an hour working the popcorn machine at a local movie theatre; now I make much more money doing a job I think is way easier and more fun. I don’t work "harder" now than your typical retail worker. And, of course, I make a tiny sliver of what your average Wall Street financial type pulls down; you can guess how much "harder" I think their job actually is. (I’m not talking about skills and qualifications; I’m simply talking about the strain and labor involved in getting through a typical day of work.)

    But then, there’s cases where income does reflect effort. One of my friends works about 70 hours a week, on two jobs; her less-employable (and, honestly, lazier) partner works half as many hours.

    This is where the gray sneaks in. There’s a ton of factors — some controllable, many not — that affect income. And when you have two people in a relationship with financially intertwined lives, the only way to avoid tension is for both to be in synch about how money, especially when it’s imbalanced, should affect everything else. Time, chores, goals, priorities, everything.

    David and I had our own wrangles with this last year. In the middle of an epically bad market, he quit the job he’d held for almost a decade. With nothing new lined up.

    While I understood and agreed with his reasons, I was still not what you would call 100% cool and supportive about the move. ("Shrill" and "cranky" would probably be better adjectives to describe some of my comments about it.)  Yes, we could scrape by with just my income, but did I really want to? I started expecting David to do a hell of a lot around the house, because part of me wanted him to "prove" he was doing as much work as I was. I was bringing in a paycheck, my little brain-voice said; what tangible thing was he doing? I was definitely using money to keep score, even as the rational part of my mind knew that wasn’t really fair.

    (Caveat: This equation becomes a very different thing when you add in kids, illness, dependent relatives, or other complications beyond a relationship of two fully functioning, equally competent adults — which is, of course, the situation most married couples face at some point in their lives. That’s a whole other column.)

    Then David got a new job, with a salary slightly smaller than his old one. That left our incomes even more out-of-whack than they’d been before.

    But that gap doesn’t faze me at all. We both work full-time, office-type jobs; mine just happens to be in a field that pays better than his does. He loves his new job and it’s a great fit for him. Since my income is higher, I cover more of our expenses, but it seems to me that it would be ridiculous to expect him to do more than I do around the house to "pay off" the salary differential.

    So … sometimes I keep score with money, and sometimes I don’t. And though there are times when it’s clearly, actively destructive — most times, I’d guess — it also feels like a thing humans will inevitably lapse into doing.

    How do you sort it out?

    Love for sale, please bring $$$$

    by  • June 14, 2010 • Tagged: ,  • Comments


    photo: David Dyte

    My cat broke. Expensively.

    It started when we noticed that his front teeth were noticeably protruding, more so than usual. "Let’s nickname him Fang," I suggested.

    "Have you had a vet look at that!?" my more observant and empathetic friend asked a few days later.

    Kea was about six months overdue for his annual checkup, so I opted to do the responsible thing and make an appointment.

    "His teeth seem a little odd," I told the vet when we arrived a week later.

    "Yes, those will need to come out," she answered.

    Come. out!? There’s nothing like being told your critter is about to lose his teeth to make you feel like a neglectful guardian.

    It turns out this isn’t uncommon in cats. They’re not terribly diligent about teeth brushing. For $10, you can buy a cat-tooth-brushing kit at any pet store, but — those of you with cats will share my incredulity at the idea of convincing a feline to go along with regular tooth-brushing. I already have scars, prominent scars, from my occasional attempts at claw-clipping. I can’t handle the blood loss tooth-brushing would entail.

    So at age 5, Kea was about to lose his teeth. And our Amex was about to take a $650 hit.

    Now, I’m more-or-less reconciled to this sort of thing. It goes with the territory of having pets, kids, a house, a car, or anything else prone to sudden, catastrophic, and expensive failure. And my husband David and I are in-sync on the financial priorities and burdens of pet ownership — one of the reasons I’m quite fond of him is that he’s very softhearted when it comes to small, furry things. There’s basically no amount of money he wouldn’t spend to do the best thing possible for our critters. So off went $650 and out came Kea’s teeth.

    The topic spins around regularly on personal-finance blogs: What does a pet really cost?

    The ASPCA has a handy breakdown, suggesting that your budget should run anywhere from $35 a year for a fish to $875 for a large dog.

    (Guess what the second-most expensive pet is, saith the ASPCA? Not a bird, cat or small dog. A rabbit.  Rabbit owners, I ask: Does litter really cost you $415 a year? What in hell do rabbits require for litter, shredded euros?)

    But my experience is that it’s the back-end costs that really whack you.

    I got my first very-own cat for my 11th birthday. I had been pleading for a cat pretty much nonstop ever since I encountered the concept, and after five-ish years of begging, my parents were either softened up or worn down. I sealed the deal by returning from the grocery store one day having spent my allowance for the month on a plastic food dish and single can of cat food. "What’s that for?" my mom asked. "For the kitten I really, really, really want for my birthday next month," I answered.  Guess who got to go to the pound and pick out a birthday kitten?

    The adoption cost was about $50, if I recall right, and for the next decade Max didn’t cost a whole lot more than that. He went through about $5 of dry food a week, one $5 box of litter every two weeks, and a $150 vet appointment each year. Total annual ownership cost, roughly $400.

    Then Max got to be a middle-aged cat. That’s when the trouble started.

    Max stayed in Maryland while I went off to college, so my Dad is the one who really got stuck with the tab for my aging kitty, but I vividly recall Max getting the diagnosis of hyperthyroidism. It’s a very common condition for older cats — and the surgery to treat it costs about $2,000. Ouch.

    Max got the surgery, and lived almost three years more years before slipping away quietly in his sleep one night.

    Capital Expenditure on Cat: $2,000 / (365 x 3) = ROI on cat ….

    I can’t do the math. That’s the reason I’ve kept having cats, even though I know they will sporadically break and throw my budget out of whack — and will, less sporadically, claw my couch, throw up on my favorite sweater, wake me up at 4 a.m. by attacking my toes, bat fragile glass things off countertops, and in general act like a troublesome and problematic creatures.

    They’ll also purr, cuddle, stalk random bits of dust, and make me laugh at least once a day at their antics.

    As I type this, Kea is draped across a box of books trying to figure out how to thoroughly kill the computer cord peeking out from the box. It is clearly an enemy computer cord, and my toothless cat is committed to defending the household from its advances.

    I think that’s worth the occasional $650 bill.

    Financial inversions

    by  • May 26, 2010 • Tagged: , ,  • Comments


    photo: alykat

    I’ve always had a pretty laisser-faire approach to calculating “my share” of financial transactions with friends and family. It stems from my previously mentioned commie streak — instead of allocating shares of bills dead equally, I’m inclined to let the person of the most means shoulder a larger share. Throughout most of my 20s, that person was almost always me.

    Not, I hasten to add, that I was swimming in cash. My life is a very distant cry from The Hills or NYC Prep , where a typical afternoon out means dropping the kind of money that would keep me in rentmortgage payments for three months. But I started working half-time at 19, and by 20 I’d ditched my senior year of college in favor of a full-time job. It was entry level and paid sustenance wages, but that still put me a fair sight ahead of my friends pulling $6 an hour from work-study gigs. And by the time they graduated into their entry-level gigs, I’d taken a promotion and changed jobs for a higher salary, and on it went. While those around me job-hopped, went to grad school, explored different fields, or suffered from pot-dot-com-kaboom layoffs, I inched up the career ladder in the same field I’ve been working in since I was 16. So at lunch, I often grabbed the check away from the friend I knew had a harder time than me making ends meet.

    And I always did that with my three-years-younger sister, who left college with a fancy diploma and the requisite five-figure debt load that comes with it. I knew she was constantly fighting to keep up with student loan, medical and credit card bills on a salary that was never more than half of what I made. When we went out for dinner or took a weekend trip, I paid.

    And then I turned 30.

    Suddenly, in the past year or so, a whole bunch of those I hang out with have leapt forward financially. The friend who used to be a broke law-school student got a job at a ritzy white-shoe law firm with an eye-popping starting salary. The friend who was a teacher is now a principal, running her own school. The math grad student became Dr. Bonnie and had two universities bidding for her services. And the friend who completed a social work masters program is head of the human services department in a big city.

    And my sister landed her dream job, which pays a very reasonable salary and comes with the unbeatable perk of free housing. (Before anyone gets too envious, said housing is in Ciudad Juárez. It has a lovely backyard — surrounded by alarms and barbed wire.)

    Of course, the recession hasn’t totally whooshed by and left my social circle unscathed. I also know people who spent small fortunes on grad degrees and now can’t find work in the field, fellow journalists left stranded as their publications closed, and friends muddling through gigs they’re overqualified for because it’s all they can find.

    But instead of being the most financially secure of my friends, I’m now somewhere in the middle of the pack — and falling. Most of those I know are in fields with much better salary-advancement prospects than mine.

    That doesn’t bother me in a financial sense (for now — check back in 10 years and see if I’m regretting this whole “write words for a living” thing), but I’ve been surprised by the mental reprogramming it’s required. I still start to reach for checks and then remember — I’m not the only one with regular paychecks anymore. I can let other people leave the extra cash for the tip, or pay a bit more than their share if we all have $20s and no change. Or let my friends treat if they offer, without feeling guilty.

    The splitting-the-bill machinations many be a me-specific thing, but I think it’s pretty universal for those in their 30s to suddenly find their whole social-circle financial landscape shaken up. People get married, get promoted out of entry-level gigs, have kids, leave grad school, ditch waiting-tables-and-acting for jobs with health insurance, and generally grow up into situations that are more complicated, but also usually more lucrative. And the salary disparties become starker — instead of everyone being young and basically broke, suddenly some people are doctors or investment bankers making much more than the friends who became teachers and office managers.

    The whole thing really hit home for me when my sister came to NYC a few weeks ago for a final pre-Juarez-departure visit. We went to Babbo, where we first journeyed eight years ago in our initial foray into pricey Foodie Nirvana Restaurantland. I saved for two months to field that bill, which came to almost a third of my monthly rent at the time.

    This time, after a four-hour wine-and-pasta extravagance, we surveyed the financial damage. I started to reach for my Amex … then realized that for the first time I didn’t have to vehemently insist that my sister put her own credit card away. Thanks to the whole free-housing thing, her take-home pay is probably better than mine these days.

    So I left her take care of more than half the bill. It’s an adjustment, but I think I can get used to this.

    Finances and Family Review

    by  • February 22, 2010 • Tagged: , , ,  • Comments

    This morning Her and I were featured on the Chicago Public Radio show Eight Forty-Eight. If this is your first time here, welcome! The portion of our interview that was broadcasted included our thoughts on how we deal with the relationship of finances and family. Here are some of the posts that go into more detail on that delicate balance:

    I talk about my parents (mom) at length in a few posts:

    How Much Do You Tell Your Parents?

    My Parents Keep Up With The Jonses

    Raise your children to rely on them – Asian Culture And Finances

    (Un)Happy Mother’s Day

    The situation with Her’s parents is nicely summed up in this post: Proactive Parent Protection

    …oh, and by the way, we’re not debt free…but we do have a positive net worth these days. We don’t have any revolving credit card debt, although we do still use them for the rewards but pay them off every month. We also still have about $50,000 of student loans to pay off, but ~$6,500 of that is at a 1.9% APR for life through a generous balance transfer, and the remainder of the balance is a federal loan with a low enough rate that we’re not freaking out about it. This is a far cry from the ~$18,000 in credit card debt and ~$130,000 in student loan debt that we had when we started this blog.

    Family Inheritance Planning

    by  • August 13, 2008 • Tagged: ,  • Comments

    This weekend was my maternal grandmother’s 85th birthday, and my family threw a big party for her. Our family is scattered across the country, but most of the family made the trip to celebrate with her. Her home is the heart of our family. Everyone calls it “the Big House” as in, “Will you be at the Big House for Christmas?” It has been in our family for generations and serves as the gathering place for every family celebration. But lately the big house has become too big for my grandmother. Even though there are other family members living there with her, nobody hears her frequent falls because the house is too big.

    So the future of the Big House was called into question this weekend, with everyone gathered there. What will become of the Big House when grandmother is no longer able to live there, or when she passes away? The entire family agrees that the house should stay in the family, but who exactly will inherit it is undetermined. The six-bedroom house is much larger than the typical modern family needs. It is older and costly to maintain: a recent roof replacement alone cost $30,000. The property is huge and requires a gardener. The property taxes are very high. Who in my generation of grandchildren could even afford to keep the home?

    We proposed that possibly, if the timing worked out in a few years, we could. Our income is higher than almost all of my other cousins’ incomes, so we would best be able to afford it. Another option would be a cousin and his wife, who could share the home and expenses with their parents. Though the expenses would be a burden, it would mean preserving a family bond for one more generation. To me and my family, that is priceless.

    Have you ever taken on a large financial obligation out of duty to your family?

    Keeping Up With The Joneses: Mom’s Ring Finger

    by  • February 1, 2008 • Tagged: , ,  • Comments

    Ah, my crazy mama. I may have posted about her a few times before. One commenter even said she enjoyed my mom’s antics. Here’s another one for your enjoyment.

    A few years ago after both of her sons were engaged, my mother seemed to have noticed that her simple, yet elegant, wedding band wasn’t enough for her ring finger compared to her future daughter-in-laws’ adornments. My mom had told us numerous times that she doesn’t wear her engagement ring because her diamond was small. I can say that’s true because I’ve never seen it.

    One day last year we were out at a family function and both Her and I immediately noticed something different about my mom…she had a platinum ring with a LARGE diamond and matching wedding band on her ring finger! When she noticed that Her and I noticed, she again said that her engagement ring was small and wanted to buy a bigger one for herself. I chalked it up to my parents being empty nesters and not knowing what to do with their money.

    Well, fast forward to a few weeks ago: Her and I were having dinner with my parents, when I noticed an entirely NEW diamond band around my mom’s ring finger. Her noticed as well and we gave each other the “Are you seeing what I’m seeing?” look at each other. A little later during dinner my mom showed off her ring to Her and again recited to us the story of how her original engagement ring diamond was too small, so she got herself a new one.

    I know what you’re thinking: ANOTHER new one? What happened to the second one? Answer: I have no idea. It’s like it never existed. Maybe we made it up. Maybe we’re the crazy ones.

    I wish my dad talked a little more, because I’d be a little pissed off if I were him. My mom essentially bitch-slapped him and said, “Your gifts to me were so crappy that I went out and had to buy 2 rings to make up for it, biatch.”

    I guess my mother’s ring envy got the best of her. Twice. Maybe because both of her sons got engaged she thought she had to try and upstage both of the new engagement rings. Who knows.

    How Much Do You Tell Your Parents?

    by  • November 9, 2007 • Tagged: , , ,  • Comments

    I love blogging about my mom. Really. She gives me so much to talk about. My dad doesn’t speak much, and he’s not crazy, so I don’t write much about him.

    Ever since I’ve been more or less financially independent from my parents, I feel as if they don’t need to know the financial minutiae of my life. When I first obtained my current job, I divulged my salary information to my mom; however, back then I did live at home and was eating their food. Now, I don’t tell her much – currently, my mom doesn’t know exactly how much I make. That doesn’t stop my mom from asking, though.

    I wouldn’t mind so much if she asked maybe once a year or so. It gets annoying because everything eventually turns to “how much did it cost?” Here’s a fun scenario:

    Me: Mom, I’m running a half-marathon!

    Mom: Oh really? How much does that cost?


    You can substitute my first line with anything, from “I like midget bondage” to “Oh my god I sliced off my thumb” to “No, Mario Lopez will always be A.C. Slater to me.” She will, in some way, ask about the cost.

    Now, here’s what happens when she’s asks about money coming in:

    Mom: So how much was your bonus?

    Me: It was a nice amount…

    Mom: You should give some to me and your dad.

    Again, you can substitute “bonus” with “salary”, “amount of Christmas presents”, “tax refund” or “illegal mob money” and still get the same result.

    Where I start to get angry is when my mom starts asking me about Her’s salary, bonuses, cost of whatever. That is certainly not her business. She has even asked Her directly about some money issues. I thought that was way out of line and I told her so.

    Why don’t I like telling her specifics? My mom has a way of using whatever information I give her against me, and possibly Her, for her own evil purposes. Oh mama, you so craaaaaaazy.

    How much financial information do you divulge to your parents? Do they ask you about your finances or do you readily give them information? How has this affected your relationship with them? Do you tell them, or do they ask about your partner’s finances?

    My Parents Keep Up With The Joneses

    by  • November 5, 2007 • Tagged: , ,  • Comments

    photo: bunchofpants

    When I was growing up, my parents were always pretty good with money. After all, they did pay for two of their son’s college educations, not a small feat for first generation immigrants.

    Since my parents became empty nesters, though, they have been a little frivolous with their money. Now as readers of this blog know, we’re not ones to shy away from luxury or the more-than-occasional-treat. Her and I get a good laugh out of some of things they buy, since we know that the cost really isn’t that significant.

    For example, when Her and I went to my parents’ home during the holidays last year, my mom kept telling us about the wine that she bought from (the now extinct) Marshall Field’s. We opened up a bottle, and offered my mom a glass. She refused because “it all tastes like vinegar and makes her dizzy.” When asked about why she bought the wine, she had no trouble bluntly saying, “Well, your aunt and uncle had it at their house last year.”

    Those same relatives who had the wine at their place also like to travel. They became empty nesters a few years before my parents did, and decided they would take a European vacation. Until then, my mom said absolutely nothing about wanting to ever travel in Europe. Lo and behold, the first year that my parents became empty nesters they took a European vacation, much to the chagrin of my dad. He was so not psyched to go that he didn’t pack until an hour before they had to leave for the airport.

    Have I mentioned that my mom has 2 cars? One that was bought…you guessed it…after my parents’ became empty nesters!

    My poor dad just goes along with all of this. I think he’s okay with it though, because my brother and I helped him put together a home theater for him. Admittedly, he didn’t really want a nice home theater until he saw how awesome my brother’s is, but it genuinely makes him happy to have and use it. His main vice is action movies on DVD, no matter how bad they are; thus, their house is littered with movies starring “Bruce Li” or “Chuk Noris.”

    I don’t feel bad at all empowering my dad to buy crappy DVDs from the $1 bargain bin.

    Guests, Guests, and More Guests

    by  • August 23, 2007 • Tagged: ,  • Comments

    We’ve just had company over for the last 11 days, hence the lack of timely posts. Mind you it wasn’t all the same people – somewhere in our budget there was room for a revolving door that family and friends could come and go as they please.

    Of course, having guests over for any period of time induces a little mental stress, although we have yet to sit down and see what kind of stress is put on our finances. Luckily, our guests were all more than generous and insisted they pay for meals out (which some they did, some we did), suggested that we eat in, or just plain stuck to inexpensive things to do. At first glance, it doesn’t seem like it’ll be too bad, but we need to give Microsoft Money a thorough work out.

    Getting Drunk Or Oil Changes For Cheap (Or Free)

    by  • May 29, 2007 • Tagged: , , ,  • Comments

    This past weekend I went to lunch with a friend of mine from way back in the day. Although I haven’t seen this guy in quite a while, when we do get together it usually results in a crazy night where I wake up without pants (in my bed, mind you) and half-eaten Doritos all over me. The great thing is that almost all of my cash that I left the apartment with is usually still left in my pants, wherever I left them.

    What I neglected to say is that my friend is bartender. Not only does that mean free drinks at the bar that he works at, but he seems to know every bartender at every other Chicago bar. He also worked at a restaurant, and when he did we would get heavily discounted meals at nice places. Alas, the biggest expense whenever we went out were for cab rides and tips.

    Normally, I’d really feel guilty taking all of the free drinks, but I NEVER ask to go out to the bars with him. Whenever I invite him out, it is usually for lunch where I can pay for myself. Whenever he invites me out, it is generally to a tavern or six. I consider myself really lucky to have such a generous, well connected friend.

    When it comes to getting discounted services, I also able to get inexpensive service performed on our car. A family friend of ours has been the mechanic for all of our cars for the past 10 years. At first we would bring our cars to him because we knew he wouldn’t rip us off, and he would charge us only a fraction of the labor charges. Now when we ask him to look at our cars he offers to do it “on the side” at his house, assuming it isn’t too complicated. He takes a little longer, but only charges us for any parts. Of course we add in some extra cash to compensate him for his work.

    In the first example, I get free stuff because of a mutual friend relationship – we do more than drink. In the second example, it is purely a business relationship – we only really see each other when the car needs work.

    Do any of your relationships (business, friendships, etc.) directly affect your personal finances? How did these relationships come about, and how are the discounted services or goods handled?

    Rich People Plan For Three Generations…

    by  • January 9, 2007 • Tagged:   • Comments

    Rich people plan for three generations; poor people plan for Saturday.

    This great quote from Money Monk via Single Ma got me thinking today. We have no children yet, but we are probably going to have to care for my parents someday. As it turns out, we are planning for three generations!

    We’re planning for my parents:
    My parents have made few arrangements for their financial future, so Him and I are trying to give them direction where possible. For example, for Christmas we bought them The Easy Will and Living Will Kit: A Simple Plan Everyone Should Have, since their Will hasn’t been updated in 30 years and they never made a Living Will. I want to be sure I am respecting their wishes in the future. We also try to educate them about retirement planning end encourage them to save for retirement.

    We’re planning for ourselves:
    We have set a target retirement number and are contributing to our 401K’s and Roth IRA’s. We are paying down our debt to improve our credit scores so that we can look forward to purchasing a home with a good mortgage rate in the future.

    We’re planning for our future family:
    We have opened a UPromise account that can someday be used toward our children’s education. We are also trying to make good financial and career decisions now so that we can provide for our family later. We donate time and money toward worthy causes that will help us leave the world brighter for our children.

    Proactive Parent Protection

    by  • July 3, 2006 • Tagged: ,  • Comments

    My parents have been planning to drive out to visit us this summer. Over the phone, my mom admitted that she was planning to pay for their trip by maxing out their home equity loan. This is a bad idea for several reasons – they are close to retirement and should be aiming for zero debt, and often a HELOC is the last line of credit available to you in an emergency and it should be reserved only for emergency use. I was dismayed by this news, and told my mom that a better choice would be to save up for a trip until they could afford it. But she wouldn’t listen.

    At the same time, I recently realized that in order to take time off during their visit, I would need to take some unpaid days off from work. This doesn’t align with our goals of aggressively paying off debt and saving up for our wedding. I realized that this trip was going to be a bad financial decision for my entire family, so I sat down and talked to Him about it.

    Him had a great idea! He suggested we cancel their visit, and offer to visit my parents during Thanksgiving instead, when we already have time off from work. At the same time, we can accrue some air miles toward our Honeymoon. It’s a better solution for everyone. I pitched the idea to my parents today, not mentioning my opinion of their loan idea, so they would feel as though they were doing us a big favor and wouldn’t be embarassed by their financial situation. They thought it was a great idea! My mom even confessed that she was worried the cost of the trip would “sink” them, but she didn’t want to cancel it and break my heart. She was so relieved when I suggested we re-schedule.

    It just goes to show how tightly money and emotions are bound up. Sometimes parents are willing to quietly put themselves in financial jeopardy for the sake of their children. Therefore, it’s important for children to recognize when parents are over-extending themselves and be proactive about protecting them.