Enough with the politics. On to something else for a bit:
I spent my formative young adult years in San Francisco. My friends and I spent a lot of time back then discussing how much we were paying for rent and other necessities. It was always WAY too much. For example, my first temping job paid $310 a week take home and my half the rent rent was $725 plus utilities. The only comforting thing about struggling to make ends meet like that is I had a lot of company because everyone I knew was struggling.
I have come to the conclusion that the desire to talk about my finances was imprinted on my brain then, kind of like the way the casual use of profanities everyone used there seeped into my vocabulary (apparently for effing forever).
Not surprisingly, neither of these traits translate particularly well back in the more reserved Midwest. I find myself talking about our personal finances with people and even though I know I should shut up, I see the words tumbling right out of my mouth. True to this impulse and despite my better judgment, I am going to share a personal story with you now, in hopes that someone might learn from our mistake. If other people’s finances make you uncomfortable, look away now.
(Just so you know, Mr. A has ok’d me sharing this info here.)
Mr. A and I are relatively conservative with our finances. We generally put the maximum in his 401k each month. I have a chunk of my own retirement savings in a Roth, a 403b and an alternative retirement pension (I don’t know the actual name but it was an alternative to contributing to social security when I worked for the gov’t), so Mr. A and I are nearly equal in our retirement savings. We have just under 20% paid on our relatively inexpensive house. We have about $80k in grad/law school loans at a very low interest rate that we are paying off faster than we are required. We have 529 accounts set up for both girls and we contribute each month (and so do my parents). We have decent life insurance. We drive used reliable cars until they die. We do not carry any credit card or consumer debt.
While we aren’t perfect, we were doing exactly what all the finance people say we should be doing, with one glaring exception. We didn’t have a cash emergency fund. Actually, we did sort of have one, but then we spent that $20K on L’s adoption. So we knew that this year we really needed to buckle down and build up a nest egg of money so we could protect ourselves in case of some kind of unexpected job loss, disability or death.
I have mentioned here many times that discussing our finances with Mr. A stresses me out. I don’t really understand investing at all. For the past year or so, I have been asking Mr. A to find a financial planner to help us. (I wanted him to ask a partner where he works because their planners would be experienced with dealing with the complications that come with partnership too.) Mr. A likes to mess around with stocks and stuff, so he didn’t want to get a financial planner. He wanted to research it himself with just the general assistance that our stock broker company provided.
Despite my feeling that we are getting in over our heads (too much money for amateurs to manage etc.), I didn’t push the issue with Mr. A, nor did I find a financial planner myself.
This is getting too long, so you will have to come back for Part 2 a.k.a. Why I Am Suddenly Very Interested in Brokerage Firms and Congress’ Bailout Package
Blah blah, still haven’t fixed the comments. Blah blah.
oh, i know! i know how this story ends! well actually, i just know the next part, i guess. how it ends remains to be seen.
Um. I’m not sure I like where this is going, y’know?
Yeah, that did end on a kind of ominous note! I’m interested to hear about your experience with (or without) a financial planner. We met with someone from Merril Lynch, and while it was utterly surreal, it was also really helpful. We’re too small-potatoes for them to have taken on as individual clients, but they gave us some good general info. However, I do often think that we’d have a deeper understanding if we’d gone the DIY route.
Not that I know anything about finances, but I wanted to say that coming from the midwest and now living on the west coast, I don’t think talking about money (or not talking about it) is as much a regional thing as a class one. Poorer people talk about money more comfortably than richer people, In my humble experience. I think this is because poorer people see it as something that they are all in together and not necessarily a general reflection of their personal worth. Richer people tend to see their money as a personal reflection on them and their own self worth. I could be wrong, but this is what it seems to me.
Lexie might be right about that. I think, no matter the region, we poorer people talk about our finances with each other, with the we’re-all-in-the-same-boat mentality. Where it gets weird is the current state of mortgage dumbness, which makes it hard to tell who is doing well and who is struggling because we can’t just look at a person’s neighborhood and take for granted that they’re doing well. Somebody living to paycheck to paycheck might feel weird hearing about your financial situation, even if it’s scary to you. There’s a feeling of, “Yeah, lady, I wish I had your problems,” you know? Just a theory. I blame sub-prime mortgages! I blame EVERYTHING on sub-prime mortgages. Stupid, stupid over-creditors.
I think it’s fine to talk in general terms about finances. I think it’s when a person starts talking about HOW MUCH they spend or have invested that people get uncomfortable. It’s the difference between, “Oh, we got our house at a very reasonable price” and “We paid XXX for our house.” And it just depends on the circumstances and who the other people are, too.
I found this entry really interesting. We have pretty much the same problem — no cash savings. We can dip into the Roths if we have to, but we’re trying to avoid doing that, and thus the adoption expenses keep wiping out anything we save up. And I think we will probably adopt a second time, too, so it’s going to be a while before we have any savings. We also owe A LOT on the house, because we had to sell our old one unexpectedly and move state to state. We lost money in that process (plus had to pay a mortgage and rent for a while) and ended up having to do a no down payment mortgage when we found this house, so the house is kind of draining us…
Yeah-adoption feeds on cash savings. Same scenario here. Retirement is handled and debt is minimal, but no emergency fund.
And I had the moving out of state and owning two houses for 15 months thing too, forcing me into a bad mortgage which I had to refinance to get out of once the old house was sold. Trying to forget how much money I lost in that process.
And I agree about the class thing. In the midwest, my friends and I talked about money all the time. My parents were always uncomfortable talking to their friends about money, because they had more than many of their friends. ~lmc
Reading this makes my palms sweat. Your “where we are now” is where I so desperately want us to be, but we’re not making enough to establish the kind of security we need. Hopefully, when Mr. Milkweed gets another job, we’ll be able to slowly make inroads into starting all the parts and pieces. As it is, right now we’re treading water…we have no debt other than student loans, and are keeping it that way…but I still feel like I’m living the life of a college student when I think about our lack of financial “roots.”
oh boy. Reading this worries me too. We’re in roughly the same boat but without kids, and that’s scary enough. And this month we had a little scare because I have to pay estimated taxes quarterly, and we didn’t leave enough $ in the account to pay them without overdrawing the account a bit. Oops.
I got the book “Investing for dummies”, yeah yeah yeah it did teach me some things. I used to be afraid of investiments too. Now I am not.