January 20, 2010

Finance for Women

Robert Brokamp of The Motley Fool contributed a new post to Get Rich Slowly about women and retirement this morning.

This should be a compelling topic not only for women but for couples. We need to understand how our earnings differ and how that can impact retirement, and how divorce can impact our retirement plans.

I’ve probably spent too much time worrying about divorce and retirement because my own parents split up when I was 27. I can’t really comment about the divorce itself — I think there’s probably a lot in that relationship that I will never know or understand. However, my parents’ financial situation was a disaster when they divorced and I can’t imagine that that didn’t contribute to the split. When their house finally sold, my mother paid off over $60,000 in credit card debt for both of them. She got the rest of the proceeds from the house and he got whatever was in his retirement account. Because my father didn’t cooperate with any of the divorce proceedings, my mother basically had to go on an old copy of his retirement benefits statement. I know she tried to be as fair as possible given the information she had.

My mother paid off every debt she was aware of and put the rest of the money into a retirement account. That money doesn’t begin to make up for what she lost in social security contributions and any possible retirement contributions she could have made if she’d worked full time instead of taking care of her children and home. (She wasn’t exclusively a homemaker like the woman in this NY Times article, but part time work in spite of getting a Masters in Social Work doesn’t add up to much).

My father, meanwhile, has pretty much spent all of his retirement income and lives on social security. I do not know what it’s been spent on, but I know he has nothing left.

I don’t even consider social security when I look at our retirement — I assume it won’t be there (so I hear — if it materializes, it’s a bonus). But my husband does have a lot more in his retirement fund than I do. I hope that we will continue to share our lives, and I hope that we fully fund our retirement accounts and pay off all our debts. It’s going to take work, but it’s work we’re willing to do, and we’re doing it together. I hope that journey will make us that much stronger as a couple.

Still I sleep easier knowing that I’m contributing to my own 401(k) and that I will have put money into social security if it turns out to still be there in 25-30 years, and I won’t be left with no clue how to handle finances. I’m in the workforce already, so I don’t need to worry about how to get a job after years at home. I have plenty of friends who stay home with their kids. I don’t know what the right path is for them, but the costs of childcare and dealing with commuting and job stress certainly can make both parents working a stressful balance. I believe for my family this is the right choice.


January 16, 2010

Fonts are Fabulous

Filed under: Uncategorized — by elysianconfusion @ 10:55 am
Tags: , ,

CollegeHumor comes up with some really funny and incredible things. I just had to share this one (as a professional writer who thinks too much about these things:-)).


(I wish I could embed it, but it’s not working.)

January 15, 2010

Thank you, Personal Finance Bloggers!

I just wanted to say thank you to all those PF bloggers out there, you’re helping us see our way out of debt.

Lifehacker posted a great article about visualizing how long the things you own actually own you. Which naturally lead me to Matt at Steadfast Finances. I’m quite jealous of Matt, he figured all of this out a lot younger than I did. Kudos to Matt!

Reading Matt’s comments led me to Debt Free Adventure. Matt Jabs has a great spreadsheet for tracking how much your debt costs you. Since it’s available as a Google Doc, Excel or OpenOffice document, you might want to pick it up from him directly at http://www.debtfreeadventure.com/interest-paid-how-much-debt-costs-spreadsheet/.

So I had to do the spreadsheet, naturally:

Month Principal Interest
January $2,160.99 $1,779.54
February $2,304.24 $1,761.29
March $2,275.50 $1,579.00
April $2,216.76 $1,728.77
May $2,625.00 $1,741.00
June $2,312.00 $1,628.00
July $2,269.00 $1,672.00
August $2,291.00 $1,675.00
September $2,310.00 $1,631.00
October $2,806.00 $1,649.00
November $2,856.00 $1,597.00
December $2,678.00 $1,579.00
Total: $29104.49 $20020.60

How Much Our Debt Cost 2009 (revised)

As I said to Matt, happily I can see that at least we’re paying more in principal than in interest, the amount of interest we pay per month looks like it’s only gone down $200.54 per month in the last year. And paying just over $20k in interest for a year, wow, I could sure use that money better!

Something else I’d like to thank Matt for: the 75%/25% plan. I’d pretty much been escrowing for future expenses (about 1400/month) and paying everything to the snowball, but I think I need a little balance. I need a little more going into my emergency fund, that $1,000 just doesn’t seem like much after the snow blower breaking. What if I also needed an emergency car repair this month? I think I’ll have to work that one into my plan, at least until we have one full month’s expenses in our emergency fund.

Thank you again for all your insight and dedication!

January 13, 2010

And a New Year

Filed under: budgets,debt,money — by elysianconfusion @ 4:36 pm
Tags: , , , , , , ,

Well, a quick update to keep us on track…
April 20, 2009: $403,438.14
January 13, 2010: $381,107.27
That’s down $22,330.87 and down $2,184.04 since last month. I can see the numbers slowly creeping down… Christmas was hard though. I had to up my savings for Christmas next year — starting this month! I think we’ll be in good shape for next year.
We did also have our snow blower break. Usually my husband can fix things, but this one was a tough call for us — to fix it would cost at least $190 and it’s an old machine, maybe about 15 years, and very heavy. We also bought it used and have had it 7 or 8 years. To buy the new Best Buy from Consumer Reports in the medium snow blower (recommended for Massachusetts and the size of our driveway) would be $600 + tax. Ugh. I hate stuff like this — which one makes more sense? I have the emergency fund, I can pay for it, and I can pay back the fund pretty quickly, I think, because my husband’s annual bonus is coming up.

Which is another topic for debate… with the bonus, what do you do? Add it all to your emergency fund? Add it to the debt snowball? Split it? Use some of it to buy wants that we’ve been putting off? I’m sure everyone has a different position on this… I’d love to hear suggestions. I’m leaning towards a little for wants, and then split the remainder between a little extra emergency fund money and a bigger snowball payment. (Sadly or maybe not, we’re not in the banking industry and do not get 5 or 6 figure bonuses.) Of course it’s my husband’s bonus, so it’s really up to him.

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