Sharing the Love

fullsizerender

I left a comment on WhiteCoatInvestor, a finance blog geared towards doctors (and the site that has pretty much single-handedly galvanized me to take control of my finances), asking advice for how to figure out how good the funds in my retirement account are, and how to figure out what fees I’m being charged. He responded and said,

“They’re required to give you a fee disclosure form every year now- so read it. Also ask for the plan document (your employer is required to provide it if you ask) and actually read it. Look for all the fee and expense ratio disclosures. “Excellent” is < 0.20% ER and no additional fees. “Good is < 0.5%” and minimal fees. Bad is > 1.0% and all kinds of fees.

You can look up the funds in your plan at Morningstar.com. Like most plans, you’ve got some good ones and some bad ones, but enough good ones to just use those and surely be able to get a reasonable asset allocation. Hint- Vanguard and DFA are usually the ones you want to use.”

I logged into my retirement account portal and was able to find all of my funds’ expense ratios, and sure enough, the lowest was a Vanguard fund with an ER of 0.02% and the highest was one of my Transamerica funds at 1.02%. That’s a huge difference! I re-allocated funds from very high ER funds to lower ER funds, still trying to stay somewhat diversified. See the screen shot of all my funds below, with the expense ratios listed on the most right hand column:

img_0665

Although I still am totally unsure of what I’m doing, I think that I’m inching in the right direction. April shared a page about the wisdom of simple investing, that seems to corroborate the choices I’m making (by people way smarter and more educated than I). Next step? Reading my plan from cover to cover to see what fees I’m being charged.

Over the past week I have had pretty involved conversations with 6 smart ladies regarding retirement, investing and finances in general as a result of the blog. I love it! I’m learning so much and feel a lot more empowered to keep inching forward in my financial life. I hope you guys are, too.  I would encourage anyone reading this blog to post their questions and resources here so that these conversations can be public, for others to learn from, as well! Also, I am going to be starting this book, in case anybody wants to get it and read along with me for discussion purposes.

P.S. Isn’t that selfie of my husband at the top cool? 🙂

Advertisements

Sundries

img_0058

I’m in the kitchen this morning preparing the best avgolemono and chopped cucumber, tomato and red onion salad with this dressing for a newly post-partum co-worker. I make the chicken by simmering it in the crockpot in chicken stock all day and shredding just prior to dinnertime.

I also wanted to point out several great links that I’ve been perusing:

The best cooking blog ever.

Some clarification on how to choose good retirement funds from April. Turns out an important point is looking for low expense ratios, preferably below 0.5%. Mine range from 0.05% (a Vanguard fund) to 1.02% (a Transamerica fund), so next goal is to figure out how to switch my contributions from the high expense funds to the lower expense funds.

From a text conversation with my lovely, super efficient and smart cousin: “We do a monthly budget, Dave Ramsey-style payoffs, meal planning via emeals.com and automatic money to tithing, retirement, deferred comp and HSA.” I had never heard of the emeals before, but it looks amazing!!

And a great article about a girl who paid off 25k of undergrad debt in four short years despite not making a ton of money.

A splendid (new) comment on an older post I wanted to make sure everyone got a chance to read from Lula because it has so many important things to ponder:

“I’d say my top three values are relationships with my siblings and friends, the ability to be generous with my friends and others in the community, and a cozy, comfortable home. The struggle for me is that these things can really trigger some crazy endorphins that lead me to spend frivolously. Like, I’m pretty sure I spent about $300 on frames and mattes to frame pictures of my study abroad and some old family pictures that I could have done without. I’m not sure they enriched my life, but I like doing projects. And I do the same thing with gifts, because I want them to be “just so”–at which point I don’t even know if it’s about being generous to that person anymore; it may be more of a compulsion to have things be perfect. All of that to say that a substantial portion of my money goes to gifts and ridiculous projects I needn’t do.

My other (un)disposable income I spend on groceries I throw away, eating out, and coffee. I realized I was spending $30/wk ($120/mo) on lattes!!! That was about two months ago. Now I drink the free (and gross) Keurig coffee at work, and allow myself one latte a week. For a while there I was also buying lunch out everyday, in addition to dinner about three times per week. I’m slowly trying to get better at dealing with this. Being a single lady, I really struggle motivating myself to cook. I used to go over to Ashley’s for dinner frequently, and now I visit Graham and Mely quite a bit, and I’d rather spend time with them than cook by myself. Between that and having the occasional dinner date with Rhylee, its hard for me to predict how many meals I should plan per week. But, I made chili last night and froze half of it, and I’ve been buying bag salads (don’t judge!!!) for lunch in an attempt to eat my veggies without buying lots of vegetables that I never cut up and eat. So that’s $3 for lunch instead of $10 to $15. Baby steps, people.

On the bright side, my net worth is getting a bit better! About one year ago, I had $6000 in credit card debt– which is now down to around $1000. Though I’ve been saying this for four months, I actually should be able to pay it off within a month. I have about $117,000 in student loans, at varying interest rates, some of which are quite high (6.8%), but which I’m paying off first, as April suggested (Abby, yours will be the same and will allow you to select the loan you want to make payment on–I can help if you need). I have contributed $3,800 to a retirement plan I just realized I will probably never benefit from (unless I work for one more year for Washington), and that I should have chosen the defined benefit plan that my employer alone contributes to, and opted for contributing my own income to the defined contribution plan, in which I could have chosen my investments, and not had to worry about vesting. Oh, and I have zero assets. 🙂 So, my net worth is -$118,000. At the beginning of the year (I’m estimating), it was -$123,000.

I both like and abhor talking about finances. Paying off my credit card is really the first time in my life I’ve felt like I could make a financial goal and make progress toward it. And not spending on everything makes the things I do spend money on more special. That control has been empowering (I’ll maybe need help on not becoming a money control-freak though, sisters). In addition, I started giving 10% of my income to World Relief (for every dollar I give, the federal government gives two more!), which has been helpful in reminding me that even if I feel stressed out about money, or maybe haven’t planned perfectly, money can always be taken in an instant, and isn’t the type of security I often perceive it to be. It also helps give me a little perspective when I’m feeling whiny about not having my lattes or envious that others are making more than I do.

On the other hand, I feel really powerless when it comes to learning about retirement plans and healthcare options because they feel so contingent on so many different scenarios that I need to predict. I don’t really even know enough to know what I need to be looking for. I just spent the evening reviewing the pamphlets I got from work, and I think I maybe understand a little more than I did last year, but it is still mostly incomprehensible. I also get really overwhelmed when I see other people who have mastered more than I have (like meal plans), which annoys me about myself, but is nonetheless true.”

If you guys have been reading any great articles regarding finance, or have any tried and true recipes you want to share I’d love to hear! Happy Sunday, everyone. XOXO.

When I’m Sixty-Four

img_0561

Alack and alas, the time has come for us to broach the subject of retirement accounts–an important topic, cause it’s gonna let me re-visit Machu Picchu as a wizened old bird with my kids and grandkids and let you do, well, whatever you want. I’m starting to move beyond my level of personal comfort and experience here, but I think it’s still important to start thinking and talking about this issue, and hopefully we can muddle through together to some greater group clarity. I especially want to bring this up since it’s open enrollment for many people, and this is when people tend to make changes to their benefits (though at my company, and maybe elsewhere (?), you can change your retirement account contribution at any time throughout the year).

The main point I think I want to drive home here, one I wish I had been better about, is that once you have started working full-time, whether you’re self-employed or in a traditionally employed position, you need to start contributing a retirement account. (Full-time students should focus on keeping educational debt low and credit card debt zero, and revisit this topic once they’re in the work force). I was blissfully unaware of how much I should be saving, so when I started out working I just made the minimum contribution to get my employee match, which was 3% (6% with employee match) of my salary. You should at a bare minimimum be saving 10% to 15% of your income for retirement from the day you start making money. But obviously, the more you save, the sooner you are financially independent and able to quit work and live off the interest of your nest egg. And there is an immediate advantage to saving for retirement now, as well, in that it lowers your tax burden for the year. In the beginning I struggled to know whether to start putting money in my retirement account or aggressively paying down debt, and discussed this with a financial advisor who recommended I do both bit by bit, but recommended that I do not delay saving for retirement.

img_0562

So here’s my challenge for those of you that have retirement accounts–do you know what your asset allocation is? What percentage of your money is in stocks versus bonds versus a multi-asset allocation (whatever that is)? What specific bonds and stocks is your account money invested in? I have two retirement accounts from previous jobs, as well as a Roth IRA I opened up independently with Fidelity, and my current 403(b) is through Transamerica. Check out the deets below:

My current 403(b):

  • 95% in stocks
  • 5% in bonds
  • 0% in Multi-Asset (Other)

More specifically, here’s the breakdown:

  • Short Bonds:Vanguard Federal Money Market Inv
  • Interm/Long Term Bonds: Baird Aggregate Bond Instl
  • Aggressive Bonds: Transamerica Partners Instl Hi Yld Bd
  • Large Cap Stocks: Dodge & Cox, Steward Lrge Cap Enhanced, Vanguard Institutional Index, Principal LargeCap Growth
  • Small/Mid-Cap Stocks: Transamerica Partners Instl Mid value, Harbor Mid Cap Growth Instl, DFA US Targeted Value I, Vanguard Small Cap Index Instl Plus, Hartford SmallCap Growth HLS IA
  • International Stocks: American Funds Europacfici, DFA International Small Company I

Now my challenge is to start talking to others and asking around to figure out if these particular investments are right for me and my money. Never fear, guys, I’ll keep you updated.

img_0560

P.S. Here ya go.

Happiness is a Warm Bun

img_0013

As a follow-up to the last blog post, I wanted to delve a little bit more into meal planning and prep as a means to save money, since this is one of the main ways I have impacted our overall budget this year. I oscillate between hating and loving preparing meals for all the reasons you might imagine, but I really got a bee in my bonnet after reading the myth of easy cooking, where author Elizabeth Dunn keeps it real, saying, “Promises of ease in the kitchen took hold in the 1940s and 50s, thanks to the flood of women entering the workplace, a newly industrialized food supply, and the invention and marketing of a whole range of timesaving kitchen gadgets. Before that, books about cooking largely admitted what every homemaker knew to be true: that feeding people was backbreaking work, and then you died.”

I immediately discussed this with all working mothers I knew, and got some valuable feedback from one of my sanest friends:

“I like the Atlantic article but its pretty negative.  I think a main problem is food snobbyness in our generation.  Also, if someone cooks dinner five nights a week for years and years, they will get really fast at cooking what they like.  I mean, with [kids and a husband] to feed, I’m just going to cook so fucking much in my life. I’m going to be amazing! I’m a much better cook than I was three years ago… before that I could afford to buy more ready made ingredients and we ate out.  Now I just cook, cook, cook, and meals really are quite fast. Fast but humble meals.”

How beautiful and sanity-preserving is that sentiment? Helps me keep my ego in check while planning family meals. I also find that these ordinary tasks are imbued with more meaning when I see them in context of the narrative they play in my life. I find a greater sense of purpose and peace in attending to my daily chores, such as making a grocery list, shopping and making meals, when I see those activities as a fulfillment of one of the main, basic tenets of my life I care about–nourishing myself and those that sit at my table, in more ways than one. MFK Fisher always says it best: “…but I still think that one of the pleasantest of all emotions is to know that I, I with my brain and my hands, have nourished my beloved few, that I have concocted a stew or a story, a rarity or a plain dish, to sustain them truly against the hungers of the world.”

On that note, and without further ado, the following are  a couple of ways that we have significantly pared down our grocery bill (and our eating out bill, since we’re prepared for dinner at home!):

– the number one, most important of all thing, is that on Saturday I plan out 6 dinners for the coming week and write down all of the ingredients I will need to make these meals. As per the above discussion, these are HUMBLE meals, and yes, doctored frozen pizza is ALWAYS on the menu one night per week

– I buy produce in season (seems like a duh point, but didn’t always do this–it’s easy to get stuck in a rut with your grocery run)

– buying things in bulk (beans, oatmeal, cereal)

– buying the crappy coffee (wah wah! but still has caffeine…)

What about you guys? Do you have a set budget for weekly groceries? Do you make a meal plan? How many times per week do you end up cooking? Would love to hear!

fullsizerender-3

P.S. As per the usual, a spoonful of sugar to help the medicine go down.

 

Say What?

fullsizerender-2

I think the next logical place to go on this blog is to spend a little time pondering the greatly feared monthly budget. In this here house we have experimented with various forms of this over the years, but mostly in non-commital ways that still allow our profligate spending ;).  No matter who you are, YOU absolutely need a budget, and you need it right now.

I have found that there are only two ways we actually end up adhering to a budget. One is we pay ourselves first–we have an automatic deduction to a savings account on every pay day, so we never see the money to begin with (we have had to temporarily stop this since our move this summer given the huge increase in rent we are paying, but are planning on starting this again as soon as I get a raise again in July). We also contribute 9% of my income to my retirement account, and are contributing to a lesser degree to an HSA account (which is a super awesome entity we need to talk about later!). Obviously deciding how much you are going to put straight into a savings account can be hard, and this is where our second successful strategy comes into play–some (fairly) painless number crunching.

We sat down a year ago and committed to looking at where our money was going at the end of every month. We got all our accounts loaded up on Mint, and will spend about 30 minutes at the end of the month going through and classifying every expense. I even have an alarm on our family google calendar reminding us both that it’s time, so I don’t have to feel the pressure or burden of broaching what can be a touchy subject. Doing this allowed us to see that we were spending $1100/month on groceries (much of which got thrown out) and $300-400/month on just coffee and snacks out. It provided us with some pretty low hanging fruit to go after when it came to painless cost cutting.

However sometimes knowledge does not equal power. Just knowing we are overspending does not always change our habits. We’ve found that sometimes the only way to actually keep us at our goal of money spent out on coffee or groceries or eating out, for example, is to actually take that amount out in cash for a two week period, and then when it’s gone, it’s gone. We’ve done that at various points throughout our life, and it’s a ruthless (but easy) way to keep yourself limited.

I know there are a billion different ways to budget, including YNAB, Personal Capital, Mint, and good old excel. I’d love to hear if you have a budget, and how you’ve approached managing your monthly finances. What are the areas in your life where you feel like you either spend too much, or just are clueless about how much you’re actually spending?  I’d also love to hear from those who feel too intimidated by the idea of a budget, and what I can do to empower you to just get going!

P.S. The photo has nothing to do with this post, except it reminds me of how much finance talk the esquire and I had when she was visiting last weekend.

P.P.S. I also wanted to point out that I am trying very hard to always link to articles written by WOMEN — not that guys don’t have a great perspective or great information, I just really want this space to provide examples of women talking, thinking, and making decisions about their finances.

Chained

img_0494

A few links to keep you singing, laughing, crying and warrioring on:

The inspiration for my post’s title.

How Happy Couples Manage Their Finances

Have you heard Terry Gross interview Bruce Springsteen? #Realtalk

8 Reasons You Need a Roth IRA Right Now

From one of my medical school friends, a great article discussing some of the deeper emotional issues surrounding money, and how they can keep women in a vicious, self-fulfilling shame spiral of defeat.

Just keep moving. Trust the path.

Almost Friday!!!!!

The Truth Will Set You Free (But First It Will Piss You Off)

img_0343

Nietzsche said, “People don’t want to hear the truth because they don’t want their illusions destroyed.” Busted! One of the hardest things about my growing financial literacy is that now I have an accurate picture of exactly how much (I mean little) cash flow available I have every week. $40.00 per week for a family of four, to be exact. Ouch! But you know what? It makes it easier to limit our spending when we know our dollars are instead going to things we very much care about (savings account, retirement account, student loans). The very first thing we did when we started getting our financial affairs in order was to sit down and calculate our net worth. This is something  we will do every year for the rest of our lives. Again, not because we want to miserly hoard our gold, but because we need to have both the big picture and the detailed picture of where our dollars are going. Calculating our net worth helps us understand that our small daily and monthly efforts regarding our spending are helping us move financially in the right direction. I’m going to discuss monthly budgets in a later post, but I’ll admit we made many unpleasant discoveries about how we were spending our money when we used a fine tooth comb to look at our monthly expenses. If calculating your net worth sounds too difficult or demoralizing, you can do what my friend April did to get a birds-eye approach to your finances. “I just did a projected yearly budget on Google sheets spreadsheet. That was really helpful to figure out yearly income versus yearly expenses and then divided by 12 months to figure out an average monthly target…the FIRE plan is really appealing to me because you can stop being a mindless consumer. Save my way to financial independence instead of earn my way. Takes a lot of pressure off knowing I don’t have to be CEO to get out of the rat race.”

There are many templates online to help you calculate your net worth or to simply establish an understanding of your yearly earnings versus expenses. Here ( nws-blog ) is a snapshot of our net worth statement from a year ago (and it has significantly improved in the interim!) as an example. (Don’t judge! I feel silly sharing this because it exposes some of our poor financial decisions, but I figure the only way to learn and grow as a community is to be transparent). I challenge you to to take an hour sometime this week to sit down and create something similar (and if you’re so inclined, come back and share the results here! I doubt any of you have a NWS with as many zeros behind a negative sign as we do ;).

Overwhelmed by this? Here is a great article regarding a very simple, hands-off strategy to being wise with your dollars–I especially love number 9! (Link from the ever-wise April). As always, would love to hear from you guys about your thoughts concerning the above!

P. S. Mostly unrelated, but here’s a great song for a rainy day.

P.P.S And if you’re a girl and you think this kind of stuff is something you don’t wanna bother with or think about, you need to check out A Story of a Fuck-Off Fund (via the inimitable Joanna Goddard)