Archive for August, 2012

Our Experience with a Financial Planner

Large bills

Photo by 401(K) 2012

Not long after we were married, Jason and I met with a financial planner.

At that time, we didn’t know the difference between fee-based and commission-based brokers. We happened upon him because we were looking into a childhood whole life insurance policy that Jason had, and it seemed like a good idea to talk to a planner about the next few years of house/college/kids/savings/etc.

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A fee-based planner is one who takes no commission, but charges a flat fee to meet with you.

A commission-based planner is free to meet with initially, but is paid only through the sale of a policy or investment.

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So we met with Jim, a commission-based planner whom we really liked. A huggable, grandfatherly type, he met with us in the evening after his regular business hours and took his time explaining every detail, every term we didn’t understand. He helped us with priorities, but not really with the long term picture like we were hoping. We walked away from our first meeting having signed up for term life insurance, which was great, just not what we’d intended to get out of the meeting.

We’d meet with Jim about once a year, and everything was fine until one day he called to tell us his daughter would be taking over our account. No biggie. We met with her about six months later when we wanted to open a 529 for our son and roll over my 403(b).

From the beginning, our relationship with her was a disaster.

She worked at a large downtown insurance broker, yet was somehow still affiliated with her father. When we met with her, a very pushy, egocentric broker sat in on the meeting to answer her questions. In reality, he took over the meeting, swept all of our concerns aside, and pushed disability insurance. Yes, disability insurance was something we were there to ask about. But it was very low on our list of concerns.

In follow-up calls to coordinate paperwork and future meetings, the daughter always took calls while she was driving and didn’t write anything down that we talked about. The result was that, during our next call, she would have no memory of what we talked about and what she had said she would do.

And she was pushy, trying to convince us to go with more disability insurance than our meager budget could allow. I’m glad we didn’t listen to her.

This experience definitely soured us on commission-based planners, and you can bet you won’t find us darkening another’s doorway.

Since our last meeting with the daughter two years ago, I’ve realized that I don’t need a financial planner to manage all my accounts. With a little extra legwork up front setting everything up at Vanguard, I can manage everything just fine myself, thank you very much.

Soon I’ll begin the process of rolling over IRAs and moving accounts to Vanguard. I’m definitely not looking forward to it, but I am looking forward to having full control of our finances.

Someday when we’re independently wealthy (ha!), we may seek out the services of a financial planner again. I can assure you that it will be a fee-based planner.

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Do you use a financial planner or go it alone?

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Renovation Update Week 3

Renovation in progress

Not our renovation, because those photos are on the doorstop, I mean computer. Photo by DanR.

I’m writing from muggy West Virginia where I’m staying with the kids for a couple of days to keep out of the contractor’s way.

The House

All of the structural beams are in and all of the walls were removed last week. The first floor of our house looks enormous! And now I can actually picture how it will all come together; where the island will be, how not silly the small wall between the living and dining rooms will look, where the stairs will go.

The kitchen floor has been removed right down to the floor joists, one of which is being replaced due to rot and the previous owner cutting a million holes in it. We’re replacing the floor because of the three-inch slope between the front of the kitchen and the back of the kitchen. I’m trying to remember if the settling was a result of termite damage or natural sinkage. The joists will be shimmed, and there will be a level floor on which to someday put kitchen cabinets. There was a piece of termite damaged sill plate (I think) that was pulled out and can I tell you how scary it is to think that the weight of our house was resting on that swiss cheese-looking piece of wood?

While we’ve been away, Jason has been working hard on the basement bathroom. That bathroom, and most of the basement, was finished when we bought the house. It was finished without the benefit of waterproofing, and it smelled like a dirty diaper. I don’t think the bathroom had a vent in it, either. We’re lucky there was only a tiny, tiny bit of mold. In anticipation of gutting and remodeling our main bathroom, we thought we should go ahead and complete the basement bathroom. And also thought the contractor and his helper might appreciate a bathroom door! Jason has drywalled, wired for better lighting, and installed a fan/light combo that will vent outside. He also wired the stairs to the basement for light.

Next week the back wall will be repaired!

The Kids

The children and I have been spending most of our time in West Virginia where my parents live. We came back for almost a week, left for a week, and then this past weekend we were in for 3.5 days.

Both kids are missing their father, big time. We’ve tried very hard to keep our time at home with him full of quality interactions, with some special daddy time for each of them. Jason took J on a tour of the renovation progress Sunday evening and he was so excited to see the tools and Jason’s workshop. One of the children has been acting out in very aggressive ways, we think because this child doesn’t handle transitions or environment changes well.

The noise hasn’t been too bad. I think putting the beams in was the loudest part. The kids have been able to nap in their third floor bedroom with the AC fan running to drown out the hammering. If it were only the noise, we wouldn’t be leaving so much, but there’s the dust and danger as well.

To get air flow in the first floor, the contractor props the back door open and has an industrial fan in the window blowing out. Unfortunately, both the door and window open onto our small patio where the kids like to play.

Their toys, the patio, and everything are always covered in a thick layer of nasty old house dust and have to be washed off before we can spend any time out there.

The contractor has also used the patio as place to put wood that’s being hauled away or materials because he’s completely out of room on the first floor. And they sit there and have lunch, as far as I can tell.

It’s pretty difficult for the kids to play outside while we’re home.

The Lovebirds

Jason and I have been doing well. He’s had a hard time going from a completely silent house to having two top-volume kids around full-time. When home, I don’t want to spend all my time cleaning, so I simply lowered my standards for a while. Hopefully it doesn’t gross out friends and family too much.

We’ve been a tad touchy with each other, but we’re obviously under some additional stress. I’m trying to make sure we get some quality alone time ourselves whenever we are together.

The excitement of starting this phase of the renovation hasn’t yet waned. It’s just too much fun to come home to another huge project completed (in 4 days!) that terrified us for 6 years.

A Wonderful, but Not-So-Frugal Weekend

laptop computer

photo by maljam2002

This weekend we had 9 people to our home, sharing three different meals with each one. Some planned, some not so planned. This part was wonderful, lots of fun, and frugal. Everyone brought something to share for the meal, and there were lots of laughs. It’s so much more fun for kids (and much easier on their parents, too!) to have a meal at a home than in a restaurant.

I also tackled some gardening and harvested tomatoes and 4 butternut squash from our tiny backyard garden.

 

Here are the not so fugal parts:

  • I bought two birthday cakes, rather than making the cupcakes I’d planned. Being in town only four days made me prioritize my time.
  • We ordered pizza when I forgot about dinner Saturday evening. Dinner always happens, same time every day. So how could I forget? This was just laziness.
  • We went out for drinks to celebrate a friend’s promotion. Worth it: We loved seeing and supporting our friend, met some lovely people, and didn’t drink much.
  • I destroyed our MacBook. The MacBook on which I am currently trying to make a living. I won’t go into details, but I’d like to state here that my husband was right and I was wrong, and that he’s the most patient and kind person I know. I’ll either freecycle the hanging plants that leak or find very inexpensive new pots that don’t leak this week.

That last one made me pretty sick. I couldn’t blame it on anyone but myself, and I felt terrible not being more careful. Unfortunately, we need to replace it, and quickly. Jason’s uncle reminded me that it’s just a thing, which I had been telling myself but not really listening to. But it really is just a thing, and an easily replaced, tax-deductible thing at that.

Stay tuned for the computer shopping saga!

 

 

Around the Web: Coffee Shop

I’m writing this morning at a coffee shop. It’s certainly not a frugal thing to do, but sometimes it helps me to get out of my house. The dirty laundry, dirty dishes, wilting plants, unmade bed, and unweeded garden can be very, very distracting. As can the contractor, whose randomly starting and stopping pounding, table saw, and air compressor certainly make for a lively environment in my house.

I’m only in town for 3+ days this weekend before I leave for another week, and I’m trying to cram a lot of activities into that time. Hopefully, I’ll get to that list of household stuff, but right now, some quiet work time is more important.

Here are some good articles that caught my eye this week:

Coping With Unplanned Medical Expenses @getrichslowly: Jason’s company doesn’t offer an FSA, so we set aside a set amount each month into an account that we use only for medical expenses. Any surprise expenses that surpass what we have saved come out of our emergency fund.

The Ultimate Cloth vs. Disposable Diaper Calculator @groceryalerts.ca: Y’all know I love a good calculator!

Would you rather save for your child’s future in a piggy bank or a real bank? @cleverdude: This reminds me of my dad telling me about going through his dad’s clothes and other items after he died. Apparently, he and my grandma had to be very careful to check every nook and cranny of an item before they donated it.

How am I paying off $109,000 in credit card debt? @enemy of debt: I’ve always wondered how debt reduction programs work. Looks like the first few months would be a little scary, but that this program in particular seems to be working.

Foodie Friday: Green Juice

I recently bought a juicer and shortly after that, I gave up caffeine. Why would I do such a crazy thing?

Juice, that’s why.

A caveat here: I believe there’s more nutritional value to eating the entire plant rather than simply the extracted juice. My attitude about the juicer is that the juice I make is a bonus. I don’t count it if I ever sit down and think about how many servings of fruit and vegetables my family is eating every day. And I’m drinking kale at 6am instead of coffee loaded up with cream and sugar (the only way I like coffee), so I consider that a definite step up. Especially since Jason and I don’t like kale. It’s a texture thing. We keep trying it in recipes, but juice and smoothies are our favorite way to eat this superfood.

Below is our favorite juice recipe so far. Jason loves it, will drink as much as I make, asks for more, and is thrilled when I make him a jar and leave it in the fridge before I leave town.

Oh, and the kids drink it. Happily, and while making approving slurping noises. ‘Nuff said.

Favorite Green Juice

1 large bunch of kale, about 20 leaves with stems

3 smallish green apples (cored when I know the kids will be drinking some)

8 carrots, ends cut off

1 large cucumber, peeled

1 lemon, roughly peeled with a knife

Wash everything and cut apples if you don’t want the seeds. Peeling the cucumber and lemon is pure personal preference. We feel that the juice is a little too bitter with those left on. Bunch the kale up with one or two carrots–that helps keep it from being spun out without juicing in our. This makes enough for a family of four to have large, age-appropriate glasses of juice.

I read that the leftover pulp could be used to make a savory turnover, so I think I might try that soon by juicing the kale, carrots and cucumber first, saving that pulp to cook with, and then juicing the lemon and apples.

Right now, all the pulp is fed to our worms, who are devouring it. I think they’re happy to have the food so easily edible.

How to: Buy on Craigslist

To many of you, Craigslist is old hat. But you’d be surprised how many questions I receive about Craigslist. This post isn’t just how to buy an item on Craigslist, but how to be a responsible buyer.

A little background: I don’t remember when exactly I started buying and selling things on Craigslist, but I can tell you that almost every month we sell a few things that we just don’t need any more. In July, we sold a jogging stroller, a double stroller, a baby carrier, and a rototiller, making $330 on stuff we no longer use. Can you tell we cleaned out the garage? When there’s something we need–a lamp breaks, a toy for the kids I’ve had my eye on, less wobbly dining chairs that won’t fall over on our children–the first place we look is Craigslist.

Little Tykes Car Craigslist

Things bought on Craigslist: a Little Tykes car modeled by P on her first birthday, exactly one year ago.

In fact, we’re starting to look for a replacement vehicle for The Blue Car (J named the cars. We also have The Green Car, which will be driven into the ground) and it’s the first place we went when wanting to see what the models we’re considering cost.

Tip #1: Search Frequently.

A couple of months ago I decided I’d like to buy a juicer. I knew I’d use it often and likely travel with it, so I wanted something very sturdy with a minimum number of parts to break. Once I identified the ideal juicer, I searched Craigslist every evening before I shut down the computer. On the Craigslist homepage for my city, I typed in “Breville” on one search and “Juicer” on another. I was looking for the Breville Juice Fountain Elite, specifically, and also wanted to see all juicers listed.

 

Stroller on Craigslist

Wonderful folding stroller we keep in the car, also from Craigslist. This picture cracks me up.

Tip #2: Traveling soon? Search at (or near) your destination!

I found the exact juicer I was looking for about a 45 minute drive from where I live, but it was missing one (replaceable) part and had been well used. They wanted $270 for it. I know that it used to retail for $399, but the price has dropped to $299 on a brand new juicer, so this was definitely not a good deal.

When I was in West Virginia recently, I searched Craigslist and found exactly what I was looking for brand new, in the box. Never used. Not once. But the asking price was $250.

And when we were traveling to my in-laws house two months ago, we found the exact kid’s bike trailer we’d been looking for about two hours from (and on the way to) their house. It was much less expensive than they run used here, and nicer than any I’d seen listed near Pittsburgh. And it meant that we could use it as a double stroller AND take the kids on bike rides while visiting. We drove all night, picked it up at about 8:30am, played at a playground, ate breakfast, and continued on our way.

 

Stove from Craigslist

Our black and stainless gas stove? Yep, that’s from Craigslist, too. It’s a little covered in this picture, as I was prepping for a bulk cooking session.

Tip #3: ALWAYS Negotiate. Kindly, of course. And by email, not in person. 

This doesn’t come naturally to me and can sometimes feel very awkward, but the more I do it, the more comfortable it becomes.

Unless you arrive to find the item is in much worse shape than the pictures showed, conclude your negotiations BEFORE you show up to buy. Ask any questions you have via email, ask for extra photos, serial numbers, anything you need before you offer a price. In the email when I ask my questions, I’ll often ask if the price is negotiable or offer an amount then if I know I have a set amount to spend.

And negotiate a little lower than you would normally if it’s been listed for over a month. I had set aside $150 to buy a juicer. I wasn’t going to pay any more for a kitchen appliance that is definitely not a need. This juicer had been listed back on June 6 and it was mid-July. So I emailed, simply stating that my budget was exactly $150 to spend on a juicer. He counter offered, so I let him know that I honestly was giving him the maximum I could afford to spend, and that I’d be paying in cash and was available at any time over the next three days. And he accepted $150!

Tip #4: Be Prompt

Not just showing up to pick up your item when you say you will, but also checking your email when you are in the middle of a negotiation or still hashing out logistics. Now is not the time to decide you are going to have a media-free day!

Tip #5: Offer a phone number, and ask for one in return.

Although the GoogleMaps directions may look straightforward, I have been lost more times than I care to count. And a couple of times I’ve actually been *gasp* running early. Once I was running late and forgot to call (actually, I think I left their phone number at home), and the seller was able to call me. It’s good to have a phone number in cases like these. It also provides both you and your buyer with a little peace of mind that neither of you have anything to hide, and that’s helpful when you need to trust someone you’ve never met.

Tip #6: Bring exactly the agreed-upon amount. In cash.

We pay in cash, exclusively. I don’t accept checks, so it wouldn’t be fair for me to try to pay with one. I’ve not bought anything like a car from Craigslist, but I have bought my high-efficiency washer and dryer, Jason bought a very nice commuting bike, and there have been other large purchases we’ve made. And we’ve paid for those large purchases in cash.

Remember that your bank card usually has a maximum daily withdrawal amount. Jason and I typically subvert this by withdrawing using both of our cards, because we can never seem to make it to the bank before it closes.

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I generally find people selling things on Craigslist to be kind, honest, and fair. And I get to buy something I need or want at a steep discount without stepping into a big box store. Win!

Do you have any additional tips that I’ve left out? What has been your experience as a buyer on Craigslist? Mostly good or mostly sub-par? 

College Savings vs. Retirement

boxer in black hoodie

photo by 3W Giant Mart

My family consists of two adults and two children, ages 35, 34, 4, and 2. Like most people in our stage of life, we tend to worry a bit about retirement and college educations.

Jason and I had a conversation recently where we agreed that saving for college was not one of our top priorities, and won’t be for the foreseeable future. A few weeks later, I had the same conversation with a friend of mine, and it turns out that he and his wife have decided to save little to nothing for their children’s future secondary education as well.

In our situation, there’s a huge home remodel to complete that will likely take most of the next two years, hopefully without taking on much debt.

Because of our 3 major life events in the last 6 years, we’ve saved very little for retirement:

  1. Jason’s bachelor’s degree from a private university
  2. Majorly remodeling a home
  3. Our decision for me to stay home with the children through their little years

That bothers us (not our choices, just not being able to save for retirement. Also a choice, actually).

Once the remodel is finished, I’m hoping that he’ll agree to funnel most of the money we were spending on it into our retirement accounts in order to beef them up.

To provide the equivalent of $45,000/year for 25 years beginning when I turn 65, CNNMoney’s retirement calculator says that we need to have $1.9 million saved ($754,078 in today’s dollars). And that we need to save $6,400/year more than we are right now. I didn’t factor income from Social Security in, since I’m not convinced it will be around in 30 years.

Jason and I talked briefly about how we hope to be able to pay for enough of our children’s post-high school education (college, training, apprenticeship, whatever) that they won’t have a mountain of student loan debt like Jason and I are still trying to dig ourselves out from under. We aren’t planning to add anything to their 529s for at least the next few years. Instead, we’ve decided to add gifts to the children’s secondary education funds onto their wishlists (starting at $10 because, hey, $10 today is $13.66 in 2026, per Tom’s Inflation Calculator) and mention it right along with whatever things they need or want whenever anyone asks us. I won’t be offended at all if nobody decides to contribute, I just hope they aren’t offended that I present the option. People can be funny about money.

Why, oh why, didn’t Dr. Seuss write THAT book??

The college cost calculator at The New York Times spit out the figure $174,646 for one year at a private university in 2026, the year our oldest will graduate from high school. That’s $698,584 for four years. I can’t even fathom that right now. That number doesn’t figure in merit-based awards, which I hope they’ll be receiving if they choose a private university.

$45,000/year isn’t much, even in today’s dollars, for two people who hope to have vibrant lives full of travel to far-flung places, visits with family, and the ability to be generous with our loved ones and the organizations we support.

Jason and I both hope to continue working part time on projects or at jobs we love well past the age of 65, so $45,000 (or less) with that additional income should work.

Deciding to focus on our retirement over our children’s probable future education expenses is the right decision for us, but I know other people in the same situation would make a different decision.

A handful of questions for you…

  1. Do you plan to pay for your kid’s secondary education in full?
  2. Is it in bad taste to include a child’s 529 or other savings account on a wishlist, or to mention it as an option to the gift-giver in conversation?
  3. Which is your priority right now, retirement or college savings? Or neither? Do tell!
  4. Have any great calculators to share? My addiction is only mild and fleeting, I swear.

Thanks for sharing!