Author Topic: Confused and Nervous  (Read 5537 times)

Wanderer

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Confused and Nervous
« on: January 18, 2014, 05:56:28 AM »
If this were someone else I would say, "Do it already!", but it's not always so easy when it's your own money. 

I have $3.9k that's been sitting around waiting for me to deposit it into my Roth IRA since March 2010.  Actually the really sad part is it started at $10.7k, but we pulled a lot of it out. 

We had a nice emergency fund, but my husband went to grad school and I was unemployed for quite a while and we ended up draining down a lot of our savings and also accumulating a lot of student loans.  (We are not Mustachian, by the way, especially my husband--we spend $3.2k/year on phones+cable+internet!)  He's out now and I have a solid job, and in the past year we've added a lot to our net worth, but mostly in terms of retirement accounts and debt repayment.  Our cash reserves are still very low.  In all we have $19k cash, but $3k is sitting around waiting on another probably non-Mustachian decision (buying a pickup from family, but selling a different car, so hopefully this one will come out a wash), and $3.9k was in theory intended for my Roth, so really we have the slack in our checking account plus $7.7k as a real emergency fund. 

I would probably just deposit that $3.9k in my Roth without worrying too much about it, but we're having a baby in late March or early April, and I'm a little nervous about not having enough cash.  It's a little silly because I can just pull this money out of my Roth if I deposit it and then really need it.  I have good insurance and 4 weeks maternity leave at 70%, and can tack on sick, vacation, and personal leave, so I probably will have to take ~2.5 weeks unpaid if I go the whole 12 weeks FMLA allows. 

I guess I really need to get a handle on where the money goes.  Our income has bounced around so much that I've completely lost track--all I know is we bring in more than we spend!  And I need to nail down how much child care is going to cost once the baby gets here. 

Anatidae V

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Re: Confused and Nervous
« Reply #1 on: January 18, 2014, 06:15:45 AM »
Congrats on the soon to be addition to the family! Sounds to me that having that extra bit of cash could be handy while your life is going through so much change.

arebelspy

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Re: Confused and Nervous
« Reply #2 on: January 18, 2014, 07:45:01 AM »
I guess I really need to get a handle on where the money goes.  Our income has bounced around so much that I've completely lost track--all I know is we bring in more than we spend!  And I need to nail down how much child care is going to cost once the baby gets here.

Do you?  Then why did the 10k dwindle down to 4?  And, if because of the lack of a job, shouldn't it have started building up again?

I don't know your situation, but everyone feels they're pretty good about spending when they have no clue, then they find out how bad it is when they start tracking.  Start tracking, now.

Contribute to the Roth (to a 2013 Roth, you can contribute to last years' Roth up until tax day, April 15). You can still access the principal tax and penalty free any time, so if you need it, it's there, but hopefully the (small) hassle of accessing it will dissuade you from touching it for something minor, and it can actually stay there and grow.

You'll have a lot of changes coming with the baby (congrats!), don't let that be an excuse to let your money issues get worse, as they were for the last few years.  Get a handle on things NOW and start that new phase off on a good foot.

Good luck!
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Wanderer

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Re: Confused and Nervous
« Reply #3 on: January 18, 2014, 07:58:36 AM »
Do you?  Then why did the 10k dwindle down to 4?  And, if because of the lack of a job, shouldn't it have started building up again?

Oh, I know why that happened.  We were essentially running two households while my husband was in grad school and I was on unemployment.  Since he's out of grad school and I'm working, we're bringing in more than we're spending.  The damage to our savings was actually a lot worse than just the $6k out of that fund.  We also had an official emergency fund that pretty much went dry, but I've been trying to prioritize that more (initially I was freaked out at $40k in student loans at 6.5% and threw more at that, now it's down to $20k) and we've added $5k in the last 6 months. 

Our net worth went from $87k to $152k in the last year ($15k due to one-off gifts from family), so we're moving in the right direction.  Unfortunately most of that is not liquid! 

I decided the one thing that I need to do today is sign my husband up for a credit card so he can put his reimbursed job expenses on that.  There are so many of his expenses I know we probably got reimbursed for, but I can't tell which, so right now I'm counting all of those as our expenses.  Getting those segregated will make things a lot less confusing. 

Another Reader

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Re: Confused and Nervous
« Reply #4 on: January 18, 2014, 08:05:09 AM »
The "one thing you need to do today" is to sign up for mint.com and start tracking your expenses.  You are confused and nervous because you are expecting a baby and that makes you think about the future and plan for the child.  Since you have no idea how much you are spending, it's impossible to plan.  You are not in control of your money and gaining control should be your number one priority.  Signing up for a credit card?  Maybe, once you know exactly what is coming in and where it is going.

golfer44

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Re: Confused and Nervous
« Reply #5 on: January 18, 2014, 08:09:28 AM »
Also, the great news is that you're here! So your mind is in the right place, you just have some old habits to break and you'll be on the right track.

Congrats on the baby, please sign up for mint, and good luck!

Also, it's a no-brainer, put the money in the Roth (2013).

Wanderer

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Re: Confused and Nervous
« Reply #6 on: January 18, 2014, 09:04:22 AM »
I have everything in Quicken going back years, so I know in principle how much we deposited in our account and how much we withdrew.  Back in the good old days when nothing had changed for a few years I had automatic transfers to all of our savings accounts and everything went like clockwork.  I guess I'm having trouble budgeting things even though I have all the numbers in front of me.  Our spending in various categories jumps all around month to month.  There's the added confusion of not knowing whether some expenses are job expenses or our spending.  And one bad habit I do need to break is depositing pooled checks without tracking what each check is for.  :p 

I don't think that Mint would be worth it.  I have all of my accounts in Quicken.  But I think I do need to sit down with Excel and some pay stubs and see what our pre-tax income was and where our taxes went and total up pre-tax deductions.  I don't have those things tracked in Quicken, just post-tax cash flow. 

I have zero concerns about handing my husband a credit card.  In fact, I just finished signing him up for it. 

I will send that $3.9k to the Roth, with a few extra to make it $4k even!

golfer44

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Re: Confused and Nervous
« Reply #7 on: January 18, 2014, 09:22:22 AM »
I have everything in Quicken going back years, so I know in principle how much we deposited in our account and how much we withdrew.  Back in the good old days when nothing had changed for a few years I had automatic transfers to all of our savings accounts and everything went like clockwork.  I guess I'm having trouble budgeting things even though I have all the numbers in front of me.  Our spending in various categories jumps all around month to month.  There's the added confusion of not knowing whether some expenses are job expenses or our spending.  And one bad habit I do need to break is depositing pooled checks without tracking what each check is for.  :p 

I don't think that Mint would be worth it.  I have all of my accounts in Quicken.  But I think I do need to sit down with Excel and some pay stubs and see what our pre-tax income was and where our taxes went and total up pre-tax deductions.  I don't have those things tracked in Quicken, just post-tax cash flow. 

I have zero concerns about handing my

The paragraphs above and below the bolded part make me think Mint would be very much worth it for you. Just give it a shot, it's very secure and you have nothing to lose by trying.

Wanderer

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Re: Confused and Nervous
« Reply #8 on: January 18, 2014, 09:51:07 AM »
I use to be very very good with where all my money was going, but then I got married in November, then we had christmas, then my birthday... and then I got the credit card bill... 4000 dollars in one month... 90% of it on garbage... So needless to say I am back to square one, I am tracking every cent of what I spend... Just because you THINK you make more then you are spending (maybe you do maybe you dont) I guarantee you there will be a lot of room for simple simple improvement...

I'm sure we're bringing in more than we're spending because I have every transaction entered and that's what the numbers tell me.  Maybe it would be more accurate to say I know where my money is going, but not always why.  :D  The numbers do tell me we're spending lots on stupid stuff.  The one part of that I have direct control over is our grocery bill, which is insane--too much shopping at the Kroger 5 min away and not enough trips to Meijer.  The rest, well, my husband spends a lot of money on stuff I would not, mostly eating out (some unknown proportion of this reimbursed!) and fast food.  Our whopping cell phone bill is also his choice, though I do admit the data plan is fun. . . 

Quote
PS Make sure that husband of yours ONLY uses that new credit card for business... NEVER NEVER use it for personal...

I'm absolutely certain he's going to occasionally pull the wrong card out of his wallet and swipe it anyway.  If he can just use the right one 90% of the time, though, that would make my life a lot easier, and his because he can just submit the statement for reimbursement.  I am not worried about him racking up a balance on it.  He had some credit card debt when we got married and we both hated it. 

I'll take a look at Mint.  Quicken will be stopping support for my version next year anyway.  But I kind of like having a record going back years. 

MilStachian

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Re: Confused and Nervous
« Reply #9 on: January 18, 2014, 10:00:00 AM »
Wanderer,
Welcome!  Congrats on the soon-to-be new addition.

I think the most critical step towards getting your house in order is getting your husband on-board.  You can't say you know where all your money goes if you can't figure out how much your husband spends on eating out, and how much of that gets reimbursed.

He just got out of grad school and I'm sure he has the mentality that he deserves a bit of slacking off, especially now that he's bringing home some money.  That's OK, just so long as you both decide together how much money everyone gets to spend on their luxuries.

Second, if you are considering putting your kid in daycare, I encourage you to begin looking now.  Call friends/colleagues and see where they're sending their kids, and call those places for a weekly/monthly estimate.  Depending on where you live, there may even be a wait list, so you'll want to jump on it quickly.

Again, you're heading in the right direction, but you need to get your husband on board!  He doesn't have to jump into the Mustachian deep-end (although that would be great!) but you both do need to find a happy compromise.

Wanderer

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Re: Confused and Nervous
« Reply #10 on: January 18, 2014, 11:03:22 AM »
He's actually kind of insanely workaholic and worked through grad school, so he'd spend 3 nights a week 2.5 h away at grad school and the rest of the week here at his full-time job (he sets his own schedule), and still put some time into his part-time job.  He still works 6 days a week--he's working right now.  I think he spends so much time worrying about work stuff that worrying about money on top of that is just too much.  He also would be happiest if we had every penny in a brick and mortar bank (including retirement savings!)  After we got out of debt and I got serious about saving money it was a matter of some acrimony for a few years that I "took over" our finances and spread our money over all these accounts, meaning I opened an INGDirect account and a Roth. 

I think I do need to try to show him our expenses and get a plan together.  I'll work on that slowly.  We had an almost fight yesterday regarding the probably non-Mustachian expense we have coming up, and he says I'm stressing him out about money right now.  He has mentioned to me wanting to open a college fund for the baby.  I think he really has no clue how much we spend--he never looks at it--so if I get all that together and then say, "We can put $100 a month into the college fund, but we need to cut back in these areas," he'll be more likely to listen. 

We probably are going to use the in-home daycare one of his friends has been using for their kids.  I need to call and ask how much they charge and get a slot reserved.

AccidentalMiser

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Re: Confused and Nervous
« Reply #11 on: January 18, 2014, 11:57:38 AM »
Wanderer,

As everyone else said, congratulations on the new addition.  I note from your last post that you were out of debt.  If that's still the case, good for you, you are at a good starting point.

I get a sense that money is a point of stress in your marriage.  You are right to be nervous about your situation, a baby will change your finances and you are trying to get your mind around how you're going to manage your money with baby expenses, a potentially reduced income from your job and a spendy husband.  Am I reading that right?

Your 4k Roth IRA question is a symptom of a much larger problem.  Mustachianism or frugality or whatever you want to call it is a lifestyle choice that consists of more than piecemeal deposits in this or that account once every couple of years, but you already know that.

You say that your DH doesn't have time to worry about money while he is working all the time.  So, try and make a deal with him.  You take over the money responsibilities and brief him on your finances once per week.  I do that with my DW.  She appreciates knowing that I am monitoring our spending and that I have the big money picture for our family.

If you can, get him to read this website.  It's changed the lives of many people, it may be the catalyst he needs to see money in a different light.  If he likes to read, ask him to read "Your Money or Your Life."

I used Quicken for years.  I liked it OK, but Mint has been a great boon to me.  It's easy and keeps all your "money buckets" in plain view, allowing you to see your finances comprehensively every day.

Best of luck to you!

Wanderer

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Re: Confused and Nervous
« Reply #12 on: January 18, 2014, 02:33:57 PM »
Money's often stressful, not because my husband likes to go into debt, thank goodness, but because he is more focused on what's happening in the next couple years rather than the longer term.  As long as we're not overdrawing, he's happy.  I'm worried about everything down to retirement (neither of us want to retire early), while he thinks retirement savings is something we do maybe later. 

We're not completely out of debt.  We have: 

$9.4k @ 2.2% (my student loans, gone in 5 years, no sooner unless I kill the next loan and get my savings balances up before then)
$21k @ 6.5% (his student loans, gone in 4ish years if we don't pay any extra)
$1.9k @ 4.84% (car loan with a prepayment penalty :p , gone in June) 

Also a $107k @ 3.875% mortgage. 

We do have some retirement savings.  We started late because of grad school for both of us and lack of retirement plans at my husband's jobs/lack of interest on his part.  In my job I put in 10% (of $52k) and my employer puts in 9.5% (plus 4.5% to a "retiree medical account" at a puny 4%).  I'm also putting 4.5% into a 457(b).  My husband's full-time job just added a 401(a) (defined contribution) for him that they deposit 9% (of $34k) into.  At his part-time job (~$20k) he has a SIMPLE IRA with lousy investment options and a tiny match, so I'm putting in $1.2k annually on that.  Right now we have $124k in retirement savings.  I'm 34 and my husband is 32, so we're behind schedule, but made a lot of progress last year. 

I've actually been in charge of tracking money, planning savings, paying bills, etc. for years now.  My husband's not really interested in how our finances are going, though, if I try to tell him it's kind of in one ear and out the other.  He was interested when we were saving to buy our house.  He needs to have an emotional investment in it, I think.  I can tell him we're spending way too much on Z, but if I can't get him to feel like we should be putting money into Y instead, he just says, "We can't cut back on Z, I like it."  I just told him I thought we needed to cut some spending to save for college and he said, "I think we just need to do it."  I told him he'd be asking me, "Why are we overdrawing??" if we just did that without cutting back, and he said, "We'll make it work!"  Ok, then DON'T COMPLAIN when all you get to eat is rice and beans!  >D 

AccidentalMiser

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Re: Confused and Nervous
« Reply #13 on: January 18, 2014, 03:02:46 PM »
Don't take this the wrong way, but your husband need some big-boy pants. 

Your money situation isn't dire.  You have 30k in non-mortgage debt and 124k in retirement savings against 100k in income.  Presumably, your incomes will rise over the next several years. 

It's fortunate that you neither of you wants to retire early.  You have a much longer time horizon to work with and that gives you more flexibility.

So, one source for retirement savings are those loan payments you're currently making.  Once the car is paid off in June, just ship the money to savings instead of the car payment.  Standard of living stays the same but now you're saving more.  Same with the student loans.  Stick your pay raises in there too.

Your husband is just going to need some more time to come around.  The birth of a first child is frequently a catalyst for maturity.  He's just scared and stressed right now (if he's anything like I was.)  I'd just focus on enjoying my family and worry about convincing your husband about the joys of Mustachianism next year.

The only other thing I will add is that this would probably be a good time to make sure you have an appropriate amount of life insurance.

All the best to you and your growing family!