Top Financial Things You Should Do After Having a Baby

As some of you know, prior to my life as a glorious SAHM, I was miserable as a financial advisor. Now, despite me not enjoying the actual work of a financial advisor, it was incredibly practical and useful in terms of preparing for my own personal future. (Also, I met some awesome people who started off as clients and became my friends.)

One of the main reasons I took the job (other than desperation, fear, and general cluelessness) was because even though I knew I wouldn’t really like it, the knowledge gained about finances and money was invaluable.

And since we just had our fourth child, Sasquatch, I recently had to make a bunch of updates to our finances in order to ensure that in the event of our improbable demise, ALL my children (no matter how new), would be financially taken care of.

Incidentally, I wrote a similar piece in my Money Series three years ago after Glow Worm was born. (Also, my buddy at Just Making Cents riffed off this current post on his blog. Want to see how he scored?)

So, I thought since I just did a bunch of adulting and took care of this crap, here are some of my Top Financial Things You Should Do After Having a Baby.

Disclaimer: I am a former financial advisor and used to own a financial advising firm with my mother. I am not being compensated by any entity or company for the following information. I am ONLY explaining what I do for my own family. If you should so choose to take this advice, please realize that it is not customized nor tailored for your specific situation. I am not dispensing personalized advice for you or your family. I am not responsible in any way, shape, or form if your investments rise or fall due to market conditions. YMMV. You have been warned.

1) Update/Create a Living Trust or Will

I know. I’m a morbid sort. But believe me – your loved ones will appreciate the forethought and time you took to make sure your assets were titled correctly, as well as included all your progeny.

Wills detail where and who gets your stuff, but Living Trusts go a step further and bypass probate. Furthermore, they can detail who will assume guardianship of your children, who will be the trustee over your assets should you die before your children are legally able to manage their assets, as well as whole slew of other handy details that make your financial life easier.

Remember: probate can take at least 60-90 days and often times, much longer (not to mention, you have to pay probate taxes). Bypassing probate is super important when your children may need to access funds in order to cover their living expenses.

Make sure your will/trust include ALL your children. (Well, assuming that you want to include all your children. But since the majority of my readers have small/young children, chances are, you do.)

I may be a registered Democrat, but I started off as a Republican and certainly do not think the government can cure all and do all. As a result, I really do not want the government to decide who should take care of my kids, where my assets should go, or anything else related to my personal or financial life.

If you are like me in this regard, make sure you get a living trust or at the very least, have a will.

Also, make sure you actually title your assets in the name of your trust.

It makes zero sense to have a living trust but not have any of your assets in it. That just means you wasted your money on lawyer fees without any of the benefits of their lawyering.

2) Update your beneficiaries.

Whether they be IRAs, Roth IRAs, 401(k)s, life insurance, Transfer on Death accounts – WHATEVER. If it has a beneficiary, make sure your newest child is added to the beneficiaries.

The possibility that my children may think I purposely disinherited them from any of our accounts versus just being an idiot or procrastinator or just a forgetful human makes me so sad. No child should be cut out of their inheritance due to stupidity on the part of their parents.

It’s a pain in the ass, I know. Lots of forms to sign and social security numbers to look up. I get it.

Do it anyway.

As soon as possible. One never knows the future – and though morbid, better safe than sorry.

3) Open up a savings/brokerage account and/or a 529 college savings account for your child. 

Again, opening accounts is easy; funding them is harder. Fund the accounts, too.

Right after a child is born, I always deposit any gift cards or financial gifts in their account right away. (For gift cards, if someone gives my kid a $20 to Target, I will deposit $20 into their account and use the Target gift card however I want.)

I also transfer some “seed” money to get the account going as well as deposit any gifts they get throughout the year. I also set up their 529 plans with an automatic monthly investment. This way, I build in saving automatically and don’t have to remember to do it. (If I waited until I remembered, I would never save any money.)

I realize that not everyone has the luxury or benefit of people giving gifts or even having excess funds to save for their kids. Even so, I urge you to open up the accounts anyway. You never know when people are generous and kind during birthdays, graduations, and holidays. It is always better to be prepared. Plus, even if you can only sock away $10/month, that is still better than nothing.

4) Update your benefits.

If you have health insurance – ADD YOUR NEW BABY. Even if it is no longer your company’s open enrollment period, a new baby (whether through birth or adoption) is considered a life changing event and you usually have 30 days after birth/adoption to add your child to your health insurance.

If you don’t remember to add your child, then you will have to wait until your next open enrollment period before you can do so. Depending on when that is, you would have too pay for all the well-baby appointments and immunizations out of pocket and just pray your child doesn’t get sick or hurt the first year.

Save yourself the worry and the potential financial disaster. Enroll your child in your health benefits.

If you have other benefits at work that they qualify for, by all means, add them to those, too.

5) Get life insurance or make sure your life insurance is enough.

Look, I get it. I’m obsessed with untimely demises.

People always complain that life insurance is paying for something that won’t likely happen. But you know what? We pay for car insurance and hope to never use it. No one complains about that. (Well, that and it’s illegal to drive without car insurance. It’s thus far, not illegal to be alive without life insurance.)

Anyhow, my point is, if you are the primary breadwinner for your family and you die, how will your family provide for their living expenses? If you are one of the breadwinners, how will your family make up the difference in income? And if you are the SAHP, how will your family pay for the child care services you provide?

Even if you live modestly and have a lot of savings, how long will your savings last?

And right now, I really want to address the SAHP.

Look, I know you can always go out and get a job. I am obviously not commenting on our abilities to work and get well-paying jobs.

But to do so immediately after your spouse dies? While taking care of grieving kids and household stuff and paperwork and the business of the dead?

That is much harder.

And the last thing you want to think about after your spouse dies is how much of a hole you are burning through your savings while trying to find a job and sending out resumes and going on interviews while you and your children are grieving.

That sucks.

Furthermore, even if you, as the SAHP get a job, you will either have to accept a lower paying job in exchange for flexibility in your work schedule to take care of your children. Or, you have to pay for someone else to take care of your children. Either way, there is a monetary outlay that eats into your income.

Also, life insurance through your employer is great and all, but you need life insurance independent of your employer. 

Why? Because if your employment terminates, so does your life insurance. And then, when you re-apply for life insurance, you will only be older and more likely to be in worse health.

Oh, and if you get a large amount of life insurance, (eg: $1 million), get multiple policies. That way, if you have a financial difficulty or you no longer need quite as much life insurance because the kids are grown or your savings are much larger, you do not have to cancel the entire amount only to re-apply when you are older and likely to be in worse health and have higher premiums (after all, the older you are, the closer you are to dying).

So, if you wanted a total of $1 million coverage, get two $500,000 policies. That way, if your financial situation becomes more volatile or you no longer need that much life insurance, you just cancel one $500,000 policy and still have the other $500,000 policy.

All this talk of death when there is a new life in the family. Seems counterintuitive. But I firmly believe that once you bring a life into the world, you are responsible for providing for them. And children are never more vulnerable than after the death of a parent.

Thus, it behooves us to do all we can while we are alive to make sure that our children are protected and provided for when we are not.

Besides, the superstitious part of me feels as if you are just inviting trouble if you don’t get this stuff taken care of ASAP.

The practical part of me knows that life happens and that when you have a new baby, you’re totally sleep deprived and overwhelmed – but you also know that the baby is new and it’s a good reminder of doing this stuff before you completely forget or it’s too late.

Now, get cracking!

(And don’t forget to check out Just Making Cents comments and feedback and additional advice!)

How to Pay for College

Author’s Note: Today’s guest post is by my college buddy, JT, from the blog, Just Making Cents. Since I just had a baby, JT was kind enough to step in and write a post for my blog – and it is totally appropos since I have four kids to put through college. 

Anyhow, JT offered to add a post to my Money Series that I started when I had Glow Worm. I love his perspective because JT has 15+ years of Wall Street experience (he was a big shot at a famous hedge fund) and he and I used to talk finance back in the day when I was a Financial Advisor. (Of course, JT had to dumb down a lot of stuff for me since he is heads and tails more amazing than I ever could hope to be.)

I hope you enjoy his post and also head on over to his blog, Just Making Cents, where he blogs about finance, teaching your kids about finance, and parenting successful kids. 

Now that Halloween is over and you have eaten all the fun-sized Kit Kat bars and tossed the gluey candy corn, you will likely come across an underrated confection: the Blow Pop.

For first-timers, the Blow Pop’s hard candy exterior eventually recedes to a surprising, softish gum center, lasting twice as long as other candies.

Sadly, when it comes to a parent’s finances, not all surprises are as sweet, or enduring things as welcome. Just when you think you’ve paid all the costs to raise your child, up surfaces college tuition bills. Surprise.

A Hard Blow:

Those are some big numbers but hard to crack without some context. Because this is Mandarin Mama’s blog, let’s analyze the case of a Bay Area family with 2 children.

Assume this family owns a standard 3 bed, 2 bath home in San Jose, which costs $775,000*, and drives 2 cars. This family saves for Stanford** and Berkeley** (their children are exceptionally smart) and the parents want to retire at 67. They’re fairly frugal, only going out to eat occasionally and taking local vacations.

Stanford costs about $60,000 a year. Berkeley costs about $28,500 a year (Both figures include room and board). To catch up to tuition growth, you would need to save $11,000 a year for Stanford and $5,750 a year for Berkeley from the moment your child is born up to the last tuition payment.

Here’s what this family would need to make in income (for readers with 4 children – ahem! – it’s safe to assume you’ll need more income. A lot more.):

CostsAnnual
Housing$45,840
Food$12,000
Utilities$10,000
Transportation$9,600
Clothing/Supplies$1,000
Other/Misc$5,000
Saving for Stanford$11,000
Saving for Berkeley$5,750
Taxes$45,010
Total Costs + Taxes$145,200
401k$18,000
Total Income Need$163,200

Don’t make $163k a year? There’s hope for you.

4 Tips on Paying for College, Depending on Your Phase in Life:

1. Newly Unwrapped (You are pre-child or have children ages 0-5): Make that budget so that you can max out your 401k and put in $6-11k per child into a 529 plan if you have children. You are in the phase of life where you should live as frugally as possible, really watching your expenses. If you save well in this phase, it provides a great foundation for the next 3 phases.

2. The Fruity Shell (You have children ages 5-12): Start talking to your children about money now. Teach them what money is and how to make it. Have your child allocate a portion of his or her profit to college savings, a portion to spending (beyond the food, clothes, and shelter you provide), and a portion to charity.

When your child knows how to make his or her own money, this reduces the amount you need to spend on their clothes or gadgets, and increases the amount you can allocate to your retirement and their tuition.

The side benefit to this is that when they know it’s their own sweat going into paying for college, they’ll have a more purposeful outlook and make college and what-to-major-in decisions more pragmatically.

(I would not recommend pushing them to start a business. Rather, I would present it as a fun thing to do, then layer in the business and finance concepts.)

3. The Gum Shows Through (You have older children ages 12-16). Start (or continue) your child’s financial education. Discuss potential side-businesses they’d be interested in starting.

At this age group, they have two important resources and skills: 1) they are tech savvy, and 2) they have a developing social network. They can tap into both resources and start a blog with affiliate links or an eCommerce store. Like in the previous step, advise them to allocate a portion of the proceeds to their college savings. The side benefit to this is that starting and running a business looks good on their college application.

(Again, I wouldn’t push your child to start their business. At this age, I would emphasize the extra spending money and the benefit of it for college applications.)

If you are willing to switch jobs or go back to work, consider working for the college near you. Sometimes they have reduced tuition for themselves or partner colleges for employees. Research this first and see how long it takes to qualify for such benefits.

4. Chew Time (Your children are 17+): Don’t panic. Even if you haven’t saved anything, there are ways to minimize the bill and still save toward retirement. I’ll spend the most time in this phase since it’s the most urgent.

Community College

Your child may want to consider spending 2 years at a community college then transfer to a 4-year college. The advantage of this, besides cutting tuition almost in half, is that it helps the GPA. If your child has a 3.8 the first two years at Diablo Valley College and squeaks out a 2.8 at UC Santa Barbara, his or her overall GPA is a solid 3.3.

The best thing is for your child to know what they want to do, find the college that best enables that, then find the JC that’s a feeder school to that college. It doesn’t diminish career prospects to attend a JC first. When people ask about schools, it’s from where you graduated rather than where you started.

Lower Cost, But Not Quality

Remember that there are plenty of financial aid and scholarships available. The listed price of tuition is generally not the actual cost.

If a public university most fits your child, attending the in-state flagships like Berkeley, UCLA, Michigan, or UVA offer almost unmatched quality per cost.

However, if a private university best fits your child, focus on schools with large endowments and smaller enrollments — they sometimes offer reduced tuition based on your income.

Research schools with endowments north of $5 billion but undergraduate enrollment of fewer than 12,000 (a private school with an undergraduate enrollment north of 12,000 has less money to spend per student and less scholarship money. Essentially, you are paying private school tuition for public school experience).

The Logical Path

If neither flagship nor well-endowed/smaller private is an option for your child, make sure your child has a strong idea of what career path he or she wants to take. So if he or she wants to do electrical engineering, find the in-state public school that routinely sends its electrical engineers to large electrical engineering employers before your child applies to college.

Don’t wait until college starts to figure things out. There is a very specific script of majors and progression of internships that prequalify candidates for certain (often the most sought-after) employers.

Income, More or Less

You yourself may want to consider starting your own side or online business to generate extra money. If your business makes enough to cover your expenses and you feel confident enough to leave your day job, you will reduce your income, qualifying your child for scholarships and reduced tuition from certain schools.

If your business takes off, consider paying yourself a low salary to qualify your child for scholarships and reduced tuition. Carefully research this, however, since some schools consider your net worth as well and may require more history of low income.

The Decision 

Now, if it has to be a choice between saving for college or retirement, choose retirement. Your children will have a long career that will help them pay off their debt. You…do not.

That’s a Wrap:

Don’t let large, scary numbers frighten you from acting. No matter what phase of life you’re in, the future can be as sweet as a lollipop if you’re willing to research and put in the extra effort. Yes, you can have your candy and eat it too.

Like what you read and want to find out more about money and parenting? Get a free, 3-day course on teaching your child about money and I’ll send you a free guide to helping your child start their own business. Just sign up here with the phrase “Mandarin Lemonade.”

*Based on median home listing in San Jose, CA on Realtor.com

**Cost of College: Using data from the CollegeBoard of price increase above inflation plus inflation, both for the last decade, Stanford and Berkeley cost assumed to rise 4.25% and 4.75%, respectively.

Savings Growth: Assumes historical growth rate of the S&P 500 of 7%.

Final Money Tally for Taiwan Trip 2016


Ok. I am super reluctant to write this post because it reveals something about me that though I joke about with my closest friends, I don’t mention too often because I personally think it makes me look bad. After all, no one likes a braggart or someone who is seemingly thoughtless with money.

And honestly, I can be pretty thoughtless with money.

Not in the sense that I don’t think about money – but in the sense that I know our general threshold and that as long as an expenditure is below that threshold, I don’t even blink.

We are very comfortable and live a very privileged life. I know it.

You see, I have a thing that Hapa Papa likes to call Rich Girl Syndrome (RGS) in the sense that I think all things can be solved if you throw enough money at it. (Irish Twins’s husband, MBE calls it the Wallet Save.)

As a result, I don’t really think about budgets or how much something costs unless it is exorbitant or something I personally find outrageous. Also, my mother gave me a very generous sum of money for the summer so that I wouldn’t have to worry about taking taxis and books and food. She wanted to make sure I wouldn’t be stingy – and that I would make sure not to get over-tired and take things easy.

So.

Obviously, my budget will likely not be yours in the sense that I thought very little about the costs except in terms of how it cut into the amount I was willing to spend. But in general, I did not count pennies or dollars or NT. I just did what I wanted when I wanted.

I suppose it helps that I’m not exactly a luxury shopper and all I really spent my money on was food and books. But still, the money went fast and Hapa Papa is mad I didn’t save more money from the trip. (Although I did save a bunch of money two years ago from the generous sum my mother gave me then. But I suppose that doesn’t count for this year.)

So.

Now you know.

My budget likely will not be your budget.

However, at least you will know a bit more about pricing.

I realize that I am a very privileged person in terms of finances and that me blithely saying, “Just go to Taiwan for six weeks! Easy! Just say goodbye to $12-13,000!” is somewhat implausible for many of you.

Also, keep in mind that we choose not to spend money on many other things during the year that likely other people choose to spend their money on (eg: trips, sports, etc.) because I know we’re going to be spending a lot of money on a trip to Taiwan.

So. Please consider my breakdown not in terms of what you HAVE to do, but more in terms of what I spent as best as I can remember it. (Which, honestly, has huge gaping holes in it because um, RGS.)

Obviously, YMMV in terms of costs depending on how often you eat out, how often you take taxis vs buses vs MRTs, how much you shop, where you buy groceries, what extracurricular things you do, what programs you choose for your children, and where you choose to live (and if you choose to rent or live with family).

Author’s Note: Any comments insulting me or the people who spend similar amounts on this type of trip will be deleted. 

I’m sure if any of us were to examine how you spend your money, we could come up with plenty of ways you are a wasteful asshole.

So since you do not know anything about our family income, monthly expenses, or financial situation other than what I choose to share on this blog for the purposes of you having an idea of how much a trip such as this can cost, any judgmental bullshit about how I am such a horrible snob or how it sucks to be poor (which, we can all readily agree that given the choice between having more money or less money, most of us would prefer the more financially secure position), or how it must be nice to be rich can just go suck on an exhaust pipe. 

So, without further ado, here are the costs for my Taiwan Trip 2016. All costs are in USD unless otherwise noted.

Travel: $4,400

– Round trip airfare for 1 adult and 3 children: (We used airline points for Hapa Papa’s tickets) $4400

Accommodations: $3,975

– Airbnb newly renovated 1br 1 bt apartment in a trendy/popular/convenient neighborhood for 40 nights: $3800 (includes about $200 in Airbnb fees)

– Hotel in Kaohsiung 1 night including breakfast: (bought as part of a business package deal including 1 night hotel and breakfast and with a Taiwanese discount so prices are approximate) $175

Education: $2,609

– International School Tuition, 4 weeks: $1,121/child (Total: $2,240)

– Local Camp A, 2 weeks: $306

– Local Camp B, 2 weeks: $339

Transportation: $990

– Taxi from TPE to apt: $40/$1300NT (7 passenger car with 2 rented car seats at $9 per car seat)

– Taxi from apt to TPE: $30/$1000NT (7 passenger car, 0 car seats, private car)

– Taxis in general: $600 (estimate)

– MRT for 1 adult, 1 child, and 1 adult for 2 weeks: $150 (estimate)

– Bus: N/A

– High Speed Rail ticket for 1 adult, 2 kids reserved seating: (bought as part of a business package deal including 1 night hotel and breakfast and with a Taiwanese discount so prices are approximate) $150

Airport Parking: $20 (Keep in mind, we saved a bunch here because we asked friends to drop off our minivan at the long term parking lot the night before we arrived home. Otherwise, if we parked in long term parking for the entire time Hapa Papa was in Taiwan like we did in 2014, the cost for airport parking would be closer to $250-300.)

Food: $1,594

– Groceries/Toiletries/Misc: $382 (estimate)

Eating Out: $1212 (estimate)

Incidentally, I likely would have spent far less if I didn’t have to provide my boys with food for lunch. I only did so because I worry about their food allergies. Otherwise, I would not have to worry about those “extra” meals as they were included in our school tuition.

However, I suppose since I got treated out a lot by family and family friends (and at way more expensive places than I would have personally chosen), it more than evens out in my favor. So, um, nevermind.

Miscellaneous: $1,525

– Kid Playspaces and Activities: $274 (Incidentally, I was an idiot and forgot a pair of tickets I had already bought so I ended up having to buy an extra two tickets. So, I guess I have two tickets for next year. Sob.)

– Kid Crafts: $90

– Cel Phone: $60

– Books/DVDs/CDs: $720

– Family Gifts/Reimbursements: $400

– Misc: $50

TOTAL: $15,093

Good Lord. Now I really feel like an asshole.

However.

One of my other friends is ALSO in Taiwan and in the same city and they were NOT as thoughtless as I am and STILL, they spent a similar amount. Why? Because some fixed costs you just can’t get rid of like round trip tickets and lodging.

Here are some of her basic numbers:

– Travel: (roundtrip tickets for 2 adults and 2 children) $5,400

– Housing: (4 br, 2 bt, washer/dryer in a less popular neighborhood for 7 weeks) $4,900

– Local camps, 5 weeks: $800

– Adult Language camp, 7 weeks: $500

– Books/DVDs/CDs: $625

– Food/MRT/HSR/Misc: (didn’t really take taxis due to safety concerns) $1642

Total: $13,867

Keep in mind, her housing costs are so high because she had other family members crashing at her place during various points. But she really didn’t eat out at fancy places (mostly the food stands and corner restaurants) and they definitely paid attention to their bottom line.

So, if you are a typical family of four and have no means to get free plane tickets and do not have access to free housing in Taiwan, the bulk of your costs are fixed at approximately $8-9,000. That’s BEFORE you do ANYTHING else.

So, are you just screwed with the costs?

Not necessarily.

While the fixed costs likely will not move much, you can do some small things that might change the hugeness of the number to slightly less huge. (I do concede housing is a place you can fiddle with – but it really depends on what amount of discomfort you are willing to endure for 4-6 weeks.)

So, here is a way to redeem myself.

Therefore, another list: Where you can save money on your trip to Taiwan.

1) Keep all your receipts and get a tax refund.

If you bring your foreign passport to the malls or save all your receipts, you can receive a tax refund on your purchases at the mall or at the airport. But that would require you to keep ALL your receipts.

2) Eat street food and shop at local groceries.

If you didn’t eat out at the more expensive restaurants and ate mostly food court food or street food, you will save a lot of money. I ate a LOT of shaved ice. Some were cheap. Some were not.

I also ate at places that were close to $40USD/1500NT for lunch or dinner. That’s a lot of money in a place where you can get a decent and filling meal for $6USD/200NT or less.

3) Enroll in local schools and camps.

The reason camps were so expensive for Gamera and Glow Worm were because they were in an international school. I got many comments from locals that the school they attended is one of the most expensive schools in the city.

I would have preferred to send them to a local school, but they wouldn’t take Glow Worm due to his food allergies. According to family friends of friends, a month of a local 幼兒 (you4 er2/preschool 3-6yo) or 大班 (da4 ban/kindergarten 6yo+) for $300USD a month.

4) Live in less popular neighborhoods.

I chose to live in a very expensive neighborhood because I wanted to be close to the MRT, to a lot of convenient restaurants I like to frequent, have a renovated space, and I like clean streets that don’t smell. I also don’t like being too far away from my children’s schools and activities.

You do NOT have to choose this for yourself. There are plenty of decent places to live that are larger and cheaper than what I got for my money. If you do not mind living further out on less popular MRT lines, or doing more research in terms of local schools vs. the big popular names, or even choosing less popular cities, you will save a lot of money.

I don’t think your experience will suffer for it.

5) Take the bus or MRT instead of cabs.

Trust me. There were many times I would have preferred to take the MRT or bus – but as things shook out (and with the number of children and them being uncooperative or the weather being sopping wet), I took cabs more often than I technically needed to.

In general, though, I took the MRT as much as possible. I didn’t go for buses at all this time, but I loved buses my last trip to Taiwan. I think it depends on your location and your destinations and what ends up being most convenient.

That said, my average taxi ride was about $5-6/150-200NT. However, an MRT ride is $0.50/16NT regardless of distance and the bus is approximately $0.31/10NT. (Keep in mind that kids are free unless they are 6 or above a certain height. Their fares are even lower.)

I’m certain there are plenty more ways to save money. (Such as not buy so many books or CDs or DVDs – but since you would spend more to have the items shipped since shipping to the US is approximately $75-100/22kg box and takes at least 2-3 months, personally, I think it costs more money not to.) But being as I am likely the last person on Earth to be useful in this arena, I am all tapped out for suggestions.

If you have any to share, please do so in the comments! (But keep in mind: not every one has access to mileage points or relatives in Taiwan. That, in itself, is a privilege of sorts.)

Alright, I’m done for today. Have a great day!

Slowly Moving Forward

I can’t believe it’s almost the end of March already. I thought 2014 just started? *sigh*

I don’t know about you, but I’ve been just slammed these past few months. It’s not even that bad – I’m just slow. I’ve been making excuses for myself, taking advantage of all Glow Worm and my doctor appointments (between his allergic reactions and my back going out), I’ve dropped most of my house-cleaning (except the bare minimum) and paying attention to the mail (eg: medical bills from all these appointments). Plus, my 2014 Goals were just slammed to the back burner and I ignored them.

Well, I’ve been very productive today. Of course, it’s 1:30am and I am also really screwed tomorrow (today?). But I’ve gotten several monkeys off my back. (Which makes me exceedingly happy even though really, these things are just what normal, responsible adults do on a daily basis. Whatever. I’m still feeling chuffed.) It especially makes me happy in light of my previous post addressing stuff I suck at.

So, because I’m four years old, I’m gonna tell you what I finally did:

1) Cleared out and filed approximately 3-4 months of unopened mail. SO PLEASED and SO RELIEVED. Do you know that this isn’t even the longest I’ve gone without going through my mail? I had at least two years worth of mail in several paper bags that I powered through right before Gamera was born. Or was it Glow Worm? I really don’t remember. All I know is that it was pathetic. And yes. Really. TWO YEARS. (This includes medical bills – I really don’t know how I was that bad. It’s not like we don’t have the means to pay for things. I was just really fucking lazy. *sigh*)

2) Gathered my 2013 tax documents for my CPA appointment today. Now, at least I was a teensy bit better last year and started a folder for tax documents (both a physical one and an electronic one). But, of course, I didn’t download all my 1099s and W-2s until past 11pm. (Hey, Cookie Monster and Gamera didn’t conk out until past 10:30pm and I ranted about it on Facebook and then I watched a well-deserved episode of The Vampire Diaries.) And you know, we have a shit-ton of accounts.

3) Paid a lot of slightly past due/about to be past due medical bills. What? I kinda mentioned this in #1? Pffft. This is so awesome it’s worthy of it’s own mention. (Admittedly, this is a lot like being proud of NOT beating my own children. But I don’t care.)

4) Started back on my housecleaning schedule again. Ok. I didn’t only do it today. And I am still letting a lot slide. But baby steps, ok?

What? You were expecting more? TOO BAD. That’s all I’ve got. I really need a wife.

Chasing that Status

An article on why poor people spend a lot of money on stuff they can’t afford has been making the rounds on the interwebs lately and I’m glad I finally read it. I’ve always wondered this very same thing and would make confused comments to Hapa Papa like, “If they don’t have money, why are they spending it on huge flat screens and name brand clothes and things that we, who do have money, don’t even spend on?” Hapa Papa‘s theory was that if you thought you were always going to be poor, why delay gratification? Get what pleasures you can when you can.

However, this article finally explained why in a way that I could understand and even identify with. The tl;dr gist can be summed up in this quote:

Why do poor people make stupid, illogical decisions to buy status symbols? For the same reason all but only the most wealthy buy status symbols, I suppose. We want to belong. And, not just for the psychic rewards, but belonging to one group at the right time can mean the difference between unemployment and employment, a good job as opposed to a bad job, housing or a shelter, and so on.

We’ve all heard of the expression, “Dress for the job you want to have, not the job that you do.” This is just a variant of the expression – except for your whole life. It never occurred to me that the poor might possibly be spending so much on these items because it helped them not be immediately lumped into an easily dismissed category. That they wanted to signify they belonged at a job interview or at a restaurant or a nice store.

It totally makes sense to me. I do the same in my own life – but perhaps not in this extreme. And the only reason it’s not as extreme is because my ethnicity, clothing, demeanor, and gender scream, “middle class housewife with lots of spending money.” I don’t need as many outward symbols of wealth because I already fit in.

I recall distinctly my mother telling me that when I go get a haircut, or makeup, or even shopping for nicer clothes, to always dress up. Not only would I get better service, but I would get a better haircut or clothing or makeup as a result. My mom explained that if I showed up looking the part, it would take the sales person less stretch of the imagination to put me in quality than if I had shown up in sweats and no makeup. I thought it was a horribly classist way to view the world, but in my own experience, I have found my mom’s statement to be completely accurate.

When I first started working as a financial advisor, it took me almost a year before I finally settled in on clothes that suited both the position as well as my personal sense of style. At first, I had purchased all these suits from a suit outlet, but I just looked so old and dowdy. I hated the clothes – especially when I went on a three week training session and there were young women there who dressed so fabulously. I felt insecure, unprofessional, and sadly, somewhat less confident. Thankfully, my personality is such that it didn’t affect my interactions too badly. All the same, when I got home, I went shopping.

I would work with men who got custom made suits and spent ridiculous amounts of money on monogrammed shirts and fancy cuff links. I thought it was ridiculous. After all, if you had a financial advisor, wouldn’t you be looking for someone who was PRUDENT with their money? But then again, would you want someone who didn’t look outwardly “successful” and didn’t drive the “right” car?

I was teased about driving a Toyota Avalon. Not sure why since it’s totally a grandma car (nor exactly cheap), but they said it wasn’t flashy enough. Quite frankly, I wouldn’t really want a flashy advisor – I’d be too worried about them trying to make as much money off of me as possible. But I can see WHY certain people gravitated towards that type of advisor. Thankfully, I attracted clients just like myself. People who had money to invest because they didn’t spend it all on fancy clothes and cars.

Anyway, I guess this is just my rambling way of saying, I kinda get why poor people choose to spend their money a certain way. I do it, too. It’s just less obvious because I have more discretionary funds – and no one is judging me on my purchases because it’s in keeping with my income threshold.

One other thing. As much as I love to judge people, ultimately, who are we to tell people how to spend their money? Whether or not people are rich or poor, the money is theirs and they can spend it however they want.

Why I Have a Financial Advisor: Money Series Pt 5

Now, it may seem weird to you that I have a financial advisor – especially since I used to be one and own a financial advising firm with my mother. I’m sure it won’t be any surprise to anyone that my mother is my financial advisor. What can I say? It saves on fees.

Well, the reasons I have my mother manage my money versus managing it myself are largely the same reasons most people have a financial advisor. And those are because I don’t have some combination of the following:

1) Time
2) Interest
3) Ability
4) Resources

(For the record, mine is a combination of 1 and 2.) With that said, here is my inside scoop on what to look for in a financial advisor should you choose to have one.

Disclaimer: I am a financial advisor and own a financial advising firm with my mother. I am not being compensated by any entity or company for the following information. I am ONLY explaining what I do for my own family. If you should so choose to take this advice, please realize that it is not customized nor tailored for your specific situation. I am not dispensing personalized advice for you or your family. I am not responsible in any way, shape, or form if your investments rise or fall due to market conditions. YMMV. You have been warned.

1) Make sure you like the person. This seems like such a stupid reason. After all, there are plenty of likable people out there who should NOT be financial advisors. But ultimately, you’ll be discussing the details of your financial life as well as your hopes and dreams for the future (because let’s be real – that all requires money). If you don’t like your financial advisor, it’s going to be pretty difficult divulging such intimate information. Plus, you’ll be talking to them at least a few times a year. If you don’t like the person, you’ll put off meeting them, likely not follow their advice in a timely manner, and in general, waste everyone’s time.

2) Don’t get hung up on “The Best.” Just like the rest of life, “The Best” is a moving target and different for everybody. Whether it’s “The Best” advisor, fund, or stock, you’re most likely not going to have it. Or have it at the wrong time. There is no way out of the thousands of financial advisors you are going to have “The Best.” Even if you’re a gazillionaire, you’re not. Settle for good and competent. You want reasonable returns (whatever that means to you), sound advice, and a responsive attitude.

3) Don’t pay for a financial plan. Pay for advice and management. This is not to say that paying for a financial plan is a waste of money. Indeed, if you are confident that you will hold yourself accountable to following every single item on your plan, then, have at it. But let’s be real. You most likely won’t. Instead, you’ll have paid approximately $1,500-2,000 for a fat pile of paper that just sits on your shelf collecting dust while your financial house is still in shambles. Then a few years later, you’ll go through the cycle again.

Save everyone the trouble. Pay an advisor to manage your money. I wouldn’t necessarily give them full discretion over your funds (that seems unnecessarily trusting), but do follow their advice. Usually, this translates into a monthly fee. Think of it as having an advisor on retainer. Not only do you get to call them up and ask for advice any time you want, you also have someone actively looking at your account and managing it in a way that is consistent with your desires.

4) Along with #3, avoid paying per transaction/by commission. Now, realistically, some products are commission only. (eg: Annuities, life insurance, REITs) But for the most part, this way, you know that the advisor is recommending you buy/sell something because it really IS a good thing for your account (and not because they get paid a commission). As for annuities, life insurance, and REITs, they all have their place and can be good for you depending on your situation. Annuities and life insurance get pilloried quite often but in reality, I have highly recommended their usage. (Annuities especially since despite the higher cost, it’s the closest thing most people will get to a pension.)

5) Have as much of your assets at one place. I don’t mean one fund or one stock. I mean, have as much of your assets as possible held with the same financial advisor. Why? Because they will have a fuller view of your financial life and can give you better advice if they have the big picture. Also, it sounds awful, but financial advisors are only human. They will pay more attention to more money (because you are a bigger client). If you spread out your assets across several advisors, you are pretty much guaranteeing no one will look at your stuff.

Ok, that’s it for now. If I think of more, I will add it to this post or write another one. For those of you with financial advisors, what has your experience been? And for those of you without one, why haven’t you gotten one yet?

ETA:A friend asked me a great question on FB that I wanted to share with the rest of you.

I want to get started! Where do I start? It’s long overdue. How do you know which advisors are for you and your best interest? I thought of reading up on stock trading and understanding it, so I can do it myself. Signing up on Etrade? Talk to me. Lol.

Here’s my response:

I’d start by asking friends (especially those who are wealthier than you). Check out their recommendations. Or you can just walk into a Schwab, TD Ameritrade, or Ameriprise and ask for a broker on duty. Or, keep your eye out for seminars and attend some. Once you have some names, google and interview them.

Most advisors will talk to you and get to know you without charging you. If they do, run away. If they recommend you open an account or buy something with them before getting to know you, run away. Find out how they get paid. How do they decide or evaluate what is a good stock or fund? How do they determine when to sell? How often will they review your account? What type of clients are they looking for?

Also, trust your gut. If someone makes you feel uneasy, run. They may be perfectly honest but if YOU don’t feel comfortable, then they are not for you.

Most advisors end up with a book of business that looks like them. So you want to look for someone who is similar to you (except has time, interest, ability, and resources to do investments). You want someone who has similar values and world view.

Thanks for asking! Hope that helps. Feel free to ask more questions.

Why I Buy Used: Money Series Pt 2

Now, everyone knows I do my fair share to stimulate the economy. I can be quite the profligate spender – especially when it comes to buying fruit from Costco. I have often come back from a trip to Costco after throwing down a ton of money only to be asked by Hapa Papa, “Where is the food?” Because all he can see are piles and piles of fruit. What can I say? I’m Chinese. We eat fruit. Lots of it.

But even with Hapa Papa being my personal money train, we do still live off of one income (albeit, very generous) and have a mortgage and preschool and utilities so at some point, there is a limit to my spending. One time, in despair, Hapa Papa asked, “Why don’t you love me? Do you want me to work until I die?” After that, I started to watch my spending as a way to love him. He asks for so little, you know. The least I could do was throw him a bone.

Anyhow, even though Amazon and Costco are kept in business almost single-handedly by me, I do try to limit my spending without hampering my desire to hoard and get stuff. What I do, however, is buy used.

For those of you who have had the dubious honor of coming to my house, you know that it is a giant toy store. I own pretty much every toy known to man and the beauty of it is that around 80% of them were purchased used. I’m sure my kids think my day job is a drug dealer because I constantly go to people’s houses, give them cash and get something in return. People also come to my house to buy things I sell. I don’t think Cookie Monster or Gamera realize that we can go to stores to buy toys. They think toys come from other people’s houses.

It has actually come to the point where I no longer troll craigslist or the various Facebook virtual garage sale pages because I OWN EVERYTHING. (This helps a lot because now, I don’t really buy anything anymore.) When I go to real garage sales, I go for fun and rarely spend more than $20 because again, I OWN EVERYTHING. (Of course, my house is crammed full of toys, so you know, there are downsides to owning everything.) I justify having so many toys because I will have so many children they are bound to be used.

For clothes, I often buy used to supplement clothes I buy on clearance and clothes swap with friends. I think Cookie Monster’s baby clothes have gone through at least five (soon to be six) babies so far. The majority of them have held up just fine because babies grow so quickly, they really don’t wear them long enough to do enough damage.

I buy ahead for the next year or two when clothes go on clearance at the end of each season because why pay full price for clothes if I don’t have to? Who’s going to know they were purchased on clearance? Do kids’ clothes really go out of style? (Not the clothes I’m buying.) Plus, as the kids get older, the clothes wear out more quickly because they are more actively running, jumping, climbing, and therefore falling. I have bought many an iron on patch! Also, Cookie Monster grows so quickly that he is sometimes in between sizes in the spring – but I know he will be out of them by fall or winter. Why buy brand new pants if he’s going to be wearing them only for a few months?

Here’s my secret to buying used things: go to the super-nice, rich neighborhoods. People often have a glut of barely worn, brand name clothes that they want to get rid of quickly. I have purchased a bag of clothes for $25 that contained nine pairs of pants/shorts, ten shirts, and a sweater or two thrown in for good measure. When you consider that often, a pair of jeans from Old Navy is $15, that’s a really good deal.

The same goes for toys. Usually, used toys start at 50% retail (and are sometimes lower). You will get better deals on toys at garage sales, but if you want something specific, you’ll have to wait a long time. If you don’t want to wait, craigslist or the Facebook pages will be a better bet (although a little more costly). Sadly, I know the going rate of almost any used toy (as well as their retail price). Why is my brain so full of useless minutiae? My family will HATE me for all this useless information in the coming zombie apocalypse.

As for books, I usually buy them when the local library has their book sales. Children’s books are usually $0.50-$1 and I also get to support my local library. Incidentally, I use the library a TON for my personal use as well as for my kids. I read at least 100-150 books a year and if I bought them all new or even used, that would be thousands of dollars. Instead, I am willing to wait for new releases and get pretty much all my books for free. That allows me to pay for the occasional new book in order to support an author or a series that I really appreciate and enjoy. Plus, I already paid taxes for my library access – why shouldn’t I use it?

This also keeps my house from accumulating hundreds of books every year. Between my brother and I, we had hundreds of books that I no longer had room for. I gave several boxes to the local library and sold at least twenty boxes back to various used book stores for either cash or credit. Nothing is sadder than an unread or no longer read book sitting on a dusty shelf, waiting to be noticed. Why not send it somewhere it can be loved or put to good use?

I also buy used furniture – but usually, I buy things that are made of wood because the thought of a used mattress or couch I find squicky. I know. I’m a snob. But all my dining tables have been used – and they were great deals! I once got a dining set with six chairs for $100. The guy even lent us his truck to move it! Hapa Papa was very sad when I sold the same set three years later for the same $100.

Ok, this post ended up much longer than I originally anticipated. To sum up in nice bullet-points, here are some reasons I buy used:

1) It saves money – sometimes at least 50%.

2) Helps the environment – reduce, reuse, recycle and all that. (But it seriously is not a very important reason for me, personally.)

3) I can get more for less money – therefore, it frees up more money for things I really want but cannot get at reduced price. (It’s the same basic premise as #1.)

4) I feel smug/brilliant every time I see something go “on sale” new and it’s STILL more expensive than I spent on a used item. Even better when I can’t tell the difference between the new and used item due to the previous owner’s awesomeness.

5) My kids end up turning new toys into “used” toys almost immediately. Why not just save myself the trouble? It pains me less when they batter something I bought used than when they batter something I bought brand new. Although, sometimes I get even more upset because WHEN WILL I EVER GET WEDGE-ITS FOR LESS THAN $1 EVER AGAIN?!

6) My kids don’t really know any better – they are just happy they get toys (and lots of them). Bonus: they don’t realize you can buy the toys at the store – so they never ask me for anything they see in a store.

7) DO YOU KNOW HOW MUCH LEGOS COST BRAND NEW? OMG – it’s the biggest racket EVER. Even used, they are pricey. But let’s just say that I’ve spent about $200 in total on both the BIG and small Legos – and I guarantee for the same price, I would’ve come away with two, small, sad regular Lego sets. (Perhaps a slight exaggeration – but not by much!)

8) In addition, DO YOU KNOW HOW MUCH THOMAS TRAINS COST BRAND NEW??? It’s almost as big a racket as the Lego Conspiracy! I’ve spent about $8-900 used on various train related things since Cookie Monster started to like trains. This same stuff would have cost me several thousand if I purchased brand new. Yes, I realize $900 is A LOT of money already (not all at the same time, thank goodness), but for the same haul brand new? At least $3-4,000. This only makes me feel slightly better.

9) When my children finally are done with the toys and I start selling them, I can most likely sell them at the same price at which I purchased them – and possibly, even more. Granted, that’s likely another ten years down the line, but then I can claim “vintage” status so I can charge even MORE. It won’t hurt nearly as much as if I bought them brand new and I think to myself, “I’m selling these things at 50% off! GAH!! All my MONIES!!!”

Ok. I think you get my point. I buy used to save money and as a nice after thought, to save the environment. Either way, I’m a HERO. A SAVVY HERO!!!

What about you? Do you buy used? Why or why not? Tell me in the comments. 😀