The Real Benefit of Savings

I seriously loved this article. It reminded me of how I ended up marrying X in the first place. And staying with him for as long as I did.

I didn't marry him until I was 7 months pregnant with our second child. At that point, it seemed inevitable. When he asked, there didn't seem to be any real reason to say no. I figured having kids with him was a bonding enough experience, so why not get the marital benefits out of it?

Except, of course, marrying the wrong person can be the worst mistake you can make - emotionally and financially.

Because he was such a drain on our finances, it wasn't long until I felt I wasn't in any position to leave him. Finally, the timing worked out where I was both 1) ready to leave him emotionally, and 2) had a tax refund to get out of there.

My daughter has previously asked me why I make her save 20% of each paycheck, and also, why I always say "no" when she wants to dip into it. Now, granted, her financial needs are low and her salary is low. But she already has more in her Emergency Fund than I ever had until just about 2 years ago.

Oh sure, it can sound romantic and noble to have nothing, to be reminded that money isn't everything (which it isn't), but I think it's time for a new financial story.

We need protection from our own bad decisions or unlucky twists of fate.

I can remember more than once calling my sister in tears because of yet another financial consequence of that truly terrible decision. I remember wondering, when will it end? Why wasn't it enough that I was raising the girls on my own while working full-time (and for many years, going to school part-time at the same time)? When would I be done paying these dues?

Without a financial safety net (whether you call it an Emergency Fund, a Freedom Fund or a F*** You Fund), it took me about a decade.

Now, if all that sounds too maudlin, here's another perspective. I hope the first time we both think it's okay for Sylvia to dip into her Emergency Fund is for a happy twist of fate. I hope that it's to help pay for a move for a great new career or education (without draining the Fund completely, of course). There can be opportunities that require a little investment to get started. Of course, I hope it's for something like that.

The real benefit of savings is to minimize the disruption of a bad decision/unfortunate event or maximize an opportunity. To take care of you when you need it.

eBook on sale!

First, an apology. Wanted to get this done for New Year's, but couldn't get my act together in time. Then again, if you're like me in that sense, this will be perfect timing!

My eBook is on sale Jan 10 - 17! Check it out!

Balancing the Middle Class

CNN has this nifty calculator where you can find out if you are in the middle class where you live.

While the value of this information is limited, I do think it helps to understand where you stand in your community, particularly living somewhere like L.A., where living costs are high, but incomes vary.

I'm practically as middle class as one can get, which surprised me a little because I don't feel middle class. Not that I feel dirt poor either, but I guess working class or lower middle class is more what I thought we were.

Of course, it begs the question, what it does mean to be middle class? To me, it means that one doesn't have to struggle to meet their daily/monthly needs. Crazy, but I feel like like we're there...which I wouldn't have said just a few years ago.

I think it's important, however, to stick to that scarcity mentality one has to develop when their income is less than middle. Even if/when you've reached middle or beyond, it doesn't matter how much your annual income is; there is still a limit.

If discovering you're middle class or above comes as a shock, that might be a sign of not practicing enough scarcity mentality.

This is why I like the Warren/Tyagi method in All Your Worth: The Ultimate Life Money Plan. If you can keep your needs (housing, food, transportation, monthly bills) to 50% of your income, then save 20%, you can use 30% towards wants. I'm still not there yet, but I like using that as my ultimate goal.

If I actually got there, I might even feel like I'm in the middle class.

Changing my Mindset

My First Mindset Change. It wasn't a New Year's resolution, but in early 2013, I vowed to not incur any new credit card debt. It took a few months, but by the summer, I knew I could keep it up and didn't look back.

My Second Mindset Change. I can't pinpoint this one exactly, except maybe to say when I started using YNAB. Obsessing over the budget screen helped me to look at my spending differently. Suddenly, making my lunches felt like a better plan. Then, giving up cable. I focused on decreasing my monthly have-to bills so I could spend more money on things I really enjoy, like going to see live theatre.

My Third Mindset Change. I loved when I got off the paycheck-to-paycheck cycle and started living on last month's income, but I still couldn't see the value of a large chunk of money in the bank...except it was nice to think about ways to spend it.

This year, my mindset change has been to appreciate the concept of letting money sit, something that we discuss on the YNAB Forums frequently. I don't know exactly when it changed, but I did realize that suddenly, even though I have more in my Emergency Savings than I've ever had before, I'm more focused on making that account grow than I am on thinking of ways to spend it. I have mini-goals planned that I'm working towards, but I also plan to just keep letting it grow indefinitely.

This mindset change has also affected my retirement planning. I decided to increase my 401k contribution and then was so excited to discover that it had a way for me to automatically increase it annually! I was a little frustrated with myself that this didn't occur to me before, but I'm trying to accept that as long as I'm moving in the right direction now, I just have to keep doing what I can do now.

But the point of this post is not to boast or brag. None of this has come easily for me, yet I am discovering that the longer I keep at this, the better I'm getting at it. Certain lifestyle changes which seemed unthinkable in years past have become a part of everyday life. And most importantly, certain ways of thinking about money have also changed, slowly but surely.

And that, I think, is the key. Start slow. Pick one thing. Here are some ideas.

If credit card/consumer debt is consuming you, do not incur new debt. period. Just that.  Of course, pay what you can, but don't try and pay it all off in one month or something crazy like that. Just get used to life without incurring consumer debt.

If you're drowning in monthly bills, pick one area per month to focus on. Maybe in January, you try to find a better rate for your cell phone bill. In February, you try to get a lower auto insurance rate. In March, you focus on eating out. And so on.

If you need to save more money, try Afford Anything's one percent challenge. If that's too intense, just up your automatic savings by $5 per pay period. Then, try $10 per pay period.

Again, don't try to do them all at once. Just pick one. After it becomes easy, then move on to something else. 

Seriously, if I can change my mindset, anyone can.

Wishing you a prosperous New Year!

Guest Post at Logix

I was honored to be asked to write a guest post for Logix: A Financial Fresh Start.

Xmas 2015 post

Long-time readers may recall that I generally prefer odd years over even. This year was no different.

Highlights:

Sylvia graduated high school, turned 18 and is taking on more and more adult responsibilities. She’s working, she’s auditioning and keeping me entertained. She got a tattoo, but it’s a Sondheim quote so it’s kind of okay. She dyed her hair. Again. She’s a redhead as of this writing.

Riley is still thriving at school (sophomore year), and she’s back in LAPD’s Cadet program, hoping for a promotion soon.  She still wants me to let her shave her head, but like Sylvia’s tattoo, she’ll have to wait until she’s 18. She’s not as into social media and selfies as her sister, so the pic of the two of them will have to do. 

And in case you somehow missed it :), I published an eBook on Amazon: Balancing the Single Mom Budget, and got to make two podcast appearances to talk about back-to-school budgeting and holiday budgeting. Our family was also featured in a real book, How We Live Now by Bella DePaulo.

Family outings included Newsies at the Pantages and the annual Sound of Music Sing-along at the Hollywood Bowl. Sylvia and I had a couple of date nights, including Idina Menzel at the Hollywood Bowl, and Riley and I thoroughly enjoyed seeing Wait! Wait! Don’t Tell Me. I also got to see If/Then at the Pantages with 4 members of the original Broadway cast (Idina Menzel, Anthony Rapp, LaChanze and James Snyder), which was so incredibly special and made me laugh, cry, and Idina's 11:00 number gave me chills.

I know I should probably be sentimental about the girls growing up, but every year, I enjoy their company more. My only complaints are that Sylvia is not obsessed with Hamilton like me and Riley, and Riley won’t watch Gremlins (which I really think she would love…and it’s not because she doesn’t like scary things, because she totally does). Otherwise, I’m pretty okay with who they are.  They’re not perfect (like, at all!), but they are closer than I ever got. So mostly, they just make me smile.

I hope there are plenty of smiles for you in the holiday season and year to come.

Happy Holidays,

April (and Sylvia & Riley)

Balancing Fear

Like every other family with school-aged kids here, we were affected by the closure of LA schools yesterday.

I'd already dropped my daughter off. Since we don't have cable anymore, I actually enjoy my news-free mornings and Riley and I listen to music on the way to school so we had no prior knowledge of the threat (the breaking news emails didn't come until later).

About 5 minutes away from work, Riley called to let me know that "1S1S"* had called in a bomb threat and school was canceled. She'd arranged for a ride home already and said, "guess I'll have to take my math final tomorrow." I commented that it may have been a student trying to avoid finals, but I heard from many that it was deemed a "credible" threat. (Later news states that the threat was a hoax after all.)

Most posts I've read about this are talking about the fear. Riley had no fear. Instead, she was occupied with planning what she'd do today in lieu of school. While she did believe that the threat was credible, she also seemed confident that the police and others would handle it.

Of course, I feel a sense of melancholy that she's accepted terrorist threats as part of life, but I also think she has the right attitude about it: she's not letting fear prevail. She acted responsibly by getting a ride home so she was away from the threat, but then went on about her life.

We can't change this particular aspect of the world we live in. But we can also keep living every day we're alive with abundance and gratitude. And making peace where we can.


*Yes, I do know that's not how it's spelled, but trying to avoid a certain kind of traffic here.