1st Financial Update of 2016

You Need a Budget (YNAB) came out with a new program that is web-based, which I started using Dec. 30. Personally, I like the technical changes.

I decided to start fresh, update my categories, and this new perspective showed me that, hey, I actually have spending $$ available! Now, I didn't go nuts, and I'm still pretty focused on building my Freedom Fund...but I also didn't stress about buying new boots when I saw how worn mine had gotten. I didn't stress about buying a new laptop because my old one was going. I planned outings with friends without stressing about $$.

Sylvia's budget has also gone really well (and she too prefers the new YNAB). She decided to start community college and, for the first time ever, got my seal of approval to dip into her Emergency Fund :) Of course, I told her this can't be a regular habit, but given the timing, it was the best option. Now, we have a better understanding of how much she'll need each semester, and can budget accordingly. Neither of us regret that she took some time off before starting school again, and both of us are confident that community college is the right place for her right now.

She is also budgeting regularly for car maintenance, car insurance, registration, gas/parking and her insurance deductible. There's no way she could afford to live on her own right now, but she is developing good habits and staying out of debt.

Meanwhile, Riley and I have started a car/driver's license fund. As with Sylvia, she will have to wait until she has a job before she can really get going on driving (or anything else), but at least we're on the same page about things.

The new YNAB has an "Age of Money" feature. The goal is for the money you spend to be at least 30 days old. Sylvia and I both have "35 Days" as our Age of Money.

I decided to use my most recent 5th paycheck to fund one annual category in full to alleviate the "monthly" budget (as well as beef up my Freedom Fund), which I'll do again with the next 5th paycheck.


I'm also beefing up Theatre Tix to see Hamilton at least twice and Something Rotten on their national tours. And I have a really lofty goal for my Freedom Fund, but it's more than a decade away.

I'm not sure if it's truly financially viable, but it's a really great motivator to continue cutting costs where I can and dream about being able to afford what I really want!

But in the meantime, I'm making sure there are enough funds to not only cover our needs, but some of the more reasonable wants, too.

I think I'm even starting to believe that we are in the middle class after all!

eBook now available in Paperback!

It's a little more expensive this way, but I decided to make the book available in paperback form. You can buy it on Amazon or CreateSpace. And, it should also be available in public libraries soon so feel free to ask your local librarian, too!

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Admiring my Daughter's Independence

Riley really wanted to see this recently-released movie. So she did. By herself.

I don't think I realized that it can be great doing things by myself until my thirties.

It wasn't until after I dropped her off that I even realized that she was doing what she wanted to do alone. Sylvia and I have both experienced the struggles of trying to make things come together with friend groups and sometimes, it feels like more trouble than it's worth. Riley didn't even bother trying. She had this window of opportunity to see this movie on opening weekend, and we picked the time and theatre and that was that.

Afterward, I told her that I was proud of her for doing this, and she acknowledged that she felt a little awkward when she saw she was the only one by herself (and when the theatre's commercial promoted "togetherness at the movies"), but once the movie started, she was glad that no one was trying to talk to her during the movie and she could just relax and enjoy.

I remember when we were in NYC, I went to see Next to Normal by myself...and was really glad that I was alone. The show is so emotional that it took me several minutes to collect myself to just stand up! And walking back to the hotel was a great time to reflect on what I'd just seen. I didn't need to worry about whether anyone else enjoyed it, I got to have my own authentic experience (and I loved it).

Now, I also enjoy seeing things with friends and the girls. I remember when the girls and I saw The Book of Mormon with two of our friends, and at intermission, my friend Nancy and I just giggled with delight that we were finally seeing it! It's great to have a conversation after about what we liked, what we didn't, what it made us think about.

But when it's too much of a hassle, when you're afraid no one else will get it/like it, when you have this window of opportunity to do something you solely want to do, it's great to just go do it by yourself.

I love that it didn't take Riley decades to discover that.

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!