Wake up!

I was reading my beloved Wall Street Journal today at lunch (leftover scrambled eggs and potato salad, weird but yum) when I saw this heartbreaking poll.

Like I wanted to cry.

Nest- Egg Numbers: how much surveyed workers 55 and older said they have in savings and investments.

Less than $1000        21%

$1,000- $9,999           11%

$10,000-$24,999        11%

$25,000-$49,999         9%

$50,000-$99,999         9%

$100,000-$249,999    14%

$250,000 or more      25%

Guys. This is so sad. We work our whole lives and we look toward retirement as our reward for a lifetime spent caring for and providing for our families. Then to see that 75% of people have less than $250,000? That's just horrible. And while 250K sounds like a lot of money right now, just try living on it for 30 years. It's not going to go far.

This has to stop. Don't think that you're just magically going to be okay when you retire because you're a good person or because you've worked hard. You are those things and more but it doesn't work that way. You have to be smart and you have to be intentional with your money.

Get out of debt.

Stay out of debt.

Have a plan.

And SAVE something! Let interest be your friend, let it work for you for a change. Once you're out of debt start putting just a little bit aside each month. Before you know it, magical compound interest is going to take over and you won't be one of the 21% with less than $1,000 to your name.

Be smart. That's pretty easy, right?

Oh and if you're one of those who is over 55 and aren't where you want to be, don't give up. As long as you're still breathing there's time to change. You are going to have to be extra diligent but I'm certain you can make it.

It's the little things

I had to write a short discussion post in response to an article in the Wall Street Journal. I feel so grownup with my WSJ subscription, never mind that it's only for this class and after the semester I'll cancel it and if I feel the urge to read it anytime after that I'll get it from the library, but for the next 2 months I'm a grownup!!

Wow, sorry about that, I get distracted sometimes. Like I was saying we were asked to pick 5 things from this article that resonated with our financial beliefs. Here are my takeaways. I also recommend that you read the article (you know, if you're a grownup and have a subscription), it has some good insights into financial behavior.

1. Keep it simple. History has shown that the most successful people are those that very simply diversify their investments. They don’t try to choose the most flashy and popular things, rather they look for things that have a proven track record. I invest my own portfolio in the same way with a simple mix of mutual funds. This is proving to be profitable.
2. Protect yourself from disaster. Soon after my husband and I were married we began purchasing term life insurance. We did not have any children at the time but we knew that if one of us were to go, it would leave the other with responsibilities that needed to be met. Since that time we have always carried insurance, gradually increasing the amount as we had more children and our other needs changed. Knowing that the other spouse would be able to carry on financially is a comforting feeling.
3. Make the most of what you have. A few years ago we were making very good money but somehow we were still late on payments and always scraping to get by. After a job loss and career change we are not quite back to where we were but we are always early to pay our bills, there is money in the bank for emergencies and we are making serious progress toward paying our debts. The difference is we are intentional with our money and we use it wisely. We know what’s important and it’s not stuff. The money that we have is to be used for the benefit of our family, not for momentary thrills.
4. Teach your children about money. Having 5 children means a lot of demands on my time. The list is always longer than the time I have and if I'm not careful I could spend all my time just dealing with the immediate needs. I need to be intentional about the way that we spend our time. I want my children to grow up to be successful, independent adults that I enjoy spending time with. A key to this is to teach them to be wise with their finances. We pay our children comission for work that they do around our home. They then divide this money into 3 categories; give, save and spend. They are learning that money comes from work and that there is great pride to be found in taking care of your own needs. That’s pretty amazing.
5. Share. This category of my financial plan is very personal and tied to my religious beliefs. I believe that God provides all that I have; health, money, peace, love, everything. In return He has asked that I give back a percentage of my increase. I do this because I believe in a loving God that blesses His children and only wants the best for them. I give because it’s a commandment but I receive so much more in return.

What's your favorite financial principle? Share in the comments, I'd love to know what works for you.

4 Walls

Walls? What?

Kristen, I thought this was about money and debt and that kinda stuff, not walls.

Before I lose you, let me explain. There's this guy, I talk about him all the time, you might've heard of him. He goes by the name Dave, last name Ramsey. Ya, he's awesome. Has completely changed our lives and he has this idea that he calls the 4 walls. Basically it's a way to prioritize things and to make sure that the essentials are taken care of.

1. Shelter. Rent or mortgage, whatever you need to pay to keep a roof over your head.
2. Food. Your family needs to eat. Sometimes that means you're eating ramen and (gag me) macaroni and cheese but what's important is that you're eating.
3. Utilities. Make sure the lights and heat are on and the water is running. That's important.
4. Transportation. Keep gas in your car and if you have a car payment stay current. Don't forget insurance either. You need to have a car to get to your job to pay your bills. Does that mean you need a $40,000 car? Uh, I'm gonna say probably not but you do need cheap, reliable transportation.

When Greg and I were out of work we had to make some tough choices. And using this 4 wall plan made it easier for us to focus on what was most important. Sometimes when you're looking at all of the bills due it can just be overwhelming. Especially if you have credit cards or other loans. After all if you miss a payment or pay late, you'll probably get hit with a fee and other penalties but you need to take a step back and take care of essentials first. It doesn't make sense to be current on your credit cards but to not have food in the house. I'm definitely not advocating ignoring your debts. Don't read that into anything I have ever said or will ever say, if you created the mess you'd better clean it up! But you do need to be wise when you have limited resources.

Take care of essentials and then work towards paying the rest. Little by little you will get things under control.

I promise.

Saying Goodbye

After almost 12 years, lots of highchair scraps and dog hair everywhere we said goodbye to our Katie dog. Most of the time we just called her Doggie, that's why our kids never went through that stage where they call every dog their own dog's name (our nephew called all dogs Ottos, seriously adorable) instead they thought every dog was named Doggie.

Katie was diagnosed with Congestive Heart Failure last Tuesday. The vet told us she had 6 to 8 months left. Instead we got 6 days. On Monday morning she just couldn't breathe anymore, she was panting frantically and in so much pain. Greg and I made the painful decision to take her to the vet and end her life. The medicine that she was on just wasn't helping and she was miserable. We could tell that she was frightened and in pain.

Greg picked up the kids from school and gave them a chance to say goodbye. We cried and cried and then took her to the animal hospital. Greg carried her into that little room where we waited for the vet. I held her while they prepped her and then almost before we knew it she was gone. Finally she relaxed and she wasn't hurting anymore.

It's been heartbreaking. She was the best dog ever. So good to the kids, such a mellow animal. Just absolutely perfect. I've never considered myself a dog person and I'm still not a huge fan of them in general but Doggie, she was special. I keep looking over expecting to see her laying by my desk but there's just an empty spot where her blanket used to be.

You might wonder what this has to do with money and it doesn't. Except it kinda does. See never once during this process did we have to stop and figure out how to pay to care for our Katie dog. We have our little emergency fund so the thought of how to pay for all of this never crossed our minds. Instead we were able to take care of her, comfort the kids and know that even though our hearts are broken we're not worried about bounced checks or credit card bills.

That's why we're working so hard and budgeting so carefully. We want to be able to grieve and mourn and laugh and enjoy the moments that come our way rather than being burdened by debt. We are paying a really high price right now. Greg and I are both working very hard. We're budgeting every dollar that we get so that we have money for emergencies and so that we don't get behind on our bills. We're sacrificing like crazy right now so that the next time life happens how we're going to pay for the crisis isn't our first thought.