30 second video: protect your emergency cash like a chess match queen May 22, 2008

New shoes, new iMac, & old cash worries:
It’s fun spending cash reserved for emergencies.

Even more than fun – it’s bloody easy!

It’s easy to break discipline & access those dollars meant to protect from rainy days. But since that approach has made my family more vulnerable financially, it’s time to rethink. The short-term benefits of a change are clear.

Emergency cash reserves & chess: create the pawns

After 7.5 years of marriage, these prove true:

• if we have only one stash of cash, we’ll spend it. It matters not if it’s reserved for emergencies. We’ll spend it on non-urgent desires. Do these desires help us be more effective sometimes? You bet. But occasionally our compulsion runs rampant.
• it’s time to view emergency reserves like a chess queen and find ways to protect her.
• thus it’s time to create the ‘chess pawns’ in our personal finance life.

The Pawns are the soul of the game. -Francois Philidor

For the past few months, I’ve tested a new strategy. And it’s producing positive results for Sean and me. The goals are two-fold: truly learn to reserve emergency funds for unforeseen, urgent cases; and next, create a system to enable that habit.

Here’s what we did:

• set-up (10) online sub-savings accounts via ING Direct, in addition to our main emergency cash reserves account. These are metaphorically ‘chess pawns’ protecting the emergency cash ‘queen’. In the past, we dipped into cash reserves for these reasons; so we decided to designate sub-accounts to ideally prevent future dipping.
• each month, monies direct to these sub-accounts i.e. medical/dental; clothes/dry cleaning; annual visit to parents; pet care; computer/tech; family gifts; books/education; condo; Alaskan trip for parents by 2012; relocation expenses.
• each pay cycle, 12% auto-deposits into emergency cash savings with app. 3% funneling to the sub-account buckets. And so far for one business quarter, the emergency bucket has stabilized and steadily increased since we use those other sub-accounts for spending choices. Hooray!
• Note: at least so far, we don’t necessarily spend monies each month that were allocated to those sub-accounts. Yet if for example my husband needs Ruby on Rails books for his coding library, he has accessible, dedicated funds for that decision.

Pawns, marriage partners, & the psycho-summary:
It’s just another way to budget. But the tangible existence of these ‘pawn’ sub-accounts has helped us stay on track with building emergency cash. And it’s helped to clarify spending priorities.

It’s working too from a psychological perspective aka it’s less stressful in the guilt department. In the past, I’d mentally beat up on my husband and me for dipping into emergency reserves for play or even basic needs like new shoes (…to replace that broken heel). Footnote: guilt drains marital trust and fun for sure!

More from:

• Housewifery & another whacky point along our rainy-day cash quest;
• The Simple Dollar’s tact to emergency reserves;
• Emergency Preparedness Tips & your cash (use the freezer?);
• MSN & the ever frank Liz Pulliam Weston on learning financial flexibility for tough times;
• Millionaire Mommy Next Door & her fantastic approach toward tailoring a budget & recognizing spending values.
  

my husband, me, & our financial habits make front page of business section in washington post February 10, 2008

photo by Lois Raimondo, Washington Post, 2/10/08

What a blast!

It was published today, in the Washington Post’s business section — with our happy mugs below the fold (& as the second photo in the online slideshow).

Talking with Post reporter Nancy Trejos was a comfortable, positive experience. She expressed a lot of interest in different facets of family finance, especially in the face of a slowing economy & home sales.

Thanks Shashi Bellamkonda for connecting Nancy, Sean, & me.

More from:

• Awesome mind & equally so husband Sean Stickle with his feedback to the Post’s interpretation of our interview;
• U.S. News & the premise we’re convincing ourselves of a weak economy despite indicators of stability;
• Business Week’s podcast with ActionCoach CEO Brad Sugars on how we can thrive in slower economic times, especially small biz.

2007 goals met & missed (plus recalling family mantra for ‘tell the truth!’) January 7, 2008

I heard that as a kid growing up from Oklahoma relatives – said when it was really time to tell the truth! I love it. And for whatever reason, it surmounts my agnosticism & paraphrases the need for honesty to this day.

In that spirit…:

Life balance goals met & missed (2006 vs 2007)

Come to Jesus 2006:

-on dining out: spent $11k (what's that phrase…'ignorance is bliss'?!)

-on cooking for family: avoided learning how

-on retirement savings: had diddle for a plan

-on spending habits: didn't have a clue

-on tax protection: accrued $7k tax bill (paid for via credit card…gulp)

Come to Jesus 2007:

-on dining out: cut that puppy DOWN & roughly ended year spending app. $1.5k

-on cooking for family: learned! We spent app. $5k on groceries this year. And my husband was fantastic in brainstorming ideas & being patient with sometimes a very smoky home (I'd like to think my self-esteem is pretty strong being 37 and admitting this … or just SILLY)

-on retirement savings: met with financial planners & invested 12% income toward a specific plan (as in we now know 'the number' to save for by retirement age). I disagreed with some planners' suggestion on how much to save for. More on that later.

-on spending habits: set an actual plan and more regularly audited habits via Quicken. Frankly I didn't audit them habitually. I attempted tracking via our spending plan which wasn't comprehensive. It's time for me to buck up and do that download account process per Quicken.

-on tax protection: our pre-tax retirement contributions lowered our taxable income; I also worked from home (resigned from high stress management job & made far less money). That fact as pros & cons but it was a great year for re-gaining sanity, renewing/building communities online and off, & gaining a few clients. And the reduced stress enhanced the marriage (ain't that right honey??). NOTE: That $7k tax bill balance decreased some (see below).

The main goal for 2008 is two-fold: to completely pay-off that '06 puke-vomit-ick-tax-bill (paid for via credit card in '07) and to build six months worth of savings.

QUESTION TO YOU:
What life balance/personal finance goal motivates you for 2008? …Any come-to-Jesus moments of your own last year?

HAPPY NEW YEAR! And thanks for your ideas & motivation throughout last year. Your insight and humor strengthened resolve.

MORE FROM:

–Get Rich Slowly shares factory worker's story to millionaire retirement. This guy's simple, prudent decisions inspire!

– Playful, honest journey through spending plans at Budgeting Babe;

-Clear, actionable approach for starting 2008 … Chirs Brogan shares (3) words that help him decide or decline next steps.

$1million by 2012: dream it, plan it, live it October 13, 2007

So it’s time to take ownership & aim big.

I remember once being fearless in the face of challenges and dreams — going after them was the fun rush of life. Then on the financial front – I learned how much it costs to retire, to retire with decent health care protection, to raise children and their education, to run one’s own business, and more …. my momentum to achieve sobered-up.

Why is that? Maybe it’s just looking at too much at once -vs- one step at a time. Maybe it’s taking one’s self too seriously. Maybe dreams were too high with resources & energy too low. Is it even possible to have dreams too high?

…a mix of all likely but here’s the sitch: family members need our help. They’d never, ever ask for financial support. But bottom line, their situations are precarious & their means too small to evoke stability on their own. My judgment could be off but after reviewing all up, down, and sideways my husband and I agree taking action helps more than fretting.

And results just don’t fall from the sky. So can we realistically help? yes. Can we preserve our basic needs & personal savings plan too? yes. So is it time for a plan?

Yes and here it is:

$1million by 2012 (that’s $1million in overall paper value vs net).

It makes my stomach tight writing this out, tight as in nervous. But Jonny Goldstein just published his big dream. And his resolve and zeal are contagious.

So here it is:

Summary of Intent:

We are millionaires by 2012. By that year, we will have built our financial wealth to at least $1million through dedicated & united partnership to include: multiple income streams, property ownership in secondary cities, tax control, & wealth protection. Our love of life motivates this intent – and our family, whom we most dearly want to help.

It’s posted at our desks.

…along with the plan, the numbers, the benchmarks, a list of mentors (…need to contact them), & somewhere deep down is something that feels like resolve.

More from:

• Todd Duncan on innovation & reconciling your inner dreamer & inner realist;
• KeyBank & their fresh reminder on making financial goals quantifiable & specific;
• CNNMoney’s nice intro to self-directed IRAs; I/we haven’t built one yet but benefits seem overt.

marital money mantra #3: giving gifts is not a license to be financially irresponsible August 30, 2007

Oh the irony of having vision with blurred discernment.

Mmmmmaybe that’s one of my top embarrassing fiscal decisions considering two things:
1) My ego thinks she’s fiscally disciplined;
2) In that same week I barked at my husband for over-spending.

Yup I’m rolling in imperfection! Dang if that mantra isn’t worth repeating and recycling over and over again in one’s marriage, partnership, whichever.

So for all our benefit, here ’tis again:

Holy Smokes(!)…giving gifts is not a license to be fiscally irresponsible.

More from:
The GiveWell Blog, an interesting blog that takes the gift-giving discussion to a community scale. They evaluate non-profits to gauge the appropriateness of their use of funding, including financial gifts from the average Joe. GiveWell also reviews the effectiveness of a non-profit’s service. That seems a prickly albeit relevant undertaking.

ask ask ask: your employer’s benefit’s plan August 28, 2007

I rarely reviewed medical or dental coverage plans when joining a new firm (unless you consider ‘whatevah‘ as a valid acknowledgment to such material).

Today I attend a benefits fair at my husband’s work. In preparation, I’ve been humbled to learn just how much there’s to learn on our coverage — stuff like:

What percentage is covered for out-of-network consults?
Where/how should reimbursements be submitted?
What’s that flex spending plan all about?
Does the employer offer health care benefits for retired employees?

More from:
-APA outlines apt questions to ask your company’s benefits team or HR staff, even sensitive ones I didn’t first consider;
-For gay/lesbian domestic partners, this looked insightful for benefits & legal protections;
-The Money Blog, the ever credible source comments on potential benefits which you may not be aware of — cool eye care & flex spending accounts.

marital money mantra #1: overt & unified approach August 23, 2007

HUSBAND-WIFE ROLE PLAY:

During the first years of marriage, our conversations on spending splurges went down like this:

The husband likes books – admirably. And sure I’m addicted to eating out with friends & travel.

With books though, Sean’s a read-it-once-learn-it type of brain & is a strong visual learner. Books are his friend. It’s a learning style that differs heartily from my own. I love a good Edith Wharton novel & a few graphs from business books. But I just did not appreciate his relationship with books as they related to his well being.

But more than that, his book buying irked me because deep down, I knew our family finances were shaky with our unclear financial philosophy convincingly…unclear.

Once we took actionable steps toward more stability, my emotional freak-outs eased considerably. It helps that my husband owns a really laid-back demeanor toward home finances a.k.a. “That sounds good baby!” — his reply to many suggestions tossed out for discussion.

Our facilitating questions on the topic:
–Do we agree that saving for present & future is worth it? …get mutual buy in first; establish tactics later.

–In what ways does money affect your sense of self? …sounds corny but ask. Do they want 100% control? Do they care if you do? Do you feel like a ‘less-than man or woman’ with someone else handling the bills? In what ways do you crave financial autonomy or partnership?

–How do you like to play? e.g. books, tech, travel, hobbies

–If saving & investing for your overall health is the driving goal, what are you/we willing to financially modify – or not – toward the play stuff?

I’ve heard of spouses going out of town for the weekend with the other spouse staying home. Upon return, there’s a newly purchased car in the driveway. That actually happened with my parents. Yikes that was a cherished family moment in Mustang, Oklahoma; and looking back – there were power struggles & self images at work, all tied up with money.

If at all possible, make all that overt…with some flexible conversation on what’s the healthiest, happiest shared value on money that you can agree on.

Bottom line, if all this becomes open, then spending becomes all the more fun & relaxed. …since you’ve as a team asserted responsibility toward your driving financial goal.

More from:
1) Gerri Willis, clear, straight shooter;
2) Kiplinger & financial unions;
3) Women Today mag & couples (I like what’s said about learning what constitutes a major purchase).