Savings, Rainy Days and Make Your Own Rules

Hooray! I am back. I have "emotionally occupied" with my new job. Not in a bad way, but any new role has adjustments, so I haven't dedicated enough time to my blog.

In my last post, I talked about saving money, which then begs the second question: How much money do you need to save? There are lots of things to consider: Are you saving to buy a house? Saving for college? Retirement? Vacation? Remodel? New car?

Let's put all of those aside for now. How much cash do you need on hand, for like a small rainy day? The general rule of thumb is three months of living expenses. This cash should be liquid, like in a checking or an accessible savings account. I am not talking about the stock market or bonds or anything 

a) you would need to pay capital gains on, or 

b) that could easily decrease in value (hello Bear Market!)

First, let's discuss what could be a "rainy day." It could be a car repair, and you need your car to go to work. It could be a healthcare expense. It could be you need to fly to visit your ailing parents. You could lose your job. Whatever. Rain is rain. 

Here is the wild and trippy things that sounds weird in words but makes sense in numbers. The fewer expenses you have, the less you need to save, but then the more you can save. So having fewer expenses means you can save more money.

Here's the math:

• Figure out your monthly expenses
• Multiply that by 3.

	b. Monthly Expenses	d. Three Months of Expenses (b x 3)
Example 1	$5,500	$16,500
Example 2	$5,000	$15,000
Example 3	$4,500	$13,500
Example 4	$4,000	$12,000
Example 5	$3,500	$10,500
Example 6	$3,000	$9,000
Example 7	$1,000	$3,000

Great! You can probably do that on a piece of paper! If you want to become a superstar, I recommend learning how to use a spreadsheet like Excel or Google sheets. (Note to self: I can probably figure out a way to post these spreadsheets so I can share them.)

So how can you save that money? 

• What is your income minus monthly expenses? I call this my buffer. This is my discretionary money after all of my expected expenses are paid. (I'll talk about a list of expenses in another post.) 

	a. Monthly income	b. Monthly Expenses	c. Difference (a-b)	d. Three Months of Expenses (b x 3)	e. How long to save this much? Months (d / c)
Example 1	$5,000	$5,500	$(500)	$16,500	(33)
Example 2	$5,000	$5,000	$-	$15,000	#DIV/0!
Example 3	$5,000	$4,500	$500	$13,500	27
Example 4	$5,000	$4,000	$1,000	$12,000	12
Example 5	$5,000	$3,500	$1,500	$10,500	7
Example 6	$5,000	$3,000	$2,000	$9,000	5
Example 7	$5,000	$1,000	$4,000	$3,000	1

See the magic here? The less you spend, the less you need to save, but the faster you can save it, which means you can save more!

Of course, you still need to live. You need a roof over your head, you need groceries, clothes and probably some kind of entertainment. How can you decrease your expenses?

I've read a bunch of books on financial planning and some of them are brilliant and others make me cringe with all of the "rules" or what is a "good" way to spend money and what is not. Some of them are useful, like try to get out of paying PMI (principal mortage insurance) on you home loan as soon as possible.

Yet, most of these rules are bullshit. You will need to figure out what you value and if you want to spend money on it. Some of these financial planners don't want you to have any fun. They would have you dress in a burlap sack you bought at Goodwill that you drove to in your used Prius while drinking your homemade coffee after your trip to the library to get a book on how to cut your own hair. You are reading library books because no Netflix, cable television, etc. Plus the library has free internet! Actually, you should walk because then you could drop your gym membership. 

Here are some of the financial rules that you can take or leave. You may 100% agree with them, which is awesome. You have the power and freedom to choose.

Rule 1: Don't buy books. Get them from the library.

• Not gonna happen here. I love books. There is a Japanese word tsundoku which means buying more books than you can read. This happens to me all of the time. I love the library books, but I also like owning my own books. Sometime I check out a book from the library, keep it for a month after it is due, owe $8 in overdue fees and then buy it anyway. This is what I did to Untamed by Glennon Doyle. I bought it, then highlighted half of it and wrote in the margins.

Rule 2: Make coffee at home instead of going to Starbucks or other coffee shops. At $6 a day times 5 days a week for 50 weeks a year, you could save $1,500.

• Do you go for coffee with your friends or co-workers? Is this coffee enhancing your career or sustaining friendships? Is this an affordable luxury? A small break that makes you feel awesome? Do you meet your neighbors at your neighborhood coffee shop? Does the cool coffee shop bring fun to your corner of town? If you answered yes or even maybe to any of these questions, drink the coffee. (Maybe split the difference and get coffee twice a week and buy stock in Starbucks SBUX.)

Rule 3: Eat at home. Don't eat in restaurants. 

• Restaurants are more expensive than eating in, but what are you getting? When the kids were living home, going out to eat gave me an hour and a half of their undivided attention, and I didn't have to spend time grocery shopping, cooking and cleaning. This was at at point in my life where I had more money than time so it was a good investment. I know how much I spend in restaurants. I measure it. I make trade-offs. I spend less (than I want to) on shoes and clothes so I can go out to eat.

Rule 4: Credit card debt is the root of all evil.

• I am 98% percent on board with this, but there are (rare) occasions when it makes sense to float some credit card debt. I had a friend who lost his job. He was deciding if he should take $10K out of his retirement to cover expense in case he didn't find a job soon enough. I suggested doing the math. He would have paid a 10% penalty on the $10K, which is $1,000. He was a tech guy in Seattle, so the likelihood of him getting a new job was high. I recommended seeing how long he could get by with a credit card. He got a new job in about a month. He didn't rack up much credit card debt at all, just a few thousand, which he then paid off. He paid way less than $1,000 in interest and still had all of his retirement money. Long story short -- do the math before making a decision. Sometimes credit cards are cheaper.

I have nothing against saving money. My problem is with rigid rules that people can't live by. Then they break a rule (for a good reason, let's say) and then give up on their mindful spending and cry.

I propose something else. Make your own guidelines. Rules are rigid. Guidelines are flexible. But make them your own.

I lost eight pounds. Why do I still feel fat? And Credit Card Debt Cruncher

As I mentioned in my last post, I am using this Noom app to help me lose weight. Noom's idea is to build self-awareness around nutrition and diet, which is both good and kinda of bullshit because I really don't want self-awareness. I just want to be thin AND eat chicken wings smothered in BBQ sauce with a side of garlic fries. Or maybe a wedge salad with a cup of bleu cheese dressing. I also want to wear the hottest spring fashions. Think Alexis Rose. 

Why hasn't Noom taught me how to deal with the fact that in two months I've lost eight pounds which is super cool but also kind of depressing because I still have forty-two pounds to go? (Maybe that will be tomorrow's lesson.) Friday I was so excited and happy then yesterday I caught my reflection in a street window and I thought "Holy cow I still look pudgy." How can I have patience for the long haul?

This reminded me of back in the days when I had credit card debt. In my early twenties, I lived in Lincoln Park in Chicago, which is a very cool and expensive place to live. I was carrying $2000 on my Visa. I'd add some charges every month, and pay some off, but the balance was always about $2K. My dad, an accountant, wouldn't judge me or anything about it, but he would drop subtle hints that giving my hard earned money on interest was a waste. Finally, I realized my dad was right and I paid it off. 

That is the simple and short version of the story.

How did my credit card bill get out of control in the first place? I wasn't tracking my spending. The first December after I graduated from college, I went Christmas shopping with my friend H. We were in downtown Chicago and I spend $50 here, $60 there, and so on. I remember we went to the Chop House for dinner and had steak, potatoes and creamed spinach. It was divine. Was it worth the $45 I spent at the time? Yes because I remember that meal and that day all of these years later.

In January, I got my credit card bill for $750, which at the time was a lot and I couldn't afford to pay it off. I was shocked--How did I spend all of that money? I only spent $50...fifteen times. My gut got in the game and said this is not cool.

How did I pay off this debt:

• I became aware of how much I was spending by tracking all of my credit card purchases in a spreadsheet and compared how much I was spending relative to my monthly income.
• When I saw how much I was spending, I made better choices and spent less. If I was going to enter it into my spreadsheet, it had better be worth it.
• I used the money I saved to pay off the credit card debt.
• Every time I came into a small wad of cash (like a tax refund or birthday money), I dumped it towards the debt.

That is the practical way I paid it off. Spiritually, it was a lot harder. How did I tame those gremlins in my mind that wanted to buy fancy shoes? How did I stop the tug-of-war between my head that knew I needed to pay off the debt and my heart that wanted cool stuff and nights out on the town? I needed to convince my heart, my head and my gut that I needed to not spend as much money. Enter self-awareness.

Was I aware that I was self-aware at that point? No. This is me looking back through the retroscope. But I was aligned. My brain knew maintaining a credit card balance was a dumb idea, but self-discipline will only get you so far before your heart starts to object. Once my heart agreed that I needed to reign in my spending, the rest came into place. 

How do you convince your heart? Or your partner?

When Jack and I first got married, he had a large amount of credit card debt. He had just finished medical school and residency, and was in his fellowship. While he was paid in residency and fellowship, he was making less than he was spending. His student loans from medical school were due, and all of his non-medical friends had "real jobs" with some discretionary funds.

I was able to convince myself to stop spending money, but how to convince Jack? 

Spreadsheets, baby. Spreadsheets.

My dad taught me how to use spreadsheets when I was in college because he thought they were cool. Back then, only accountants and engineers used spreadsheets. Now, they are ubiquitous. I created a spreadsheet for Jack of how much credit card debt he had, how much interest he was paying each month and the interest rate per card. Then I did a running total of the interest. 

There was no shame, no blame, no calling him a stupid fool for spending money. It was just a spreadsheet that showed how much he spent and how much he owed.

"Oh my god this is terrible!" he said. He wasn't arguing with me or against me. He was looking at the data. Why do you think the entire business world wants to move to "data-driven solutions?" Data has no feelings. (Shock was a useful tool, though, I have to admit.)

And so this spreadsheet became the credit card cruncher. Each month, I added rows until it was all paid off.

Back to my diet, which is a lot like debt. First I had to admit there was a problem. I was not happy I gained weight. Then I had to decide to do something about it. I wanted to stop gaining weight and lose weight, so I started a diet. Finally, I had to ride out the ups and downs of getting to my goal. There were times I paid off a decent amount of debt, only to still have a decent amount of debt left. There are times where I have lost eight pounds and still feel pudgy.

As Dory says, "Just keep swimming." Keeping going towards the goal. I was able to manage debt. I can lose fifty pounds. 

Will fifty pounds make me magically happy and my life perfect and beautiful and wonderful? 

No.

Will it make me less stressed and feel more energetic? I hope so. 

The same goes with debt. When the debt was paid off, the psyche burden went away. I slept better and I felt better.

A River Runs Through It

The Boy has become a Montanan.

He has lived here for eleven months and is now a resident. 

"I don't plan on living in Seattle ever again permanently," he said. I think the Capitol Hill Autonomous Zone (aka CHAZ) might have been hard for him to explain to his non-Seattle friends at school. To the rest of the world, they saw CHAZ and thought "WTF?" To Seattlites, we knew this was the uber-left co-opting the Black Live Matter movement to justify taxing Amazon, not to change policing practices towards people of color.

The Boy is becoming an outdoorsman. He imagines his first car will be a pickup truck. He likes Dodge Chargers. He thinks there is nothing inherently wrong with Republicans and one day he might own a gun to hunt.

The Boy has become a Montanan.

Since the Boy can't mountain bike or hike or ski with his newly repaired knee, he has found a new sport. The Boy collects sports the way I collect books: just because I found a new book doesn't mean I don't love the ones I've already read. This sport is one that will likely never leave him: fly fishing. 

"In our family, there was no clear line between religion and fly fishing," opens Norman Maclean's A River Runs Through It, a book read and re-read by the Boy. We watched the movie tonight at the Boy's request. The story takes place in Missoula, about 150 miles from the Boy's school. In Montana terms, 150 miles is considered the next town over. The scenery is breathtaking.

Norman's brother, Paul, is played by a young Brad Pitt. Paul is charming and smart and handsome and an artist when it comes to fly fishing. He also has a gambling problem and some other addictions that in the end ruin his life and break the hearts of his parents and sibling.

"Why do the people who need help the most refuse it?" Norman's girlfriend, J.C., asks. Her own brother is a very hot mess, but lacks the kindness and grace of Paul.

I was talking to a fellow boarding school mom the other day and she was moaning about the cost. Another parent a few months ago also kvetched about the cost. While I have no solid proof, my guess is that these families have some means. If they can afford this, why are they complaining? Don't they know they are lucky to be able to save their sons, cost be damned?

Why do I think this? I am the queen of investing and saving money. Shouldn't I be evaluating the cost-benefit analysis of this spending? Why am I so okay with shelling out an obscene amount of cash when people who I am guessing have way more money than me are complaining?

My brother was Paul Maclean, minus the fly fishing.

I couldn't save my brother, but perhaps I can save my son. If I lose him to Montana, I am okay with that, as long as he finds himself.

Ant v Grasshopper, or Negative Savings

When I was a little kid, my mom got me a Aesop’s fable book. It came with a record so I could listen to the words I couldn’t yet read. One of the stories I remember the most was the Ant and the Grasshopper. (And one about a vain crown who sings and drops his cheese and then a mouse eats it.)

By my basic nature, I am an ant. I toil and save and prepare. I am ready for a financial nuclear winter.

Then a bunch of shit happened and I said fuck it. Why am I saving all of this money? So if I die of cancer in the next three years my husband's next wife can drive a Telsa from the money I scrapped and saved?

No.

I went total grasshopper. "There is no winter coming!" I said to myself.

Until this week when I looked at my famous banking spreadsheet where I track all of the money we earn, save and spend.

For the first time in as long as I can remember, we had negative savings. Which means we spent more than we earned. And that is not including the downpayment for the condo.

Ouch.

The good news is we had saved a bunch of money for years and years for a year like 2018. We had a massive tax bill, college tuition, a new car and furniture for the condo, plus a vacation to London, tickets to Hamilton twice, new ski equipment and a trampoline.

The best thing about the pain of looking at my spreadsheet was the pain of looking at the spreadsheet.  If I hadn't kept track of all of it, I wouldn't have known. If I could go back, would I do things differently? Not really. The spreadsheet helped us keep track of reality. If we didn't have the spreadsheet, we might have bought new furniture instead of Jack toiling for hours finding gems off of Craigs List. Would I have given up a trip with my daughter before she left for college? Never. And now I know so I can roll back my expenses for 2019.

The ant is back. Granted, I'm sitting my very nice condo, with my dog curled up next to me. Is it easier to be an ant when I am comfortable? I don't know. I'll find out. Hopefully, I'll spend more time with friends and family in 2019 instead of spending money. Maybe I need a spreadsheet for that.

CSS or the FCS-- The Financial Cavity Search

Claire-Adele is a senior and is applying to college for next year. We were at a picnic last week and every single adult she spoke to asked her about her plans for next year. What is often considered polite conversation starter: "Where are you applying?" is considered by Claire-Adele to be a crazily invasive question. Afterward, she said she wanted to wear a sign that reads "Please don't ask me about college."

I can appreciate her stress. She is applying to some serious reach schools where it comes down to luck as to whether or not she'll get in.

In support of Claire-Adele chasing her dream schools, Jack and I (mostly I) worked on the FAFSA and the CSS forms this weekend. FAFSA is the Free Application for Federal Student Aid. That form asks for some basic tax info from the previous year and how much money you have in cash and investments. They don't care about retirement or the value of your home. It didn't take that long to fill nor was it complicated as long as you have a copy of your previous year's tax return in hand. Enter your AGI, the amount of taxes paid, the balance in your bank accounts and your kid's accounts, and you are basically done.

Jack and I know the kids aren't going to be eligible for much (or any) financial aid until the Boy starts school, and even then it might be dicey, especially now that I have a job. We filled out the form anyway as a baseline in case something happens to our cashflow and we can no longer afford tuition. Jack could lose his job or become disabled. Both of us could encounter elder care expenses for our parents. Seattle could get hit by an earthquake or Jack could run off with another doctor at the hospital and we could end up divorced. None of these are likely to happen in the near future, but the probability isn't zero, so I buckled down and filled out the forms.

Fine.

The FAFSA was one thing, then there is the CSS, sponsored by the College Board, the same organization that charges $60 (or whatever) for every high school student to take the SAT and $100 (or whatever) to take an AP exam. The CSS is the College Scholarship Service, but it should be called the FCS, the Financial Cavity Search. Most private colleges want both the FAFSA and the FCS. Here is a summary of the FCS:

• How much money did you earn last year and this year? How much do you expect to earn next year? 
• When did you buy your home? How much did you pay for it? How much you owe on your mortgage? What is your monthly payment and how much is your home worth now? (Damn you, Zillow!!!)
• How much money did you put in retirement funds last year? 
• How much did you spend on healthcare?
• Are you being supported by other people? 
• Are you supporting other people?
• Do you own a vacation home? Family business? Farm?
• How much money did your kid make last summer? Next summer? 
• Do you have a trust fund?
• Life insurance?
• How many cars do you own? What are the makes, models, year and how much did they cost?
• How much money are you hiding in your mattress? 
• Have you looked in the cushions of your couch? 
• How much money is in your coin bucket?
• What is your non-taxable income? (This one is for the likes of the Corleone and Gambino families. Michael Corleone went to Dartmouth, after all, but I doubt he applied for financial aid.)
• Are your parents rich?
• Are your parents old and decrepit and you need to take care of them? How much are you paying for that nursing home?
• Do you have a rich, childless sibling who is going to pay for your kid to go to college?
• Is there any money anywhere else that you are not telling about, because if there is and you are not telling us, you are in big, big trouble, Mister!

Oh. My. God. It was awful. I only made up three of those questions on that list. The rest of them are true, and I left some of the other ones out because I blocked them out from the pain of answering them. The only question they didn't ask was how much jewelry I owned and how much was it worth. I bet next year it gets added to the list, or else they know not to get between a woman and her bling. They also didn't ask about the cash back program for my credit cards. Oh shit--would that be non-taxable income? Too bad. They didn't list it as on option on the form.

Yesterday was a beautiful, sunny day, one of the last before the hellish Seattle rainy winter brings nine months of gray and gloom, and I spent it exposing every financial detail about my life to the internet. People aren't supposed to talk about money but here I am having to financially strip down and be evaluated by complete strangers.

I would have said FTS to the FCS and not filled it out. I might have gone rogue and said "Ha! I am not playing your games and and and...wait, how much does this dream school of my daughter's cost? Really?" and then I buckled. They might decide to give us some money some day, I thought. We should fill it out on the off chance something bad happens.

I entered the list of all of the colleges she is going to apply to that require the FCS and hit submit, when I got a delightful* surprise: It was going to cost $110 to send all of my private financial information to all of these schools. It is bad enough my daughter wants to leave me and move to the East Coast. And now I have to pay for the privilege of having my family's financial situation scrutinized?

Kill me now, I thought. Kill me now.

* By delightful, I mean hellish.

Death v. Retirement

"Nothing is certain in life except death and taxes," said someone like Benjamin Franklin more than two hundred years ago. The problem--and blessing--of the certainty of death is that I don't know when it will occur, and right now I need to place a bet. I am going to bet short on my own life. Is that sad, or empowering?

After my father's parents died, my dad figured that their average life span would be his life expectancy. My paternal grandfather died when he was 79, my grandmother 78. My maternal grandfather lived a healthy life into his nineties, and my grandmother died when she was 81. My mother was adopted, so her parents' life expectancy doesn't bear much impact on hers. One could say that their lifestyle could impact her longevity, but now that my mother is in the late stages of Alzheimer's, all of that is out the window.

Last month, I got a phone call from my former employer asking if I would like a lump sum distribution for my defined benefits retirement program (a.k.a., a pension). Instead of the lump sum which I would add to my IRA, I could take out a monthly payment of about $100 now, or have a greater monthly payment of around $700 when I turn 67.5 years old.

Normally, I would crunch a bunch of numbers and figure out which would leave me with the most money in the end. The challenge here is I don't know when the end will be, and I am betting on my own death and health before I die.

A few years ago, I used my grandparents' age of death and figured my life expectancy would be about 80 or so. Both of my grandparents smoked, and I don't. I figure I'd get an extra year or two added, maybe five.

Then my mother got Alzheimer's in her late sixties. She is seventy-one now. She has a chance to make it to seventy-two in October, but it is very unlikely she will make it to seventy three. I did a quick google search to see if there is a greater chance that I will have Alzheimer's. There is lots of data, which I am not going to look through now. In short, Alzheimer's doesn't run in families, but I do have a three times greater chance of getting Alzheimer's than the general population.

So what to do? I am taking the lump sum. If I do get something bad early on, I'll need the money so I can have proper care. $700 a month won't help much if I need care that costs in the thousands a month. At some point, the money stops when Jack or I die, too. There are few different options, but one says if I live for 5 years after taking payments, my family get nothing.

Jack and I have a decent amount saved for retirement, and we should have the house paid off in a few years. I am not as worried about typical months expenses as am I about the catastrophic costs if I need to be in a nursing home for a period of time. If I am normal and healthy, I can live on the cheap. If I am not normal or healthy, then what? I can reasonably say I don't want to be on life support, but what if I end up like my mom? We can't pull the plug on her because there is no plug to pull. I could as if I get to be non-responsive, put me in the middle of the woods alone for a week and I'll die of natural causes, but I don't want my family to have to make that decision either or get charged with murder.

If you asked me what to do before my mom had Alzheimer's, I might have said I'll bet that I'll outlive the terms of the retirement amount. But now I am betting short, and taking the lump sum.

Brexit and The End of the World

Yesterday morning, I didn't read the newspaper when I was eating breakfast. I didn't know the outcome of the Brexit vote until I was checking my investments and saw this sign. It was not subtle.

OMG, I thought. This is not going to be good news. Normally, the Vanguard website has a picture of a happy couple drinking coffee and reading the newspaper. Last summer, the stock market took a major dip, and Vanguard usually says stuff like "This is a market correction. No worries. Stick to your plan and hold. The market will rebound," etc.

This time, Vanguard admitted there might be problem, such as increased uncertainty which will cause greater volatility in the market. (Here's the link to what they said.) They didn't say this, but volatility can be good. Back in the days when I did compensation consulting, we used the Black-Scholes Model for evaluating stock options. (Please keep reading--it will only be boring for a few more sentences.) Options are worth more when a stock had a more volatile history as measured by the amount a stock price fluctuated. The more it goes up and down, the greater the chance to buy low, sell high and then pocket a nice profit. Steady and stable stocks were worth less because they were less like to have dramatic increases in price.

The downside of volatility is when you need to sell a stock or fund to pay for your daughter to go to college, and the market tanks before her tuition is due. Or that it really might not be volatility, but the actual final cratering signifying the end of the world.

I read a nice summary of the Brexit mentality by John Cassidy in The New Yorker. (You can tell where he stands by the photograph of Nigel Farage looking like dressy Homer Simpson.) One of his points (Cassidy's, not Simpson's) is that globalization has helped some people and hurt others. Just because the people who support xenophobic, racist, and sexist leaders, those who have lost out due to globalization have real grievances.

It seems as if the U.S. and other parts of other relatively stable First World are going through some political rubbing of our tectonic plates which could lead to upheaval. I am waiting for the day when I click on the Vanguard site when the market slides down to read:

Greetings valued investor! The world is coming to an end. We give up.

• Take all of your money out of the market and invest in canned goods, bike tires and duct tape.
• Consider installing solar panels on your home for when the grid crashes. Collect rain water in rain barrels for showering and flushing your toilet. Consider purchasing a water purifier that does not run on electricity. 
• What plants grow well in your region? Consider growing root vegetables like potatoes or onions. Live in a warmer climate? Grow tomatoes and can them for easy meals in the winter. Many urban areas allow you to raise chickens, and eggs are an excellent source of protein, as are squirrels.
• Click here to find out ways to turn old clothes into quilts and make those jeans last for another ten years. 
• Do you have good skills like making furniture, chopping down trees or trapping squirrels? Barter is a great way to get what you need from your neighbors.
• Pillaging? Don't forget your local library! Your e-reader likely be out of commission. Abe Lincoln did fine reading Shakespeare and the Bible when he was growing up.
• Live in a dense urban area? Consider relocating to a place with arable land. Pennsylvania, Iowa and New Zealand are excellent choices.
• Click here to find ways to stay warm in the winter and cool in the summer when the grid crashes. 
• Are you on a daily medication? Consider purchasing a five year supply. Order a book on home medicine tout de suite. 
• Consider reading post-apocalypitical fiction like Station Eleven* by Emily St. John Mandel to learn survival techniques. 

And remember: print all of this out!! There might not be electricity in a few weeks!"


* Actually, this is a really good book. I recommend it.

Relative Empathy

Last week, I was at a luncheon where former Congresswoman Gabby Giffords and her husband Mark Kelly spoke. Kelly did most of the talking as Congresswoman Giffords had a difficult time speaking as a result of injuries from being shot in the head. I didn't realize the degree of her disability. She seems bright and cheerful in photos. She smile might be a little off, but other than that she looks healthy. It seemed there was a struggle behind each word she spoke. She has a difficult time walking. It seemed that attending this luncheon with 1,500 was exhausting for the guest of honor. It probably was not as exhausting as the month of therapy while she was recovering from a gunshot wound, but exhausting nonetheless.

Kelly made a comment towards the end of his speech. He had recently had surgery on his arm after he had a pole vaulting accident. ("Yes," he said. "Pole vaulting.") He was complaining about his arm one morning over the breakfast table, and he said Giffords replied, "You have to be frigging kidding me."

This made me think of relative empathy. Can we have empathy for those who are suffering less than us? Clearly, getting shot in the head is way worse that hurting an arm, but for the person whose arm is hurting, it is still a big deal when they can't get dressed or make lunch. They might have pain, even if it is temporary. Are they not allowed to complain? Are we in a competition of who hurts the most?

I hope not. And yet...

It can be hard to have empathy for people who are struggling with problems far less complicated than our own. To be clear, I am not talking about people who are whining about imaginary problems. Jack is growing through a challenging time in his job. To outsiders, it would appear that he is fine, but he is disappointed in himself with some aspects of his own work. The job he has now has so many tasks and expectations that he can't possibly do them all, so he picks what he thinks is in most need of attention. His focus tends to be on the good of the organization while neglecting his own development. He worries about the long-term implication for his career by sacrificing other external parts of the job.

I have been a volunteer, a stay-at-home mom and a budding politician for the past sixteen years. I feel like Gabby Giffords listening to her husband. Jack is worried about whether or not is career is perfectly awesome, whereas I don't even have one.

But then people who are suffering health-wise from issues far greater than a torn ACL might not think I have reason to complain. I was told by one friend I injured myself doing a leisure activity. I am fortunate enough to have time and money to ski, and I have good health insurance that pays for surgery and physical therapy. Jack and I have saved enough money for rainy days that we can pay the out pocket expenses without deciding which bill we won't pay that month or charging it to the credit card. Then again, Jack has a good enough job that we can afford to save money and still take vacations and ski. We still make choices. We drive old, used cars. I wear old clothes. We live in a small house that had what my friend Sarah gently called "deferred maintenance."

To be clear, I am not complaining. Of all of the problems in my life--mother dying of Alzheimer's, a son who struggles with adolescence, a knee that isn't fully recovered--money isn't one of them. When I look at my life, I could easily say it could be better, but it could be worse. My mom didn't die when I was twelve. My son recognized he has some problems, and that gives me infinite hope that he will pull out of this tailspin. If one were heartless, one could say, "All parents die. Being a teenager sucks. Middle age people have bodies that fall apart. What's new?" Well, this is all new to me, even if collective humanity has been experiences these things for ages. I've never watched my mother die, but Roz Chast has, and she wrote about it in Can't We Talk about Something More Pleasant? I got it from the library Saturday, and I've read it twice. Having empathy gives us to the chance to learn about things that haven't yet happened to us--yet.

I haven't been to church in a million years, but I think of the song I heard growing up, "Whatever so you do, to the least of my brothers, that you do unto me." I understand the sentiment. Those who are hungry or homeless or ill or other otherwise suffer need an extra dose of compassion and support from those who have more to give. Yet, I thought it was kind of weird that we would figure out who is "less" than us. Is that condescending? Do we need to compare? I have a friend from college who married a man who became very wealthy. She is tall, thin and athletic. She has two beautiful, intelligent sons. On the surface, she really has nothing to worry about, but she still has worries, concerns and problems just like the rest of us. One of her problems is people telling her she doesn't have problems and she should just shut up. I think that is incredibly harsh, and frankly wrong. Who am I to say she doesn't have problems?

Or, is this why we have tribes? Is this why tall, skinny, rich women tend to have tall, rich friends? Because they can give each other and get back empathy? Does this apply to everyone?

Maybe the point is empathy is empathy, all the way around.

Nest

Back in a writing class years ago, we were asked to jot down on a piece of paper what our private obsession, not what we were writing about in class. I can't remember what I said, but I do remember what I wanted to say but didn't: money. I don't consider myself greedy or materialistic, but I like to have my money in order. I like to track how much interest I am paying on my mortgage. I save money so I don't need to borrow when it comes time to buy a new car or get a house repair. I make sure my extra money is well invested. Before we bought a house, I went to the library and checked out a handful of books on getting a mortgage. After we got a house, I read a dozen books on investing. Andrew Tobias is my favorite financial planning writer and I love his The Only Investment Guide You'll Ever Need. (He also wrote the memoir, The Best Little Boy in the World, about growing up gay. I read it in college, but then it was under Tobias' pseudonym, John Reid.)

I am reading novel Nest by Cynthia D'Aprix Sweeney. I read some great reviews about it, and since I am reading a ton lately, I though I'd get it. This is a book about money and family, and so far I love it. The four siblings were set to inherit a modest sum when the youngest turns forty. One daughter is banking on this money to fund her kids' college educations. Another hopes to use the windfall to spare his flailing business. A crisis arises and the money is in jeopardy. What are these people to do when then money they had been hoping for disappears?

Money is intimate. People don't talk about to their friends, neighbors, kids and other family members about how much money they make or the overall picture of their financial situation. I think some people would rather talk publicly about their sex life instead of announce the balance of their checking account.

Why hasn't anyone written a novel about money before? I am not talking about Jane Austen discussing Mr. Darcy or Mr. Bingley's fortune, nor the poverty of Oliver Twist in Dickens. What about the modern middle ground? This book seems to fit the gap. I am curious how it turns out.

Money and Teens: Allowance or ATM?

As you may know, the Big E just started high school this September.  Since then, Jack and I have become an ATM.  When she asks for money, we've been handing it out.  (Mostly me.  Jack doesn't carry cash, much to my annoyance.)  One of the issues is the Big E's campus has open lunch, and is surrounded by cute fast food restaurants and is near a Whole Foods and a Starbucks.

On the one hand, I'd like her to be social and have friends during lunch.  I don't want her to be the only one staying in, eating her toasted peanut butter sandwiches and gala apples alone.  On the other hand, I don't want to fund her frappuccino habit?  A Grande Double Chocolaty Chip Frappuccino Blended Creme is 410 calories.  I have no idea what one costs ($3.85?  $4.25?), but seriously, 410 calories that can be sucked down in two minutes?  I know she runs cross country, but come on.

"A creamy blend of rich mocha-flavored sauce, chocolaty chips, milk and ice. Topped with sweetened whipped cream and mocha drizzle." -- Starbucks.com

Read:  This is dessert.  And the word "chocolaty" freaks me out.  Is it or is it not real chocolate?

I've started asking other parents of teens how they handle money with their kids.  Are they an ATM, or do they give their kids an allowance and expect them to budget?  I had an allowance growing up, which was lunch money plus $5 a week.  Was this enough?  I didn't really need to worry because I had a male chauvinist pig* boyfriend with a job who insisted on paying for everything.  Another boyfriend had affluent parents who were the ATM.  I saved my money and took a trip to France my junior year.  If my parents had the ATM approach, I never would have been able to save up for something big.

One set of parents I talked to about money and teens has two boys, both of whom have graduated from high school.  One son was shy, so the parents took the ATM approach.  Anytime he asked to go out, they were happy, so they forked over the cash.  Their other son was an athlete, and they wanted to make sure he had enough to eat, so they funded his Rain City Burger lunch.  Both boys were on the frugal side, so they never had to worry about the kids over asking.  The kids pretty much spent money on what they said they were going to spend it on, so no worries.

Another friend said she gives her kid money on the ATM basis so she can control her daughter's spending.  She does not want her daughter buying clothes that would be suitable for a stripper gig.  Makes sense.

There is another crowd that gives an allowance, many depositing money to an account and giving the kid a debit card to manage.  Some give money for clothes, others parents give an allowance and still fund the non-optional things, like safety gear for sports or athletic fees.

Jack and I had this conversation with the Big E and she completely balked at the idea of getting an allowance.  I was shocked.  She said she'd rather ask for money when she needs it.  Little does she know that she could be amassing a small (very small) fortune as there are more weeks she doesn't need money than when she does.

Part of me thinks I am getting the better deal keeping the money in my bank account.  I have saved money for the kids to go to college, but very little of it is in their names.  I want to reserve the right to cash it in in case we need a new roof or one of us were to become disabled.

But therein lies the lesson: The Big E--and everyone else--should learn the value of saving for a rainy day.  And when the rainy day fund is full, time to fund a trip to Paris or New Zealand or whatever floats your boat.  The Big E could ask for money when she needs it, but then she will depend on us.  Having money means she doesn't have to ask.  If we give her money and allow to her spend it within reason, she gets freedom.

* I debated whether or not to refer to one of my high school boyfriend as a male chauvinist pig.  He was, and not because he paid for everything.  He thought he was smarter than all women because of his y-chromosome.  I could have a whole blog post on this dude, but I won't.  Well, maybe but I'd rather avoid thinking about him altogether.

Live Poor and Hamburger Buns

I was looking up an article on the Wall Street Journal and I saw this video in the list of other articles: "Five Things Rich People Know that You Don't."  I was curious.  I have been fairly reasonable at managing money, especially when Jack and I didn't have much except for his massive student loan debt.  My Uncle Bob once said, "Money doesn't come with instructions."  I always thought that was interesting.   A few years after my first job, I decided to look for instructions.  I've read a fair number of money management books, my favorite is The Only Investment Guide You'll Ever Need by Andrew Tobias.  I have read pop books like The Millionaire Next Door and The Wealthy Barber.  I have read half of Benjamin Graham's classic The Intelligent Investor, one of the more academic books on money management.

I had a great Aunt and Uncle who, later in life, made more money off their investments than they earned from their day jobs.  When my Uncle Tom lost his job as a manager at some manufacturing company, he had the freedom to look for other things.  He thought he'd try his hand at selling cars.  He didn't want to sell any car, so he got a job selling Mercedes at a downtown Chicago dealer.  Anyhow, I learned having your money work for you = freedom.  I also learned that I had to figure out how to make that happen; hence, my independent study of managing money.

So I was curious.  Did this two minute video contain something not covered in Jane Bryant Quinn's 1,066* page Making the Most of Your Money?  Did this contain the secrets to becoming the next Bill Gates, Warren Buffet or the guy who owns Ikea?  When I worked at E&Y, the partner I worked for said being a partner was a good gig, but the best way to make money was have something that would sell while you slept, like Coca-Cola.  Did this video tell how to become part of the ownership class where you start your own business that refines or creates its own industry?  How to recognize which companies are worth investing in?  Lessons on how to get that CEO gig with an obscene amount of stock options**?

No.  But it wasn't all that bad, either mostly common sense ideas.  (Didn't someone say that comment sense isn't all that common?) The first four points of the video were simple:

1.  Start early
2.  Automate your savings
3.  Maximize your retirement savings
4.  Don't carry credit card debt

I have checked off the first four, no problem.  The fifth was interesting, and the hardest.

5.  Live Poor

My good friend Carla is the master of living poor.  She used to work in international finance, so has she has a clue.  She makes her own hamburger buns.  She could very easily afford to buy hamburger buns, but she doesn't.  She bakes them herself.  I've had them before.  They are really good, and she makes them small, like the size of reasonable hamburger that a middle aged woman should eat, not some monstrous 3/4 burger that would give you a heart attack three minutes after you ate it.   Her family has prioritized traveling, so all of the money they don't spend on hamburger buns gives her the choice of going to New York City or Istanbul for Spring Break.

It isn't just the hamburger buns by themselves that create the savings to travel: it is the whole philosophy surrounding it.  A woman who makes her own hamburger buns also paints her own house,  does her own home improvements, and saves more money than I do at the grocery store.  She drives used cars.  Granted, her husband has a nice job, but he is not the founder of Microsoft.

My other Seattle friends are super thrifty, too.  My friend Jane is the best thrift store clothing shopper ever.  (She should enter one of those Seattle Times contests on best thrift shop wardrobe.  She'd win.) Jane said the other day that Seattle covers its money in fleece.  Which begs the question: do people have money because they are so thrifty here?  Which came first?  Seattle was a blue collar town for decades.  Houses are smaller here than in other parts of the country.  Having lived in both a large house and a small house, I buy way less with the small house because I have less space to put stuff.  We have natural beauty and a climate that allows us to be outdoors for a large part of the year, so we don't need a beautiful indoor environment to keep us in frigid winters and melting summers.  A small house in a moderate climate encourages us to be outdoors which means we spend less on furniture and wallpaper.

I digress.   Did I learn something from the video?  It didn't tell me how to live poor, but it made me look at some of my friends who do it with grace and elegance that I admire and aspire to.


* 1,066 is an auspicious number.  It was the year William the Conqueror invaded what is now France.  It is one of the few years I remember from history.
** I used to work in compensation consulting for a few years where we would recommend how much executives should get paid.  I analyzed the value of stock options using the Black-Scholes model.  I am sorry, America.

Mad Money and the Sweep

Once in a writing class, the teacher asked us share an obsession.  Her thought was things we think about often make good writing topics.  I didn't say it in class, but I obsess about money.  I don't obsess about shoes or clothes or beautifying my house.  While I might not remember how and when I acquired a pair of peach socks, I can tell you the interest rate on my mortgage (3.25% fixed) and when it will be paid off (September 2021.)

My obsession with money has nothing to do with excessive greed or frugality.  It has everything to do with control combined with my love of spreadsheets.  My interest began when my husband had sizable student loans from graduate school, and I kept track of them.  If I managed my weight as well as my checkbook, I'd be in supermodel shape.  Instead, I've used my discipline to build a decent safety net for my family and I can account for 98% of the money we spend.

I've been so frugal for so long, recently I have been experimenting to unlearn some of my frugal tricks.  This is like someone with anorexia learning to enjoy food again.  A few weeks ago, I tried an experiment, breaking one of my favorite frugal rules, the sweep, to see what would happen.

A friend of mine taught me a little trick for savings.  When she was newly married, she and her husband got a joint checking account.  Michelle knew how much was in there, and then was surprised to see it gone a few days later.  She asked her husband what happened.  At the end of the month, he "swept" unspent money into their savings where was was less likely to be spent.  Since then, I do same.  Surprise money -- birthday gifts, tax refunds, credit card cash rebates -- get put in savings, too.

This month, however, I didn't sweep the account.  We had a small bolus of extra income and I wanted to see what happened.  Would I blow it all on clothes and new shoes?  Eating in fancy restaurants?  A trip someplace exciting?

I felt rich for about a week when I saw our checking account balance, and then the novelty wore off.  Did my frugality cease?  It faded.  (Granted, it was my birthday and Mother's Day.)  I acquired two new teapots that I didn't need, but wanted.  I bought new pearl earrings to replace my old pair that I have worn everyday since I was sixteen.  I did indulge, but on things that I use or wear everyday.  I also made more charitable contributions, which kind of surprised me.  Instead of just spending the money on myself, my generosity increased.

The biggest change I noticed when I spent this mad money was I finally got around to some house projects.  I am using this money to get the exterior of the house painted and have an arborist tend to the half dozen old trees around my home.  This surprised me the most.  Feeling "rich" made me get stuff done and cross off the home maintenance to-do list.  By letting control of one area, I gained control in another.