Category Archives: Married Life

Thinking About Retirement Savings… as a Married Couple

My husband and I have very different financial philosophies. He spends very little and keeps his savings in a bank account. I spend too much but given my income have managed to save quite a bit — and I aggressively invest my savings in index funds, stocks, and alternatives.

Together, we have about $550k in savings, with $443 of that in my investment accounts ($235.5k in retirement included in that), and about $100k in his bank accounts. Over the last few years he has been investing in a Roth IRA, so he probably has about $10k in retirement savings to his name. As a married couple, he’s no longer eligible for an IRA, and he is an independent contractor, so I’ve done some digging into how he can increase his retirement savings, you know, before we retire. Continue reading

Thoughts on the Marriage Tax Penalty, Now that I’m Married

Unlike many unsuspecting newlyweds, I was well aware of the marriage tax penalty long before I got married. It seemed like a cruel joke that the tax brackets were different for married couples than singles, and that once married you no longer could file as a “single person.” There’s plenty of publicity around the “marriage bonus” but this only applies if you have one working person in the household. If both partners work and make about the same amount of money, you end up screwed.

I got married anyway.

The marriage penalty impacts different classes in different ways. The worst impact is on lower income couples who end up phasing out of tax credits and other benefits such as healthcare allowances if both partners work, even if together the couple is still together earning at poverty levels. For middle income couples in high-cost-of-living areas, the $1k-$10k+ that has to be paid to the government just for the privilege of being married is significant. Is love worth that much? Continue reading

When You Come Home from Work Shaking With Anxiety…

There are plenty of signs that my current job is on its last legs, and soon it will be time to move on. Although I can potentially obtain another role with the same or even a higher salary, at this point there is the logical side of me that says “stay just another month” as each month is coming to an end, just to save up for my future, just to get to a point in life where I won’t need to be stressed so much about finances, where I can focus on living instead of worrying every day.

My objective in life is to be in my 50s and to be able to take my children and friends out to dinner and get the check, without worrying if I can pay my rent. I imagine I need $2M by my 50s in order to afford this lifestyle. That seems rather impossible, but with my current savings if I can earn 10% YoY for the next 17 years, I’d have over $2M. The 10% annual growth is unlikely, though, so bringing it down to a much more likely 5%, that only gets me to $1M at 50. This doesn’t include any additional contributions between now and then, so it’s still possible… I need to save about $40k annually for the next 17 years in order to hit my goal.

Today, with my current lifestyle and savings, I’m able to save ~$6k a month or more. To be conservative, I would easily save $72k a year at the moment. If I can sustain that for the next 17 years, I will clearly hit my goal (unless all hell breaks loose in the economy, of course.) However, I know I cannot maintain this career for 17 more years. I also don’t want to — I don’t want to get to 50 and look back on my life and see that I didn’t create anything significant or impact the world in a positive way. Yes, I can “start” my life at 50… assuming I have kids soon, they’ll be in high school then, and I can go back to school or change careers at that point with $2M in the bank as a safety net, but that seems sad to me… I cannot imagine spending my children’s entire childhoods and adolescence working a job that requires me to rarely be home… missing out on important life events and just being there for my kids. I really don’t want that.

Of course, if I can’t have kids, this is a moot point… if I end up not able to have children, then two things happen – I can stay employed in this type of role for longer, saving more money, and I don’t have kids, so clearly I would be not spending as much either. Regardless, I still want children, and I’m still going to try to have them.

If I do get pregnant and have kids, I know my life has to change, as does my expectations for the future. I don’t think I’ll be able to continuously save $40k+ a year – some years, I’ll be lucky if I can max out my 401k. If I want to change my career, I’ll likely need to go back to school and invest in that and start at a lower wage for many years. I’m not going to do that until I know for sure what I want to be when I grow up… which may never happen. But this career isn’t right. This career is going to cause me to have a heart attack before I even make it to 50.

There is other $ variables at play, that I don’t consider when planning my future, as they’re all “extras” and “nice to haves” but cannot be counted on. My husband makes a living as well, and although his salary is much lower than mine, he still is able to save something each year, and eventually he can earn more as well. Then we have our parents who may pass down something to us one day, but planning for a life with a potential inheritance seems both futile and deeply morbid. Neither of our parents are well off, but there’s a chance we’ll get a few hundred thousand dollars or more one day down the line. That alone could pay for our retirements. So, the reality is I’m in a good place… the $500k mark in my networth will be a sigh of a relief, a moment to celebrate maybe a glimmer of financial freedom… the opportunity to take a few more risks… to start to find out what really matters to me in this very short life, versus just working for works sake.

I have a new boss. New boss is great in the sense that new boss is really good at her job. New boss is everything someone in a senior leadership role in this career should be. New boss is, in many ways, the opposite of me. New Boss (I’ll call boss “B” for the sake of simplicity) is a tiger. B doesn’t take shit from anyone and knows what she wants and she gets it done. B knows what to do and how to navigate the political waters of the workplace with ease. B is on the ball, all the time, and doesn’t let emotions get in the way of decisions.  B is not someone I can aspire to be like — my entire being cannot be that person. I can’t fake it. I can’t just wake up every morning and put my “B” cap on and suddenly be this great senior executive. B will never be me.

In the meantime, if I want to stay, I have to impress B. I am already starting from far behind as B was clearly told things about me in the interview process that were far from flattering, and B has visibility into my salary and knows that it’s high for my current role (it was high but fair for my prior role where I was running the department, not so much for my smaller and smaller role, which is shrinking by the day.) At some point the numbers just won’t work. At some point either they would give me a pay cut or let me go.

B is very strategic. B knows there is a large amount of change required and will make those changes in an organized manner, getting the most value out of me as possible before I am removed from the organization. If I continue to provide value, I don’t think I’ll be fired immediately. I could be wrong, but the organization seems to have a policy around being fair, and if I’m doing the job requested of me and fulfilling the role, I do not see being tossed out as long as the company is doing well and isn’t going through any formal layoffs. In the case of formal layoff it is clear I’d be one of the first to go. But as long as we’re doing well and I’m doing my job and getting things done on time and at a quality expected of me, I should get to stay.

Yet I’m not sure I’m capable of getting the things done that are required of me on time and at the level of quality expected. I’m determine to try – focusing on doing my very best and giving it my all for ~3 months is not a bad objective, even if my future tenure is limited. That’s 90 days, $18k+ in savings, and ideally a good reference to walk with based on the fact that I really did try my best and, as the song goes, I guess my best wasn’t good enough.

According to my latest networthIQ entry, my networth today is $468k. With that $18k additional, that gets me to about $486k, within an arm’s reach from my $500k goal.

Or, I get another job that pays less, and is more sustainable, and I get to $500k sometime later this year — which is the goal anyway and theoretically I could work through the end of May, get to $486k, take my PTO dollars and some of my savings, take 3 months off and travel the world, come back with $475k in the bank, get a job that pays less than my current one (say $7k take home per month after tax vs $10k), save $4k a month, save $16k for the rest of the year, get to around $491k by the end of the year (and that’s WITH taking 3 months off and taking a job that pays much less when I get back.) So even if I take a ~$3k paycut and take 3 months off, I should still be within striking distance of my goals.

OR, I just suck it up, work in this role through the rest of the year by giving it my all and somehow being “not firable” … save $70k more, get to around $538k, get pregnant sometime this summer, stay at work for the 9 months of my pregnancy, say 5 more months in 2018, save another $35k, get to ~$575k then freelance for a few years earning a lot less, but living off the money I was able to save fighting through this job for … 15 more months. That seems like a very long time and between now and then we could easily have a mass layoff which I’d be caught up in anyway, but logically staying 15 more months gives me +2 years in my current job (good for the resume), and the amount I’d save is almost worth it. With interest, I could have $600k saved up when I leave work for a more flexible lifestyle for a few years when my kids are young. My objective, then, would be to not tap that $600k… to make enough money to pay rent/mortgage/taxes, for food and any vacations/entertainment travel with whatever I earn (and what my husband earns.)

In that reality, with $600k untouched for 10 years growing at 5-6% YoY I get to $900k-$1M by 44. That’s not the $2M by 50, but it’s still rather exciting that this seems possible — better if I stay in my current role for 15 months (or obtain another role that pays the same or more that I can successfully stay in for 15 months!) … or I just say fuck it, stick this out for 3 more months, take a few months off, then come back and get a lower paying job that I can sustain throughout being pregnant and the early years of parenting.

At least, thanks to savings a substantial amount in my 20s, I have options.

 

 

Happy New Year: Embracing Myself as Myself

 

Quite randomly I ended up taking a neuropsychological screening this week. Well, it wasn’t entirely random. I was attempting to find a therapist (psychologist, psychiatrist, MFT, social worker, what have you) that accepted my insurance plan since theoretically I am supposed to be able to have $20-per-session visits for outpatient mental healthcare. Searching my insurance provider’s website however returned the names of hundreds of doctors who are no longer practicing or specialists for something that, despite being rather special myself, I’m not special enough for (i.e. serves youth or geriatric patients only.) I admit I didn’t call the entire list, but after about 20 google searches, emails and contacts I felt like giving up. Then, I found someone who responded to my email and said he was covered by my insurance (sort of) and could help.

This doctor didn’t do talk therapy. Instead, he is a neuropsychologist who does neuropsychological screenings. What on earth is that? Yesterday I found out. The screening itself is $1700. Insurance may cover that BUT they only decide after you get evaluated. Also, I believe it goes to my deductible anyway, so I’m basically paying for it out of pocket, or at least out of FSA. So much for the $20 per session mental healthcare. Continue reading

Trying to Figure This All Out

My husband wants me to focus on the present. He’s right. I need to stop worrying about the future. I need to stop spinning on the same concerns and focus on now. Maybe then I’d find happiness or at least contentment. And I’d get things done.

I’ve been having panic attacks lately about the cost of life and my inability to maintain my career. We want to have children soon – I’m turning 33 in a month – yet I feel so horribly unprepared. Yes, I have $400k in the bank when most people who have kids are still in debt, but that just doesn’t feel like enough. What I need is a job that I can see myself in 30 years from now while also being able to be the mother I want to be. I don’t see that in my current job. I have no idea what I can do that makes enough money to support the life I want. Continue reading

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Working Moms: When is the best time to have kids?

The answer I get re: when is the best time to have kids is “there is never a best time to have kids.” I’m sure that is true, but there is definitely “a time when it becomes harder / impossible to have kids” (at least naturally), so I’m trying to make that deadline without pushing it too much.

When I was younger, I thought 30 was old. I’m now turning 33 in 3 months. Thirty-three is fine age to have kids, but I always thought I’d have my second by 33. Now I’m looking at not yet even having my first.

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Can We Afford Life on a dual-income, one Teacher’s Salary?

My husband is adamant that until I get my ADHD mess in order, we should not discuss the future. He has a point. I am good at planning for years down the line, but in terms of “today,” my life is a mess. I still cannot get myself to work on time and despite some progress in the cleaning up department – my laundry never manages to make it from the drier to my closet. It’s completely fair for him to state that until I can stick to a basic routine, we should not discuss the future.

I know if I can just keep the house clean (well get it clean and then keep it clean) and leave the house in the morning to get to work on time, he will, eventually, be willing to plan life with me. I am trying to get rid of things and simplify as much as possible so that there is just less stuff to create messes. It definitely helps. Continue reading

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How Lack of Maternity Leave Hurts Working Women

I’m 32 going on 33 and my biological clock is tick-tock ticking. If I’m going to have at least one child, it’s most likely going to occur within the next 1-3 years of my life. I have significant savings so I can afford to take time off to have a kid, but that doesn’t make the whole lack of maternity leave situation any less stressful.

The US is still the only developed country that doesn’t guarantee paid maternity leave. In fact, the US is one of just two countries in the world that doesn’t ensure any paid time off for new moms, according to a report from the International Labor Organization. The other: Papua New Guinea. Continue reading

Marriage Is the Worst Financial Decision of My Life – And I Don’t Regret It

The marriage tax penalty is real and it is painful if you live and work in a region of the country that tops the “highest cost of living” lists. While you can make the argument that this is a “choice” and that incomes tend to be higher in that region versus the rest of the country (if you work in a high-paying field), it still doesn’t balance out. I’m glad that I knew going into marriage it was the worst financial decision of my life (my husband says the wedding was, but actually the cost of the wedding was pennies versus what I’ll personally lose over my lifetime, financially speaking.)

There are numerous benefits to marriage, and above all else I’m a sap who believes in love and cares more about stability and security than wealth. I’m happy to be married. Happier than I thought I’d be (at least a month in) as it shockingly feels very different from being single. I didn’t expect it to feel different at all, especially after dating over a decade and co-habiting for the last two years. The only difference, I thought, would be that I can’t just walk out the door without repercussions, and neither could he.

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Keeping Married Finances Separate – Is it Possible?

We’re married, now what?

Against the wiser half of my brain, Mr. HECC and I did not go through a formal financial planner before we got married. We didn’t get a prenup (he’s opposed to them and even though I think it would protect me I find them terribly unromantic and I wasn’t going into a marriage with any easy out of divorce, since I think the point of marriage is that you shouldn’t get divorced.) I hope I won’t link back to this article later filled with regret, but I’m feeling good about that decision at the moment.

When it comes to finances, many married couples merge their finances by default. In the case of a divorce (at least in California) the money gets split anyway, so why keep it separate while married?

We’re both very fortunate that we bring no debt to the table. While he has been less proactive in his career and has saved significantly less than I have, we both are financially stable compared to most newlyweds. I believe together we have about $450k in savings – not bad for “just starting out.” However, I’m still unsure on how to handle finances going forward. Right now we’re both working and fairly independent so it’s easy – we split major household costs — food and rent — and then everything else we pay for out of our own budgets and earnings/savings. What I don’t want to happen for either of us is that we don’t strive to earn more income because the other is making up for it. Neither of us LOVE working so it would be unfair to the other person. If I end up taking a job that makes less money, I should just focus on spending less on myself. If we cannot afford to live in this area, then we need to move.

In this WSJ article from 2014 financial planners/writers argue for and against merging accounts as a married couple. One says keeping accounts separate is the secret to a peaceful, happy marriage – and the other says merging accounts builds trust. The commenters tend to think having separate accounts is bad, one of them writing “it’s nothing more than an exit strategy.” I disagree.

I don’t think we have to merge accounts to talk about finances and plan together as a team. I also feel very passionate about having my own money. If my husband were to get sick and need help, or even if he were to want to go to school and not be able to afford it, I’d put the money down then he’d “pay me back” over the years. I’ve borrowed money from him as well because he keeps his savings more liquid and mine is tied up in investments. In the end during retirement we’ll split what we have.

He knows I’m much better about financial planning than he is, sans my shopping addictions, so he generally trusts me to manage our money within reason. I like him keeping his own separate because then he never feels a lack of independence or ability to buy his own shit (i.e. he can back as many Kickstarters as he likes even if I think it’s a waste of money, and I can go splurge at Nordstrom Rack even though that’s probably a bad idea too.)

When we have kids I think things will change. Kids are expensive and to be fair to them we’re going to have to marge a chunk of our finances to cover their lives which will be a lot of our income. If we buy a house, things might change as most of our savings will go into that together. But I really don’t see what’s so wrong with keeping our accounts separate. Yes, it makes it easier to split our finances should we ever get divorced (not that I’m planning on it) – but it also is good for us to know who is really pulling the financial weight in the marriage and who has to contribute more to the household if their earnings aren’t as high. Luckily Mr. HECC is awesome with kids and will be a great part-time stay-at-home dad should we decide that makes sense one day.

In any case, a part of me thinks it would be nice to have totally merged finances, but I don’t see the point. Half the internet has me thinking I’m a horrible person here, but wiser financial savvy people (esp women) don’t want to merge their bank accounts.

We are probably going to keep doing what we’ve been doing… separate accounts but he pays the rent check and I pay him back (eventually) for what I owe — I pay for all food on our 2% cash back card and then I deduct half of that from what I owe him. I’m thinking now that we’re married we might want to merge our travel and healthcare costs – but even that seems unnecessary at this point. Ie for healthcare he currently pays $400 a month as he doesn’t get it through his work. My work will cover him at 50% with better insurance, so if he goes on my health plan (which he might) I think he should pay the full amount he is responsible for, and I’ll pay my piece which is less because my work covers more of my amount. It is his choice to not get a job with health insurance therefore I don’t think I should have to subsidize that. I believe people need a little kick in the ass (husband’s included) to improve their careers and nothing sabotages that more than just paying for their inability to seek better employment.

Now, if we have a kid, and one of us decides to stay at home to take care of them, or if someone goes to school for their master’s, that’s different – but I don’t consider opting to not look for a better job a reason for me to pay more for him, and he agrees.

It might not be romantic, but marriage is a business as much as it is about love. To us it’s more about love and less about business. I hope I can inspire him to save more towards retirement over the years, and also to either take on a job that pays more or become a teacher which will pay about the same but provide more flexibility for taking care of children and also likely more happiness in his life. I just don’t think merging finances is really something we need to do. I know he doesn’t want to do it.

According to a 2010 report, keeping money separate is a leading factor in couples breaking up. But it’s hard to really claim that to be true because it would consider couples keeping money separate and not sharing any information about how they spend the money with each other and couples that just keep separate accounts but who are transparent about their spending.

The argument that sharing forces you to commit is a silly one. We wouldn’t have gotten married if we weren’t ready to commit. Yes it’s harder to disentangle yourself if your merge your finances, but I find that an immature reason to merge your money.

Another argument is that separate money undermines the financial stability of marriage. I guess that could be true, but as long as you remain responsible for your own money and having enough to cover your own emergencies, why create shared accounts? I still want my own financial security, and my focus is on helping Mr. HECC achieve his. He wants to, and I think he can – he’s much more frugal than I am, so it is easier for him.

Instead of feeling like you have to lie if you want to splurge a bit, keeping money separate allows you to know what you have and keep living like an independent adult. I’m glad we agree on keeping finances separate, and I hope we continue to be able to do this successfully and still be happily married.