Category Archives: cost of kids

Why does divorce cost so much? Because it is worth it. (It might be a sign when your well paid marriage counselor shares this with you…)

prenupIf you are part of the one third of Americans who have experienced divorce, then you clearly have your own war stories to share.

It’s going to happen [sometimes], so let this story of mine be advice that is kind of like an insurance policy. I hope you’ll never have to use it, but you’ll be glad you had it if you do.

Laws differ in every state, and are complicated by kids, real property, debts, and businesses. Mine involved all four. But an hour with an attorney was all the legal counsel I needed, while my ex chose to keep a lawyer on retainer.

It surprisingly took us about an hour to hash out the details of how we would divide our assets. Just like that, it was settled. It still took about 5 months to go through the motions and have a finalized divorce (feet dragging was at play). All the important details were sorted in what felt like record time.

It helped that we had a prenup. Though we didn’t actually divide things even close to what we had originally agreed upon, the general tenants were stood by. Rewind to a decade prior, and thankfully we had the foresight to realize that our financial lives might look very different. I read a short but helpful book on prenups, “What to do, before ‘I do'”, that was more helpful than the lawyer I paid.

The main aspects of our agreement were:

  1. Premarital assets would remain individual. (James had one rental property and I had no assets to speak of).
  2. Retirement funds would be kept as individual. (James had about $70k in retirement, but by the time we divorced, I would have triple of his retirement).
  3. Any inheritance would be kept separate. (I would have hoped not to receive any inheritance by now, but had heard a horror story of someone whose wife got the house that the husband had bought with the inheritance he had gotten when his mother died. This was just a year after her death and a few years into marriage.)
  4. No alimony. (James had seen his dad pay alimony and didn’t like the taste of it. Though in reality if we had divorced a couple of years ago, I might have been the one paying him.)
  5. Our primary residence would be split 70/30, in my favor. (This was due to expecting that I would pay for more of our household expenses as James was headed into a Ph.D. program just after we married. I would end up supporting the majority of our household expenses over a 5 year period).

When it came down to the dissolution of our marriage, our net worth would be more than a million dollars and include a variety of assets. It ended up working out that James would propose what he felt was fair, and I agreed with only a few tweaks. It looked like this:

James got our blogging business that spun off of the original DINKs Finance and $20k in cash that he would use to further build this business and build a revenue stream from.

In turn, I got all four properties (two rentals in DC, one beach cabin bought with inheritance money, and my sweet pad in NE Portland), plus all remaining joint funds that had come from the sale of our last place in DC.

We both got wanted we wanted, though in turn have the responsibility of managing complex asset portfolios. (Whoever thinks income generation is a passive sport has never had assets to manage). Despite the fact that managing them will be a source of some stress, I think I got the better deal. (As my college friend Eli put it, “In Monopoly, no one ever wins with the utilities.”)

Best advice about prenups: get one to protect yourself (even if you aren’t going to get a divorce and don’t have any assets). It may not feel romantic, but if you can’t talk frankly about finances, you probably aren’t ready for marriage. Here is my original post on prenups, at the time of writing one.

Best advice about divorce: Establish common ground and don’t sell yourself sort.

Best advice about lawyers: Use them sparingly. If we had both taken our lawyer’s advice, then things would have been much more complex, drawn out, and neither of us would have gotten what we wanted.

Best,

Miel

We’re Broke But Not Busted

Holger FlickrI never thought that I would need to feel broke before I could authentically write about our family finances (and hopefully help other in the process). Yet, that seems to be the case.

We’ve suddenly found ourselves in debt for the first time. Our true financial situation dawned on me when I realized that we were overdrawn. I had gone to meet Kevin in Old Town for lunch and our debit card was rejected. It shocked both us, but the truth is that we had each been in denial.

The tipping point was a check that I had written for our new nanny. We’re sharing the expense with Miel, but since she had left her check book in D.C. when she moved, it was up to me to sign off on the first two weeks of care (which I still believe is one of the best moves ever and I don’t care how badly I need to cut the budget to still afford the care…more on that topic very soon). The check obviously didn’t sync up with Hubby’s payday, and we were suddenly in trouble.

Yet, our financial situation is more complicated than a bounced check. I can only explain with three factors:

  1. Our home has drained our savings
  2. We haven’t cut costs enough since I left my City salary
  3. Life with three active kids is expensive

1) I already shared a fair amount of detail in my recent post about feeling underwater, but there’s still a “story behind that story.” When we decided to put on a new roof for $10k and spend $4k trying to make our basement dry, we agreed to take out a line of credit loan on our home to pay for it. Yet, somehow we had a misunderstanding. We had talked about it and agreed that we would spend the money that we had earned from AirBnB to pay down the loan faster. So, I took out money from that account and paid down $4k of the loan (even though I had originally hoped that it would be our vacation fund…) Then, in an inexplicable lapse in judgement, Hubby decided that we needed to pay off the the entire loan from our savings. To make matters worse, he didn’t see that I had already written the $4k check (just above in the ledger!) and so he actually overpaid the loan and overdrew our account (prior to the bounced check). Whew. Talk about a SNAFU. My only explanation is wishful thinking.

2) As extremely frustrated as I was about the situation, I didn’t have the heart to get mad though. Since I felt at fault for the random overspending that seems to plague me. Yes, we have a budget, but somehow there’s always some completely justified expense that comes up. That month we had several unplanned expenses. The truth is that I need to start earning a real income in order for us to continue our current lifestyle.

3) We love our kids pure and deep. We do our best not to spoil them or bribe them (although few parents can truly claim either). We don’t indulge in impulse spending, but even the planned stuff truly adds up. Yet we have a weak spot for the experiential expenses. At the moment, if we’re honest, we probably can’t afford all the extracurricular activities our kids are involved in (as much as it pains me to admit it). Somehow we sign them up before we’ve actually put it in the budget, and then it’s like “whoops” and we shrug, knowing how much they each grow through social learning. Plus, after all those activities, our kids get really hungry. Lately it feels like we can’t control our food/snack bill, and Teagan is just starting to truly chow down.

We have soooo much to be grateful for though, starting with the fact that we didn’t explode at each other when we realized we had drained our accounts. All our Money Honey talks have strengthened our financial resolve, even if we don’t seem to have gotten any savvier. Second, I was able to ask for a personal loan of $5k from my Aunt Carol (who initially helped us in invest in the cabins, and lent us money on one other occasion…thankfully the banks can’t compete with interest rates). Third, I feel like actually feeling the pain of being in debt is probably the best motivator for helping me adjust my spending habits. I’m also feeling more resourceful and creative than I have in a long while, and I have complete faith that I can help my family get out of debt fast.

Have you ever been broke?

What motivated you to get out of debt?

Darcy

Cloth Diapering System…3rd Time’s a Charm!

Cloth diapers are not as difficult as our society makes it out to be. Sure, disposable diapers can be convenient, and I use them myself about 10-15% of the time. But once you’ve set up a convenient system, using cloth only really adds a load of laundry every 5-7 days. With all the laundry my family requires, I hardly notice the extra effort.

There is a bit of a learning curve to get a system that works for you. Using cloth diapers has become a lost art and parents need to find resources in order to demystify things. 


I was actually talked out of using cloth with my Big Guy, by a friend who works in the environmental field. I ended up using G-Diapers as a middle ground, but had mixed results. Here’s my Diaper Duty story for #1 and #2. 


Now that Miel has recently had her first child in June, I’ve been asked to reflect once again on my diapering experience.


Here are the three steps to setting up a diapering system:

  1. Start cloth diapers at about 12 pounds (which obviously depends on baby’s size)
  2. Buy a mix of “all-in-one” diapers for mostly night time and wraps for the days
  3. You need a few more supplies to set up your system (see list below)

1. This third time around using cloth diapers has felt like second nature. I started when Sweetie had grown out of of size 1 disposables, at about 12 pounds. Almost all of my diapers are made to grow with her and can expand with snaps. Starting at just after the newborn stage will save you money on diapers that you would only use for a month. Plus, it also gives you a chance to settle into parenthood with the new little person you’ve just created. 

2. In an effort find the “right diaper” I ended up buying several different brands. This made it more complicated than necessary, since each diaper has it’s own nuances. Take my advice, and just buy the one brand that works, I really like the
Thirsties Duo Wrap and BumGenius works great too. 

3. You’ll need more than just cloth diapers. The good news is that some of the items you can repurpose once you are done diapering. Here’s my list:

  • Air tight 5 Gallon Eco Bucket with a lid
  • Two smaller Airtight Containers With a Handle (I used these to transport diapers to/from daycare, but at home they are handy to have for changing diapers on different floors)
  • Flushable BioLiners diaper liners make dumping poop much easier. You don’t need to start using until you introduce solids and their poop firms up. These were a game changer for cloth diapering! (It is doable to go without, but it sure is messier…)
  • Oxygen bleach and essential oils to add to wash loads
  • A dedicated laundry basket for fresh diapers

Once you have your supplies set up, the system is really easy…catching your toddler for a diaper change is the real challenge! 

What does your diaper system consist of?

Darcy

Darcy’s Money Stories: After Kiddos

Each chapter of my life brings a ton more stories…here we go…looking forward to getting this all off my mind to be able to start focusing on manifesting money for our current family dreams. 🙂

  • Having gotten pregnant while wrapping up graduate school, I was happy to have completed my higher education, but I felt like my career was just beginning (hence the whole next section will mostly relate to my career progression). I was tired of working at non-profits to barely pay the bills, and felt like I would be the most effective working from the “inside” at the local government level. I had set my sights on working for the City of Portland before going back to graduate school, but still wasn’t exactly sure how that would play out.
  • Applying for jobs while newly pregnant was an adventure. I had the mixed feelings of being anxious to prove myself in my career while becoming a loving new Mama. There were so many unknowns about what my life would be like in barely six months. At one point I ended up getting very close to a job offer, but in a third interview the employer still felt a hesitancy in me that they couldn’t explain. I admitted that I was pregnant and they basically told me that I would be given ZERO maternity leave (aside from the few sick days that I could have accrued in my first five months).  
  • Realizing the complete lack of maternity leave, I ended opting to stay at my current p/t non-profit job organizing environmental lectures until they could find someone to take over for me. Then I work for a temp agency for about two months before Kieran arrived (10 days overdue!). I did a week’s worth of filing at PDC (where Hubby now works!) and then several weeks of mindless data entry for Regence. It was the first time in my career where I had a job with virtually no decision making, and it felt very strange to simply punch in and punch out each day. (They kindly offered me a long-term job, which I very politely refused…over my dead body could I work in such a mindless cube job!)
  • Before quitting my job to go on truly unpaid maternity leave, I had budgeted out my various options. Childcare is very expensive in Portland, and in some ways it could have been smarter for me to simply stay at home, but I also felt like that I had a critical career window to apply my fresh graduate school skills. Plus, as much as we loved our starter home, I knew that there was no way could possibly afford a larger home on a single income and that we couldn’t possibly fit more than one child into our tiny place (While the place was 1200 square feet, the second bedroom was a glorified closet).
  • My grandfather passed away when I was pregnant with Kieran, and I was given a gift of $10,000 from my Grandmother from his estate. Thankfully I was able to pay my student loan and my phone bill for about a year with this money. I was very grateful, since I didn’t want to dip into our savings in order to take a maternity leave.
  • After taking three months of leave I started looking for job prospects, and quickly came across a part-time job at the City of Portland, coordinating their River Renaissance Initiative. Even though it was technically a paid internship, I was filling in for the Program Coordinator. So, the duties were fulfilling but the pay was minimal. When I accepted the position they didn’t know whether it would be funded for more than six weeks, but I proved myself valuable, and they kept me on a temporary basis for ten months. I quickly found some expensive childcare downtown so I could nurse on breaks, and during that time I basically lost money on weeks with holidays (since I wasn’t paid any vacation/holiday), but I felt like it was a foot in the door at the City. I was pretty crushed not to land the permanent position (mostly because they were trying to hire someone who could do my manager’s job who literally only got paid to schmooze for long lunches and approve my work. I was actually kind of bitter about this at the time, because as nice as a person as he was, my manager showed up late and left early, earning over six figures, while I worked passionately to prove myself. He did give me one piece of solid advice: When someone calls or emails, return their message within an hour to let them know you’re on it, even it takes you longer to track down the answer. Customer service is key with community outreach projects, so I’ve tried my best to follow this rule).
A few weeks after starting my new job at the City of Portland, I was asked to help organize an educational river cruise. It was a great gig, and I even took Kieran along…the first of many community meetings and events for our kids!
  • I left this job at the City when Kieran had just turned a year and stayed home with him for almost six months. Initially, there was someone I had met on a river cruise from the private sector who continued to try to recruit me for a position. He even took me out to Higgin’s (a lovely upscale restaurant where lots of business types do lunch), and was eager to tell me how family-friendly the position would be, how flexible my schedule would be, and that I’d be able to work part-time and earn twice as much. In the end, the contracts didn’t pan out (and I don’t think I would have been the right fit anyway).
During my time “off” between jobs, I worked on several small home project like stripping and repainting this door (with six small bevels on each window pain!). I loved the tongue-in-cheek paint color: The Ego Has Landed. 🙂
  • Our home projects, which I was mostly the foreman on, were all done with the idea of adding enough value to our home to sell at enough of a profit to be able to afford a bigger home. Literally as soon as Kieran was born, Kevin started itching to move. Our chimney was falling down, and we spent somewhere around $8k to fix it. Meanwhile our tiny cottage was feeling smaller and smaller. This put pressure on me to find a job that would help make our dream home a reality.
  • With some serendipity, I found out about another temporary job at the City, helping out in the community outreach group at the Portland Water Bureau. Again, I knew that I was skilled enough to do the job of any of the permanent staff members, but needed to get my foot in the door once more. This time I at least negotiated for enough to earn a few dollars after childcare tuition was paid, I think I started at $19 an hour with no benefits.
  • Eventually, after interviewing for a half dozen other City jobs, I landed my first full-time permanent position since I had left college. It was about time. The job ended up including several interesting community projects, and I was finally saving for retirement. Just the other day I was in a conversation with Miel about my desire to start saving for retirement again and I quickly realized how sensitive I’ve felt about this subject…knowing that Miel has socked every spare nickle while I’ve either been lagging on the career end or overpaying for childcare to the point that I couldn’t afford to save much more. So this is definitely a money story I need to clear up.
  • Plus, I feel like I/we need to clear up how much kids cost. Our largest kid related expense has certainly been childcare. I don’t even want to tally up the tens of thousands of dollars that we’ve spent. Partly because I ran the math between working and staying at home, I’ve always felt like it was my salary paying for tuition. I remember getting into a little debate with a someone who commented on this blog about why we didn’t “share” this expense. It was really more of mental division than anything, just like how I always wanted to be the one to pay my own student loans back. In the end, I’m very happy with the caring and educational environment that my two oldest kids were essentially raised in during their early years. However, I am very happy now not to be paying tuition (just one more year of Kindergarten tuition…although I do plan on hiring a p/t nanny in the fall to give me dedicated time for coaching calls).
  • For the most part I feel like we’ve been fairly frugal. I’ve overspent on cute clothes, but also bought pretty much everything on sale. I’ve bought more books than I “should” have, but we’ve kept the toy purchases to a minimum. We’ve chosen to prioritize experience expenses, like swim or dance classes. These “non-essentials” do make new neural pathways, on top of simply being fun.
  • I can’t recall specific arguments we’ve had about money related to kid expenses, but there have been debates/spats about how much things costs and both of us lamenting that kids are expensive. This may be a “fact,” but only if we convince ourselves of it.
  • We were able to sell our first home within just a few weeks while I was newly pregnant with Makenna. I worked overtime to get everything decluttered and perfect (it didn’t even look like a child lived there because we knew the new owners wouldn’t have room for kids!). All our work paid off, and we were able to earn $70k in equity in just three years in our starter home.
  • We essentially plunged every last dime into our next (and current) home, where we have lived for almost seven years and plan to live for the foreseeable future.
  • When we moved into our new home, which is 1665 square feet, it was obvious that we had very little furniture to fill it. Our second-hand couch went straight to the basement, and for over a month our living room only had a lawyer’s book case, some plants and a lamp. Our tiny cheap dining table went to the backyard to use as a potting bench. Despite our desire to have nice antique furniture, IKEA soon became our friend. Over the fall we bought and assembled a dining tables, chairs, coffee table, entertainment console and twin bed. Thankfully, they actually look pretty decent and we haven’t regretted our purchases or are anxious to buy new stuff once the kids get better…they now have a distressed character with fork marks and kid tracks.
  • What we had already accumulated was a ton of kid gear, and now that our youngest is almost a year old, we’re getting anxious to purge our basement once and for all…
  • Thankfully our “new” 1904 home had already been fully renovated and initially we only had a few repairs to make. Almost seven years later and we are now gearing up for some major repairs to replace the roof and finally make the basement dry.
  • Otherwise, back to life with kids, once Makenna was born (a lovely and inexpensive home birth), we tried to keep our expenses down, knowing that childcare for two kids would be like having another mortgage payment.
  • Just as I was returning to work full-time was when I first got the idea to start writing this blog. I had gotten a wedding invite for a close friend in Denmark for the following summer, but even with such advance notice, I knew we couldn’t afford it. It made my heart sad and I was frustrating thinking that I didn’t know when we could ever afford such a trip. Miel’s DINKs Finance blog was becoming very successful and earning around $2k each month, which was basically what I was taking home after my childcare bills. Miel had continued to tell me that I should start writing a blog, but I had always shrugged it off…but admittedly once I learned how much she was earning, I thought long and hard about the idea. I brainstormed topics that I would want to write about and started making plans.
  • To date this blog hasn’t earned more than a few random ads. I had agreed to do the writing, which I did diligently for the first several years, but Miel was too busy making life better for others around the globe. I honestly could never fault her for wanting to travel/work in Africa instead of help me make my blog earn an income, but it is something that I suppose I should fully forgive as in some ways it feels like we are restarting this venture five years after we first set out. She has still been my biggest fan and I’m truly excited to see what we can accomplish together.
  • Now back to that time just after kids, I guess it feels like it was a time of getting our financial systems down. I took the time to set up all our accounts on autopay, but was also very good about monitoring our budget as we set about saving up for our big trip to Denmark. We had regular “Money Honey” chats, which were probably just as important for our marriage as our bank account.
  • Thankfully, we were able to reach our savings goal, and afford our $7500 three-week vacation to Denmark. It’s still amazing to me that we were able to save so diligently and that our budget was so accurate. Very soon I’ll be coming up with a budget for a trip we plan to take back to Europe next summer, and I’m actually looking forward to saving toward the goal…that’s just the incentive I need to save money. Somehow saving to the replace the roof just doesn’t inspire me the same way! 😉
  • One “last” note here is that we have had a challenge of not wanting my Mom in particular to spoil the kids with stuff. I wrote about our “official gift policy” first four years ago, and it can still be a challenge at times. My Mom (who is completely loving and generous!) does her best to comply, but it means that she often saves stuff up to give for the holidays and she loves bringing the girls second hand clothes that she’s scored, which are adorable but not always necessary.
Lastly, in retrospect, having kids hasn’t really changed who we are or what we prioritize in life. We still want to live as down-to-earth as possible, avoiding the consumer culture as much as we can. We believe spending money on experiences and travel is more important than buying stuff.
In my next post I’ll reflect on life after we received a family inheritance, since it has changed things for us financially…although plenty still feels the same…
Have a beautiful day,
Darcy

Tips for Teaching Kids About Money

 

 

When and how we learn life skills depends on several factors. We have many chances to practice social graces, such as ‘thank you’ and ‘excuse me’. Children learn to manage their time and prioritize through school or deciding what sports they want to play.
However, gaining practical finance skills is more difficult. An allowance or odd jobs teach us how to earn money; but little in the way of budgeting and planning.
Many kids simply spend pocket money for quick fun or buying gadgets. Credit cards are the first money temptation many college students will face. A young adult may feel money is earned to be spent based on their brief work history. Overspending without concept of the consequences is a common result. This poses challenges later in life, where a lack of money experience has long term effects.
So, how can we teach kids about money in a practical and effective way?
Here are some strategies to consider:
Learn Money Skills Early and Often:
Parents can teach their children about making a budget and setting aside cash from an early age. You could set small financial goals for buying toys or tech widgets based on the child’s age. Children should then have chances to earn money in stages to buy the product.
Tips for success:
     Set specific targets. Your child should know what the product costs and how much they must save each week/month to get it.
     Let your child make their own decisions. They will be tempted to spend money along the way while saving for a new bike or skateboard. If they don’t reach their goal, be supportive but don’t cave in. You may offer more chores or work so they can continue to save.
Attend Money Workshops and Camps for Kids:
Consider workshops and summer camps geared to kids. Community centers and financial institutions often hold ‘Kid’s Nights’, where money subjects are taught in fun ways. Your local library, community college or bank may hold these events.
In July of 2013, USC Alumnus Elliott Broidy provided scholarships for children to attend summer camps at his alma mater. Careers, money and college life were among the topics.
You may also look to personal finance books with content for the whole family to share.
Use Technology:
Our digital world makes it easier to learn real life money skills. There are online tools and apps for kids of all ages.
Young Children: Free apps such as Allowance or Virtual Piggy help children set and achieve money goals. With Allowance, parents can assign chores with dollar values and time deadlines. Kids then prioritize to earn money in the most efficient way. Parents and kids can track % to goal with real time updates. The app even divides earnings into savings, spending and investing buckets.
Pre and Early Teens: Beyond saving, children can learn to grow their money with apps such as Bee Farming ($2.99) and The Game of Life ($0.99).
At Bee Farming, kids runs a virtual bee farm with set time periods to grow the business. The app teaches entrepreneurial skills such as reinvesting, spotting opportunity and managing scarce resources.
Using The Game of Life, kids learn about college debt and buying a house or car. Your child will see how loan rates affect debt and interest payments. This shows kids the true cost of making major purchases.
Teenage Years:College planning becomes a reality in teenage years. Online calculators and social media help teenagers research the best college choices.
Facebook, Google+ and YouTube are more than social sites. Your child can quickly connect with admissions offices and college students for a better sense of each school.
Sit with your teenager and calculate the debt service for each college they’re interested in. Rank your schools in order of preference and decide what college offers the best value, all things considered. A school’s atmosphere, aid, grants and degree programs should all be considered. Effective college planning goes past the hype to understand total costs and benefits. 
Summary:
Money is a vital subject that can be learned outside the classroom. Planning, persistence and technology make this easier.


~*~*~*~*~*~ Sustainable Family Finances Growing abundance while living down-to-Earth.